Document:

<PAGE>
                                                                    EXHIBIT 10.3

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                                                  EXECUTION COPY

                             SECURED LOAN AGREEMENT

                                 by and between

                          NEUROCRINE BIOSCIENCES, INC.

                             a Delaware corporation

                                   as Borrower

                                       and

                                   PFIZER INC.

                             a Delaware corporation

                                    as Lender

                                  $175,000,000
                                 CREDIT FACILITY

                                DECEMBER 18, 2002
<PAGE>
                             SECURED LOAN AGREEMENT

      THIS SECURED LOAN AGREEMENT (this "Agreement") is dated as of December 18,
2002, by and between PFIZER INC., a Delaware corporation, having an address at
235 East 42nd Street, New York, New York 10017 ("Lender") and NEUROCRINE
BIOSCIENCES, INC., a Delaware corporation having an address at 10555 Science
Center Drive, San Diego, CA 92121 ("Borrower").

      WHEREAS, Borrower and Lender have entered into that certain Collaboration
Agreement (the "Collaboration Agreement") and License Agreement (the "License
Agreement"), each dated on or about the date hereof relating to Neurocrine's
compound generically known as indiplon;

      WHEREAS, Borrower wishes to obtain and Lender is willing, in consideration
for Borrower entering into the Collaboration Agreement and the License
Agreement, to provide a secured loan facility on the terms and subject to the
conditions contained herein;

      THEREFORE, in consideration of the mutual covenants contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties, intending to be legally bound hereby, agree
as follows.

1. ACCOUNTING AND OTHER TERMS

      Accounting terms not otherwise defined in this Agreement will be construed
in accordance with GAAP. Calculations and determinations must be made in
accordance with GAAP. The term "financial statements" includes the notes and
schedules thereto. The terms "including" and "includes" always mean "including
(or includes) without limitation" in this or any Loan Document. Capitalized
terms not otherwise defined herein (including in Section 13) shall have the same
meanings as in the Collaboration Agreement and the License Agreement and in the
case of conflict between the capitalized terms in the License Agreement and the
Collaboration Agreement, the capitalized terms in the Collaboration Agreement
shall control.

2. LOAN AND TERMS OF PAYMENT

      2.1.  ADVANCES.

            (a) Subject to the terms and conditions contained herein, Lender
agrees during the Loan Period to make Advances to Borrower, and Borrower may
request Advances from Lender in an aggregate amount not exceeding the applicable
Committed Line at any given time. The Advances shall be used by Borrower for
general corporate purposes. Any amount borrowed under this Agreement that is
repaid (other than a repayment pursuant to Section 2.6 or 7.1 hereof) may be
reborrowed in accordance with the terms and conditions hereof. Each Advance
<PAGE>
shall be evidenced by a Promissory Note to be executed and delivered by Borrower
to Lender on the date hereof and shall be repaid in accordance with the terms of
this Agreement and the Promissory Note.

            (b) To obtain an Advance, Borrower must deliver to Lender no later
than fifteen (15) Business Days prior to the date such Advance is requested a
Notice of Borrowing duly signed by a Responsible Officer in the form attached as
EXHIBIT B. Notwithstanding anything to the contrary contained herein, Lender may
decline to make any Advance in the event that Lender determines, in its
reasonable discretion, that the conditions set forth in Sections 3.1 and 3.2 in
the case of the first Advance hereunder and Section 3.2 in the case of all other
Advances hereunder are not satisfied as of the date of the Notice of Borrowing
or as of the date the Advance is requested to be made. Lender will pay Advances
in US dollars into a US dollar bank account located in the United States in
which Lender has a first priority perfected security interest pursuant to the
terms of an Account Control Agreement in accordance with the payment
instructions set forth on each Notice of Borrowing.

            (c) Borrower must repay all Advances together with all accrued but
unpaid interest and any other Obligation hereunder then due on or before the
Maturity Date.

2.2. INTEREST RATE; PAYMENTS.

            (a) Except as otherwise provided in Section 2.3, Advances shall bear
interest at a per annum rate (the "Base Rate") equal to [***].

            (b) Interest shall accrue daily based on a year of 360 days based on
twelve months of thirty days each.

            (c) Interest shall be payable in same day funds on the last day of
each Interest Period, unless such day is not a Business Day in which case it
shall be payable on the next Business Day.

2.3. DEFAULT INTEREST. After an Event of Default has occurred and while it is
continuing, all Obligations shall accrue interest at a rate equal to [***].

2.4. LENDER EXPENSES. Borrower will pay to Lender immediately upon demand
therefor all Lender Expenses incurred after the execution hereof.

2.5. USURY. Notwithstanding anything to the contrary contained in any Loan
Document, the interest and fees paid or agreed to be paid under the Loan
Documents shall not exceed the maximum rate of non-usurious interest permitted
by applicable law (the "Maximum Rate"). If Lender shall receive interest or a
fee in an amount that exceeds the Maximum Rate, the excessive interest or fee
shall be applied to the principal of the Obligations or, if it exceeds the

      *** Certain information on this page has been omitted and filed separately
      with the Commission. Confidential treatment has been requested with
      respect to the omitted portions.

                                      -2-
<PAGE>
unpaid principal, refunded to Borrower. In determining whether the interest or a
fee contracted for, charged, or received by Lender exceeds the Maximum Rate,
such Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations.

      2.6. MANDATORY PREPAYMENTS.

            (a) Equity Issuance. Upon the completion of any Equity Issuance,
Borrower shall immediately apply (or cause to be applied) to permanently prepay
any outstanding Advances the lesser of: (i) an amount equal to 25% of the Net
Cash Equity Issuance Proceeds of Borrower or any of its Subsidiaries or any
holding company of Borrower from such Equity Issuance; (ii) an amount equal to
50% of the average of the amount of outstanding Advances on each day over the
180 days immediately preceding the completion of such Equity Issuance; and (iii)
$75,000,000.

            (b) CHANGE IN CONTROL. Upon and following the occurrence of a Change
in Control (the date on which a Change in Control occurs being the "Change in
Control Date"), Lender shall have the right, in its sole discretion, to require
the prepayment of all outstanding Advances in whole or in part at a repayment
price equal to 100% of the amount of all outstanding Advances plus accrued but
unpaid interest to the date of repayment plus all other Obligations. Not later
than thirty (30) days prior to any proposed, expected or contemplated Change in
Control Date, Borrower shall give a written notice to Lender stating that a
Change in Control is proposed or anticipated and such notice shall contain all
relevant information regarding the terms of such Change in Control and the
intentions of any acquirer with respect to the Borrower and its Subsidiaries, to
the extent known by Borrower. In the event that a Change in Control occurs
without the prior knowledge of Borrower, Borrower shall notify Lender the
Business Day after Borrower becomes aware that a Change in Control has occurred.

      2.7. VOLUNTARY PREPAYMENT OR TERMINATION BY BORROWER. Borrower shall have
the right at any time and from time to time to prepay any Advance in whole or in
part, without premium or penalty. In addition, at any time at which no Advances
are outstanding hereunder and Borrower has not delivered any Notice of Borrowing
requesting an Advance which has not yet been made, Borrower may terminate this
Agreement on five (5) Business Days' prior written notice to Lender.

3. CONDITIONS OF LOANS

      3.1. CONDITIONS PRECEDENT TO INITIAL ADVANCE. Lender's obligation to make
the first Advance hereunder is subject to the satisfaction, as determined by
Lender in its reasonable discretion, of the following conditions:

            (a) Borrower shall have executed and delivered to Lender the
Security Agreement in the form of EXHIBIT C (THE "SECURITY AGREEMENT");

                                      -3-
<PAGE>
            (b) Borrower shall have executed and delivered to Lender the
Borrower Patent and Trademark Security Agreement for filing in the U.S. Patent
and Trademark Office in the form of EXHIBIT D;

            (c) Borrower and Lender shall have entered into an Account Control
Agreement with each bank, Securities Intermediary or other financial institution
with whom Borrower or its Subsidiaries have an Account substantially in the form
of EXHIBIT E together with such changes requested by the bank, Securities
Intermediary or other financial institution and which changes are acceptable to
Lender and Borrower;

            (d) Borrower shall have executed and delivered to Lender a duly
executed Promissory Note in the form of EXHIBIT A;

            (e) receipt by Lender of an opinion of Latham & Watkins, counsel for
Borrower (or such other nationally recognized counsel reasonably acceptable to
Lender), dated as of the date the first Advance is made, substantially in the
form of EXHIBIT F hereto and covering such additional matters relating to the
transactions contemplated hereby as Lender may reasonably request;

            (f) Borrower and each of its Subsidiaries shall have executed and
delivered to Lender a duly executed Perfection Certificate in the form of
EXHIBIT B and (x) if such Perfection Certificate demonstrates that any
Collateral is owned by any Subsidiary, then, to the extent necessary for
Borrower to comply with its obligations under Section 6.13 hereof, such
Subsidiary of Borrower shall grant a first priority perfected security interest
in such Collateral to Lender and (y) if such Perfection Certificate demonstrates
that any Subsidiary organized in the U.S. of Borrower owns assets worth in
excess of $1,000,000 then such Subsidiary shall have executed and delivered to
Lender a guaranty of the Loan Documents in customary form reasonably
satisfactory to Lender;

            (g) Borrower and each of its Subsidiaries shall have executed and
delivered to Lender a certificate, dated as of the date hereof and the date the
first Advance is made, duly executed by its Secretary or an Assistant Secretary
certifying as to: (A) a true and correct copy of its certificate of
incorporation or certificate of formation attached thereto, as certified by the
secretary of state of its jurisdiction of organization as of a date no earlier
than ten (10) days prior to the date hereof and the date the first Advance is
made, and stating that such certificate of incorporation or certificate of
formation is in full force and effect and that there have been no amendments,
alteration or modifications of such certificate (B) a true and correct copy of
its bylaws or operating agreement, attached thereto, and stating that such
bylaws or operating agreement are in full force and effect as of the date hereof
and the date of the first Advance, (C) the good standing certificate attached
thereto from each jurisdiction where it is qualified to do business, (D) the
copy of the resolutions attached thereto of the Board of Directors authorizing
and approving the execution, delivery and performance of, and the consummation
of the transactions contemplated by, this Agreement, the other Loan Documents
and any other documents or instruments contemplated hereby, and stating that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded; and (E) the incumbency, authority and

                                      -4-
<PAGE>
specimen signature of each officer executing this Agreement, the Loan Documents
or any other document or instrument contemplated hereby;

            (h) no event specified in Section 2.6(b) shall have occurred;

            (i) no injunctive or equitable relief has been obtained in favor of
any Person other than Borrower or Lender due to the infringement of any third
party rights by the Products;

            (j) the License Agreement shall not have been terminated and shall
be in full force and effect, and Borrower is not at such time in default or
breach (x) (other than a de minimis breach) of any provision of the License
Agreement or (y) of any of payment obligations under Section 5.3(a) or 6A.7 of
the Collaboration Agreement or any obligation to comply with law under Section
2.2 or 6A.3(a)(i) of the Collaboration Agreement;

            (k) termination of any outstanding Liens on any assets or properties
of Borrower and its Subsidiaries other than Permitted Liens;

            (l) Borrower and the Subsidiaries shall have no outstanding
Indebtedness other than Permitted Indebtedness;

            (m) the US Launch Date shall have occurred on or prior to [***]; and

            (n) development of the MR Product shall not have been terminated.

      3.2. CONDITIONS PRECEDENT TO ALL ADVANCES. Lender's obligations to make
each Advance, including the first Advance, are subject to the satisfaction, as
determined by Lender in its reasonable discretion, of the further following
conditions:

            (a) Lender shall have timely received any Notice of Borrowing;

            (b) the representations and warranties of Borrower contained in
Section 5 hereof and contained in the License Agreement must be true, complete
and correct if qualified by any concept of materiality, in all respects, and if
not qualified by any concept of materiality in all material respects on the date
of the Notice of Borrowing and on the date any Advance is to be made as if made
with reference to and as of such date unless such representation speaks of a
particular date;

            (c) the receipt of all consents, approvals, qualifications or
authorizations of, or registrations, designations, declarations or filings with,
any local, state, federal or foreign Governmental Authority or any third party
required in connection with the valid execution, delivery or performance by the
Borrower and its Subsidiaries of the Loan Documents, or the consummation of any
transaction contemplated thereby or the making of any Advance;

            (d) no Event of Default or Potential Event of Default shall have
occurred and be continuing or result from the proposed Advance;

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                      -5-
<PAGE>
            (e) if the Borrower shall have established or acquired any
Subsidiaries, an equivalent certificate to the certificates described in
Sections 3.1(f) and (g) with reference to such Subsidiary, to the extent
applicable, dated as of the date the Advance is proposed to be made and if any
Subsidiary organized in the U.S. of Borrower owns assets worth in $1,000,000
such Subsidiary shall have executed and delivered to Lender a guaranty in
customary form of the Loan Documents reasonably satisfactory to Lender;

            (f) no event specified in Section 2.6(b) has occurred;

            (g) the License Agreement shall not have been terminated and shall
be in full force and effect, and Borrower is not at such time in default or
breach (x) (other than a de minimis breach) of any provision of the License
Agreement or (y) of any of payment obligations under Section 5.3(a) or 6A.7 of
the Collaboration Agreement or any obligation to comply with law under Section
2.2 or 6A.3(a)(i) of the Collaboration Agreement; after making the requested
Advance the amount of all outstanding Advances shall not exceed the Committed
Line;

            (h) Borrower, and, to the extent necessary for Borrower to comply
with its obligations under Section 6.13 hereof, each Subsidiary organized in the
U.S. of Borrower which owns cash and Securities having an aggregate value in
excess of $100,000 and each Subsidiary organized outside the U.S. of Borrower
which owns cash and Securities having an aggregate value in excess of $250,000,
and Lender shall have entered into an Account Control Agreement with each bank,
Securities Intermediary or other financial institution with whom Borrower or
such Subsidiaries have an Account substantially in the form of EXHIBIT E
together with such changes requested by the bank, Securities Intermediary or
other financial institution and which are acceptable to Lender and Borrower.

4. SECURITY INTEREST All Obligations of Borrower hereunder shall be secured by a
first priority perfected security interest in the Collateral subject to
Permitted Liens described in clauses (b), (e), (g), (i) and (j) of the
definition of "Permitted Liens."

5. REPRESENTATIONS AND WARRANTIES

      Borrower hereby makes all of the representations and warranties set forth
below to Lender as of the date hereof, the date of each Notice of Borrowing and
the date each Advance is made:

      5.1. ORGANIZATION AND STANDING. Borrower is a corporation duly organized,
validly existing under, and by virtue of, the laws of the State of Delaware, and
is in good standing under such laws. Borrower has all requisite corporate power
and authority to own and operate its properties and assets, and to carry on its
business as presently conducted and as proposed to be conducted. Borrower is
duly qualified and authorized to transact business and is in good standing as a
foreign corporation in each jurisdiction in which the failure so to qualify
could reasonably be expected to have a Material Adverse Effect.

                                      -6-
<PAGE>
      5.2. CORPORATE POWER. Borrower has all requisite legal and corporate power
and authority to execute and deliver this Agreement and the Loan Documents and
to carry out and perform its obligations under the terms of this Agreement and
the Loan Documents and the transactions contemplated hereby and thereby.

      5.3. SUBSIDIARIES. As of the date hereof, other than as listed on Schedule
5.3 Borrower has no Subsidiaries and does not otherwise own or control, directly
or indirectly, any equity interest in any corporation, association or other
business entity. As of the date hereof, except as set forth in Schedule 5.3,
Borrower is not a participant in any joint venture, partnership or similar
arrangement. Each existing Subsidiary, and if on any day this representation and
warranty is repeated any new Subsidiary of Borrower has been formed or acquired
such new Subsidiary, is duly organized and validly existing under the laws of
its jurisdiction of organization and is in good standing under such laws. Each
Subsidiary is duly qualified and authorized to transact business and is in good
standing as a foreign corporation in each jurisdiction in which the failure so
to qualify could reasonably be expected to have a Material Adverse Effect.

      5.4. AUTHORIZATION. All corporate action on the part of Borrower, its
officers, directors and stockholders necessary for the authorization of the
execution, delivery and performance of this Agreement and the Loan Documents by
Borrower, and as applicable its Subsidiaries, the authorization, issuance, and
delivery of the Promissory Note and the performance of all of Borrower's, and as
applicable its Subsidiaries', obligations hereunder and under the other Loan
Documents has been taken. This Agreement has been duly executed and delivered.
This Agreement is, and each of the other Loan Documents to be executed
subsequent to the date hereof when executed and delivered will be, a valid and
legally binding obligations of Borrower or its Subsidiary, as applicable,
enforceable in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies.

      5.5. TITLE TO PROPERTIES; LIENS AND ENCUMBRANCES. Each of Borrower and its
Subsidiaries has good and marketable title to all of its properties and assets
or holds valid leasehold interests in the properties which it leases, in each
case, free and clear of any Liens other than Permitted Liens. Neither Borrower
nor any Subsidiary is in default under or in breach of any provision of any
leases or other agreement governing the lease of any property or assets, except
where such default or breach could not reasonably be expected to have a Material
Adverse Effect. All properties and assets of Borrower and its Subsidiaries are
in good condition and repair, normal wear and tear excepted.

      5.6. INTELLECTUAL PROPERTY. Each of Borrower and its Subsidiaries owns or
possesses sufficient legal rights to all patents, patent applications,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
know-how, concepts, computer programs, technical data, proprietary rights,
proprietary processes and other information necessary for its business as now
conducted and as proposed to be conducted (including pursuant to the
Collaboration Agreement) (each such item "Borrower Intellectual Property")
without any conflict with or infringement of

                                      -7-
<PAGE>
the rights of others except as could not reasonably be expected to cause a
Material Adverse Effect. Neither Borrower nor any Subsidiary has received any
communications alleging, nor does Borrower have reason to believe, that Borrower
or any Subsidiary has violated or, by conducting its business as proposed, would
violate any of the patents, trademarks, service marks, trade names, copyrights,
trade secrets, or other proprietary rights or processes of any other person or
entity except as could not reasonably be expected to have a Material Adverse
Effect and is not aware, based on reasonable investigation, of any reasonable
basis therefor or threat thereof. Borrower is not aware that any of its or any
Subsidiary's employees, agents, consultants or contractors is obligated under
any contract (including licenses, covenants, or commitments of any nature) or
other agreement, or subject to any judgment, decree, or order of any court or
administrative agency, that would interfere with the use of such Person's best
efforts to promote the interests of Borrower or any Subsidiary, or that would
conflict with Borrower's business or any Subsidiary's business as proposed to be
conducted. Neither Borrower nor any Subsidiary is aware of any violation or
infringement by a third party of any of the Borrower Intellectual Property.
Neither the execution nor the delivery of this Agreement or the Loan Documents,
nor the carrying on of Borrower's business or any Subsidiary's business by the
employees, agents, consultants or contractors of Borrower and its Subsidiaries,
nor the conduct of Borrower's business or any Subsidiary's business as currently
proposed, will conflict with or result in a breach of the terms, conditions, or
provisions of, or constitute a default under, any contract, covenant, or
instrument under which Borrower or any Subsidiary or any of such employees,
agents, consultants or contractors is now obligated except as could not
reasonably be expected to have a Material Adverse Effect. Neither Borrower nor
any Subsidiary has any plan to utilize, and does not believe it is or will be
necessary to utilize, any inventions of any of its employees (or people it
currently intends to hire) made prior to their employment or engagement by
Borrower or any Subsidiary.

      5.7. CONSENTS. No consent, approval, qualification or authorization of, or
registration, designation, declaration or filing (other than the filing of
financing statements or patent or trademark assignments and other than
notifications and other filings under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder) with, any local, state, federal or foreign Governmental Authority or
any third party on the part of Borrower and its Subsidiaries is required in
connection with the valid execution, delivery or performance of this Agreement
or the Loan Documents, or the consummation of any transaction contemplated
hereby or thereby or the making of any Advance.

      5.8. COMPLIANCE WITH OTHER INSTRUMENTS. Neither Borrower nor any
Subsidiary is in violation or default of any provisions of its respective
organizational documents, or of any mortgage, indenture, agreement, instrument,
judgment, order, writ, decree or contract to which it is a party or by which it
or any of its assets is bound, or any provision of any federal, state or foreign
statute, rule or regulation applicable to Borrower or its Subsidiaries, except
for such violations or defaults which could not reasonably be expected to have a
Material Adverse Effect, and the execution and delivery of this Agreement and
any Loan Document and making of any Advance will not result in any such
violation or be in conflict with or constitute, with or without the passage of
time or giving of notice, either a default under any such provision, instrument,

                                      -8-
<PAGE>
judgment, order, writ, decree or contract or an event which results in the
creation of any Lien on any asset or property of Borrower or any Subsidiary or
the suspension, revocation, impairment, forfeiture, or nonrenewal of any
material permit, license, authorization, or approval applicable to Borrower or
any of its Subsidiaries, their respective businesses, operations, properties or
assets, except for such violations, defaults or Liens which could not reasonably
be expected to have a Material Adverse Effect.

      5.9. CAPITALIZATION AND INDEBTEDNESS.

            (a) The authorized, issued and treasury capital stock of Borrower is
as reported in the most recent SEC Report required to contain or otherwise
containing such information. A sufficient number of shares of Common Stock are
reserved in the aggregate for issuance pursuant to all currently outstanding
obligations. All of the issued and outstanding shares of Common Stock have been
duly authorized and validly issued, are fully paid and nonassessable, and are
not subject to preemptive rights.

            (b) Except as set forth in the most recent SEC Report required to
contain or otherwise containing such information (or as expressly contemplated
by this Agreement), there are no outstanding securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings of any kind
to which Borrower is a party or by which it is bound obligating Borrower to
issue, deliver or sell, or cause to be issued, delivered or sold, directly or
indirectly, additional shares of Capital Stock of Borrower, or obligating
Borrower to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking. Except
for shares of Capital Stock of each Subsidiary of Borrower that are owned by
Borrower free and clear of Liens, there are no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings
of any kind to which Borrower or any Subsidiary of Borrower is a party or by
which Borrower or any such Subsidiary is bound obligating Borrower or any such
Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold,
directly or indirectly, additional shares of Capital Stock of any Subsidiary of
Borrower, or obligating Borrower or any such Subsidiary to issue, grant, extend
or enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. Except as set forth in the most recent
SEC Report required to contain or otherwise containing such information or on
Schedule 5.9(b), there are not any outstanding contractual obligations of
Borrower or any of its Subsidiaries to repurchase, redeem or otherwise acquire,
or providing preemptive or registration rights with respect to, any shares of
Capital Stock of Borrower or any of its Subsidiaries. Except as set forth in the
most recent SEC Report required to contain or otherwise containing such
information, there are no anti-dilution or price adjustment provisions contained
in any security issued by Borrower (or in any agreement providing rights to
security holders) that will be triggered by the issuance of any Promissory Note
or making of any Advance. Except as set forth in the most recent SEC Report
required to contain or otherwise containing such information, Borrower and its
Subsidiaries do not have outstanding any loans to any person in respect of the
purchase of securities issued by Borrower and its Subsidiaries.

                                      -9-
<PAGE>
            (c) Except as set forth in the most recent SEC Report required to
contain or otherwise containing such information or in any Schedule 13D (or
successor form thereto) filed under the Exchange Act to report beneficial
ownership of Borrower's securities and except for pledge of shares by officers
of Borrower to secure personal loans or margin accounts, there are no voting
trusts or agreements, stockholders agreements, pledge agreements, buy-sell
agreements, rights of first refusal, preemptive rights or proxies relating to
any securities of Borrower or any of its Subsidiaries to which Borrower or a
Subsidiary is a party, or, to its knowledge, any of such instruments to which it
is not a party. All of the outstanding securities of Borrower were issued in
compliance with all applicable federal and state securities laws, including the
Securities Act of 1933, as amended (the "Securities Act").

            (d) Other than Permitted Indebtedness Borrower and its Subsidiaries
have no Indebtedness and no obligations to incur any Indebtedness.

      5.10. LITIGATION. There are no actions or proceedings pending or, to
Borrower's knowledge, threatened by or against Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.

      5.11. SEC REPORTS AND FINANCIAL STATEMENTS. Borrower and its Subsidiaries
have timely filed all forms, reports (annual, quarterly or periodic), schedules,
registration statements, proxy statements, certifications and other documents
(together with all amendments thereof and supplements thereto) (as such
documents have since the time of their filing been amended or supplemented, the
"SEC Reports") which Borrower and its Subsidiaries have been required to file
with the Securities and Exchange Commission ("SEC"). As of their respective
dates, the SEC Reports (i) complied as to form with the requirements of the
Securities Act or the Exchange Act, as the case may be, and (ii) did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The audited consolidated financial statements and unaudited interim
consolidated financial statements (including, in each case, the notes, if any,
thereto) included in the SEC Reports filed with the SEC (the "Financial
Statements") complied as to form with the rules and regulations of the SEC with
respect thereto, were in accordance with the books and records of Borrower and
its Subsidiaries, were prepared in accordance with GAAP (except as may be
indicated therein or in the notes thereto and except with respect to unaudited
statements as permitted by Form 10-Q of the SEC) and fairly present (subject, in
the case of the unaudited interim financial statements, to normal, recurring
year-end audit adjustments (which are not individually or in the aggregate,
material)) the consolidated assets, liabilities and financial position of the
Borrower and its consolidated Subsidiaries as of the last day of the periods
reported and the consolidated results of their operations and cash flows and
changes in financial position for the respective periods reported.

      5.12. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the most
recently audited financial statements contained in an SEC Report, there has not
been any change, event or

                                      -10-
<PAGE>
development having, or that could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.

      5.13. REGULATORY COMPLIANCE. Borrower is not an "investment company" or a
company "controlled" by an "investment company" under the Investment Company Act
of 1940, as amended. Borrower is not engaged as one of its important activities
in extending credit for margin stock (under Regulations T and U of the Federal
Reserve Board of Governors). Each of Borrower and its Subsidiaries has complied
in all material respects with the Federal Fair Labor Standards Act and the
Sarbanes-Oxley Act. Neither Borrower nor any of its Subsidiaries has violated
any laws, ordinances or rules, the violation of which could reasonably be
expected to have a Material Adverse Effect. None of Borrower's or any of its
Subsidiaries' properties or assets has been used by Borrower or any of its
Subsidiaries or, to the best of Borrower's knowledge, by previous Persons, in
disposing, producing, storing, treating, or transporting any hazardous substance
in violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances. Borrower and each of its Subsidiaries has timely filed all
required tax returns and paid, or made adequate provision to pay, all material
taxes, except those being contested in good faith with adequate reserves under
GAAP. Borrower and each of its Subsidiaries have obtained all consents,
approvals and authorizations of, made all declarations or filings with, and
given all notices to, all Governmental Authorities that are necessary to
continue its business as currently conducted except where the failure to do so
could not reasonably be expected to cause a Material Adverse Effect.

      5.14. FULL DISCLOSURE. Borrower has provided Lender with all of the
information which Lender has requested in connection with the execution of this
and any Loan Document. No representation or warranty of Borrower contained in
this Agreement, the Loan Documents, or any certificate furnished or to be
furnished to Lender at the Closing or prior to making any Advance (when read
together) contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.

      5.15. OUTSTANDING LIENS. As of the Closing Date, no property or asset of
Borrower or any Subsidiary of Borrower is subject to any Liens other than
Permitted Liens.

      5.16. LEGAL STATUS. Borrower and each of its Subsidiaries that are
requested by Lender to execute and deliver the Perfection Certificate have
delivered to Lender a certificate signed by Borrower and each of its
Subsidiaries and entitled "Perfection Certificate" on or before the date
required. Borrower and each of its Subsidiaries that are requested by Lender to
execute and deliver the Perfection Certificate represent and warrant to Lender
as follows: (a) Borrower's and each of the Subsidiary's exact legal names are
those indicated on the Perfection Certificate and on the signature page hereof,
(b) Borrower and each of the relevant Subsidiaries are organizations of the
type, and are organized in the jurisdictions, set forth in the Perfection
Certificates, (c) the Perfection Certificates accurately set forth Borrower's
and each of the

                                      -11-
<PAGE>
relevant Subsidiaries' organizational identification numbers or accurately state
that that Borrower and each of the relevant Subsidiaries have none, (d) the
Perfection Certificates accurately sets forth Borrower's and each of the
Subsidiary's chief executive office, as well as the mailing addresses, if
different, (e) all other information set forth on the Perfection Certificate
pertaining to Borrower and each of the relevant Subsidiaries is accurate and
complete and (f) there has been no change in any of such information since the
date on which the Perfection Certificate was signed by Borrower and each of the
relevant Subsidiaries, except to the extent that Borrower and each of the
relevant Subsidiaries notifies Lender of such change pursuant to the terms
hereof.

6. AFFIRMATIVE COVENANTS

      Commencing on the date the first Advance is made hereunder and until all
Obligations (other than any contingent reimbursement and indemnification
Obligations that are not due and payable at or prior to the time that all
Advances have been paid in full) have been paid in full, Borrower will, and will
cause its Subsidiaries, to do all of the following:

      6.1. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Borrower and
each of its Subsidiaries will maintain its existence and good standing in its
jurisdiction of incorporation and maintain qualification in each jurisdiction in
which the failure to so qualify could have a Material Adverse Effect. Borrower
will, and will cause each of its Subsidiaries to, comply with (a) the applicable
laws, rules, ordinances and regulations wherever its business is conducted
including applicable reporting requirements of the SEC, (b) the provisions of
its certificate or articles of incorporation, its by-laws and all shareholder
agreements, voting trusts and similar arrangements applicable to any of its
capital stock, (c) all agreements and instruments by which it or any of its
properties may be bound including any agreement evidencing Indebtedness and (d)
all applicable decrees, orders, and judgments, except in each case where the
failure to comply could not cause a Material Adverse Effect and shall promptly
notify Lender of any such noncompliance. If any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
Governmental Authority shall become necessary or required in order that Borrower
or any of its Subsidiaries may fulfill any of its obligations hereunder or any
of the other Loan Documents to which Borrower or such Subsidiary is a party,
Borrower will, or (as the case may be) will cause such Subsidiary to,
immediately take or cause to be taken all reasonable steps within the power of
Borrower or such Subsidiary to obtain such authorization, consent, approval,
permit or license and furnish the Lender with evidence thereof.

      6.2. FINANCIAL STATEMENTS AND OTHER INFORMATION. Borrower shall furnish to
Lender: promptly after filing with the SEC all SEC Reports which are not
available to the public on the SEC's EDGAR system as soon as available, and in
any event, within thirty (30) days after the end of each month of each fiscal
year of Borrower, its monthly consolidated financial statements, prepared in
accordance with GAAP.

                                      -12-
<PAGE>
      6.3. REPORTS. Borrower shall provide Lender with a prompt report of any
legal actions pending or threatened against Borrower or any Subsidiary that
could reasonably be expected to have a Material Adverse Effect.

      6.4. MAINTENANCE OF LEGAL STATUS. Borrower, on behalf of itself and its
Subsidiaries, covenants with Lender as follows: (a) without providing at least
thirty (30) days prior written notice to Lender, Borrower and its Subsidiaries
will not change its name or its organizational identification number if it has
one, (b) if each of Borrower and its Subsidiaries does not have an
organizational identification number and later obtains one, Borrower will
forthwith notify Lender of such organizational identification number, (c)
without providing at least thirty (30) days prior written notice to Lender,
Borrower will not change and will not permit its Subsidiaries to change its type
of organization, jurisdiction or organization, certificate or articles of
incorporation, by-laws or other legal structure and (d) without providing
reasonable written notice to Lender, Borrower and its Subsidiaries will not form
or acquire any Subsidiaries.

      6.5. TAXES. Borrower will make, and cause each of its Subsidiaries to
make, timely payment of all material federal, state, local and foreign taxes or
assessments and will deliver to Lender, on demand, appropriate certificates
attesting to the payment, other than those taxes being contested in good faith
with adequate reserves under GAAP.

      6.6. INSURANCE. Borrower will keep, and will cause each of its
Subsidiaries to keep, its business and assets insured for risks and in amounts
customary for companies similar to Borrower. Insurance policies will be in a
form, with companies, and in amounts that are reasonably satisfactory to Lender.

      6.7. INTELLECTUAL PROPERTY RIGHTS. Borrower will, and will cause its
Subsidiaries to: (i) protect, defend and maintain the validity and
enforceability of the Borrower Intellectual Property that constitutes Collateral
(except as otherwise explicitly required by the License Agreement and except to
the extent Borrower's power to do so is explicitly limited by the License
Agreement); (ii) protect, defend and maintain the validity and enforceability of
the Borrower Intellectual Property that does not constitute Collateral unless
Borrower determines, in the exercise of reasonable business judgment, in good
faith that doing so is not in Borrower's best interests; (iii) promptly advise
Lender in writing of material infringements of the Borrower Intellectual
Property; (iv) not allow any Borrower Intellectual Property that constitutes
Collateral to be abandoned, forfeited or dedicated to the public without
Lender's written consent and (v) without Lender's written consent, not allow any
Borrower Intellectual Property that does not constitute Collateral to be
abandoned, forfeited or dedicated to the public unless Borrower determines, in
the exercise of reasonable business judgment, in good faith that doing so is in
Borrower's best interests.

      6.8. BOOKS AND RECORDS; INSPECTIONS. Borrower shall, and shall cause each
of its Subsidiaries to, keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP and any applicable law,
rule and regulation. Borrower shall provide Lender and its agents access to its
premises and the premises of its Subsidiaries at any time and from time to time,
during normal business hours and upon reasonable notice under the

                                      -13-
<PAGE>
circumstances, and at any time on and after the occurrence of an Event of
Default or Potential Event of Default, for the purposes of (i) inspecting and
verifying any Collateral, (ii) inspecting and copying any and all records
pertaining thereto, and (iii) discussing the affairs, finances and business of
Borrower and its Subsidiaries with any officer or employee of Borrower or with
its accountants. Borrower shall reimburse Lender for the reasonable travel and
related expenses of Lender's employees or, at Lender's option, of such outside
accountants or examiners as may be retained by Lender to verify or inspect
Collateral, records or documents of Borrower up to once per year after the date
of the initial Advance hereunder unless an Event of Default or a Potential Event
of Default has occurred in which case Borrower shall reimburse Lender with
respect to one or more special inspections if Lender deems the same appropriate.

      6.9. NOTICE OF DEFAULT. As soon as possible and in any event within three
(3) Business Days after Borrower obtains knowledge of the occurrence of an Event
of Default or a Potential Event of Default, Borrower shall provide to Lender the
written statement of a Responsible Officer setting forth the details of such
Event of Default or Potential Event of Default and the action which Borrower
proposes to take with respect thereto.

      6.10. FURTHER ASSURANCES. Borrower will execute any further instruments
and take further action as Lender reasonably requests to perfect or continue
Lender's security interest in the Collateral or to effect the purposes of this
Agreement or any Loan Document.

      6.11. NET WORTH. Borrower will maintain a Net Worth at least equal to the
amount of outstanding Advances from time to time.

      6.12. NEW ACCOUNTS. Within thirty (30) calendar days of opening or
establishing any Account, to the extent required to comply with Section 6.13
hereof, Borrower shall, and shall cause each of its Subsidiaries to, create in
favor of the Lender a first priority perfected security interest in such Account
and unless Lender agrees in writing that Lender already has "control" (as
defined in the Code) over such Account by virtue of an existing Account Control
Agreement, Borrower shall and shall cause the bank, Securities Intermediary,
Financial Intermediary or other financial institution with whom such Account is
held or established to enter into an Account Control Agreement in the form of
EXHIBIT E together with such changes requested by the bank, Securities
Intermediary, or other financial institution as are agreed to by Lender and
Borrower.

      6.13. CASH AND INVESTMENTS. Borrower shall at all times keep all cash and
Securities owned by it or its Subsidiaries in an Account over which the Lender
has been granted a first priority perfected security interest pursuant to an
Account Control Agreement, except for (i) cash and Securities having a value up
to an aggregate of $100,000 held by Subsidiaries organized in the U.S.; (ii)
cash and Securities having a value up to an aggregate of $250,000 held by
Subsidiaries organized outside the U.S.; (iii) restricted cash placed on
deposit, placed into an escrow account or otherwise restricted which cash, in
each case, is prohibited from being pledged by Borrower and its Subsidiaries, in
each case in the ordinary course of Borrower's business consistent with past
practice and (iv) cash and securities having an aggregate value not to exceed
$100,000.

                                      -14-
<PAGE>
7. NEGATIVE COVENANTS

      Commencing on the date the first Advance is made hereunder and until all
Obligations (other than any contingent reimbursement and indemnification
Obligations that are not due and payable at or prior to the time that all
Advances have been paid in full) have been paid in full, Borrower will not, and
will cause its Subsidiaries to not, do any of the following without Lender's
prior written consent:

      7.1. DISPOSITIONS. Borrower shall not convey, sell, lease, transfer or
otherwise dispose of (other than pursuant to the License Agreement or a license
of Borrower Intellectual Property in the ordinary course of business)
(collectively a "Transfer"), or permit any of its Subsidiaries to Transfer, all
or any material part of its business or property, other than a Transfer (i) of
inventory in the ordinary course of business; (ii) of worn-out or obsolete
equipment; (iii) of assets by a Subsidiary of Borrower to Borrower or another
wholly-owned Subsidiary of Borrower; or (iv) of assets other than those
contemplated by clauses (i)-(iii) so long as (A) Borrower demonstrates to the
satisfaction of Lender that, after giving effect to such Transfer, Borrower and
its Subsidiaries remain in compliance with the terms and covenants of this
Agreement, (B) no part of any asset Transferred consists of any Collateral, (C)
Borrower receives consideration at the time of such Transfer at least equal to
the fair market value, as determined in good faith by Borrower's board of
directors, of the assets Transferred, (D) not less than 80% of the consideration
received by Borrower is in the form of cash or Cash Equivalents, and (E)
Borrower within 180 days of the date of such Transfer either (x) reinvests the
proceeds of such Transfer in similar or replacement assets to be used in the
business of Borrower or its Subsidiaries or (y) uses the net proceeds of such
Transfer to permanently repay any Advances outstanding hereunder.

      7.2. CHANGES IN BUSINESS, DOCUMENTS OR MANAGEMENT. Borrower shall not (i)
engage in or permit any of its Subsidiaries to engage in any business other than
the businesses currently engaged in by Borrower or reasonably related thereto;
(ii) amend its Certificate of Incorporation, or similar formation document;
(iii) amend its bylaws or similar operating document in a manner adverse to
Lender; or (iv) change its chief executive officer other than to fill vacancies
in such positions caused by death, permanent disability or voluntary
resignation.

      7.3. ACQUISITIONS. Borrower shall not (i) acquire, or permit any of its
Subsidiaries to acquire, all or any portion of the Capital Stock or property or
assets of another Person or establish or enter into any joint venture agreement
unless (x) the aggregate of all consideration paid for acquisitions of all or
any portion of the Capital Stock or property or assets of another Person and the
aggregate of Borrower's investments in all joint ventures, in each case
completed at any time after the date hereof (whether before or after the Closing
Date), is less than $125,000,000 and (y) in the case of an acquisition of
Capital Stock, either (A) Borrower and its Subsidiaries acquire at least all or
substantially all of the Capital Stock of an acquired Person or (B) the
acquisition of less than all or substantially all of the Capital Stock of a
Person is accomplished pursuant to or in connection with a co-promotion,
licensing or collaboration agreement with a Person engaged in the pharmaceutical
industry and Borrower or its Subsidiaries grants a first priority perfected
security interest in such Capital Stock acquired to

                                      -15-
<PAGE>
Lender or (ii) agree to or effect any capital expenditure (including acquiring
any material assets outside of the ordinary course of business and inconsistent
with past practice) other than Approved Capital Expenditures. In the event that
the consideration for any acquisition described in clause (i) of the preceding
sentence is comprised in whole or in part of non-cash consideration, such
non-cash consideration shall be valued as follows: (x) if the consideration
consists of securities which are traded on a recognized national stock exchange
or market, the securities shall be valued at the last reported sale price (or
the average of the last reported bid and ask price in the absence of any last
reported sale price) on the last date on which such exchange or market was open
for trading preceding the date such securities are delivered as consideration
and (y) if the consideration is in a form other than as described in clause (x),
such consideration shall be valued at its fair market value as of the date such
consideration is paid and as determined by the board of directors of the
Borrower acting reasonably and in good faith. The value of Borrower's investment
in any joint venture shall be determined by the board of directors of the
Borrower acting reasonably and in good faith based upon any valuations produced
by the parties to such joint venture in connection with the establishment of
such joint venture.

      7.4. INDEBTEDNESS. Borrower shall not create, incur, assume, permit to
exist, or be liable for any Indebtedness, or permit any of its Subsidiaries to
do so, other than Permitted Indebtedness.

      7.5. ENCUMBRANCE. Borrower shall not create, incur, or allow to exist any
Lien on any of its property or assets, or assign or convey any right to receive
income, including the sale of any accounts receivable, or permit any of its
Subsidiaries to do so, except for Permitted Liens, or permit Lender's first
priority security interest in the Collateral to change.

      7.6. INVESTMENTS; DISTRIBUTIONS. Borrower shall not (i) directly or
indirectly make or hold any Investment in any Person, other than Permitted
Investments, or permit any of its Subsidiaries to do so; or (ii) pay any
dividends or make any distribution or payment on Capital Stock (except for
dividends or stock splits payable solely in Capital Stock and dividends payable
solely to Borrower or a wholly-owned Subsidiary of Borrower) or redeem, retire
or purchase any Capital Stock (except for restricted shares of Capital Stock
issued to officers, directors, or employees pursuant to the terms for
repurchases thereof upon a termination of employment or directorship).

      7.7. TRANSACTIONS WITH AFFILIATES. Borrower and its Subsidiaries shall not
directly or indirectly enter into or permit any material transaction with any
Affiliate of Borrower, except (i) transactions that are in the ordinary course
of Borrower's business, on terms no less favorable to Borrower than would be
obtained in an arm's length transaction with a non-affiliated Person, (ii)
transactions under agreements existing as of the date of this Agreement with
officers and directors that Borrower is legally obligated to perform and which
are disclosed in the SEC Reports filed prior to the date hereof, (iii) any
employment agreement entered into by Borrower or any of its Subsidiaries in the
ordinary course of business, consistent with the past practice of Borrower or
such Subsidiary and approved by the compensation committee of Borrower's board

                                      -16-
<PAGE>
of directors, and (iv) transactions between or among Borrower and one or more of
its Subsidiaries or among Subsidiaries.

      7.8. COMPLIANCE. Borrower and its Subsidiaries shall not undertake as one
of its important activities extending credit to purchase or carry margin stock,
or use the proceeds of any Advance for that purpose; fail to meet the minimum
funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, each as defined in ERISA, to occur; fail to comply with the Federal
Fair Labor Standards Act, the Securities Act, the Exchange Act, the
Sarbanes-Oxley Act or violate any other law or regulation, unless such failure
to comply or violation could not reasonably be expected to have a Material
Adverse Effect.

8. EVENTS OF DEFAULT

      Any one of the following is an Event of Default:

      8.1. PAYMENT DEFAULT. Borrower fails to pay any of the Obligations when
due and payable within five (5) days of its due date.

      8.2. COVENANT DEFAULT. Borrower does not perform any obligation in Section
6 or violates any covenant in Section 7 or does not perform or observe any other
term, condition or covenant in this Agreement, any Loan Documents and as to any
default under a term, condition or covenant that can be cured, has not cured the
default within thirty (30) days after Borrower becomes aware of such occurrence
(but no Advances will be made during such cure period).

      8.3. MATERIAL ADVERSE CHANGE. (i) A material impairment in the perfection
or priority of Lender's security interest in the Collateral or in the value of
such Collateral which is not covered by adequate insurance occurs; or (ii) an
event having a Material Adverse Effect shall occur.

      8.4. ATTACHMENT. (i) Any material portion of Borrower's or any of its
Subsidiaries' assets is attached, seized, levied on, or comes into possession of
a trustee or receiver and the attachment, seizure or levy is not removed in five
(5) days (but no Advance will be made during such period); (ii) Borrower or any
of its Subsidiaries are enjoined, restrained, or prevented by court order from
conducting a material part of its business; (iii) a judgment or other claim
becomes a Lien on Borrower's or any of its Subsidiaries' assets of an aggregate
value in excess of $100,000; or (iv) a notice of lien, levy, or assessment is
filed against any of Borrower's or its Subsidiaries' assets of an aggregate
value in excess of $100,000 by any Governmental Authority and not paid within
ten (10) days after Borrower or any of its Subsidiaries receive notice thereof.

      8.5. INSOLVENCY. (i) Borrower or any of its Subsidiaries begins an
Insolvency Proceeding; or (ii) an Insolvency Proceeding is begun against
Borrower or any of its Subsidiaries and not dismissed or stayed within sixty
(60) days (but no Advances will be made before such Insolvency Proceeding is
dismissed).

                                      -17-
<PAGE>

         8.6. MISREPRESENTATIONS. Borrower, any of its Subsidiaries, or any
Person acting for Borrower makes any material misrepresentation or material
misstatement now or later in any warranty or representation in this Agreement or
in any communication delivered to Lender pursuant to or in connection with this
Agreement or to induce Lender to enter this Agreement or any Loan Document or to
make any Advance; provided that such misrepresentation or misstatement shall not
be an Event of Default if such misrepresentation or misstatement is capable of
being remedied and is remedied within ten (10) days of Borrower becoming aware
of such misrepresentation or misstatement.

         8.7. CROSS DEFAULT. Borrower or any Subsidiary fails to pay any
Indebtedness in excess of $250,000 when due and payable beyond the period of
grace (not to exceed thirty (30) days), if any, provided in the instrument or
agreement under which such indebtedness was created.

         8.8. [***]

         8.9. LICENSE AGREEMENT. (i) The License Agreement shall have been
terminated or (ii) Borrower is in default or breach (x) (other than a de minimis
breach) of any provision of the License Agreement or (y) of any payment
obligations under Section 5.3(a) or 6A.7 of the Collaboration Agreement or any
obligation to comply with law under Section 2.2 or 6A.3(a)(i) of the
Collaboration Agreement.

9. LENDER'S RIGHTS AND REMEDIES

         9.1. RIGHTS AND REMEDIES. Upon the occurrence of an Event of Default,
Lender may, without notice or demand, do any or all of the following:

                  (a) Declare all Obligations immediately due and payable (but
if an Event of Default described in Section 8.5 occurs all Obligations are
immediately due and payable without any action by Lender);

                  (b) Stop advancing money or extending credit for Borrower's
benefit under this Agreement or any Loan Document;

                  (c) Make any payments and do any acts it considers necessary
or reasonable to protect its security interest in the Collateral and take any
action permitted under the Loan Documents, the Code or other applicable law; or

                  (d) Apply to the Obligations any amount held by Lender owing
to or for the credit or the account of Borrower, including amounts under the
License Agreement or the Collaboration Agreement.

         9.2. LENDER EXPENSES. If Borrower fails to pay any amount or furnish
any required proof of payment to third persons Lender may make all or part of
the payment or obtain

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                      -18-
<PAGE>
insurance policies required by any Loan Document, and take any action under the
policies Lender deems prudent. Any amounts paid by Lender are Lender Expenses
and immediately due and payable, bearing interest at the then applicable Base
Rate and secured by the Collateral. No payments by Lender are deemed an
agreement to make similar payments in the future or Lender's waiver of any Event
of Default.

         9.3. REMEDIES CUMULATIVE. Lender's rights and remedies under this
Agreement, the Loan Documents, and all other agreements are cumulative. Lender
has all rights and remedies provided under the Code, by law, or in equity.
Lender's exercise of one right or remedy is not an election, and Lender's waiver
of any Event of Default is not a continuing waiver. Lender's delay is not a
waiver, election, or acquiescence. No waiver is effective unless signed by
Lender and then is only effective for the specific instance and purpose for
which it was given.

         9.4. DEMAND WAIVER. Except for notices explicitly required under any
Loan Document, Borrower waives demand, notice of default or dishonor, notice of
payment and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guaranties held by Lender on which Borrower is
liable.

10.      NOTICES

         All notices or demands by any party to this Agreement or any other
related agreement must be in writing and be personally delivered or sent by an
overnight delivery service, by certified mail, postage prepaid, return receipt
requested, or by telefacsimile at the addresses listed below each parties'
signature hereto. A party may change its notice address by giving the other
party written notice.

11.      CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

         This Agreement shall be governed and construed in accordance with the
internal law of the State of New York without regard to principles of conflicts
of law. Borrower submits to the non-exclusive jurisdiction of the state and
federal courts sitting in the city of New York, New York.

BORROWER WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THIS
AGREEMENT. BORROWER HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

12.      GENERAL PROVISIONS

         12.1. SUCCESSORS AND ASSIGNS. This Agreement binds and is for the
benefit of the successors and permitted assigns of each party. Borrower may not
assign this Agreement or any

                                      -19-
<PAGE>
rights or Obligations under it without Lender's prior written consent which may
be granted or withheld in Lender's discretion. Lender has the right, without the
consent of or notice to Borrower, to sell, transfer, negotiate, or grant
participation in all or any part of, or any interest in, Lender's obligations,
rights and benefits under this Agreement, the Loan Documents or any related
agreement to any Affiliate of Lender and following the occurrence of an Event of
Default to any Person other than to one of Borrower's competitors listed on
Schedule 12.1 hereto.

         12.2. INDEMNIFICATION. Borrower will indemnify, defend and hold
harmless Lender and its officers, employees and agents against: (a) all
obligations, demands, claims, and liabilities asserted by any other party in
connection with the transactions contemplated by the Loan Documents; (b) all
losses or Lender Expenses incurred, or paid by Lender from, following, or
consequential to transactions between Lender and Borrower pursuant to or in
connection with any Loan Document (including reasonable attorneys' fees and
expenses), except in the case of clauses (a) and (b) any amounts caused by
Lender's gross negligence or willful misconduct and (c) any and all Taxes
payable or which must be withheld in respect of all payments by Borrower to
Lender hereunder other than Taxes on Lender's net income or gross receipts and
Lender's franchise taxes.

         12.3. TIME OF ESSENCE. Time is of the essence for the performance of
all Obligations in this Agreement.

         12.4. SEVERABILITY OF PROVISION. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.

         12.5. AMENDMENTS IN WRITING, INTEGRATION. All amendments to this
Agreement must be in writing signed by both Lender and Borrower. This Agreement
and the Loan Documents together with the definitions specifically incorporated
from the License Agreement and the Collaboration Agreement in accordance with
Section 1 hereof represent the entire agreement about this subject matter, and
supersedes prior or contemporaneous negotiations or agreements. All prior or
contemporaneous agreements, understandings, representations, warranties, and
negotiations between the parties about the subject matter of this Agreement and
the Loan Documents merge into this Agreement and the Loan Documents.

         12.6. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, are an original, and all taken together, are one
Agreement.

         12.7. SURVIVAL. All covenants, representations and warranties made in
this Agreement continue in full force while any Obligations remain outstanding.
The obligations of Borrower in Section 12.2 to indemnify Lender will survive
until all statutes of limitations for actions that may be brought against Lender
have run.

         12.8. CONFIDENTIALITY. Borrower and Lender each agree to keep the
contents of the Loan Documents and any other information about the other party
or its business, assets, liabilities or properties which they receive in
connection with the Loan Documents (the

                                      -20-
<PAGE>
"Confidential Information") confidential and not to disclose such information to
any other Person except as required by applicable law, rule, regulation, stock
exchange rule or legal process; provided, however, that if a party hereto is
required so to disclose any Confidential Information it will use its reasonable
best efforts to obtain confidential treatment, redaction, an in camera review or
other methods to limit to the maximum extent possible the content and scope of
the disclosure required and each party shall to the extent practicable permit
the other party and its counsel to review any such request and participate in
the process of prosecuting such request.

13.      DEFINITIONS

         13.1. DEFINITIONS.

         "ACCOUNTS" shall mean all existing and later arising deposit accounts
(as defined in the Code), securities accounts (as defined in the Code) and any
other account in which cash or Securities or the proceeds thereof are held.

         "ACCOUNT CONTROL AGREEMENT" shall mean any Account Control Agreement
entered into pursuant to the terms hereof which grants the Lender "control" as
defined in the Code over any Account in the form of EXHIBIT E together with such
changes requested by the bank, Securities Intermediary or other financial
institution party thereto which changes have been agreed to by Lender and
Borrower.

         "ADVANCE" means an advance made or to be made under the terms and
subject to the conditions of this Agreement or the principal amount outstanding
for the time being of that advance.

         "AFFILIATE" of a Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person's executive officers,
directors, partners and, for any Person that is a limited liability company,
that Person's managers and members.

         "APPROVED CAPITAL EXPENDITURES" means any capital expenditures (x) to
purchase or construct one headquarters campus containing a laboratory facility
and (y) capital expenditures for the purchase, construction or reconstruction of
equipment or other capital assets not exceeding, in the aggregate, $25,000,000
in any fiscal year of Borrower.

         "BORROWER'S BOOKS" are all of Borrower's books and records including
ledgers, records regarding Borrower's assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.

         "BORROWER PATENT AND TRADEMARK SECURITY AGREEMENT" means the Patent and
Trademark Security Agreement substantially in the form of EXHIBIT D attached
hereto.

         "BUSINESS DAY" is any day that is not a Saturday, Sunday or a day on
which banks in New York, NY are generally not open for business.

                                      -21-
<PAGE>
         "CAPITAL STOCK" shall mean all shares of stock (whether or not common
or preferred) or other securities or rights to acquire or which are convertible
or exchangeable into such shares of stock or any other securities entitling the
holder to participate in the profits of a Person or entitling the holder thereof
to vote on any matter.

         A "CHANGE IN CONTROL" shall mean (a) a sale of all or substantially all
of the assets of Borrower and its Subsidiaries taken as a whole, (b) any merger,
consolidation, recapitalization, reclassification, share exchange or other
business combination involving the Borrower or its Subsidiaries (a "Business
Combination") in which either (x) Borrower is not the continuing or surviving
entity and the holders of the Capital Stock of Borrower outstanding immediately
prior to the Business Combination do not hold, directly or indirectly, at least
a majority of the Capital Stock and the combined voting power of the surviving
entity immediately after such Business Combination, or (y) Borrower is the
continuing or surviving entity and the holders of the Capital Stock of Borrower
outstanding immediately prior to the Business Combination do not hold, directly
or indirectly, at least a majority of the Capital Stock and the combined voting
power of Borrower immediately after such Business Combination, and (c) any
Person or group of Persons (as defined in Rule 13d-3 under the Exchange Act)
becomes the beneficial owner (determined in accordance with Rule 13d-3 under the
Exchange Act) of more than 35% (calculated in accordance with Rule 13d-3 under
the Exchange Act) of the Capital Stock or the combined voting power of the
Borrower.

         "CLOSING DATE" shall mean the date the first Advance is made hereunder.

         "CODE" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York, provided that to the extent that by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Collateral or the availability of
any remedy is governed by the Uniform Commercial Code as in effect on or after
the date hereof in any other jurisdiction, "UCC" means the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or effect of perfection or non-perfection or
availability of such remedy.

         "COLLATERAL" shall mean the property described in the Security
Agreement, any Account Control Agreement and the Borrower Patent and Trademark
Security Agreement or in any other Loan Document as being subject to a Lien in
favor of Lender.

         "COMMITTED LINE" shall mean the maximum aggregate amount of all
Advances which may be outstanding hereunder which is equal to: (x) during the
Initial Loan Period $75,000,000 minus any amount which has been repaid pursuant
to Section 2.6 or 7.1 hereof and (y) during the Second Loan Period $175,000,000
minus any amount which has been repaid pursuant to Section 2.6 or 7.1 hereof.

         "CONSOLIDATED EBITDA" shall mean for any period, the sum of
Consolidated Net Income, plus the following to the extent deducted or not
included in calculating such Consolidated Net Income: (a) all income tax
expense; (b) Consolidated Interest Expense; (c) depreciation and amortization
expense (excluding amortization expense attributable to a prepaid

                                      -22-
<PAGE>
operating activity item that was paid in cash on a prior period); and (d) all
other non-cash charges (excluding any such non-cash charge to the extent that it
represents an accrual of or reserve for cash expenditures in any future period);
in each case for such period.

         "CONSOLIDATED FIXED CHARGE COVERAGE RATIO" shall mean the ratio of the
aggregate amount of Consolidated EBITDA for the most recent four full fiscal
quarters (such four full fiscal quarter period being referred to herein as the
"Prior Quarters") for which financial statements contained in an SEC Report have
been filed with the SEC preceding the date of the incurrence of such
Indebtedness (the "Transaction Date") to the aggregate amount of Consolidated
Fixed Charges of such Person for the Prior Quarters. In addition to and without
limitation of the foregoing, for purposes of this definition, "Consolidated
EBITDA" and "Consolidated Fixed Charges" shall be calculated after giving effect
on a pro forma basis for the period of such calculation to, without duplication,
(a) the incurrence of any Indebtedness of Borrower or any of its Subsidiaries
(and the application of the net proceeds thereof) and the repayment of any
Indebtedness of Borrower and its Subsidiaries during the period commencing on
the first day of the Prior Quarters to and including the Transaction Date (the
"Reference Period"), including, without limitation, the incurrence of the
Indebtedness giving rise to the need to make such calculation (and the
application of the net proceeds thereof), as if such incurrence (and
application) or repayment, as the case may be, occurred on the first day of the
Reference Period, and (b) any sales or acquisitions of assets outside the
ordinary course of business (including, without limitation, any acquisition
giving rise to the need to make such calculation as a result of Borrower or one
of its Subsidiaries (including any Person who becomes a Subsidiary as a result
of the acquisition) incurring, assuming or otherwise being liable for
Indebtedness) occurring during the Reference Period, as if such sale of assets
or acquisition occurred on the first day of the Reference Period. Furthermore,
in calculating "Consolidated Fixed Charges" for purposes of determining the
denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage
Ratio," (i) interest on outstanding Indebtedness determined on a fluctuating
basis as at the Transaction Date and that will continue to be so determined
thereafter shall be deemed to have accrued at a fixed or floating rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; and (ii) if interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate based upon a
factor of a prime, LIBOR, or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the Transaction Date
will be deemed to have been in effect during the Reference Period. If Borrower
or any of its Subsidiaries directly or indirectly guarantees Indebtedness of a
third Person, the above clause shall give effect to the incurrence of such
guaranteed Indebtedness as if Borrower or such Subsidiary had directly incurred
or otherwise assumed such guaranteed Indebtedness.

         "CONSOLIDATED FIXED CHARGES" shall mean, with respect to Borrower and
its Subsidiaries for any period, the sum of, without duplication, (a)
Consolidated Interest Expense for such period; (b) scheduled mandatory principal
payments of Indebtedness; (c) the principal component of any capitalized lease
obligations paid by such Person during such period, (d) cash dividends on
Capital Stock paid by such Person during such period (excluding dividends paid
to

                                      -23-
<PAGE>
the Borrower or any wholly-owned Subsidiary), all as determined on a
consolidated basis in accordance with GAAP.

         "CONSOLIDATED INTEREST EXPENSE" shall mean for any period, without
duplication, the sum of (a) the interest expense of Borrower and its
Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP, including, without limitation, (i) any amortization or accretion of
debt discount, (ii) the net cost under any Hedge, (iii) the interest portion of
any deferred payment obligation, and (iv) all accrued interest; (b) the interest
component of capitalized lease obligations paid, accrued and/or scheduled to be
paid or accrued by Borrower and its Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP; (c) that portion of
all operating lease rentals representative of an interest factor (which shall be
deemed to be equal to 1/3 of all operating lease rentals); (d) the amount of
interest expense recorded by a Person whose Indebtedness is guaranteed by the
Borrower or its Subsidiaries which relates to the Indebtedness of such Person
which is so guaranteed; (e) the amount of any dividends on any Capital Stock
which by it terms entitles the holder thereof to specified accruing dividends.

         "CONSOLIDATED NET INCOME" shall mean for any period, the consolidated
net income (or loss) of Borrower and its Subsidiaries for such period, adjusted,
to the extent included in calculating such net income, by excluding, without
duplication, (a) all extraordinary gains or losses, (b) the portion of net
income (but not losses) of Borrower and its Subsidiaries allocable to minority
interests in unconsolidated Persons to the extent that cash dividends or
distributions have not actually been received by Borrower or its wholly-owned
Subsidiaries, (c) any gain or loss realized upon the termination of any employee
pension benefit plan, on an after-tax basis, (d) gains or losses in respect of
any asset sales by Borrower or its Subsidiaries, and (e) the net income of any
Subsidiary of Borrower to the extent that the declaration of dividends or
similar distributions by that Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, law, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders. All
amounts and determinations under this definition shall be in accordance with
GAAP.

         "CONTINGENT OBLIGATION" means, for any Person, any direct or indirect
liability, contingent or not, of that Person for any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; but "Contingent Obligation" does not include endorsements in the
ordinary course of business. The amount of a Contingent Obligation is the stated
or determined amount of the primary obligation for which the Contingent
Obligation is made or, if not determinable, the maximum reasonably anticipated
liability for it determined by the Person in good faith; but the amount may not
exceed the maximum of the obligations under the guarantee or other support
arrangement.

         "EQUITY ISSUANCE" means the sale or issuance by Borrower or any of its
Subsidiaries or a holding company of Borrower of any of its Capital Stock for
cash in a public or private offering

                                      -24-
<PAGE>
other than (w) in connection with entering into any co-promotion, collaboration
or other agreement relating to the joint development, marketing or sale of any
products of Borrower if such Capital Stock is issued to one or more of the
parties to such Agreement (other than the Borrower or its Subsidiaries) or one
of their Affiliates; (x) the sale or issuance of Capital Stock to any employee
or director of Borrower or its Subsidiaries pursuant to any stock option plan
approved by the board of directors of Borrower prior to the date hereof or any
plan adopted after the date hereof containing substantially similar terms; or
(y) the sale or issuance of shares of Capital Stock upon the exercise of any
warrants or upon the conversion of any convertible preferred stock or other
convertible securities outstanding on the date hereof and disclosed in the SEC
Reports filed prior to the date hereof or in any schedule hereto; or (z) the
sale of Capital Stock by Borrower or any of its Subsidiaries to Borrower, a
wholly owned Subsidiary of Borrower or a holding company of Borrower as the case
may be; provided that following such transaction, the beneficial owners of the
Capital Stock of Borrower own in the same proportion as prior to the transaction
the Capital Stock of Borrower or a holding company of Borrower.

         "ERISA" is the Employment Retirement Income Security Act of 1974, and
its regulations.

         "EVENT OF DEFAULT" shall mean the occurrence of any event specified in
Section 8 hereof.

         "EXCHANGE ACT" shall mean the US Securities Exchange Act of 1934, as
amended.

         "FINANCIAL ASSET" shall have the same meaning as in the Code.

         "GAAP" shall mean generally accepted accounting principles in the
United States as consistently applied by Borrower together with the applicable
provisions of all accounting rules, regulations, bulletins and requirements
(including Regulation S-X) promulgated by the SEC or any division or part
thereof.

         "GOVERNMENTAL AUTHORITY" shall mean any government and any authority,
agency, department, subdivision or instrumentality of any government.

         "INDEBTEDNESS" shall mean:

         (a)      indebtedness for borrowed money;

         (b)      the deferred price of property or services;

         (c)      obligations evidenced by notes, bonds, debentures, mortgages
                  or similar instruments;

         (d)      capital or finance lease obligations or hire purchase
                  arrangements;

         (e)      Contingent Obligations;

                                      -25-
<PAGE>
         (f)      any documentary or standby letter of credit facility or
performance bond facility;

         (g)      Any derivative (as defined in Accounting for Derivative
Instruments and Hedging Activities - FASB Statement No. 133 as amended and
interpreted, incorporating FASB Statement No. 138 and certain Statement No. 133
implementation issues, and Derivatives Implementation Group Issues);

         (h)      any amount under bankers acceptances;

         (i)      any amount raised pursuant to any issue of shares which are
expressed to be redeemable;

         (j)      receivables sold or discounted (other than on a non-recourse
basis);

         (k)      any agreement or option to re-acquire an asset if one of the
primary reasons for entering into such agreement or option is to raise finance;

         (l)      any amount raised under any other transaction (including any
forward sale or purchase agreement) having the commercial effect of a borrowing;
and

         (m)      the amount of any liability in respect of any guarantee or
indemnity for any of the items referred to in paragraphs (a) to (l) above.

         "INITIAL LOAN PERIOD" shall mean the period commencing on the calendar
day immediately following the US Launch Date and ending on the first anniversary
of the US Launch Date.

         "INSOLVENCY PROCEEDING" is any proceeding by or against any Person
under the United States Bankruptcy Code, or any other bankruptcy or insolvency
law, including assignments for the benefit of creditors, compositions,
extensions generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

         "INTEREST PERIOD" shall mean the three month period ended March 31,
June 30, September 30 or December 31 except for the first Interest Period which
shall commence on the Closing Date and end on the first of the foregoing dates
to occur.

         "INVESTMENT" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of guarantee
or similar arrangement; but excluding advances to customers in the ordinary
course of business that are, in conformity with GAAP, recorded as accounts
receivable on the balance sheet of the Borrower or its Subsidiaries) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, bonds, notes, debentures or other
similar instruments issued by, such Person.

                                      -26-
<PAGE>
         "LENDER EXPENSES" shall mean all costs, fees and expenses (including
reasonable attorneys' fees and expenses) for administering, defending and
enforcing the Loan Documents (including appeals or Insolvency Proceedings)).

         "LIEN" shall mean a mortgage, lien, deed of trust, charge, pledge,
security interest or other encumbrance or imposition.

         "LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Promissory Note, the Security Agreement, any Account Control Agreement, the
Borrower Patent and Trademark Security Agreement, any note, or notes or
guaranties executed by Borrower in favor of Lender, and any other present or
future agreement between Borrower and, or for the benefit of, Lender in
connection with this Agreement other than the License Agreement or the
Collaboration Agreement, all as amended, extended or restated.

         "LOAN PERIOD" shall mean the Initial Loan Period and the Second Loan
Period collectively.

         "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (x)
the business, assets, liabilities, condition (financial or otherwise) or results
of operations of Borrower and its Subsidiaries taken as a whole or (y) the
validity or enforceability of, or the ability of Borrower to perform its
obligations under this Agreement or any of the other Loan Documents.

         "MATURITY DATE" shall mean the third anniversary of the US Launch Date.

         "NET CASH EQUITY ISSUANCE PROCEEDS" means, with respect to any Equity
Issuance, the excess of the gross cash proceeds received by such Person for such
Equity Issuance after deduction of all reasonable and customary transaction
expenses (including, without limitation, underwriting discounts and commissions
and/or placement agent fees) actually and directly incurred in connection with
such Equity Issuance.

         "NET WORTH" means the assets minus the liabilities of the Borrower and
its Subsidiaries on a consolidated basis as determined in accordance with GAAP.

         "NOTICE OF BORROWING" is the Notice of Borrowing substantially in the
form of EXHIBIT B attached hereto.

         "OBLIGATIONS" shall mean debts, penalties, principal, interest, Lender
Expenses and other amounts Borrower owes Lender pursuant to the Loan Documents
now or later, including interest accruing after Insolvency Proceedings have
begun.

         "PERFECTION CERTIFICATE" is the Perfection Certificate substantially in
the form of EXHIBIT G attached hereto.

                                      -27-
<PAGE>
         "PERMITTED INDEBTEDNESS" is:

                  (a)      Borrower's Obligations to Lender under this Agreement
or the Loan Documents;

                  (b)      Indebtedness existing on the date hereof which is
reflected in the most recent financial statements of Borrower filed in an SEC
Report;

                  (c)      Indebtedness to trade creditors incurred in the
ordinary course of business consistent with past practices so long as either (x)
payment is made within ninety (90) days of the date payment is first due or (y)
the payment is the subject of a bona fide dispute being pursued in good faith
with a trade creditor that is a contract research organization;

                  (d)      Indebtedness incurred directly to finance Approved
Capital Expenditures;

                  (e)      Indebtedness of Borrower to any of its Subsidiaries
and Contingent Obligations of any Subsidiary of Borrower with respect to
obligations of Borrower (provided that the primary obligations are not
prohibited hereby), and Indebtedness of any Subsidiary of Borrower to any other
Subsidiary of Borrower and Contingent Obligations of any Subsidiary of Borrower
with respect to obligations of any other Subsidiary of Borrower (provided that
the primary obligations are not prohibited hereby);

                  (f)      additional Indebtedness incurred by Borrower or any
of its Subsidiaries in an aggregate principal amount at any one time outstanding
not to exceed $10,000,000;

                  (g)      Any derivative that qualifies as hedge under U.S.
Generally Accepted Accounting Principles currently set forth in Accounting for
Derivative Instruments and Hedging Activities - FASB Statement No. 133, as
amended and interpreted, and incorporating FASB Statement No. 138 and Statement
No. 133 implementation issues and, Derivatives Implementation Group issues as
promulgated by the FASB Derivatives Implementation Group from time to time;

                  (h)      Indebtedness incurred prior to the Closing Date in
the form of capital leases obligations not to exceed $10,000,000 in the
aggregate; and

                  (i)      any other Indebtedness not described in clauses (a)
to (h) if such Indebtedness is Subordinated Indebtedness and if immediately
after giving effect to the incurrence of such Indebtedness and giving pro forma
effect to the incurrence of such Indebtedness (x) the Consolidated Fixed Charge
Coverage Ratio is at least equal to 3.5:1 and (y) Borrower shall have Tangible
Net Worth in excess of an amount equal to 75% of all Indebtedness of Borrower
(including any amount of outstanding Advances hereunder) immediately after
giving effect to the incurrence of such Indebtedness and giving pro forma effect
to the incurrence of such Indebtedness.

                                      -28-
<PAGE>
         "PERMITTED INVESTMENTS" are (i) Investments in any Subsidiary which is
wholly owned, directly or indirectly, by Borrower; and (ii) Investments by
Borrower in any one or more of the following:

         (a)      United States treasury bills which are backed by the full
faith and credit of the US federal government;

         (b)      United States federal government coupon issues which are
backed by the full faith and credit of the US federal government;

         (c)      obligations of agencies of the United States federal
government which are backed by the full faith and credit of the US federal
government;

         (d)      deposits, certificates of deposit or bankers acceptances
denominated in US dollars or Euro of any bank or trust company organized under
the laws of the United States of America (or any state thereof) or any member
state of the European Union, having combined capital and surplus and undivided
profits of not less than $100,000,000 or its equivalent and has outstanding debt
which is rated `A' (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule 436
under the Securities Act);

         (e)      debt obligations (including master notes, medium term notes or
commercial paper) of any corporation;

         (f)      collateralized mortgage obligations;

         (g)      repurchase agreements;

         (h)      asset backed securities;

         (i)      Capital Stock, or securities (A) received in the settlement of
debts which were created in the ordinary course of business of the Borrower and
were owing to Borrower or any of its Subsidiaries if such settlement is pursuant
to a bankruptcy, reorganization or other similar general settlements or
compromise or arrangement of debts with the creditors of a Person other than the
Borrower or its Subsidiaries or (B) received pursuant to any judgment of a court
or arbitral tribunal;

         (j)      other Investments in any Person having at any time an
aggregate fair market value, when taken together with all other Investments made
pursuant to this clause (j), not to exceed $2,500,000;

         (k)      Investments in all or a portion of the Capital Stock of a
Person or in joint ventures if (i) the aggregate consideration for all
acquisitions of Capital Stock or property or assets by Borrower and its
Subsidiaries and the aggregate of Borrower's and its Subsidiaries' investments
in such joint ventures completed after the date hereof (whether before or after
the

                                      -29-
<PAGE>
Closing Date) does not exceed $125,000,000 (the value of the consideration paid
or investment is to be determined in the same manner as under Section 7.3); (ii)
either (A) Borrower and its Subsidiaries together own at least all or
substantially all of the Capital Stock of such acquired Person or (B) the
acquisition of less than all or substantially all of the Capital Stock of a
Person was accomplished pursuant to, or in connection with, a co-promotion,
licensing or collaboration agreement with a Person engaged in the pharmaceutical
industry and Borrower or its Subsidiaries grant a first priority perfected
security interest in such Capital Stock to Lender upon the later of (x) the
completion of such acquisition or (y) the Closing Date; and (iii) such
acquisition or joint venture was not completed in violation of Section 7.3
hereof; and

         (l)      Investments existing on the date hereof and listed on Schedule
13.1; provided that with respect to clauses (a) to (h):

         (a)      such Investments are rated at least A2/P2 or A by at least one
nationally recognized statistical rating organization (as defined in Rule 436
under the Securities Act);

         (b)      all asset backed securities are rated at least AA+ by at least
one nationally recognized statistical rating organization (as defined in Rule
436 under the Securities Act);

         (c)      the maximum maturity of any single Investment shall not exceed
44 months;

         (d)      the maximum average maturity of all Permitted Investments must
not exceed 40 months;

         (e)      all Permitted Investments in any one Person (other than the US
federal government or any agency thereof) with a rating of at least AA by at
least one nationally recognized statistical rating organization (as defined in
Rule 436 under the Securities Act) at time the time such Permitted Investment is
made shall not exceed 10% of the market value of all Permitted Investments at
any time;

         (f)      all Permitted Investments in any one Person (other than the US
federal government or any agency thereof) with a rating less than AA by at least
one nationally recognized statistical rating organization (as defined in Rule
436 under the Securities Act) at the time such Permitted Investment is made
shall not exceed 5% of the market value of all Permitted Investments at any
time;

         (g)      the market value of Investments in collateralized mortgage
obligations shall not exceed 5% of the market value of all Permitted Investments
at any time.

         "PERMITTED LIENS" shall mean:

         (a)      Liens arising under this Agreement or other Loan Documents;

                                      -30-
<PAGE>
         (b)      Liens for taxes, fees, assessments or other government charges
or levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on Borrower's Books;

         (c)      Purchase money Liens securing Indebtedness described in
clauses (d) and (h) of the definition of "Permitted Indebtedness" if the Lien is
confined solely to the subject property and improvements;

         (d)      Landlord and materialman's liens and inchoate liens arising by
operation of law to secure claims for the purchase of labor, services,
materials, equipment or supplies to the extent that payment thereof shall not at
the time be required to be made;

         (e)      Liens created by or resulting from any litigation or legal
proceeding which is being contested in good faith by appropriate proceedings;
provided that adequate reserves with respect thereto are maintained on
Borrower's Books;

         (f)      easements, rights of way or other such Liens incidental to the
normal conduct of the business of Borrower or its Subsidiaries which do not
secure Indebtedness and which do not in the aggregate materially impair the use
of such property in the operation of the business of the Borrower and its
Subsidiaries taken as a whole or the value of such property for the purposes of
such business;

         (g)      other Liens incidental to the normal conduct of the business
of Borrower or its Subsidiaries which do not secure Indebtedness and which do
not in the aggregate materially impair the use of such property in the operation
of the business of the Borrower and its Subsidiaries or the value of such
property;

         (h)      subject to compliance with or a waiver of Section 7.3, (i) any
Lien on property existing on such property at the time of acquisition thereof,
whether or not the Indebtedness secured thereby is assumed by Borrower or any
Subsidiary thereof; provided that such Lien does not attach to any other
property of Borrower or its Subsidiaries other than the specific property so
acquired, or (ii) any Lien existing on the property of a Person at the time such
Person is merged into or consolidated with Borrower or any Subsidiary thereof;
provided that such Lien does not attach to any existing or after acquired
property of Borrower or any of its Subsidiaries but only to the actual property
of such Person at the time of such merger or consolidation; provided further
that in the case of both (i) and (ii) such Lien was not created in anticipation
of or in connection with such acquisition, merger or consolidation;

         (i)      pledges and deposits made in the ordinary course of business
in connection with workers compensation, unemployment insurance and other social
security laws or regulations;

         (j)      deposits to secure the performance of bids, trade contracts,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like manner,

                                      -31-
<PAGE>
and Liens of assets relating to customer deposits and advances (including
progress payments) in each case in the ordinary course of business; and

         (k)      Liens existing on the date hereof and disclosed on Schedule
13.2 hereto.

         "PERSON" shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, company, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or Governmental Authority.

         "POTENTIAL EVENT OF DEFAULT" shall mean any event, circumstance,
situation or omission which could with the giving of notice, lapse of time or
otherwise become an Event of Default.

         "PRIME RATE" shall mean the variable per annum rate of interest equal
at all times to the rate of interest established and quoted by Citibank N.A. as
its prime rate, such Prime Rate to change contemporaneously with each change in
such established and quoted rate by Citibank N.A. In the event that Citibank
N.A. shall abolish or abandon its practice of establishing and quoting a prime
rate, or should the same or any Replacement Prime Rate (as defined below) become
unavailable or unascertainable, the Lender shall select any alternative rate
which in its reasonable judgment is substantially equivalent to the Prime Rate
(or Replacement Prime Rate, as the case may be) being replaced, expressed as a
per annum rate, and effective as of the date the Lender notifies the Borrower of
its selection such selected alternative rate of interest (the "Replacement Prime
Rate") shall become the Prime Rate.

         "PROMISSORY NOTE" means a Promissory Note from Borrower in favor of
Lender substantially in the form of EXHIBIT A attached hereto, dated as of the
Closing Date, together with all renewals, amendments, modifications and
substitutions, therefor.

         "RESPONSIBLE OFFICER" shall mean each of the Chief Executive Officer
and the Chief Financial Officer of the Borrower.

         "SECOND LOAN PERIOD" shall mean the period commencing on the calendar
day immediately following the last day of the Initial Loan Period and ending on
that date which is one (1) day prior to the Maturity Date.

         "SECURITIES" shall mean financial assets and investment property each
as defined in the Code.

         "SECURITIES ACCOUNT" shall have the same meaning as in the Code.

         "SECURITIES INTERMEDIARY" shall have the same meaning as in the Code.

         "SUBORDINATED INDEBTEDNESS" shall mean Indebtedness (x) the maturity
date of which or the earliest date upon which repayment can be demanded is after
the Maturity Date and (y) which has been subordinated in right of payment to the
Obligations owing to Lender hereunder

                                      -32-
<PAGE>
pursuant to a subordination agreement providing that the holder thereof (i) may
not exercise any remedies against Borrower or its Subsidiaries without the
consent of Lender and (ii) will pay over to Lender any amounts it receives which
it is not entitled to receive under the terms of such subordination agreement or
pursuant to a subordination agreement containing terms otherwise acceptable to
Lender.

         "SUBSIDIARY" shall mean for any Person, joint venture, or any other
business entity of which more than fifty percent (50%) of the stock or other
equity interests is owned or controlled, directly or indirectly, by the Person
or one or more Affiliates of the Person.

         "TANGIBLE NET WORTH" shall mean, as of any date, (a) the amount of any
capital stock, paid-in capital and similar equity accounts (other than with
respect to any Capital Stock which by its terms is mandatorily redeemable) plus
(or minus in the case of a deficit) the capital surplus and retained earnings of
Borrower on a consolidated basis and the amount of any foreign currency
translation adjustment account shown as a capital account of Borrower, less (b)
the net book value of all items of the following character which are included in
the assets of Borrower: (i) goodwill, including without limitation, the excess
of cost over book value of any asset, (ii) organization or experimental
expenses, (iii) unamortized debt discount and expense, (iv) patents, trademarks,
trade names and copyrights, (v) treasury stock, (vi) deferred taxes (but only to
the extent that the deferred taxes shown as an asset on the Borrower's
consolidated balance sheet exceeds the deferred taxes shown as a liability on
the Borrower's consolidated balance sheet) and deferred charges, (vii)
franchises, licenses and permits, and (viii) other assets which are deemed
intangible assets under GAAP; provided that "Tangible Net Worth" shall not
include any positive amount attributable to any revaluation of any asset after
the date hereof.

         "TAX" (and, with correlative meaning, "Taxes") shall mean any federal,
state, local or foreign income, gross receipts, property, sales, use, license,
excise, franchise, employment, payroll, premium, withholding, alternative or
added minimum, ad valorem, value added, inventory, transfer or excise tax, or
any other tax, custom, duty, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest or penalty.

         "US", "U.S." OR "UNITED STATES" shall mean the geographic territory of
any state of the United States of America or any territory or possession of the
federal government of the United States of America.

         "US LAUNCH DATE" shall mean the first date on which a Product is first
shipped in commercial quantities for commercial sale to unaffiliated third
parties located in the United States.

                     [SIGNATURES ARE ON THE FOLLOWING PAGE]

                                      -33-
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.

BORROWER:

NEUROCRINE BIOSCIENCES, INC.

By: /s/ Gary A. Lyons
   -----------------------------------
   Name:   Gary A. Lyons
   Title:  President and Chief Executive Officer

Address and Fax Number for Notices:

LENDER:

PFIZER INC.

By: /s/ Henry A. McKinnell
   -----------------------------------
   Name:   Henry A. McKinnell
   Title:  Chairman of the Board and
           Chief Executive Officer

Address and Fax Number for Notices:

                                      -34-RIGHTS AGREEMENT DATED 12-03-1997

	 EXHIBIT 4.4
	

	

	

	

	

	  
	  
	  
	 DEERE & COMPANY
	  
	 and
	  
	 THE BANK OF NEW YORK
	  
	 Rights Agent
	  
	  
	  
	
	
	

	  	  	  
	  	  	  
	  
	 Rights Agreement
	  
	 Dated as of December 3, 1997
	  
	  
	  
	

	

	

	

 Page 9 

	 TABLE OF CONTENTS
	  
	  	  	 Page
	 Section 1	 Certain Definitions	 13
	 Section 2. 	 Appointment of Rights Agent 	 18
	 Section 3. 	 Issue of Rights Certificates 	 18
	 Section 4. 	 Form of Rights Certificates 	 21
	 Section 6. 	 Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates 	 23
	 Section 7. 	 Exercise of Rights; Purchase Price; Expiration Date of Rights	 24
	 Section 8. 	 Cancellation and Destruction of Rights Certificates	 27
	 Section 9. 	 Reservation and Availability of Capital Stock 	 27
	 Section 10. 	 Preferred Stock Record Date 	 30
	 Section 11. 	 Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights 	 30
	 Section 12. 	 IGNCertificate of Adjusted Purchase Price or Number of Shares	 42
	 Section 13. 	 Consolidation, Merger or Sale or Transfer of Assets or Earning Power	 42
	 Section 14. 	 Fractional Rights and Fractional Shares 	 46
	 Section 15. 	 Rights of Action 	 48
	 Section 16. 	 Agreement of Rights Holders 	 48

 Page 10 

	 Section 17. 	 Rights Certificate Holder Not Deemed a Stockholder	 49
	 Section 18. 	 Concerning the Rights Agent 	 49
	 Section 19. 	 Merger or Consolidation or Change of Name of Rights Agent	 50
	 Section 20. 	 Duties of Rights Agent 	 51
	 Section 21. 	 Change of Rights Agent 	 54
	 Section 22. 	 Issuance of New Rights Certificates 	 55
	 Section 23. 	 Redemption and Termination 	 56
	 Section 24. 	 Exchange. 	 57
	 Section 25. 	 Notice of Certain Events 	 58
	 Section 26. 	 Notices 	 59
	 Section 27. 	 Supplements and Amendments 	 60
	 Section 28. 	 Successors 	 61
	 Section 29. 	 Determinations and Actions by the Board of Directors, etc. 	 61
	 Section 30. 	 Benefits of this Agreement 	 62
	 Section 31. 	 Severability 	 62
	 Section 32. 	 Governing Law 	 62
	 Section 33. 	 Counterparts 	 63
	 Section 34. 	 Descriptive Headings 	 63
	  	  
	 Exhibit A - Form of Rights Certificate	 64
	 Exhibit B - Form of Summary of Rights 	 71

 Page 11

	 RIGHTS AGREEMENT
	  
	      RIGHTS AGREEMENT, dated as of December 3, 1997 (the "Agreement"), between Deere & Company, a Delaware corporation (the "Company"), and The Bank of New York, a New York
corporation (the "Rights Agent").
	  
	 W I T N E S S E T H
	  
	      WHEREAS, on December 9, 1987 (the "1987 Rights Dividend Declaration Date"), the Board of Directors of the Company authorized the Rights Agreement, dated as of December 9, 1987, as
amended, between the Company and the Rights Agent thereunder (the "1987 Agreement") and declared a dividend distribution of one right (a "1987 Right") for each share of Common Stock (as hereinafter defined) of the Company outstanding at the close of
business on December 31, 1987 (the "1987 Record Date"). Each 1987 Right representing the right to purchase one one-hundredth of a share of Series A Participating Preferred Stock of the Company; 
	  
	      WHEREAS, on December 3, 1997, the Board of Directors of the Company determined it desirable and in the best interests of the Company and its shareholders for the Company to extend
the benefits afforded by the 1987 Agreement and to implement such extension by executing this Agreement; 
	  
	      WHEREAS, on December 3, 1997 (the "Rights Dividend Declaration Date"), the Board of Directors of the Company authorized and declared a dividend distribution of one Right (as
hereinafter defined) for each share of Common Stock outstanding upon the close of business on December 31, 1997 (the "Record Date"), and has authorized the issuance of one Right (as such number may hereinafter be adjusted pursuant to the provisions
of Section 11(p) hereof) for each share of Common Stock issued (whether as an original issuance or from the Company's treasury) between the Record Date and the Distribution Date (as hereinafter defined) and in certain other circumstances provided
herein, each Right initially representing the right to purchase one three-hundredth of a share of Series A Participating Preferred Stock of the Company upon the terms and subject to the conditions hereinafter set forth (the "Rights"); 

 Page 12

	      NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows: 
	  
	 Section 1.   Certain Definitions.  For purposes of this Agreement, the following terms have the meanings indicated: 
	  
	 (a) 	 "Acquiring Person" shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of fifteen percent (15%) or more of the shares of
Common Stock then outstanding, but shall not include the (i) Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of the Company, or of any Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan or (iv) any Person who becomes the Beneficial Owner of fifteen percent (15%) or more of the shares of Common Stock then outstanding as a result of a reduction in the number of
shares of Common Stock outstanding due to the repurchase of shares of Common Stock by the Company unless and until such Person, after becoming aware that such Person has become the Beneficial Owner of fifteen percent (15%) or more of the then
outstanding shares of Common Stock, acquires beneficial ownership of additi onal shares of Common Stock representing one percent (1%) or more of the shares of Common Stock then outstanding, or (v) any such Person who has reported or is required to
report such ownership (but less than 20%) on Schedule 13G under the Securities and Exchange Act of 1934, as amended and in effect on the date of the Agreement (the "Exchange Act") (or any comparable or successor report) or on Schedule 13D under the
Exchange Act (or any comparable or successor report) which Schedule 13D does not state any intention to or reserve the right to control or influence the management or policies of the Company or engage in any of the actions specified in Item 4 of
such schedule (other than the disposition of the Common Stock) and, within 10 Business Days of being requested by the Company to advise it regarding the same, certifies to the Company that such Person acquired shares of Common Stock in excess of
14.9% inadvertently or without knowledge of the terms of the Rights and who, together with all Affiliates and Associates, thereafter does not acquire additional shares of Common Stock while the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding; 

 Page 13 

	  	 provided, however, that if the Person requested to so certify fails to do so within 10 Business Days, then such Person shall become an Acquiring Person immediately after such 10-Business-
Day period.
	  	  
	 (b) 	 "Act" shall mean the Securities Act of 1933. 
	  	  
	 (c) 	 "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended
and in effect on the date of this Agreement (the "Exchange Act"). 
	  	  
	 (d) 	 A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to "beneficially own," any securities: 
	  	  
	  	 (i) 	 which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A) securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or
exchange, (B) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering Event (as hereinafter defined), or (C) securities issuable upon exercise of Rights from and after the occurrence of a Triggering Event
which Rights were acquired by such Person or any of such Person's Affili ates or Associates prior to the Distribution Date (as hereinafter defined) or pursuant to Section 3(a) or Section 22 hereof (the "Original Rights") or pursuant to Section 11(i)
hereof in connection with an adjustment made with respect to any Original Rights; 
	  	  	  
	  	 (ii) 	 which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to vote or dispose of or has "beneficial ownership" of (as determined pursuant to Rule 13d-3
of the General Rules and 

 Page 14 

	  	  	 Regulations under the Exchange Act), including pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," any security under this subparagraph (ii) as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding: (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act, and (B) is not reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report); or 
	  	  	  
	  	 (iii) 	 which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso to subparagraph (ii) of this paragraph (d)) or disposing of any
voting securities of the Company; provided, however, that nothing in this paragraph (d) shall cause a Person engaged in business as an underwriter of securities to be the "Beneficial Owner" of, or to "beneficially own," any securities acquired
through such Person's participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition, and then only if such securities continue to be owned by such Person at such expiration of
forty days. 
	  	  	  
	 (e) 	 "Business Day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the States of Illinois or New York are authorized or obligated by law or executive
order to close. 
	  	  
	 (f) 	 "Close of business" on any given date shall mean 5:00 P.M., New York City time (or Chicago time for purposes of Section 23 hereof), on such date; provided, however, that if such date is not
a Business Day it shall mean 5:00 P.M., New York City time (or Chicago time for purposes of Section 23 hereof), on the next succeeding Business Day. 

 Page 15 

	 (g) 	 "Common Stock" shall mean the common stock, $1 par value, of the Company, except that "Common Stock" when used with reference to any Person other than the Company shall mean the capital stock of such
Person with the greatest voting power, or the equity securities or other equity interest having power to control or direct the management, of such Person. 
	  	  
	 (h) 	 "Common Stock Equivalents" shall have the meaning set forth in Section 11(a)(iii) hereof. 
	  	  
	 (i) 	 "Current market price" shall have the meaning set forth in Section 11(d)(i) hereof. 
	  	  
	 (j) 	 "Current Value" shall have the meaning set forth in Section 11(a)(iii) hereof. 
	  	  
	 (k) 	 "Distribution Date" shall have the meaning set forth in Section 3(a) hereof. 
	  	  
	 (l) 	 "Equivalent Preferred Stock" shall have the meaning set forth in Section 11(b) hereof. 
	  	  
	 "(m) 	 ""Exchange Act" shall have the meaning set forth in Section 1(c) hereof. 
	  	  
	 (n) 	 "Exchange Ratio" shall have the meaning set forth in Section 24 hereof. 
	  	  
	 (o) 	 "Expiration Date" shall have the meaning set forth in Section 7(a) hereof. 
	  	  
	 (p) 	 "Final Expiration Date" shall have the meaning set forth in Section 7(a) hereof. 
	  	  
	 (q) 	 "Person" shall mean any individual, firm, corporation, partnership or other entity. 
	  	  
	 (r) 	 "Preferred Stock" shall mean shares of Series A Participating Preferred Stock, $1 par value, of the Company and, to the extent that there are not a sufficient number of shares of Series A
Participating Preferred Stock authorized to permit the full exercise of the Rights, any other series of Preferred Stock, $1 par value, of the Company designated for 

 Page 16 

	  	 such purpose containing terms substantially similar to the terms of the Series A Participating Preferred Stock. 
	  	  
	 (s) 	 "Principal Party" shall have the meaning set forth in Section 13(b) hereof. 
	  	  
	 (t) 	 "Purchase Price" shall have the meaning set forth in Section 4(a)(ii) hereof. 
	  	  
	 (u) 	 "Record Date" shall have the meaning set forth in the WHEREAS clause at the beginning of this Agreement. 
	  	  
	 (v) 	 "Redemption Price" shall have the meaning set forth in Section 23(a) hereof. 
	  	  
	 (w) 	 "Rights" shall have the meaning set forth in the WHEREAS clause at the beginning of this Agreement. 
	  	  
	 (x) 	 "Rights Certificates" shall have the meaning set forth in Section 3(a) hereof. 
	  	  
	 (y) 	 "Rights Dividend Declaration Date" shall have the meaning set forth in the WHEREAS clause at the beginning of this Agreement. 
	  	  
	 (z)	 "Section 11(a)(ii) Event" shall mean any event described in Section 11(a)(ii) hereof. 
	  	  
	 (aa)	 "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in Section 11(a)(iii) hereof. 
	  	  
	 (bb)	 "Section 13 Event" shall mean any event described in clauses (x), (y) or (z) of Section 13(a) hereof. 
	  	  
	 (cc)	 "Spread" shall have the meaning set forth in Section 11(a)(iii) hereof. 
	  	  
	 (dd)	 "Stock Acquisition Date" shall mean the first date of public announcement (which, for purposes of the definition, shall include, without limitation, a report filed pursuant Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such. 

 Page 17

	 (ee)	 "Subsidiary" shall mean, with reference to any Person, any corporation of which an amount of voting securities sufficient to elect at least a majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such Person. 
	  	  
	 (ff)	 "Substitution Period" shall have the meaning set forth in Section 11(a)(iii) hereof. 
	  	  
	 (gg)	 "Summary of Rights" shall have the meaning set forth in Section 3(b) hereof. 
	  	  
	 (hh)	 "Trading Day" shall have the meaning set forth in Section 11(d)(i) hereof. 
	  	  
	 (ii)	 "Triggering Event" shall mean any Section 11(a)(ii) Event or any Section 13 Event. 
	  	  
	 Section 2.   Appointment of Rights Agent.  The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with
Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Stock) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such
co- rights agents as it may deem necessary or desirable. The Rights Agent shall have no duty to supervise and shall, in no event, be liable for the acts or omissions of any such co-rights agent. 
	  
	 Section 3.   Issue of Rights Certificates. 
	  
	 (a)	 Until the earlier of (i) the close of business on the tenth day after the Stock Acquisition Date (or, if the tenth day after the Stock Acquisition Date occurs before the Record Date, the close of
business on the Record Date), or (ii) the close of business on the tenth business day (or such later date as the Board shall determine) after the date that a tender or exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan) is first published 

 Page 18

	  	 or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person would become an Acquiring Person (the
earlier of (i) and (ii) being herein referred to as the "Distribution Date"), (x) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the certificates for the Common Stock registered in the names of the
holders of the Common Stock (which certificates for Common Stock shall be deemed also to be certificates for Rights) and not by separate certificates, and (y) the Rights will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company). The Company shall give the Rights Agent prompt written notice of the Distribution Date. As soon as practicable after the Distribution Date, and receipt of written notice of such
Distribution Date from the Company the Rights Agent will send by such means as may be selected by the Company, to each record holder of the Common Stock as of the close of business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificates, in substantially the form of Exhibit A hereto (the "Rights Certificates"), evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein. In the event
that an adjustment in the number of Rights per share of Common Stock has been made pursuant to Section 11(p) hereof, at the time of distribution of the Rights Certificates, the Company shall make the necessary and appropriate rounding adjustments
(in accordance with Section 14(a) hereof) so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates. 
	  	  
	 (b)	 The Company will make available, as promptly as practicable following the Record Date, a copy of a Summary of Rights, in substantially the form attached hereto as Exhibit B (the "Summary of Rights")
to any holder who may so request from time to time prior to the expiration Date. With respect to certificates for the Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates for
the Common Stock and the registered holders of the Common Stock shall also be the registered holders of the associated Rights. Until the earlier of the 

 Page 19

	  	 Distribution Date or the Expiration Date (as such term is defined in Section (a) hereof), the transfer of any certificates representing shares of Common Stock in respect of which Rights have been
issued shall also constitute the transfer of the Rights associated with such shares of Common Stock. 
	  	  
	 (c)	 Rights shall be issued in respect of all shares of Common Stock which are issued (whether originally issued or from the Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates representing such shares of Common Stock shall also be deemed to be certificates for Rights and shall bear the following legend (or the legend required under the 1987 Agreement): 
	  	  
	  	 This certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Rights Agreement between Deere & Company (the "Company") and the Rights Agent thereunder (the
"Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Rights Agreement, as in effect on the date of mailing, without charge, promptly after
receipt of a written request therefor. Under certain circumstances set forth in the Rights Agreement, Rights issued to, or held by, any Person who is, was or becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on behalf of such Person or by any subsequent holder, may become null and void.
	  	  
	  	 With respect to such certificates bearing the foregoing legend (or the legend required under the 1987 Agreement), until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be evidenced by such certificates alone and registered holders of Common Stock shall also be the registered holders of the associated Rights, and the transfer

 Page 20

	  	 of any of such certificates shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates.
	  
	 Section 4.   Form of Rights Certificates. 
	  
	 (a)	 The Rights Certificates (and the forms of election to purchase and of assignment to be printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit A hereto
and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. The Rights Certificates shall be in
machine printable format in a form satisfactory to the Rights Agent. Subject to the provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated as of the Record Date and on their face shall entitle
the holders thereof to purchase such number of one three-hundredths o f a share of Preferred Stock as shall be set forth therein at the price set forth therein (such exercise price per one three-hundredth of a share, the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein. 
	
	

	 (b)	 Any Rights Certificate issued pursuant to Section 3(a), Section 11(i) or Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom such Acquiring Person has any continuing 

 Page 21

	 	 agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent feasible) the following legend: 
	
	

	
	 The Rights represented by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly, this Rights Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of such Agreement. 
	
	

	 Section 5.   Countersignature and Registration.
	

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

 Page 22

	 (b)	 Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office or offices designated as the appropriate place for surrender of Rights Certificates
upon exercise or transfer, books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Rights Certificates, the number of Rights evidenced on its
face by each of the Rights Certificates and the date of each of the Rights Certificates. 
	
	

	 Section 6.   Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. 
	

	 (a)	 Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at any time after the close of business on the Distribution Date, and at or prior to the close of business on
the Expiration Date, any Rights Certificate or Certificates (other than Rights Certificates representing Rights that may have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a like number of one three- hundredths of a share of Preferred Stock (or, following a Triggering Event, Common Stock, other securities, cash or other assets, as the case may
be) as the Rights Certificate or Certificates surrendered then entitles such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent, a nd shall surrender the Rights Certificate or Certificates to be transferred, split up, combined or exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b), 

 Page 23

	 	 Section 7(e), Section 14 and Section 24 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Rights Certificates. 
	
	

	 (b)	 Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them, and reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the
Rights Certificate if mutilated, the Company will execute and deliver a new Rights Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated. 
	
	

	 Section 7.   Exercise of Rights; Purchase Price; Expiration Date of Rights. 
	

	 (a)	 Subject to Section 7(e) hereof, at any time after the Distribution Date the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the
total number of one three-hundredths of a share (or other securities, cash or other assets, as the case may be) as to which such surrendered Rights are then exercisable, at or prior to the earlier of (i) 5:00 P.M., New York City time, on December
31, 2007, or such later date as may be established by the Board of Directors prior to the expiration of the Rights (such date, as it may be extended by the Board, the "Final Expiration Date"), or (ii) the time at 

 Page 24

	 	 which the Rights are redeemed or exchanged as provided in Section 23 and Section 24 hereof (the earlier of (i) and (ii) being herein referred to as the "Expiration Date"). 
	
	

	 (b)	 The Purchase Price for each one three-hundredth of a share of Preferred Stock pursuant to the exercise of a Right shall initially be $225, and shall be subject to adjustment from time to
time as provided in Sections 11 and 13(a) hereof and shall be payable in accordance with paragraph (c) below. 
	
	

	 (c) 	 Upon receipt of a Rights Certificate representing exercisable Rights, with the form of election to purchase and the certificate duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price per one three-hundredth of a share of Preferred Stock (or other shares, securities, cash or other assets, as the case may be) to be purchased as set forth below and an amount equal to any applicable transfer
tax, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any transfer agent of the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such shares) certificates
for the total number of one three- hundredths of a share of Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) if the Company shall have elected to deposit the
total number of shares of Preferred Stock issuable upon exercise o f the Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts representing such number of one three- hundredths of a share of Preferred
Stock as are to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the same to be
delivered to or, upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the Purchase Price (as such amount 

 Page 25

	 	 may be adjusted pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified bank check or bank draft payable to the order of the Company. In the event that the Company is
obligated to issue other securities (including Common Stock) of the Company, pay cash and/or distribute other property pursuant to Section 11(a) hereof, the Company will make all arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if and when appropriate. The Company reserves the right to require prior to the occurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights be exercised so
that only whole shares of Preferred Stock will be issued. 
	
	

	 (d)	 In case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, subject to the provisions of
Section 14 hereof. 
	
	

	 (e) 	 Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders
of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding wh ich has as a primary purpose or effect the avoidance of this Section 7(e), shall become null and void without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any 

 Page 26

	 	 provision of this Agreement or otherwise. The Company shall use all reasonable efforts to insure that the provisions of this Section 7(e) and Section 4(b) hereof are complied with, but shall
have no liability to any holder of Rights Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. 
	
	

	 (f)	 Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7 unless such registered holder shall have (i) completed and signed the certificate contained in the form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. 
	
	

	 Section 8.   Cancellation and Destruction of Rights Certificates.  All Rights Certificates surrendered for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights Certificates shall be issued
in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the Company, or shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.
	

	 Section 9.   Reservation and Availability of Capital Stock. 
	

	 (a)	 The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Preferred Stock (and, following the 

 Page 27

	 	 occurrence of a Triggering Event, out of its authorized and unissued shares of Common Stock and/or other securities or out of its authorized and issued shares held in its treasury), the
number of shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) that, as provided in this Agreement including Section 11(a)(iii) hereof, will be sufficient to permit the exercise in
full of all outstanding Rights. 
	
	

	 (b)	 So long as the shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) issuable and deliverable upon the exercise of the Rights
may be listed on any national securities exchange, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed on such exchange upon official notice
of issuance upon such exercise. 
	
	

	 (c)	 The Company shall use its best efforts to (i) file, as soon as practicable following the earliest date after the first occurrence of a Section 11(a)(ii) Event on which the consideration to
be delivered by the Company upon exercise of the Rights has been determined in accordance with Section 11(a)(iii) hereof, a registration statement under the Act, with respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as soon as practicable after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities, and (B) the date of the expiration of the Rights. The Company will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states in connection with the exercisability of the Rights. The Company may temporarily suspend, for a period of time not to exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as well as a public 

 Page 28

	 	 announcement at such time as the suspension has been rescinded. In addition, if the Company shall determine that a registration statement is required following the Distribution Date, the
Company may temporarily suspend the exercisability of the Rights until such time as a registration statement has been declared effective. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained, the exercise thereof shall not be permitted under applicable law, or a necessary registration statement shall not have been declared effective.

	
	

	 (d)	 The Company covenants and agrees that it will take all such action as may be necessary to ensure that all one three-hundredths of a share of Preferred Stock (and, following the occurrence of
a Triggering Event, Common Stock and/or other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and non-assessable. 
	
	

	 (e)	 The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Rights Certificates and of any certificates for a number of one three-hundredths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Rights Certificates to a Person other than, or the issuance or delivery of a number of one three-hundredths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) in respect of a name other than that of the registered holder of the Rights Certificates evidencing Rights surrendered for exercise or to issue or deliver any certificates for a number of one
three-hundredths of a share of Preferred Stock (or Common Stock and/or ot her securities, as the case may be) in a name other than that of the registered holder upon the exercise of any Rights until such tax shall have been paid (any such tax being
payable by the holder of such Rights Certificate at the time of surrender) or until it has been established to the Company's satisfaction that no such tax is due. 

 Page 29

	 Section 10.   Preferred Stock Record Date.  Each person in whose name any certificate for a number of one three-hundredths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of such fractional shares of Preferred Stock (or Common Stock and/or other securities, as
the case may be) represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares (fractional or otherwise) on, an d such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of a stockholder of the Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

	

	 Section 11.   Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.  The Purchase Price, the number and kind of shares covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. 
	

	 (a)	 (i)	 In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation), except as 

 Page 30

	 	
	 otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a
time when the Preferred Stock transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which
would require an adjustment under both this Section 11(a)(i) and Se ction 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof. 
	
	
	

	
	 (ii)	 In the event any Person shall, at any time after the Rights Dividend Declaration Date, become an Acquiring Person, unless the event causing such Person to become an Acquiring Person is a
transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the
members of the Board of Directors who are not officers of the Company and who are not representatives, nominees, Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price
which is fair to stockholders and not inadequate (taking into account all factors which such members of the Board deem relevant, including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and (b) otherwise i n the best interests of the Company and its stockholders then, promptly following the occurrence of such event, proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then 

 Page 31

	 	
	 current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one three-hundredths of a share of Preferred Stock, such number of shares of Common Stock of the
Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one three-hundredths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price
(determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"). 
	
	
	

	
	 (iii)	 In the event that the number of shares of Common Stock which are authorized by the Company's Restated Certificate of Incorporation, but which are not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights, are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall (A) determine the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value"), and (B) with respect to each Right (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock, such as the Preferred Stock, which
the Board has deemed to have the essentially same value or econ omic rights as shares of Common Stock (such shares of preferred stock being referred to as "Common Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the Current Value (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board based upon the advice of a nationally recognized
investment banking firm selected by the Board; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a
Section 11(a)(ii) 

 Page 32

	 	
	 Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board determines in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek sharehol der approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the extent
that action is to be taken pursuant to the first and/or third sentences of this Section 11(a)(iii), the Company (1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (2) may suspend
the exercisability of the Rights until the expiration of the Substitution Period in order to seek such shareholder approval for such authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of each Adjustment Share shall be the current market price per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the per share
or per unit value of any Common Stock Equivalent shall be deemed to equal the current market price per share of the Common Stock on such date. 
	
	

	 (b)	 In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a
period expiring within forty-five (45) calendar days

 Page 33

	 	 after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("Equivalent Preferred Stock")) or securities
convertible into Preferred Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or per share of Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred Stock or Equivalent
Preferred Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or Equiv alent Preferred Stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market
Price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid by delivery of consideration part or all of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights.
Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpos e of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event
that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 
	
	
	

	 (c)	 In case the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or

 Page 34

	 	 merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend payable in stock other than Preferred Stock) or evidences of indebtedness, or of subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market
Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock, and the denominator of which shall be
such Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the
Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed. 
	
	
	

	 (d)	 (i)	 For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the Current
Market Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following such date; provided, however, that in the
event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common
Stock or securities 

 Page 35

	 	
	 convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day Period, as set forth above, then, and in
each such case, the Current Market Price shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by the National Association of Securities Dealers Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date no market maker is making a market in the Common Stock, the fair
value of such shares on such date as determined in good faith by the Board shall be used. The te rm "Trading Day" shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to
trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, Current
Market Price per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. 

 Page 36

	 	 (ii)	 For the purpose of any computation hereunder, the Current Market Price per share of Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in clause
(i) of this Section 11(d) (other than the last sentence thereof). If the Current Market Price per share of Preferred Stock cannot be determined in the manner provided above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the Current Market Price per share of Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as such number may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Agreement) multiplied by the Current Market Price per share of the Common Stock. If neither the Common Stock nor the Preferred Stock is publicly
held or so listed or traded, Current Market Price per share of the Prefer red Stock shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes of this Agreement, the Current Market Price of a Unit shall be equal to the Current Market Price of one share of Preferred Stock divided by 100. 
	
	
	

	 (e)	 Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of a share of Common Stock or other share or one-millionth of a share of Preferred Stock, as the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier of (i) three (3) years from the date of the transaction which mandates such adjustment, or (ii) the Expiration Date. 
	
	

	 (f)	 If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any

 Page 37

	 	 shares of capital stock other than Preferred Stock, thereafter the number of such other shares so receivable upon exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like terms to any such other shares. 
	
	

	 (g)	 All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number
of one three-hundredths of a share of Preferred Stock purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.
	
	

	 (h)	 Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c),
each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one three-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one three-hundredths of a share covered by a Right immediately prior to this adjustment, by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, and
(ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. 
	
	

	 (i)	 The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of any adjustment in the number of one three- hundredths of a share
of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of one three-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights 

 Page 38

	 	 (calculated to the nearest one-ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment
to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the additional Ri ghts to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on the record date specified in the public announcement. 
	
	

	 (j)	 Irrespective of any adjustment or change in the Purchase Price or the number of one three-hundredths of a share of Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the Purchase Price per one three-hundredth of a share and the number of one three-hundredths of a share which were expressed in the initial Rights Certificates issued hereunder.

	
	

	 (k)	 Before taking any action that would cause an adjustment reducing the Purchase Price below the then stated value, if any, of the number of one three-hundredths of a share 

 Page 39

	 	 of Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and non-assessable such number of one three-hundredths of a share of Preferred Stock at such adjusted Purchase Price. 
	
	

	 (l) 	 In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until
the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of one three-hundredths of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one three- hundredths of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares (fractional or otherwise) or securities upon the occurrence of
the event requiring such adjustment. 
	
	

	 (m)	 Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that in their good faith judgment the Board of Directors of the Company shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for cash
of any shares of Preferred Stock at less than the Current Market Price, (iii) issuance wholly for cash of shares of Preferred Stock or securities which by their terms are convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders. 
	
	

	 (n)	 The Company covenants and agrees that it shall not, at any time after the Distribution Date, (i) consolidate with 

 Page
40

	 	 any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a series of related transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such consolidation, merger or sale there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to, simul taneously with or immediately after such consolidation, merger or sale, the shareholders of the Person who constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates and Associates. 
	
	

	 (o)	 The Company covenants and agrees that, after the Distribution Date, it will not, except as permitted by Section 23 or Section 26 hereof, take (or permit any Subsidiary to take) any action if
at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights. 
	
	

	 (p) 	 Anything in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time after the Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine the outstanding shares of Common Stock into a smaller number of shares, the
number of Rights associated with each share of Common Stock then outstanding, or issued or delivered thereafter but prior to the Distribution Date, shall be proportionately adjusted so that the number of Rights thereafter associated with each share
of Common Stock following 

 Page 41

	 	 any such event shall equal the result obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction the numerator
which shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Common Stock outstanding immediately following the occurrence
of such event. 
	
	

	 Section 12.   Certificate of Adjusted Purchase Price or Number of Shares.  Whenever an adjustment is made as provided in Section 11 and Section 13 hereof, the Company
shall (a) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) promptly file with the Rights Agent, and with each transfer agent for the Preferred Stock and the Common
Stock, a copy of such certificate, and (c) if a Distribution Date has occurred, mail a brief summary thereof to each holder of a Rights Certificate in accordance with Section 26 hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall not be deemed to have knowledge of such adjustment unless and until it shall have received such certificate. 
	

	 Section 13.   Consolidation, Merger or Sale or Transfer of Assets or Earning Power. 
	

	 (a)	 In the event that, following the Stock Acquisition Date, directly or indirectly, (x) the Company shall consolidate with, or merge with and into, any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), and the Company shall not be the continuing or surviving corporation of such consolidation or merger, (y) any Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof) shall consolidate with, or merge with or into, the Company, and the Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be changed into or exchanged for stock or other securities of any other Person or cash or any other property, or (z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise 

 Page 42

	 	 transfer), in one transaction or a series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any Person or Persons (other than the Company or any Subsidiary of the Company in one or more transactions each of which complies with Section 11(o) hereof), then, and in each such case (except as may be contemplated by Section 13(d)
hereof), proper provision shall be made so that: (i) each holder of a Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive, upon the exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, such number of validly authorized and issued, fully paid, non- assessable and freely tradable shares of Common Stock of the Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the result obtained by (1) multiplying the then current Purchase Price by the number of one three-hundredths of a share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section 13 Event, multiplying the number of such one three-hundredths of a share for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to such first occurrence), and dividing that product (which, following the first occurrence of a Section 13 Event,
shall be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (2) 50% of the Current Market Price (determined pursuant to Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party on the
date of consummation of such Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall apply only to such Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of its Common Stock) in connection with the consummation of any such transaction as may be necessary to assure that the

 Page 43

	 	 provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to its shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect following the first occurrence of any Section 13 Event. 
	
	

	 (b)	 "Principal Party" shall mean:
	
	

	
	 (i)	 in the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a), the Person that is the issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, and if no securities are so issued, the Person that is the other party to such merger or consolidation; and 
	
	
	

	
	 (ii)	 in the case of any transaction described in clause (z) of the first sentence of Section 13(a), the Person that is the party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions; 
	
	
	

	
	
	 provided, however, that in any such case, (1) if the Common Stock of such Person is not at such time and has not been continuously over the preceding twelve (12) month period registered
under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, "Principal Party" shall refer to such other person; and (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stocks of two or more of which are and have been so registered, "Principal Party" shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest
aggregate market value. 
	
	
	

	 (c)	 The Company shall not consummate any such consolidation, merger, sale or transfer unless the Principal Party shall have a sufficient number of authorized shares of its Common Stock
which have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and further providing that, as soon as 

 Page 44

	 	 practicable after the date of any consolidation, merger or sale of assets mentioned in paragraph (a) of this Section 13, the Principal Party will 
	
	
	

	
	 (i)	 prepare and file a registration statement under the Act, with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as soon as practicable after such filing and (B) remain effective (with a prospectus at all times meeting the requirements of the Act) until the Expiration Date; 
	
	
	

	
	 (ii)	 ) take all such other action as may be necessary to enable the Principal Party to issue the securities purchasable upon exercise of the Rights, including but not limited to the registration
or qualification of such securities under all requisite securities laws of jurisdictions of the various states and the listing of such securities on such exchanges and trading markets as may be necessary or appropriate; and
	
	
	

	
	 (iii)	 will deliver to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all respects with the requirements for registration
on Form 10 under the Exchange Act.
	
	
	

	
	
	 The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been exercised shall thereafter become exercisable in the manner described in Section 13(a).
	
	
	

	 (d)	 Notwithstanding anything in this Agreement to the contrary, Section 13 shall not be applicable to a transaction described in subparagraphs (x) and (y) of Section 13(a) if (i) such
transaction is consummated with a Person or Persons who acquired shares of Common Stock pursuant to a tender offer or exchange offer for all outstanding shares of Common Stock which complies with the provisions of Section 11(a)(ii) hereof (or a
wholly owned subsidiary of any such Person or Persons), (ii)

 Page 45

	 	 the price per share of Common Stock offered in such transaction is not less than the price per share of Common Stock paid to all holders of shares of Common Stock whose shares were
purchased pursuant to such tender offer or exchange offer, and (iii) the form of consideration being offered to the remaining holders of shares of Common Stock pursuant to such transaction is the same as the form of consideration paid pursuant to
such tender offer or exchange offer. Upon consummation of any such transaction contemplated by this Section 13(d), all Rights hereunder shall expire.
	
	
	

	 Section 14.   Fractional Rights and Fractional Shares. 
	

	 (a)	 The Company shall not be required to issue fractions of Rights, except prior to the Distribution Date as provided in Section 11(p) hereof, or to distribute Rights Certificates
which evidence fractional Rights. In lieu of such fractional Rights, the Company shall pay to the registered holders of the Rights Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of the Rights for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction reporting sy stem with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading, or if the Rights are
not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights, 

 Page 46

	 	 selected by the Board of Directors of the Company. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good
faith by the Board of Directors of the Company shall be used. 
	
	

	 (b)	 the Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are integral multiples of one three-hundredth of a share of Preferred Stock)
upon exercise of the Rights or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are integral multiples of one three-hundredth of a share of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one three-hundredth of a share of Preferred Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one three-hundredth of a share of Preferred Stock. For purposes of this Section 14(b), the current market value of one three-hundredth of a share of Preferred Stock shall be one
three-hundredth of the closing price of a share of Preferred Stock (as determined pu rsuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of such exercise. 
	
	

	 (c)	 Following the occurrence of a Triggering Event, the Company shall not be required to issue fractions of shares of Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of Common Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one (1) share of Common Stock. For purposes of this Section 14(c), the current market value of one share of Common Stock shall be the closing price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise. 
	
	

	 (d)	 The holder of a Right by the acceptance of the Rights expressly waives his right to receive any fractional Rights or any fractional shares upon exercise of a Right, except as permitted by
this Section 14. 

 Page 47

	 Section 15.   Rights of Action.  All rights of action in respect of this Agreement are vested in the respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Rights Certificate (or, prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of
any other Rights Certificate (or, prior to the Distribution Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would no t have an adequate remedy at law for any breach of this Agreement and shall be entitled to specific performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any Person subject to this Agreement.
	

	 Section 16.   Agreement of Rights Holders.  Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and with every
other holder of a Right that: 
	

	 (a)	 prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of Common Stock; 
	
	

	 (b)	 after the Distribution Date, the Rights Certificates are transferable only on the registry books of the Rights Agent if surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate forms and certificates fully executed; 
	
	

	 (c)	 subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the person in whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the 

 Page
48

	 	 Rights Certificates or the associated Common Stock certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e) hereof, shall be required to be affected by any notice to the contrary; and 
	
	

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

	 Section 17.   Rights Certificate Holder Not Deemed a Stockholder.  No holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be
deemed for any purpose the holder of the number of one three-hundredths of a share of Preferred Stock or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by suc h Rights Certificate shall have been exercised in accordance with the provisions hereof. 
	

	 Section 18.   Concerning the Rights Agent. 
	

	 (a)	 The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it 

 Page 49

	 	 hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense, incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of
liability in the premises. 
	
	

	 (b)	 The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement,
or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons. 
	
	

	 Section 19.   Merger or Consolidation or Change of Name of Rights Agent. 
	

	 (a) 	 Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to all, or substantially all, the corporate trust, stock transfer or other shareholder services business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; but only if such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Rights Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt 

 Page 50

	 	 the countersignature of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor or in the name of the successor Rights Agent; and in all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement. 
	
	

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

	 Section 20.   Duties of Rights Agent.  The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all
of which the Company and the holders of Rights Certificates, by their acceptance thereof, shall be bound: 
	

	 (a)	 The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. 
	
	

	 (b)	 Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without limitation, the identity of
any Acquiring Person and the determination of Current Market Price) be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of the Board, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant 

 Page 51

	 	 Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate. 
	
	

	 (c)	 The Rights Agent shall be liable hereunder only for its own negligence, bad faith or willful misconduct. 
	
	

	 (d)	 The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Rights Certificates or be required to verify the same
(except as to its countersignature on such Rights Certificates), but all such statements and recitals are and shall be deemed to have been made by the Company only. 
	
	

	 (e) 	 The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Rights Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the provisions of Section 11, Section 13 or Section 24 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after actual notice of any such adjustment); nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock or Preferred Stock to be issued pursuant to this Agreement or any Rights Certificate or as to whether any shares of Common Stock or Preferred Stock will, when so issued,
be validly authorized and issued, fully paid and non-assessable. 
	
	

	 (f)	 The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. 

 Page 52

	 (g)	 The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman of the Board, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any such officer. 
	
	

	 (h) 	 The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other legal entity. 
	
	

	 (i)	 The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct; provided, however, reasonable care
was exercised in the selection and continued employment thereof. 
	
	

	 (j) 	 No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or
in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.
	
	

	 (k)	 If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the
case may be, has either not been completed or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not take any further 

 Page 53

	 	 action with respect to such requested exercise of transfer without first consulting with the Company. 
	
	

	 (l)	 The Company agrees to give the Rights Agent prompt written notice of any event or ownership which would prohibit the exercise or transfer of the Rights Certificates. 
	
	

	 Section 21.   Change of Rights Agent.  The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon thirty
(30) days' notice in writing mailed to the Company, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and, if such resignation occurs after the Distribution Date, to the registered holders of the
Rights Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and Preferred Stock, by registered or certified mail, and, if such removal occurs after the Distribution Date, to the holders of the Rights Certificates by first-class mail. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoi nt a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice, submit his Rights Certificate for inspection by the Company), then any
registered holder of any Rights Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a legal business
entity organized and doing business under the laws of the United States or of the State of New York or of any other state of the United States, in good standing, having an office in the State of New York, which is authorized under such laws to
exercise corporate trust or stock transfer or shareholders services powers and which has at the time of its a ppointment as Rights Agent a combined capital and surplus of at least $100,000,000 or (b) an affiliate of a legal business entity described
in clause (a) of this sentence. After appointment, the successor Rights Agent 

 Page 54

	 shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and, if such appointment occurs after the Distribution Date, mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be. 
	

	 Section 22.   Issuance of New Rights Certificates.  Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option,
issue new Rights Certificates evidencing Rights in such form as may be approved by the Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable
under the Rights Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of shares of Common Stock following the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock so issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement, granted or awarded as of the Distribution Date, or upon the exercise,
conversion or exchange of securities hereinafter issued by th e Company, and (b) may, in any other case, if deemed necessary or appropriate by the Board of Directors of the Company, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no such Rights Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such Rights Certificate would be issued, and (ii) no such Rights 

 Page 55

	 Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof. 
	

	 Section 23.   Redemption and Termination.
	

	 (a)	 The Board of Directors of the Company may, at its option, at any time prior to the earlier of (i) the close of business on the tenth day following the Stock Acquisition Date (or, if the
Stock Acquisition Date shall have occurred prior to the Record Date, the close of business on the tenth day following the Record Date), or (ii) the Final Expiration Date, redeem all but not less than all the then outstanding Rights at a redemption
price of $.01 per Right, as such amount may be appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Agreement to the contrary, the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as the Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, shares of Comm on Stock (based on the Current Market Price, as defined in Section 11(d)(i) hereof, of the Common Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors. 
	
	

	 (b)	 Immediately upon the action of the Board of Directors of the Company ordering the redemption of the Rights, evidence of which shall have been filed with the Rights Agent and without any
further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice of such redemption to the Rights Agent and the holders of the then outstanding Rights by mailing such notice to all such holders at each holder's last address as it
appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. 

 Page 56

	 Section 24.   Exchange.
	
	

	 (a)	 The Board of Directors of the Company may, at its option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to the provisions of Section 7(e) hereof) for Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors of the Company shall not be empowered to effect such exchange at
any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Stock for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owne r of 50% or more of the Common Stock then outstanding. 
	
	

	 (b)	 Immediately upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to subsection (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights. 

 Page 57

	 (c)	 In any exchange pursuant to this Section 24, the Company, at its option, may substitute Preferred Stock (or Equivalent Preferred Stock, as such term is defined in paragraph (b) of Section 11
hereof) for Common Stock exchangeable for Rights, at the initial rate of one three- hundredth of a share of Preferred Stock (or Equivalent Preferred Stock) for each share of Common Stock, as appropriately adjusted to reflect stock splits, stock
dividends and other similar transactions after the date hereof. 
	
	

	 (d) 	 In the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance
with this Section 24, the Company shall take all such action as may be necessary to authorize additional shares of Common Stock for issuance upon exchange of the Rights. 
	
	

	 (e)	 The Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares of Common Stock. In lieu of such fractional
shares of Common Stock, there shall be paid to the registered holders of the Rights Certificates with regard to which such fractional shares of Common Stock would otherwise be issuable, an amount in cash equal to the same fraction of the current
market value of a whole share of Common Stock. For the purposes of this subsection (e), the current market value of a whole share of Common Stock shall be the closing price of a share of Common Stock (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24. 
	
	

	 Section 25.   Notice of Certain Events.
	

	 (a) 	 In case the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend payable in stock of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular quarterly cash dividend out of earnings or retained earnings of the Company), or (ii) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options, or (iii) to effect any reclassification of its 

 Page 58

	 	 Preferred Stock (other than a reclassification involving only the subdivision of outstanding shares of Preferred Stock), or (iv) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall give to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the shares of Preferred Stock, if any such date is to be fixed, and such notice shall be so given
in the case of any action covered by clause (i) or (ii) above at least twenty (20) days prior to the record date for determining holders of the shares of Preferred Stock for purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of Preferred Stock whichever shall be the earlier. 
	
	

	 (b) 	 In case any of the events set forth in Section 11(a)(ii) hereof shall occur, then, in any such case, (i) the Company shall as soon as practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of the occurrence of such event, which shall specify the event and the consequences of the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if appropriate, other securities. 
	
	

	 Section 26.   Notices.  Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by 

 Page 59

	 the holder of any Rights Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent by the Company) as follows: 
	

	
	 Deere & Company 
 Attention: Corporate Secretary 
 John Deere Road 
 Moline, Illinois 61265
	

	 Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing by the Rights Agent with the Company) as follows: 
	

	
	 The Bank of New York 
 Attention: Vice President Administration
 101 Barclay Street - 12W 
 New York, New York 10286 
	
	

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

	

	 Section 27.   Supplements and Amendments.  Prior to the Distribution Date, and subject to the penultimate sentence of this Section 27, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this Agreement without the approval of any holders of certificates representing shares of Common Stock. From and after the Distribution Date, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to change or 

 Page 60

	 supplement the provisions hereunder in any manner which the Company may deem necessary or desirable and which shall not adversely affect the interests of the holders of Rights Certificates (other than
an Acquiring Person or an Affiliate or Associate of an Acquiring Person); provided, this Agreement may not be supplemented or amended to lengthen any time period hereunder, pursuant to clause (iii) of this sentence, (A) a time period relating to
when the Rights may be redeemed at such time as the Rights are not then redeemable, or (B) any other time period unless such lengthening is for the purpose of protecting, enhancing or clarifying the rights of, and/or the benefits to, the holders of
Rights. Upon the delivery of a certificate from an appropriate officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. Prior to the Distribution Date, the interests of th e holders of Rights shall be deemed coincident with the interests of the holders of Common Stock. Notwithstanding anything herein to the contrary, this Agreement may not be amended at a
time when the Rights are not redeemable. 
	

	 Section 28.   Successors.  All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of
their respective successors and assigns hereunder. 
	

	 Section 29.   Determinations and Actions by the Board of Directors, etc.  For all purposes of this Agreement, any calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the particular percentage of such outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-
3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The Board of Directors of the Company shall have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the
Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a determination to redeem or not redeem 

 Page 61

	 the Rights or to amend the Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties, and (y) not subject the Board, or any directors on the Board to any liability
to the holders of the Rights. 
	

	 Section 30.   Benefits of this Agreement.  Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders
of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock). 
	

	 Section 31.   Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, void or unenforceable and the Board of Directors of the Company determines in its good faith judgment
that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the B oard of Directors. 
	

	 Section 32.   Governing Law.  This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be performed entirely within such State, except that the rights 

 Page 62

	 and obligations of the Rights Agent shall be governed by the laws of the State of New York. 
	

	 Section 33.   Counterparts.  This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute but one and the same instrument. 
	

	 Section 34.   Descriptive Headings.  Descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof. 
	

	 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above
written. 

  

	 Attest: 	 DEERE & COMPANY
	
	

	 By: 	 /s/ Michael A. Harring 	
	 By: 	 /s/ Robert W. Lane
	
	
	
	
	

	 Name:	 Michael A. Harring 	
	 Name:	 Robert W. Lane
	 Title:	 Assistant Secretary 	
	 Title: 	 Senior Vice President

  

	 Attest: 	 THE BANK OF NEW YORK 
	
	

	 By: 	 /s/ Robert McMonagle 	
	 By: 	 /s/ John Sivertsen
	
	
	
	
	

	 Name:	 Robert McMonagle 	
	 Name:	 John Sivertsen
	 Title:	 Assistant Vice 
 President	
	 Title: 	 Vice President

 Page 63

	 Exhibit A
	  
	 Certificate No. R- 	  	 Rights
	
	
	

	  	  	  
	      NOT EXERCISABLE AFTER DECEMBER 31, 2007 UNLESS EXTENDED PRIOR THERETO BY THE BOARD OF DIRECTORS OR EARLIER IF REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.] 
	  
	 Rights Certificate
	  
	 DEERE & COMPANY
	  
	 This certifies that ____________________, or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of December 3, 1997 (the "Rights Agreement"), between Deere & Company, a Delaware corporation (the "Company"), and The Bank of New York, a New York corporation (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 P.M. (New York City time) on December 31, 2007 (unless such date is extended prior thereto by the Board of Directors) at the office or offices of the Rights Agent designated for such purpose, or
its successors as Rights Agent, one three-hundredth of a fully paid, non-assessable share of Series A Participating Preferred Stock (the "Preferred Stock") of the Company, at a purchase price of $225 per one three-hundredth of a share (the "Purchase
Price"), upon 
	  
	
	

	  
	 1	 The portion of the legend in brackets shall be inserted only if applicable and shall replace the preceding sentence. 

 Page
64

	 presentation and surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed. The number of Rights evidenced by this Rights Certificate (and the number of
shares which may be purchased upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as of December 3, 1997 based on the Preferred Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a Triggering Event (as such term is defined in the Rights Agreement) that a number of Rights be exercised so that only whole shares of Preferred Stock will be issued. 
	  
	      Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights Agreement), if the Rights evidenced by this Rights Certificate are beneficially owned by (a)
an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Rights Agreement), (b) a transferee of any such Acquiring Person, Associate or Affiliate, or (c) under certain circumstances specified in
the Rights Agreement, a transferee of a person who, after such transfer, became an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such Rights shall become null and void and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Section 11(a)(ii) Event. 
	  
	      As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of Preferred Stock or other securities, which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to modification and adjustment upon the happening of certain events, including Triggering Events. 
	  
	      This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights 

 Page
65

	 Agreement. Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent and are also available upon written request to the Rights Agent. 
	  
	      This Rights Certificate, with or without other Rights Certificates, upon surrender at the principal office or offices of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of one three-hundredths of a share of Preferred Stock as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised. 
	  
	      Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a redemption price of $.01 per Right at
any time prior to the earlier of the close of business on (i) the tenth day following the Stock Acquisition Date (as such time period may be extended pursuant to the Rights Agreement), and (ii) the Final Expiration Date. In addition, under certain
circumstances following the Stock Acquisition Date, the Rights may be exchanged, in whole or in part, for shares of the Common Stock, or shares of preferred stock of the Company having essentially the same value or economic rights as such shares.
Immediately upon the action of the Board of Directors of the Company authorizing any such exchange, and without any further action or any notice, the Rights (other than Rights which are not subject to such exchange) will terminate and the Rights
will only enable holders to receive the shares iss uable upon such exchange. 
	  
	      No fractional shares of Preferred Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one three-
hundredth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. The Company, at its election, may require
that a number of Rights be exercised so that only whole shares of Preferred Stock would be issued. 

 Page 66

	      No holder of this Rights Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of shares of Preferred Stock or of any other
securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give consent to or withhold consent from any corporate action, or, to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised as provided in the Rights
Agreement. 
	  
	      This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent. 
	  
	      WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. 
	  
	 Dated as of __________ __, ____ 
	  
	 ATTEST: 	 DEERE & COMPANY
	  	  
	  	  
	  	  	 By:	  
	
	
	
	

	 Secretary	  	  	 Title:
	  	  	  	  
	 Countersigned: 
	  
	 THE BANK OF NEW YORK
	  
	 By: 	  
	
	
	

	  	 Authorized Signature	  

 Page 67

	 [Form of Reverse Side of Rights Certificate]
	  
	 FORM OF ASSIGNMENT
	  
	 (To be executed by the registered holder if such holder desires to transfer the Rights Certificate.) 
	  
	 FOR VALUE RECEIVED _________________________________ hereby sells, assigns and transfers unto ____________________________
	  
	  
	

	 (Please print name and address of transferee)
	  
	 this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ________________ Attorney, to transfer the within Rights Certificate on
the books of the within-named Company, with full power of substitution. 
	  
	 Dated: ______________, ____
	  	 __________________________________
 Signature
	  	  
	 Signature Guaranteed:	  
	  	  
	 Certificate
	      The undersigned hereby certifies by checking the appropriate boxes that: 
	  
	 (1)	 this Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights Agreement); 
	  	  
	 (2)	 after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate of Associate of an Acquiring Person. 
	  	  
	 Dated: ______________, ____
	  
	  	 __________________________________
	  	 Signature
	  	  
	 Signature Guaranteed:	  

 Page 68

	 NOTICE
	      The signature to the foregoing Assignment and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever. 
	  
	 FORM OF ELECTION TO PURCHASE
	  
	 (To be executed if holder desires to exercise Rights
 represented by the Rights Certificate.)
	  
	 To: DEERE & COMPANY:
	  
	      The undersigned hereby irrevocably elects to exercise __________ Rights represented by this Rights Certificate to purchase the shares of Preferred Stock issuable upon the
exercise of the Rights (or such other securities of the Company or of any other person which may be issuable upon the exercise of the Rights) and requests that certificates for such shares be issued in the name of and delivered to: 
	  
	 Please insert social security
 or other identifying number 
	  
	

	 (Please print name and address)
	  
	

	  
	      If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in
the name of and delivered to:
	  
	 Please insert social security
 of other identifying number 
	  
	

	 (Please print name and address)
	  
	

	  
	 Dated: ______________, ____ 	 ___________________________
	  	 Signature
	  	  
	 Signature Guaranteed:	  

 Page 69

	 CERTIFICATE
	  
	 The undersigned hereby certifies by checking the appropriate boxes that: 
	  
	 (1)	 the Rights evidenced by this Rights Certificate [ ] are [ ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights Agreement); 
	  	  
	 (2)	 after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person. 
	  
	 Dated: ______________, ____ 	 ___________________________
	  	 Signature
	  	  
	 Signature Guaranteed:	  
	  	  
	 NOTICE
	  
	      The signature to the foregoing Election to Purchase and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever. 

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	 Exhibit B
	  
	 SUMMARY OF RIGHTS TO PURCHASE
	 PREFERRED STOCK
	  
	      On December 3, 1997, the Board of Directors of Deere & Company (the "Company") declared a dividend distribution of one Right for each outstanding share of Company Common Stock to
stockholders of record at the close of business on December 31, 1997 (the "Record Date"). Each Right entitles the registered holder to purchase from the Company a unit consisting of one three-hundredth of a share (a "Unit") of Series A Participating
Preferred Stock, $1 par value (the "Preferred Stock") at a Purchase Price of $225 per Unit, subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement") between the Company and The Bank
of New York, as Rights Agent. 
	  
	      Initially, the Rights will be attached to all Common Stock certificates representing shares then outstanding, and no separate Rights Certificates will be distributed. Subject to
certain exceptions specified in the Rights Agreement, the Rights will separate from the Common Stock and a Distribution Date will occur upon the earlier of (i) 10 days following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership of 15% or more of the outstanding shares of Common Stock (the "Stock Acquisition Date"), other than as a result of repurchases of stock by the Company or certain
inadvertent actions by institutional or certain other stockholders, or (ii) 10 business days (or such later date as the Board shall determine) following the commencement of a tender offer or exchange offer that would result in a person or group
becoming an Acquiring Person. Until the Distribution Date, (i) the Ri ghts will be evidenced by the Common Stock certificates and will be transferred with and only with such Common Stock certificates, (ii) new Common Stock certificates issued after
the Record Date will contain a notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate. Pursuant to the Rights Agreement, the Company reserves the right to require prior to the occurrence of a Triggering Event (as defined below) that, upon any exercise of 

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	 Rights, a number of Rights be exercised so that only whole shares of Preferred Stock will be issued. 
	  
	      The Rights are not exercisable until the Distribution Date and will expire at 5:00 P.M. (New York City time) on December 31, 2007, unless such date is extended or the Rights are
earlier redeemed or exchanged by the Company as described below. 
	  
	      As soon as practicable after the Distribution Date, Rights Certificates will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date
and, thereafter, the separate Rights Certificates alone will represent the Rights. Except as otherwise determined by the Board of Directors, only shares of Common Stock issued prior to the Distribution Date will be issued with Rights. 
	  
	      In the event that a Person becomes an Acquiring Person, except pursuant to an offer for all outstanding shares of Common Stock which the independent directors determine to be fair
and not inadequate to and to otherwise be in the best interests of the Company and its stockholders, after receiving advice from one or more investment banking firms, each holder of a Right will thereafter have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times the exercise price of the Right. Notwithstanding any of the foregoing, following the occurrence of any of the events set
forth in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. However, Rights are not exercisable following the occurrence of
the events set forth above until such time a s the Rights are no longer redeemable by the Company as set forth below. 
	  
	      For example, at an exercise price of $225 per Right, each Right not owned by an Acquiring Person (or by certain related parties) following an event set forth in the preceding
paragraph would entitle its holder to purchase $450 worth of Common Stock (or other consideration, as noted above) for $225. Assuming that the Common Stock had a per share value of $50 at such time, the holder of each valid Right would be entitled
to purchase 9 shares of Common Stock for $225. 

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	      In the event that, at any time following the Stock Acquisition Date, (i) the Company is acquired in a merger or other business combination transaction in which the Company is not the
surviving corporation (other than with an entity which acquired the shares pursuant to an offer described in the second preceding paragraph), (ii) the Company engages in a merger or other business combination transaction in which the Company is the
surviving corporation and the Common Stock of the Company is changed or exchanged, or (iii) 50% or more of the Company's assets or earning power is sold or transferred, each holder of a Right (except Rights which have previously been voided as set
forth above) shall thereafter have the right to receive, upon exercise, Common Stock of the acquiring company having a value equal to two times the exercise price of the Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Ev ents."
	  
	      At any time after a person becomes an Acquiring Person and prior to the acquisition by such person or group of fifty percent (50%) or more of the outstanding Common Stock, the Board
may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of one share of Common Stock, or one three- hundredth of a share of Preferred Stock (or of a share of a class
or series of the Company's preferred stock having equivalent rights, preferences and privileges), per Right (subject to adjustment). 
	  
	      At any time until ten days following the Stock Acquisition Date, the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (payable in cash, Common
Stock or other consideration deemed appropriate by the Board of Directors). Immediately upon the action of the Board of Directors ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to
receive the $.01 redemption price. 
	  
	      Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights will not be taxable to stockholders or to the Company, stockholders may, depending upon the circumstances, recognize taxable income in the event 

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	 that the Rights become exercisable for Common Stock (or other consideration) of the Company or for Common Stock of the acquiring company or in the event of the redemption of the Rights as set forth above.

	  
	      Any of the provisions of the Rights Agreement may be amended by the Board of Directors of the Company prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board in order to cure any ambiguity, to make changes which do not adversely affect the interests of holders of Rights, or to shorten or lengthen any time period under the Rights Agreement. The foregoing
notwithstanding, no amendment may be made at such time as the Rights are not redeemable. 
	  
	      A copy of the Rights Agreement is being filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A copy of the Rights Agreement is
available free of charge from the Rights Agent. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which is incorporated herein by reference. 

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