Document:

Exhibit
10.3

INDEMNIFICATION
AGREEMENT

(Director
and Officer)

This
Indemnification Agreement (“Agreement”) is made as of June 15, 2007 by
and between Arena Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and
                   
(“Indemnitee”).

RECITALS

WHEREAS,
Indemnitee is currently serving as a director and an officer of the Company;

WHEREAS, Article V
of the Fifth Amended and Restated Certificate of Incorporation of the Company
(the “Certificate of Incorporation”) and Article IV of the Amended and
Restated Bylaws of the Company (the “Bylaws”), each as currently in
effect, require the Company under certain circumstances to indemnify and
advance expenses to its directors and officers to the fullest extent permitted
by the Delaware General Corporation Law (the “DGCL”) and Indemnitee has been
serving and continues to serve as a director and an officer of the Company in
part in reliance on such provisions;

WHEREAS, in
recognition of Indemnitee’s need for substantial protection against personal liability
in order to promote Indemnitee’s continued service to the Company in an
effective manner, Indemnitee’s reliance on the aforesaid Certificate of
Incorporation and Bylaw provisions, and, in part, to provide Indemnitee with
specific contractual assurance that the protection provided by the Certificate
of Incorporation and Bylaws will be available to Indemnitee (regardless of,
among other things, any amendment to or revocation of such Certificate of
Incorporation and Bylaws or any change in the composition of the Board of
Directors of the Company (the “Board”) or any Change in Control (as
defined below)), the Company wishes to provide in this Agreement for the
indemnification of, and the advancing of expenses to, Indemnitee to the fullest
extent (whether partial or complete) permitted by law, and, to the extent
insurance is maintained, for the continued coverage of Indemnitee under the
Company’s directors’ and officers’ liability insurance policies; and

WHEREAS, the Board
has determined that (i) it is essential for the Company to retain and
attract highly qualified individuals to serve as directors and executive
officers; (ii) it is essential to the best interests of the Company’s
stockholders that the Company act to assure its directors and executive officers
that there will be increased certainty of such protection in the future; and
(iii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify and to advance Expenses (as
defined below) on behalf of its directors and executive officers to the fullest
extent permitted by applicable law as provided in this Agreement so that they
will continue to act in their capacities as directors and/or executive officers
of the Company (and the Company can attract new directors and executive
officers) free from undue concern that they will not be so indemnified;

NOW, THEREFORE, in
consideration of the premises and the covenants contained herein, the Company
and Indemnitee do hereby covenant and agree as follows:

Section 1.               Definitions.   As used in this Agreement:

(a)           A “Change in Control” shall be deemed
to occur upon the earliest to occur after the date of this Agreement of any of
the following events:

i.              Acquisition of Stock by
Third Party.  Any person or group of persons acting in
concert (excluding Company employee benefit plans) becoming the beneficial
owner of securities of the Company having at least 30% of the voting power of
the Company’s then outstanding securities (unless the event causing the 30%
threshold to be crossed is an acquisition of voting common securities directly
from the Company);

ii.             Change in Board. 
Within any 24 month period, the persons who were directors immediately
before the beginning of such period (the “Incumbent Directors”) shall cease to
constitute at least a majority of the Board or the board of directors of a
successor to the Company.  For this
purpose, any director who was not a director at the beginning of such period
shall be deemed to be an Incumbent Director if such director was elected to the
Board by, or on the recommendation of or with the approval of, at least
three-quarters of the directors who then qualified as Incumbent Directors (so
long as such director was not nominated by a person who has expressed an intent
to effect a Change in Control or engage in a proxy or other control contest);

iii.            Corporate Transactions.  Any
merger or other business combination of the Company, any sale or lease of the
Company’s assets or any combination of the foregoing transactions (the “Transactions”)
other than a Transaction immediately following which the stockholders of the
Company immediately prior to the Transaction own at least 60% of the voting
power, directly or indirectly, of (A) the surviving corporation in any such
merger or other business combination; (B) the purchaser or lessee of the
Company’s assets; or (C) both the surviving corporation and the purchaser or
lessee in the event of any combination of Transactions;

iv.            Liquidation.  The
approval by the stockholders of the Company of a complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets; or

v.             Other Events. 
There occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or a response to any similar item on any similar schedule
or form) promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), whether or not the Company is then subject to such reporting
requirement.

(b)           “Disinterested Director” means a
director of the Company who is not and was not a party to the Proceeding in
respect of which indemnification is sought by Indemnitee.

(c)           “Enterprise” means any corporation,
limited liability company, partnership, joint venture, trust plan, employee
benefit plan or other enterprise of which Indemnitee is or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary;
and, with respect to employee benefit plans, the references herein to 

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(i) “fines”
shall include any excise tax assessed with respect to such plans, (ii) “serving
at the request of the Company” shall include any service which imposes
duties on, or involves service by, Indemnitee with respect to such plans, its
participants or beneficiaries, and (iv) a person who acted in good faith and in
a manner he or she reasonably believed to be in the best interests of the
participants and beneficiaries of such a plan shall be deemed to have acted in
a manner “not opposed to the best interests of the Company” as referred
to in this Agreement.

(d)           “Expenses” shall include, without
limitation, all reasonable attorneys’ fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees,
and all other disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding.  “Expenses”
also shall include (i) Expenses incurred in connection with any appeal,
counterclaims and crossclaims resulting from or in connection with any
Proceeding, including without limitation the premium, security for, and other
costs relating to any cost bond, supersedeas bond, or other appeal bond or its
equivalent, and (ii) for purposes of Section 11(d) only,
Expenses incurred by Indemnitee or on Indemnitee’s behalf associated with the
interpretation, enforcement or defense of Indemnitee’s rights under this
Agreement, by litigation or otherwise.  “Expenses”,
however, shall not include amounts paid in settlement by Indemnitee or the
amount of judgments or fines against Indemnitee.

(e)           “Independent Counsel” means a law
firm, or a member of a law firm, that is experienced in matters of corporation
law and who neither at the time of its engagement as Independent Counsel is,
nor in the preceding five years has been, retained to represent:  (i) the Company or Indemnitee in any
matter material to either such party (other than with respect to matters
concerning Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements), or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards
of professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. 
The Company agrees to pay the reasonable fees and expenses of the Independent
Counsel referred to above and to fully indemnify such counsel against any and
all Expenses, claims, liabilities and damages arising out of or relating to
this Agreement or such Independent Counsel’s engagement pursuant hereto.

(f)            “Proceeding” shall include, without
limitation, any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding, whether
brought in the right of the Company or otherwise and whether of a civil,
criminal, administrative, legislative, or investigative nature, including any
appeal therefrom, in which Indemnitee was, is or will be involved as a party,
potential party, non-party witness or otherwise by reason of the fact that Indemnitee
is or was a director or an officer of the Company, by reason of any action
taken or omitted to be taken by Indemnitee or on Indemnitee’s part, or alleged
to have been so taken or omitted to be taken, while acting as a director or an
officer of the Company, or by reason of the fact that Indemnitee is or was
serving at the request of the Company as a director, officer, employee, agent
or fiduciary of another Enterprise, in each case whether or not serving in 

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such
capacity at the time any liability or Expense is incurred for which
indemnification, reimbursement, or advancement of Expenses can be provided
under this Agreement; except for any such Proceeding initiated by Indemnitee to
enforce Indemnitee’s rights under this Agreement (which shall be governed by Section
11 of this Agreement).

(g)           “to the fullest extent permitted by
applicable law” and “to the fullest extent not prohibited by applicable
law” shall include, but not be limited to:

i.             to the fullest extent permitted or not
prohibited, as the case may be, by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the DGCL; and

ii.            to the fullest extent authorized or permitted
or not prohibited, as the case may be, by any amendments to or replacements of
the DGCL adopted after the date of this Agreement that increase the extent to
which a corporation may indemnify its officers and directors.

Section 2.               Indemnity in
Third-Party Proceedings.  The Company
shall indemnify Indemnitee in accordance with the provisions of this Section 2
if Indemnitee is, or is threatened to be made, a party to or a participant in
any Proceeding, other than a Proceeding by or in the right of the Company to
procure a judgment in its favor. 
Pursuant to this Section 2, Indemnitee shall be indemnified
to the fullest extent permitted by applicable law against all Expenses,
judgments, fines and amounts paid in settlement, actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf, in connection with such
Proceeding or any claim, issue or matter therein, if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company and, in the case of a criminal proceeding,
had no reasonable cause to believe that Indemnitee’s conduct was unlawful.

Section 3.               Indemnity in
Proceedings by or in the Right of the Company.   The Company shall indemnify Indemnitee in
accordance with the provisions of this Section 3 if Indemnitee is,
or is threatened to be made, a party to or a participant in any Proceeding by
or in the right of the Company to procure a judgment in its favor.  Pursuant to this Section 3,
Indemnitee shall be indemnified to the fullest extent permitted by applicable
law against all Expenses actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with such Proceeding or any claim, issue or
matter therein, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company.  No indemnification for Expenses
shall be made under this Section 3 in respect of any Proceeding or
any claim, issue or matter therein as to which Indemnitee shall have been
finally adjudged by a court to be liable to the Company, unless and only to the
extent that the Delaware Court of Chancery or any court in which the Proceeding
was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnification.

Section 4.               Indemnification
for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provisions of this
Agreement, to the fullest extent permitted by applicable law and to the extent
that Indemnitee is a party to (or a participant in) 

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and is successful, on the
merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Company shall indemnify Indemnitee
against all Expenses actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection therewith. 
If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by Indemnitee
or on Indemnitee’s behalf in connection with each successfully resolved claim,
issue or matter.  For purposes of this
Section and without limitation, the termination of any claim, issue or matter
in such a Proceeding by dismissal, with or without prejudice, shall be deemed
to be a successful result as to such claim, issue or matter.

Section 5.               Additional
Indemnification.  Notwithstanding any
limitation in Section 2, 3, or 4, the Company shall
indemnify Indemnitee to the fullest extent permitted by applicable law if
Indemnitee is a party to or threatened to be made a party to any Proceeding
(including a Proceeding by or in the right of the Company to procure a judgment
in its favor) against all Expenses, judgments, fines and amounts paid in
settlement, actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf, in connection with the Proceeding.

Section 6.               Exclusions.  Notwithstanding any provision in this
Agreement, the Company shall not be obligated under this Agreement to make any
indemnity in connection with any claim made against Indemnitee:

(a)           Other than as provided in Section 4,
for (i) an accounting of profits made from the purchase and sale (or sale
and purchase) by Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law, or (ii) any reimbursement of the Company by Indemnitee
of any bonus or other incentive-based or equity-based compensation or of any
profits realized by Indemnitee from the sale of securities of the Company, as
required in each case under the Exchange Act (including any such reimbursements
that arise from an accounting restatement of the Company pursuant to
Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”), or the payment to the Company of profits arising from the purchase
and sale by Indemnitee of securities in violation of Section 306 of the
Sarbanes-Oxley Act); or

(b)           except as provided in Section 11(d)
of this Agreement, in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee (whether on Indemnitee’s own behalf or by
or in the right of the Company to procure a judgment in its favor), including
any Proceeding (or any part of any Proceeding) initiated by Indemnitee against
the Company or its directors, officers, employees, agents, fiduciaries or other
indemnitees and not by way of defense, unless (i) the Board authorized the
Proceeding (or any part of any Proceeding) prior to its initiation or
(ii) the Company provides the indemnification, in its sole discretion,
pursuant to the powers vested in the Company under applicable law.

Section 7.               Advances of
Expenses.  In accordance with the
pre-existing requirement of Article V of the Certificate of Incorporation, and
notwithstanding any provision of this Agreement to the contrary, the Company
shall advance, to the fullest extent not prohibited by applicable law, the
Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with
any Proceeding, and such advancement shall be made within 15 days after
the receipt by the 

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Company of a statement or
statements requesting such advances from time to time, whether prior to or
after final disposition of any Proceeding. 
Advances shall (i) be unsecured and interest free; (ii) be made without
regard to Indemnitee’s ability to repay the Expenses and without regard to
Indemnitee’s ultimate entitlement to indemnification under the other provisions
of this Agreement; and (iii) include any and all reasonable Expenses incurred
pursuing an action to enforce this right of advancement, including Expenses
incurred preparing and forwarding statements to the Company to support the
advances claimed.  Indemnitee shall
qualify for advances upon the execution and delivery to the Company of this
Agreement, which shall constitute an unsecured undertaking by Indemnitee to
repay the advance if and to the extent that it is ultimately determined that
Indemnitee is not entitled to be indemnified by the Company.  The right to advances under this Section 7
shall continue until final disposition of any Proceeding.  This Section 7 shall not apply to
any claim made by Indemnitee for which indemnity is excluded pursuant to Section 6.

Section 8.               Procedure for
Notification and Defense of Claim.

(a)           Indemnitee shall notify the Company in
writing of any matter with respect to which Indemnitee intends to seek
indemnification or advancement of Expenses hereunder as soon as reasonably
practicable following the receipt by Indemnitee of written notice thereof.  The written notification to the Company shall
include a reasonable description of the nature of the Proceeding and the facts
underlying the Proceeding.  To obtain
indemnification under this Agreement, Indemnitee shall submit to the Company a
written request, including therein or therewith such documentation and information
as is reasonably available to Indemnitee and is reasonably necessary to
determine whether and to what extent Indemnitee is entitled to indemnification
following the final disposition of such Proceeding.  The omission by Indemnitee to notify the Company
hereunder will not relieve the Company from any liability which it may have to
Indemnitee hereunder or otherwise than under this Agreement, and any delay in
so notifying the Company shall not constitute a waiver by Indemnitee of any
rights under this Agreement.  The
Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that Indemnitee has requested
indemnification.

(b)           The Company will be entitled to participate
in any Proceeding in connection with which Indemnitee seeks indemnification
hereunder at its own expense.

(c)           Any provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement to indemnify Indemnitee under this Agreement for any amounts
paid in settlement of a Proceeding effected without the Company’s written
consent, such consent not to be unreasonably withheld, delayed or conditioned
by the Company.

Section 9.               Procedure Upon
Application for Indemnification.

(a)           Upon written request by Indemnitee for
indemnification pursuant to Section 8(a), a determination, if
required by applicable law, with respect to Indemnitee’s entitlement thereto
shall be made in the specific case: 
(i) if a Change in Control shall have occurred, by Independent
Counsel in a written opinion to the Board, a copy of which shall be delivered
to Indemnitee; or (ii) if a Change in Control shall not have occurred,
(A) by a majority 

 6
 

vote
of the Disinterested Directors, even though less than a quorum of the Board,
(B) by a majority vote of a committee of Disinterested Directors
designated by a majority vote of the Disinterested Directors, even though less
than a quorum of the Board, (C) if there are no Disinterested Directors
or, if a majority of the Disinterested Directors so direct, by Independent
Counsel in a written opinion to the Board, a copy of which shall be delivered
to Indemnitee, or (D) if so directed by the Board, by the stockholders of
the Company; and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within 10 days after
such determination.  Indemnitee shall
cooperate with the person, persons or entity making such determination with
respect to Indemnitee’s entitlement to indemnification, including providing to
such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected
from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to make such determination. 
Any Expenses incurred by Indemnitee or on Indemnitee’s behalf in so
cooperating with the person, persons or entity making such determination shall
be borne by the Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification) and the Company shall indemnify and hold
Indemnitee harmless therefrom.

(b)           In the event the determination of entitlement
to indemnification is to be made by Independent Counsel pursuant to Section 9(a),
the Independent Counsel shall be selected as provided in this Section 9(b).  If a Change in Control shall not have
occurred, the Independent Counsel shall be selected by the Board, and the
Company shall give written notice to Indemnitee advising Indemnitee of the
identity of the Independent Counsel so selected.  If a Change in Control shall have occurred,
the Independent Counsel shall be selected by Indemnitee (unless Indemnitee
shall request that such selection be made by the Board, in which event the
preceding sentence shall apply), and Indemnitee shall give written notice to
the Company advising it of the identity of the Independent Counsel so
selected.  In either event, Indemnitee or
the Company, as the case may be, may, within 10 days after such written
notice of selection shall have been given, deliver to the Company or to
Indemnitee, as the case may be, a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as defined in Section 1(e), and the objection shall set
forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the
person so selected shall act as Independent Counsel.  If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court of competent
jurisdiction has determined that such objection is without merit.  If, within 20 days after the later of
submission by Indemnitee of a written request for indemnification pursuant to Section 8(a)
and the final disposition of the Proceeding, no Independent Counsel shall have
been selected and not objected to, either the Company or Indemnitee may
petition a court of competent jurisdiction for resolution of any objection
which shall have been made by the Company or Indemnitee to the other’s
selection of Independent Counsel and/or for the appointment as Independent Counsel
of a person selected by the court or by such other person as the court shall
designate, and the person with respect to whom all objections are so resolved
or the person so appointed shall act as Independent Counsel under Section 9(a).  Upon the due commencement of any judicial
proceeding or arbitration pursuant to Section 11(a), Independent
Counsel shall be discharged and relieved of any further responsibility in such
capacity (subject to the applicable standards of professional conduct then
prevailing).

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Section 10.             Presumptions and
Effect of Certain Proceedings.

(a)           In making a determination with respect to
entitlement to indemnification hereunder, the person, persons or entity making
such determination shall, to the fullest extent not prohibited by applicable
law, presume that Indemnitee is entitled to indemnification under this
Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 8(a), and the Company shall, to the fullest
extent not prohibited by applicable law, have the burden of proof to overcome
that presumption in connection with the making by any person, persons or entity
of any determination contrary to that presumption.  Neither the failure of the Company (including
by its Disinterested Directors or any committee thereof, by its stockholders or
by Independent Counsel) to have made a determination prior to the commencement
of any action pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct,
nor an actual determination by the Company (including by its Disinterested
Directors or any committee thereof or by Independent Counsel) that Indemnitee
has not met such applicable standard of conduct, shall be a defense to the action
or create a presumption that Indemnitee has not met the applicable standard of
conduct.

(b)           Subject to Section 11(e), if the
person, persons or entity empowered or selected under Section 9 to
determine whether Indemnitee is entitled to indemnification shall not have made
a determination within 60 days after receipt by the Company of the request
therefor, the requisite determination of entitlement to indemnification shall,
to the fullest extent not prohibited by applicable law, be deemed to have been
made and Indemnitee shall be entitled to such indemnification, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement, in light of the
circumstances under which such statement is made, not materially misleading, in
connection with the request for indemnification, or (ii) a prohibition of
such indemnification under applicable law as determined by a court of competent
jurisdiction; provided, however, that such 60-day period may be
extended for a reasonable time, not to exceed an additional 30 days, if
the person, persons or entity making the determination with respect to
entitlement to indemnification in good faith requires such additional time for
the obtaining or evaluating of documentation and/or information relating
thereto; provided, further, that the foregoing provisions of this
Section 10(b) shall not apply if the determination of entitlement
to indemnification is to be made by (x) the stockholders pursuant to Section 9(a)
and if (A) within 15 days after receipt by the Company of the request
for such determination the Board has resolved to submit such determination to
the stockholders for their consideration at an annual meeting thereof to be
held within 75 days after such receipt and such determination is made
thereat, or (B) a special meeting of stockholders is called within
15 days after such receipt for the purpose of making such determination,
such meeting is held for such purpose within 60 days after having been so
called and such determination is made thereat, or (y) Independent Counsel
pursuant to Section 9(a).

(c)           The termination of any Proceeding or of any
claim, issue or matter therein, by judgment, order, settlement or conviction,
or upon a plea of nolo  contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely
affect the right of Indemnitee to indemnification or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the 

 8
 

best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that Indemnitee’s  conduct was unlawful.

(d)           For purposes of any determination of good
faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s
action is based on the records or books of account of the Company, including
financial statements, or on information supplied to Indemnitee by the officers
of the Company in the course of their duties, or on the advice of legal counsel
for the Company or on information or records given or reports made to the
Company by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Company.  The provisions of this Section 10(d)
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.  For purposes of this Section 10(d),
the term Company shall include any other Enterprise if Indemnitee is serving
such Enterprise as a director, officer, employee, agent or fiduciary at the
request of the Company.

(e)           The knowledge and/or actions, or failure to
act, of any director, officer, employee, agent or fiduciary of the Company or
of any other Enterprise which Indemnitee serves as a director, officer,
employee, agent or fiduciary at the request of the Company shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.

Section 11.             Remedies of
Indemnitee.

(a)           Subject to Section 11(e), in the
event that (i) a determination is made pursuant to Section 9
that Indemnitee is not entitled to indemnification under this Agreement,
(ii) advancement of Expenses is not timely made pursuant to Section 7,
(iii) no determination of entitlement to indemnification shall have been
made pursuant to Section 9(a) within 90 days after receipt by
the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 4 or the last
sentence of Section 9(a) within 10 days after receipt by the
Company of a written request therefor, (v) payment of indemnification
pursuant to Section 2, 3 or 5 is not made within
10 days after a determination has been made that Indemnitee is entitled to
indemnification, or (vi) the Company or any other person takes or
threatens to take any action to declare this Agreement void or unenforceable,
or institutes any litigation or other action or proceeding designed to deny, or
to recover from, Indemnitee the benefits provided or intended to be provided to
Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a
court of competent jurisdiction of Indemnitee’s entitlement to such
indemnification or advancement of Expenses. 
Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration Association.  Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within 180 days
following the date on which Indemnitee first has the right to commence such
proceeding pursuant to this Section 11(a).  The Company shall not oppose Indemnitee’s
right to seek any such adjudication or award in arbitration.

(b)           In the event that a determination shall have
been made pursuant to Section 9(a) that Indemnitee is not entitled
to indemnification, any judicial proceeding or arbitration commenced pursuant
to this Section 11 shall be conducted in all respects as a de
novo trial, or arbitration, on the merits and Indemnitee shall not be
prejudiced by reason of that 

 9
 

adverse
determination.  In any judicial
proceeding or arbitration commenced pursuant to this Section 11,
the Company shall have the burden of proving Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.

(c)           If a determination shall have been made
pursuant to Section 9(a) that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 11,
absent (i) a misstatement by Indemnitee of a material fact, or an omission
of a material fact necessary to make Indemnitee’s statement, in the light of
the circumstances under which such statement is made, not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law as determined by a
court of competent jurisdiction.

(d)           The Company shall, to the fullest extent not
prohibited by applicable law, be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 11
that the procedures and presumptions of this Agreement are not valid, binding
and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement.  It is the intent of the Company that
Indemnitee not be required to incur Expenses associated with the
interpretation, enforcement or defense of Indemnitee’s rights under this
Agreement by litigation or otherwise because such Expenses would substantially
detract from the benefits intended to be extended to Indemnitee hereunder.  The Company shall indemnify Indemnitee
against any and all Expenses and, if requested by Indemnitee, shall (within
10 days after receipt by the Company of a written request therefor)
advance, to the fullest extent not prohibited by applicable law, such Expenses
to Indemnitee, which are incurred by Indemnitee or on Indemnitee’s behalf in
connection with any action brought by Indemnitee for indemnification or
advancement of Expenses from the Company under this Agreement or under any
directors’ and officers’ liability insurance policies maintained by the
Company, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advancement of Expenses or insurance
recovery, as the case may be.

(e)           Notwithstanding anything in this Agreement to
the contrary, no determination as to entitlement to indemnification under this
Agreement shall be required to be made prior to the final disposition of the
related Proceeding.

Section 12.             Non-exclusivity;
Survival of Rights; Insurance; Subrogation.

(a)           The rights of indemnification and to receive
advancement of Expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Certificate of Incorporation, the Bylaws, any
agreement, a vote of stockholders or a resolution of directors, or
otherwise.  No amendment, alteration or
repeal of this Agreement or of any provision hereof shall limit or restrict any
right of Indemnitee under this Agreement in respect of any action taken or
omitted by Indemnitee prior to such amendment, alteration or repeal.  To the extent that a change in Delaware law,
whether by statute or judicial decision, permits greater indemnification or
advancement of Expenses than would be afforded currently under the Certificate
of Incorporation, the Bylaws and this Agreement, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.  No 

 10
 

right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise.  The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other right or
remedy.

(b)           To the extent that the Company maintains an
insurance policy or policies providing liability insurance for directors,
officers, employees, agents or fiduciaries of the Company or of any other
Enterprise which Indemnitee serves as a director, officer, employee, agent or
fiduciary at the request of the Company, Indemnitee shall be covered by such
policy or policies in accordance with its or their terms to the maximum extent
of the coverage available for Indemnitee under such policy or policies.  If, at the time of the receipt of a notice of
a claim pursuant to the terms hereof, the Company has directors’ and officers’
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies.  The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of
Indemnitee, all amounts payable as a result of such proceeding in accordance
with the terms of such policies.

(c)           In the event of payment of indemnification to
Indemnitee under this Agreement, the Company shall be subrogated to the extent
of such payment to any right of recovery Indemnitee may have and Indemnitee, as
a condition of receiving such indemnification from the Company, shall execute
all documents and do all things that the Company may deem necessary or
desirable to perfect such right of recovery, including the execution of such
documents necessary to enable the Company effectively to enforce such recovery.

(d)           The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder (or
for which advancement of Expenses is provided hereunder) if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise, including from any other Enterprise
which Indemnitee was serving as a director, officer, employee, agent or
fiduciary at the request of the Company.

Section 13.             Duration of
Agreement.  This Agreement shall
continue until and terminate upon the later of: (a) 10 years after
the latest date that Indemnitee shall have ceased to serve as a director or an
officer of the Company or as a director, officer, employee, agent or fiduciary
of any other Enterprise at the request of the Company or (b) one year
after the final termination of any Proceeding then pending in respect of which
Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11
relating thereto.  This Agreement shall
be binding upon the Company and its successors and assigns and shall inure to
the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators.

Section 14.             Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever:  (a) the validity,
legality and enforceability of the remaining provisions of this Agreement
(including without limitation, each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable,
that is not itself invalid, 

 11
 

illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain
enforceable to the fullest extent permitted by applicable law; (b) such
provision or provisions shall be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (c) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, each portion of any Section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.

Section 15.             Enforcement.

(a)           The Company expressly confirms and agrees
that it has entered into this Agreement and assumed the obligations imposed on
it hereby in order to induce Indemnitee to serve as a director and an officer
of the Company, and the Company acknowledges that Indemnitee is relying upon
this Agreement in serving as a director and an officer of the Company.

(b)           This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof; provided,
however, that this Agreement is a supplement to and in furtherance of
the Certificate of Incorporation, the Bylaws and applicable law, and shall not
be deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.

Section 16.             Modification and
Waiver.  No supplement, modification,
waiver, cancellation or amendment of this Agreement or any provision hereof
shall be binding unless executed in writing by the parties hereto.  No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
of this Agreement nor shall any waiver constitute a continuing waiver.

Section 17.             Notice by
Indemnitee.  Indemnitee agrees
promptly to notify the Company in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other document
relating to any Proceeding or matter which may be subject to indemnification or
advancement of Expenses hereunder.  The
failure of Indemnitee to so notify the Company shall not relieve the Company of
any obligation which it may have to Indemnitee under this Agreement or
otherwise.

Section 18.             Notices.  All notices required
hereunder shall be in writing and be delivered personally, sent by
internationally recognized express courier service (e.g., FedEx), transmitted
via facsimile, or sent via registered or certified mail (postage prepaid)
requiring return receipt, and shall be deemed to have been validly served,
given or delivered:  (i) date of
delivery, if sent by personal delivery; (ii) two days after date of deposit, if
sent by express courier service; (iii) date of transmission, if faxed with
confirmatory printout of transmission; or (iv) one week after date of mailing,
if sent by mail.  Notices shall be
addressed as provided below or to such other addressee as either party may in
the future designate by written notice to the other in accordance with the
terms hereof:

 12
 

i.              If to Indemnitee, at the address indicated on
the signature page of this Agreement, or such other address as Indemnitee shall
provide to the Company.

ii.             If to the Company to:

Arena Pharmaceuticals,
Inc.

6166 Nancy Ridge Drive

San Diego,
California  92121

Attention:  General Counsel

Facsimile: 
858.677.0065

or to any other address
as may have been furnished to Indemnitee by the Company.

Section 19.             Contribution.  To the fullest extent permitted under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee
or on Indemnitee’s behalf, whether for judgments, fines, penalties, excise
taxes, amounts paid or to be paid in settlement and/or for Expenses, in
connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all
of the circumstances of the related Proceeding in order to reflect (a) the
relative benefits received by the Company and Indemnitee as a result of the
event(s) and/or transaction(s) giving cause to such Proceeding and (b) the
relative fault of the Company (and its directors, officers, employees, agents
and fiduciaries) and Indemnitee in connection with such event(s) and/or
transaction(s).

Section 20.             Applicable Law.  This Agreement and the legal relations among
the parties hereunder shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to its
conflict of laws rules.

Section 21.             Identical
Counterparts.  This Agreement may be
executed in one or more counterparts, each of which shall for all purposes be
deemed to be an original but all of which together shall constitute one and the
same Agreement.

Section 22.             Headings.  The headings of the paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.

 13

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

	
  

  	
  ARENA PHARMACEUTICALS, INC.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	 

	
   

  	
  Name:

  	 

	
   

  	
  Title:

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  INDEMNITEE

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	 

	
   

  	
  Name:

  	 

	
   

  	
  Address:Exhibit 4.1

[Form of
Fixed Rate Medium-Term Note]

(Face of
Security)

[IF A GLOBAL SECURITY, INSERT - THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY
MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO
TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

[IF DTC IS THE DEPOSITARY, INSERT — UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO MINNESOTA MINING AND
MANUFACTURING COMPANY, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

[INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE
CODE AND THE REGULATIONS THEREUNDER.]

CUSIP NO.
                         

ISIN
NO.:                            

Common
Code:                   

3M COMPANY

MEDIUM-TERM NOTES, SERIES E

(Fixed Rate)

The following terms apply to this Security, as and to
the extent shown below:

	
  PRINCIPAL AMOUNT:

  	
   

  	
  REDEMPTION COMMENCEMENT DATE:

  
	
   

  	
   

  	
   

  
	
  STATED MATURITY
  DATE:

  	
   

  	
  REPAYMENT DATE(S):

  
	
   

  	
   

  	
   

  
	
  SPECIFIED
  CURRENCY: U.S. dollars for all payments unless otherwise specified below:

  	
   

  	
  REDEMPTION OR REPAYMENT PRICE(S):

  
	
   

  	
   

  	
   

  
	
  ·      payments of principal and any premium:

  	
   

  	
  INTEREST RATE:

  
	
   

  	
   

  	
   

  
	
  ·      payments of interest:

  	
   

  	
  INTEREST PAYMENT DATES:

  
	
   

  	
   

  	
   

  
	
  ·      Exchange Rate Agent:

  	
   

  	
  OTHER TERMS:

  
	
  Citibank, N.A.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ORIGINAL ISSUE
  DATE*:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ORIGINAL ISSUE
  DISCOUNT SECURITY:

  	
   

  	
   

  
	
  ·      Total Amount of OID:

  	
   

  	
   

  
	
  ·      Yield to Maturity:

  	
   

  	
   

  
	
  ·      Initial Accrual Period OID:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFEASANCE:

  	
   

  	
   

  
	
  ·      Full Defeasance:

  	
   

  	
   

  
	
  ·      Covenant Defeasance:

  	
   

  	
   

  

 

Terms left blank or marked “N/A”, “No”, “None” or in a similar manner
do not apply to this Security except as otherwise may be specified.

Whenever used in this Security, the terms specified
above that apply to this Security have the meanings specified above, unless the
context requires otherwise. Other terms used in this Security that are not
defined herein but that are defined in the Indenture referred to in Section 1
on the reverse of this Security are used herein as defined therein.

* This date shall be the issue date of this Security,
unless there is a Predecessor Security, in which case this date shall be the
issue date of the first Predecessor Security.

 2
 

3M Company, a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter called the “Company”,
which term includes any successor Person under the Indenture), for value
received, hereby promises to pay to Cede & Co., or registered assigns, as
principal the Principal Amount on the Stated Maturity Date and to pay interest
thereon, at the Interest Rate shown above (computed on the basis of a 360-day
year of twelve 30-day months), semi-annually on each Interest Payment Date set
forth above from and after the date of this Security and at Maturity until
payment of the principal amount hereof has been made or duly provided for. Unless
this Security is a Security which has been issued upon transfer of, in exchange
for, or in replacement of, a Predecessor Security, interest on this Security
shall accrue from the Original Issue Date indicated above. If this Security has
been issued upon transfer of, in exchange for, or in replacement of, a
Predecessor Security, interest on this Security shall accrue from the last
Interest Payment Date to which interest was paid on such Predecessor Security
or, if no interest was paid on such Predecessor Security, from the Original
Issue Date indicated above. The first payment of interest on this Security
shall be on the first Interest Payment Date that is at least 15 calendar days
after the Original Issue Date. Any premium and any such installment of interest
that is overdue at any time shall also bear interest (to the extent that the
payment of such interest shall be legally enforceable), at the rate per annum
at which the principal then bears interest, from the date any such overdue
amount first becomes due until it is paid or made available for payment.
Notwithstanding the foregoing, interest on any principal, premium or
installment of interest that is overdue shall be payable on demand.

The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the 15th calendar day
(whether or not a Business Day, as such term is defined in Section 3(c) on the
reverse hereof) next preceding such Interest Payment Date (a “Regular Record
Date”). Any interest so payable, but not punctually paid or duly provided
for, on any Interest Payment Date will forthwith cease to be payable to the
Holder on such Regular Record Date and such Defaulted Interest either may be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to the Holder of this Security not less than 10 days
prior to such Special Record Date, or may be paid in any other lawful manner
not inconsistent with the requirements of any securities exchange on which this
Security may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.

Currency of
Payment

Payment of principal of (and premium, if any) and
interest on this Security will be made in the Specified Currency for such
payment, except as provided in this and the next three paragraphs. The
Specified Currency for any payment shall be the currency specified as such on
the face of this Security unless, at the time of such payment, such currency is
not legal tender for the payment of public and private debts in the country
issuing such currency on the Original Issue Date, in which case the Specified
Currency for such payment shall be such coin or currency as at the time of such
payment is legal tender for the payment of public and private debts in such
country, except as provided in the next sentence. If the euro is specified on
the face of this Security as the Specified Currency for any payment, the
Specified Currency for such

 3

payment shall be such
coin or currency as at the time of payment is legal tender for the payment of
public and private debts in all EMU Countries (as defined in Section 3(c) on
the reverse hereof), provided that, if on any day there are not at least two EMU
Countries, or if on any day there are at least two EMU Countries but no coin or
currency is legal tender for the payment of public and private debts in all EMU
Countries, then the Specified Currency for such payment shall be deemed not to
be available to the Company on such day.

Except as provided in the next paragraph, any payment
to be made on this Security in a Specified Currency other than U.S. dollars
will be made in U.S. dollars if the Person entitled to receive such payment
transmits a written request for such payment to be made in U.S. dollars to the
Trustee at its Corporate Trust Office, on or before the tenth day before the
payment is to be made. Such written request may be mailed, hand delivered,
telecopied or delivered in any other manner approved by the Trustee. Any such
request made with respect to any payment on this Security payable to a
particular Holder will remain in effect for all later payments on this Security
payable to such Holder, unless such request is revoked on or before the tenth
day before a payment is to be made, in which case such revocation shall be
effective for such and all later payments. In the case of any payment of
interest payable on an Interest Payment Date, such written request must be made
by the Person who is the registered Holder of this Security on the relevant
Regular Record Date.

The U.S. dollar amount of any payment made pursuant to
the preceding paragraph will be determined by the Exchange Rate Agent based
upon the highest bid quotation received by the Exchange Rate Agent as of 11:00
A.M., New York City time, on the second Business Day preceding the applicable
payment date, from three (or, if three are not available, then two) recognized
foreign exchange dealers selected by the Exchange Rate Agent in The City of New
York, in each case for the purchase by the quoting dealer, for U.S. dollars and
for settlement on such payment date of an amount of the Specified Currency for
such payment equal to the aggregate amount of such Specified Currency payable
on such payment date to all Holders of Securities of this or any other series
who elect to receive U.S. dollar payments on such payment date, and at which
the applicable dealer commits to execute a contract. If the Exchange Rate Agent
determines that two such bid quotations are not available on such second
Business Day, such payment will be made in the Specified Currency for such
payment. All currency exchange costs associated with any payment in U.S.
dollars on this Security will be borne by the Holder entitled to receive such
payment, by deduction from such payment.

Notwithstanding the foregoing, if any amount payable
on this Security is payable on any day (including at Maturity) in a Specified
Currency other than U.S. dollars, and if such Specified Currency is not available
to the Company on the two Business Days before such day, due to the imposition
of exchange controls, disruption in a currency market or any other
circumstances beyond the control of the Company, the Company will be entitled
to satisfy its obligation to pay such amount in such Specified Currency by
making such payment in U.S. dollars. The amount of such payment in U.S. dollars
shall be determined by the Exchange Rate Agent on the basis of the noon buying
rate for cable transfers in The City of New York for such Specified Currency
(the “Exchange Rate”) as of the latest day before the day on which such
payment is to be made. Any payment made under such circumstances in U.S.
dollars where the required payment is in other than U.S. dollars will not
constitute an Event of Default under the Indenture or this Security.

 4
 

Manner of Payment
- U.S. Dollars

Except as provided in the next paragraph, payment of
any amount payable on this Security in U.S. dollars will be made at the office
or agency of the Company maintained for that purpose in The City of New York
(or at any other office or agency maintained by the Company for that purpose),
against surrender of this Security in the case of any payment due at the
Maturity of the principal hereof (other than any payment of interest that first
becomes due on an Interest Payment Date); provided, however,
that, at the option of the Company and subject to the next paragraph, payment
of interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.

Payment of any amount payable on this Security in U.S.
dollars will be made by wire transfer of immediately available funds to an
account maintained by the payee with a bank located in The City of New York, if
(i) the principal of this Security is at least $1,000,000 and (ii) the Holder
entitled to receive such payment transmits a written request for such payment
to be made in such manner to the Paying Agent at its Corporate Trust Office,
Attention: Citibank Agency & Trust Services, on or before the tenth day
before the day on which such payment is to be made; provided that, in
the case of any such payment due at the Maturity of the principal hereof (other
than any payment of interest that first becomes due on an Interest Payment
Date), this Security must be surrendered at the office or agency of the Company
maintained for that purpose in The City of New York (or at any other office or
agency maintained by the Company for that purpose) in time for the Paying Agent
to make such payment in such funds in accordance with its normal procedures.
Any such request made with respect to any payment on this Security payable to a
particular Holder will remain in effect for all later payments on this Security
payable to such Holder, unless such request is revoked on or before the tenth
day before a payment is to be made, in which case such revocation shall be
effective for such and all later payments. In the case of any payment of
interest payable on an Interest Payment Date, such written request must be made
by the Person who is the registered Holder of this Security on the relevant
Regular Record Date. The Company will pay any administrative costs imposed by
banks in connection with making payments by wire transfer with respect to this
Security, but any tax, assessment or other governmental charge imposed upon any
payment will be borne by the Holder of this Security and may be deducted from
the payment by the Company or the Paying Agent.

Manner of Payment
- Other Specified Currencies

Payment of any amount payable on this Security in a
Specified Currency other than U.S. dollars will be made by wire transfer of
immediately available funds to such account as is maintained in such Specified
Currency at a bank or other financial institution acceptable to the Company and
the Trustee and as shall have been designated at least ten days prior to the
applicable payment date by the Person entitled to receive such payment; provided
that, in the case of any such payment due at the Maturity of the principal
hereof (other than any payment of interest that first becomes due on an
Interest Payment Date), this Security must be surrendered at the office or
agency of the Company maintained for that purpose in The City of New York (or
at any other office or agency maintained by the Company for that purpose) in
time for the Paying Agent to make such payment in such funds in accordance with
its normal procedures. Such account designation shall be made by transmitting
the appropriate information to the Paying Agent at its Corporate Trust Office,
Attention: Citibank Agency & Trust Services, by mail, hand

 5
 

delivery, telecopier or
in any other manner approved by the Trustee. Unless revoked, any such account
designation made with respect to this Security by the Holder hereof will remain
in effect with respect to any further payments with respect to this Security
payable to such Holder. If a payment in a Specified Currency other than U.S.
dollars with respect to this Security cannot be made by wire transfer because
the required account designation has not been received by the Paying Agent on
or before the requisite date or for any other reason, the Company will cause a
notice to be given to the Holder of this Security at its registered address
requesting an account designation pursuant to which such wire transfer can be
made and such payment will be made within five Business Days after the Paying
Agent’s receipt of such a designation meeting the requirements specified above,
with the same force and effect as if made on the due date. The Company will pay
any administrative costs imposed by banks in connection with making payments by
wire transfer with respect to this Security, but any tax, assessment or other
governmental charge imposed upon any payment will be borne by the Holder of
this Security and may be deducted from the payment by the Company or the Paying
Agent.

Manner of Payment
- Global Securities

Notwithstanding any provision of this security or the
Indenture, if this Security is a Global Security, the Company may make any and
all payments of principal, premium and interest on this Security pursuant to
the applicable policies of the Depositary for this Security as permitted in the
Indenture.

Payments Due on a
Business Day

Unless otherwise specified on the face of this
Security, the following sentence shall apply to this Security. Notwithstanding
any provision of this Security or the Indenture, if any amount of principal,
premium or interest would otherwise be due on this Security on a day (the “Specified
Day”) that is not a Business Day, such amount may be paid or made available
for payment on the next succeeding Business Day with the same force and effect
as if such amount were paid on the Specified Day. The provisions of this
paragraph shall apply to this Security in lieu of the provisions of Section 113
of the Indenture.

Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has
been executed by the Trustee by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.

 6
 

IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.

	
  

  	
  3M COMPANY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

This is one of the Securities of the series designated
herein and referred to in the Indenture.

Dated:

	
  

  	
  CITIBANK, N.A.,
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  

 

 7
 

(Reverse of Security)

1.               Securities and Indenture

This Security is one of a duly authorized issue of
securities of the Company (herein called the “Securities”) issued and to
be issued in one or more series under an Indenture, dated as of November 17,
2000 (herein called the “Indenture”, which term shall have the meaning
assigned to it in such instrument), between the Company and Citibank, N.A., as
Trustee (herein called the “Trustee”, which term includes any successor
trustee under the Indenture), and reference is hereby made to the Indenture for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.

2.               Series and Denominations

This Security is one of the series designated on the
face hereof, limited to an aggregate principal amount not to exceed
$3,000,000,000 (or the equivalent thereof in any other currency or currencies
or currency units), which amount may be increased at the option of the Company
if in the future it determines that it may wish to sell additional Securities
of this series. References herein to “this series” mean the series of
securities designated on the face hereof.

The Securities of this series are issuable only in
registered form without coupons in “Authorized Denominations”, which
term shall have the following meaning. For each Security of this series having
a principal amount payable in U.S. dollars, the Authorized Denominations shall
be $2,000 and integral multiples of $1,000 in excess thereof. For each Security
of this series having a principal amount payable in a Specified Currency other
than U.S. dollars, the Authorized Denominations shall be the amount of such
Specified Currency equivalent, at the Exchange Rate on the first Business Day
next preceding the date on which the Company accepts the offer to purchase such
Security, to $2,000 and integral multiples of $1,000 in excess thereof.

3.               Interest Rate

(a)             Calculation of Interest.
Payments of interest hereon with respect to any Interest Payment Date or at the
Maturity of the principal hereof will include interest accrued to but excluding
such Interest Payment Date or the date of such Maturity, as the case may be.

All percentages resulting from any calculation with
respect to this Security will be rounded upward or downward, as appropriate, to
the next higher or lower one hundred-thousandth of a percentage point (e.g.,
9.876541% (or .09876541) being rounded down to 9.87654% (or .0987654) and
9.876545% (or .09876545) being rounded up to 9.87655% (or .0987655) ). All amounts
used in or resulting from any calculation with respect to this Security will be
rounded upward or downward, as appropriate, to the nearest cent, in the case of
U.S. dollars, or to the nearest corresponding hundredth of a unit, in the case
of a currency other than U.S. dollars, with one-half cent or one-half of a
corresponding hundredth of a unit or more being rounded upward.

 8
 

(b)             Exchange Rate Agent.  The Company has initially appointed the
institution named on the face of this Security as Exchange Rate Agent, to act
as such agent with respect to this Security, but the Company may, in its sole
discretion, appoint any other institution (including any Affiliate of the
Company) to serve as such agent from time to time. The Company will give the
Trustee prompt written notice of any change in any such appointment. Insofar as
this Security provides for any such agent to obtain rates, quotes or other data
from a bank, dealer or other institution for use in making any determination
hereunder, such agent may do so from any institution or institutions of the
kind contemplated hereby notwithstanding that any one or more of such
institutions are any such agent, Affiliates of any such agent or Affiliates of
the Company.

All determinations made by the Exchange Rate Agent may
be made by such agent in its sole discretion and, absent manifest error, shall
be conclusive for all purposes and binding on the Holder of this Security and
the Company. The Exchange Rate Agent shall not have any liability therefor.

(c)             Definitions of Terms.  As used in this Security, the following terms
have the meanings set forth below:

“Business Day” means, for this Security, a day
that meets the requirements set forth in each of clauses (i) through (iv)
below, in each case to the extent such requirements apply to this Security as
specified below:

(i)            is a Monday, Tuesday, Wednesday, Thursday
or Friday that is not a day on which banking institutions in The City of New
York generally are authorized or obligated by law, regulation or executive
order to close;

(ii)           if the Specified Currency for payment of
principal of or interest on this Security is other than U.S. dollars or euros,
is also a day on which banking institutions in the principal financial center
of the country issuing such Specified Currency are not authorized or obligated
by law, regulation or executive order to close;

(iii)          if the Specified Currency for payment of
principal of or interest on this Security is euros, is also a TARGET Business
Day; and

(iv)          solely with respect to any payment or other
action to be made or taken at any Place of Payment outside The City of New
York, is a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on
which banking institutions in such Place of Payment generally are authorized or
obligated by law, regulation or executive order to close.

With respect to any particular location, the close of
business on any day on which business is not being conducted at that location
shall be deemed to mean 5:00 P.M., New York City time, on that day.

“EMU Countries” means, at any time, the
countries (if any) then participating in the European Economic and Monetary
Union (or any successor union) pursuant to the Treaty on

 9
 

European Union of
February 1992 (or any successor treaty), as it may be amended from time to time.

“TARGET Business Day” means any day on which
the Trans-European Automated Real-Time Gross Settlement Express Transfer
(TARGET) System, or any successor system, is open for business.

References in this Security to U.S. dollars shall
mean, as of any time, the coin or currency that is then legal tender for the
payment of public and private debts in the United States of America.

References in this Security to the euro shall mean, as
of any time, the coin or currency (if any) that is then legal tender for the
payment of public and private debts in all EMU Countries.

References in this Security to a particular currency
other than U.S. dollars and euros shall mean, as of any time, the coin or
currency that is then legal tender for the payment of public and private debts
in the country issuing such currency on the Original Issue Date.

4.               Redemption at the Company’s
Option

Unless a Redemption Commencement Date is specified on
the face hereof, this Security shall not be redeemable at the option of the
Company before the Stated Maturity Date. If a Redemption Commencement Date is
so specified, and unless otherwise specified on the face hereof, this Security
is subject to redemption upon not less than 30 days’ nor more than 60 days’
notice at any time and from time to time on or after the Redemption
Commencement Date, in each case as a whole or in part, at the election of the
Company and at the applicable Redemption Price specified on the face hereof
(expressed as a percentage of the principal amount of this Security to be
redeemed), together with accrued interest to the Redemption Date, but interest
installments due on or prior to such Redemption Date will be payable to the
Holder of this Security, or one or more Predecessor Securities, of record at
the close of business on the relevant Regular Record Date, all as provided in
the Indenture.

5.               Repayment at the Holder’s Option

Except as otherwise may be provided on the face
hereof, if one or more Repayment Dates are specified on the face hereof, this
Security will be repayable in whole or in part in an amount equal to any
Authorized Denomination (provided that the remaining principal amount of
any Security surrendered for partial repayment shall at least equal an
Authorized Denomination), on any such Repayment Date, in each case at the
option of the Holder and at the applicable Repayment Price specified on the
face hereof (expressed as a percentage of the principal amount to be repaid),
together with accrued interest to the applicable Repayment Date (but interest
installments due on or prior to such Repayment Date will be payable to the
Holder of this Security, or one or more Predecessor Securities, of record at
the close of business on the relevant Regular Record Date as provided in the
Indenture). If this Security provides for more than one Repayment Date, and the
Holder exercises its option to elect repayment, the Holder shall be deemed to
have elected repayment on the earliest repayment date after all conditions to

 10
 

such exercise have been
satisfied, and references herein to the applicable Repayment Date shall mean
such earliest Repayment Date.

In order for the exercise of such option to be
effective and this Security to be repaid, the Company must receive at the
applicable address of the Paying Agent set forth below (or at such other place
or places of which the Company shall from time to time notify the Holder of
this Security), on any Business Day at least 30 but not more than 45 days prior
to the applicable Repayment Date (or, if either such calendar day is not a Business
Day, the next succeeding Business Day), either (i) this Security, with the form
below entitled “Option to Elect Repayment” duly completed and signed, or (ii) a
telegram, telex, facsimile transmission or letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc., a
commercial bank or a trust company in the United States of America setting
forth (a) the name, address and telephone number of the Holder of this
Security, (b) the principal amount of this Security and the amount of this
Security to be repaid, (c) a statement that the option to elect repayment is
being exercised thereby and (d) a guarantee stating that the Company will
receive this Security, with the form below entitled “Option to Elect Repayment”
duly completed and signed, not later than five Business Days after the date of
such telegram, telex, facsimile transmission or letter (provided that
this Security and form duly completed and signed are received by the Company by
such fifth Business Day). Any such election shall be irrevocable. The address
to which such deliveries are to be made is Citibank, N.A., Attention: Agency
and Trust, 388 Greenwich Street, 14th Floor, New York, NY 10013 (or at such
other places as the Company or the Paying Agent shall notify the Holder of this
Security). All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Security for repayment will be determined by the
Company, whose determination will be final and binding. Upon any partial
repayment, this Security shall be cancelled and a new Security or Securities
for the remaining principal amount hereof shall be issued in the name of the
Holder of this Security.

6.               Transfer
and Exchange

As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company at the corporate trust office
of the Trustee in the City of New York or at the office of the Paying Agent in
New York, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed
by, the Holder hereof or his or her attorney duly authorized in writing, and
thereupon one or more new Securities of this series and of like tenor and
terms, of Authorized Denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different Authorized Denomination, as requested by the Holder surrendering
the same.

 11
 

No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security is registered
as the owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company nor the Trustee nor any such agent shall be affected by
notice to the contrary.

If this Security is a Global Security, this Security
shall be subject to the provisions of the Indenture relating to Global
Securities, including the limitations in Section 305 thereof on transfers and
exchanges of Global Securities.  In addition to the provisions of Section 305 of
the Indenture, if at any time an Event of Default has occurred and is
continuing with respect to this Security and such Event of Default has not been
cured or waived pursuant to the provisions of the Indenture, the Company will
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Securities, will authenticate and
deliver, Securities in definitive form and in an aggregate principal amount
equal to the principal amount of the Global Security or Securities in exchange
for such Global Security or Securities.

7.               Defeasance.

The Indenture contains provisions for defeasance at
any time of the entire indebtedness of this Security or certain restrictive
covenants and Events of Default with respect to this Security, in each case
upon compliance with certain conditions set forth in the Indenture. If so specified
on the face hereof, either or both of such provisions are applicable to this
Security, as so specified.

8.               Remedies.

If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the Securities of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.

No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.

9.               Modification and Waiver.

The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the Securities at the time Outstanding of each series to be
affected.

 12
 

Under the Indenture, the Holders of a majority in
aggregate principal amount of the Outstanding Securities of this series or any
other series of Outstanding Securities may, on behalf of all Holders of that
series, waive compliance by the Company with certain restrictive covenants of
the Indenture, and waive any past Event of Default under the Indenture, but in
each case only with respect to that series, except an Event of Default in the
payment of the principal of or any premium or interest on and Securities of
that series or an Event of Default under any provision of the Indenture which
itself cannot be modified or amended without the consent of the holders of each
Outstanding Security of that series. Any such consent or waiver by the Holder
of this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

10.         Governing Law.

This
Security and the Indenture shall be governed by and construed in accordance
with the laws of the State of New York.

 13

	
                                               CUSIP
  NO.

  
	
   

  
	
                      ORIGINAL
  ISSUE DATE:

  

3M
COMPANY

MEDIUM-TERM NOTE, SERIES E

OPTION TO
ELECT REPAYMENT

TO BE COMPLETED ONLY IF
THIS SECURITY IS REPAYABLE

AT THE OPTION OF THE HOLDER AND THE HOLDER

ELECTS TO EXERCISE SUCH RIGHT

The undersigned
hereby irrevocably requests and instructs the Company to repay the Security
referred to in this notice (or the portion thereof specified below) at the
applicable Repayment Price, together with interest to the Repayment Date, all
as provided for in such Security, to the undersigned, whose name, address and
telephone number are as follows:

(please print name of the undersigned)

(please print address of the undersigned)

(please print telephone number of the undersigned)

If such Security provides for more than one Repayment
Date, the undersigned requests repayment on the earliest Repayment Date after
the requirements for exercising this option have been satisfied, and references
in this notice to the Repayment Date mean such earliest Repayment Date. Terms
used in this notice that are defined in such Security are used herein as
defined therein.

For such Security to be repaid the Company must
receive at the applicable address of the Paying Agent set forth below or at
such other place or places of which the Company shall from time to time notify
the Holder of such Security, any Business Day not later than the 30th or
earlier than the 45th calendar day prior to the Repayment Date (or, if either such
calendar day is not a Business Day, the next succeeding Business Day), (i) such
Security, with this “Option to Elect Repayment” form duly completed and signed,
or (ii) a telegram, telex, facsimile transmission or letter from a member of a
national securities exchange or the National Association of Securities Dealers,
Inc., a commercial bank or a trust company in the United States of America
setting forth (a) the name, address and telephone number of the Holder of such
Security, (b) the principal amount of such Security and the amount of such
Security to be repaid, (c) a statement that the option to elect repayment is
being exercised thereby and (d) a guarantee stating that such Security to be
repaid with the form entitled “Option to Elect Repayment” on the addendum to
the Security duly completed and signed will be received by the Company not
later

 14

than five Business Days
after the date of such telegram, telex, facsimile transmission or letter
(provided that such Security and form duly completed and signed are received by
the Company by such fifth Business Day). The address to which such deliveries are
to be made is:

Citibank, N.A.

Attention: Agency & Trust 

388 Greenwich Street

14th Floor

New York, New York 10013

or at such other place as the Company or the Paying
Agent shall notify the holder of such Security.

If less than the entire
principal amount of such Security is to be repaid, specify the portion thereof
(which shall equal any Authorized Denomination) that the Holder elects to have
repaid:

and specify the
denomination or denominations (which shall equal any Authorized Denomination)
of the Security or Securities to be issued to the Holder in respect of the
portion of such Security not being repaid (in the absence of any specification,
one Security will be issued in respect of the portion not being repaid):

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Notice: The signature to this Option to Elect
  Repayment must correspond with the name of the Holder as written on the face
  of such Security in every particular without alteration or enlargement or any
  other change whatsoever.

  

 

 15
 

ABBREVIATIONS

The following abbreviations, when used in the
inscription on the face of this Security, shall be construed as though they
were written out in full according to applicable laws or regulations.

TEN COM  -  as tenants in common

TEN ENT  -  as tenants by the
entireties

JT TEN  -  as
joint tenants with the right of survivorship and not as tenants in common

	
  UNIF GIFT MIN ACT - 

  	
   

  	
  Custodian

  	
   

  	
   

  
	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  	
   

  
	
   

  	
  under Uniform Gifts to Minors Act

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (State)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Additional abbreviations may also be used though not
  in the above list.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
							

 

 16
 

ASSIGNMENT

FOR VALUE RECEIVED, the
undersigned hereby sell(s), assign(s) and transfer(s) unto                                                                                                                                          

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE                                                                                                                                                                  

                                                                                                                                                            

(Please Print or Typewrite Name and Address

Including Postal Zip Code of Assignee)

the attached Security and all rights thereunder, and
hereby irrevocably constitutes and appoints                                                                     
to transfer said Security on the books of the Company, with full power of
substitution in the premises.

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NOTICE: Signature must be guaranteed.

  	
   

  	
  NOTICE: The signature to this assignment must
  correspond with the name of the Holder as written upon the face of the
  attached Security in every particular, without alteration or enlargement or
  any change whatever.

  

 

 17

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