CALGENE, INC.

                            (formerly Calgene II, Inc.)

                                        AND

                                  MONSANTO COMPANY

                    AMENDED AND RESTATED STOCKHOLDERS AGREEMENT


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                                 TABLE OF CONTENTS


        ARTICLE 1 Effect of this Agreement ..............................      2

  1.1   Effect of this Agreement ........................................      2

        ARTICLE 2 Compliance with Securities Act ........................      2

  2.1   Certain Definitions .............................................      2
  2.2   Requested Registration ..........................................      8
  2.3   Company Registration ............................................     11
  2.4   Expenses of Registration ........................................     12
  2.5   Registration Procedures .........................................     13
  2.6   Indemnification .................................................     14
  2.7   Information by Holder ...........................................     16
  2.8   Rule 144 Reporting ..............................................     17
  2.9   Transfer of Registration Rights .................................     17
        2.10 Limitations on Subsequent Registration Rights ..............     18
        2.11 Termination of Registration Rights .........................     18
        2.12 "Market Stand-off" Agreement ...............................     18

        ARTICLE 3 Anti-Dilution Rights and Limitations on Owner .........     18

  3.1   Anti-Dilution Rights ............................................     18
  3.2   Private Offering ................................................     19
  3.3   Public Offering .................................................     19
  3.4   Limitations .....................................................     20
  3.5   Open Market Purchases to Maintain Ownership Percentage ..........     20
  3.6   Limitations on Holder's Ownership ...............................     20
  3.7   Limitations on Holder's Resale of Company Securities ............     21

        ARTICLE 4 Company and Calgene Corporate Governance ..............     22

  4.1   Composition of the Board of Directors and Calgene Board .........     22
  4.2   Solicitation and Voting of Shares ...............................     25
  4.3   Committees ......................................................     26
  4.4   Approval Required for Certain Actions ...........................     28
  4.5   Enforcement of this Agreement ...................................     31
  4.6   Certificate of Incorporation and By-laws ........................     31
  4.7   Advisors ........................................................     31
  4.8   Injunctive Relief ...............................................     31

        ARTICLE 5 Governance of Gargiulo ................................     32
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        ARTICLE 6 Miscellaneous .........................................     32

  6.1   Governing Law ...................................................     32
  6.2   Successors and Assigns ..........................................     32
  6.3   Entire Agreement; Amendment .....................................     32
  6.4   Notices .........................................................     32
  6.5   Delays or Omissions .............................................     33
  6.6   Counterparts ....................................................     33
  6.7   Severability ....................................................     33
  6.8   Stock Legends ...................................................     34
  6.9   [This section intentionally left blank.] ........................     34
        6.10 Audits, Consultants and Inspections ........................     34
        6.11 No Third Party Beneficiaries ...............................     35
        6.12 Sections and Articles ......................................     35
        6.13 Headings ...................................................     35

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                    AMENDED AND RESTATED STOCKHOLDERS AGREEMENT

     AGREEMENT made as of the 12th day of November, 1996, by and between
Calgene, Inc., a Delaware corporation, (formerly known as Calgene II, Inc.)
having its principal place of business at 1920 Fifth Street, Davis, California
95616 (the "Company"), and Monsanto Company, a Delaware corporation, having its
principal place of business at 800 North Lindbergh Boulevard, St. Louis,
Missouri 63167 ("Monsanto").

     WHEREAS, Calgene Technology Corporation, a Delaware corporation and a
wholly- owned subsidiary of the Company (formerly known as Calgene, Inc.)
("Calgene"), and Monsanto entered into an Agreement and Plan of Reorganization,
dated as of October 13, 1995 (the "Reorganization Agreement"), and certain other
Transaction Agreements (as defined in the Reorganization Agreement) whereby
Monsanto acquired shares of the Company's common stock, par value $.001 per
share ("Common Stock") and may acquire additional shares of Common Stock;

     WHEREAS, the Company and Monsanto agreed that the Company shall, at the
request of a Holder (as hereafter defined), register under the Securities Act of
1933, as amended (the "Securities Act"), and register or qualify under any
applicable state securities or blue sky laws the Common Stock of the Company
acquired or to be acquired by Holder so as to permit a Holder to sell such
Common Stock in the public markets;

     WHEREAS, the Company and Monsanto agreed on certain restrictions and
obligations with respect to the management and operation of the Company, Calgene
and Tomato Investment Associates, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Company ("Tomato Associates");

     WHEREAS, the Company and Monsanto have entered into a Stock Purchase
Agreement dated as of September 27, 1996 (the "Stock Purchase Agreement")
pursuant to which Monsanto has agreed to purchase additional shares of Common
Stock of the Company; and

     WHEREAS, in connection with the consummation of the transaction
contemplated by the Stock Purchase Agreement, the Company and Monsanto desire to
amend the Stockholders Agreement dated March 31, 1996 by and between the Company
and Monsanto (the "Prior Stockholders Agreement") in its entirety and to become
bound by the terms of this Agreement;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions herein contained, the Company and Monsanto hereby agree as
follows:

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                                     ARTICLE 1
                              Effect of this Agreement

     1.1  Effect of this Agreement. Effective upon the date hereof, and subject
          only to the conditions set forth herein, all provisions relating to
          the granting of registration rights and covenants related thereto made
          by the Company and Monsanto shall be contained in this Agreement. The
          registration rights and covenants provided herein set forth the sole
          and entire agreement between the Company and Monsanto on the subject
          matter of registration rights.


                                     ARTICLE 2
                           Compliance with Securities Act

     2.1  Certain Definitions. As used in this Agreement, the following terms
          shall have the following respective meanings (all terms defined in
          this Article 2 or in other provisions of this Agreement in the
          singular shall have the same meaning when used in the plural and vice
          versa):

          "Affiliate" has the same  meaning as in Rule 12b-2  promulgated  under
          the Exchange Act.

          "Associate" has the same  meaning as in Rule 12b-2  promulgated  under
          the Exchange Act.

          "Board" or "Board of Directors" means the Board of Directors of the
          Company except where the context otherwise requires.

          "Calgene" has the meaning set forth in the recitals herein.

          "Calgene Board" means the Board of Directors of Calgene.

          "Calgene Director" means a member of the Calgene Board.

          "Commission" means the Securities and Exchange Commission or any other
          federal agency at the time administering the Securities Act.

          "Common Stock"  means  the  Common  Stock,  $.001  par  value,  of the
          Company.

          "Company" has the meaning set forth in the first paragraph hereof.

          "Company Credit Facility" means the Holding Company Credit Facility
          Agreement dated March 31, 1996 between the Company and Monsanto.


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          "Company Director" means an Independent Director who is designated for
          such position by the Company in accordance with Section 4.1 hereof.

          "Company Management Director" means the Chief Executive Officer (or,
          if there is none at any time, a Director nominated by a majority of
          the Company Directors) and a second Director who shall be nominated by
          a majority of the Company Directors.

          "Company Securities" has the meaning set forth in Section 3.1 hereof.

          "Control Securities" means securities of the Company, other than
          Restricted Securities, owned by a Holder at the time such Holder would
          be deemed to be an Affiliate of the Company.

          "Credit Facilities" means the Company Credit Facility and the Gargiulo
          Credit Facility.

          "Director" means a member of the Board of Directors of the Company.

          "Effective Date" means November 12, 1996.

          "Effective Date Percentage" means the greater of 53% or the percentage
          of outstanding shares of Common Stock of the Company held by Monsanto
          immediately after the consummation of the transactions contemplated by
          the Stock Purchase Agreement.

          "Equity Security" means (i) any Common Stock or other Voting Stock,
          (ii) any securities of the Company convertible into or exchangeable
          for Common Stock or other Voting Stock or (iii) any options, rights or
          warrants (or any similar securities) issued by the Company to acquire
          Common Stock or other Voting Stock.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Financial Purchaser" means a Person (i) purchasing Company Securities
          from Monsanto for investment purposes or otherwise in the ordinary
          course of business and not for the purpose nor with the effect of
          changing or influencing the control of the Company and (ii) which
          Person is not already primarily in the same lines of business as the
          Company.

          "Gargiulo" means Gargiulo,  Inc.  formerly known as Tomato  Investment
          Associates, Inc.

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          "Gargiulo Business" means the business transacted by Tomato Associates
          after March 31, 1996, which business was transacted by Gargiulo prior
          to March 31, 1996.

          "Gargiulo  Credit   Facility"   means  the  Gargiulo  Credit  Facility
          Agreement dated March 31, 1996 between the Company and Monsanto.

          "hereto", "hereunder", "herein", "hereof" and the like mean and refer
               to this Agreement as a whole and not merely to the specific
               article, section, paragraph or clause in which the respective
               word appears.

              "Holder" means Monsanto and, subject to Section 2.9 hereof and
              except for purposes of Article 3 hereof, any subsequent holder of
              outstanding Registrable Securities.

              "Indemnified  Party" has the meaning set forth in Section  2.6(c)
              hereof.

              "Indemnifying  Party" has the meaning set forth in Section 2.6(c)
              hereof.

              "Independent Director" means a Director or Calgene Director (i)
              who is not and has never been an officer or employee of Calgene,
              the Company, any Affiliate or Associate of Calgene or the Company
              or of a Person that derived five percent (5%) or more of its
              revenues or earnings in its most recent fiscal year from
              transactions involving Calgene, the Company or any Affiliate or
              Associate of Calgene or the Company, (ii) who is not and has never
              been an officer or employee of Monsanto, any Affiliate or
              Associate of Monsanto or of a Person that derived more than five
              percent (5%) of its revenues or earnings in its most recent fiscal
              year from transactions involving Monsanto or any Affiliate or
              Associate of Monsanto, (iii) who is not and never has been an
              officer or employee of Gargiulo, any Affiliate or Associate of
              Gargiulo or of a Person that derived more than five percent (5%)
              of its revenues or earnings in its most recent fiscal year from
              transactions involving Gargiulo or any Affiliate or Associate of
              Gargiulo, (iv) who has no affiliation, compensation, consulting or
              contracting arrangement with Calgene, the Company, Monsanto,
              Gargiulo or their respective Affiliates or Associates or any other
              Person such that a reasonable person would regard such Director as
              likely to be unduly influenced by management of Calgene, the
              Company or Monsanto, respectively (provided, however, that no
              Person shall be regarded as being unduly influenced by the
              management of Monsanto merely because such Person serves or
              previously served as a director of Monsanto or any Affiliate or
              Associate of Monsanto), and (v) who has an outstanding reputation
              for personal integrity and distinguished achievement in areas
              relevant to the Company. Notwithstanding the foregoing, no member
              of the immediate family of any Person who does not qualify to be
              an Independent Director by reason



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              of clause (i), (ii), (iii) or (iv) above shall be considered an
              Independent Director. For purposes of the preceding sentence, the
              term "immediate family" shall have the same meaning as set forth
              in Item 404(a) of Regulation S-K. Without limiting the foregoing,
              Roger H. Salquist shall qualify as an Independent Director so long
              as he continues to qualify under clauses (iv) and (v) of such
              definition. Roger H. Salquist shall not fail to qualify under
              clause (iv) above as a result of his Change in Control Employment
              Agreement dated July 19, 1995, as modified, or Consulting
              Agreement dated September 16, 1996 with the Company. Any of the
              above restrictions may be waived by unanimous action of the Board
              of Directors.

              "Monsanto" has the meaning set forth in the first paragraph
              hereof.

              "Monsanto Director" means a Director or Calgene Director,
              including any Monsanto Management Director, who is designated for
              such position by Monsanto in accordance with Section 4.1 hereof.

              "Monsanto Management Director" means a Director or Calgene
              Director who is designated for such position by Monsanto in
              accordance with Section 4.1 hereof and who is or was an employee
              of Monsanto.

              "New Percentage Ownership" has the meaning set forth in
              Section 3.6(c) hereof.

              "Non-Financial  Purchaser" means a Person, other than a Financial
              Purchaser, purchasing Company Securities from Monsanto.

              "Operating Plan" has the meaning set forth in Section  4.4(a)(ix)
              hereof.

              "Other Selling Stockholders" has the meaning set forth in Section
              2.2(c) hereof.

              "Percentage Interest" means the percentage of outstanding Voting
              Stock that is controlled directly or directly by Monsanto and its
              Affiliates.

              "Person" means a corporation, association, partnership, joint
              venture, limited liability company, individual, trust,
              unincorporated organization, a government agency or political
              subdivision thereof and any other entity.

              "Preliminary Prospectus" means a preliminary prospectus as
              contemplated by Rule 430 or 430A under the Securities Act included
              at any time in the Registration Statement.

              "Pre-Offering  Percentage"  has the  meaning set forth in Section
              3.1 hereof.


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              "Prospectus" means (i) the prospectus as first filed with the
              Commission pursuant to Rule 424(b) under the Securities Act or,
              (ii) if no such filing is required, the form of final prospectus
              included in the Registration Statement at the effective date
              thereof or (iii) if a Term Sheet or Abbreviated Term Sheet (as
              such terms are defined in Rule 434(b) and 434(c), respectively,
              under the Securities Act) is filed with the Commission pursuant to
              Rule 424(b) (7) under the Securities Act, the Term Sheet or
              Abbreviated Term Sheet and the last Preliminary Prospectus filed
              with the Commission prior to the time the Registration Statement
              became effective, taken together (including, in each case, the
              documents incorporated by reference therein pursuant to Item 12 of
              Form S-3 under the Securities Act), together with any supplement
              to any of the foregoing.

              "Registration Statement" means any registration statement of the
              Company filed under the Securities Act which covers any of the
              Registrable Securities pursuant to the provisions of this
              Agreement, including the Prospectus relating thereto and all
              amendments and supplements to such registration statement,
              including post-effective amendments, all exhibits and all material
              incorporated or deemed to be incorporated by reference in such
              registration statement.

              "Registrable Securities" means shares of Common Stock issued or
              issuable to Monsanto pursuant to the Transaction Agreements and
              the Prior Stockholders Agreement and the Stock Purchase Agreement
              whether owned by Monsanto or a permitted transferee of Monsanto
              and all such other securities of the Company acquired by Monsanto
              or any Affiliate of Monsanto in accordance herewith.

              "Register", "Registered" and "Registration", whether or not
              capitalized, mean and refer to a registration effected by
              preparing and filing a Registration Statement in compliance with
              the Securities Act and applicable rules and regulations
              thereunder, and the declaration or ordering of the effectiveness
              of such Registration Statement.

              "Registration Expenses" means all expenses incurred by the Company
              in compliance with this Article 2, including, without limitation,
              all registration fees, qualification fees, filing fees,
              advertising and road show expenses (excluding advertising and road
              show expenses incurred by a Holder), printing expenses, escrow
              fees, fees and disbursements of counsel for the Company, blue sky
              fees and expenses, and the expense of any special audits incident
              to or required by any such registration (but excluding the
              compensation of regular employees of the Company, which shall be
              paid in any event by the Company).

              "Reorganization  Agreement"  has the  meaning  set  forth  in the
              recitals herein.

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              "Requesting Holder" means a Holder requesting any registration
              pursuant to Section 2.2 hereof.

              "Restricted Securities" means the securities of the Company
              acquired by a Holder from the Company or an Affiliate of the
              Company otherwise than pursuant to a public offering.

              "Section 16  Officers"  has the  meaning  set  forth  in  Section
              4.3(b)(iii) hereof.

              "Securities Act" means the Securities Act of 1933, as amended.

              "Selling Expenses" means all underwriting discounts and selling
              commissions applicable to the sale of Registrable Securities.

              "Strategic Plan" has the meaning set forth in Section 4.4(a)(ix)
              hereof.

              "Subsidiary" has the same meaning as in Rule l2b-2 promulgated
              under the Exchange Act.

              "Substantial Part" means more than ten percent (10%) of the total
              consolidated assets of the Company as shown on the Company's
              consolidated balance sheet as of the end of the most recent fiscal
              quarter ending prior to the time the determination is made.

              "Tomato Associates" has the meaning set forth in the recitals
              herein.

              "Transaction Agreements" has the meaning set forth in the
              Reorganization Agreement.

              "Trigger Event" means the earliest of (i) any time that Monsanto's
              Percentage Interest is at least fifty-five percent (55%), (ii) the
              Company elects to convert borrowings made from Monsanto into
              Equity Securities and Monsanto's Percentage Interest is at least
              fifty percent (50%) after such conversion, or (iii) the closing of
              Monsanto's purchase of additional shares of Common Stock pursuant
              to the Stock Purchase Agreement.

              "Unaffiliated Equity Holders" means holders of Equity Securities
              other than Monsanto or any of its Affiliates.

              "Voting Stock" means securities having the right to vote generally
              in any election of Directors of the Company (other than solely by
              reason of the occurrence of an event).


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         2.2  Requested Registration.

               (a)  Request for Registration.  Holders of Registrable Securities
                    shall  have the right to  request  (with  such  requests  in
                    writing  and  stating  the  number of shares of  Registrable
                    Securities  to be  disposed  of and the  intended  method of
                    disposition  of  shares  by  such  Holders)  up to  two  (2)
                    registrations  on Form  S-3  (and  up to two (2)  additional
                    registrations on Form S-3 for each conversion of outstanding
                    principal  or interest  into shares of Common Stock upon the
                    occurrence of an "Event of Default" under the Company Credit
                    Facility or the Gargiulo Credit Facility (as defined in each
                    such  Credit  Facility,   respectively))  at  the  Company's
                    expense and an unlimited number of additional  registrations
                    on Form S-3 at the selling Holder's  expense,  provided that
                    the  requests  for  additional  registrations  are  made  by
                    Holders  of at least ten  percent  (10%) of the  Registrable
                    Securities, subject only to the following:

               (i)  The Company  shall not be required to effect a  registration
                    pursuant to this  Section 2.2 prior to  September  30, 1998,
                    unless an Event of Default has  occurred  and is  continuing
                    under the  Company  Credit  Facility  or under the  Gargiulo
                    Credit  Facility,  in  which  event  the  Company  shall  be
                    required to effect a  registration  pursuant to this Section
                    2.2 at any time upon the request of a Holder with respect to
                    any  shares  of  Common   Stock  issued  to  a  Holder  upon
                    conversion  of  outstanding  principal  or accrued  interest
                    under  either the Company  Credit  Facility or the  Gargiulo
                    Credit  Facility after the occurrence of an Event of Default
                    under either of such agreements.

               (ii) The Company  shall not be required to effect a  registration
                    pursuant to this Section 2.2 within one hundred eighty (180)
                    days after the effective date of the last such  registration
                    pursuant to this Section 2.2.

               (iii)The Company  shall not be required to effect a  Registration
                    Statement  in  any  particular  jurisdiction  in  which  the
                    Company  would be required  to execute a general  consent to
                    service   of  process  in   effecting   such   registration,
                    qualification  or compliance,  unless the Company is already
                    subject to service in such jurisdiction and except as may be
                    required  by the  Securities  Act  or  applicable  rules  or
                    regulations thereunder.

               (iv) The Company  shall not be required to effect a  Registration
                    Statement  for a period  of not more than  ninety  (90) days
                    immediately  following the delivery of a certificate  signed
                    by the



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                    President of the Company to the Requesting  Holders stating
                    that, in the good faith  judgment of the Board of Directors
                    of the Company,  it would be seriously  detrimental  to the
                    Company and its shareholders for such  Registration
                    Statement to be filed  on or  before  the date  filing
                    would  otherwise  be required hereunder;  provided,
                    however, that the Company may not  utilize  this right
                    more than once in any twelve  (12) month  period and the
                    Company may not  exercise  this right based on the fact
                    that the Company has  recently  registered any of its
                    securities  for the account of a security  holder or
                    holders  exercising their respective demand
                    registration rights.

                    If the Company cannot qualify for registration on Form S-3,
                    then the Company shall effect any registration required or
                    requested by the Holder on Form S-1, or such other
                    appropriate form, in which event this Section 2.2 shall
                    apply in all respects as if the words "Form S-3" were
                    replaced by the words "Form S-1" or the appropriate
                    designation for such other form.

               (b)  Notice of Inclusion.  The Company shall give written  notice
                    to all Holders of Registrable Securities of the receipt of a
                    request for  registration  pursuant to this  Section 2.2 and
                    shall provide a reasonable  opportunity for other Holders to
                    participate in the registration; provided, however, that, if
                    the registration is for an underwritten  offering,  then the
                    terms  of  Section   2.2(c)   hereof   shall  apply  to  all
                    participants in such offering. Subject to the foregoing, the
                    Company  shall use its best  efforts to effect  promptly the
                    registration of all shares of Registrable Securities on Form
                    S-3 to the extent requested by the Holder or Holders thereof
                    for purposes of disposition.

               (c)  Underwriting. If the Requesting Holders intend to distribute
                    the Registrable Securities covered by their request by means
                    of an underwriting, then they shall so advise the Company as
                    a part of their  request made  pursuant to this Section 2.2,
                    and  the  Company  shall  include  such  information  in the
                    written notice  referred to in Section  2.2(b)  hereof.  The
                    right of any Holder to registration pursuant to this Section
                    2.2 shall be conditioned upon such Holder's participation in
                    such   underwriting  and  the  inclusion  of  such  Holder's
                    Registrable  Securities  in the  underwriting  to the extent
                    requested and to the extent provided herein.

                    The Company shall (together with all Holders proposing to
                    distribute their securities through such underwriting) enter
                    into an underwriting agreement in customary form with the
                    representative of the underwriter



<PAGE>
                   or underwriters of recognized national standing, selected for
                   such underwriting by a majority in interest of the Requesting
                   Holders and reasonably acceptable to the Company.
                   Notwithstanding any other provision of this Section 2.2, if
                   the representative advises the Requesting Holders in writing
                   that marketing factors require a limitation on the number of
                   shares to be underwritten, then the Requesting Holders shall
                   so advise all Holders, and the number of shares of
                   Registrable Securities that may be included in the
                   registration and underwriting shall be allocated first among
                   all Holders thereof in proportion, as nearly as practicable,
                   to the respective amounts of Registrable Securities held by
                   such Holders at the time of filing the Registration
                   Statement. No Registrable Securities excluded from the
                   underwriting by reason of the underwriter's marketing
                   limitation shall be included in such registration.

                   If any Holder of Registrable Securities disapproves of the
                   terms of the underwriting, then such person may elect to
                   withdraw therefrom by written notice to the Company, the
                   underwriter and the Requesting Holders. The Registrable
                   Securities and/or other securities so withdrawn shall also be
                   withdrawn from registration; provided, however, that, if, by
                   the withdrawal of such Registrable Securities, a greater
                   number of Registrable Securities held by other Holders may be
                   included in such registration (up to the maximum of any
                   limitation imposed by the underwriters), then the Company
                   shall offer to all Holders who have included Registrable
                   Securities in the registration the right to include
                   additional Registrable Securities in the same proportion used
                   to determine the underwriter limitation in this Section
                   2.2(c).

                   If the underwriter has not limited the number of Registrable
                   Securities to be underwritten, then the Company and its
                   executive officers, and such other Persons as are determined
                   by the Board of Directors, their successors, and their
                   assigns ("Other Selling Stockholders"), may include
                   securities for their own account in such registration if the
                   underwriter so agrees and if the number of Registrable
                   Securities held by the Holders that would otherwise have been
                   included in such registration and underwriting will not
                   thereby be limited for any reason, including but not limited
                   to the price for which the Registrable Securities will be
                   sold. To the extent that the underwriter wishes to limit the
                   number of shares to be included in the registration on behalf
                   of the Company and the Other Selling Stockholders, the shares
                   of Common Stock to be registered held by the Other Selling
                   Stockholders shall be excluded from such offering prior to
                   excluding any shares held by the Company and those held by
                   the Company shall be excluded prior to excluding any
                   Registrable Securities held by the Holders.


<PAGE>
         2.3  Company Registration.

              (a)  Notice and Inclusion. If, at any time after September 30,
                   1998, the Company shall determine to register any of its
                   securities for its own account, other than a registration
                   relating solely to employee benefit plans, or a registration
                   relating solely to a Commission Rule 145 transaction, the
                   Company shall:

                   (i)  promptly give to each Holder written notice thereof
                        (which shall include a list of the jurisdictions in
                        which the Company intends to attempt to qualify such
                        securities under the applicable blue sky or other state
                        securities laws); and

                   (ii) include in such registration (and any related
                        qualification under blue sky laws or other compliance),
                        and in any underwriting involved therein, all
                        Registrable Securities specified in a written request or
                        requests, within twenty (20) days after receipt of the
                        written notice from the Company, by any Holder or
                        Holders.

               (b)  Underwriting. If the registration of which the Company gives
                    notice is for a registered public offering by the Company of
                    its  securities  through an  underwriting,  then the Company
                    shall so advise the Holders as a part of the written  notice
                    given pursuant to Section  2.3(a)(i)  hereof. In such event,
                    the right of any  Holder to  registration  pursuant  to this
                    Section  2.3  shall  be   conditioned   upon  such  Holder's
                    participation in such underwriting and the inclusion of such
                    Holder's  Registrable  Securities in the underwriting to the
                    extent provided herein.  All Holders proposing to distribute
                    their securities  through such underwriting  shall (together
                    with the  Company,  and all the Other  Selling  Stockholders
                    distributing  their  securities  through such  underwriting)
                    enter into an underwriting  agreement in customary form with
                    the underwriter or underwriters selected for underwriting by
                    the  Company.  Notwithstanding  any other  provision of this
                    Section 2.3, if the  underwriter  determines  that marketing
                    factors  require a limitation  on the number of shares to be
                    underwritten,  then the  underwriter  may exclude  from such
                    registration and underwriting some or all of the Registrable
                    Securities  held by the  Holders  or the stock held by Other
                    Selling Stockholders in accordance with this Section 2.3(b).
                    The  Company  shall so  advise  all  Holders  and all  Other
                    Selling  Stockholders  distributing their securities through
                    such  underwriting,  and (i) as to the first registration in
                    which Holders are entitled to  participate  pursuant to this
                    Section 2.3, the number of Registrable  Securities and other
                    securities  that may be  included  in the  registration  and
                    underwriting shall be allocated among all Holders thereof on
                    the basis that shares held by all



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                  the Other Selling Stockholders who are not Holders shall
                   first be excluded to the extent required and, if further
                   exclusion is necessary, shares held by the selling Holders
                   shall then be excluded; provided, however, that, as among the
                   respective Other Selling Stockholders as a group on the one
                   hand and the Holders as a group on the other hand suffering
                   such exclusion, the exclusion shall be in proportion, as
                   nearly as practicable, to the amount of securities entitled
                   to inclusion in such registration held by each of the Other
                   Selling Stockholders as a group and each of the Holders at
                   the time of filing the Registration Statement; and (ii) as to
                   all subsequent registrations, the number of shares of
                   Registrable Securities and other securities that may be
                   included in the registration and underwriting shall be
                   allocated among all Other Selling Stockholders and the
                   Holders in proportion, as nearly as practicable, to the
                   respective amounts of securities entitled to inclusion in
                   such registration held by all such Other Selling Stockholders
                   and Holders at the time of filing the Registration Statement.
                   For purposes of the apportionment provisions in clause (i)
                   above, for any selling Holder that is a partnership or
                   corporation, the partners, retired partners, and shareholders
                   of such Holder, the estate and family members of such
                   partners and retired partners, and any trusts for the benefit
                   of any of the foregoing persons shall be deemed to be a
                   single "selling Holder," and any pro rata reduction with
                   respect to such selling Holder shall be based upon the
                   aggregate number of shares carrying registration rights owned
                   by all entities and individuals included in such "selling
                   Holder," as defined in this sentence. If any Other Selling
                   Stockholder or Holder disapproves of the terms of any such
                   underwriting, he may elect to withdraw therefrom by written
                   notice to the Company and the underwriter. Any securities
                   excluded or withdrawn from such underwriting shall be
                   withdrawn from such registration.

         2.4  Expenses of Registration. All Registration Expenses incurred in
              connection with any registration qualification or compliance
              pursuant to this Article 2 shall be borne by the Company;
              provided, however, that the Registration Expenses for the fifth
              and all subsequent registrations under Section 2.2(a) hereof
              requested by the Holders shall be borne by the requesting Holders
              pro rata on the basis of the number of their shares so registered.
              All Selling Expenses relating to the securities registered by
              Holders and, if applicable, Other Selling Stockholders, and fees
              and disbursements of counsel, shall be borne by the Holders or the
              Other Selling Stockholders, as the case may be, of such securities
              pro rata on the basis of the number of their shares so registered.


<PAGE>
         2.5  Registration Procedures.

               (a)  Company  shall use its best  efforts to  register or qualify
                    the  Registrable  Securities  covered  by such  Registration
                    Statement  under such other  securities  or blue sky laws of
                    such United States  jurisdictions as Holder shall reasonably
                    request  and do any and all acts  and  things  which  may be
                    necessary or desirable to enable  Holder to  consummate  the
                    public  sale or  other  disposition  in such  jurisdictions;
                    provided,  however,  that  Company  shall not be required in
                    connection therewith or as a condition thereto to qualify to
                    do business or file a general  consent to service of process
                    in any such jurisdictions.

               (b)  The Company represents and warrants that, on the date of its
                    effectiveness, the Registration Statement will comply in all
                    material  respects with the applicable  requirements  of the
                    Securities Act and the rules  thereunder,  including without
                    limitation Rule 415; on the date of its  effectiveness,  the
                    Registration Statement will not contain any untrue statement
                    of a  material  fact or  omit to  state  any  material  fact
                    required to be stated  therein or necessary in order to make
                    the  statements  made  therein  not  misleading;   provided,
                    however,  that no  representation  is made by  Company  with
                    respect  to  information  relative  to any  Holder;  and the
                    Prospectus  will  not  include  any  untrue  statement  of a
                    material fact or omit to state a material fact  necessary in
                    order  to make  the  statements  therein,  in  light  of the
                    circumstances  under which they were made,  not  misleading;
                    provided, however, that no representation is made by Company
                    with respect to information relative to any Holder.

               (c)  If, at any time or times while the Registration Statement is
                    effective,  Company  notifies  Holder that a development has
                    occurred or is pending which,  based upon  consultation with
                    Company's  legal counsel,  Company  reasonably  believes may
                    cause the then current  Prospectus  not to be in  compliance
                    with applicable  securities  laws, then Holder shall refrain
                    from delivering the Prospectus and from making any offers or
                    sales of  Registrable  Securities  requiring the delivery of
                    the Prospectus  until such time as Company  either  notifies
                    Holder  that  the  Prospectus  complies  with  such  laws or
                    delivers  an  amended   Prospectus  in  replacement  of  the
                    deficient Prospectus.  Company shall use its reasonable best
                    efforts to  minimize  the time during  which  Holder must so
                    refrain,  and no more than one (1) such  period  of  refrain
                    shall be imposed  during any  period of one  hundred  eighty
                    (180) days.

              (d)  At least two (2) business days prior to the initial filing of
                   the Registration Statement or Prospectus and no fewer than
                   two (2) business days prior to the filing of any amendment or
                   supplement thereto



<PAGE>
                   (including any document that would be incorporated or deemed
                   to be incorporated therein by reference), Company shall
                   furnish Holder, its legal counsel and the managing
                   underwriter, if any, copies of all such documents proposed to
                   be filed, which documents (other than those incorporated or
                   deemed to be incorporated by reference) shall be subject to
                   review of Holder, its legal counsel and such underwriters, if
                   any, and Company shall cause its officers and directors and
                   the independent certified public accountants to Company to
                   respond to such inquiries as shall be necessary, in the
                   opinion of respective counsel to Company and any such
                   underwriters, to conduct a reasonable investigation within
                   the meaning of the Securities Act. Company shall not file any
                   such Registration Statement or Prospectus or any amendments
                   or supplements thereto to which Holder, its legal counsel, or
                   the managing underwriters, if any, shall reasonably object on
                   a timely basis (i.e., within two (2) business days of receipt
                   thereof).

              (e)  Company shall promptly notify Holder when the Registration
                   Statement is declared effective; notify Holder of any
                   stop-order or similar proceeding by the Commission or any
                   state securities authority; and furnish such number of
                   Prospectuses, Prospectus supplements and other documents
                   incident thereto as Holder from time to time may reasonably
                   request.

              (f)  In the event of any breach by Company of the provisions of
                   Section 2.2, 2.3, 2.4 or 2.5, the parties agree that Holder
                   will suffer irreparable harm. Accordingly, the parties agree
                   that the provisions of Sections 2.2, 2.3, 2.4 and 2.5 are
                   specifically enforceable by Holder and that Holder shall be
                   entitled to temporary and permanent injunctive relief against
                   Company and the other rights and remedies to which Holder may
                   be entitled to at law, in equity or under this Agreement for
                   any such breach.

         2.6  Indemnification.

               (a)  Indemnification by the Company.  The Company shall indemnify
                    each   Holder   with   respect   to   which    registration,
                    qualification  or compliance  has been effected  pursuant to
                    this Article 2, each of its officers, directors,  employees,
                    agents and  partners,  each Person  controlling  such Holder
                    within the meaning of Section 15 of the Securities Act, each
                    underwriter,  if any,  and  each  Person  who  controls  any
                    underwriter   within  the  meaning  of  Section  15  of  the
                    Securities  Act,  against  all  expenses,   claims,  losses,
                    damages and  liabilities  (or  actions in respect  thereof),
                    including any of the foregoing incurred in settlement of any
                    litigation, commenced or threatened, arising out of or based
                    on any untrue  statement (or alleged untrue  statement) of a
                    material fact contained in any Prospectus,



<PAGE>
                   offering circular or other document (including any related
                   Registration Statement, notification or the like) incident to
                   any such registration qualification or compliance, or based
                   on any omission (or alleged omission) to state therein a
                   material fact required to be stated therein or necessary to
                   make the statements therein not misleading, or any violation
                   by the Company of the Securities Act or any rule or
                   regulation thereunder applicable to the Company and relating
                   to action or inaction required of the Company in connection
                   with any such registration, qualification or compliance. The
                   Company shall reimburse each such Holder, each of its
                   officers, directors, employees, agents and partners, and each
                   Person controlling such Holder, each such underwriter and
                   each Person who controls any such underwriter for any legal
                   and any other expenses reasonably incurred in connection with
                   investigating, preparing or defending any such expense,
                   claim, loss, damage, liability or action; provided, however,
                   that the Company shall not be liable in any such case to the
                   extent that any such claim, loss, damage, liability, action
                   or expense arises out of or is based on any untrue statement
                   or omission or alleged untrue statement or omission made in
                   reliance upon and in conformity with written information
                   furnished to the Company by an instrument duly executed by
                   such Holder or underwriter and stated to be specifically for
                   use therein.

               (b)  Indemnification  by the Holders.  To the extent set forth in
                    the second  sentence  of this  Section  2.6(b),  each Holder
                    shall, if Registrable Securities or other securities held by
                    such Holder are included in the  securities as to which such
                    registration, qualification or compliance is being effected,
                    indemnify  the  Company,  each of its  directors,  officers,
                    employees  and  agents,  each  underwriter,  if any,  of the
                    Company's   securities   covered  by  such  a   Registration
                    Statement,  each  Person who  controls  the  Company or such
                    underwriter   within  the  meaning  of  Section  15  of  the
                    Securities  Act, each other such Holder,  each of such other
                    Holder's   officers,   directors,   employees,   agents  and
                    partners, and each Person controlling such Holder within the
                    meaning of  Section 15 of the  Securities  Act  against  all
                    expenses,   claims,  losses,  damages  and  liabilities  (or
                    actions in respect thereof),  including any of the foregoing
                    incurred  in  settlement  of any  litigation,  commenced  or
                    threatened,  arising out of or based on any untrue statement
                    (or alleged untrue statement) of a material fact made by the
                    Holder and  contained  in any such  Registration  Statement,
                    Prospectus,  offering  circular  or other  document,  or any
                    amendment  or  supplement  thereto or  incident  to any such
                    registration,  qualification  or  compliance or based on any
                    omission (or alleged  omission) to state  therein a material
                    fact required to be made by the Holder and stated therein or
                    necessary to make the  statements  therein not misleading or
                    any  violation  by the  Company  of any  rule or  regulation
                    promulgated



<PAGE>
                   under the Securities Act applicable to the Company in
                   connection with such registration, qualification or
                   compliance as a result of any statement (or based on any
                   omission to state or alleged omission) required to be made by
                   such Holder. Each such Holder shall reimburse the Company,
                   such other Holders, directors, officers, employees, agents,
                   partners, Persons, underwriters and control persons for any
                   legal or any other expenses reasonably incurred in connection
                   with investigating, preparing or defending any such expense,
                   claim, loss, damage, liability or action, in each case to the
                   extent, but only to the extent, that such untrue statement
                   (or alleged untrue statement) or omission (or alleged
                   omission) is made in such Registration Statement, Prospectus,
                   offering circular or other document or any amendment or
                   supplement thereto in reliance upon and in conformity with
                   written information furnished by the Holder to the Company by
                   an instrument duly executed by such Holder and stated to be
                   specifically for use therein; provided, however, that the
                   obligations of such Holders hereunder shall be limited to an
                   amount equal to the proceeds to each such Holder of
                   Registrable Securities sold as contemplated herein in
                   connection with the particular registration qualification or
                   compliance involved.

               (c)  Notice.  Each party entitled to  indemnification  under this
                    Section 2.6 (the  "Indemnified  Party") shall give notice to
                    the  party   required   to  provide   indemnification   (the
                    "Indemnifying  Party") promptly after such Indemnified Party
                    has actual  knowledge of any claim as to which indemnity may
                    be sought and shall permit the Indemnifying  Party to assume
                    the  defense of any such claim or any  litigation  resulting
                    therefrom;   provided,   however,   that   counsel  for  the
                    Indemnifying  Party,  who shall  conduct the defense of such
                    claim  or  any  litigation  resulting  therefrom,  shall  be
                    approved by the Indemnified  Party (whose approval shall not
                    unreasonably be withheld),  and that the  Indemnified  Party
                    may  participate  in such  defense at its own  expense;  and
                    provided  further that the failure of any Indemnified  Party
                    to give  notice as  provided  herein  shall not  relieve the
                    Indemnifying Party of its obligations under this Section 2.6
                    unless   such   failure   resulted  in   detriment   to  the
                    Indemnifying Party. No Indemnifying Party, in the defense of
                    any such claim or litigation, shall, except with the consent
                    of each Indemnified Party,  consent to entry of any judgment
                    or enter into any  settlement  which does not  include as an
                    unconditional  term  thereof  the giving by the  claimant or
                    plaintiff  to such  Indemnified  Party of a release from all
                    liability in respect to such claim or litigation.

         2.7  Information by Holder. Each Holder or Holders of Registrable
              Securities in any registration shall furnish to the Company such
              information regarding such Holder or Holders and the distribution
              proposed by such Holder or Holders as



<PAGE>
              the Company may reasonably request in writing but only to the
              extent as shall be required in connection with any registration,
              qualification or compliance referred to in this Article 2.

         2.8  Rule 144 Reporting. With a view to making available the benefits
              of certain rules and regulations of the Commission which may
              permit the sale of the Restricted Securities or Control Securities
              to the public without registration, the Company agrees to:

              (a)  Use its best efforts to make and keep public information
                   available as those terms are understood and defined in Rule
                   144 under the Securities Act;

              (b)  Use its best efforts to file with the Commission in a timely
                   manner all reports and other documents required of the
                   Company under the Securities Act and the Exchange Act (at any
                   time after it has become subject to such reporting
                   requirements);

              (c)  For so long as a Holder owns any  Restricted  Securities  or
                   Control  Securities,  furnish to the Holder  forthwith  upon
                   request  (i) a written  statement  by the  Company as to its
                   compliance  with the reporting  requirements of Rule 144 and
                   of the  Securities  Act and the Exchange Act, (ii) a copy of
                   the most recent  annual or quarterly  report of the Company,
                   and (iii) such other  reports and documents so filed as such
                   Holder may reasonably request in availing itself of any rule
                   or  regulation of the  Commission  allowing a Holder to sell
                   any such securities without registration; and

              (d)  When any Holder qualifies under Rule 144 for the unrestricted
                   right of sale under Rule 144, the Company shall, upon written
                   request of such Holder (such request to include sufficient
                   detail as to establish how the Holder so qualifies under Rule
                   144), promptly remove any restrictive legend that may have
                   been placed on any Restricted or Control Securities and issue
                   Common Stock of the Company free of such restrictive or other
                   legends.

         2.9  Transfer of Registration Rights. The rights to cause the Company
              to register the Registrable Securities granted to each Holder by
              the Company under Sections 2.2 and 2.3 hereof may be transferred
              or assigned to a transferee or assignee in connection with the
              transfer or assignment of not less than one million (1,000,000)
              shares of the Registrable Securities; provided, however, that the
              Company shall be entitled to notice of any such transfer of
              registration rights within thirty (30) days of the date such
              transfer is effected.


<PAGE>
         2.10 Limitations on Subsequent Registration Rights. No owner or
              prospective owner of securities of the Company shall have any
              registration rights other than as set forth in this Agreement. The
              Company shall not, without the prior written consent of the
              Holders (which consent shall not be unreasonably withheld) of not
              less than sixty-six and two-thirds percent (66 2/3%) of the
              Registrable Securities then held by Holders, enter into any
              agreement with any owner or prospective owner of any securities of
              the Company that would allow such owner or prospective owner to
              include such securities in any registration filed under this
              Article 2 if such inclusion would adversely affect the rights of
              any Holder.

         2.11 Termination of Registration Rights. The registration rights
              granted pursuant to this Article 2 shall terminate as to each
              Holder at such time as (a) all Registrable Securities can be sold
              within a given three (3) month period without compliance with the
              registration requirements of the Securities Act pursuant to Rule
              144 supported by a written opinion of legal counsel for the
              Company, which opinion shall be reasonably satisfactory in form
              and substance to legal counsel for such Holders, and (b) all
              accrued interest and principal under the Company Credit Facility
              and the Gargiulo Credit Facility has been repaid in full or
              converted into Common Stock of the Company (and such Common Stock
              can be sold as provided in (a) above).

         2.12 "Market Stand-off" Agreement. Each Holder hereby agrees that, to
              the extent requested by the Company and an underwriter of a sale
              of Common Stock (or other securities) of the Company for the
              account of the Company and not for the account of a security
              holder or holders exercising their respective demand registration
              rights, it shall not sell or otherwise transfer or dispose of
              (other than to transferees who agree to be similarly bound) any
              Registrable Securities during the ninety (90) day period following
              the effective date of a registration statement of the Company
              filed under the Securities Act; provided, however, that all
              officers and directors of the Company, all Other Selling
              Stockholders and all other Persons with registration rights
              (whether or not pursuant to this Agreement) shall enter into
              similar agreements. To enforce the foregoing covenant, the Company
              may impose stop-transfer instructions with respect to the
              Registrable Securities of each Holder (and the shares or
              securities of every other Person subject to the foregoing
              restriction) until the end of such ninety (90) day period.


                                     ARTICLE 3
                    Anti-Dilution Rights and Limitations on Owner

     3.1  Anti-Dilution  Rights.  If,  at any time  after  the  Effective  Date,
          Company  agrees to sell  shares of its  Common  Stock or other  Voting
          Stock ("Company



<PAGE>
              Securities") in a private or public offering (other than Company
              Securities issued pursuant to the Company's stock option plans),
              Holder shall have the right, but not the obligation, to acquire
              all or any portion of the Company Securities sufficient for Holder
              to maintain, after the offering, the same percentage of ownership
              of issued and outstanding Company Securities that Holder possessed
              immediately prior to the offering (the "Pre-Offering Percentage").
              With respect to the issuance of Company Securities pursuant to the
              Company's stock option plans, Holder shall have a right to
              maintain its percentage ownership of issued and outstanding
              Company Securities by making open market purchases as provided in
              Section 3.5 hereof.

         3.2  Private Offering. With respect to a private offering, other than
              pursuant to a Company stock option plan, Company shall, within
              five (5) business days after the execution of any agreement
              entered into in connection with such private offering, notify
              Holder in writing of the proposed offering and provide Holder with
              copies of all related documentation, including, for example, any
              letter of intent and the final contract. Holder shall have twenty
              (20) business days from the date of receipt of Company's notice in
              which to advise Company whether Holder elects to exercise its
              rights under Section 3.1 hereof. If Holder does not respond, or if
              Holder indicates that it will not exercise its rights, Holder
              shall be considered irrevocably to have waived its rights under
              Section 3.1 hereof with respect to such specific private offering.
              If Holder timely advises Company that Holder will exercise its
              rights under Section 3.1 hereof, Holder shall have the right to
              acquire all or any portion of the necessary amount of the Company
              Securities to maintain Holder's Pre-Offering Percentage at the
              price or value of the consideration specified in the private
              offering agreement entered into between Company and the purchaser.
              Closing shall be in accordance with the terms of the private
              offering agreement, and Holder shall make such investment
              representations to Company and shall provide Company with such
              other documentation at closing as is reasonably required by
              Company to comply with applicable securities laws.

         3.3  Public Offering. With respect to a public offering, Company shall
              notify Holder no later than five (5) business days after Company
              has entered into a letter of intent with its underwriters, and
              shall provide Holder with a copy of the letter of intent. Holder
              shall have twenty (20) business days from the date of receipt of
              Company's notice in which to advise Company whether Holder elects
              to exercise its rights under Section 3.1 hereof. If Holder does
              not respond or if Holder indicates that it will not exercise its
              rights, Holder shall be considered irrevocably to have waived its
              rights under Section 3.1 hereof with respect to the public
              offering. If Holder timely advises Company that Holder desires to
              retain its rights under Section 3.1 hereof, then, when Company
              files a Registration Statement containing a Preliminary Prospectus
              with the Commission, Company shall provide Holder with copies of
              the Preliminary



<PAGE>
              Prospectus and all subsequent amendments. Holder shall have twenty
              (20) business days from its receipt of the Preliminary Prospectus
              in which to exercise its rights under Section 3.1 hereof by making
              an offer to acquire all or any portion of the necessary amount of
              Company Securities to maintain Holder's Pre-Offering Percentage
              based on the price, less all Selling Expenses, and the other terms
              contained in the final Prospectus. No such offer to buy shall be
              accepted prior to the time that the Registration Statement becomes
              effective. The Registration Statement shall indicate that Holder
              has anti-dilution rights to purchase Company Securities on the
              terms offered to the public.

         3.4  Limitations. Notwithstanding the preceding provisions of this
              Article 3, Company shall not be required to issue any fractional
              shares as a result of Holder's exercise of its rights under
              Section 3.1 hereof. Company shall not be required to transfer any
              Company Securities to Holder under this Article 3 if to do so
              would result in the violation of any applicable law, rule or
              regulation.

         3.5  Open Market Purchases to Maintain Ownership Percentage.
              Notwithstanding any other provision hereof, at any time after the
              Effective Date, Holder may make such open market purchases of
              Company Securities as are necessary to maintain Holder's
              percentage of ownership of issued and outstanding Company
              Securities at the Effective Date Percentage or to increase its
              percentage of ownership of issued and outstanding Company
              Securities to the Effective Date Percentage. With respect to the
              issuance of Company Securities pursuant to a Company stock option
              plan or any warrant, conversion right or other option, Company
              shall notify Holder no later than ten (10) calendar days after the
              end of each calendar quarter and within ten (10) calendar days of
              the record date for a shareholder meeting and for dividend
              payments for Company Securities of the number of shares and
              issuance price of Company Securities issued pursuant to Company's
              stock option plans or any warrant, conversion right or other
              option subsequent to the last notice given pursuant to this
              Section 3.5 so as to enable Holder to make open market purchases
              of Company Securities as permitted under this Section 3.5.

         3.6  Limitations on Holder's Ownership. Except for purchases of Company
              Securities made in accordance with this Article 3 or the Stock
              Purchase Agreement, during the term of this Agreement, Holder
              shall not directly or indirectly acquire any Company Securities
              except as follows:

              (a)  On and after March 31, 1996 until September 30, 1998, Holder
                   shall not increase or further increase its ownership of
                   issued and outstanding Company Securities above the Effective
                   Date Percentage, except through one (1) or more of the
                   following:


<PAGE>
                   (i)  Conversion of principal and/or interest under the
                        Company Credit Facility or the Gargiulo Credit Facility
                        into shares of Common Stock;

                   (ii) Issuance of Company Securities in an asset sale by
                        Holder Company; and

                   (iii)A tender offer by Holder to increase its ownership to
                        seventy percent (70%) or more of the issued and
                        outstanding Company Securities at a price approved by
                        the disinterested Directors of Company and based upon a
                        fairness opinion delivered to the Board of Directors of
                        the Company by an investment banking firm; provided,
                        however, that, if Holder makes a tender offer to
                        increase its ownership to more than eighty percent (80%)
                        of the issued and outstanding Company Securities, such
                        tender offer must be for one hundred percent (100%) of
                        the publicly traded Company Securities.

              (b)  After September 30, 1998, Holder may increase its ownership
                   of Company Securities through open market purchases or
                   otherwise.

              (c)  If, at any time after the Effective Date, Holder shall elect
                   to  increase  its  percentage  of  ownership  of issued  and
                   outstanding  Company  Securities  above the  Effective  Date
                   Percentage   as  permitted  by  paragraph  (a)  above  (such
                   increased  percentage  hereafter  being the "New  Percentage
                   Ownership"),  then  thereafter  Holder  may make  such  open
                   market  purchases of Company  Securities as are necessary to
                   maintain  such New  Percentage  Ownership or to increase its
                   percentage  of ownership of issued and  outstanding  Company
                   Securities to such New Percentage Ownership.

              (d)  Holder shall not be required to dispose of any Company
                   Securities if Holder's percentage ownership of Company
                   Securities is increased as a result of any recapitalization
                   by Company or any other action taken by Company.

     3.7  Limitations on Holder's Resale of Company Securities. Holder shall not
          directly or indirectly sell any Company  Securities  (other than to an
          Affiliate of Holder) except as follows:

              (a)  On and after March 31, 1997 until September 30, 1998, Holder
                   may sell Company Securities (i) as part of a joint venture,
                   merger or sale of all or substantially all of its current
                   Crop Protection business unit, as such



<PAGE>
                   business may be subsequently renamed or reorganized, or (ii)
                   pursuant to a tender offer by a third party to the
                   shareholders of Company.

              (b)  After  September 30, 1998, in addition to the rights to sell
                   Company Securities set forth in paragraph (a) above,  Holder
                   may  sell  Company  Securities  (i) in a  registered  public
                   offering  pursuant  to the  registration  rights  granted to
                   Holder under this Agreement,  (ii) through sales pursuant to
                   Rule 144 under the  Securities  Act,  (iii) through sales
                   of not more  than ten  percent  (10%) of the total  issued
                   and outstanding Company Securities to a Non-Financial
                   Purchaser, or (iv) through sales to a Financial Purchaser.

              (c)  After September 30, 1999, in addition to the rights to sell
                   Company Securities as set forth in paragraphs (a) and (b)
                   above, Holder may sell Company Securities through a private
                   sale of thirty-five percent (35%) or more of the total issued
                   and outstanding Company Securities to a Non-Financial
                   Purchaser under circumstances where such third party assumes
                   the applicable and proportionate rights and obligations of
                   Holder under this Agreement and the other Transaction
                   Agreements.

              (d)  Notwithstanding the foregoing, at any time after the
                   Effective Date, Holder may sell Company Securities issued to
                   Holder upon conversion by Holder of principal or accrued
                   interest under either of the Credit Facilities after the
                   occurrence of an Event of Default under either of such Credit
                   Facilities.


                                     ARTICLE 4
                      Company and Calgene Corporate Governance

         4.1  Composition of the Board of Directors and Calgene Board. The
              number of Directors comprising both the Board of Directors and the
              Calgene Board and the manner of nominating the members thereof
              shall be as follows:

               (a)  The number of  Directors  comprising  the Board of Directors
                    shall initially be fixed at nine (9) Directors.  The parties
                    agree  that the  manner of  nominating,  and the  governance
                    provisions  relating  to,  the  Board of  Directors  and the
                    Calgene Board shall be identical, and that the provisions of
                    this Section 4.1 set forth below and of Sections  4.3(c) and
                    4.3(d)  hereof  shall  be  deemed  to apply  equally  to the
                    Calgene  Board  and  Calgene  Directors.  Accordingly,  when
                    applied to the Calgene Board,  the term "Director"  shall be
                    deemed  to mean  "Calgene  Director",  the  term  "Company",
                    whether used alone or as a modifier, shall be deemed to



<PAGE>
                   mean "Calgene", and the term "Board of Directors" shall be
                   deemed to mean "Calgene Board".

              (b)  Until changed in accordance with this Agreement, the Board of
                   Directors shall be comprised of nine (9) Directors, and the
                   Company shall nominate for election as Directors: (i) one (1)
                   Company Management Director, (ii) three (3) Company
                   Directors, and (iii) five (5) Directors designated by
                   Monsanto, at least one (1) of which shall be an Independent
                   Director.

              (c)  [This section intentionally left blank]

              (d)  At any time that Monsanto's  Percentage Interest is at least
                   seventy percent (70%),  (i) the Company shall nominate:  (i)
                   six  (6)  Directors  designated  by  Monsanto,  which  shall
                   consist of the one (1) Company Management  Director and five
                   (5) other  Monsanto  Directors  (including  at least one (1)
                   Independent   Director)  and  (ii)  three  (3)   Independent
                   Directors. At such time as Monsanto's Percentage Interest is
                   at  least  ninety-nine  percent  (99%),  the  Company  shall
                   nominate nine (9) Directors designated by Monsanto.

              (e)  Notwithstanding anything in the foregoing paragraphs (b) and
                   (d) to the contrary,  (i) at any time Monsanto's  Percentage
                   Interest  is less  than  forty  percent  (40%)  but at least
                   twenty percent  (20%),  the Company shall nominate three (3)
                   Directors   designated   by  Monsanto,   (ii)  at  any  time
                   Monsanto's  Percentage  Interest is less than twenty percent
                   (20%) but at least ten  percent  (10%),  the  Company  shall
                   nominate two (2) Directors  designated by Monsanto and (iii)
                   at any time Monsanto's  Percentage Interest is less than ten
                   percent  (10%) but at least five percent  (5%),  the Company
                   shall nominate one (1) Director designated by Monsanto.  If,
                   at any time,  Monsanto's  Percentage  Interest  is less than
                   five  percent  (5%),  the Company  shall not be obligated to
                   nominate any Director  designated  by Monsanto.  At any such
                   time, all other Directors, other than the Company Management
                   Directors, shall be nominated by the Company.

              (f)  The  Independent  Directors  to be  nominated by the Company
                   from time to time shall be nominated by action of a majority
                   of Company  Directors then in office.  The Company Directors
                   shall consult with the other Independent Directors as to the
                   nomination  of any  Company  Director,  and in the  event  a
                   majority of the Company  Directors  are unable to agree upon
                   any Company Director  nominee,  then the majority of all the
                   Independent  Directors  shall nominate such nominee.  In the
                   event that no Company Directors are in office at the time of
                   any



<PAGE>
                   nomination of a Company Director, such Company Directors
                   shall be nominated by a majority of the Independent Directors
                   then in office; provided, however, that the holders of a
                   majority of the outstanding Voting Stock held by Unaffiliated
                   Equity Holders shall be entitled to nominate and elect
                   Company Directors in lieu of any individuals so nominated to
                   be such Company Directors by a majority of the Independent
                   Directors.

              (g)  The Company and Monsanto, respectively, shall have the right
                   to nominate  any  replacement  for a Director  nominated  in
                   accordance with this Section 4.1 by the Company or Monsanto,
                   respectively,  upon  the  death,  resignation,   retirement,
                   disqualification  or removal  from  office for cause of such
                   Director.  Such  replacement  for any  Independent  Director
                   shall also be an Independent Director unless, in the case of
                   a replacement of a Monsanto Director, the Monsanto Directors
                   include  more  than  the  required   number  of  Independent
                   Directors. The Board of Directors shall elect each person so
                   nominated  by  Monsanto  or the  Company  pursuant  to  this
                   paragraph  (g). In addition,  the Board of  Directors  shall
                   nominate the Company's  Chief  Executive  Officer to replace
                   such officer's predecessor in office as a Company Management
                   Director.

              (h)  In the event that the number of  Monsanto  Directors  on the
                   Board of Directors differs from the number that Monsanto has
                   the right (and wishes) to designate for nomination  pursuant
                   to this Section 4.1, (i) if the number of Monsanto Directors
                   exceeds  such  number,  Monsanto  shall  promptly  take  all
                   appropriate  action  to  cause  to  resign  that  number  of
                   Monsanto  Directors  as is  required  to make the  remaining
                   number of such  Monsanto  Directors  conform to this Section
                   4.1 or (ii) if the number of Monsanto Directors otherwise is
                   less than such number,  the Company shall  promptly take all
                   necessary action to create sufficient vacancies on the Board
                   of Directors to permit Monsanto to designate the full number
                   of Monsanto  Directors  which it is entitled (and wishes) to
                   nominate  pursuant  to this  Section  4.1  (such  action  to
                   include  seeking the resignation or removal of Directors or,
                   at the request of Monsanto, calling a special meeting of the
                   stockholders  of the  Company  for the  purpose of  removing
                   Directors to create such  vacancies to the extent  permitted
                   by  applicable  law).  Upon  the  creation  of  any  vacancy
                   pursuant to the preceding sentence,  Monsanto shall nominate
                   the  person to fill such  vacancy  in  accordance  with this
                   Section  4.1 and the Board of  Directors  shall  elect  each
                   person so nominated.  Notwithstanding the foregoing, at each
                   annual  meeting  of the  stockholders  of the  Company,  the
                   Company shall  nominate such number of Directors as Monsanto
                   is otherwise entitled to designate under this Section 4.1.

<PAGE>
              (i)  Notwithstanding anything herein to the contrary, no
                   individual who is an officer, director, employee, agent,
                   partner or principal stockholder of any competitor of the
                   Company or any of its Affiliates (other than Monsanto and its
                   Affiliates) or any competitor of Monsanto or any of its
                   Affiliates (other than the Company) shall serve as a Director
                   without the unanimous consent of the Board of Directors.

              (j)  In the event that  Monsanto  desires to remove any  Monsanto
                   Director  with or without  cause and  Monsanto  is unable to
                   procure the  resignation  of such Monsanto  Director,  then,
                   upon the request of Monsanto,  the Board of Directors  shall
                   promptly  call a  special  meeting  of  stockholders  of the
                   Corporation for purposes of removing such Monsanto Director.
                   In the event that the Company  desires to remove any Company
                   Director  with or without cause and the Company is unable to
                   procure the resignation of such Company Director, then, upon
                   the  request  of  a  majority  of  all  of  the  Independent
                   Directors  then in  office,  the  Board of  Directors  shall
                   promptly  call a  special  meeting  of  stockholders  of the
                   Company for purposes of removing such Company  Director.  In
                   the event that the Chief Executive Officer's employment with
                   the  Company is  terminated  for any  reason,  then upon the
                   request  of  either  Monsanto  or a  majority  of all of the
                   Independent Directors then in office, the Board of Directors
                   shall promptly call a special meeting of stockholders of the
                   Corporation  for the  purpose of  removing  such person as a
                   Company Management Director.

              (k)  Notwithstanding anything to the contrary herein, the Board of
                   Directors, by unanimous action of all members of the Board of
                   Directors, may increase the number of directors comprising
                   the Board of Directors and may elect, or nominate for
                   election, the director(s) to fill the vacancy or vacancies
                   created by such increase.

         4.2  Solicitation and Voting of Shares.

              (a)  The Company shall use its best efforts to solicit from the
                   stockholders of the Company eligible to vote for the election
                   of Directors proxies in favor of the Company Management
                   Directors and the nominees designated in accordance with
                   Section 4.1 hereof or the removal of any Director pursuant to
                   Section 4.1(h) or 4.1(j) hereof.

              (b)  In any election of Directors or any meeting of the
                   stockholders of the Company called expressly for the removal
                   of Directors, so long as the Board of Directors includes (and
                   will include after any such removal) the number of Monsanto
                   Directors contemplated by Section 4.1 hereof and so long as
                   such meeting is properly called and Monsanto is



<PAGE>
                   properly notified in accordance with the Company's By-laws
                   and Certificate of Incorporation, Monsanto and its Affiliates
                   shall attend such meeting for purposes of establishing a
                   quorum and shall vote all their shares of Voting Stock (i) in
                   favor of any nominee or Director designated in accordance
                   with Section 4.1 hereof, (ii) in favor of removal of any
                   Director as contemplated by Section 4.1(h) or 4.1(j) hereof,
                   and (iii) otherwise against the removal of any Director
                   designated in accordance with Section 4.1 hereof (other than
                   in cases of removal of a Director for cause); provided,
                   however, that, if Monsanto and its Affiliates elect to
                   cumulate their votes in accordance with the Company's By-laws
                   and Certificate of Incorporation, then, in any vote electing
                   Monsanto Directors, Monsanto and its Affiliates may cast all
                   of their votes in favor of one (1) or more of the Monsanto
                   Directors designated by Monsanto and in any vote with respect
                   to the removal of a Monsanto Director, Monsanto and its
                   Affiliates may cast all or any portion of their votes either
                   in favor or against the removal of any Monsanto Director
                   unless a Monsanto Director is otherwise required to be
                   removed in accordance with Section 4.1(h) hereof. In any
                   other matter submitted to a vote of the stockholders of the
                   Company, Monsanto and its Affiliates may vote any or all of
                   their shares in their sole discretion.

              (c)  Monsanto  agrees  that it will,  and will  cause  any of its
                   Subsidiaries  (other than the Company and its  Subsidiaries)
                   to, take all action as a stockholder of the Company or as is
                   otherwise  reasonably  within its  control,  as necessary to
                   effect the provisions of this Agreement,  including, without
                   limitation,  voting all  shares of Voting  Stock in favor of
                   all persons nominated in accordance with Section 4.1 hereof;
                   provided,  however, that, if Monsanto cannot so take actions
                   to give effect to all of the  provisions of this  Agreement,
                   it may first take  actions to ensure that it receives all of
                   its benefits hereunder and then, to the extent possible,  to
                   give effect to the provisions in favor of the Company.

         4.3  Committees.

              (a)  The Board of Directors shall establish, empower and maintain
                   the committees of the Board of Directors contemplated by this
                   Section 4.3.

              (b)  The following committees shall be established, empowered and
                   maintained by the Board of Directors at all times during the
                   term of this Agreement:

                    (i)  an Audit Committee, consisting of at least three (3) of
                         the Company's  Independent  Directors,  which committee
                         shall be authorized  and empowered to cause an audit to
                         be   performed   of  the   Company   and  each  of  its
                         Subsidiaries;
<PAGE>

                   (ii) [This section intentionally left blank]

                   (iii)a Compensation Committee, responsible, among other
                        things, for recommending to the Board of Directors, for
                        approval by a majority of the Board of Directors, (a)
                        the adoption and amendment of all employee benefit plans
                        and arrangements, (b) the engagement of, terms of any
                        employment agreements and arrangements with, and
                        termination of, all persons designated by the Company as
                        "officers" for purposes of Section 16 of the Exchange
                        Act ("Section 16 Officers") and (c) the policies,
                        limitations and procedures under which the Stock Option
                        Plan Administration Committee shall operate; and

                   (iv) such other committees as the Board of Directors deems
                        necessary or desirable; provided, however, that such
                        committees are established in compliance with Section
                        4.4(a)(vi) hereof, if applicable.

              (c)  Except as otherwise  provided in Section 4.3(b) hereof or as
                   agreed by a majority of the Monsanto  Management  Directors,
                   the number of Monsanto  Directors  on each  committee of the
                   Board of  Directors  shall be the same  proportion  (but not
                   less than one (1)) of the total membership of such committee
                   as the number of Monsanto Directors,  as the case may be, is
                   of the  entire  Board  of  Directors.  Except  as  otherwise
                   provided in Section 4.3(b) hereof, the Monsanto Directors on
                   each committee of the Board of Directors shall be determined
                   by a majority of the Monsanto Management Directors.

              (d)  No action by any  committee of the Board of Directors  shall
                   be  valid  unless  taken by  unanimous  written  consent  as
                   provided in the Company's  by-laws or taken at a meeting for
                   which  adequate  notice has been duly given or waived by the
                   members  of such  committee.  Such  notice  shall  include a
                   description  of the  general  nature of the  business  to be
                   transacted  at the  meeting,  and no other  business  may be
                   transacted  at  such  meeting  unless  all  members  of  the
                   committee  are present and consent to the  consideration  of
                   such  other  business.   Any  committee   member  unable  to
                   participate  in  person  at any  meeting  shall be given the
                   opportunity  to  participate  by  telephone.  The  Board  of
                   Directors or the remaining committee members shall designate
                   an Independent  Director or Company  Management  Director to
                   replace  any  absent or  disqualified  Independent  Director
                   member or Company Management


<PAGE>
                   Director member, respectively, of any committee and a
                   majority of the Monsanto Management Directors shall designate
                   a Monsanto Director to replace any absent or disqualified
                   Monsanto Director member of any committee. Each of the
                   committees established by the Board of Directors pursuant to
                   this Section 4.3 shall establish such other rules and
                   procedures for its operation and governance (consistent with
                   the terms of this Agreement) as it shall see fit and may seek
                   such consultation and advice as to matters within its purview
                   as it shall require.

         4.4  Approval Required for Certain Actions.

              (a)  On and after the Effective Date and until the earlier of a
                   Trigger Event or such date on which Monsanto's Percentage
                   Interest is less than twenty-five (25%), a majority of the
                   Board, including at least one (1) Company Director and one
                   (1) Monsanto Management Director, shall be required to
                   approve any of the following:

                   (i)  the entry by the Company or any of its Affiliates into
                        any merger or consolidation or the acquisition by the
                        Company or any of its Affiliates of any business or
                        assets that would constitute a Substantial Part of the
                        Company (determined on a consolidated basis) whether
                        such acquisition be by merger or consolidation or the
                        purchase of stock or assets or otherwise;

                   (ii) the sale, pledge, grant of security interest in,
                        transfer, retirement or other disposal of (A) a
                        Substantial Part of the Company (determined on a
                        consolidated basis), except pursuant to a security
                        interest granted in connection with borrowings permitted
                        under subsection (iv) below or (B) the pledge or
                        granting of a security interest in any intangible
                        property set forth in Exhibit B attached to the
                        disclosure letter from Monsanto to Calgene dated June
                        27, 1995 (the "Monsanto Disclosure Letter");

                   (iii)any dividend by or return of capital by the Company or
                        Gargiulo (other than such distributions by Gargiulo to
                        the Company as are necessary for the Company to timely
                        perform its obligations under Sections 1.02 and 5.02(c)
                        of the Gargiulo Credit Facility);

                   (iv) any incurrence or assumption, in the aggregate, by the
                        Company, any of its Affiliates or any combination
                        thereof, of any indebtedness for borrowed money at any
                        time outstanding exceeding in the aggregate (determined
                        on a consolidated basis) the greater of (i) fifteen
                        million dollars ($15,000,000), increasing by five
                        million dollars ($5,000,000) on each July 1 commencing
                        July



<PAGE>
                        1, 1996, plus amounts secured by inventory and/or
                        receivables for seasonal working capital lines and
                        indebtedness incurred to acquire property, plant or
                        equipment and secured by the acquired asset, minus
                        amounts outstanding under the Company Credit Facility,
                        or (ii) the amounts set forth in the Company's Operating
                        Plan (hereinafter defined), provided that loans under
                        the Gargiulo Credit Facility shall not be counted in
                        this limitation;

                   (v)  the  repurchase or redemption of any Equity  Securities
                        of  the  Company,   other  than  from   employees  upon
                        termination of employment or service;

                   (vi) the establishment of any new committees of the Board (or
                        the Calgene Board) or new or revised delegation(s) of
                        Board (or the Calgene Board) authority to any Board (or
                        Calgene Board) committee or changes or revisions to
                        general delegations of authority to officers or other
                        Persons for categories of expenditures;

                   (vii)the adoption of or amendment to any benefit or incentive
                        plans of the Company or any of its Affiliates which
                        would increase the annual cost thereof by more than
                        fifteen percent (15%) from the prior fiscal year or any
                        adoption of, or amendment to, any stock option plan;

                   (viii)the election, appointment or removal of the Chief
                        Executive Officer, Chief Operating Officer or Chief
                        Financial Officer of the Company and Calgene and their
                        successors and the establishment of their annual or long
                        term compensation level and benefits and basis for
                        awards (other than agreements in effect on the Effective
                        Date); provided, however, that Monsanto shall have the
                        right to select the Chief Technical Officer of the
                        Company and a controller reporting to the Chief
                        Financial Officer of the Company;

                   (ix) approval of the annual operating plan ("Operating Plan")
                        and long-term strategic plan ("Strategic Plan") of the
                        Company and its Affiliates, as well as the annual
                        operating plan and long-term strategic plan for the
                        Gargiulo Business, to be submitted to the Board annually
                        for approval, and any material changes thereto;

                   (x)  any transaction between the Company (and its
                        Affiliates), on the one hand, and its (their) directors,
                        officers or employees, on the other hand, which is not
                        in the normal course of business;


<PAGE>
                   (xi) any modification of the Transaction Agreements;

                   (xii)any  amendment  of  the  By-laws  or   Certificate   of
                        Incorporation  of the  Company,  Calgene or Gargiulo by
                        the respective Boards of Directors thereof;

                  (xiii)the issuance of any warrants for the purchase of Equity
                        Securities or the issuance of additional Equity
                        Securities (other than warrants for the purchase of
                        Equity Securities) in excess of four million (4,000,000)
                        shares of Common Stock in any two (2) year period to a
                        third party, other than pursuant to plans referred to in
                        subsection (vii) above;

                   (xiv)the sale or licensing by the Company or any of its
                        Affiliates of (A) any intangible property set forth in
                        Exhibit B attached to the Monsanto Disclosure Letter or
                        (B) any other intangible property for consideration
                        (other than royalties contingent on future sales)
                        exceeding five million dollars ($5,000,000) in the
                        aggregate (determined on a consolidated basis) per
                        transaction or per series of related transactions;

                   (xv) new fixed capital investments, capital leases or
                        noncancellable operating leases by the Company and its
                        Affiliates having annual payments in the aggregate
                        (determined on a consolidated basis) exceeding the
                        aggregate amount set forth in the Operating Plan;

                   (xvi)[This section intentionally left blank]

                   (xvii)any press release which mentions or directly or
                        indirectly refers to Monsanto, except as required by law
                        and where Board approval cannot be obtained in a timely
                        manner;

                   (xviii)the initiation, settlement or termination of any suit
                        or proceeding concerning intellectual property, any
                        other matter which could have an adverse public affairs
                        effect upon Monsanto or the filing of any insolvency or
                        bankruptcy proceeding by or on behalf of the Company or
                        any of its Affiliates; or

                   (xix)the removal or election of the directors of Gargiulo.

              (b)  After a Trigger Event and until the earlier of (i) March 31,
                   1999 or (ii) Monsanto's Percentage Interest is at least
                   seventy percent (70%), a majority of the Board, including at
                   least two (2) Company Directors, shall be required to approve
                   any of the following:

<PAGE>
                    (i)  the matters set forth in subsections  (i), (ii),  (vi),
                         (viii), (ix) and (xi) of paragraph (a) above; or

                    (ii) any   transaction   between   the   Company   (and  its
                         Affiliates) and Monsanto or any Affiliate of Monsanto.

              (c)  From and after the occurrence of both (i) a Trigger Event and
                   (ii) March 31, 1999, and until Monsanto's Percentage Interest
                   is at least ninety-nine percent (99%), neither Monsanto nor
                   any of its Affiliates shall enter into any transaction with
                   the Company or any of its Affiliates without the approval of
                   at least two (2) Company Directors.

         4.5  Enforcement of this Agreement. The Independent Directors, acting
              by unanimous consent, shall have full and complete authority on
              behalf of the Company to enforce the terms of this Agreement.

         4.6  Certificate of Incorporation and By-laws. The Company and Monsanto
              shall take or cause to be taken all lawful action necessary to
              ensure at all times that the Company's and Calgene's Certificate
              of Incorporation and By-laws are not at any time inconsistent with
              the provisions of this Agreement. Not later than the Effective
              Date, the Board of Directors shall amend the Company's By-laws and
              the Calgene Board shall amend Calgene's By-laws to reflect the
              provisions of this Agreement.

         4.7  Advisors. The Independent Directors shall be entitled to retain,
              at the cost and expense of the Company, the services of an
              investment banking firm of national reputation of their choice and
              one (1) law firm of their choice to advise them in their capacity
              as Independent Directors with respect to any matter on which the
              Independent Directors are required or permitted to act hereunder.

         4.8  Injunctive  Relief. In the event of a breach of the provisions of
              this  Article 4, a party  hereto  entitled  to rights  under this
              Article 4 will suffer  irreparable  harm and the total  amount of
              monetary  damages  will  be  impossible  to  calculate  and  will
              therefore be an inadequate  remedy.  Accordingly,  in such event,
              such  party  shall  be  entitled  to  temporary   and   permanent
              injunctive  relief  against the  Company and any other  breaching
              party and to any other  rights and  remedies  to which such party
              may be entitled to at law or in equity.


<PAGE>
                                     ARTICLE 5
                               Governance of Gargiulo

              [This Article intentionally left blank.]

                                     ARTICLE 6
                                   Miscellaneous

          6.1  Governing Law. This  Agreement  shall be governed in all respects
               by the laws of the State of Delaware  (exclusive  of such state's
               choice of laws rules).

          6.2  Successors and Assigns.  Except as otherwise provided herein, the
               provisions  hereof  shall inure to the benefit of, and be binding
               upon,   the   successors,    assigns,   heirs,   executors,   and
               administrators of the parties hereto.

          6.3  Entire  Agreement;  Amendment.  The Company and  Monsanto  hereby
               agree  that,  as of the  date of this  Agreement:  (i) the  Prior
               Stockholders  Agreement is hereby amended in its entirety by this
               Agreement,   (ii)  the  provisions  of  the  Prior   Stockholders
               Agreement  shall no longer be of any force or  effect,  (iii) the
               Company  and  Monsanto  shall  be  bound  by the  terms  of  this
               Agreement,  and  (iv)  this  Agreement  and the  other  documents
               delivered pursuant hereto constitute the complete,  exclusive and
               final understanding and agreement between the parties with regard
               to the subjects hereof and thereof.  Except as  specifically  set
               forth  herein,  any term of  Section 2 or 3 hereof  may be waived
               only  with the  prior  written  consent  of the  Company  and the
               Holders of at least sixty-six and two-thirds percent (66 2/3%) of
               the  outstanding  shares  of  the  Registrable  Securities.   Any
               amendment or waiver  effected in accordance with this Section 6.3
               shall be binding upon each Holder of the  Registrable  Securities
               (including securities into which such Registrable Securities have
               been  converted)  outstanding at the time,  each future Holder of
               all such  securities,  and the  Company.  Any  provision  of this
               Agreement  may be  amended  or  waived  if,  and  only  if,  such
               amendment  or waiver is in writing and signed,  in the case of an
               amendment,  by the  Company  and  Monsanto,  or in the  case of a
               waiver,  by the party against whom the waiver is to be effective;
               provided  that no such  amendment  or waiver  shall be  effective
               without the approval of all of the Independent Directors.

          6.4  Notices.  Any notice required or permitted to be given under this
               Agreement shall be in writing,  and shall be deemed  sufficiently
               given when delivered in




<PAGE>
               person or  transmitted  by telegram or  telecopier  (confirmed by
               mail), addressed as follows:

              If to Monsanto:     Monsanto Company
                          800 North Lindbergh Boulevard
                            St. Louis, Missouri 63167
                         Attention: Assistant Secretary
                          Telecopy Number: 314-694-2574

              If to any other Holder, at such address and telecopy number as
              such Holder shall have furnished the Company in writing.

              If to Company:      Calgene, Inc.
                                  1920 Fifth Street
                                  Davis, California  95616
                                  Attention:  Chairman and Chief Executive
                                     Officer
                          Telecopy Number: 916-753-1510

              or to such other address as may be specified from time to time in
              a notice given by such party. The parties agree to acknowledge in
              writing the receipt of any such notice delivered in person.

          6.5  Delays or Omissions.  No delay or omission to exercise any right,
               power  or  remedy  accruing  to any  Holder  of  any  Registrable
               Securities,  upon any breach or default of the Company under this
               Agreement,  shall impair any such right,  power or remedy of such
               Holder  nor  shall it be  construed  to be a  waiver  of any such
               breach or default,  or an acquiescence  therein,  or of or in any
               similar  breach or  default  thereafter  occurring.  Any  waiver,
               permit,  consent or approval of any kind or character on the part
               of any  party  or any  waiver  on the  part of any  party  of any
               provisions  or  conditions  of  this  Agreement  must  be made in
               writing and shall be  effective  only to the extent  specifically
               set  forth in such  writing.  All  remedies,  either  under  this
               Agreement,  at law, in equity or otherwise afforded to any party,
               shall be cumulative and not alternative.

          6.6  Counterparts.  This  Agreement  may be  executed in any number of
               counterparts,  each of  which  shall be an  original,  but all of
               which together shall constitute one instrument.

          6.7  Severability.  In the event that any provision of this  Agreement
               becomes or is declared by a court of competent jurisdiction to be
               illegal,  unenforceable or void, this Agreement shall continue in
               full force and effect without said provision;  provided, however,
               that no such  severability  shall be effective  if it  materially
               changes the economic benefit of this Agreement to any party.

          6.8  Stock Legends.  Subject to Section  2.8(d)  hereof,  certificates
               representing   Restricted   Securities   (other  than  Restricted
               Securities  issued to Monsanto in connection  with the conversion
               of principal  and/or  accrued  interest  under the Company Credit
               Facility or the Gargiulo  Credit  Facility upon the occurrence of
               an Event of Default under either such Credit  Facility) issued to
               Monsanto  pursuant to the  Transaction  Agreements  and the Stock
               Purchase Agreement shall bear the following legend:

                   "The securities represented by this certificate are subject
                   to certain resale restrictions and entitled to the benefits
                   set forth in a Stockholders Agreement dated March 31, 1996,
                   as amended and restated on November 12, 1996, between
                   Calgene, Inc., a Delaware corporation (formerly known as
                   Calgene II, Inc.), and Monsanto Company, a Delaware
                   corporation (the "Agreement") . A copy of the Agreement and
                   all amendments thereto are on file in the office of the
                   Secretary of the Company."

          6.9  [This section intentionally left blank.]

          6.10 Audits,  Consultants and Inspections. Monsanto (using Monsanto's
               internal and/or external  auditors or any other Person  appointed
               by Monsanto to whom the Company does not reasonably object) shall
               have  the  right  (i) to  audit  the  books  and  records,  other
               financial  information  and business  practices and operations of
               the Company and its Affiliates,  and (ii) to discuss the business
               practices and operations,  affairs,  finances and accounts of the
               Company and its  Affiliates  with the officers of the Company and
               its Affiliates and the independent  public accountants who review
               or  audit  the  Company's  financial  statements,   all  at  such
               reasonable times and as often as may reasonably be requested. The
               Company shall also permit inspection of its (and its Affiliates')
               properties,  books and  records by  Monsanto  (using the  Persons
               identified  above)  during  normal  business  hours  or at  other
               reasonable  times. The scope of all such audits,  discussions and
               inspections   shall  be   determined  by  Monsanto  in  its  sole
               discretion.  Any  authorized  representative  of Monsanto  who or
               which is not  employed  by  Monsanto  (i)  shall be  required  to
               execute a  confidentiality  agreement  in a form  approved by the
               Board of  Directors  (which  approval  shall not be  unreasonably
               withheld  or  delayed)  and  (ii)  may  not  be  employed  by  or
               affiliated  with a  competitor  of  the  Company,  as  reasonably
               determined by the Board of Directors;  provided, however, that an
               independent  certified public accounting firm shall not be deemed
               to be employed by or affiliated  with a competitor of the Company
               even  if such  firm  provides  services  to a  competitor  of the
               Company.


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          6.11 No  Third  Party   Beneficiaries.   Nothing   contained  in  this
               Agreement,  express or implied,  is  intended to or shall  confer
               upon anyone other than the parties  hereto (and their  successors
               and assigns,  including,  without limitation,  subsequent Holders
               and purchasers under Section 3.7(c)) any right, benefit or remedy
               of any nature whatsoever under or by reason of this Agreement.

          6.12 Sections and  Articles.  All  sections  and articles  referred to
               herein are sections and articles of this Agreement.

          6.13 Headings.  Headings as to the contents of particular articles and
               sections  are  for  convenience  only  and  are  in no  way to be
               construed as part of this  Agreement  or as a  limitation  of the
               scope of the particular articles or sections to which they refer.



<PAGE>
         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
         executed and delivered as of the day and year first above written.

                                       CALGENE, INC.



                            By: /s/ Lloyd M. Kunimoto
                                            Lloyd M. Kunimoto
                                    President


                                MONSANTO COMPANY



                                       By:  /s/ Hendrik A. Verfaillie
                                            Hendrik A. Verfaillie
                                            Executive Vice President

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