<PAGE>

                                                                    EXHIBIT 10.3

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES

                                     FORM OF

                          COMMON STOCK PURCHASE WARRANT

              To Purchase ______________ Shares of Common Stock of

                                   SCOLR, INC.

                  THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value
received, _____________________ (the "Holder"), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after February 24, 2004 (the "Initial Exercise Date") and on
or prior to the close of business on February 23, 2009 (the "Termination Date")
but not thereafter, to subscribe for and purchase from SCOLR, Inc., a
corporation incorporated in the State of Delaware (the "Company"), up to
_________________ shares (the "Warrant Shares") of Common Stock, of the Company
(the "Common Stock"). The purchase price of one share of Common Stock (the
"Exercise Price") under this Warrant shall be $4.75, subject to adjustment
hereunder. The Exercise Price and the number of Warrant Shares for which the
Warrant is exercisable shall be subject to adjustment as provided herein.
CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS
SET FORTH IN THAT CERTAIN SECURITIES PURCHASE AGREEMENT (THE "PURCHASE
AGREEMENT"), DATED FEBRUARY 24, 2004, BETWEEN THE COMPANY AND THE PURCHASERS
SIGNATORY THERETO.

                                       1

<PAGE>

                  1. Title to Warrant. Prior to the Termination Date and subject
to compliance with applicable laws and Section 7 of this Warrant, this Warrant
and all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

                  2. Authorization of Shares. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

                  3. Exercise of Warrant.

                            (a) Except as provided in Section 4 herein, exercise
         of the purchase rights represented by this Warrant may be made at any
         time or times on or after the Initial Exercise Date and on or before
         the Termination Date by the surrender of this Warrant and the Notice of
         Exercise Form annexed hereto duly executed, at the office of the
         Company (or such other office or agency of the Company as it may
         designate by notice in writing to the registered Holder at the address
         of such Holder appearing on the books of the Company) and upon payment
         of the Exercise Price of the shares thereby purchased by wire transfer
         or cashier's check drawn on a United States bank or by means of a
         cashless exercise pursuant to Section 3(d), the Holder shall be
         entitled to receive a certificate for the number of Warrant Shares so
         purchased. Certificates for shares purchased hereunder shall be
         delivered to the Holder within five (5) Trading Days after the date on
         which this Warrant shall have been exercised as aforesaid. This Warrant
         shall be deemed to have been exercised and such certificate or
         certificates shall be deemed to have been issued, and the Holder or any
         other person so designated to be named therein shall be deemed to have
         become a holder of record of such shares for all purposes, as of the
         date the Warrant has been exercised by payment to the Company of the
         Exercise Price and all taxes required to be paid by the Holder, if any,
         pursuant to Section 5 prior to the issuance of such shares, have been
         paid. If the Company fails to deliver to the Holder a certificate or
         certificates representing the Warrant Shares pursuant to this Section
         3(a) by the close of business on the fifth Trading Day after the date
         of exercise, then the Holder will have the right to rescind such
         exercise. In addition to any other rights available to the Holder, if
         the Company fails to deliver to the Holder a certificate or
         certificates representing the Warrant Shares pursuant to an exercise by
         the close of business on the fifth Trading Day after the date of
         exercise, and if after such fifth Trading Day the Holder is required by
         its broker to purchase (in an open market transaction or otherwise)
         shares of Common Stock to deliver in satisfaction of a sale by the
         Holder of the Warrant Shares which the Holder anticipated receiving
         upon such exercise (a "Buy-In"), then the Company shall (1) pay in cash
         to the Holder the amount by which (x) the Holder's total purchase price
         (including brokerage commissions, if any) for the shares of Common
         Stock so purchased exceeds

                                       2

<PAGE>

         (y) the amount obtained by multiplying (A) the number of Warrant Shares
         that the Company was required to deliver to the Holder in connection
         with the exercise at issue times (B) the price at which the sell order
         giving rise to such purchase obligation was executed, and (2) at the
         option of the Holder, either reinstate the portion of the Warrant and
         equivalent number of Warrant Shares for which such exercise was not
         honored or deliver to the Holder the number of shares of Common Stock
         that would have been issued had the Company timely complied with its
         exercise and delivery obligations hereunder. For example, if the Holder
         purchases Common Stock having a total purchase price of $11,000 to
         cover a Buy-In with respect to an attempted exercise of shares of
         Common Stock with an aggregate sale price giving rise to such purchase
         obligation of $10,000, under clause (1) of the immediately preceding
         sentence the Company shall be required to pay the Holder $1,000. The
         Holder shall provide the Company written notice indicating the amounts
         payable to the Holder in respect of the Buy-In, together with
         applicable confirmations and other evidence reasonably requested by the
         Company. Nothing herein shall limit a Holder's right to pursue any
         other remedies available to it hereunder, at law or in equity
         including, without limitation, a decree of specific performance and/or
         injunctive relief with respect to the Company's failure to timely
         deliver certificates representing shares of Common Stock upon exercise
         of the Warrant as required pursuant to the terms hereof.

                            (b) If this Warrant shall have been exercised in
         part, the Company shall, at the time of delivery of the certificate or
         certificates representing Warrant Shares, deliver to Holder a new
         Warrant evidencing the rights of Holder to purchase the unpurchased
         Warrant Shares called for by this Warrant, which new Warrant shall in
         all other respects be identical with this Warrant.

                            (c) The Holder shall not have the right to exercise
         any portion of this Warrant, pursuant to Section 3(a) or otherwise, to
         the extent that after giving effect to such issuance after exercise,
         the Holder (together with the Holder's affiliates), as set forth on the
         applicable Notice of Exercise, would beneficially own in excess of
         4.99% of the number of shares of the Common Stock outstanding
         immediately after giving effect to such issuance. For purposes of the
         foregoing sentence, the number of shares of Common Stock beneficially
         owned by the Holder and its affiliates shall include the number of
         shares of Common Stock issuable upon exercise of this Warrant with
         respect to which the determination of such sentence is being made, but
         shall exclude the number of shares of Common Stock which would be
         issuable upon (A) exercise of the remaining, nonexercised portion of
         this Warrant beneficially owned by the Holder or any of its affiliates
         and (B) exercise or conversion of the unexercised or nonconverted
         portion of any other securities of the Company (including, without
         limitation, any other Warrants) subject to a limitation on conversion
         or exercise analogous to the limitation contained herein beneficially
         owned by the Holder or any of its affiliates. Except as set forth in
         the preceding sentence, for purposes of this Section 3(c), beneficial
         ownership shall be calculated in accordance with Section 13(d) of the
         Exchange Act, it being acknowledge by Holder that the Company is not
         representing to Holder that such calculation is in compliance with
         Section 13(d) of the Exchange Act and Holder is solely responsible for
         any schedules required to be filed in accordance therewith. To the
         extent that the limitation contained in this Section 3(c) applies, the
         determination of whether this

                                       3

<PAGE>

         Warrant is exercisable (in relation to other securities owned by the
         Holder) and of which a portion of this Warrant is exercisable shall be
         in the sole discretion of such Holder, and the submission of a Notice
         of Exercise shall be deemed to be such Holder's determination of
         whether this Warrant is exercisable (in relation to other securities
         owned by such Holder) and of which portion of this Warrant is
         exercisable, in each case subject to such aggregate percentage
         limitation, and the Company shall have no obligation to verify or
         confirm the accuracy of such determination. For purposes of this
         Section 3(c), in determining the number of outstanding shares of Common
         Stock, the Holder may rely on the number of outstanding shares of
         Common Stock as reflected in (x) the Company's most recent Form 10-QSB
         or Form 10-KSB, as the case may be, (y) a more recent public
         announcement by the Company or (z) any other notice by the Company or
         the Company's Transfer Agent setting forth the number of shares of
         Common Stock outstanding. Upon the written or oral request of the
         Holder, the Company shall within two Trading Days confirm orally and in
         writing to the Holder the number of shares of Common Stock then
         outstanding. In any case, the number of outstanding shares of Common
         Stock shall be determined after giving effect to the conversion or
         exercise of securities of the Company, including this Warrant, by the
         Holder or its affiliates since the date as of which such number of
         outstanding shares of Common Stock was reported.

                            (d) If, but only if, at any time after one year from
         the date of issuance of this Warrant there is no effective Registration
         Statement registering the resale of the Warrant Shares by the Holder,
         this Warrant may also be exercised at such time by means of a "cashless
         exercise" in which the Holder shall be entitled to receive a
         certificate for the number of Warrant Shares equal to the quotient
         obtained by dividing [(A-B) (X)] by (A), where:

                  (A)   = the Closing Price on the Trading Day immediately
                          preceding the date of such election;

                  (B)   = the Exercise Price of this Warrant, as adjusted; and

                  (X)   = the number of Warrant Shares issuable upon exercise
                          of this Warrant in accordance with the terms of this
                          Warrant by means of a cash exercise rather than a
                          cashless exercise.

                            (e) Subject to the provisions of this Section 3, if
         after the 12 month anniversary of the Effective Date, the VWAP for each
         of twenty consecutive Trading Days (the "Measurement Price", which
         period shall not have commenced until after such anniversary date)
         exceeds $8.00 per share (the "Threshold Price") (subject to adjustment
         for reverse and forward stock splits, stock dividends, stock
         combinations and other similar transactions of the Common Stock that
         occur after the date of the Purchase Agreement), then the Company may,
         within two Trading Days of such period, call for cancellation of all or
         any portion of this Warrant for which a Notice of Exercise has not yet
         been delivered (such right, a "Call"). To exercise this right, the
         Company must deliver to the Holder an irrevocable written notice (a
         "Call Notice"), indicating therein the portion of unexercised portion
         of this Warrant to which such notice applies. If the conditions set
         forth below for such Call are satisfied from the period from the date
         of the

                                       4

<PAGE>

         Call Notice through and including the Call Date (as defined below),
         then any portion of this Warrant subject to such Call Notice for which
         a Notice of Exercise shall not have been received from and after the
         date of the Call Notice will be cancelled at 6:30 p.m. (New York City
         time) on the tenth Trading Day after the date the Call Notice is
         received by the Holder (such date, the "Call Date"). Any unexercised
         portion of this Warrant to which the Call Notice does not pertain will
         be unaffected by such Call Notice. In furtherance thereof, the Company
         covenants and agrees that it will honor all Notices of Exercise with
         respect to Warrant Shares subject to a Call Notice that are tendered
         from the time of delivery of the Call Notice through 6:30 p.m. (New
         York City time) on the Call Date. The parties agree that any Notice of
         Exercise delivered following a Call Notice shall first reduce to zero
         the number of Warrant Shares subject to such Call Notice prior to
         reducing the remaining Warrant Shares available for purchase under this
         Warrant. For example, if (x) this Warrant then permits the Holder to
         acquire 100 Warrant Shares, (y) a Call Notice pertains to 75 Warrant
         Shares, and (z) prior to 6:30 p.m. (New York City time) on the Call
         Date the Holder tenders a Notice of Exercise in respect of 50 Warrant
         Shares, then (1) on the Call Date the right under this Warrant to
         acquire 25 Warrant Shares will be automatically cancelled, (2) the
         Company, in the time and manner required under this Warrant, will have
         issued and delivered to the Holder 50 Warrant Shares in respect of the
         exercises following receipt of the Call Notice, and (3) the Holder may,
         until the Termination Date, exercise this Warrant for 25 Warrant Shares
         (subject to adjustment as herein provided and subject to subsequent
         Call Notices). Subject again to the provisions of this Section 3(e),
         the Company may deliver subsequent Call Notices for any portion of this
         Warrant for which the Holder shall not have delivered a Notice of
         Exercise. Notwithstanding anything to the contrary set forth in this
         Warrant, the Company may not deliver a Call Notice or require the
         cancellation of this Warrant (and any Call Notice will be void),
         unless, from the beginning of the 20th consecutive Trading Days used to
         determine whether the Common Stock has achieved the Threshold Price
         through the Call Date, (i) the Company shall have honored in accordance
         with the terms of this Warrant all Notices of Exercise delivered by
         6:30 p.m. (New York City time) on the Call Date, (ii) the Registration
         Statement shall be effective as to all Warrant Shares and the
         prospectus thereunder available for use by the Holder for the resale of
         all such Warrant Shares and (iii) the Common Stock shall be listed or
         quoted for trading on the Trading Market. The Company's right to Call
         the Warrant shall be exercised ratably among the Purchasers based on
         each Purchaser's initial purchase of Common Stock pursuant to the
         Purchase Agreement.

                  4. No Fractional Shares or Scrip. No fractional shares or
scrip representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

                  5. Charges, Taxes and Expenses. Issuance of certificates for
Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company, and
such certificates shall be issued in the name of the Holder or in such name or
names as may be directed by the Holder; provided, however, that in the event

                                       5

<PAGE>

certificates for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

                  6. Closing of Books. The Company will not close its
stockholder books or records in any manner which prevents the timely exercise of
this Warrant, pursuant to the terms hereof.

                  7. Transfer, Division and Combination.

                            (a) Subject to compliance with any applicable
         securities laws and the conditions set forth in Sections 1 and 7(e)
         hereof and to the provisions of Section 4.1 of the Purchase Agreement,
         this Warrant and all rights hereunder are transferable, in whole or in
         part, upon surrender of this Warrant at the principal office of the
         Company, together with a written assignment of this Warrant
         substantially in the form attached hereto duly executed by the Holder
         or its agent or attorney and funds sufficient to pay any transfer taxes
         payable upon the making of such transfer. Upon such surrender and, if
         required, such payment, the Company shall execute and deliver a new
         Warrant or Warrants in the name of the assignee or assignees and in the
         denomination or denominations specified in such instrument of
         assignment, and shall issue to the assignor a new Warrant evidencing
         the portion of this Warrant not so assigned, and this Warrant shall
         promptly be cancelled. A Warrant, if properly assigned, may be
         exercised by a new holder for the purchase of Warrant Shares without
         having a new Warrant issued.

                            (b) This Warrant may be divided or combined with
         other Warrants upon presentation hereof at the aforesaid office of the
         Company, together with a written notice specifying the names and
         denominations in which new Warrants are to be issued, signed by the
         Holder or its agent or attorney. Subject to compliance with Section
         7(a), as to any transfer which may be involved in such division or
         combination, the Company shall execute and deliver a new Warrant or
         Warrants in exchange for the Warrant or Warrants to be divided or
         combined in accordance with such notice.

                            (c) The Company shall prepare, issue and deliver at
         its own expense (other than transfer taxes) the new Warrant or Warrants
         under this Section 7.

                            (d) The Company agrees to maintain, at its aforesaid
         office, books for the registration and the registration of transfer of
         the Warrants.

                            (e) If, at the time of the surrender of this Warrant
         in connection with any transfer of this Warrant, the transfer of this
         Warrant shall not be registered pursuant to an effective registration
         statement under the Securities Act and under applicable state
         securities or blue sky laws, the Company may require, as a condition of
         allowing such transfer (i) that the Holder or transferee of this
         Warrant, as the case may be, furnish to the Company a written opinion
         of counsel (which opinion shall be in form, substance and scope
         customary for opinions of counsel in comparable transactions) to the
         effect that such transfer may be made without registration under the
         Securities Act and under

                                       6

<PAGE>

         applicable state securities or blue sky laws, (ii) that the holder or
         transferee execute and deliver to the Company an investment letter in
         form and substance acceptable to the Company and (iii) that the
         transferee be an "accredited investor" as defined in Rule 501(a)
         promulgated under the Securities Act.

                  8. No Rights as Shareholder until Exercise. This Warrant does
not entitle the Holder to any voting rights or other rights as a shareholder of
the Company prior to the exercise hereof. Upon the surrender of this Warrant and
the payment of the aggregate Exercise Price (or by means of a cashless
exercise), the Warrant Shares so purchased shall be and be deemed to be issued
to such Holder as the record owner of such shares as of the close of business on
the later of the date of such surrender or payment.

                  9. Loss, Theft, Destruction or Mutilation of Warrant. The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which, in the case of the Warrant, shall not include the posting of any bond),
and upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate
of like tenor and dated as of such cancellation, in lieu of such Warrant or
stock certificate.

                  10. Saturdays, Sundays, Holidays, etc. If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday, Sunday or a legal holiday, then
such action may be taken or such right may be exercised on the next succeeding
day not a Saturday, Sunday or legal holiday.

                  11. Adjustments of Exercise Price and Number of Warrant
Shares. The number and kind of securities purchasable upon the exercise of this
Warrant and the Exercise Price shall be subject to adjustment from time to time
upon the happening of any of the following. In case the Company shall (i) pay a
dividend in shares of Common Stock or make a distribution in shares of Common
Stock to holders of its outstanding Common Stock, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, or (iv) issue any shares of its capital stock in a reclassification of
the Common Stock, then the number of Warrant Shares purchasable upon exercise of
this Warrant immediately prior thereto shall be adjusted so that the Holder
shall be entitled to receive the kind and number of Warrant Shares or other
securities of the Company which it would have owned or have been entitled to
receive had such Warrant been exercised in advance thereof. Upon each such
adjustment of the kind and number of Warrant Shares or other securities of the
Company which are purchasable hereunder, the Holder shall thereafter be entitled
to purchase the number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable pursuant hereto immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company that are purchasable pursuant hereto immediately after such
adjustment. An adjustment made pursuant to this paragraph shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.

                                       7

<PAGE>

                  12. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of its property, assets or business to
another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation ("Other Property"), are
to be received by or distributed to the holders of Common Stock of the Company,
then the Holder shall have the right thereafter to receive upon exercise of this
Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

                  13. [Intentionally Omitted].

                  14. Notice of Adjustment. Whenever the number of Warrant
Shares or number or kind of securities or other property purchasable upon the
exercise of this Warrant or the Exercise Price is adjusted, as herein provided,
the Company shall give notice thereof to the Holder, which notice shall state
the number of Warrant Shares (and other securities or property) purchasable upon
the exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.

                  15. Notice of Corporate Action. If at any time:

                           (a) the Company shall take a record of the holders of
         its Common Stock for the purpose of entitling them to receive a
         dividend or other distribution, or any

                                       8

<PAGE>

         right to subscribe for or purchase any evidences of its indebtedness,
         any shares of stock of any class or any other securities or property,
         or to receive any other right, or

                           (b) there shall be any capital reorganization of the
         Company, any reclassification or recapitalization of the capital stock
         of the Company or any consolidation or merger of the Company with, or
         any sale, transfer or other disposition of all or substantially all the
         property, assets or business of the Company to, another corporation or,

                           (c) there shall be a voluntary or involuntary
         dissolution, liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder (i) at
least 20 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 20
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Holder appearing on the books of the Company and delivered in
accordance with Section 17(d).

                  16. Authorized Shares. The Company covenants that during the
period the Warrant is outstanding, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of the Warrant Shares upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
the Warrant Shares upon the exercise of the purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to assure
that such Warrant Shares may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed.

                    Except and to the extent as waived or consented to by the
Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be

                                       9

<PAGE>

necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.

                    Before taking any action which would result in an adjustment
in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

                  17. Miscellaneous.

                            (a) Jurisdiction. All questions concerning the
         construction, validity, enforcement and interpretation of this Warrant
         shall be determined in accordance with the provisions of the Purchase
         Agreement.

                            (b) Restrictions. The Holder acknowledges that the
         Warrant Shares acquired upon the exercise of this Warrant, if not
         registered, will have restrictions upon resale imposed by state and
         federal securities laws.

                            (c) Nonwaiver and Expenses. No course of dealing or
         any delay or failure to exercise any right hereunder on the part of
         Holder shall operate as a waiver of such right or otherwise prejudice
         Holder's rights, powers or remedies, notwithstanding all rights
         hereunder terminate on the Termination Date. If the Company willfully
         and knowingly fails to comply with any provision of this Warrant, which
         results in any material damages to the Holder, the Company shall pay to
         Holder such amounts as shall be sufficient to cover any costs and
         expenses including, but not limited to, reasonable attorneys' fees,
         including those of appellate proceedings, incurred by Holder in
         collecting any amounts due pursuant hereto or in otherwise enforcing
         any of its rights, powers or remedies hereunder.

                            (d) Notices. Any notice, request or other document
         required or permitted to be given or delivered to the Holder by the
         Company shall be delivered in accordance with the notice provisions of
         the Purchase Agreement; provided upon any permitted assignment of this
         Warrant, the assignee shall promptly provide the Company with its
         contact information.

                            (e) Limitation of Liability. No provision hereof, in
         the absence of any affirmative action by Holder to exercise this
         Warrant or purchase Warrant Shares, and no enumeration herein of the
         rights or privileges of Holder, shall give rise to any liability of
         Holder for the purchase price of any Common Stock or as a stockholder
         of the Company, whether such liability is asserted by the Company or by
         creditors of the Company.

                                       10

<PAGE>

                            (f) Remedies. Holder, in addition to being entitled
         to exercise all rights granted by law, including recovery of damages,
         will be entitled to specific performance of its rights under this
         Warrant. The Company agrees that monetary damages would not be adequate
         compensation for any loss incurred by reason of a breach by it of the
         provisions of this Warrant and hereby agrees to waive the defense in
         any action for specific performance that a remedy at law would be
         adequate.

                            (g) Successors and Assigns. Subject to applicable
         securities laws, this Warrant and the rights and obligations evidenced
         hereby shall inure to the benefit of and be binding upon the successors
         of the Company and the successors and permitted assigns of Holder. The
         provisions of this Warrant are intended to be for the benefit of all
         Holders from time to time of this Warrant and shall be enforceable by
         any such Holder or holder of Warrant Shares.

                            (h) Amendment. This Warrant may be modified or
         amended or the provisions hereof waived with the written consent of the
         Company and the Holder.

                            (i) Severability. Wherever possible, each provision
         of this Warrant shall be interpreted in such manner as to be effective
         and valid under applicable law, but if any provision of this Warrant
         shall be prohibited by or invalid under applicable law, such provision
         shall be ineffective to the extent of such prohibition or invalidity,
         without invalidating the remainder of such provisions or the remaining
         provisions of this Warrant.

                            (j) Headings. The headings used in this Warrant are
         for the convenience of reference only and shall not, for any purpose,
         be deemed a part of this Warrant.

                              ********************

                                       11

<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated:  February 24, 2004

                                     SCOLR, INC.

                                     By: ______________________________________
                                         Name:
                                         Title:

                                       12

<PAGE>

                               NOTICE OF EXERCISE

To:      SCOLR, Inc.

                  (1) The undersigned hereby elects to purchase _____________
Warrant Shares of SCOLR, Inc. pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price
in full, together with all applicable transfer taxes, if any.

                  (2) Payment shall take the form of (check applicable box):

                           [ ] in lawful money of the United States; or

                           [ ] the cancellation of such number of Warrant Shares
                           as is necessary, in accordance with the formula set
                           forth in subsection 3(d), to exercise this Warrant
                           with respect to the maximum number of Warrant Shares
                           purchasable pursuant to the cashless exercise
                           procedure set forth in subsection 3(d).

                  (3) Please issue a certificate or certificates representing
said Warrant Shares in the name of the undersigned or in such other name as is
specified below:

                  ______________________________

The Warrant Shares shall be delivered to the following:

                  ______________________________

                  ______________________________

                  ______________________________

                  (4) Accredited Investor. The undersigned is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of
1933, as amended.

                                         [PURCHASER]


                                         By: ___________________________________
                                             Name:
                                             Title:

                                         Dated:_________________________________

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

                  FOR VALUE RECEIVED, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to

_______________________________________________ whose address is

_________________________________________________________________ .

_________________________________________________________________

                                                 Dated:  ______________, _______

                  Holder's Signature:_____________________________

                  Holder's Address:_______________________________

                                   _______________________________

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.