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                                                                      EXHIBIT 2


                         [CHAD THERAPEUTICS LETTERHEAD]



         Contact: Earl L. Yager             Subject: Share Purchase
                  Senior Vice President              Rights Plan

                          CHAD THERAPEUTICS' ANNOUNCES
                        SHAREHOLDER PURCHASE RIGHTS PLAN

CHATSWORTH, California, April 24, 1997

Chad Therapeutics, Inc. (ASE-CTU), producer and distributor of oxygen conserving
devices and portable oxygen systems used by pulmonary patients who need
supplementary oxygen, today announced that its Board of Directors unanimously
adopted a Share Purchase Rights Plan. Under the Plan, Rights to purchase Common
Shares of the company will be distributed as a dividend at the rate of one Right
for each Chad Common Share held of record as of the close of business on May 5,
1997.

The Rights are not being distributed in response to any effort to acquire
control of Chad, and the Board is not aware of any such effort. The Plan is
being implemented to protect Chad's shareholders in the event that any effort to
acquire control occurs.

Each Right will entitle holders of Chad Common Shares to buy one Common Share at
an exercise price of $25.00. The Rights will be exercisable, and will detach
from the Common Shares, only if a person or group acquires 15 percent or more of
Chad's outstanding Common Shares, or were to announce a tender or exchange offer
that, if consummated, would result in a person or group beneficially owning 15
percent or more of Chad's Common Shares. If such an event occurs without prior
approval of the Disinterested Board (the Company's outside Directors), each
Right would entitle the holder (other than such acquiring person or group) to
purchase Chad Common Shares (or, in certain circumstances, Common Shares of the
acquiring person or group) with a value of twice the exercise price of the
Rights, Chad will be entitled to redeem the Rights at U.S. $0.001 per right at
any time before the close of business on the tenth day after the Rights become
exercisable. The Rights will expire at the close of business on May 5, 2007.

Complete details of the Rights Plan are outlined in materials that will be
mailed to all shareholders.

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