exhibit_4-4.htm


    
      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

        


        


        
          
            
            

          

          
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        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:

        


        


        


        
          
            
            

          

          
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                          (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

        


        
          
            
            

          

          
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        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.

        


        


        
          
            
            

          

          
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                       "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

        


        


        
          
            
            

          

          
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            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

        


        


        
          
            
            

          

          
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        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

        


        
          
            
            

          

          
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        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.

        


                       (c)
Certificates for Common Shares which become outstanding

        (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.


        


        
          
            
            

          

          
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                       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

        


        
          
            
            

          

          
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        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

        


        
          
            
            

          

          
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        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

        


        


        
          
            
            

          

          
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        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.

        


                       (c)
Upon receipt of a Right Certificate representing exercisable

        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

        


        
          
            
            

          

          
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        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

        


        
          
            
            

          

          
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        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.

        


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

        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.

        


        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

        


                       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

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

        


        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

        


        


        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

        


        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

        


        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

        


        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,

        


        


        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

        

        


        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

        


        


        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

        

         

        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.

        


                       (c)
In case the Company shall fix a record date for the making of

        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;

        


        


        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

        

        


        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

        


        


        
          
            
            

          

          
            21

            
              

            

          

          
            
            

          

        

        


         

        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.

        


        
          
            
            

          

          
            22

            
              

            

          

          
            
            

          

        

        


                       (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

        


        


        
          
            
            

          

          
            23

            
              

            

          

          
            
            

          

        

        


        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

        


        


        
          
            
            

          

          
            24

            
              

            

          

          
            
            

          

        

        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

        


        
          
            
            

          

          
            25

            
              

            

          

          
            
            

          

        

         

        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 bill
or

        other
appropriate instrument evidencing such holder's right to receive
such

        additional
shares upon the occurrence of the event requiring such adjustment.

        


                       (m)
Anything in this Section 11 to the contrary notwithstanding,

        the
Company shall be entitled to make such 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,

        


        
          
            
            

          

          
            26

            
              

            

          

          
            
            

          

        

        


        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

        


        
          
            
            

          

          
            27

            
              

            

          

          
            
            

          

        

        


        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

        


        
          
            
            

          

          
            28

            
              

            

          

          
            
            

          

        

        


        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

        


        
          
            
            

          

          
            29

            
              

            

          

          
            
            

          

        

        


        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,

        


        
          
            
            

          

          
            30

            
              

            

          

          
            
            

          

        

        


        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.

        


                       (c)
The holder of a Right by the acceptance of the Right

        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

        


        


        
          
            
            

          

          
            31

            
              

            

          

          
            
            

          

        

         

        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

        


                       (c)
the Company and the Rights Agent may deem and treat the

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

        the
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.

        


        
          
            
            

          

          
            32

            
              

            

          

          
            
            

          

        

        


        


                       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.

        


        
          
            
            

          

          
            33

            
              

            

          

          
            
            

          

        

        


        


        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

        


        


        
          
            
            

          

          
            34

            
              

            

          

          
            
            

          

        

        


        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

        


        


        
          
            
            

          

          
            35

            
              

            

          

          
            
            

          

        

        


        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.

        


                       (c)
The Rights Agent shall be liable hereunder only for its own

        negligence,
bad faith or willful misconduct.

        


                       (d)
The Rights Agent shall not be liable for or by reason of any

        of the
statements of fact or recitals contained in this Agreement or in
the

        Right
Certificates (except 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

        


        
          
            
            

          

          
            36

            
              

            

          

          
            
            

          

        

        


        


        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

        


        


        
          
            
            

          

          
            37

            
              

            

          

          
            
            

          

        

        


        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

        


        
          
            
            

          

          
            38

            
              

            

          

          
            
            

          

        

        


        


        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

        


        


        
          
            
            

          

          
            39

            
              

            

          

          
            
            

          

        

        


        


        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.

        


        
          
            
            

          

          
            40

            
              

            

          

          
            
            

          

        

        


                       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

        


        


        
          
            
            

          

          
            41

            
              

            

          

          
            
            

          

        

        


        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

        


        


        
          
            
            

          

          
            42

            
              

            

          

          
            
            

          

        

        


                       


        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.

        


                       (c)
In any exchange pursuant to this Section 24, the Company, at

        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

        


        
          
            
            

          

          
            43

            
              

            

          

          
            
            

          

        

        


        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

        


        


        
          
            
            

          

          
            44

            
              

            

          

          
            
            

          

        

        


                      

        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.

                       8340
154th Avenue NE

                       Redmond,
Washington 98052-3864

        


        


                       Attention:
Secretary

        


        


        
          
            
            

          

          
            45

            
              

            

          

          
            
            

          

        

         

                       Copy
to:

        


                       Garvey
Schubert Barer

                       1191
Second Avenue, Suite 1800

                       Seattle,
Washington 98101

        


                       Attention:
Alan M. Mitchel

        


        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.

                       1000
SW Broadway, Suite 920

                       Portland,
Oregon 97205

        


                       Attention:  Robert
E. Roach

        


        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

        


        
          
            
            

          

          
            46

            
              

            

          

          
            
            

          

        

        


        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).

        


        


        
          
            
            

          

          
            47

            
              

            

          

          
            
            

          

        

        


                       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

        


        


        
          
            
            

          

          
            48

            
              

            

          

          
            
            

          

        

        


        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.

        


        


        
          
            
            

          

          
            49

            
              

            

          

          
            
            

          

        

         

        


                       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/ STEVE
MOGER                        
By: /s/ DAVID T. HOWARD

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

        Name:
Steve
Moger                       Name:
David T. Howard

        Title:
Chief Financial
Officer         Title: President,
Chief

                                                                            
Executive Officer

        


        


        Attest:                                     OTR,
INC.,

                                                    as
Rights Agent

        


        


        /s/
BRITNEY
KALBERER             
By: /s/ ROBERT E. ROACH

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

        Name:
Britney
Kalberer                 
Name: Robert E. Roach

        Title:
Marketing
Director               Title:
Vice President

         

        
          
            
            

          

          
            50

            
              

            

          

          
            
            

          

        

        
          


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

          


          


                                             SCOLR,
INC.

          


                                                 and

          


                                              OTR,
INC.

          


                                            Rights
Agent

          


                                          Rights
Agreement

          


                                    Dated
as of November 1, 2002

          


          


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                                           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