RIGHTS AGREEMENT Agreement, dated as of November 1, 2002, between SCOLR, Inc., a Delaware corporation (the "Company"), and OTR, Inc. (the "Rights Agent"). The Board of Directors of the Company has authorized and declared a dividend of one preferred...

Exhibit 4.4

RIGHTS AGREEMENT

Agreement, dated as of November 1, 2002, between SCOLR, Inc.,

a Delaware corporation (the "Company"), and OTR, Inc. (the "Rights Agent").

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, par value $0.001 per share, of the Company (a "Common Share")

outstanding on the Close of Business on November 12, 2002 (the "Record Date")

and has authorized the issuance of one Right with respect to each additional

Common Share that shall become outstanding between the Record Date and the

earliest of the Close of Business on the Distribution Date, the Redemption Date

and the Close of Business on the Final Expiration Date, and certain additional

shares of Common Stock that shall become outstanding after the Distribution Date

as provided in Section 22 of this Agreement, each Right representing the right

to purchase one one-thousandth of a Preferred Share (as hereinafter defined), or

such different amount and/or kind of securities as shall be hereinafter

provided.

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

meanings indicated:

"Acquiring Person" shall mean any Person who or which, together

with all Affiliates and Associates of such Person, shall be the Beneficial Owner

of 15% or more of the Common Shares of the Company then outstanding but shall

not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any

employee benefit plan of the Company or any Subsidiary of the Company, or (iv)

any entity holding Common Shares for or pursuant to the terms of any such

employee benefit plan. Notwithstanding the foregoing, (1) no Person shall become

an "Acquiring Person" as the result of an acquisition of Common Shares by the

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

proportionate number of shares beneficially owned by such Person to 15% (or such

other percentage as would otherwise result in such person becoming an Acquiring

Person) or more of the Common Shares of the Company then outstanding; provided,

however, that if a Person shall so become the Beneficial Owner of 15% (or such

other percentage) or more of the Common Shares of the Company then outstanding

by reason of an acquisition of Common Shares by the Company and shall, after

such share purchases by the Company, become the Beneficial Owner of an

additional 1% of the outstanding Common Shares of the Company, then such Person

shall be deemed to be an "Acquiring Person"; and (2) if the Board of Directors

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

"Acquiring Person," as defined pursuant to the foregoing provisions of this

paragraph, has become such inadvertently, and such Person divests as promptly as

practicable a sufficient number of Common Shares so that such Person would no

longer be an "Acquiring Person," as defined pursuant to the foregoing provisions

of this paragraph, then such Person shall not be deemed to have become an

"Acquiring Person" for any purposes of this Agreement.

"Affiliate" and "Associate" shall have the respective meanings

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

the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in

effect on the date of this Agreement.

A Person shall be deemed the "Beneficial Owner" of and shall be

deemed to "beneficially own" any securities:

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

Associates beneficially owns, directly or indirectly;

(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), written or otherwise, or upon the exercise of

conversion rights, exchange rights, rights (other than the Rights), warrants or

options, or otherwise; provided, however, that a Person shall not be deemed to

be the Beneficial Owner of, or to beneficially own, securities tendered pursuant

to a tender or exchange offer made pursuant to, and in accordance with, the

applicable rules and regulations promulgated under the Exchange Act by or on

behalf of such Person or any of such Person's Affiliates or Associates until

such tendered securities are accepted for purchase or exchange; 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 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 with 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), written or otherwise, for the purpose of acquiring,

holding, voting (except to the extent contemplated by the proviso to section (B)

of the immediately preceding paragraph (ii)) or disposing of any securities of

the Company.

Notwithstanding anything in this definition of Beneficial

Ownership to the contrary, the phrase "then outstanding," when used with

reference to a Person's Beneficial Ownership of securities of the Company, shall

mean the number of such securities then issued and outstanding together with the

number of such securities not then actually issued and outstanding which such

Person would be deemed to own beneficially hereunder.

"Business Day" shall mean any day other than a Saturday, Sunday,

or a day on which banking institutions in the state of New York are authorized

or obligated by law or executive order to close.

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

eastern time, on such date; provided, however, that if such date is not a

Business Day it shall mean 5:00 P.M., eastern time, on the next succeeding

Business Day.

"Common Shares" when used with reference to the Company shall

mean the shares of Common Stock, par value $.001 per share, of the Company.

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

shall mean the capital stock (or 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.

"common stock equivalents" shall have the meaning set forth in

Section 11(a)(iii)(B)(3) hereof.

"Current Value" shall have the meaning set forth in Section

11(a)(iii)(A)(1) hereof.

"Distribution Date" shall have the meaning set forth in Section

3(a) hereof.

"equivalent preferred shares" shall have the meaning set forth in

Section 11(b) hereof.

"Exchange Ratio" shall have the meaning set forth in Section

24(a) hereof.

"Final Expiration Date" shall mean November 1, 2012.

"Person" shall mean any individual, firm, corporation,

partnership, limited partnership, limited liability partnership, business trust,

limited liability company, unincorporated association or other entity, and shall

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

"Purchase Price" shall have the meaning set forth in Section 7(b)

hereof.

"Preferred Shares" shall mean shares of Series A Junior

Participating Preferred Stock, par value $0.01 per share, of the Company having

such rights and preferences as are set forth in the form of Certificate of

Designation set forth as Exhibit A hereto, as the same may be amended from time

to time.

"Redemption Date" shall have the meaning set forth in Section 23

hereof.

"Right Certificate" shall mean a certificate evidencing a Right

in substantially the form of Exhibit B hereto.

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

in Section 11(a)(iii) hereof.

"Shares Acquisition Date" shall mean the earlier of the date of

(i) the public announcement by the Company or an Acquiring Person that an

Acquiring Person has become

such or (ii) the public disclosure of facts by the Company or an Acquiring

Person indicating that an Acquiring Person has become such.

"Spread" shall have the meaning set forth in Section

11(a)(iii)(A) hereof.

"Subsidiary" of any Person shall mean any Person of which a

majority of the voting power of the voting equity securities or equity interest

is owned, directly or indirectly, by such Person.

"Substitution Period" shall have the meaning set forth in Section

11(a)(iii) hereof.

"Summary of Rights" shall mean the Summary of Rights to Purchase

Preferred Shares in substantially the form of Exhibit C hereto.

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 also be the holders of the Common

Shares) 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 earlier of (i) the tenth day after the Shares

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 the Company, any Subsidiary of the Company, any employee benefit

plan of the Company or of any Subsidiary of the Company or any entity holding

Common Shares for or pursuant to the terms of any such plan) of, or of the first

public announcement of the intention of any Person (other than any of the

Persons referred to in the

preceding parenthetical) to commence, a tender or exchange offer the

consummation of which would result in any Person becoming the Beneficial Owner

of Common Shares aggregating 15% or more of the then outstanding Common Shares

(such date 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 Shares registered in the names of the holders thereof

(which certificates shall also be deemed to be Right Certificates) and not by

separate Right Certificates, and (y) the right to receive Right Certificates

will be transferable only in connection with the transfer of Common Shares. 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, at the expense of the

Company, send) by first-class, insured, postage-prepaid mail, to each record

holder of Common Shares as of the Close of Business on the Distribution Date, at

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

Certificate evidencing one Right for each Common Share 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 the Summary of Rights by first-class,

postage-prepaid mail, to each record holder of Common Shares as of the Close of

Business on the Record Date, at the address of such holder shown on the records

of the Company. With respect to certificates for Common Shares outstanding as of

the Record Date, until the Close of Business on the Distribution Date, the

Rights will be evidenced by such certificates registered in the names of the

holders thereof together with a copy of the Summary of Rights attached thereto.

Until the Close of Business on the Distribution Date (or the earlier of the

Redemption Date or the Close of Business on the Final Expiration Date), the

surrender for transfer of any certificate for Common Shares outstanding on

the Record Date, with or without a copy of the Summary of Rights attached

thereto, shall also constitute the transfer of the Rights associated with the

Common Shares evidenced thereby.

(including, without limitation, reacquired Common Shares referred to in the last

sentence of this paragraph (c)) after the Record Date but prior to the earliest

of the Close of Business on the Distribution Date, the Redemption Date or the

Close of Business on the Final 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 SCOLR, Inc. and OTR, Inc., as Rights

Agent, dated as of November 1, 2002, as it may from time

to time be amended or supplemented pursuant to its terms

(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 SCOLR, Inc.

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. SCOLR, Inc. 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, Rights that are or were acquired

or beneficially owned by Acquiring Persons (as defined in

the Rights Agreement) may become null and void.

With respect to such certificates containing the foregoing legend, until the

Close of Business on the Distribution Date, the Rights associated with the

Common Shares represented by certificates shall be evidenced by such

certificates alone, and the surrender for transfer of any such certificate shall

also constitute the transfer of the Rights associated with the Common Shares

represented thereby. In the event that the Company purchases or acquires any

Common Shares after the Record Date but prior to the Close of Business on the

Distribution Date, any Rights associated with such Common Shares shall be deemed

canceled and retired so that the Company shall not be entitled to exercise any

Rights associated with the Common Shares which are no longer outstanding.

Section 4. Form of Right Certificates.

The Right Certificates (and the forms of election to purchase

Preferred Shares and of assignment to be printed on the reverse thereof) shall

be substantially the same as 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 on which the Rights may from time to

time be listed, or to conform to usage. Subject to the other provisions of this

Agreement, the Right Certificates shall entitle the holders thereof to purchase

such number of one one-thousandths of a Preferred Share as shall be set forth

therein at the Purchase Price, but the number of one one-thousandths of a

Preferred Share and the Purchase Price shall be subject to adjustment as

provided herein.

Section 5. Countersignature and Registration.

The Right Certificates shall be executed on behalf of the Company

by its Chairman of the Board, its Chief Executive Officer, its President, any of

its Vice Presidents, or its Treasurer, 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 any Assistant Secretary of the

Company, either manually or by facsimile signature. The Right Certificates shall

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

unless so countersigned, either manually or by facsimile. 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 Rights Agreement any such person was not such an officer.

Following the Distribution Date, the Rights Agent will keep or

cause to be kept, at its principal office, books for registration of the

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.

Subject to the provisions of Section 14 hereof, at any time after

the Close of Business on the Distribution Date, and prior to the earlier of the

Redemption Date or the Close of Business on the Final Expiration Date, any Right

Certificate or Right Certificates (other than Right Certificates representing

Rights that have become void pursuant to Section 11(a)(ii) hereof or that have

been exchanged pursuant to Section 24 hereof) 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-thousandths

of a Preferred Share 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 principal office of the Rights Agent. 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 for any tax or governmental

charge that may be imposed in connection with any transfer, split up,

combination or exchange of Right Certificates.

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) The registered holder of any Right Certificate (other than a

holder whose Rights have become void pursuant to Section 11(a)(ii) hereof or

have been exchanged pursuant to Section 24 hereof) may exercise the Rights

evidenced thereby in whole or in part at any time after the Distribution Date

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 its principal

office, together with payment of the Purchase Price for each one one-thousandth

of a Preferred Share as to which the Rights are exercised, prior to the earliest

of (i) the Close of Business on the Final Expiration Date, (ii) the time at

which the right to exercise the Rights terminates pursuant to

Section 23 hereof, or (iii) the time at which the right to exercise the Rights

terminates pursuant to Section 24 hereof.

(b) The purchase price for each one one-thousandth of a Preferred

Share to be purchased upon the exercise of a Right shall initially be Fifteen

Dollars ($15.00) (the "Purchase Price"), 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)

below.

Rights, with the form of election to purchase and certificate duly executed,

accompanied by payment of the Purchase Price for the number of one

one-thousandths of a Preferred Share 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 by cash, 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 Shares certificates for the number of one one-thousandths of a

Preferred Share to be purchased and the Company hereby irrevocably authorizes

its transfer agent to comply with all such requests, or (B) requisition from any

depositary agent for the Preferred Shares depositary receipts representing such

number of one one-thousandths of a Preferred Share as are to be purchased (in

which case certificates for the Preferred Shares represented by such receipts

shall be deposited by the transfer agent with the depositary agent) and the

Company hereby directs any such 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 Preferred Shares in accordance with

Section 14 hereof, (iii) 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, deliver such cash to or upon the order of the registered holder

of such Right Certificate.

(d) In case the registered holder of any Right Certificate shall

exercise less than all the Rights evidenced thereby, a new Right Certificate

evidencing Rights equivalent to the 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 upon the occurrence of any purported

exercise as set forth in this Section 7 unless such registered holder shall have

(i) completed and signed the certificate following the form of election to

purchase set forth on the reverse side of the Right Certificate surrendered for

such exercise and (ii) provided such additional evidence of the identity of the

Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates

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 Rights 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. Status and Availability of Preferred Shares.

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

action as may be necessary to ensure that all Preferred Shares delivered upon

exercise of Rights shall, at the time of delivery of the certificates for such

Preferred Shares (subject to payment of the Purchase Price), be duly and validly

authorized and issued and fully paid and non-assessable shares.

(b) 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 Preferred Shares 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 Shares in a name other than that of, the registered holder of the

Right Certificate evidencing Rights surrendered for exercise, or to issue or to

deliver any certificates or depositary receipts for Preferred Shares upon the

exercise of any Rights until any such tax shall have been paid (any such tax

being payable by the 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.

reserved and kept available, out of its authorized and unissued Preferred Shares

or any Preferred Shares held in its treasury, the number of Preferred Shares

that will be sufficient to permit the exercise in full of all outstanding Rights

in accordance with Section 7 hereof.

Section 10. Preferred Shares Record Date.

Each person in whose name any certificate for Preferred Shares is

issued upon the exercise of Rights shall for all purposes be deemed to have

become the holder of record of the Preferred Shares 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. 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 Shares for which the Rights

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

receive dividends or other distributions or to exercise any preemptive rights,

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 of Shares or

Number of Rights.

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

of this Agreement (A) declare a dividend on the Preferred Shares payable in

Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine

the outstanding Preferred Shares into a smaller number of Preferred Shares or

(D) issue any shares of its capital stock in a reclassification of the Preferred

Shares (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, he 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 the following paragraph of this

subparagraph (ii) and to Section 24 of this Agreement, in the event any Person

shall become an Acquiring Person, each holder of a Right shall thereafter have a

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

Purchase Price multiplied by the number of one one-thousandths of a Preferred

Share for which a Right is then exercisable, in accordance with the terms of

this Agreement and in lieu of Preferred Shares, such number of Common Shares of

the Company as shall equal the result obtained by (x) multiplying the then

current Purchase Price by the number of one one-thousandths of a Preferred Share

for which a Right is then exercisable and dividing that product by (y) 50% of

the then current per share market price of the Company's Common Shares

(determined pursuant to Section 11(d) hereof) on the date such Person became an

Acquiring Person. In the event that any Person shall become an Acquiring Person

and the Rights shall then be outstanding, the Company shall not take any action

that would eliminate or diminish the benefits intended to be afforded by the

Rights.

From and after the occurrence of such an event, any Rights that

are or were acquired or beneficially owned by such Acquiring Person (or any

Associate or Affiliate of such Acquiring Person) on or after the earlier of (x)

the date of such event and (y) the Distribution Date shall be void and any

holder of such Rights shall thereafter have no right to exercise such Rights

under any provision of this Agreement. No Right Certificate shall be issued

pursuant to

Section 3 that represents Rights beneficially owned by an Acquiring

Person whose Rights would be void pursuant to the preceding sentence or any

Associate or Affiliate thereof; no Right Certificate shall be issued at any time

upon the transfer of any Rights to an Acquiring Person whose Rights would be

void pursuant to the preceding sentence or any Associate or Affiliate thereof or

to any nominee of such Acquiring Person, Associate or Affiliate; and any Right

Certificate delivered to the Rights Agent for transfer to an Acquiring Person

whose Rights would be void pursuant to the preceding sentence or any Associate

or Affiliate thereof shall be canceled.

(iii) In the event that the number of Common Shares

which are authorized by the Company's certificate of incorporation and not

outstanding or subscribed for, or reserved or otherwise committed for issuance

for purposes other than upon exercise of the Rights, are not sufficient to

permit the holder of each Right to purchase the number of Common Shares to which

he would be entitled upon the exercise in full of the Rights in accordance with

the foregoing subparagraph (ii) of paragraph (a) of this Section 11, or should

the Board of Directors so elect, the Company shall: (A) determine the excess of

(1) the value of the Common Shares issuable upon the exercise of a Right

(calculated as provided in the last sentence of this subparagraph (iii))

pursuant to Section 11(a)(ii) hereof (the "Current Value") over (2) the Purchase

Price (such excess, the "Spread"), and (B) with respect to each Right, make

adequate provision to substitute for such Common Shares, upon payment of the

applicable Purchase Price, any one or more of the following having an aggregate

value determined by the Board of Directors to be equal to the Current Value: (1)

cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity

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

shares, of preferred stock which the Board of Directors of the Company has

determined to have the same value as Common Shares (such shares of preferred

stock, "common stock equivalents")), (4) debt securities of the Company, or (5)

other assets; provided, however, if the Company shall not have made adequate

provision to deliver value pursuant to clause (B) above within thirty (30) days

following the first occurrence of an event triggering the rights to purchase

Common Shares described in Section 11(a)(ii) (the "Section 11(a)(ii) Trigger

Date"), then the Company shall be obligated to deliver, upon the surrender for

exercise of a Right and without requiring payment of the Purchase Price, Common

Shares (to the extent available) and then, if necessary, cash, which shares and

cash have an aggregate value equal to the Spread. If the Board of Directors of

the Company shall determine in good faith that it is likely that sufficient

additional Common Shares could be authorized for issuance upon exercise in full

of the Rights, 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 stockholder approval for the

authorization of such additional shares (such period, as it may be extended, the

"Substitution Period"). To the extent that the Company determines that some

action need be taken pursuant to the first and/or second sentences of this

Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)

hereof and the last paragraph of Section 11(a)(ii) 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 first sentence and

to determine the value thereof. In the event of any such suspension, the Company

shall make a public announcement, and shall deliver to the Rights Agent a

statement, stating that the exercisability of the Rights has been temporarily

suspended. At such time as the suspension is no longer in effect,

the Company shall make another public announcement, and deliver to the Rights

Agent a statement, so stating. For purposes of this Section 11(a)(iii), the

value of the Common Shares shall be the current per share market price (as

determined pursuant to Section 11(d)(i) hereof) of the Common Shares on the

Section 11(a)(ii) Trigger Date and the value of any common stock equivalent

shall be deemed to have the same value as the Common Shares on such date.

(b) In case the Company shall fix a record date for the

issuance of rights, options or warrants to all holders of Preferred Shares

entitling them (for a period expiring within 45 calendar days after such record

date) to subscribe for or purchase Preferred Shares (or shares having the same

rights, privileges and preferences as the Preferred Shares ("equivalent

preferred shares")) or securities convertible into Preferred Shares or

equivalent preferred shares at a price per Preferred Share or equivalent

preferred share (or having a conversion price per share, if a security

convertible into Preferred Shares or equivalent preferred shares) less than the

then current per share market price of the Preferred Shares (as defined in

Section 11(d)) on such record date, the Purchase Price to be in effect after

such record date shall be adjusted 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 Preferred Shares outstanding on such record date plus the

number of Preferred Shares which the aggregate offering price of the total

number of Preferred Shares 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 Preferred Shares outstanding on such record date

plus the number of additional Preferred Shares 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.

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 Shares (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 Shares) 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 Shares 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 Preferred Share and the denominator of which shall be such

current per share market price of the Preferred Shares;

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) 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 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 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 the

National Association of Securities Dealers, Inc. Automated Quotations System

("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, the

"current per share market price" of the Preferred Shares shall be determined in

accordance with the method set forth in Section 11(d)(i). If the Preferred

Shares are not publicly traded, the "current per share market price" of the

Preferred Shares shall be conclusively deemed to be the current per share market

price of the Common Shares as determined pursuant to Section 11(d)(i)

(appropriately adjusted to reflect any stock split, stock dividend or similar

transaction occurring after the date hereof), multiplied by 1000. If neither the

Common Shares nor the Preferred Shares are publicly held or so listed or 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 ten-millionth of a

Preferred Share or one ten-thousandth of any 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 three years from the

date of the transaction which requires such adjustment.

(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 Preferred

Shares, the number of such other shares so receivable upon exercise of any Right

shall thereafter 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 Shares contained in Section 11(a) through (c), inclusive, and the

provisions of Sections 7, 9, 10 and 13 with respect to the Preferred Shares

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-thousandths of a

Preferred Share 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 (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-thousandths of a Preferred Share

(calculated to the nearest one ten-millionth of a Preferred Share) obtained by

(i) multiplying (x) the number of one one-thousandths of a share covered by a

Right immediately prior to this 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 to adjust the number of Rights in substitution for any

adjustment in the number of one one-thousandths of a Preferred Share 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-thousandths of a Preferred Share 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 hundred-thousandth) 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. This record date may

be the date on which the Purchase Price is adjusted or any day thereafter, but,

if the Right Certificates have been distributed, shall be at least 10 days later

than the date of the public announcement. If Right Certificates have been

distributed, upon each adjustment of the number of Rights pursuant to this

Section 11(i), the Company shall, 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 to be so 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-thousandths of a Preferred Share issuable upon

the exercise of the Rights, the Right Certificates theretofore and thereafter

issued may continue to express the Purchase Price and the number of one

one-thousandths of a Preferred Share 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 one one-thousandth of the then par value of

the Preferred Shares issuable upon exercise of the Rights, 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

non-assessable Preferred 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 the issuing to the holder of any Right exercised after such record date of

the Preferred Shares and other capital stock or securities of the

Company, if any, issuable upon such exercise over and above the Preferred Shares

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 xxxx 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 reductions 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 (i) combination or subdivision of the Preferred Shares, (ii)

issuance wholly for cash of any Preferred Shares at less than the current market

price, (iii) issuance wholly for cash of Preferred Shares or securities which by

their terms are convertible into or exchangeable for Preferred Shares, (iv)

dividends on Preferred Shares payable in Preferred Shares or (v) issuance of any

rights, options or warrants referred to hereinabove in Section 11(b), hereafter

made by the Company to holders of its Preferred Shares shall not be taxable to

such stockholders.

(n) In the event that at any time after the date of this

Agreement and prior to the Distribution Date, the Company shall (i) declare or

pay any dividend on the Common Shares payable in Common Shares or (ii) effect a

subdivision, combination or consolidation of the Common Shares (by

reclassification or otherwise other than by payment of dividends in Common

Shares) into a greater or lesser number of Common Shares, then in any such case

(i) the number of one one-thousandths of a Preferred Share purchasable after

such event upon proper exercise of each Right shall be determined by multiplying

the number of one one-thousandths of a Preferred Share so purchasable

immediately prior to such event by a fraction,

the numerator of which is the number of Common Shares outstanding immediately

before such event and the denominator of which is the number of Common Shares

outstanding immediately after such event, and (ii) each Common Share outstanding

immediately after such event shall have issued with respect to it that number of

Rights which each Common Share outstanding immediately prior to such event had

issued with respect to it. The adjustments provided for in this Section 11(n)

shall be made successively whenever such a dividend is declared or paid or such

a subdivision, combination or consolidation is effected.

Section 12. Certificate of Adjustment.

Whenever an adjustment is made as provided in Sections 11 and 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

Shares or the Preferred Shares a copy of such certificate and (c) if such

adjustment occurs following a Distribution Date, mail a brief summary thereof to

each holder of a Right Certificate in accordance with 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 obligated or responsible for

calculating any adjustment nor shall it be deemed to have knowledge of such an

adjustment unless and until it shall have received such certificate.

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

or Earning Power.

In the event that, at any time after a Person becomes an

Acquiring Person, directly or indirectly, (i) the Company shall consolidate

with, or merge with and into, any other Person, (ii) any Person shall

consolidate with the Company, or 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 Shares shall be changed into or

exchanged for stock or other securities of any other Person (or 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 of its

wholly-owned Subsidiaries, then, and in each such case, proper provision shall

be made so that (A) each holder of a Right (except as otherwise provided herein)

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

equal to the then current Purchase Price multiplied by the number of one

one-thousandths of a Preferred Share for which a Right is then exercisable, in

accordance with the terms of this Agreement and in lieu of Preferred Shares,

such number of Common Shares of such other Person (including the Company as

successor thereto or as the surviving corporation) as shall equal the result

obtained by (x) multiplying the then current Purchase Price by the number of one

one-thousandths of a Preferred Share for which a Right is then exercisable and

dividing that product by (y) 50% of the then current per share market price of

the Common Shares of such other Person (determined pursuant to Section 11(d)

hereof) on the date of consummation of such consolidation, merger, sale or

transfer; (B) the issuer of such Common Shares 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 Agreement; (C) the

term "Company" shall thereafter be deemed to refer to such issuer; and (D) such

issuer shall take such steps (including, but not limited to, the reservation of

a sufficient number of its Common Shares in accordance with Section 9 hereof) in

connection with such consummation as may be necessary to assure that the

provisions hereof shall thereafter be applicable, as nearly as reasonably may

be, in

relation to the Common Shares thereafter deliverable upon the exercise of

the Rights. The Company covenants and agrees that it shall not consummate any

such consolidation, merger, sale or transfer unless prior thereto the Company

and such issuer shall have executed and delivered to the Rights Agent a

supplemental agreement so providing. The Company shall not enter into any

transaction of the kind referred to in this Section 13 if at the time of such

transaction there are any rights, warrants, instruments or securities

outstanding or any agreements or arrangements which, as a result of the

consummation of such transaction, would eliminate or substantially diminish the

benefits intended to be afforded by the Rights. The provisions of this Section

13 shall similarly apply to successive mergers or consolidations or sales or

other transfers. For purposes hereof, the "earning power" of the Company and its

Subsidiaries shall be determined in good faith by the Company's Board of

Directors on the basis of the operating earnings of each business operated by

the Company and its Subsidiaries during the three fiscal years preceding the

date of such determination (or, in the case of any business not operated by the

Company or any Subsidiary during three full fiscal years preceding such date,

during the period such business was operated by the Company or any Subsidiary).

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. 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 Shares (other than fractions which are integral multiples of one

one-thousandth of a Preferred Share) upon exercise of the Rights or to

distribute certificates which evidence fractional Preferred Shares (other than

fractions which are integral multiples of one one-thousandth of a Preferred

Share). Fractions of Preferred Shares in integral multiples of one

one-thousandth of a Preferred Share 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 Shares represented by such depositary receipts. In lieu of

fractional Preferred Shares that are not integral multiples of one

one-thousandth of a Preferred Share, the Company shall pay to each registered

holder of Right Certificates at the time such Rights are exercised as herein

provided an amount in cash equal to the same fraction of the current market

value of one Preferred Share as the fraction of one Preferred Share that such

holder would otherwise receive upon the exercise of the aggregate number of

rights exercised by such holder. For the purposes of this Section 14(b), the

current market value of a Preferred Share shall be the closing price of a

Preferred Share (as determined pursuant to the second sentence of Section

11(d)(i) hereof) for the Trading Day immediately prior to the date of such

exercise.

expressly waives any right to receive fractional Rights or fractional shares

upon exercise 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 Shares); and any

registered holder of any Right Certificate (or, prior to the Distribution Date,

of the Common Shares) may, 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 Shares), on his own behalf and for his own benefit, 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 in the manner provided in such Right

Certificate

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 Shares;

(b) after the Distribution Date, the Right Certificates are

transferable only on the registry books maintained by the Rights Agent if

surrendered at the principal office of the Rights Agent, duly endorsed or

accompanied by a proper instrument of transfer with a completed form of

certification; and

person in whose name the Right Certificate (or, prior to the Distribution Date,

the associated Common Shares 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 associated Common Shares

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 Stockholder.

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

Shares or any other securities of the Company which may at any time be issuable

on the exercise 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 stockholder of the Company or

any right to vote for the election of directors or upon any matter submitted to

stockholders at any meeting thereof, or to give or withhold consent to any

corporate action, or to receive notice of meetings or other actions affecting

stockholders (except as provided in Section 25 hereof), or to receive dividends

or subscription rights, or otherwise, until the Right or Rights evidenced by

such Right Certificate shall have been exercised in accordance with the

provisions hereof.

Section 18. Concerning the Rights Agent.

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 or

liability in connection therewith. The indemnification provided for hereunder

shall survive the expiration of the Rights and the termination of this

Agreement.

The costs and expenses of enforcing this right of indemnification shall also be

paid by the Company.

The Rights Agent may conclusively rely upon and 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 Preferred

Shares 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. Notwithstanding anything in this

Agreement to the contrary, in no event shall the Rights Agent be liable for

special, indirect or consequential loss or damage of any kind whatsoever

(including but not limited to lost profits), even if the Rights Agent has been

advised of the likelihood of such loss or damage and regardless of the form of

the action.

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

Agent.

Any corporation into which the Rights Agent or any successor

Rights Agent may be merged or with which it may be consolidated, or any

corporation resulting from any merger or consolidation to which the Rights Agent

or any successor Rights Agent shall be a party, or any corporation succeeding to

the corporate trust business 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 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.

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 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 expressly

set forth in this Agreement and no implied duties or obligations shall be read

into this Agreement against the Rights Agent. The Rights Agent shall perform

those duties and obligations 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) Before the Rights Agent acts or refrains from acting, it 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 any one of the Chairman of the Board, the

Chief Executive Officer, the President, a Vice President, the Treasurer or the

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.

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 as to 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 adjustment required under the provisions of

Sections 11 or 13 hereof or

responsible for the manner, method or amount of any such adjustment or the

ascertaining of the existence of facts that would require any such adjustment

(except with respect to the exercise of Rights evidenced by Right Certificates

after actual notice of any such 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 Shares to be issued pursuant to this

Agreement or any Right Certificate or as to whether any Preferred Shares will,

when so 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

one of the Chairman of the Board, the Chief Executive Officer, the President, a

Vice President, the Secretary or the Treasurer 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 to be taken by it in good

faith in accordance with instructions of any such officer. 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 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 ten 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, in response to

such application, written instructions with respect to the proposed action or

omission specifying a different 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) No provision of this Agreement shall require the Rights Agent

to expend or risk its own funds or otherwise incur any financial liability in

the performance of any of its duties hereunder or in the exercise of its rights

if there shall be reasonable grounds for believing that repayment of such funds

or adequate indemnification against such risk or liability is not reasonably

assured to it.

(k) The Rights Agent shall not be required to take notice or be

deemed to have notice of any fact, event or determination (including, without

limitation, any dates or events

defined in this Agreement or the designation of any Person as an Acquiring

Person, Affiliate or Associate) under this Agreement unless and until the Rights

Agent shall be specifically notified in writing by the Company of such fact,

event or determination.

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 Shares and the

Preferred Shares by registered or certified 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 Shares and the Preferred Shares by registered

or certified 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

corporation organized and doing business under the laws of the United States or

of any state of the United States, in good standing, which is authorized under

such laws to exercise corporate trust 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 $10

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 Shares

and the Preferred Shares. 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 form 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 earlier of the Redemption Date

and the Close of Business on the Final 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 employment 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 Right 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 its option, at

any time prior to such time as any Person becomes an Acquiring Person, redeem

all but not less than all the then outstanding Rights at a redemption price of

$0.001 per Right, appropriately adjusted to reflect any stock split, stock

dividend or similar transaction occurring after the date hereof (such redemption

price being hereinafter referred to as the "Redemption Price"). The redemption

of the Rights by the Board of Directors may be made effective at such time, on

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

discretion may establish.

(b) Immediately upon the time of the effectiveness of the

redemption of the Rights pursuant to paragraph (a) of this Section 23 or such

earlier time as may be determined by the Board of Directors of the Company in

the action ordering such redemption (although not earlier than the time of such

action) (such time the "Redemption Date"), and without any further action and

without any notice, the right to exercise the Rights shall 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 pursuant to paragraph (a), 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

Shares. Any notice which is mailed in the manner herein provided shall be deemed

given, whether or not the holder receives the notice. If the payment of the

Redemption Price is not included with such notice, each such notice shall state

the method by which the payment of the Redemption Price will be made. Neither

the Company nor any of its Affiliates or Associates

may redeem, acquire or purchase for value any Rights at any time in any manner

other than that specifically set forth in this Section 23 or in Section 24

hereof, other than in connection with the purchase of Common Shares prior to the

Distribution Date.

Section 24. Exchange.

(a) The Board of Directors of the Company may, at its option, at

any time after any Person becomes an Acquiring Person, 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 Shares at an exchange ratio of one Common Share per Right (such exchange

ratio 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 any Person (other than the Company, any Subsidiary of

the Company, any employee benefit plan of the Company or any such Subsidiary, or

any entity holding Common Shares for or pursuant to the terms of any such plan),

together with all Affiliates and Associates of such Person, becomes the

Beneficial Owner of a majority of the Common Shares then outstanding.

(b) Immediately upon the action of the Board of Directors of the

Company ordering the exchange of any Rights pursuant to subsection (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 Common Shares 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 promptly shall mail a notice

of any such exchange to all of the holders of such

Rights 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 Common Shares 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.

its option, may substitute Preferred Shares or common stock equivalents for

Common Shares exchangeable for Rights, at the initial rate of one one-thousandth

of a Preferred Share (or an appropriate number of common stock equivalents) for

each Common Share, as appropriately adjusted to reflect adjustments in the

voting rights of the Preferred Shares pursuant to the terms thereof, so that the

fraction of a Preferred Share delivered in lieu of each Common Share shall have

the same voting rights as one Common Share.

(d) In the event that there shall not be sufficient Common

Shares, Preferred Shares or common stock equivalents authorized by the Company's

certificate of incorporation and not outstanding or subscribed for, or reserved

or otherwise committed for issuance for purposes other than upon exercise of

Rights, to permit any exchange of Rights as contemplated in accordance with this

Section 24, the Company shall take all such action as may be necessary to

authorize additional Common Shares, Preferred Shares or common stock equivalents

for issuance upon exchange of the Rights.

(e) The Company shall not be required to issue fractions of

Common Shares or to distribute certificates which evidence fractional Common

Shares. In lieu of such fractional

Common Shares, the Company shall pay to the registered holders of the Right

Certificates with regard to which such fractional Common Shares would otherwise

be issuable an amount in cash equal to the same fraction of the current per

share market value of a whole Common Share. For the purposes of this paragraph

(e), the current per share market value of a whole Common Share shall be the

closing price of a Common Share (as determined pursuant to the second sentence

of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of

exchange pursuant to this Section 24.

Section 25. Notice of Certain Events.

(a) In case the Company shall after the Distribution Date propose

(i) to pay any dividend payable in stock of any class to the holders of its

Preferred Shares or to make any other distribution to the holders of its

Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer

to the holders of its Preferred Shares rights or warrants to subscribe for or to

purchase any additional Preferred Shares or shares of stock of any class or any

other securities, rights or options, (iii) to effect any reclassification of its

Preferred Shares (other than a reclassification involving only the subdivision

of outstanding Preferred Shares), (iv) to effect any consolidation or merger

into or with, or to effect any sale or other transfer (or to permit one or more

of its Subsidiaries to effect any sale or other transfer), in one or more

transactions, of 50% or more of the assets or earning power of the Company and

its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the

liquidation, dissolution or winding up of the Company, or (vi) to declare or pay

any dividend on the Common Shares payable in Common Shares or to effect a

subdivision, combination or consolidation of the Common Shares (by

reclassification or otherwise than by payment of dividends in Common Shares),

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 reclassification, consolidation, merger, sale, transfer,

liquidation, dissolution, or winding up is to take place and the date of

participation therein by the holders of the Common Shares and/or Preferred

Shares, 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 Shares 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 Shares and/or Preferred

Shares, whichever shall be the earlier.

(b) In case any event set forth in Section 11(a)(ii) hereof shall

occur, then the Company shall as soon as practicable thereafter give to each

holder of a Right Certificate, 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) 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:

SCOLR, Inc.

0000 000xx Xxxxxx XX

Xxxxxxx, Xxxxxxxxxx 00000-0000

Attention: Secretary

Copy to:

Xxxxxx Xxxxxxxx Xxxxx

0000 Xxxxxx Xxxxxx, Xxxxx 0000

Xxxxxxx, Xxxxxxxxxx 00000

Attention: Xxxx X. Xxxxxxx

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 registered or certified mail and shall be deemed given upon receipt

and, addressed (until another address is filed in writing with the Company) as

follows:

OTR, Inc.

0000 XX Xxxxxxxx, Xxxxx 000

Xxxxxxxx, Xxxxxx 00000

Attention: Xxxxxx X. Xxxxx

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.

The Company may from time to time, and the Rights Agent shall, if

the Company so directs, supplement or amend this Agreement without the approval

of any holders of Right Certificates in order to cure any ambiguity, to correct

or supplement any provision contained herein which may be defective or

inconsistent with any other provisions herein, or to make any change to or

delete any provision hereof or to adopt any other provisions with respect to the

Rights which the Company may deem necessary or desirable; provided, however,

that from and after such time as any Person becomes an Acquiring Person, this

Agreement shall not be amended or supplemented in any manner which would

adversely affect the interests of the holders of Rights (other than an Acquiring

Person and its Affiliates and Associates). Any supplement or amendment

authorized by this Section 27 will be evidenced by a writing signed by the

Company and the Rights Agent. Notwithstanding anything in this Agreement to the

contrary, no supplement or amendment that changes the rights and duties of the

Rights Agent under this Agreement will be effective against the Rights Agent

without the execution of such supplement or amendment by the Rights Agent.

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 or entity other than the Company, the Rights Agent and the registered

holders of the Right Certificates (and, prior to the Distribution Date, the

Common Shares) 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 Shares).

Section 30. 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 31. 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 Delaware 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 32. 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 33. 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.

Section 34. Administration.

The Board of Directors of the Company shall have the exclusive

power and authority to administer and interpret the provisions of this Agreement

and to exercise all rights and powers specifically granted to the Board of

Directors or the Company or as may be

necessary or advisable in the administration of this Agreement. All such

actions, calculations, determinations and interpretations which are done or made

by the Board of Directors in good faith shall be final, conclusive and binding

on the Company, the Rights Agent, the holders of the Rights and all other

parties and shall not subject the Board of Directors to any liability to the

holders of the Rights.

IN WITNESS WHEREOF, the parties hereto have caused this Rights

Agreement to be duly executed and their respective corporate seals to be

hereunder affixed and attested, all as of the day and year first above written.

Attest: SCOLR, INC.

/s/ XXXXX XXXXX By: /s/ XXXXX X. XXXXXX

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

Name: Xxxxx Xxxxx Name: Xxxxx X. Xxxxxx

Title: Chief Financial Officer Title: President, Chief

Executive Officer

Attest: OTR, INC.,

as Rights Agent

/s/ XXXXXXX XXXXXXXX By: /s/ XXXXXX X. XXXXX

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

Name: Xxxxxxx Xxxxxxxx Name: Xxxxxx X. Xxxxx

Title: Marketing Director Title: Vice President

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

SCOLR, INC.

and

OTR, INC.

Rights Agent

Rights Agreement

Dated as of November 1, 2002

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

- i -

TABLE OF CONTENTS

Page

----

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

Section 2. Appointment of Rights Agent..........................................................................6

Section 3. Issue of Right Certificates.................................................................................6

Section 4. Form of Right Certificates..................................................................................9

Section 5. Countersignature and Registration..................................................................9

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

Mutilated, Destroyed, Lost or Stolen Right Certificates............................10

Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................11

Section 8. Cancellation and Destruction of Right Certificates......................................13

Section 9. Status and Availability of Preferred Shares...................................................14

Section 10. Preferred Shares Record Date.........................................................................15

Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights..15

Section 12. Certificate of Adjustment.................................................................................27

Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power..27

Section 14. Fractional Rights and Fractional Shares........................................................29

Section 15. Rights of Action................................................................................................31

Section 16. Agreement of Right Holders...........................................................................32

Section 17. Right Certificate Holder Not Deemed a Stockholder...................................33

Section 18. Concerning the Rights Agent.........................................................................33

Section 19. Merger or Consolidation or Change of Name of Rights Agent.................34

Section 20. Duties of Rights Agent....................................................................................35

Section 21. Change of Rights Agent..................................................................................39

Section 22. Issuance of New Right Certificates................................................................40

Section 23. Redemption........................................................................................................41

Section 24. Exchange............................................................................................................42

Section 25. Notice of Certain Events.................................................................................44

Section 26. Notices...............................................................................................................45

Section 27. Supplements and Amendments.....................................................................46

Section 28. Successors........................................................................................................47

Section 29. Benefits of this Agreement.............................................................................47

Section 30. Severability........................................................................................................48

Section 31. Governing Law..................................................................................................48

Section 32. Counterparts......................................................................................................48

Section 33. Descriptive Headings.......................................................................................48

Section 34. Administration..................................................................................................48

Document Metadata

Table of Contents

RIGHTS AGREEMENT Agreement, dated as of November 1, 2002, between SCOLR, Inc., a Delaware corporation (the "Company"), and OTR, Inc. (the "Rights Agent"). The Board of Directors of the Company has authorized and declared a dividend of one preferred...

Document Metadata