Exhibit 4.1 — Rights Agreement







EXHIBIT 4.1
















RIGHTS
AGREEMENT





Dated as
of June 1, 2007





between






EDEN
BIOSCIENCE CORPORATION





and






MELLON
INVESTOR SERVICES LLC,



as Rights
Agent













CONTENTS



	SECTION 1. CERTAIN DEFINITIONS 	1

	 	

	SECTION 2. APPOINTMENT OF RIGHTS AGENT 	8

	 	

	SECTION 3. ISSUANCE OF RIGHTS AND RIGHTS CERTIFICATES 	8

	 	

	SECTION 4. FORM OF RIGHTS CERTIFICATES 	10

	 	

	SECTION 5. EXECUTION, COUNTERSIGNATURE AND REGISTRATION 

    	10

	 	

	SECTION 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES; LOST, STOLEN, DESTROYED OR MUTILATED RIGHTS
CERTIFICATES; UNCERTIFICATED RIGHTS 	11

	 	

	SECTION 7. EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS 	12

	 	

	SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES 	14

	 	

	SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES 	15

	 	

	SECTION 10. PREFERRED SHARES RECORD DATE 	16

	 	

	SECTION 11. ADJUSTMENTS IN RIGHTS AFTER THERE IS AN ACQUIRING PERSON; EXCHANGE OF RIGHTS FOR SHARES; BUSINESS COMBINATIONS	16

	 	

	SECTION 12. CERTAIN ADJUSTMENTS 	20

	 	

	SECTION 13. CERTIFICATE OF ADJUSTMENT	21

	 	

	SECTION 14. ADDITIONAL COVENANTS	22

	 	

	SECTION 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES 	22

	 	

	SECTION 16. RIGHTS OF ACTION	23

	 	

	SECTION 17. AGREEMENT OF RIGHTS HOLDERS 	24

	 	

	SECTION 18. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER	25

	 	

	SECTION 19. CONCERNING THE RIGHTS AGENT 	25

	 	

	SECTION 20. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT 	26

	 	

	SECTION 21. RIGHTS AND DUTIES OF RIGHTS AGENT	27

	 	

	SECTION 22. CHANGE OF RIGHTS AGENT	29

	 	

	SECTION 23. ISSUANCE OF ADDITIONAL RIGHTS AND RIGHTS CERTIFICATES	30

	 	

	SECTION 24. REDEMPTION AND TERMINATION	31

	 	




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	SECTION 25. NOTICES	31

	 	

	SECTION 26. SUPPLEMENTS AND AMENDMENTS	32

	 	

	SECTION 27. SUCCESSORS	33

	 	

	SECTION 28. BENEFITS OF THIS RIGHTS AGREEMENT; DETERMINATIONS AND ACTIONS BY THE COMPANY’S BOARD OF DIRECTORS	33

	 	

	SECTION 29. SEVERABILITY	34

	 	

	SECTION 30. GOVERNING LAW	34

	 	

	SECTION 31. COUNTERPARTS; EFFECTIVENESS	34

	 	

	SECTION 32. DESCRIPTIVE HEADINGS	34









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RIGHTS
AGREEMENT




RIGHTS
AGREEMENT, dated as of June 1, 2007 between Eden Bioscience Corporation, a Washington
corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey limited
liability company, as Rights Agent (the “Rights Agent”).



The
Board of Directors of the Company (the “Board of Directors”) has authorized and declared
a dividend of one Right (as hereinafter defined) for each share of common stock, par
value $0.0025 per share, of the Company (the “Common Stock”) outstanding at the Close of
Business (as hereinafter defined) on June 1, 2007 (the “Record Date”).  The Board of
Directors has further authorized the issuance of one Right (as such number may be
hereinafter adjusted pursuant to the provisions of this Rights Agreement) with respect to
each share of Common Stock that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Expiration Date (as such
terms are hereinafter defined); provided, however, that the Company may issue Rights with
respect to shares of Common Stock that shall become outstanding after the Distribution
Date and prior to the earlier of the Redemption Date and the Expiration Date in
accordance with the provisions of Section 23 hereof.  Each Right shall initially
represent the right to purchase one one-hundredth (1/100) of a share of Series R
Participating Cumulative Preferred Stock, without par value, of the Company (the
“Preferred Shares”), having the powers, rights and preferences set forth in the
Certificate of Designation (as hereinafter defined) attached as Exhibit A hereto.



Accordingly,
in consideration of the premises and the mutual agreements set forth in this Rights
Agreement, the Company and the Rights Agent hereby agree as follows:



SECTION
1.        CERTAIN DEFINITIONS





For
purposes of this Rights Agreement, the following terms have the meanings indicated:



“Acquiring
Person” shall mean any Person (as hereinafter defined) who or which, alone or together
with all Affiliates and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as hereinafter defined) of 5%, or in the case of
any person or group (including any affiliates or associates of such person or group) that
owned beneficially more than 5% of the outstanding Common Stock on the Record Date, 13%
(such 5% or 13% being hereafter referred to as the “Requisite Percentage”) or more of the
Common Shares (as hereinafter defined) then outstanding, but shall not include (a) SF
Holding Corp. and its successors and assigns as long as SF Holding Corp. and its
successors and assigns does not own more than 18% of the Common Shares at any one time
outstanding, (b) the Company, any Subsidiary (as hereinafter defined) of the Company, any
employee benefit or compensation plan of the Company or of any of its Subsidiaries, or
any Person holding Common Shares for or pursuant to the terms of any such employee
benefit or compensation plan or (c) any Person who has become and is the Beneficial Owner
of the 






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Requisite
Percentage, or more of the Common Shares outstanding at the time solely as the result of
(i) a change in the aggregate number of Common Shares outstanding since the last date on
which such Person acquired Beneficial Ownership of any Common Shares, (ii) the
acquisition by such Person or one or more of its Affiliates or Associates of Beneficial
Ownership of additional Common Shares if such acquisition was made in the good faith
belief that such acquisition would not (A) cause the Beneficial Ownership by such Person,
together with its Affiliates and Associates, to equal or exceed the Requisite Percentage
of the Common Shares outstanding at the time of such acquisition and such good faith
belief was based on the good faith reliance on information contained in publicly filed
reports or documents of the Company that are inaccurate or out-of-date or (B) otherwise
cause a Distribution Date or the adjustment provided for in Section 11(a) hereof to occur
or (iii) the acquisition by such Person or one or more of its Affiliates or Associates of
Beneficial Ownership of additional Common Shares if the Board of Directors determines
that such acquisition was made in good faith without the knowledge by such Person or
Affiliates or Associates that such Person would thereby become an Acquiring Person (which
determination of the Board of Directors of the Company shall be conclusive and binding on
such Person, the Rights Agent, the holders of the Rights and all other Persons).
Notwithstanding clause (b)(ii) or (b)(iii) of the prior sentence, if any Person that is
not an Acquiring Person due to such clause (b)(ii) or (b)(iii) does not reduce its
percentage of Beneficial Ownership of Common Shares to less than the Requisite Percentage
by the Close of Business on the tenth calendar day after notice from the Company (the
date of notice being the first day) that such Person’s Beneficial Ownership of Common
Shares would make it an Acquiring Person, such Person shall, at the end of such ten
calendar day period, become an Acquiring Person (and such clause (b)(ii) or (b)(iii)
shall no longer apply to such Person).  For purposes of this definition, the
determination whether any Person acted in “good faith” shall be conclusively determined
by the Board of Directors.



“Affiliate”
and “Associate,” when used with reference to any Person, shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act (as hereinafter defined), as in effect on the date of this Rights
Agreement.



A
Person shall be deemed to be the “Beneficial Owner” of, to “Beneficially Own,” and to
have “Beneficial Ownership” of, any securities:



(a)
     that such Person or any of such Person’s Affiliates or Associates is deemed to
“Beneficially Own” within the meaning of Rule 13d-3 of the General Rules and Regulations
under the Exchange Act, as in effect on the date of this Rights Agreement;



(b)
     that such Person or any of such Person’s Affiliates or Associates has (i) the right
to acquire (whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (written or oral), 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, to Beneficially Own, or to have Beneficial Ownership of,
any 





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securities
tendered pursuant to a tender or exchange offer made 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 thereunder or (ii) the right to vote pursuant to any agreement,
arrangement or understanding (written or oral); provided, however, that a Person shall
not be deemed to be the Beneficial Owner of, to Beneficially Own, or to have Beneficial
Ownership of, any security if (A) the agreement, arrangement or understanding (written or
oral) to vote such security 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 under the Exchange Act and (B) the
beneficial ownership of such security is not also then reportable on Schedule 13D under
the Exchange Act (or any comparable or successor report); or



(c)
     that 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 (written or oral) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in clause (b)(ii) of this
definition) or disposing of any securities of the Company.



Notwithstanding
the foregoing, nothing contained in this definition shall cause a Person ordinarily
engaged in business as an underwriter of securities to be the “Beneficial Owner” of, or
to “Beneficially Own,” any securities acquired in a bona fide firm commitment
underwriting pursuant to an underwriting agreement with the Company.



Notwithstanding
anything in this definition 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.



“Book
Value,” when used with reference to Common Shares issued by any Person, shall mean the
amount of such Person’s equity applicable to each Common Share, determined (a) in
accordance with generally accepted accounting principles in effect on the date as of
which such Book Value is to be determined, (b) using all the consolidated assets and all
the consolidated liabilities of such Person on the date as of which such Book Value is to
be determined, except that no value shall be included in such assets for goodwill arising
from consummation of a business combination, and (c) after giving effect to (i) the
exercise of all rights, options and warrants to purchase such Common Shares (other than
the Rights), and the conversion of all securities convertible into such Common Shares, at
an exercise or conversion price per Common Share that is less than such Book Value before
the exercise or conversion (whether or not exercisability or convertibility is
conditioned upon occurrence of a future event), (ii) all dividends and other
distributions on the capital stock of such Person declared prior to the date as of which
such Book Value is to be determined and to be paid or made after such date, and (iii) any
other agreement, arrangement or understanding (written or oral), transaction or other
action prior to the date as of which such Book Value is to be determined that would have
the effect of thereafter reducing such Book Value.




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“Business
Combination” shall have the meaning set forth in Section 11(c)(i) hereof.



“Business
Day” shall mean any day other than a Saturday, Sunday or a day on which banking
institutions in New Jersey or the state of Washington, are authorized or obligated by law
or executive order to close.



“Certificate
of Designation” shall mean the Certificate of Designation of Series R Participating
Cumulative Preferred Stock setting forth the powers, preferences, rights, qualifications,
limitations and restrictions of such series of Preferred Stock of the Company, a form of
which is attached to this Rights Agreement as Exhibit A.



“Close
of Business” on any given date shall mean 5:00 p.m., Seattle, Washington time, on such
date; provided, however, that if such date is not a Business Day, “Close of Business”
shall mean 5:00 p.m., Seattle, Washington time, on the next succeeding Business Day.



“Common
Shares,” when used with reference to the Company prior to a Business Combination, shall
mean the shares of Common Stock of the Company or any other shares of capital stock of
the Company into which the Common Stock shall be reclassified or changed.  “Common
Shares,” when used with reference to any Person (other than the Company prior to a
Business Combination), shall mean shares of capital stock of such Person (if such Person
is a corporation) of any class or series, or units of equity interests in such Person (if
such Person is not a corporation) of any class or series, the terms of which (i) do not
limit (as a maximum amount and not merely in proportional terms) the amount of dividends
or income payable or distributable on such class or series or the amount of assets
distributable on such class or series upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person and (ii) do not provide that such class or
series is subject to redemption at the option of such Person, or any shares of capital
stock or units of equity interests into which the foregoing shall be reclassified or
changed; provided, however, that, if at any time there shall be more than one such class
or series of capital stock or equity interests of such Person, “Common Shares” of such
Person shall include all such classes and series substantially in the proportion of the
total number of shares or other units of each such class or series outstanding at such
time.



“Common
Stock” shall have the meaning set forth in the second paragraph of this Rights Agreement.



“Company”
shall have the meaning set forth in the introductory paragraph of this Rights Agreement;
      provided, however, that if there is a Business Combination, “Company” shall have the
meaning set forth in Section 11(c)(iii) hereof.



“control”
with respect to any Person shall mean the power to direct the management and policies of
such Person, directly or indirectly, by or through stock ownership, agency or otherwise,
or pursuant to or in connection with an agreement, arrangement or understanding (written
or oral) with one or more other Persons by or through stock ownership, agency or
otherwise.  The term “controlled” shall have meaning correlative to the foregoing.





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“Distribution
Date” shall have the meaning set forth in Section 3(b).



“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended and in effect on the date
in question, unless otherwise specifically provided in this Rights Agreement.



“Exchange
Consideration” shall have the meaning set forth in Section 11(b)(i).



“Expiration
Date” shall have the meaning set forth in Section 7(a) hereof.



“Formula
Number” shall have the meaning set forth in the Certificate of Designation.



“Major
Part,” when used with reference to the assets of the Company and its Subsidiaries as of
any date, shall mean assets (a) having a fair market value aggregating 50% or more of the
total fair market value of all the assets of the Company and its Subsidiaries (taken as a
whole) as of the date in question, (b) accounting for 50% or more of the total value (net
of depreciation and amortization) of all the assets of the Company and its Subsidiaries
(taken as a whole) as would be shown on a consolidated or combined balance sheet of the
Company and its Subsidiaries as of the date in question, prepared in accordance with
generally accepted accounting principles then in effect, or (c) accounting for 50% or
more of the total amount of net income or revenues of the Company and its Subsidiaries
(taken as a whole) as would be shown on or derived from a consolidated or combined
statement of income of the Company and its Subsidiaries for the period of 12 months
ending on the last day of the Company’s monthly accounting period next preceding the date
in question, prepared in accordance with generally accepted accounting principles then in
effect.



“Market
Value,” when used with reference to any securities on any date, shall mean the average of
the daily per share closing prices of such securities for the period that is the shorter
of (a) 30 consecutive Trading Days (as hereinafter defined) immediately prior to (but not
including) the date in question and (b) the number of consecutive Trading Days beginning
on the Trading Day immediately after the date of the first public announcement of the
event requiring a determination of the Market Value and ending on the Trading Day
immediately prior to but not including the record date of such event; provided, however,
that, in the event that the Market Value of such securities is to be determined in whole
or in part during a period following the announcement by the issuer of such securities of
any action of the type described in Section 12(a) hereof that would require an adjustment
thereunder, then, and in each such case, the Market Value of such securities shall be
appropriately adjusted to reflect the effect of such action on the market price of such
securities.  The closing price for each Trading Day shall be the closing price quoted on
the principal United States securities exchange registered under the Exchange Act (or any
recognized foreign stock exchange) on which such securities are listed, or if such
securities are not listed on any such exchange, the average of the closing bid and asked
quotations with respect to a share of such securities on 





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the Nasdaq
Stock Market or such other system then in use or, if no such quotations are available,
the average of the closing bid and asked prices as furnished by a professional market
maker making a market in such securities selected by the Company’s Board of Directors.
 If on any such Trading Day no market maker is making a market in such securities, the
closing price of such securities on such Trading Day shall be deemed to be the fair value
of such securities as determined in good faith by the Company’s Board of Directors (whose
determination shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent, the holders of Rights and all other Persons); provided,
however, that for the purpose of determining the closing price of the Preferred Shares
for any Trading Day on which there is no public market for the Preferred Shares or there
is no such market maker for the Preferred Shares, the closing price on such Trading Day
shall be deemed to be the Formula Number times the closing price of the Common Stock on
such Trading Day.



“Person”
shall mean an individual, firm, corporation, partnership, limited liability company,
joint venture, association, trust, unincorporated organization or other entity and shall
include any successor (by merger or otherwise) thereof or thereto.



“Preferred
Shares” shall have the meaning set forth in the second paragraph of this Rights
Agreement.  Any reference in this Rights Agreement to Preferred Shares shall be deemed to
include any authorized fraction of a Preferred Share, unless the context otherwise
requires.



“Principal
Party” shall mean the Surviving Person (as hereinafter defined) in a Business
Combination; provided, however, that if such Surviving Person is a direct or indirect
Subsidiary of any other Person, “Principal Party” shall mean the Person which is the
ultimate parent of such Surviving Person and which is not itself a Subsidiary of another
Person.  In the event ultimate control of such Surviving Person is shared by two or more
Persons, “Principal Party” shall mean that Person which is immediately controlled by such
two or more Persons.



“Purchase
Price” with respect to each Right shall mean $12.00, subject to adjustment as provided
herein, and shall be payable in lawful money of the United States of America.  All
references herein to the Purchase Price shall mean the Purchase Price as in effect at the
time in question.



“Record
Date” shall have the meaning set forth in the second paragraph of this Rights Agreement.



“Redemption
Date” shall have the meaning set forth in Section 24(a) hereof.



“Redemption
Price” with respect to each Right shall mean $0.0025, as such amount may from time to
time be adjusted in accordance with Section 12 hereof.  All references in this Rights
Agreement to the Redemption Price shall mean the Redemption Price as in effect at the
time in question.



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“Registered
Common Shares” shall mean Common Shares that are, as of the date of consummation of a
Business Combination, and have continuously been for the 12 months immediately preceding
such date, registered under Section 12 of the Exchange Act.



“Right”
shall mean the right to purchase Preferred Shares (or other securities) as provided in
this Rights Agreement.



“Rights
Agent” shall (a) have the meaning set forth in the introductory paragraph of this Rights
Agreement, (b) mean any successor or replacement to Mellon Investor Services LLC as
provided in Sections 20 and 22, or (c) mean any additional Person appointed pursuant to
Section 2.



“Rights
Certificate” shall mean a certificate evidencing a Right in substantially the form
attached to this Rights Agreement as Exhibit B.



“Securities
Act” shall mean the Securities Act of 1933, as amended and in effect on the date in
question, unless otherwise specifically provided in this Rights Agreement.



“Shares
Acquisition Date” shall mean the first date of public announcement by the Company or an
Acquiring Person that an Acquiring Person has become such.



“Subsidiary”
shall mean a Person, at least a majority of the total outstanding voting power (being the
power under ordinary circumstances and not merely upon the happening of a contingency) to
vote in the election of directors of such Person (if such Person is a corporation) or to
participate in the management and control of such Person (if such Person is not a
corporation) of which is owned, directly or indirectly, by another Person or by one or
more other subsidiaries of such other Person or by such other Person or by one or more
other subsidiaries of such other Person.



“Summary
of Rights” shall mean the Summary of Rights to Purchase Preferred Shares in substantially
the form of Exhibit C attached hereto.



“Surviving
Person” shall mean (a) the Person which is the continuing or surviving Person in a
consolidation or merger specified in Section 11(c)(i)(A) or 11(c)(i)(B) hereof or (b) the
Person to which the Major Part of the assets of the Company and its Subsidiaries is sold,
leased, exchanged or otherwise transferred or disposed of in a transaction specified in
Section 11(c)(i)(C) hereof; provided, however, that if the Major Part of the assets of
the Company and its Subsidiaries is sold, leased, exchanged or otherwise transferred or
disposed of in one or more related transactions specified in Section 11(c)(i)(C) hereof
to more than one Person, the “Surviving Person” in such case shall mean the Person that
acquired assets of the Company and/or its Subsidiaries with the greatest fair market
value in such transaction or transactions.



“Trading
Day” shall mean a day on which the principal national securities exchange (or principal
recognized foreign stock exchange, as the case may be) on which any securities or Rights,
as the case may be, are listed or admitted to trading is open for the transaction of
business or, if the securities or Rights in question are not listed or admitted to
trading on any national securities exchange (or recognized foreign stock exchange, as the
case may be), a Business Day.




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SECTION
2.        APPOINTMENT OF RIGHTS AGENT





The
Company hereby appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions of this Rights Agreement, and the Rights Agent hereby
accepts such appointment.  The Company may from time to time appoint one or more
co-Rights Agents as it may deem necessary or desirable upon ten (10) days’ prior written
notice thereof to the Rights Agent. Notwithstanding the foregoing, the Rights Agent shall
have no duty to supervise, and in no event shall be liable for, the acts or omissions of
any such co-Rights Agent.



SECTION
3.        ISSUANCE OF RIGHTS AND RIGHTS CERTIFICATES





(a)
One Right shall be associated with each share of Common Stock outstanding on the Record
Date, each additional share of Common Stock that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption Date and the
Expiration Date and each additional share of Common Stock with which Rights are issued
after the Distribution Date but prior to the earlier of the Redemption Date and the
Expiration Date as provided in Section 23 hereof; provided, however, that if the number
of outstanding Rights are combined into a smaller number of outstanding Rights pursuant
to Section 12(a) hereof, the appropriate fractional Right determined pursuant to such
Section shall thereafter be associated with each such share of Common Stock.



(b)
Until the earlier of (i) the Close of Business on the tenth Business Day after the Shares
Acquisition Date and (ii) the Close of Business on such date, if any, as may be
designated by the Company’s Board of Directors following the commencement of, or first
public disclosure of an intent to commence, a tender or exchange offer by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any of its Subsidiaries, or any Person holding Common Stock for or pursuant
to the terms of any such employee benefit plan) for outstanding Common Stock, if upon
consummation of such tender or exchange offer such Person could be the Beneficial Owner
of 15% or more of the outstanding Common Stock (the Close of Business on the earlier of
the dates set forth in (i) and (ii) being the “Distribution Date”), (x) the Rights will
be evidenced by the certificates for Common Stock registered in the names of the holders
thereof and not by separate Rights Certificates and (y) the Rights, including the right
to receive Rights Certificates, will be transferable only in connection with the transfer
of Common Stock.  The Company will notify the Rights Agent in writing as promptly as
practicable that a Distribution Date has occurred and, if such notification is given
orally, the Company shall confirm the same in writing on or prior to the next Business
Day.  Until such notice is received by the Rights Agent, the Rights Agent may presume
conclusively for all purposes that the Distribution Date has not occurred.  As soon as
practicable after the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, 





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and the Company
will deliver or cause to be sent by first-class, postage-prepaid mail, to each record
holder of Common Stock as of the Distribution Date, at the address of such holder shown
on the records of the Company, a Rights Certificate evidencing one whole Right for each
share of Common Stock (or for the number of shares of Common Stock with which one whole
Right is then associated if the number of Rights per share of Common Stock held by such
record holder has been adjusted in accordance with the proviso in Section 3(a) hereof).
 If the number of Rights associated with each share of Common Stock has been adjusted in
accordance with the proviso in Section 3(a) hereof, at the time of distributing the
Rights Certificates the Company may make any necessary and appropriate rounding
adjustments so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Right in accordance with Section
15(a) hereof.  The Company will notify the Rights Agent in writing as promptly as
practicable of any such adjustments.  As of and after the Distribution Date, the Rights
will be evidenced solely by such Rights Certificates.



(c)
As soon as practicable, and in any event no later than 30 days after the Record Date, the
Company will send a copy of a Summary of Rights, by first-class, postage-prepaid mail, to
each record holder of Common Stock 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 Stock outstanding as of the Record Date, until the earliest of the
Distribution Date, the Redemption Date and the Expiration Date, (i) 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, and the registered holders of the
Common Stock shall also be the registered holders of the associated Rights, and (ii) the
surrender for transfer of any such certificate, even without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of the Rights associated with
the Common Stock represented thereby.



(d)
Certificates representing Common Stock issued after the Record Date (including, without
limitation, upon transfer or exchange of outstanding Common Stock), but prior to the
earliest of the Distribution Date, the Redemption Date and the Expiration Date, shall
have printed on, written on or otherwise affixed to them substantially the following
legend:



	 	                             This
certificate also evidences and entitles the holder hereof to certain rights as set forth
in          the Rights Agreement dated as of June 1, 2007 as it may be amended or
supplemented from time to time (the “Rights          Agreement”), between Eden Bioscience
Corporation (“Eden”) and Mellon Investor Services LLC (or any successor
         thereto), as Rights Agent (or between Eden and any successor Rights Agent under
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
Eden.  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.  Eden will mail to the holder of this          certificate a copy of
the Rights Agreement without charge after receipt of a written request therefor.  Rights
         Beneficially Owned by Acquiring Persons or their Affiliates or Associates (as
such terms are defined in the Rights          Agreement) and by any subsequent holder of
such Rights are null and void and nontransferable.









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Notwithstanding
the requirements of this paragraph (d), neither the omission of this legend nor the
inclusion of a legend that refers to a rights agreement other than the Rights Agreement
shall affect the enforceability of any part of this Rights Agreement or the rights of any
holder of Rights.



SECTION
4.        FORM OF RIGHTS CERTIFICATES





The
Rights Certificates (and the form of election to purchase and form of assignment to be
printed on the reverse side thereof) shall be in substantially the form set forth as
Exhibit B 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 Rights Agreement and which do not affect the
rights, duties or responsibilities of the Rights Agent, 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 provisions of Sections 7, 11 and 23
hereof, the Rights Certificates, whenever issued, shall be dated as of the Distribution
Date, and on their face shall entitle the holders thereof to purchase such number of
Preferred Shares as shall be set forth therein for the Purchase Price set forth therein,
subject to adjustment from time to time as herein provided.



SECTION
5.        EXECUTION, COUNTERSIGNATURE AND REGISTRATION





(a)
The Rights Certificates shall be executed on behalf of the Company by the Chief Executive
Officer, the President, the Chief Financial Officer, the Treasurer or a Vice President
(whether preceded by any additional title) of the Company, either manually or by
facsimile signature, and shall have affixed thereon the Company’s seal or a facsimile
thereof, if any, which shall be attested by the Secretary, an Assistant Secretary or a
Vice President (whether preceded by any additional title, provided that such Vice
President shall not have also executed the Rights Certificates) of the Company, either
manually or by facsimile signature.  The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless so
countersigned.  In case any officer of the Company who shall have signed any of the
Rights Certificates shall cease to be such an officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company, such
Rights Certificates may nevertheless be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such an officer of the Company; and any
Rights Certificate may be signed on behalf of the Company by any person who, at the
actual date of execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the date of execution of this Rights
Agreement any such person was not such an officer of the Company.



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(b)
Following the Distribution Date and receipt by the Rights Agent of (i) written notice of
the occurrence of the Distribution Date pursuant to Section 3(b), and (ii) all necessary
information requested by the Rights Agent pursuant to Section 3(b), the Rights Agent will
keep or cause to be kept, at its office designated for such purpose, books for
registration and transfer of the Rights Certificates issued under this Rights Agreement.
 Such books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced by each Rights Certificate, the certificate
number of each Rights Certificate and the date of each Rights Certificate.



SECTION
6.        TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES; LOST,
STOLEN, DESTROYED OR MUTILATED RIGHTS CERTIFICATES; UNCERTIFICATED RIGHTS





(a)
Subject to the provisions of Sections 7(e), 11 and 15 hereof, at any time after the
Distribution Date, and at or prior to the Close of Business on the earlier of the
Redemption Date and the Expiration Date, any Rights Certificate or Rights Certificates
(other than Rights Certificates representing Rights that have become null and void
pursuant to Section 7(e) hereof or that have been exchanged pursuant to Section 11(b)
hereof) may be transferred, split up, combined or exchanged for another Rights
Certificate or Rights Certificates entitling the registered holder to purchase a like
number of one one-hundredths of a Preferred Share as the Rights Certificate or Rights
Certificates surrendered then entitled such holder to purchase.  Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the Rights Agent and shall
surrender the Rights Certificate or Rights Certificates to be transferred, split up,
combined or exchanged at the office of the Rights Agent designated for such purpose.  The
Rights Certificates are transferable only on the registry books of the Rights Agent.
 Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any Rights Certificate surrendered for
transfer until the registered holder shall have properly completed and signed the
certification contained in the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
Company or the Rights Agent shall reasonably request.  Thereupon the Rights Agent shall,
subject to the provisions of Sections 7(e), 11 and 15 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested.  The Company or the Rights Agent may require payment from a Rights
holder of a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split-up, combination or exchange of Rights Certificates.



The
Rights Agent shall have no duty or obligation to take any action under this Section 6 or
under any Section of this Rights Agreement which requires the payment by a Rights holder
of applicable taxes or governmental charges unless and until it is satisfied that all
such taxes and/or charges have been paid in full.




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(b)
Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction or mutilation of a valid Rights Certificate, and, in
case of such loss, theft or destruction, of indemnity or security satisfactory to them,
and, at the Company’s or Rights Agent’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 Rights Certificate if mutilated, the Company will
make a new Rights Certificate of like tenor and deliver such new Rights Certificate to
the Rights Agent for countersignature and delivery to the registered holder in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.



(c)
Notwithstanding any other provision of this Rights Agreement to the contrary, the Company
and the Rights Agent may amend this Rights Agreement to provide for uncertificated Rights
in addition to or in place of Rights evidenced by Rights Certificates.



SECTION
7.        EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS





(a)
Subject to Section 7(e) hereof and except as otherwise provided in this Rights Agreement
(including Section 11 hereof), each Right shall entitle the registered holder thereof,
upon exercise thereof as provided in this Rights Agreement, to purchase for the Purchase
Price, at any time after the Distribution Date and at or prior to the earlier of (i) the
Close of Business on the 10th anniversary of the date of this Rights Agreement (the Close
of Business on such date being the “Expiration Date”) and (ii) the Redemption Date, one
one-hundredth (1/100) of a Preferred Share, subject to adjustment from time to time as
provided in Sections 11 and 12 hereof.



(b)
The registered holder of any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided in this Rights Agreement) in whole or in part at any time
after the Distribution Date, upon surrender of the Rights Certificate with the form of
election to purchase on the reverse side thereof duly executed, to the Rights Agent at
the office of the Rights Agent designated for such purpose, together with payment of the
Purchase Price for each one one-hundredth (1/100) of a Preferred Share as to which the
Rights are exercised, at or prior to the earliest of (i) the Expiration Date, (ii) the
Redemption Date, and (iii) the time at which such Rights are exchanged as provided in
Section 11(b) hereof.



(c)
Upon receipt of a Rights Certificate representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by payment of the Purchase Price for the
Preferred Shares to be purchased, together with an amount equal to any applicable tax or
charge, by certified check, cashier’s check or money order payable to the order of the
Company, the Rights Agent shall thereupon (i) either (A) promptly requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights Agent is the
transfer agent) certificates for the number of Preferred Shares to be purchased, and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the Preferred Shares with a
depositary agent under a 




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depositary
arrangement, promptly requisition from the depositary agent depositary receipts
representing the number of one one-hundredths of a Preferred Share to be purchased (in
which case certificates for the Preferred Shares to be represented by such receipts shall
be deposited by the transfer agent with the depositary agent) and the Company will direct
the depositary agent to comply with all such requests, (ii) when necessary to comply with
this Agreement, promptly requisition from the Company the amount of cash to be paid in
lieu of the issuance of fractional shares in accordance with Section 15 hereof, (iii)
promptly after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder, and (iv) when
necessary to comply with this Agreement, after receipt, promptly deliver such cash to or
upon the order of the registered holder of such Rights Certificate.  In the event that
the Company is obligated to issue other securities (including Common Stock) of the
Company, pay cash and/or distribute other property pursuant to Section 11(a) hereof, the
Company shall make all arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if and when necessary
to comply with this Agreement.



(d)
In case the registered holder of any Rights Certificate shall exercise fewer than all the
Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the
Rights remaining unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Rights Certificate or to his or her duly authorized assigns,
subject to the provisions of Section 6 and Section 15 hereof.



(e)
Notwithstanding anything in this Rights Agreement to the contrary, if the Rights are at
any time Beneficially Owned by (i) an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Persons becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred rights or (B) a transfer which the Board of Directors of the
Company has determined is part of an agreement, arrangement or understanding which has as
a primary purpose or effect the avoidance of this Section 7(e), such Rights shall be null
and void and nontransferable and no holder of any such Right (including any purported
transferee or subsequent holder) shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Rights Agreement or otherwise.  No Rights
Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be null and 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 Rights Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be null and void pursuant to the preceding sentence
shall be canceled.  The Company shall notify the Rights Agent in writing when this
Section 7(e) applies and shall use all reasonable efforts to ensure that the provisions
of this Section 7(e) are complied with, but 




-13-











neither the
Company nor the Rights Agent shall have any liability to any holder of any Rights
Certificate or any other Person as a result of the Company’s failure to make any
determinations with respect to an Acquiring Person or its Affiliate or Associate, or any
transferee thereof, hereunder.  The Company shall give the Rights Agent written notice of
the identity of any such Acquiring Person, Associate or Affiliate, or the nominee of any
of the foregoing, and the Rights Agent may rely on such notice in carrying out its duties
under this Agreement and shall be deemed not to have any knowledge of the identity of any
such Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing
unless and until it shall have received such notice.



(f)
Notwithstanding anything in this Rights Agreement to the contrary, neither the Rights
Agent nor the Company shall be obligated to undertake any action with respect to a
registered holder of any Rights Certificates upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have (i)
properly completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights 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 or
the Rights Agent shall reasonably request.



(g)
The Company may temporarily suspend, for a period of time not to exceed 90 calendar days
after the Distribution Date, the exercisability of the Rights in order to prepare and
file a registration statement under the Securities Act, on an appropriate form, with
respect to the Preferred Shares purchasable upon exercise of the Rights and permit such
registration statement to become effective; provided, however, that no such suspension
shall remain effective after, and the Rights shall without any further action by the
Company or any other Person become exercisable immediately upon, the effectiveness of
such registration statement.  Upon any such suspension, the Company shall notify the
Rights Agent in writing thereof and issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended and shall issue a further
public announcement at such time as the suspension is no longer in effect (with prompt
notice thereof to the Rights Agent including copies of such announcements).
 Notwithstanding any provision in this Rights Agreement to the contrary, the Rights shall
not be exercisable in any jurisdiction if the requisite qualification under the blue sky
or securities laws of such jurisdiction shall not have been obtained or the exercise of
the Rights shall not be permitted under applicable law.



SECTION
8.        CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES





All
Rights Certificates surrendered or presented for the purpose of exercise, transfer,
split-up, combination or exchange shall, and any Rights Certificate surrendered or
presented for any purpose that represents Rights that have become null and void and
nontransferable pursuant to Section 7(e) hereof shall, if surrendered or presented to the
Company or to any of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered or presented to the Rights Agent, shall be canceled by
it, and no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by this Rights 





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Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any Rights Certificate purchased or acquired by the
Company.  The Rights Agent shall deliver all canceled Rights Certificates to the Company,
or shall, at the Company’s written request, destroy such canceled Rights Certificates,
and in such case shall deliver a certificate of destruction thereof to the Company.



SECTION
9.        RESERVATION AND AVAILABILITY OF PREFERRED SHARES





(a)
The Company shall cause to be reserved and kept available out of its authorized and
unissued Preferred Shares or any authorized and issued Preferred Shares held in its
treasury, free from preemptive rights or any right of first refusal, a number of
Preferred Shares sufficient to permit the exercise in full of all outstanding Rights.



(b)
In the event that there shall not be sufficient Preferred Shares authorized but unissued
to permit the exercise or exchange of Rights in accordance with Section 11 hereof, the
Company shall take all such action as may be necessary to authorize additional Preferred
Shares for issuance upon the exercise or exchange of Rights pursuant to Section 11
hereof; provided, however, that if the Company is unable to cause the authorization of
additional Preferred Shares, then the Company shall, or if action by the Company’s
shareholders is necessary to cause such authorization in lieu of seeking any such
authorization, the Company may, to the extent necessary and permitted by applicable law
and any agreements or instruments in effect prior to the Distribution Date to which it is
a party, (i) upon surrender of a Right, pay cash equal to the Purchase Price in lieu of
issuing Preferred Shares and requiring payment therefor, (ii) upon due exercise of a
Right and payment of the Purchase Price for each Preferred Share as to which such Right
is exercised, issue equity securities having a value equal to the value of the Preferred
Shares that otherwise would have been issuable pursuant to Section 11 hereof, which value
shall be determined by a nationally recognized investment banking firm selected by the
Board of Directors of the Company, or (iii) upon due exercise of a Right and payment of
the Purchase Price for each Preferred Share as to which such Right is exercised,
distribute a combination of Preferred Shares, cash and/or other equity and/or debt
securities having an aggregate value equal to the value of the Preferred Shares that
otherwise would have been issuable pursuant to Section 11 hereof, which value shall be
determined by a nationally recognized investment banking firm selected by the Board of
Directors of the Company.  To the extent that any legal or contractual restrictions
(pursuant to agreements or instruments in effect prior to the Distribution Date to which
it is party) prevent the Company from paying the full amount payable in accordance with
the foregoing sentence, the Company shall pay to holders of the Rights as to which such
payments are being made all amounts that are not then restricted on a pro rata basis as
such payments become permissible under such legal or contractual restrictions until such
payments have been paid in full.



(c)
The Company shall take all such action as may be necessary to ensure that all Preferred
Shares delivered upon exercise or exchange 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 nonassessable shares.





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(d)
So long as the Preferred Shares issuable upon the exercise or exchange of Rights are to
be listed on the New York Stock Exchange, the Nasdaq Stock Market or any national
securities exchange, the Company shall use its commercially reasonable best efforts to
cause, from and after such time as the Rights become exercisable or exchangeable, all
Preferred Shares reserved for such issuance to be listed on the New York Stock Exchange,
the Nasdaq Stock Market or such securities exchange upon official notice of issuance.



(e)
The Company shall pay when due and payable any and all taxes and governmental charges
that may be payable in respect of the issuance or delivery of Rights Certificates or of
any Preferred Shares upon the exercise or exchange of Rights.  The Company shall not,
however, be required to pay any tax or charge that may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or in respect of the
issuance or delivery of certificates representing the Preferred Shares in a name other
than that of, the registered holder of the Rights Certificate evidencing Rights
surrendered for exercise or exchange or to issue or deliver any certificates representing
Preferred Shares upon the exercise or exchange of any Rights until any such tax or charge
shall have been paid (any such tax or charge being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the Company’s
and the Rights Agent’s satisfaction that no such tax or charge is due.



SECTION
10.       PREFERRED SHARES RECORD DATE





Each
Person in whose name any certificate for Preferred Shares is issued upon the exercise or
exchange 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 on which the Rights Certificate evidencing such Rights was duly surrendered and
payment of any Purchase Price (and any applicable taxes and governmental charges ) was
made; provided, however, that if the date of such surrender and payment is a date on
which the Preferred Shares transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such Preferred Shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Shares transfer
books of the Company are open.  Prior to the exercise of the Rights evidenced thereby,
the holder of a Rights 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.       ADJUSTMENTS IN RIGHTS AFTER THERE IS AN ACQUIRING PERSON; EXCHANGE OF RIGHTS
FOR SHARES; BUSINESS COMBINATIONS





(a)
Upon a Person becoming an Acquiring Person, each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have a right to receive, upon exercise thereof for
the Purchase Price in accordance with the terms of this Rights Agreement, such number of
shares of Common Stock as shall equal the result obtained by multiplying the Purchase
Price by a fraction, the numerator of which is the number of one one-hundredths 




-16-










of a Preferred
Share for which a Right is then exercisable and the denominator of which is 50% of the
Market Value of the Common Stock on the date on which a Person becomes an Acquiring
Person.  As soon as practicable after a Person becomes an Acquiring Person (provided the
Company shall not have elected to make the exchange permitted by Section 11(b)(i) hereof
for all outstanding Rights), the Company shall use its commercially reasonable efforts to:



(i)
   prepare and file a registration statement under the Securities Act, on an appropriate
form, with respect to the securities purchasable upon exercise of the Rights;



(ii)
   cause such registration statement to become effective as soon as practicable after
such filing;



(iii)
   cause such registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date; and



(iv)
   qualify or register the securities purchasable upon exercise of the Rights under the
blue sky or securities laws of such jurisdictions as may be necessary or appropriate.



(b)
  (i)    The Company’s Board of Directors may, at its option, at any time after a Person
becomes an Acquiring Person, mandatorily exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that shall have become null and void
and nontransferable pursuant to the provisions of Section 7(e) hereof) for consideration
per Right consisting of either (A) one-half of the securities that would be issuable at
such time upon the exercise of one Right in accordance with Section 11(a) hereof, or, if
applicable, Section 9(b)(ii) or 9(b)(iii) hereof or (B) if applicable, the cash
consideration specified in Section 9(b)(i) hereof (the consideration issuable per Right
pursuant to this Section 11(b)(i) being the “Exchange Consideration”).  The Company’s
Board of Directors may, at its option, issue, in substitution for Preferred Shares,
Common Shares in an amount per Preferred Share equal to the Formula Number if there are
sufficient Common Shares issued but not outstanding or authorized but unissued.  If the
Company’s Board of Directors elects to exchange all the Rights for the Exchange
Consideration pursuant to this Section 11(b)(i) prior to the physical distribution of the
Rights Certificates, the Company may distribute the Exchange Consideration in lieu of
distributing Rights Certificates, in which case for purposes of this Rights Agreement
holders of Rights shall be deemed to have simultaneously received and surrendered for
exchange Rights Certificates on the date of such distribution.  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 Person 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 more than 50% of the Common
Shares then outstanding.



(ii)
   Any action of the Company’s Board of Directors ordering the exchange of any Rights
pursuant to Section 11(b)(i) hereof shall be irrevocable and, immediately upon the 




-17-












taking of such
action and without any further action and without any notice, the right to exercise any
such Right pursuant to Section 11(a) hereof shall terminate and the only right thereafter
of a holder of such Right shall be to receive the Exchange Consideration in exchange for
each such Right held by such holder or, if the Exchange Consideration shall not have been
paid or issued, to exercise any such Right pursuant to Section 11(c)(i) hereof.  The
Company shall promptly notify the Rights Agent in writing whenever it makes a public
announcement pursuant to this Section 11(b)(ii) and give the Rights Agent a copy of such
announcement; 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 the Rights Agent and to all holders of such Rights at their last
addresses as they appear on the registry books of the Rights Agent.  Any notice that is
mailed in the manner provided in this Rights Agreement shall be deemed given, whether or
not the holder receives the notice.  Each such notice of exchange shall state the method
by which the exchange of the Rights for the Exchange Consideration will be effected and,
in the event of any partial exchange, the number of Rights that will be exchanged.  Any
partial exchange shall be effected pro rata based on the number of Rights (other than
Rights that shall have become null and void and nontransferable pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.



(c)
  (i)    In the event that, following a Distribution Date, any transactions specified in
the following clause (A), (B) or (C) of this Section 11(c)(i) (each such transaction
being a “Business Combination”) shall be consummated, directly or indirectly:



(A)
     the Company shall consolidate with, or merge with and into, any Acquiring Person or
any Affiliate or Associate of an Acquiring Person;



(B)
     any Acquiring Person or any Affiliate or Associate of an Acquiring Person shall
merge with and into the Company and, in connection with such merger, all or part of the
Common Shares shall be changed into or exchanged for capital stock or other securities of
the Company or of an Acquiring Person or any Affiliate or Associate of an Acquiring
Person or cash or any other property; or



(C)
     the Company shall sell, lease, exchange or otherwise transfer or dispose of (or one
or more of its Subsidiaries shall sell, lease, exchange or otherwise transfer or dispose
of), in one or more transactions, the Major Part of the assets of the Company and its
Subsidiaries (taken as a whole) to an Acquiring Person or any Affiliate or Associate of
an Acquiring Person;



then, in each
such case, proper provision shall be made so that each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof for the Purchase Price in accordance with the terms of this Rights
Agreement, the securities specified below (or, at such holder’s option, the securities
specified in Section 11(a) hereof if the Company is the surviving corporation in such
Business Combination):




-18-










(1)
     If the Principal Party in such Business Combination has Registered Common Shares
outstanding, each Right shall thereafter represent the right to receive, upon the
exercise thereof for the Purchase Price in accordance with the terms of this Rights
Agreement, such number of Registered Common Shares of such Principal Party, free and
clear of all liens, encumbrances or other adverse claims, as shall have an aggregate
Market Value equal to the result obtained by multiplying the Purchase Price by two; or



(2)
     If the Principal Party in such Business Combination does not have Registered Common
Shares outstanding, each Right shall thereafter represent the right to receive, upon the
exercise thereof for the Purchase Price in accordance with the terms of this Rights
Agreement, at the election of the holder of such Right at the time of the exercise
thereof, any of:



(x)
    such number of Common Shares of the Surviving Person in such Business Combination as
shall have an aggregate Book Value immediately after giving effect to such Business
Combination equal to the result obtained by multiplying the Purchase Price by two;



(y)
    such number of Common Shares of the Principal Party in such Business Combination (if
the Principal Party is not also the Surviving Person in such Business Combination) as
shall have an aggregate Book Value immediately after giving effect to such Business
Combination equal to the result obtained by multiplying the Purchase Price by two; or



(z)
    if the Principal Party in such Business Combination is an Affiliate of one or more
Persons which has Registered Common Shares outstanding, such number of Registered Common
Shares of whichever of such Affiliates of the Principal Party has Registered Common
Shares with the greatest aggregate Market Value on the date of consummation of such
Business Combination as shall have an aggregate Market Value on the date of such Business
Combination equal to the result obtained by multiplying the Purchase Price by two.



(ii)
   The Company shall not consummate any Business Combination unless each issuer of Common
Shares for which Rights may be exercised, as set forth in this Section 11(c), shall have
sufficient authorized Common Shares that have not been issued or reserved for issuance
(and that shall, when issued upon exercise thereof in accordance with this Rights
Agreement, be validly issued, fully paid and nonassessable and free of preemptive rights,
rights of first refusal or any other restrictions or limitations on the transfer or
ownership thereof) to permit the exercise in full of the Rights in accordance with this
Section 11(c) and unless prior thereto:



(A)
     a registration statement under the Securities Act, on an appropriate form, with
respect to the Rights and the Common Shares of such issuer purchasable upon exercise of
the Rights, shall be effective; and





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(B)
     the Company and each such issuer shall have:



(1)
     executed and delivered to the Rights Agent a supplemental agreement providing for
the assumption by such issuer of the obligations set forth in this Section 11(c)
(including the obligation of such issuer to issue Common Shares upon the exercise of
Rights in accordance with the terms set forth in Sections 11(c)(i) and 11(c)(iii)) and
further providing that such issuer, at its own expense, will use its best efforts to:



(x)
    cause a registration statement under the Securities Act, on an appropriate form, with
respect to the Rights and the Common Shares of such issuer purchasable upon exercise of
the Rights, to remain effective (with a prospectus at all times meeting the requirements
of the Securities Act) until the Expiration Date;



(y)
    qualify or register the Rights and the Common Shares of such issuer purchasable upon
exercise of the Rights under the blue sky or securities laws of such jurisdictions as may
be necessary or appropriate; and



(z)
    list the Rights and the Common Shares of such issuer purchasable upon exercise of the
Rights on each national securities exchange on which the Common Shares were listed prior
to the consummation of the Business Combination or, if the Common Shares were not listed
on a national securities exchange prior to the consummation of the Business Combination,
on a national securities exchange;



(2)
     furnished to the Rights Agent a written opinion of independent counsel stating that
such supplemental agreement is a valid, binding and enforceable agreement of such issuer;
and



(3)
     filed with the Rights Agent a certificate of a nationally recognized firm of
independent accountants setting forth the number of Common Shares of such issuer that may
be purchased upon the exercise of each Right after the consummation of such Business
Combination.



(iii)
   After consummation of any Business Combination and subject to the provisions of
Section 11(c)(ii) hereof, (A) each issuer of Common Shares for which Rights may be
exercised as set forth in this Section 11(c) shall be liable for, and shall assume, by
virtue of such Business Combination, all the obligations and duties of the Company
pursuant to this Rights Agreement, (B) the term “Company” shall thereafter be deemed to
refer to such issuer, (C) each such issuer shall take such steps in connection with such
consummation as may be necessary to ensure that the provisions of this Rights Agreement
(including the provisions of Sections 11(a) and 11(c) hereof) shall thereafter apply, as
nearly as reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights, and (D) the number of Common Shares of each such issuer
thereafter receivable upon exercise of any Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the provisions of
Sections 11 and 12 hereof, and the provisions of Sections 7, 9 and 10 hereof with respect
to the Preferred Shares shall apply, as nearly as reasonably may be, on like terms to any
such Common Shares.




-20-










SECTION
12.       CERTAIN ADJUSTMENTS





(a)
     To preserve the actual or potential economic value of the Rights, if at any time
after the date of this Rights Agreement there shall be any change in the Common Stock or
the Preferred Shares, whether by reason of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations or exchanges of securities,
split-ups, split-offs, spin-offs, liquidations, other similar changes in capitalization,
any distribution or issuance of cash, assets, evidences of indebtedness or subscription
rights, options or warrants to holders of Common Stock or Preferred Shares, as the case
may be (other than distribution of the Rights or regular quarterly cash dividends), or
otherwise, then, in each such event the Company’s Board of Directors shall make such
appropriate adjustments in the number of Preferred Shares (or the number and kind of
other securities) issuable upon exercise of each Right, the Purchase Price and Redemption
Price in effect at such time and the number of Rights outstanding at such time (including
the number of Rights or fractional Rights associated with each share of Common Stock)
such that following such adjustment such event shall not have had the effect of reducing
or limiting the benefits the holders of the Rights would have had absent such event.



(b)
     If, as a result of an adjustment made pursuant to Section 12(a) hereof, the holder
of any Right thereafter exercised shall become entitled to receive any securities other
than Preferred Shares, then the number of such securities so receivable upon exercise of
any Right thereafter shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions of Sections 11 and 12 hereof,
and the provisions of Sections 7, 9 and 10 hereof with respect to the Preferred Shares
shall apply, as nearly as reasonably may be possible, on like terms to any such other
securities.



(c)
     All Rights originally issued by the Company subsequent to any adjustment made to the
amount of Preferred Shares or other securities relating to a Right shall evidence the
right to purchase, for the Purchase Price, the adjusted number and kind of securities
purchasable from time to time under this Rights Agreement upon exercise of the Rights,
all subject to further adjustment as provided in this Rights Agreement.



(d)
     Irrespective of any adjustment or change in the Purchase Price or the number of
Preferred Shares or number or kind of other securities issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue to express
the terms that were expressed in the initial Rights Certificates issued under this Rights
Agreement.



(e)
     In any case in which action taken pursuant to Section 12(a) hereof requires that an
adjustment be made effective as of a record date for a specified event, the Company may
elect to defer (and shall give prompt written notice of such election to the Rights
Agent), until the occurrence of such event, issuing to the holder of any Right exercised
after such 



-21-










record date the
Preferred Shares and/or other securities, if any, issuable upon such exercise over and
above the Preferred Shares and/or other securities, if any, issuable before giving effect
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 securities upon the occurrence of the event requiring such adjustment.



SECTION
13.       CERTIFICATE OF ADJUSTMENT





Whenever
an adjustment is made or any event affecting the Rights or their exercisability
(including without limitation an event that causes rights to become null and void) occurs
as provided in Section 11 or 12 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief, reasonably detailed statement of
the facts and computations accounting for such adjustment, (b) promptly file with the
Rights Agent and with each transfer agent for the Preferred Shares a copy of such
certificate, and (c) mail a brief summary thereof to each holder of a Rights Certificate
(or, prior to the Distribution Date, of Common Stock) in accordance with Section 25
hereof.  The Rights Agent shall be fully protected in relying on any such certificate and
on any adjustment or statements contained therein, and shall have no duty or liability
with respect to, and shall not be deemed to have knowledge of, any such adjustment or any
such event unless and until it shall have received such a certificate.



SECTION
14.       ADDITIONAL COVENANTS





(a)
     Notwithstanding any other provision of this Rights Agreement, no adjustment to the
number of Preferred Shares (or fraction of a share) or other securities for which a Right
is exercisable or the number of Rights outstanding or associated with each Common Share
or any similar or other adjustment shall be made or be effective if such adjustment would
have the effect of reducing or limiting the benefits the holders of the Rights would have
had absent such adjustment, including, without limitation, the benefits under Sections 11
and 12 hereof, unless the terms of this Rights Agreement are amended so as to preserve
such benefits.



(b)
     The Company shall not, after the Distribution Date, except as permitted by Section
26 hereof, take (or permit any Subsidiary of the Company to take) any action if at the
time such action is taken it is reasonably foreseeable that such action will reduce or
otherwise limit the benefits the holders of the Rights would have had absent such action,
including, without limitation, the benefits under Sections 11 and 12 hereof.  Any action
taken by the Company during any period after any Person becomes an Acquiring Person but
prior to the Distribution Date shall be null and void unless such action could be taken
under this Section 14(b) from and after the Distribution Date.  The Company shall not
consummate any Business Combination if any issuer of Common Shares for which Rights may
be exercised after such Business Combination in accordance with Section 11(c) hereof
shall have taken any action that reduces or otherwise limits the benefits the holders of
the Rights would have had absent such action, including the benefits under Sections 11
and 12 hereof.




-22-











SECTION
15.       FRACTIONAL RIGHTS AND FRACTIONAL SHARES





(a)
     The Company may, but shall not be required to, issue fractional Rights or distribute
Rights Certificates that evidence fractional Rights.  In lieu of such fractional Rights,
the Company may pay to the registered holders of the Rights 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 purposes of this Section
15(a), the current market value of a whole Right shall be the closing price of the Rights
(as determined pursuant to the second and third sentences of the definition of Market
Value contained in Section 1 hereof) for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable.



(b)
     The Company may, but shall not be required to, issue fractional Preferred Shares
upon exercise of the Rights or distribute certificates that evidence fractional Preferred
Shares.  In lieu of fractional Preferred Shares, the Company may elect to (i) utilize a
depository arrangement as provided by the terms of the Preferred Shares or (ii) in the
case of a fractional Preferred Share (other than one one-hundredth (1/100th) of a
Preferred Share or any integral multiple thereof), pay to the registered holders of
Rights Certificates at the time such Rights are exercised as provided in this Rights
Agreement an amount in cash equal to the same fraction of the current market value of one
Preferred Share, if any are outstanding and publicly traded (or the Formula Number times
the current market value of one share of Common Stock if the Preferred Shares are not
outstanding and publicly traded).  For purposes of this Section 15(b), the current market
value of a Preferred Share (or share of Common Stock) shall be the closing price of a
Preferred Share (or share of Common Stock) (as determined pursuant to the second and
third sentences of the definition of Market Value contained in Section 1 hereof) for the
Trading Day immediately prior to the date of such exercise.  If, as a result of an
adjustment made pursuant to Section 12(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any securities other than Preferred Shares,
the provisions of this Section 15(b) shall apply, as nearly as reasonably may be, on like
terms to such other securities.



(c)
     The Company may, but shall not be required to, issue fractional Common Shares upon
exchange of Rights pursuant to Section 11(b) hereof, or to distribute certificates that
evidence fractional Common Shares.  In lieu of such fractional Common Shares, the Company
may pay to the registered holders of Rights 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 Market Value of one Common Share as of the date on which a Person
became an Acquiring Person.



(d)
     Each holder of Rights, by accepting the Rights, expressly waives his, her or its
right to receive any fractional Rights or any fractional shares upon exercise of a Right,
except as provided in this Section 15.





-23-












(e)
     Whenever a payment for fractional Rights or fractional shares is to be made by the
Rights Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a
certificate setting forth in reasonable detail the facts related to such payment and the
prices and/or formulas utilized in calculating such payments, and (ii) provide sufficient
monies to the Rights Agent in the form of fully collected funds to make such payments.
 The Rights Agent shall be fully protected in relying upon such a certificate and shall
have no duty with respect to, and shall not be deemed to have knowledge of any payment
for fractional Rights or fractional shares under any Section of this Rights Agreement
relating to the payment of fractional Rights or fractional shares unless and until the
Rights Agent shall have received such a certificate and sufficient monies.



SECTION
16.       RIGHTS OF ACTION





(a)
     All rights of action in respect of this Rights Agreement, excepting the rights of
action given to the Rights Agent under Sections 19 and 21 hereof, are vested in the
respective registered holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock), and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of the Common Stock), without the
consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior
to the Distribution Date, of the Common Stock), may, in his, her or its own behalf and
for his, her or its 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, her or
its right to exercise the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate and in the Rights 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 by the Company of this Rights Agreement and shall be entitled to specific
performance of the obligations of any Person under, and injunctive relief against actual
or threatened violations by the Company of the obligations of any Person subject to, this
Rights Agreement.



(b)
     Any holder of Rights who prevails in an action to enforce the provisions of this
Rights Agreement against the Company shall be entitled to recover the reasonable costs
and expenses, including attorneys’ fees, incurred in such action.



(c)
     Notwithstanding anything in this Agreement to the contrary, neither the Company nor
the Rights Agent shall have any liability to any holder of a Right or other Person as a
result of its inability to perform any of its obligations under this Rights Agreement by
reason of any preliminary or permanent injunction or other order, judgment, decree or
ruling (whether interlocutory or final) issued by a court or by a governmental,
regulatory, self regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided, however,
that the Company must use all reasonable efforts to have any such injunction, order,
judgment, decree or ruling lifted or otherwise overturned as soon as possible.




-24-














SECTION
17.       AGREEMENT OF RIGHTS 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 Stock, and the Rights associated with each share of
Common Stock shall be automatically transferred upon the transfer of each share of Common
Stock;



(b)
     after the Distribution Date, the Rights Certificates will be transferable, subject
to Section 7(e) hereof, only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or accompanied
by a proper instrument of transfer with all required certifications completed; and



(c)
     the Company and the Rights Agent may deem and treat the Person in which name a
Rights Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the Rights Certificates
or the associated Common Stock certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.



SECTION
18.       RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER





No
holder, as such, of any Rights Certificate shall be entitled to vote or receive dividends
or be deemed for any purpose the holder of the Preferred Shares or of any other
securities of the Company that may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained in this Rights Agreement or in any
Rights Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a shareholder of the Company, including, without limitation,
any right to vote for the election of directors or on any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting shareholders, or to
receive dividends or other distributions or subscription rights, or otherwise, until the
Right or Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions of this Rights Agreement.



SECTION
19.       CONCERNING THE RIGHTS AGENT





(a)
     The Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it under this Rights Agreement and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and disbursements and other
disbursements incurred in preparing, negotiating, delivering, amending, administering and
executing this Rights Agreement and exercising and performing its duties under this
Rights Agreement, including any taxes or governmental charges imposed as a result of any
action 





-25-












taken by it
hereunder (other than taxes on the fees payable to it).  The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss, liability,
damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including
without limitation, the reasonable fees and expenses of legal counsel) incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights Agent (which
gross negligence, bad faith or willful misconduct must be determined by final,
non-appealable order, judgment, decree or ruling of a court of competent jurisdiction) on
the part of the Rights Agent for any action taken, suffered or omitted by the Rights
Agent in connection with the execution, acceptance, administration, exercise or
performance of its duties under this Rights Agreement, including, without limitation, the
costs and expenses of defending against any claim of liability arising therefrom,
directly or indirectly.  The provisions of this Section 19 and Section 21 below shall
survive the termination of this Rights Agreement, the exercise or expiration of the
Rights and the resignation or removal of the Rights Agent.  The costs and expenses
incurred in enforcing this right of indemnification by the Rights Agent shall be paid by
the Company.



(b)
     The Rights Agent shall be authorized to rely on, 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 acceptance and administration of this Rights Agreement or the
exercise or performance of its duties hereunder, in reliance on any Rights Certificate or
certificate for the Preferred Shares or Common Stock 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, or otherwise upon the advice of counsel as
set forth in Section 21.  The Rights Agent shall not be deemed to have knowledge of any
event of which it was supposed to receive notice thereof hereunder, and the Rights Agent
shall be fully protected and shall incur no liability for failing to take any action in
connection therewith unless and until it has received such notice in writing.



SECTION
20.       MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT





(a)
     Any Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be a party,
or any Person succeeding to the business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Rights Agreement without the
execution or filing of any paper or any further act on the part of any of the parties to
this Rights Agreement; provided, however, that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 22 hereof.  In
case at the time such successor Rights Agent shall succeed to the agency created by this
Rights Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so countersigned; and, in
case at that time any of the Rights 





-26-












Certificates
shall not have been countersigned, any successor Rights Agent may countersign such Rights
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 Rights Certificates shall have the
full force provided in the Rights Certificates and in this Rights Agreement.



(b)
     In case at any time the name of the Rights Agent shall be changed and at such time
any of the Rights Certificates shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its prior name and deliver Rights
Certificates so countersigned; and, in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and, in all such cases,
such Rights Certificates shall have the full force provided in the Rights Certificates
and in this Rights Agreement.



SECTION
21.       RIGHTS AND DUTIES OF RIGHTS AGENT





The
Rights Agent undertakes to perform only the duties and obligations, expressly imposed by
this Rights Agreement (and no implied duties or obligations) upon the following terms and
conditions, by all of which the Company and the holders of the Rights Certificates (or,
prior to the Distribution Date, of the Common Stock), by their acceptance thereof, shall
be bound:



(a)
     The Rights Agent may consult with legal counsel of its choice (who may be legal
counsel for the Company, or may be an employee of the Rights Agent), and the advice or
opinion of such counsel shall be full and complete authorization and protection to the
Rights Agent, and the Rights Agent shall incur no liability for or in respect of any
action taken, suffered or omitted by it in accordance with such advice or opinion.



(b)
     Whenever in the performance of its duties under this Rights Agreement the Rights
Agent shall deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the determination of “current market
price”) be proved or established by the Company prior to taking, suffering or omitting
any action under this Rights Agreement, such fact or matter (unless other evidence in
respect thereof be specifically prescribed in this Rights Agreement) may be deemed to be
conclusively proved and established by a certificate signed by any one of the Chairman of
the Board, any Vice Chairman of the Board, the Chief Executive Officer, the President,
the Chief Financial Officer, a Vice President (whether preceded by any additional title),
the Treasurer or the Secretary of the Company and delivered to the Rights Agent, and such
certificate shall be full and complete authorization and protection to the Rights Agent,
and the Rights Agent shall incur no liability for or in respect of any action taken or
suffered or omitted to be taken by it under the provisions of this Rights Agreement in
reliance upon such certificate.



(c)
     The Rights Agent shall be liable under this Rights Agreement to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct (which
gross negligence, bad faith or willful misconduct must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent jurisdiction).
 Anything 




-27-











in this Rights
Agreement to the contrary notwithstanding, in no event shall the Rights Agent be liable
for special, punitive, indirect, incidental 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 possibility or likelihood of such loss or damage.  Any liability of
the Rights Agent under this Agreement will be limited to the amount of annual fees paid
by the Company to the Rights Agent.



(d)
     The Rights Agent shall not have any liability for, nor be liable for or by reason of
any of the statements of fact or recitals contained in this Rights Agreement or in the
Rights 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 have any liability for, nor be under any responsibility
in respect of the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution of this Rights Agreement by the Rights Agent) or in respect of
the validity or execution of any Rights Certificate (except its countersignature
thereof); it shall not be responsible for any breach by the Company of any covenant or
condition contained in this Rights Agreement or in any Rights Certificate; it shall not
be responsible for any change or adjustment in the terms of the Rights including any
adjustment required under the provisions of Section 11 or 12 hereof or 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 Rights Certificates after actual notice of any such adjustment, upon which
the Rights Agent may rely); it shall not by any act under this Rights Agreement be deemed
to make any representation or warranty as to the authorization or reservation of any
Preferred Shares or Common Stock to be issued pursuant to this Rights Agreement or any
Rights Certificate or as to whether any Preferred Shares or Common Stock will, when so
issued, be validly authorized and issued, fully paid and nonassessable; and it shall not
be responsible for any change in the exercisability of the Rights (including the Rights
becoming null and void hereunder).



(f)
     The Company agrees that it shall 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 Rights Agreement.



(g)
     The Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties under this Rights Agreement from any one of the
Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, a Vice President (whether preceded by any
additional title), the Treasurer or the Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and such advice or
instructions shall be full authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability (i) for or in respect of any action taken, suffered
or omitted by it, in accordance with the 





-28-















advice or
instructions of any such officer or (ii) in failing to take action prior to receiving
such advice or instruction.  The Rights Agent shall be fully authorized and protected in
relying upon the most recent instructions received by 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, suffered or omitted
by the Rights Agent under this Rights Agreement and the date on and/or after which such
action shall be taken or suffered or such omission shall be effective.  The Rights Agent
shall not be liable for any action taken or suffered by, or omission or, the Rights Agent
in accordance with a proposal included in any such application on or after the date
specified therein (which date shall not be less than five Business Days after the date
any such officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to taking,
suffering or omitting any such action (or the effective date in case of an omission), the
Rights Agent has received written instructions in response to such application specifying
the action to be taken, suffered or omitted.



(h)
     The Rights Agent and any shareholder, Affiliate, 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 the Rights Agent were not the Rights Agent under this Rights Agreement.
 Nothing in this Rights Agreement shall preclude the Rights Agent or any such
shareholder, Affiliate, director, officer or employee from acting in any other capacity
for the Company or for any other Person.



(i)
     The Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty under this Rights Agreement either itself (through its
directors, officers and employees) or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, omission, default,
neglect or misconduct of any such attorneys or agents or for any loss to the Company or
any other Person resulting from any such act, omission, default, neglect or misconduct
absent any gross negligence, bad faith or willful misconduct (which gross negligence, bad
faith or willful misconduct must be determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction) in the selection and
continued employment thereof.



(j)
     No provision of this Rights 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 it believes that repayment of
such funds or adequate indemnification against such risk or liability is not reasonably
assured to it.



(k)
     If, with respect to any Rights Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate attached to the form of assignment or form of
election to purchase, as the case may be, has not been completed, the Company and the
Rights Agent will deem the beneficial owner of the rights evidenced by such Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof and such
assignment or election to purchase will not be honored.





-29-








SECTION
22.       CHANGE OF RIGHTS AGENT





The
Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this Rights Agreement upon thirty (30) days’ notice in writing mailed to the
Company and to each transfer agent of the Common Stock or the Preferred Shares known to
the Rights Agent by registered or certified mail, and to the holders of the Rights
Certificates (or, prior to the Distribution Date, of the Common Stock) by first-class
mail.  The Company may remove the Rights Agent or any successor Rights Agent upon thirty
(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 Stock or the Preferred Shares by
registered or certified mail, and to the holders of the Rights Certificates (or, prior to
the Distribution Date, of the Common Stock) by first-class 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 thirty (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 Rights Certificate (or, prior to the
Distribution Date, of Common Stock) (who shall, with such notice, submit his, her or its
Rights Certificate or, prior to the Distribution Date, the certificate representing his,
her or its Common Stock, for inspection by the Company), then the registered holder of
any Rights Certificate (or, prior to the Distribution Date, of the Common Stock) 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 either (A) a Person in good standing organized and doing business under the laws of
the United States or of any state of the United States so long as such Person 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 fifty million
dollars ($50,000,000), or (B) an Affiliate of a Person described in clause (A) of this
sentence.  After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; provided, however, that the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the time held by
it under this Rights Agreement, 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 Stock and the Preferred
Shares, and mail a notice thereof in writing to the registered holders of the Rights
Certificates (or, prior to the Distribution Date, of the Common Stock).  Failure to give
any notice provided for in this Section 22, 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
23.       ISSUANCE OF ADDITIONAL RIGHTS AND RIGHTS CERTIFICATES





Notwithstanding
any of the provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights 






-30-
















in such form as
may be approved by its Board of Directors to reflect any adjustment or change made in
accordance with the provisions of this Rights 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 Expiration Date, the Company (a) shall issue, with
respect to Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or exchange of
securities, notes or debentures issued by the Company, and (b) may issue, in any other
case, if deemed necessary or appropriate by the Company’s Board of Directors, Rights
Certificates representing the appropriate number of Rights in connection with such
issuance or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Rights Certificate would be issued, (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof, and (iii) no such Rights
Certificate shall be issued to an Acquiring Person or an Affiliate or Associate of any
Acquiring Person.



SECTION
24.       REDEMPTION AND TERMINATION





(a)
     The Company’s Board of Directors may, at its option, at any time prior to the
earlier of (i) such time as any Person becomes an Acquiring Person and (ii) the Close of
Business on the Expiration Date, order the redemption of all, but not fewer than all, the
then outstanding Rights at the Redemption Price (the date of such redemption being the
“Redemption Date”), and the Company, at its option, may pay the Redemption Price either
in cash or in Common Shares or other securities of the Company deemed by the Board of
Directors, in the exercise of its sole discretion, to be at least equivalent in value to
the Redemption Price.  The redemption of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the Board of Directors
in its sole discretion may establish.



(b)
     Immediately upon the action of the Company’s Board of Directors ordering the
redemption of the Rights, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price.  Within ten (10) Business Days after
the action of the Company’s Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and to the holders of
the then outstanding Rights by mailing such notice to all such holders 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 Stock.
 Each such notice of redemption will state the method by which payment of the Redemption
Price will be made.  The notice, if mailed in the manner provided in this Rights
Agreement, shall be conclusively presumed to have been duly given, whether or not the
holder of Rights receives such notice.  In any case, failure to give such notice by mail,
or any defect in the notice, to any particular holder of Rights shall not affect the
sufficiency of the notice to other holders of Rights.




-31-













SECTION
25.       NOTICES





Notices
or demands authorized by this Rights Agreement to be given or made by the Rights Agent or
by the holder of a Rights Certificate (or, prior to the Distribution Date, of Common
Stock) to or on the Company shall be sufficiently given or made if delivered by facsimile
transmission (provided confirmation of receipt is received immediately thereafter) or
sent by first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:





	 	 Eden Bioscience Corporation 

11816 North Creek Parkway N. 

Bothell, WA 98011 

Attention: President 

Facsimile No.: (425) 806-7400 

	 
	 
	 
	 
	 
	 


Subject to the
provisions of Section 22 hereof, notices or demands authorized by this Rights Agreement
to be given or made by the Company or by the holder of a Rights Certificate (or, prior to
the Distribution Date, of Common Stock) to or on the Rights Agent shall be sufficiently
given or made if delivered by facsimile transmission (provided confirmation of receipt is
received immediately thereafter) or sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:

	 	 Mellon Investor Services LLC 

520 Pike Street, Suite 1220 

Seattle, WA 98101 

Attention: Relationship Manager 

Facsimile No.: (206) 674-3059 

    
	 	 
	 	           with a copy to:
	 	 
	 	 Mellon Investor Services, LLC

480 Washington Boulevard

Jersey City, NJ 07310

Attention: General Counsel

Facsimile No.: (201) 680-4610




Notices or
demands authorized by this Rights Agreement to be given or made by the Company or the
Rights Agent to any holder of a Rights Certificate (or, prior to the Distribution Date,
of Common Stock) shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at such holder’s address as shown on the registry books
of the Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Stock.




-32- 














SECTION
26.       SUPPLEMENTS AND AMENDMENTS





At
any time prior to the time any Person becomes an Acquiring Person and subject to the last
two sentences of this Section 26, the Company may, subject to the other terms and
conditions of this Rights Agreement, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of this Rights Agreement (including, without
limitation, the date on which the Distribution Date or the Expiration Date shall occur,
the amount of the Purchase Price, the definition of “Acquiring Person,” the time during
which the Rights may be redeemed pursuant to Section 24 hereof or any provision of the
Certificate of Designation) without the approval of any holder of the Rights.  From and
after the time any Person becomes an Acquiring Person and subject to applicable law and
the last two sentences of this Section 26, the Company may, and the Rights Agent shall if
the Company so directs, amend this Rights Agreement without the approval of any holder of
Rights Certificates to (a) cure any ambiguity or correct or supplement any provision
contained in this Rights Agreement that may be defective or inconsistent with any other
provision of this Rights Agreement or (b) make any other provision in regard to matters
or questions arising under this Rights Agreement that the Company may deem necessary or
desirable and that shall not adversely affect the interests of the Rights Agent or the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person).  Any supplement or amendment adopted during any period
after any Person has become an Acquiring Person but prior to the Distribution Date shall
be null and void unless such supplement or amendment could have been adopted under the
prior sentence from and after the Distribution Date. Upon the receipt of a certificate
from an appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26 and, provided such
supplement or amendment does not change or affect the Rights Agent’s rights, duties,
liabilities, obligations or immunities hereunder, the Rights Agent shall execute such
supplement or amendment.  In addition, notwithstanding anything to the contrary contained
in this Rights Agreement, no supplement or amendment to this Rights Agreement shall be
made which reduces the Redemption Price (except as required by Section 12(a) hereof) and
the Rights Agent may, but shall not be obligated to, enter into any supplement or
amendment that affects the Rights Agent’s own rights, duties, obligations or immunities
under this Rights Agreement.



SECTION
27.       SUCCESSORS





All
the covenants and provisions of this Rights 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 under this Rights Agreement.



SECTION
28.       BENEFITS OF THIS RIGHTS AGREEMENT; DETERMINATIONS AND ACTIONS BY THE COMPANY’S
BOARD OF DIRECTORS





(a)
     Nothing in this Rights Agreement shall be construed to give to any Person other than
the Company, the Rights Agent and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, of the Common Stock) any legal or equitable 




-33-











right, remedy
or claim under this Rights Agreement; provided, however, that this Rights Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date, of the Common
Stock).



(b)
     Except as explicitly otherwise provided in this Rights Agreement, the Company’s
Board of Directors shall have the exclusive power and authority to administer this Rights
Agreement and to exercise all rights and powers specifically granted to the Company’s
Board of Directors or to the Company, or as may be necessary or advisable in the
administration of this Rights Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Rights Agreement and (ii) make all
determinations or calculations deemed necessary or advisable for the administration of
this Rights Agreement (including, without limitation, a determination to redeem or not
redeem the Rights or to amend this Rights Agreement and a determination of whether there
is an Acquiring Person).  All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with respect
to the foregoing) that are done or made by the Board of Directors in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the
Rights, as such, and all other Persons, and (y) not subject the Board of Directors to any
liability to the holders of the Rights.  The Rights Agent shall always be entitled to
assume that the Board of Directors acted in good faith and shall be fully protected and
incur no liability in reliance thereon.



(c)
     Nothing contained in this Rights Agreement shall be deemed to be in derogation of
the obligation of the Board of Directors to exercise its fiduciary duty.  Without
limiting the foregoing, nothing contained herein shall be construed to suggest or imply
that the Board of Directors shall not be entitled to reject any tender offer or other
acquisition proposal, or to recommend that holders of Common Stock reject any tender
offer, or to take any other action (including the commencement, prosecution, defense or
settlement of any litigation and the submission of additional or alternative offers or
other proposals) with respect to any tender offer or other acquisition proposal that the
Board of Directors believes is necessary or appropriate in the exercise of such fiduciary
duty.



SECTION
29.       SEVERABILITY





If
any term, provision, covenant or restriction of this Rights 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 Rights Agreement
shall remain in full force and effect and shall in no way be affected, impaired or
invalidated.



SECTION
30.       GOVERNING LAW





This
Rights Agreement and each Rights Certificate issued under this Rights Agreement shall be
deemed to be a contract made under the laws of the state of Washington and for all
purposes shall be governed by and construed in accordance with the law of such State
applicable to contracts to be made and performed entirely within such State; provided,
however, that all provisions regarding the rights, duties and obligations of the Rights
Agent 







-34-















shall be
governed by and construed in accordance with the laws of the state of New York applicable
to contracts made and to be performed entirely within such state, without regard to the
principles or rules concerning conflicts of laws which might otherwise require
application of the substantive laws of another jurisdiction.



SECTION
31.       COUNTERPARTS; EFFECTIVENESS





This
Rights Agreement may be executed in any number of counterparts, each of which shall for
all purposes be deemed to be an original, and all of which shall together constitute but
one and the same instrument.  This Rights Agreement shall be effective as of the Close of
Business on the date of this Rights Agreement first set forth above.



SECTION
32.       DESCRIPTIVE HEADINGS





Descriptive
 headings of the several Sections of this Rights Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the provisions
of this Rights Agreement.




-35-








IN
WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to be duly executed
as of the day and year first above written.






	 	 	EDEN BIOSCIENCE CORPORATION
	 	 	 
	 	 	 
	 	By: 
	/s/ Bradley S. Powell
	 	 	

	 	 	Name: Bradley S. Powell
	 	 	Its: President 
	 	 	 
	 	 	 
	 	 	MELLON INVESTOR SERVICES LLC, as Rights Agent
	 	 	 
	 	By: 
	/s/ Thomas L. Cooper 
	 	 	

	 	 	Name: Thomas L. Cooper
	 	 	Its: Client Relationship Executive 



-36-








EXHIBIT
INDEX

	 Exhibit	   Description




	A 	 Certificate of Designation




	B 	  Form of Rights Certificate




	C 	 Summary of Rights to Purchase Preferred Shares
















EXHIBIT A



Certificate
of Designation



		         2.3 	Designation
of Rights and Preferences of Series R Participating Cumulative Preferred Stock






The
following series of Preferred Stock is hereby designated, which series shall have the
rights, preferences and privileges and limitations set forth below:



		                      2.3.1 	Designation
of Series R Participating Cumulative Preferred Stock






The
shares of such series shall be designated the “Series R Participating Cumulative
Preferred Stock” (the “Series R Preferred Stock”), without par value.  The number of
shares initially constituting the Series R Preferred Stock shall be 1,000,000; provided,
however, if more than a total of 1,000,000 shares of Series R Preferred Stock shall be
issuable upon the exercise of Rights (the “Rights”) issued pursuant to the Rights
Agreement dated as of June 1, 2007 between the corporation and Mellon Investor Services
LLC, as Rights Agent (the “Rights Agreement”), the corporation’s Board of Directors,
pursuant to Section 23B.06.020 of the Revised Code of Washington, shall direct by
resolution or resolutions that Articles of Amendment be properly executed and filed with
the Washington Secretary of State providing for the total number of shares of Series R
Preferred Stock authorized for issuance to be increased (to the extent that the Restated
Articles of Incorporation then permits) to the largest number of whole shares (rounded up
to the nearest whole number) issuable upon exercise of such Rights.  In addition, such
number of shares may be decreased by resolution of the Board of Directors; provided,
however, that no decrease shall reduce the number of shares of Series R Preferred Stock
to a number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the corporation convertible
into Series R Preferred Stock.



		                      2.3.2 	Dividends
and Distributions






(a)
     Subject to the prior and superior rights of the holders of shares of any other
series of Preferred Stock or other class of capital stock of the corporation ranking
prior and superior to the shares of Series R Preferred Stock with respect to dividends,
the holders of shares of Series R Preferred Stock shall be entitled to receive, when, as,
and if declared by the Board of Directors, out of the assets of the corporation legally
available therefor, quarterly dividends payable in cash on the last day of each fiscal
quarter in each year, or such other dates as the corporation’s Board of Directors shall
approve (each such date being referred to in this Designation as a “Quarterly Dividend
Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or a fraction of a share of Series R Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of (i) $0.01 and (ii) the
Formula Number (as hereinafter defined) then in effect times 







A-1













the cash
dividends then to be paid on each share of Common Stock.  In addition, if the corporation
shall pay any dividend or make any distribution on the Common Stock payable in assets,
securities or other forms of noncash consideration (other than dividends or distributions
solely in shares of Common Stock), then, in each such case, the corporation shall
simultaneously pay or make on each outstanding whole share of Series R Preferred Stock a
dividend or distribution in like kind equal to the Formula Number then in effect times
such dividend or distribution on each share of Common Stock.  As used in this Designation
and in the Rights Agreement, the “Formula Number” shall be 100; provided, however, that
if at any time after June 1, 2007 the corporation shall (i) declare or pay any dividend
on the Common Stock payable in shares of Common Stock or make any distribution on the
Common Stock in shares of Common Stock, (ii) subdivide (by a stock split or otherwise)
the outstanding shares of Common Stock into a larger number of shares of Common Stock, or
(iii) combine (by a reverse stock split or otherwise) the outstanding shares of Common
Stock into a smaller number of shares of Common Stock, then in each such event the
Formula Number shall be adjusted to a number determined by multiplying the Formula Number
in effect immediately prior to such event by a fraction, the numerator of which is the
number of shares of Common Stock that are outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that are outstanding
immediately prior to such event (and rounding the result to the nearest whole number);
and provided further, that if at any time after June 1, 2007 the corporation shall issue
any shares of its capital stock in a merger, reclassification or change of the
outstanding shares of Common Stock, then in each such event the Formula Number shall be
appropriately adjusted to reflect such merger, reclassification or change so that each
share of Preferred Stock continues to be the economic equivalent of a Formula Number of
shares of Common Stock prior to such merger, reclassification or change.



(b)
     The Corporation shall declare a dividend or distribution on the Series R Preferred
Stock as provided in Section 2.3.2(a) immediately prior to or at the same time it
declares a dividend or distribution on the Common Stock (other than a dividend or
distribution solely in shares of Common Stock); provided, however, that in the event no
dividend or distribution (other than a dividend or distribution in shares of Common
Stock) shall have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date,
a dividend of $0.01 per share on the Series R Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.  The Corporation’s Board of
Directors may fix a record date for the determination of holders of shares of Series R
Preferred Stock entitled to receive a dividend or distribution declared thereon, which
record date shall be the same as the record date for any corresponding dividend or
distribution on the Common Stock and which shall not be more than 60 days prior to the
date fixed for payment thereof.



(c)
     Dividends shall begin to accrue and be cumulative on outstanding shares of Series R
Preferred Stock from and after the Quarterly Dividend Payment Date next preceding the
date of original issue of such shares of Series R Preferred Stock; provided, however,
that dividends on such shares that are originally issued after the record date for the
determination of holders of shares of Series R Preferred Stock entitled to receive a
quarterly 





A-2










dividend on or
prior to the next succeeding Quarterly Dividend Payment Date shall begin to accrue and be
cumulative from and after such Quarterly Dividend Payment Date.  Notwithstanding the
foregoing, dividends on shares of Series R Preferred Stock that are originally issued
prior to the record date for the determination of holders of shares of Series R Preferred
Stock entitled to receive a quarterly dividend on or prior to the first Quarterly
Dividend Payment Date shall be calculated as if cumulative from and after the last day of
the fiscal quarter (or such other Quarterly Dividend Payment Date as the corporation’s
Board of Directors shall approve) next preceding the date of original issuance of such
shares. Accrued but unpaid dividends shall not bear interest.  Dividends paid on the
shares of Series R Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.



(d)
     So long as any shares of Series R Preferred Stock are outstanding, no dividends or
other distributions shall be declared, paid or distributed, or set aside for payment or
distribution, on the Common Stock unless, in each case, the dividend required by this
Section 2.3.2 to be declared on the Series R Preferred Stock shall have been declared.



(e)
     The holders of shares of Series R Preferred Stock shall not be entitled to receive
any dividends or other distributions except as provided in this Designation.



		                      2.3.3 	Voting
Rights






The
holders of shares of Series R Preferred Stock shall have the following voting rights:



(a)
     Each holder of Series R Preferred Stock shall be entitled to a number of votes equal
to the Formula Number then in effect for each share of Series R Preferred Stock held of
record on each matter on which holders of the Common Stock or shareholders generally are
entitled to vote, multiplied by the maximum number of votes per share that any holders of
the Common Stock or shareholders generally then have with respect to such matter
(assuming any holding period or other requirement to vote a greater number of shares is
satisfied).



(b)
     Except as otherwise provided in this Designation or by applicable law, the holders
of shares of Series R Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the corporation having general voting rights shall vote together
as one class for the election of directors of the corporation and on all other matters
submitted to a vote of shareholders of the corporation.



(c)
     Except as provided in this Designation or by applicable law, holders of Series R
Preferred Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common Stock as
set forth in this Designation) for authorizing or taking any corporate action.




A-3












2.3.4
        Certain Restrictions





(a)
     Whenever quarterly dividends or other dividends or distributions payable on the
Series R Preferred Stock as provided in Section 2.3.2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series R Preferred Stock outstanding shall have been paid in full, the
corporation shall not:



	 	                                      (i)
     declare or pay dividends on, make any other distributions on, or redeem or purchase
or otherwise          acquire for consideration any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or          winding up) to the
Series R Preferred Stock;








	 	                                      (ii)
    declare or pay dividends on or make any other distributions on any shares of stock
ranking on a          parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series R Preferred Stock, except          dividends paid ratably on
the Series R Preferred Stock and all such parity stock on which dividends are payable or
in          arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;








	 	                                      (iii)
   redeem or purchase or otherwise acquire for consideration shares of any stock ranking
junior          (either as to dividends or upon liquidation, dissolution or winding up)
with the Series R Preferred Stock; provided,          however, that the corporation may
at any time redeem, purchase or otherwise acquire shares of any such junior stock in

         exchange for shares of any stock of the corporation ranking junior (either as to
dividends or upon dissolution, liquidation          or winding up) to the Series R
Preferred Stock; or

     







	 	                                      (iv)
    redeem or purchase or otherwise acquire for consideration any shares of Series R
Preferred Stock,          or any shares of stock ranking on a parity with the Series R
Preferred Stock, except in accordance with a purchase offer          made in writing or
by publication (as determined by the corporation’s Board of Directors) to all holders of
such shares upon          such terms as the corporation’s Board of Directors, after
consideration of the respective annual dividend rates and other          relative rights
and preferences of the respective Preferred Stock classes, shall determine in good faith
will result in fair          and equitable treatment among the respective series or
classes.








(b)
     The corporation shall not permit any subsidiary of the corporation to purchase or
otherwise acquire for consideration any shares of stock of the corporation unless the
corporation could, under paragraph (a) of this Section 2.3.4, purchase or otherwise
acquire such shares at such time and in such manner.



		                      2.3.5 	Liquidation
Rights






Upon
the liquidation, dissolution or winding up of the corporation, whether voluntary or
involuntary, no distribution shall be made to (a) the holders of shares of stock ranking 






A-4















junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series R Preferred
Stock unless, prior thereto, the holders of shares of Series R Preferred Stock shall have
received an amount equal to the greater of (i) $.01 per share and (ii) the accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date of such
payment, plus an aggregate amount per share equal to the Formula Number then in effect
times the aggregate amount to be distributed per share to holders of Common Stock or (b)
the holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series R Preferred Stock, except
distributions made ratably on the Series R Preferred Stock and all other such parity
stock in proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.



		                      2.3.6 	Consolidation,
Merger, etc.






In
case the corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case the then
outstanding shares of Series R Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share equal to the Formula Number then in effect
times the aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock is
exchanged or changed.  In the event both this Section 2.3.6 and Section 2.3.2 appear to
apply to a transaction, this Section 2.3.6 will control.



		                      2.3.7 	No
Redemption; No Sinking Fund






(a)
     The shares of Series R Preferred Stock shall not be subject to redemption by the
corporation or at the option of any holder of Series R Preferred Stock; provided,
however, that the corporation may purchase or otherwise acquire outstanding shares of
Series R Preferred Stock in the open market or by offer to any holder or holders of
shares of Series R Preferred Stock.



(b)
     The shares of Series R Preferred Stock shall not be subject to or entitled to the
operation of a retirement or sinking fund.



		                      2.3.8 	Ranking






The
Series R Preferred Stock shall rank junior to all other series of Preferred Stock of the
corporation, unless the corporation’s Board of Directors shall specifically determine
otherwise in fixing the powers, preferences and relative, participating, optional and
other special rights of the shares of such Preferred Stock and the qualifications,
limitations and restrictions thereof.




A-5










		                      2.3.9 	Fractional
Shares






The
Series R Preferred Stock shall be issuable upon exercise of the Rights issued pursuant to
the Rights Agreement in whole shares or in any fractional share that is one one-hundredth
(1/100th) of a share or any integral multiple of such fraction, and shall entitle the
holder, in proportion to such holder’s fractional shares, to receive dividends, exercise
voting rights, participate in distributions and have the benefit of all other rights of
holders of Series R Preferred Stock.  In lieu of fractional shares, the corporation,
prior to the first issuance of a share or a fractional share of Series R Preferred Stock,
may elect to (a) make a cash payment as provided in the Rights Agreement for a fractional
share other than one one-hundredth (1/100th) of a share or any integral multiple thereof
or (b) issue depository receipts evidencing such authorized fractional share of Series R
Preferred Stock pursuant to an appropriate agreement between the corporation and a
depository selected by the corporation; provided, however, that such agreement shall
provide that the holders of such depository receipts shall have all the rights,
privileges and preferences to which they are entitled as holders of the Series R
Preferred Stock.



		                      2.3.10 	Reacquired
Shares






Any
shares of Series R Preferred Stock purchased or otherwise acquired by the corporation in
any manner whatsoever shall be retired and canceled promptly after the acquisition
thereof.  All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock, without designation as to series until such shares are once
more designated as part of a particular series by the corporation’s Board of Directors
pursuant to the provisions of Article 2 of the Restated Articles of Incorporation.



		                      2.3.11 	Amendment






None
of the powers, preferences and relative, participating, optional and other special rights
of the Series R Preferred Stock as provided in this Designation or in the Restated
Articles of Incorporation shall be amended in any manner that would alter or change the
powers, preferences, rights or privileges of the holders of Series R Preferred Stock so
as to affect them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series R Preferred Stock, voting as a separate
class.





A-6














EXHIBIT B





Certificate No.
R-                                                                            Rights



	 	NOT
 EXERCISABLE  AFTER  JUNE 1,  2017 OR EARLIER IF  REDEMPTION  OR EXCHANGE  OCCURS.  THE
RIGHTS ARE SUBJECT TO          REDEMPTION  AT THE  OPTION OF THE  COMPANY  AT $0.0025
 PER RIGHT AND TO  EXCHANGE  ON THE TERMS SET FORTH IN THE          RIGHTS AGREEMENT.








	 	RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS          SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND          NONTRANSFERABLE.

     






RIGHTS
CERTIFICATE



EDEN
BIOSCIENCE CORPORATION



This
certifies that ________________, or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles the owner thereof, subject to
the terms, provisions and conditions of the Rights Agreement, dated as of June 1, 2007
(the “Rights Agreement”), between EDEN BIOSCIENCE CORPORATION, a Washington corporation
(the “Company”), and Mellon Investor Services LLC, a New Jersey limited liability company
as Rights Agent (the “Rights Agent”), unless the Rights evidenced hereby have been
previously redeemed by the Company, to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00
P.M., Seattle, Washington time, on June 1, 2017 at the office of the Rights Agent
designated for such purpose, or at the office of its successor as Rights Agent, one
one-hundredth (1/100) of a fully paid non-assessable share of Series R Participating
Cumulative Preferred Stock, without par value (the “Preferred Shares”), of the Company,
at a purchase price of $12.00 per one one-hundredth of a Preferred Share (the “Purchase
Price”), upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase duly executed.  The number of Rights evidenced by this Rights
Certificate (and the number of one-hundredths of a Preferred Share that may be purchased
upon exercise hereof) set forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of June 1, 2007, based on the Preferred Shares as
constituted at such date.  As provided in the Rights Agreement, the Purchase Price and
the number of one one-hundredths of a Preferred Share that may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events.



If
the Rights evidenced by this Rights Certificate are at any time beneficially owned by an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are 





B-1


















defined in the
Rights Agreement), such Rights shall be null and void and nontransferable and the holder
of any such Right (including any purported transferee or subsequent holder) shall not
have any right to exercise or transfer any such Right.



This
Rights Certificate is subject to all the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made
for a full description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates.  Copies of the Rights Agreement are on file at the principal executive
offices of the Company.



This
Rights Certificate, with or without other Rights Certificates, upon surrender at the
office of the Rights Agent designated for such purpose, may be exchanged for another
Rights Certificate or Rights Certificates of like tenor and date evidencing rights
entitling the holder to purchase a like aggregate number of Preferred Shares as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered shall have
entitled such holder to purchase.  If this Rights Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.



Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Certificate (i)
may be redeemed by the Company at a redemption price (in cash or shares of Common Stock
or other securities of the Company deemed by the Company’s Board of Directors to be at
least equivalent in value) of $0.0025 per Right (subject to adjustment, as provided in
the Rights Agreement) or (ii) may be exchanged in whole or in part for shares of the
Company’s Common Stock, without par value, or for Preferred Shares.



The
Company may, but shall not be required to, issue fractions of Preferred Shares or
distribute certificates that evidence fractions of Preferred Shares upon the exercise of
any Right or Rights evidenced hereby.  In lieu of issuing fractional shares, the Company
may elect to make a cash payment as provided in the Rights Agreement for fractions of a
share other than one one-hundredth (1/100) of a share or any integral multiple thereof or
to issue certificates or utilize a depository arrangement as provided in the terms of the
Rights Agreement and the Preferred Shares.



No
holder of this Rights Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Preferred Shares or of any other securities of
the Company that may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting, shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscriptions rights, or otherwise, until the
Right or Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.





B-2










This
Rights Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Rights Agent.



WITNESS
the facsimile signature of the proper officers of the Company and its corporate seal, if
any.  Dated as of June 1, 2007.

	 	EDEN BIOSCIENCE CORPORATION
	 	 
	 	 
	 	By: /s/ Bradley S. Powell
	 	 Its: President 
	 	
       
	 	 
	COUNTERSIGNED:	 
	 	 
	Mellon Investor Services LLC

    as Rights Agent	 
	 	 
	 	 
	By: 	 
	
	 
	 Its: 	 
	
	 



B-3 







—Form of
Reverse Side of Rights Certificate—





FORM OF
ASSIGNMENT



(To be
executed by the registered holder if such holder desires to transfer the
                  Rights Certificate)



FOR VALUE
RECEIVED _____________________________________________ hereby sells, assigns and transfer
unto ______________________________________
      







(Please print
name and address of transferee)



this Rights
Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint _____________ as attorney, to transfer this Rights
Certificate on the books of the within-named Company, with full power of substitution.



The
undersigned hereby certifies that (1) the Rights evidenced by this Rights Certificate are
not being sold, assigned or transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement), (2) this Rights Certificate is not being sold, assigned or transferred
to or on behalf of any such Acquiring Person, Affiliate or Associate, and (3) after
inquiry and to the best knowledge of the undersigned, the undersigned did not acquire the
Rights evidenced by this Rights Certificate from any Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement).

	Dated: 	 
	
       	 
	 	 
	 	 Signature : 
	 	
       
	 	 
	Signature Guarantee*	 
	 	 
	 	 
	
	 









*Signatures
must be guaranteed by a participant in the Securities Transfer Agent Medallion Program,
the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion
Signature Program.





B-4













—Form of
Reverse Side of Rights Certificate—                                                                  

(continued)



FORM OF
ELECTION TO PURCHASE



(To be
executed if holder desires to exercise Rights represented by the Rights
                  Certificate)




To:  EDEN
BIOSCIENCE CORPORATION



The undersigned
hereby irrevocably elects to exercise __________ Rights represented by this Rights
Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights
and requests that certificates for such Preferred Shares be issued in the name of: Please
insert social security or other identifying number



 



(Please print
name and address)



 



If such number
of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights
Certificate for the balance remaining of such Rights shall be registered in the name of
and delivered to:



Please insert
social security or other identifying number



 



(Please print
name and address)



The
undersigned hereby certifies that (1) the Rights evidenced by this Rights Certificate are
not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), and (2) after inquiry and to the best
knowledge of the undersigned, the undersigned did not acquire the Rights evidenced by
this Rights Certificate from any Person who is or was an Acquiring Person or an Affiliate
or Associate thereof (as such terms are defined in the Rights Agreement).

	Dated: 	 
	

         	 
	 	 
	 	 Signature : 
	 	

         
	 	 
	Signature Guarantee*	 
	 	 
	 	 
	
	 




*Signatures
must be guaranteed by a participant in the Securities Transfer Agent Medallion Program,
the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion
Signature Program.



B-5












—Form of
Reverse Side of Rights Certificate—

(continued)



NOTICE



The signature
in the Form of Assignment or Form of Election to Purchase, as the case may be, must
conform to the name as written on the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.



In the event
the certification set forth above in the Form of Assignment or the Form of Election to
Purchase, as the case may be, is not completed, the Company and the Rights Agent will
deem the beneficial owner of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.





B-6














EXHIBIT C



EDEN
BIOSCIENCE CORPORATION



SHAREHOLDER
RIGHTS PLAN



SUMMARY OF
RIGHTS                                                      TO PURCHASE PREFERRED SHARES




	
     Distribution and Transfer 

Rights; Rights


Certificates:  	
of
         On June 1, 2007, the Board of Directors (the “Board of Directors”) of Eden
Rights;RightsCertificates:          Bioscience Corporation (the “Company”) authorized the
implementation of a                                       Shareholder Rights Plan and
declared a dividend of one preferred share                                       purchase
right (a “Right”) for each outstanding share of common stock,
                                      without par value, of the Company (the “Common
Shares”).  Prior to the                                       Distribution Date referred
to below, if any, the Rights will be evidenced                                       by
and trade with the certificates for the Common Stock.  After the
                                      Distribution Date, if any, the Company will cause
rights certificates to                                       be delivered to the
Company’s shareholders and the Rights will become
                                      transferable apart from the Common Stock.






	
     Distribution Date: 	
The
Rights will separate from the Common Stock and become exercisable
                                      following the earlier of (i) the close of business
on the tenth business                                       day after a public
announcement that a person or group (including any
                                      affiliate or associate of such person or group) has
acquired beneficial                                       ownership of 5%, or in the case
of any person or group (including any                                       affiliates or
associates of such person or group) that owned beneficially
                                      more than 5% or more of the outstanding Common
Shares on June 1, 2007, 13%                                       (or 18% in the case of
SF Holding Corp., an existing investor that owned
                                      in excess of 16% of the Company’s outstanding
Common Shares on June 1,                                       2007) or more of the
outstanding Common Shares (such person or group being
                                      an “Acquiring Person”) and (ii) the close of
business on such date, if                                       any, as may be designated
by the Board of Directors following the
                                      commencement of, or first public disclosure of an
intent to commence, a                                       tender or exchange offer for
outstanding Common Shares which could result                                       in the
offeror becoming the beneficial owner of 5% or 13% as the casemay
                                      be or more of the outstanding Common Shares (the
earlier of such dates                                       being the “Distribution
Date”).










C-1













	
     Preferred Shares 

Purchasable upon Exercise

of Rights:  	
After
the Distribution Date, each Right will entitle the holder to ExerciseofRights:
                  purchase, for $12.00 (the “Purchase Price”), one one-hundredth (1/100)
of                                       a share of Series R Participating Cumulative
Preferred Stock of the                                       Company (a “Preferred
Share”) with economic terms similar to that of one
                                      Common Share.






	
     Flip-In Provision: 	
In
the event a person or group becomes an Acquiring Person, the Rights
                                      will entitle each holder of a Right (other than an
Acquiring Person (or                                       any affiliate or associate of
such Acquiring Person)) to purchase, for the
                                      Purchase Price, that number of Common Shares
equivalent to the number of                                       Common Shares which at
the time of the transaction would have a market
                                      value of twice the Purchase Price.  Any Rights that
are at any time                                       beneficially owned by an Acquiring
Person (or any affiliate or associate                                       of an
Acquiring Person) will be null and void and nontransferable and any
                                      holder of any such Right (including any purported
transferee or subsequent                                       holder) will be unable to
exercise or transfer any such Right.






	
     Flip-Over Provision: 	
If,
at any time after any person or group becomes an Acquiring Person, the
                                      Company is acquired in a merger or other business
combination with another                                       entity, or if 50% or more
of its assets or assets accounting for 50% or                                       more
of its net income or revenues are transferred (in one or more
                                      transactions), each Right will entitle its holder
to purchase, for the                                       Purchase Price, that number of
shares of common stock of the person or                                       group
engaging in the transaction having a then current market value of
                                      twice the Purchase Price.






	
     Exchange Provisions: 	
At
any time after any person or group becomes an Acquiring Person, but
                                      before a person or group becomes the beneficial
owner of more than 50% of                                       the Common Shares, the
Board of Directors may elect to exchange each Right
                                      (other than Rights that have become null and void
and nontransferable as                                       described above) for
consideration per Right consisting of one-half of the
                                      number of Common Shares that would be issuable at
such time on the                                       exercise of one Right and without
payment of the Purchase Price.








C-2













	
     Redemption of Rights: 	
At
any time prior to any person or group becoming an Acquiring Person, the
                                      Board of Directors may redeem the Rights in whole,
but not in part, at a                                       price of $0.0025 per Right,
subject to adjustment as provided in the                                       Rights
Agreement (the “Redemption Price”).






	
     Expiration of Rights: 	
The
Rights are not exercisable until the Distribution Date and will expire
                                      on June 1, 2017, unless earlier redeemed or
exchanged by the Company.






	
     Amendment of Terms of

Rights: 	
of
Rights:         The terms of the Rights and the Rights Agreement may be amended without
                                      the approval of any holder of the Rights, at any
time prior to the                                       Distribution Date.






	
     Voting Rights: 	
Until
a Right is exercised, the holder thereof, as such, will have no
                                      rights as a shareholder of the Company, including,
without limitation, the                                       right to vote or receive
dividends.






	
     Antidilution Provisions: 	
In
order to preserve the actual or potential economic value of the Rights,
                                      the number of Preferred Shares or other securities
issuable upon exercise                                       of the Right, the Purchase
Price, the Redemption Price and the number of
                                      Rights associated with each outstanding Common
Share are all subject to                                       adjustment by the Board of
Directors pursuant to certain customary
                                      antidilution provisions.






	
     Taxes: 	
The
Rights distribution should not be taxable for federal income tax
                                      purposes.  Following an event that renders the
Rights exercisable or upon                                       redemption of the
Rights, shareholders may recognize taxable income.






The
foregoing is a summary of certain principal terms of the Shareholder Rights Plan and is
qualified in its entirety by reference to the detailed terms of the Rights Agreement.  A
copy of the Rights Agreement has been filed with the Securities and Exchange Commission
as an exhibit to a Registration Statement on Form 8-A and is available free of charge
from the Company.


C-3