exhibit_4-2.htm


    
      Exhibit
4.2

    

    
                                          

                                           
 FORM

      


                                              
   of

      


                 CERTIFICATE
OF DESIGNATION

      


                                         
        of

       

      SERIES A
JUNIOR PARTICIPATING PREFERRED STOCK

         


                                                  of

      


                                         SCOLR,
INC.

      


                ____________________________________________________

      
 

              (Pursuant
to Section 151 of the Delaware General Corporation Law)

      


                 ____________________________________________________

      


      


      


                     SCOLR,
Inc., a corporation organized and existing under the

      General
Corporation Law of the State of Delaware (hereinafter called the

      "Corporation"),
hereby certifies that the following resolution was adopted by

      the Board
of Directors of the Corporation as required by Section 151 of the

      General
Corporation Law at a meeting duly called and held on November 1,
2002:

      


                     RESOLVED,
that pursuant to the authority granted to and vested in

      the Board
of Directors of this Corporation (hereinafter called the "Board of

      Directors"
or the "Board") in accordance with the provisions of the
Certificate

      of
Incorporation of the Corporation (the "Certificate of Incorporation"),
the

      Board of
Directors hereby creates a series of Preferred Stock, par value
$0.01

      per share
(the "Preferred Stock"), of the Corporation and hereby states the

      designation
and number of shares, and fixes the relative rights, preferences,

      and
limitations thereof as follows:

      


                     Section
1. Designation and Amount. The shares of this series

      shall be
designated as "Series A Junior Participating Preferred Stock" (the

      "Series A
Preferred Stock") and the number of shares constituting the Series
A

      Preferred
Stock shall be 30,000. Such number of shares may be increased or

      decreased
by resolution of the Board of Directors; provided, that no decrease

      shall
reduce the number of shares of Series A Preferred Stock to a number
less

      than the
number of shares then outstanding plus the number of shares
reserved

      for

      


      


      


                                            A-1

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      issuance
upon the exercise of outstanding options, rights or warrants or

      upon the
conversion of any outstanding securities issued by the Corporation

      convertible
into Series A Preferred Stock.

      


                     Section
2. Dividends and Distributions.

      


                            (A)
Subject to the rights of the holders of any shares of

      any
series of Preferred Stock (or any other stock) ranking prior and superior
to

      the
Series A Preferred Stock with respect to dividends, the holders of shares
of

      Series A
Preferred Stock shall be entitled to receive, when, as and if
declared

      by the
Board of Directors out of funds legally available for the purpose,

      quarterly
dividends payable in cash on the last day of March, June, September

      and
December in each year (each such date being referred to herein as a

      "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend

      Payment
Date after the first issuance of a share or fraction of a share of

      Series A
Preferred Stock, in an amount (if any) per share (rounded to the

      nearest
cent), subject to the provision for adjustment hereinafter set
forth,

      equal to
1000 times the aggregate per share amount of all cash dividends,
and

      1000
times the aggregate per share amount (payable in kind) of all
non-cash

      dividends
or other distributions, other than a dividend payable in shares of

      Common
Stock, par value $0.001 per share (the "Common Stock"), of the

      Corporation
or a subdivision of the outstanding shares of Common Stock (by

      reclassification
or otherwise), declared on the Common Stock since the

      immediately
preceding Quarterly Dividend Payment Date or, with respect to the

      first
Quarterly Dividend Payment Date, since the first issuance of any share
or

      fraction
of a share of Series A Preferred Stock. In the event the
Corporation

      shall at
any time declare or pay any dividend on the Common Stock payable in

      shares of
Common Stock, or effect a subdivision or combination or
consolidation

      of the
outstanding shares of Common Stock (by reclassification or otherwise
than

      by
payment of a dividend in shares of Common Stock) into a greater or
lesser

      number of
shares of Common Stock, then in each such case the amount to which

      holders
of shares of Series A Preferred Stock were entitled immediately prior
to

      such
event under the preceding sentence shall be adjusted by multiplying
such

      amount by
a fraction, the numerator of which is the number of shares of
Common

      Stock
outstanding immediately after such event and the denominator of which
is

      the
number of shares of Common Stock that were outstanding immediately prior
to

      such
event.

      


                            (B)
The Corporation shall declare a dividend or

      distribution
on the Series A Preferred Stock as provided in paragraph (A) of

      this
Section immediately after it declares a dividend or distribution on
the

      Common
Stock (other than a dividend payable in shares of Common Stock).

      


                            (C)
Dividends due pursuant to paragraph (A) of this

      Section
shall begin to accrue and be cumulative on outstanding shares of
Series

      A
Preferred Stock from the Quarterly Dividend Payment Date next preceding
the

      date of
issue of such shares, unless the date of issue of such shares is
prior

      to the
record date for the first Quarterly Dividend Payment Date, in which
case

      dividends
on such shares shall begin to accrue from the date of issue of such

      shares,
or unless the date of issue is a Quarterly Dividend Payment Date or is
a

      date
after the record date for the determination of holders of shares of
Series

      A
Preferred Stock entitled to receive a quarterly dividend and before
such

      Quarterly
Dividend Payment Date, in either of which events such dividends
shall

      begin to
accrue and be cumulative from such Quarterly Dividend Payment Date.

      Accrued
but unpaid dividends shall not bear interest. Dividends paid

      


      


      


                                            A-2

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      on the
shares of Series A Preferred Stock in an amount less than the total

      amount of
such dividends at the time accrued and payable on such shares shall
be

      allocated
pro rata on a share-by-share basis among all such shares at the
time

      outstanding.
The Board of Directors may fix a record date for the determination

      of
holders of shares of Series A Preferred Stock entitled to receive payment
of

      a
dividend or distribution declared thereon, which record date shall be not
more

      than 60
days prior to the date fixed for the payment thereof.

      


                     Section
3. Voting Rights. The holders of shares of Series A

      Preferred
Stock shall have the following voting rights:

      


                            (A)
Subject to the provision for adjustment hereinafter

      set
forth, each share of Series A Preferred Stock shall entitle the
holder

      thereof
to 1000 votes on all matters submitted to a vote of the stockholders
of

      the
Corporation. In the event the Corporation shall at any time declare or
pay

      any
dividend on the Common Stock payable in shares of Common Stock, or effect
a

      subdivision
or combination or consolidation of the outstanding shares of Common

      Stock (by
reclassification or otherwise than by payment of a dividend in
shares

      of Common
Stock) into a greater or lesser number of shares of Common Stock,
then

      in each
such case the number of votes per share to which holders of shares
of

      Series A
Preferred Stock were entitled immediately prior to such event shall
be

      adjusted
by multiplying such number by a fraction, the numerator of which is
the

      number of
shares of Common Stock outstanding immediately after such event and

      the
denominator of which is the number of shares of Common Stock that
were

      outstanding
immediately prior to such event.

      


                            (B)
Except as otherwise provided in the Certificate of

      Incorporation,
including any other Certificate of Designations creating a series

      of
Preferred Stock or any similar stock, or by law, the holders of shares
of

      Series A
Preferred Stock and the holders of shares of Common Stock and any
other

      capital
stock of the Corporation having general voting rights shall vote

      together
as one class on all matters submitted to a vote of stockholders of
the

      Corporation.

      


                            (C)
Except as set forth herein, or as otherwise required

      by law,
holders of Series A Preferred Stock shall have no special voting
rights

      and their
consent shall not be required (except to the extent they are
entitled

      to vote
with holders of Common Stock as set forth herein) for taking any

      corporate
action.

      


                     Section
4. Certain Restrictions.

      


                            (A)
Whenever quarterly dividends or other dividends or

      distributions
payable on the Series A Preferred Stock as provided in Section 2

      are in
arrears, thereafter and until all accrued and unpaid dividends and

      distributions,
whether or not declared, on shares of Series A Preferred Stock

      outstanding
shall have been paid in full, the Corporation shall not:

      


                                    (i)
declare or pay dividends, or make any other

      distributions,
on any shares of stock ranking junior (either as to dividends or

      upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;

      


                                    (ii)
declare or pay dividends, or make any other

      distributions,
on any shares of stock ranking on a parity (either as to

      dividends
or upon liquidation, dissolution or winding up) with the Series A

      Preferred
Stock, except dividends paid ratably on the Series A

      


      


      


                                            A-3

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Preferred
Stock and all such parity stock on which dividends are payable or
in

      arrears
in proportion to the total amounts to which the holders of all such

      shares
are then entitled; or

      


                                     (iii)
redeem or purchase or otherwise acquire

      for
consideration shares of any stock ranking junior (either as to dividends
or

      upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock,

      provided
that the Corporation may at any time redeem, purchase or otherwise

      acquire
shares of any such junior stock in exchange for shares of any stock
of

      the
Corporation ranking junior (as to dividends and upon dissolution,

      liquidation
or winding up) to the Series A Preferred Stock.

      


                            (B)
The Corporation shall not permit any subsidiary of the

      Corporation
to purchase or otherwise acquire for consideration any shares of

      stock of
the Corporation unless the Corporation could, under paragraph (A)
of

      this
Section 4, purchase or otherwise acquire such shares at such time and
in

      such
manner.

      


                     Section
5. Reacquired Shares. Any shares of Series A Preferred

      Stock
purchased or otherwise acquired by the Corporation in any manner

      whatsoever
shall be retired and canceled promptly after the acquisition
thereof.

      All such
shares shall upon their cancellation become authorized but unissued

      shares of
Preferred Stock and may be reissued as part of a new series of

      Preferred
Stock subject to the conditions and restrictions on issuance set
forth

      herein or
in the Certificate of Incorporation, including any Certificate of

      Designations
creating a series of Preferred Stock or any similar stock, or as

      otherwise
required by law.

      


                     Section
6. Liquidation, Dissolution or Winding Up. Upon any

      liquidation,
dissolution or winding up of the Corporation the holders of shares

      of Series
A Preferred Stock shall be entitled to receive an aggregate amount
per

      share,
subject to the provision for adjustment hereinafter set forth, equal
to

      1000
times the aggregate amount to be distributed per share to holders of
shares

      of Common
Stock plus an amount equal to any accrued and unpaid dividends. In
the

      event the
Corporation shall at any time declare or pay any dividend on the

      Common
Stock payable in shares of Common Stock, or effect a subdivision or

      combination
or consolidation of the outstanding shares of Common Stock (by

      reclassification
or otherwise than by payment of a dividend in shares of Common

      Stock)
into a greater or lesser number of shares of Common Stock, then in
each

      such case
the aggregate amount to which holders of shares of Series A
Preferred

      Stock
were entitled immediately prior to such event under the preceding
sentence

      shall be
adjusted by multiplying such amount by a fraction the numerator of

      which is
the number of shares of Common Stock outstanding immediately after
such

      event and
the denominator of which is the number of shares of Common Stock
that

      were
outstanding immediately prior to such event.

      


                     Section
7. Consolidation, Merger, Etc. In case the Corporation

      shall
enter into any consolidation, merger, combination or other transaction
in

      which the
shares of Common Stock are exchanged for or changed into other
stock

      or
securities, cash and/or any other property, then in any such case each
share

      of Series
A Preferred Stock shall at the same time be similarly exchanged or

      changed
into an amount per share, subject to the provision for adjustment

      hereinafter
set forth, equal to 1000 times the aggregate amount of stock,

      securities,
cash and/or any other property (payable in kind), as the case may

      be, into
which or for which each share of Common Stock is changed or
exchanged.

      In the
event the Corporation shall at any time declare

      


      


      


                                            A-4

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      or pay
any dividend on the Common Stock payable in shares of Common Stock,
or

      effect a
subdivision or combination or consolidation of the outstanding
shares

      of Common
Stock (by reclassification or otherwise than by payment of a
dividend

      in shares
of Common Stock) into a greater or lesser number of shares of
Common

      Stock,
then in each such case the amount set forth in the preceding
sentence

      with
respect to the exchange or change of shares of Series A Preferred
Stock

      shall be
adjusted by multiplying such amount by a fraction, the numerator of

      which is
the number of shares of Common Stock outstanding immediately after
such

      event and
the denominator of which is the number of shares of Common Stock
that

      were
outstanding immediately prior to such event.

      


                     Section
8. Amendment. The Certificate of Incorporation shall not

      be
amended in any manner, including in a merger or consolidation, which
would

      alter,
change, or repeal the powers, preferences or special rights of the
Series

      A
Preferred Stock so as to affect them adversely without the affirmative vote
of

      the
holders of at least two-thirds of the outstanding shares of Series
A

      Preferred
Stock, voting together as a single class.

      


                     Section
9. Rank. The Series A Preferred Stock shall rank, with

      respect
to the payment of dividends and upon liquidation, dissolution and

      winding
up, junior to all series of Preferred Stock.

      


                     IN
WITNESS WHEREOF, this Certificate of Designation is executed

      on behalf
of the Corporation by its duly authorized officer this 1st day of

      November,
2002.

      


                                                  SCOLR,
INC.

      


      


      


                                                  By:  _______________________________

                                                       Name:  David
T. Howard

                                                       Title:
President,

                                                              Chief
Executive Officer

      


      


      


                                            A-5

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


                                                                             EXHIBIT
B

      


                                  Form
of Right Certificate

      


      Certificate
No.
R-_______                                           _____
Rights

      


      


              NOT
EXERCISABLE AFTER NOVEMBER 1, 2012 OR EARLIER IF REDEMPTION OR

              EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER

              RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

              UNDER
CERTAIN CIRCUMSTANCES, RIGHTS THAT ARE OR WERE ACQUIRED OR

              BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR ANY ASSOCIATES OR

              AFFILIATES
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)

              OR
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.

      


                                      Right
Certificate

                                         SCOLR,
INC.

      


      This
certifies that ___________________________, or registered assigns, is
the

      registered
owner of the number of Rights set forth above, each of which
entitles

      the owner
thereof, subject to the terms, provisions and conditions of the
Rights

      Agreement,
dated as of November 1, 2002 (the "Rights Agreement"), between
SCOLR,

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

      Agent"),
to purchase from the Company at any time after the Distribution
Date

      (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M.,

      eastern
time, on November 1, 2012, at the principal office of the Rights
Agent,

      or at the
office of its successor as Rights Agent, one one-thousandth of a
fully

      paid
non-assessable share of Series A Junior Participating Preferred Stock,
par

      value
$0.01 per share (the "Preferred Shares"), of the Company, at a
purchase

      price of
$15.00 per one one-thousandth of a Preferred Share (the "Purchase

      Price"),
upon presentation and surrender of this Right Certificate with the

      certification
and the Form of Election to Purchase duly executed. The number of

      Rights
evidenced by this Right Certificate (and the number of one

      one-thousandths
of a Preferred Share which may be purchased upon exercise

      hereof)
set forth above, and the Purchase Price set forth above, are the
number

      and
Purchase Price as of November 12, 2002, based on the Preferred Shares
as

      constituted
at such date. As provided in the Rights Agreement, the Purchase

      Price and
the number of one one-thousandths of a Preferred Share which may be

      purchased
upon the exercise of the Rights evidenced by this Right Certificate

      are
subject to modification and adjustment upon the happening of certain
events.

      


                     From
and after the occurrence of an event described in Section

      11(a)(ii)
of the Rights Agreement, if the Rights evidenced by this Right

      Certificate
are or were at any time on or after the earlier of (x) the date of

      such
event and (y) the Distribution Date (as such term is defined in the
Rights

      Agreement)
acquired or beneficially owned by an Acquiring Person or an

      


      


      


                                            B-1

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Associate
or Affiliate of an Acquiring Person (as such terms are defined in
the

      Rights
Agreement), such Rights shall become void, and any holder of such
Rights

      shall
thereafter have no right to exercise such Rights.

      


                     This
Right Certificate is subject to all of the terms, provisions

      and
conditions of the Rights Agreement, which terms, provisions and
conditions

      are
hereby incorporated herein by reference and made a part hereof and to
which

      Rights
Agreement reference is hereby made for a full description of the
rights,

      limitations
of rights, obligations, duties and immunities hereunder of the

      Rights
Agent, the Company and the holders of the Right Certificates. Copies
of

      the
Rights Agreement are on file at the principal executive offices of
the

      Company
and the offices of the Rights Agent.

      


                     This
Right Certificate, with or without other Right Certificates,

      upon
surrender at the principal office of the Rights Agent, may be exchanged
for

      another
Right Certificate or Right Certificates of like tenor and date

      evidencing
Rights entitling the holder to purchase a like aggregate number of

      Preferred
Shares as the Rights evidenced by the Right Certificate or Right

      Certificates
surrendered shall have entitled such holder to purchase. If this

      Right
Certificate shall be exercised in part, the holder shall be entitled
to

      receive
upon surrender hereof another Right Certificate or Right
Certificates

      for the
number of whole Rights not exercised.

      


                     Subject
to the provisions of the Rights Agreement, at the

      Company's
option, the Rights evidenced by this Certificate (i) may be
redeemed

      by the
Company at a redemption price of $0.001 per Right or (ii) may be

      exchanged
in whole or in part for shares of the Company's Common Stock, par

      value
$0.001 per share, or Preferred Shares.

      


                     No
fractional Preferred Shares will be issued upon the exercise

      of any
Right or Rights evidenced hereby (other than fractions which are
integral

      multiples
of one one-thousandth of a Preferred Share, which may, at the
election

      of the
Company, be evidenced by depositary receipts), but in lieu thereof a
cash

      payment
will be made, as provided in the Rights Agreement.

      


                     No
holder of this Right Certificate shall be entitled to vote or

      receive
dividends or be deemed for any purpose the holder of the Preferred

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

      issuable
on the exercise hereof, nor shall anything contained in the Rights

      Agreement
or herein be construed to confer upon the holder hereof, as such,
any

      of the
rights of a 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 the Rights Agreement), or to receive dividends or subscription

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

      Certificate
shall have been exercised as provided in the Rights Agreement.

      


                     This
Right Certificate shall not be valid or obligatory for any

      purpose
until it shall have been countersigned by the Rights Agent.

      


                     WITNESS
the facsimile signature of the proper officers of the

      Company
and its corporate seal. Dated as of ____________, _____.

      


      


      


                                            B-2

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      


      Attest:                                      SCOLR,
INC.

      


      


      ________________________________             By:   _____________________________

      


      Countersigned:

      


      OTR,
Inc.,

      Rights
Agent

      


      


      By:   __________________________

            Authorized
Signature

      


      


      


                                            B-3

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      


                          Form
of Reverse Side of Right Certificate

      


                                     FORM
OF ASSIGNMENT

               (To
be executed by the registered holder if such holder desires

                            to
transfer the Right Certificate.)

      


                     FOR
VALUE RECEIVED ___________________________________ hereby

      sells,
assigns and transfers unto
___________________________________________

      __________________________________________________________________

                        (Please
print name and address of transferee)

      


      this
Right Certificate, together with all right, title and interest therein,
and

      does
hereby irrevocably constitute and appoint
_______________________________,

      Attorney,
to transfer the within Right Certificate on the books of the

      within-named
Company, with full power of substitution.

      


      Date:
______________ __, _______

      


      


                                                    __________________________________

                                                                   Signature

      


      Signature
Guaranteed:

      


                     Signatures
should be guaranteed by an eligible guarantor

      institution
(bank, stock broker or savings and loan association with membership

      in an
approved signature medallion program).

      


      _________________________________________________

      


      


                     The
undersigned hereby certifies that the Rights evidenced by

      this
Right Certificate are not beneficially owned by an Acquiring Person or
an

      Affiliate
or Associate thereof (as defined in the Rights Agreement).

      


                                                    __________________________________

                                                                   Signature

      


      _________________________________________________

      


      


      


                                            B-4

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      


                   Form
of Reverse Side of Right Certificate -- continued

      


                                FORM
OF ELECTION TO PURCHASE

            (To
be executed if holder desires to exercise the Right Certificate.)

      


      To:  SCOLR,
INC.:

      


                     The
undersigned hereby irrevocably elects to exercise

      _______________
Rights represented by this Right Certificate to purchase the

      Preferred
Shares issuable upon the exercise of such Rights and requests that

      certificates
for such Preferred Shares be issued in the name of:

      


      Please
insert social security

      or other
identifying number

      


      


      _______________________________________________________________________________

                               (Please
print name and address)

      


      _______________________________________________________________________________

      


      If such
number of Rights shall not be all the Rights evidenced by this
Right

      Certificate,
a new Right Certificate for the balance remaining of such Rights

      shall be
registered in the name of and delivered to:

      


      Please
insert social security

      or other
identifying number

      


      


      _______________________________________________________________________________

                               (Please
print name and address)

      


      _______________________________________________________________________________

      


      


      


      Dated:
_____________ __, ______

      


                                                     ________________________________

                                                                  Signature

      


      Signature
Guaranteed:

      


                     Signatures
should be guaranteed by an eligible guarantor

      institution
(bank, stock broker or savings and loan association with membership

      in an
approved signature medallion program).

      


      


      


                                            B-5

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      


                   Form
of Reverse Side of Right Certificate -- continued

      


      _______________________________

      


                     The
undersigned hereby certifies that the Rights evidenced by

      this
Right Certificate are not beneficially owned by an Acquiring Person or
an

      Affiliate
or Associate thereof (as defined in the Rights Agreement).

      


                                                       ______________________________

                                                                  Signature

      


      ________________________________

      


                                           NOTICE

      


                     The
signature in the foregoing Forms of Assignment and Election

      must
conform to the name as written upon the face of this Right Certificate
in

      every
particular, without alteration or enlargement or any change
whatsoever.

      


                     In
the event the certification set forth above in the Form of

      Assignment
or the Form of Election to Purchase, as the case may be, is not

      completed,
the Company and the Rights Agent will deem the beneficial owner of

      the
Rights evidenced by this Right Certificate to be an Acquiring Person or
an

      Affiliate
or Associate thereof (as defined in the Rights Agreement) and such

      Assignment
or Election to Purchase will not be honored.

      


      


      


      


                                            B-6

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


                                                                             EXHIBIT
C

      


                                SUMMARY
OF RIGHTS TO PURCHASE

                                      PREFERRED
SHARES

      


                     On
November 1, 2002, the Board of Directors of SCOLR, Inc.

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

      "Right")
for each outstanding share of Common Stock, par value $0.001 per
share

      (the
"Common Shares") outstanding on November 12, 2002 (the "Record
Date")

      to the
stockholders of record on that date. Each Right entitles the
registered

      holder to
purchase from the Company one one-thousandth of a share of Series A

      Junior
Participating Preferred Stock, par value $0.01 per share (the
"Preferred

      Shares"),
of the Company, at a price of $15.00 per one one-thousandth of a

      Preferred
Share (the "Purchase Price"), subject to adjustment. The
description

      and terms
of the Rights are set forth in a Rights Agreement (the "Rights

      Agreement")
between the Company and OTR, Inc., as Rights Agent (the "Rights

      Agent").

      


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

      announcement
that a person or group of affiliated or associated persons (an

      "Acquiring
Person") has acquired beneficial ownership of 15% or more of the

      outstanding
Common Shares or (ii) 10 business days (or such later date as may
be

      determined
by action of the Board of Directors prior to such time as any
Person

      becomes
an Acquiring Person) following the commencement of, or announcement
of

      an
intention to make, a tender offer or exchange offer the consummation of
which

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

      the
outstanding Common Shares (the earlier of such dates being called
the

      "Distribution
Date"), the Rights will be evidenced, with respect to any of the

      Common
Share certificates outstanding as of the Record Date, by such
Common

      Share
certificate with a copy of this Summary of Rights attached thereto.

      


                     The
Rights Agreement provides that, until the Distribution Date,

      the
Rights will be transferred with and only with the Common Shares. Until
the

      Distribution
Date (or earlier redemption or expiration of the Rights), new

      Common
Share certificates issued after the Record Date or upon transfer or
new

      issuance
of Common Shares will contain a notation incorporating the Rights

      Agreement
by reference. Until the Distribution Date (or earlier redemption or

      expiration
of the Rights), the surrender for transfer of any certificates for

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

      copy of
this Summary of Rights being attached thereto, will also constitute
the

      transfer
of the Rights associated with the Common Shares represented by such

      certificate.
As soon as practicable following the Distribution Date, separate

      certificates
evidencing the Rights ("Right Certificates") will be mailed to

      holders
of record of the Common Shares as of the Close of Business on the

      Distribution
Date and such separate Right Certificates alone will evidence the

      Rights.

      


                     The
Rights are not exercisable until the Distribution Date. The

      Rights
will expire on November 1, 2012 (the "Final Expiration Date"),

      unless
the Final Expiration Date is extended or unless the Rights are
earlier

      redeemed
by the Company, in each case, as described below.

      


      


      


      


                                            C-1

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      


                     The
Purchase Price payable, and the number of Preferred Shares or

      other
securities or property issuable, upon exercise of the Rights are
subject

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

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

      Shares,
(ii) upon the grant to holders of the Preferred Shares of certain
rights

      or
warrants to subscribe for or purchase Preferred Shares at a price,
or

      securities
convertible into Preferred Shares with a conversion price, less
than

      the then
current market price of the Preferred Shares or (iii) upon the

      distribution
to holders of the Preferred Shares of evidences of indebtedness or

      assets
(excluding regular periodic cash dividends paid out of earnings or

      retained
earnings or dividends payable in Preferred Shares) or of
subscription

      rights or
warrants (other than those referred to above).

      


                     The
number of outstanding Rights and the number of one

      one-thousandths
of a Preferred Share issuable upon exercise of each Right are

      also
subject to adjustment in the event of a stock split of the Common Shares
or

      a stock
dividend on the Common Shares payable in Common Shares or
subdivisions,

      consolidations
or combinations of the Common Shares occurring, in any such case,

      prior to
the Distribution Date.

      


                     Preferred
Shares purchasable upon exercise of the Rights will not

      be
redeemable. Each Preferred Share will be entitled to a quarterly
dividend

      payment
of 1000 times the dividend declared per Common Share. In the event
of

      liquidation,
the holders of the Preferred Shares will be entitled to an

      aggregate
payment of 1000 times the aggregate payment made per Common Share.

      Each
Preferred Share will have 1000 votes, voting together with the
Common

      Shares.
In the event of any merger, consolidation or other transaction in
which

      Common
Shares are exchanged, each Preferred Share will be entitled to
receive

      1000
times the amount received per Common Share. These rights are protected
by

      customary
antidilution provisions.

      


                     Because
of the nature of the Preferred Shares' dividend,

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

      Preferred
Share purchasable upon exercise of each Right should approximate
the

      value of
one Common Share.

      


                     From
and after the time any Person becomes an Acquiring Person,

      if the
Rights evidenced by this Right Certificate are or were at any time on
or

      after the
earlier of (x) the date of such event and (y) the Distribution Date

      (as such
term is defined in the Rights Agreement) acquired or beneficially
owned

      by an
Acquiring Person or an Associate or Affiliate of an Acquiring Person
(as

      such
terms are defined in the Rights Agreement), such Rights shall become
void,

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

      Rights.

      


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

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

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

      power are
sold, proper provision will be made so that each holder of a Right

      will
thereafter have the right to receive, upon the exercise thereof at the
then

      current
exercise price of the Right, that number of shares of common stock
of

      the
acquiring company which at the time of such transaction will have a
market

      value of
two times the exercise price of the Right. In the event that any
person

      becomes
an Acquiring Person, proper provision shall be made so that each
holder

      of a
Right, other than Rights beneficially owned by the Acquiring Person and
its

      Affiliates
and Associates (which will thereafter be void), will thereafter
have

      the right
to receive upon exercise that number of Common Shares having a
market

      value
of

      


      


      


                                            C-2

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      two times
the exercise price of the Right. If the Company does not have

      sufficient
Common Shares to satisfy such obligation to issue Common Shares, or

      if the
Board of Directors so elects, the Company shall deliver upon payment
of

      the
exercise price of a Right an amount of cash or securities equivalent
in

      value to
the Common Shares issuable upon exercise of a Right; provided that,
if

      the
Company fails to meet such obligation within 30 days following the date
a

      Person
becomes an Acquiring Person, the Company must deliver, upon exercise of
a

      Right but
without requiring payment of the exercise price then in effect,
Common

      Shares
(to the extent available) and cash equal in value to the difference

      between
the value of the Common Shares otherwise issuable upon the exercise of
a

      Right and
the exercise price then in effect. The Board of Directors may
extend

      the
30-day period described above for up to an additional 60 days to permit
the

      taking of
action that may be necessary to authorize sufficient additional
Common

      Shares to
permit the issuance of Common Shares upon the exercise in full of
the

      Rights.

      


                     At
any time after any Person becomes an Acquiring Person and

      prior to
the acquisition by any person or group of a majority of the
outstanding

      Common
Shares, the Board of Directors of the Company may exchange the
Rights

      (other
than Rights owned by such person or group which have become void),
in

      whole or
in part, at an exchange ratio of one Common Share per Right (subject
to

      adjustment).

      


                     With
certain exceptions, no adjustment in the Purchase Price will

      be
required until cumulative adjustments require an adjustment of at least 1%
in

      such
Purchase Price. No fractional Preferred Shares will be issued (other
than

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

      Share,
which may, at the election of the Company, be evidenced by
depositary

      receipts)
and in lieu thereof, an adjustment in cash will be made based on
the

      market
price of the Preferred Shares on the last trading day prior to the
date

      of
exercise.

      


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

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

      but not
in part, at a price of $0.001 per Right (the "Redemption Price").
The

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

      with such
conditions as the Board of Directors in its sole discretion may

      establish.
Immediately upon any redemption of the Rights, the right to
exercise

      the
Rights will terminate and the only right of the holders of Rights will be
to

      receive
the Redemption Price.

      


                     The
terms of the Rights may be amended by the Board of Directors

      of the
Company without the consent of the holders of the Rights, except
that

      from and
after such time as any person becomes an Acquiring Person no such

      amendment
may adversely affect the interests of the holders of the Rights
(other

      than the
Acquiring Person and its Affiliates and Associates).

      


                     Until
a Right is exercised, the holder thereof, as such, will

      have no
rights as a stockholder of the Company, including, without
limitation,

      the right
to vote or to receive dividends.

      


                     A
copy of the Rights Agreement has been filed with the Securities

      and
Exchange Commission as an Exhibit to a Registration Statement on Form
8-A

      dated
November 6, 2002. A copy of the Rights Agreement is available free
of

      charge
from the Company. This summary

      


                                            C-3

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      


      description
of the Rights does not purport to be complete and is qualified in

      its
entirety by reference to the Rights Agreement, which is hereby
incorporated

      herein by
reference.

      


      


                                            C-4