Exhibit 10.43


 


EXECUTION
COPY


 


***Text
Omitted and Filed Separately


with
the Securities and Exchange Commission.


Confidential
Treatment Requested


Under
17 C.F.R. Sections 200.80(b)(4)

and 240.24b-2


 


EXENATIDE
ONCE WEEKLY SUPPLY AGREEMENT


 


This EXENATIDE ONCE WEEKLY SUPPLY AGREEMENT (“Agreement”)
is entered into as of October 16, 2008, by and between Amylin
Pharmaceuticals, Inc. (“Amylin”), a Delaware corporation, and Eli Lilly
and Company (“Lilly”), a corporation organized and existing under the laws of
the State of Indiana. Amylin and Lilly are sometimes referred to herein
individually as a “Party” and collectively as “Parties”. References to “Amylin”
and “Lilly” and “Party” or “Parties” shall include their respective Affiliates.


 


RECITALS


 


1.                                       Amylin and Lilly
are parties to that certain Collaboration Agreement, effective September 19,
2002, as amended to date, pursuant to which Amylin and Lilly have agreed to
cooperate in the development, manufacturing and marketing of Exenatide Once
Weekly (the “EQW Product”, as defined below).


 


2.                                       Under the terms
of the Collaboration Agreement, Amylin is responsible for sale of EQW Product
in the U.S. and Lilly is responsible for the sale of EQW Product in the
Territory outside the U.S.


 


3.                                       In furtherance
of the goals set forth in the Collaboration Agreement, the Parties desire to
enter into this Agreement whereby Lilly will agree to purchase from Amylin and
Amylin will agree to supply to Lilly the EQW Product in commercial quantities
intended for commercial sale in the Territory outside the U.S., all on the
terms and conditions set forth herein. In addition, the Parties desire to
define how certain costs and expenses will be applied and allocated for EQW
Product intended for commercial sale in the U.S.


 


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AGREEMENT


 


NOW, THEREFORE, in consideration of the
foregoing premises and the mutual covenants contained in this Agreement, the
Parties hereby agree as follows:


 


ARTICLE 1

DEFINITIONS 


 


When used and capitalized in this Agreement
(other than the headings of the Articles and Sections), including the foregoing
Recitals, the following terms will have the meanings assigned to them in this Article 1
and include the plural as well as the singular. Capitalized terms not otherwise
defined herein will have the meaning assigned to them in the Collaboration
Agreement.


 


1.1                               “Actual
Component Manufacturing Cost” means those costs actually incurred by Amylin
for the acquisition and release of Components from Third Party Suppliers,
including an appropriate allocation of any overhead costs. Such costs include,
but are not limited to:  (i) the
landed cost of purchased materials, including, without limitation, invoice
price, outside processing costs, freight, duties, storage fees and brokers fees
(volume or trade discounts will be reflected in the calculation); (ii) conversion
costs (including, without limitation, direct labor and direct overhead)
directly associated with the releasing and shipping of Components;  (iii) replacement costs for Components
that are determined to be defective or recalled during the quality control
process or for Components that are returned to Amylin from Lilly or to Third
Party Suppliers from Amylin; (iv) Component breakage, damage and
manufacturing losses; (v) obsolete Components; and (vi) to the extent
attributable to the acquisition of Components, any other costs considered
inventory costs or Costs of Products Sold under Generally Accepted Accounting
Principles. Amylin shall share details relating to the Actual Component
Manufacturing Cost in detail and frequency as Lilly may reasonably request.


 


1.2                               “Actual
Manufacturing Cost” means those costs actually incurred by Amylin or Lilly
for the acquisition of materials from Third Party Suppliers or Lilly, and
Manufacture and conversion into EQW Product. Such costs include, but are not
limited to:


 


(a)                                  the landed cost of
purchased materials, including, without limitation, invoice price, outside
processing costs, freight, duties, and brokers fees (volume or trade discounts
will be reflected in the calculation);


 


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(b)                                 conversion costs
directly associated with the Manufacture of EQW Product at the Facility
including direct labor and direct overhead costs;


 


(c)                                  an appropriate allocation
of the actual indirect overhead costs directly associated with the Manufacture
of EQW Product incurred by Amylin at the Facility;


 


(d)                                 an appropriate
allocation of costs based on actual headcount and actual FTE rate incurred by
Amylin  outside of the Facility but
directly associated with  the Manufacture
of EQW Product, including but not limited to those items as set forth on Exhibit A;


 


(e)                                  depreciation of EQW
Product-specific capital investments at the Facility (not including the
financing charge for the Initial Capital Investment or depreciation of
capitalized interest for the capital investments made at the Facility);


 


(f)                                    EQW Product
breakage, damage and Manufacturing losses;


 


(g)                                 an allocation of the
depreciation of those capital investments net of capitalized interest in and
for Amylin’s San Diego Quality Control Laboratory to the extent such capital
investments directly support Manufacture of the EQW Product;


 


(h)                                 an allocation of
depreciation of those capital investments located at Third Party Suppliers but
owned by Amylin to the extent such capital investments directly support
Manufacture of the EQW Product;


 


(i)                                     replacement costs
for EQW Product that is determined to be defective or recalled during the
quality control process or for EQW Product that is returned to Amylin from
Lilly or any customer or to Third Party Suppliers from Amylin;


 


(j)                                     amortization of
any pre-paid assets of Amylin at a Third Party Supplier in accordance with the
terms of the agreement with any such Third Party Supplier, as well as an
appropriate carrying cost of such prepaid assets calculated in accordance with Section 1.2(l) below;


 


(k)                                  to the extent
attributable to the Manufacture of EQW Product, any other costs considered
inventory costs or Costs of Products Sold under Generally Accepted Accounting
Principles;


 


(l)                                     an appropriate
carrying cost applied to the ending monthly inventory utilizing the interest
rate agreed to in the letter agreement between the Parties dated June 12,
2006 (the “Letter Agreement”); and 


 


3

















 


(m)                               an allocation of Lilly
resources directly associated with 
Manufacture of EQW Product charged at the actual FTE rate and any other
expenses incurred by Lilly directly associated with the Manufacture of EQW
Product as agreed to in advance by the Parties.


 


All of these costs and the methodology to be
used in allocating indirect or overhead costs among Manufacturing operations
hereunder and other Amylin manufacturing operations, and among EQW Product
Manufactured pursuant to this Agreement shall be determined in a manner
consistent with Generally Accepted Accounting Practices, except as expressly
set forth herein or as otherwise agreed by the Parties. Amylin shall share
reasonable details relating to the Actual Manufacturing Cost. The Parties agree
to annually review the interest rate set forth in the Letter Agreement and Section 1.2(l) above.


 


For the avoidance of any doubt, the Actual
Manufacturing Costs for EQW Product sold either in the U.S. or in the Territory
outside the U.S. shall be calculated using the same methodology through the
nude vial stage of production, with the exception that any OUS-specific costs
(e.g., OUS-specific analytical testing) would be charged [***]% to OUS Product.
Following the nude vial stage of production, product destined for the US market
would incur additional costs related to subsequent steps in the manufacturing
process including, but not limited to, labeling, packaging, storage and
distribution and would be charged [***]% to US Product. Revisions to
allocations and methodology will not be made during the year without the
approval of the MSC.


 


Any incremental costs for the Manufacture of
EQW Product for which the primary benefit of such cost will be in a Territory
outside the U.S. shall be attributed [***]% to the Actual Manufacturing Cost
for the EQW Product to be sold in the Territory outside the U.S. and paid by
Lilly hereunder if agreed to in advance by the Parties. Likewise, any
incremental costs for the Manufacture of EQW Product for which the primary
benefit of such cost will be the U.S. Territory, such as packaging, shall be
attributed one hundred percent ([***]%) to the Actual Manufacturing Cost  for the EQW Product to be sold in the U.S. if
agreed to in advance by the Parties.


 


The foregoing definition of Actual
Manufacturing Cost assumes all of the manufacturing capacity of the Facility
will be used to Manufacture EQW Product; if at any time during the term of this
Agreement this is not the case, then this definition shall be modified as set
forth in Section 4.9(b) below.


 


1.3                               “Applicable
Laws” means all applicable U.S. statutes, ordinances, regulations, rules or
orders, including, without limitation, the FD&C Act, the Regulatory Law,
Prescription


 


***Confidential Treatment
Requested


 


4

















 


Drug Marketing Act, Generic Drug Enforcement
Act of 1992 (21 U.S.C. §3359, et. seq.),
Anti-Kickback Statute (42 U.S.C. §1320 a-7b, et.
seq.), Resource Conservation and Recovery Act, Clean Water Act,
Clean Air Act, the Drug Enforcement Act, Occupational Safety and Health Act and
cGMP, as well as comparable laws of the European Union, all as amended from
time to time.


 


1.4                               “ASC”
will have the meaning set forth in Section 2.1 of this Agreement.


 


1.5                               “Cartridge
Supply Agreement” means the Cartridge Supply Agreement, by and between
Amylin and Lilly, dated as of April 20, 2007.


 


1.6                               “cGMP”
will mean current Good Manufacturing Practices as detailed in “The Rules Governing
Medicinal Products in the European Community (EC) — Volume IV: Guide to Good
Manufacturing Practice for Medicinal Products” and the “US Current Good
Manufacturing Practices (cGMPs) for Finished Pharmaceuticals: 21 Code of
Federal Regulations (CFR) Parts 11, 210 and 211, all as amended from time to
time, and any additional cGMPs promulgated by any regulatory authority not
described above and provided to Amylin by Lilly and mutually agreed to between
the Parties.


 


1.7                               “Collaboration
Agreement” means the Collaboration Agreement set forth in the Recitals of
this Agreement, as such agreement may be amended from time to time.


 


1.8                               “Components”
means diluent, needles, stoppers, plungers, backstops, packaging materials, and
any other items as may be agreed to by the MSC.


 


1.9                               “Effective
Date” will have the meaning set forth in Section 16.17 of this
Agreement.


 


1.10                        “EQW
Manufacturing Development Costs” shall mean those Development Costs
specifically related to developing the ability to Manufacture EQW Product,
including, without limitation, Manufacturing process development and
Manufacturing and quality assurance technical support, until such time as
Manufacturing of EQW Product intended for commercial sale commences. For
purposes of clarification, EQW Manufacturing Development Costs shall not include
any Development Costs which are solely attributable to clinical studies of EQW
Product, but may include costs relating to manufacturing development
irrespective of where those costs were incurred. All Amylin and Lilly personnel
costs, including without limitation direct and indirect personnel costs, will
be charged at actual FTE cost.


 


1.11                        “EQW
Product” means the Product (whether to be used as trade, sample or clinical
trial material) or placebo developed as a fixed-dose injection of exenatide
administered once per week for diabetes and any other Indications for which
such Product may be approved


 


5

















 


for use and Manufactured by Amylin in
finished form or in nude vials, including any components thereof and associated
packaging components.


 


1.12                        “Facility”
means the manufacturing facility commissioned by Amylin and located at 8814,
8848 and 8874 Trade Port Drive, West Chester, Ohio, as such facility may be
from time to time approved, expanded or altered in accordance with this
Agreement.


 


1.13                        “Five-Year
Forecast” will have the meaning set forth in Section 5.1(a) of
this Agreement.


 


1.14                        “Force
Majeure” will have the meaning set forth in Section 16.14 of this
Agreement.


 


1.15                        “Forecast”
will have the meaning set forth in Section 5.1 (b) of this
Agreement.


 


1.16                        “Initial
Capital Investment” shall mean the capital investment made, and planned to
be made, as of the Effective Date by Amylin in and for the Facility for the
Manufacture of the first generation EQW Product. The Initial Capital Investment
is currently anticipated to be approximately $530 million; however, a precise
number will not be available until the Facility is complete. A detailed
estimate of the Initial Capital Investment, including anticipated costs of
equipment and estimates of their related useful life, is set forth on Exhibit B.


 


1.17                        “Latent
Defect” means defects that cause the EQW Product to fail to conform to the
Specifications or otherwise fail to conform to the warranties provided pursuant
to Section 10.8 (hereof, which defects are not discoverable upon
reasonable physical inspection as provided in Section 5.8(a).


 


1.18                        “Manufacture”,
“Manufacturing” or “Manufactured”
means all operations involved in the manufacturing, quality control testing
(including in-process, disposition and stability testing), disposition
(releasing or rejecting), packaging and shipping of the EQW Product as more
fully described in the MRD.


 


1.19                        “MRD” means
the Manufacturing Responsibilities Document, which sets forth written
instructions regarding the Manufacture and other technical matters including,
without limitation, testing procedures and supply of the EQW Product under this
Agreement. The Table of Contents of a sample MRD is attached for reference only
as Exhibit C.


 


1.20                        “MSC”
will have the meaning set forth in Section 2.1 of this Agreement.


 


1.21                        “Party” or “Parties” will have the meaning set forth
in the first paragraph of this Agreement.


 


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1.22                        “Purchase
Order” will have the meaning set forth in Section 5.4 of this
Agreement.


 


1.23                        “QLT”
will have the meaning set forth in Section 2.3 of this Agreement.


 


1.24                        “Quality
Agreement” means the quality agreement, as revised and amended from time to
time between the Parties, that describes certain quality expectations and
responsibilities relating to the Manufacture, release testing and supply of the
EQW Product to Lilly. The Parties acknowledge that, if they so elect, there
will be one Quality Agreement applicable for EQW Product intended to be
Commercialized in the U.S. and another Quality Agreement applicable for EQW
Product intended to be Commercialized in the Territory outside the U.S. Exhibit D
sets forth the areas to be addressed by the Parties in the Quality Agreement.


 


1.25                        “Quality
Audit” will have the meaning set forth in Section 4.5(b) of this
Agreement.


 


1.26                        “QWT”
will have the meaning set forth in Section 2.3 of this Agreement.


 


1.27                        “Regulatory
Authority” will have the meaning set forth in Section 1.97 of the
Collaboration Agreement.


 


1.28                        “Regulatory
Lead” will have the meaning set forth in Section 5.2(a) of the
Collaboration Agreement.


 


1.29                        “SCWT”
will have the meaning set forth in Section 2.2 of this Agreement.


 


1.30                        “Specifications”
for EQW Product means the specifications and quality control testing procedures
for the development, Manufacturing, final release and testing of EQW Product
and labeling and packaging requirements, which may cover one or more versions
of the EQW Product including, without limitation, EQW Product having different
physical features as set forth in the applicable Marketing Approvals, as the
same may be modified from time to time by the Parties in accordance with the
terms of the Agreement. The Specifications will be agreed to in accordance with
the terms of the Quality Agreement.


 


1.31                        “Standard
Cost” means the planned EQW Product Manufacturing costs for each SKU
divided by the production volume for such SKU as agreed to by the Parties as
part of the annual plan.


 


1.32                        “Successor
Manufacturer” will have the meaning set forth in Section 11.4(e) of
this Agreement.


 


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1.33                        “Third
Party Supplier” shall have the meaning set forth in Section 4.7 of
this Agreement.


 


ARTICLE
2


GOVERNANCE


 


2.1                               Governance
of Activities. Lilly acknowledges that Amylin shall be responsible for
day-to-day operational management of the Facility within the agreed-upon annual
plan. Governance of activities contemplated by this Agreement will be effected
through the governance structure established by the Parties, including the
SCWT, the QLT, the Manufacturing Strategy Committee (the “MSC”) and the
Alliance Steering Committee (the “ASC”). The Parties intend that MSC shall be
responsible for oversight of the Facility and the complete EQW Product supply
chain, including, but not limited to the following items:


 


(a)                                  output requirements
of the Facility;


 


(b)                                 operational
performance to plan or revised forecast;


 


(c)                                  establishing and
overseeing sub-committees, as it deems necessary;


 


(d)                                 major capital
projects;


 


(e)                                  annual and long range
plans for EQW Product supply; and


 


(f)                                    sourcing and supply
agreements.


 


The MSC shall also be responsible for
reviewing and recommending for approval annual budgets and capital investments
to the ASC under the timing described for Binding Budgets in the Collaboration
Agreement. MSC shall meet no less than four times per year with agendas and
pre-reads due at least five days in advance of the meeting or as directed by
the MSC.


 


The MSC will establish governance processes
which define how information (financials, operational performance, inventories,
capital spend, etc.) will be reported and reviewed on a periodic basis
(initially proposed to be monthly). MSC will also define the types and magnitude
of decisions that it will delegate to SCWT or other sub-committees and which
are required to be agreed upon by the Parties through the MSC structure.


 


8

















 


In the event that the parties, through the
SCWT or other sub-committees as established by the MSC, are unable to resolve
any dispute in connection with this Agreement, the SCWT or sub-committee shall
refer such dispute to the MSC. In the event that the parties, through the MSC,
are unable to resolve any dispute in connection with this Agreement, the MSC
shall refer such dispute to the ASC which has been established by mutual
understanding between the Parties in performance of their obligations under
other agreements between the Parties. If the issue can not be resolved by the
ASC, then it shall be escalated to the Chief Executive Officer of Amylin and an
Executive Committee Member from Lilly.


 


2.2                               Supply
Chain Working Team. The Parties have established a supply chain working
team for the EQW Product (the “SCWT”). The function of the SCWT shall be to
plan, coordinate and manage supply chain activities for EQW Product, develop a
risk management plan related to ensuring supply of EQW Product, review
operational performance of supply chain activities, engage in appropriate
activities to reduce supply chain costs, establish customer service levels,
serve as a forum for communication for any supply chain issues, and resolve
disputes related to supply chain issues between the Parties.


 


The SCWT will meet at such other times as are
agreed to by the Parties, but no less than once each quarter. Such meetings may
be in-person, via video conference, or via telephone conference. At least five (5) business
days prior to each SCWT meeting, each Party will provide written notice to the
other Party of agenda items proposed by such Party for discussion or decision
at such meeting, together with appropriate information related thereto. Written
minutes will be kept of all SCWT meetings and will reflect, without limitation,
material decisions made at such meetings. Responsibility for keeping minutes
will alternate between the Parties.


 


2.3                               Quality
Governance. The Parties have established an Alliance Quality Working Team
(the “QWT”) that meets on a regular basis to discuss and resolve
quality-related issues and to review data and/or perform the activities
outlined in the Quality Agreement. Pursuant to the Quality Agreement, the
Parties have also established an Alliance Quality Lead Team (the “QLT”)
responsible for strategic quality issues that arise with respect to the EQW
Product. In the event that the QWT is unable to resolve any quality-related
disputes, the QWT shall refer such dispute to the QLT. Further, if the QLT is
unable to resolve such dispute, the QLT shall refer such dispute to the head of
each Party’s Quality


 


9

















 


Department for resolution. If despite their
best efforts, the head of each Party’s Quality Department are unable to resolve
such dispute, they shall refer such dispute to the MSC for resolution.


 


ARTICLE 3


PAYMENT
OF DEVELOPMENT EXPENSES, PURCHASE AND SUPPLY OF EQW PRODUCT AND COMPONENTS AND
LIMITATION OF AGREEMENT


 


3.1                               EQW
Manufacturing Development Costs. Notwithstanding anything to the contrary
in the Collaboration Agreement or any previous formal or informal agreements
between the Parties, the Parties agree that Lilly shall be responsible for
[***]% of EQW Manufacturing Development Costs incurred up until commercial
Manufacture of EQW product commences and Amylin shall be responsible for [***]%
of EQW Manufacturing Development Costs incurred up until commercial Manufacture
of EQW product commences. Going forward, the MSC shall determine if EQW
Development Costs relate to developing capabilities to Manufacture for the U.S.
and OUS markets or solely for either the US or OUS market.


 


3.2                               Purchase
of EQW Product Requirements. Subject to the terms and conditions of this
Agreement, Amylin will Manufacture EQW Product for worldwide distribution;
provided, however, that Amylin will not have any responsibility to package EQW
Product for the territory outside of the U.S. Lilly shall purchase from Amylin,
and Amylin shall supply and deliver to Lilly, Lilly’s requirements for the EQW
Product for sale by Lilly in the territory outside the U.S. in accordance with Article 5
of this Agreement. If at any time Amylin is not able to provide Lilly with the
quantity of EQW Lilly desires to purchase in accordance herewith because of the
capacity limitations of the Facility, the Parties agree to discuss in good
faith how best to provide such additional quantities of EQW Product including,
without limitation, increasing the capacity of the Facility and/or securing a
Third Party manufacturer (including, without limitation, Lilly) for EQW Product.


 


3.3                               US
EQW Cost. The Cost of Product Sold to be allocated to Adjusted US Operating
Profit/Loss for any quarter as contemplated by Section 4.5(a) of the
Collaboration Agreement for EQW Product shipped to non-Amylin, US distribution
sites shall be based on the Standard Cost plus any US specific costs and the US
pro-rata portion of any variances for such quarter.


 


***Confidential Treatment Requested


 


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3.4                               OUS
EQW Product Purchase Price. Lilly shall purchase EQW Product from Amylin at
a price per unit equal to the Standard Cost plus any OUS specific costs and the
OUS pro-rata portion of any variances for such quarter. The purchase price for
EQW Product purchased by Lilly in each quarter will be included as part of the
periodic reconciliation of Operating Profits or Loss for such quarter as
contemplated in Section 4.9 of the Collaboration Agreement.


 


3.5                               [***]
True-Up.


 


(a) 
Within [***] after the end of each [***], Amylin shall calculate [***] Average
Unit Cost”. The [***] Average Unit Cost for any [***] shall be the quotient of (i) the
Actual Manufacturing Costs up through the nude vial stage minus any US or
OUS-specific costs divided by (ii) the total number of EQW Product units
Manufactured in such [***]. To the extent the average purchase price per unit
for any [***] paid by Lilly pursuant to Section 3.4 differs from the [***]
Average Unit Cost plus OUS-specific costs for such [***], such difference will
be included in the periodic reconciliation of Operating Profits or Loss for the
[***] as contemplated in Section 4.9 of the Collaboration Agreement.


 


(b)  In
addition, within [***] after the end of each calendar year, the Parties agree
to true-up the inventory carrying costs for the previous [***] by
re-calculating each [***] ending EQW Product inventory balance for the previous
[***] utilizing the Actual Manufacturing Cost in lieu of the Standard Cost.


 


3.6                               Purchase
of Components. Lilly will define those components it chooses to purchase
through Amylin for the OUS market. Upon agreement at the SCWT and subject to
the terms and conditions of this Agreement, Lilly shall purchase from Amylin,
and Amylin shall cause to be delivered by the applicable Third-Party Supplier
to Lilly, Lilly’s requirements for any applicable Components needed for final
packaging that are not included in the EQW Product delivered to Lilly by
Amylin, all for sale by Lilly in the territory outside the U.S. and in
accordance with Article 5 of this Agreement. If at any time a Third-Party
Supplier is not able to provide Lilly with the quantity of Components Lilly
desires to purchase in accordance herewith, the Parties will allocate supply
following the procedures set forth in Section 5.3, below.


 


3.7                               Component
Purchase Price. Lilly shall purchase any Components from Amylin at a price
per unit of such Component equal to the Actual Component Manufacturing Cost for
such Component.


 


***Confidential Treatment Requested


 


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Purchase Orders, as defined below, for
Components will be submitted by Lilly within [***] after the beginning of each
[***] using a price provided by Amylin based upon Amylin’s good faith estimate
of the Actual Component Manufacturing Cost for such Components for such [***].
Actual Component Manufacturing Costs for Components purchased by Lilly in each
[***] will be included as part of the periodic reconciliation of Operating
Profits or Loss for such [***] as contemplated in Section 4.9 of the
Collaboration Agreement.


 


3.8                               Capital
Investments. The Initial Capital Investment made by Amylin for the capital
assets will be depreciated and included in the Actual Manufacturing Costs as
set forth in Article 1, but such depreciation will not include a financing
charge or capitalized interest for the investment in the Facility, but may
include capitalized interest for investments outside the Facility. Any
additional capital investments beyond the Initial Capital Investment for
Manufacturing of the EQW Product will be based upon the Forecast and the [***]
Forecast discussed in Section 5.1, below, recommendations of the SCWT and
the MSC, and the approval of the ASC. Projects will be grouped into two
categories:  projects with a scope less than
[***] each (collectively, “Minor Projects”), and projects with a scope greater
than or equal to [***] each (collectively, “Major Projects”). Projects
classified as Minor but with an anticipated spend greater than [***] must be
listed individually. Amylin may spend money on Minor Projects included in the
first year Budget Summary without prior approval by MSC. Amylin at their sole
discretion may make trade-off decisions for Minor Projects not included in the
Budget Summary provided (i) the spend for Minor Projects does not exceed
the total approved Minor Project Budget amount for that [***] and (ii) the
trade-off does not replace a capital asset required to meet Regulatory
requirements. Spend for Major Projects must be approved by the MSC prior to
initiation of the project regardless of whether the Project was included in the
Budget Summary or not. MSC will take action on such requests for approvals on a
timely basis.


 


3.9                               Reimbursement
for Financing Charge. Exhibit E sets forth the terms by which
Lilly will reimburse Amylin for Lilly’s portion of the financing charges Amylin
has incurred or will incur in making the Initial Capital Investment in
preparation for the Manufacture of EQW Product at the Facility.


 


3.10                        Impairment.
To the extent any or all of the Facility cannot be used for the Manufacture
of EQW, the Parties shall meet to discuss the potential impairment of the
Facility and the capital investments made outside the Facility for the
Manufacture of EQW. Exhibit F sets forth the capital investments outside
the Facility for the Manufacture of EQW as of


 


***Confidential Treatment Requested


 


12

















 


the date hereof. If the Parties agree to take
an impairment charge relating to the Facility and/or the capital investments
made outside the Facility for the Manufacture of EQW, Lilly will pay to Amylin
an amount equal to either (i) in the event the impairment charge is taken
prior to the True-Up Date (as defined in Exhibit E), [***], or (ii) in
the event the impairment charge is taken after the True-Up Date, the Lilly
Percentage (as defined in Exhibit E) of any impairment charge
determined in accordance with GAAP for all 
non-depreciated capital investments in and for the Facility and the
Manufacture of EQW less:  (a) such portion of the financing charge
for the Initial Capital Investment that has not yet been amortized in
accordance with Exhibit G, (b) any amount due to Lilly under
the Loan Agreement, plus any and all outstanding interest thereon, (c) any
other amounts due and payable to Lilly from Amylin at the time of the
impairment charge; and (d) any amounts for any assets that can otherwise
be utilized for other uses by Amylin; plus
any other amounts due and payable to Amylin from Lilly at the time of
impairment charge. In the event any amounts are recovered by Amylin after the
impairment charge, such amounts shall be allocated between Lilly and Amylin in
the same proportions as the impairment charge.


 


3.11                        Audits. Each
Party will have the right to audit the other Party’s financial books and
records relating to this Agreement and the calculation of Actual Manufacturing
Cost under the same terms and in the same manner as set forth in Section 4.9(e) of
the Collaboration Agreement. Notwithstanding the foregoing, any non-financial
audit conducted by Lilly under this Agreement shall not count towards the
annual limitation of one (1) audit per year set forth in Section 4.9(e) of
the Collaboration Agreement.


 


3.12                        Reporting.


 


(a)                                  Estimate of Actual Manufacturing Costs. Amylin
will provide to Lilly a report containing a good faith estimate of the Actual
Manufacturing Cost, in a format similar to and with the similar detail as set
forth in Exhibit H, within [***] prior to the end of each [***].


 


(b)                                 Actual Manufacturing Costs. Amylin will
provide to Lilly a report containing the Actual Manufacturing Cost, in a format
similar to and with the similar detail set forth in Exhibit H,
within [***] after the end of each [***].


 


(c)                                  Budget and Long Range Plan. MSC will
establish and maintain business processes to develop and monitor budgets, plans
and long-range plans.


 


***Confidential Treatment Requested


 


13

















 


1.               Budget Summary. On an [***], a budget
summary shall be developed covering the following [***]. Such budget shall
reflect Amylin’s plan at the time such budget is created, but shall not be
binding on Amylin. MSC shall  review on
no less than [***] the actual performance relative to the plan and shall agree
upon any actions needed.


 


2.              Long-Range Plan. On
an [***], a long-range plan for anticipated EQW Product demand, capital and
manufacturing costs will be developed, reviewed and approved by MSC.


 


ARTICLE 4

MANUFACTURING AND QUALITY


 


4.1                               Quality
Agreement. No later than [***] after the Effective Date, the parties shall
prepare and adopt the Quality Agreement. The Parties shall review the Quality
Agreement at least once [***] and shall modify it from time to time as
necessary through issuance of a revised version of the Quality Agreement signed
on behalf of each of the Parties by an authorized representative incorporating
the modification and stating the effective date and revision number of the
modification. The Quality Agreement will be subject to and not inconsistent
with the terms of this Agreement, the Collaboration Agreement and the
Specifications. In the event the information in the Quality Agreement on the
one hand, and this Agreement, the Collaboration Agreement or the
Specifications, as applicable, on the other hand, conflict, this Agreement, the
Collaboration Agreement or the Specifications, as applicable, will control;
provided, however that the Quality Agreement shall control for any cGMP
compliance related issues.


 


4.2                               Development
of MRD. No later than [***] after the Effective Date, the Parties shall
prepare and adopt the MRD. The Parties shall review the MRD at least once [***]
and shall modify it from time to time as necessary through issuance of a
revised version of the MRD signed on behalf of each of the Parties by an authorized
representative incorporating the modification and stating the effective date
and revision number of the modification. The MRD will be subject to and not
inconsistent with the terms of this Agreement, the Collaboration Agreement, and
the Quality Agreement. In the event the information in the MRD, on the one
hand, and this Agreement, the Collaboration Agreement or the Quality Agreement,
on the other hand, conflict, the terms of the Collaboration Agreement, this
Agreement or the Quality Agreement, as applicable, will control.


 


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4.3                               Manufacturing.
Subject to the terms and conditions of this Agreement, Amylin will use its
Commercially Reasonable Efforts to Manufacture and supply EQW Product to Lilly,
at the times and in the quantities set forth by Lilly in a purchase order and
subject, however, to the quantity restrictions set forth in this Agreement. Amylin
will ensure that each shipment of the EQW Product delivered to Lilly:  (i) will have been manufactured in
accordance with the Specifications and cGMP in effect at the time of
Manufacture, (ii) will not be adulterated or misbranded within the meaning
of the FD&C Act, (iii) will not have been Manufactured or sold in violation
of any Applicable Laws  in any material
respect, and (iv) will have been Manufactured in accordance with
applicable Marketing Approvals and all regulatory requirements as defined in
the applicable EQW Product registration (e.g. European dossier) as provided by
Lilly to Amylin.


 


4.4                               Modifications.
The Parties anticipate that the Specifications will be modified from time
to time to reflect improvements or modifications to the EQW Product. Each Party
will provide the other with reasonable advance notice of any proposed material
modification and will consult with, and consider in good faith, the reasonable
comments of such other Party regarding such proposed material modification. Any
proposed modification to the Manufacturing process or Specifications shall be
approved by the MSC or such subcommittee appointed by the MSC (subject to Section 5.2
of the Collaboration Agreement) prior to implementation or filing with any
Regulatory Authority. Any modifications to the Manufacturing process or
Specifications required by a Regulatory Authority other than the FDA or The
European Medicines Agency (the “EMEA”) shall be solely paid for by Lilly. Prior
to any approved change in the Manufacturing process or Specifications, the
Parties shall identify, and, if needed, allocate between U.S. and O.U.S., all
costs and risks, including development costs, resulting from the changes, and a
timeline for implementing the changes.


 


(a)                                  Either Party will
notify the other as soon as practical of any changes to any Specifications or
procedures that are required by the FDA, a Regulatory Authority or Applicable
Laws that could have an impact on Amylin’s performance of this Agreement. Amylin
shall utilize its Commercially Reasonable Efforts to implement such changes.


 


(b)                                 In no event will
Amylin be required to make a modification to the EQW Product that is prohibited
by Applicable Laws or Regulatory Authorities. In no event will Amylin be
prohibited from making a modification to the EQW Product that is required by
Applicable Laws or Regulatory Authorities; provided, however, that Amylin shall
consult with Lilly prior to making any such modification, and provided further
that Amylin shall 


 


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use its Commercially Reasonable Efforts to implement
any such modification. Any modifications to the EQW Product will be in
accordance with the terms of the Quality Agreement.


 


4.5                               Audit;
Safety; Applicable Laws.


 


(a)                                  Quality
Control and Assurance. Amylin will perform quality control testing and quality
oversight on the Product to be delivered to Lilly hereunder in accordance with
this Agreement, the Quality Agreement, the MRD, Specifications and cGMP.


 


(b)                                 Quality
Audit of the Facility by Lilly Representatives. Lilly shall have the right,
upon no less than thirty (30) days’ notice and in accordance with the Quality
Agreement, to conduct an initial OUS commercial readiness audit of the Facility
during regular business hours for the purpose of conducting a quality control
inspection to assure cGMP compliance of the Facility used in the Manufacturing
of EQW Product to be delivered to Lilly (the “Start-Up Quality Audit”). Following
the Start-Up Quality Audit, upon no less than thirty (30) days’ advance written
notice to Amylin and in accordance with the terms of the Quality Agreement, no
more than one (1) time per Calendar Year, Amylin will permit Lilly’s
representatives (such representatives to be reasonably acceptable to Amylin) to
conduct an audit of the Facility during regular business hours for the purpose
of conducting a quality control inspection to assure cGMP compliance of the
Facility used in the Manufacturing of EQW Product to be delivered to Lilly (the
“Quality Audit”); provided, however, that such restriction of one (1) such
audit per Calendar Year shall not apply in cases where Lilly attends an audit
or inspection conducted by a Regulatory Authority. In addition, Lilly
representatives shall have the right to re-inspect the Facility, upon
reasonable advance written notice to Amylin and during regular business hours: (i) to
ensure appropriate remedial actions are being taken in response to a
significant adverse finding identified during a prior Lilly Quality Audit of
the Facility, (ii) if an audit of the Facility conducted by a Regulatory
Authority results in a critical finding, or (iii) if any EQW Product is,
or has the potential to be, recalled from the market by either Amylin and/or
Lilly due to Manufacturing issues. Lilly representatives will be advised of the
confidentiality obligations under this Agreement, and will follow such
security, safety and facility access procedures as are reasonably designated by
Amylin. Amylin may require that at all times the Lilly representatives be
accompanied by an Amylin representative to assure protection of Amylin
Information or confidential information of a Third Person, if applicable. Amylin
will respond in writing to any


 


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written audit observation provided by Lilly
within sixty (60) days in the form of a mutually agreed upon action plan.


 


Notwithstanding
the above, Amylin shall provide Lilly with the right to conduct pre-inspection
assessments and reviews of the Facility prior to the date on which a foreign
regulatory agency will be conducting an EQW Product pre-approval inspection. Amylin
shall reasonably cooperate with Lilly to address any needed actions identified.


 


(c)                                  Safety Procedures.
Amylin will have responsibility for developing, adopting and enforcing safety
procedures for the handling and production of EQW Product by Amylin and the
handling and disposal of all waste relating thereto. Amylin’s responsibility
for the handling of any particular EQW Product will terminate as to that
particular EQW Product upon delivery thereof to Lilly’s common carrier.


 


(d)                                 Applicable Laws.
Lilly and Amylin will each comply with all Applicable Laws in performing its
obligations hereunder, including, without limitation, laws with respect to the
protection of the environment.


 


4.6                               Access
to the Facility by Lilly. Amylin will permit Lilly to appoint one (1) or
more employee(s) to be its person in the plant at the Facility, who shall
have reasonable access during normal business hours. The scope of such person’s
role in the Facility is set forth on Exhibit I, and may be amended
from time to time by MSC. The person in the plant shall have access to
information that impacts budget, operational performance, and timelines. In
addition, Amylin will permit a reasonable number of Lilly employees reasonable
access during normal business hours to the Facility in order to observe and
review the Manufacturing process. The parties acknowledge that the foregoing
access rights are not intended to permit Lilly any level of audit rights in
addition to those described in Section 4.5 above. Lilly will comply with
Amylin’s written instructions established to enhance the safety or security of
the Facility or of persons at or near the Facility.


 


4.7                               Third
Party Suppliers. The Parties acknowledge that Amylin will Manufacture the
EQW Product and that certain materials, including active pharmaceutical
ingredient, diluents and component parts for the EQW Product and certain
testing services will be purchased by Amylin from third party suppliers (“Third
Party Suppliers”). The MSC shall be responsible for overseeing negotiations for
any supply agreements with Third Party Suppliers not already in place as of the
Effective Date (including any amendments, modifications or extensions of those
already in place) in accordance with the Letter


 


17

















 


Agreement between Amylin and Lilly dated January 30,
2004 except that the references to the Joint Commercialization Committee in the
letter are hereby replaced by MSC. Amylin shall use its Commercially Reasonable
Efforts to cause all Third Party Suppliers to fulfill their obligations under
their agreements with Amylin. The Parties agree that Amylin will not be liable
to Lilly, its Affiliates and their respective directors, officers,
shareholders, employees or agents for any Third Party Suppliers’ failure to
deliver or failure of any EQW Product as a result of materials or components
manufactured by Third Party Suppliers or the failure of such materials or
components to comply with applicable Specifications, any representations or
warranties of such Third Party Supplier or Applicable Laws. In the event Amylin
receives any indemnification payments or other recovery from Third Party
Suppliers performing services on behalf of Amylin, such amounts shall be
divided between Amylin and Lilly in proportion to their respective shares, at
the time of the payment, of U.S. EQW Gross Profit and OUS EQW Gross Profit
(less any royalty obligation to Amylin from Lilly) under the Collaboration
Agreement, as amended. To the extent legally or contractually permissible,
Amylin shall obtain a written assignment of all patent rights and know-how that
such Third Party Suppliers may develop by reason of work performed under this
Agreement.


 


4.8                               Records.
Each of the Parties shall keep accurate records of its activities under
this Agreement to the extent required by Applicable Law and in accordance with
the Quality Agreement. Access to such records will be made available by Amylin
to Lilly during normal business hours upon Lilly’s reasonable written request.
The provisions of this Section 4.8 shall not supersede the audit
provisions set forth in Section 4.5 
Amylin further agrees to provide Lilly with such information regarding
the Manufacture and testing of EQW Product hereunder as may be required to
obtain or maintain Marketing Approval of EQW Product or as may otherwise be
required or requested by any Regulatory Authority.


 


4.9                               Use
of Facility and Adjusted Costs.


 


(a)  Use of Facility. As of the
date hereof, the Parties acknowledge and agree that the Facility has been
constructed for the commercialization and projected growth of EQW Product on a
worldwide-demand basis. At any future date, Amylin may propose to the MSC that
the Facility be used for a non-EQW Product purpose. If the Parties, through the
MSC, cannot come to an agreement regarding such proposal, then the matter shall
be escalated using the dispute resolution procedure set forth in the
Collaboration Agreement. If the Parties’ senior executives cannot mutually
resolve the matter after good faith due


 


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deliberation, then Amylin shall have the
final right to decide how to use the Facility subject to Section 4.9(b),
below.


 


(b) Adjusted Costs. Prior to a
final decision being reached on any additional non-EQW Product use(s) of
the Facility, the Parties shall agree in good faith to modify the definition of
Actual Manufacturing Cost set forth in Section 1.2. Any such modification
to the definition of Actual Manufacturing Cost shall take into account, among
other things:  (1) the actual cost
of the portion of the existing Facility to be used by Amylin for any non-EQW
Product use, (2) an allocation of site-wide support facilities and
resources that takes into account the planned non-EQW Product use of the Facility,
and (3) a prospective adjustment to the up-front financing fee Lilly has
paid concurrent herewith (as described in Section 3.9). All capital
expenses and costs associated with the planned non-EQW Product use of the
Facility shall be Amylin’s sole responsibility


 


ARTICLE 5

PURCHASE OF EQW PRODUCT; FORECASTS


 


5.1                               Forecasts.


 


(a)                                  [***]
Forecast. Lilly will submit to Amylin no later than [***] after the
Effective Date a [***] forecast (the “[***] Forecast”) of Lilly’s anticipated
purchase requirements of EQW Product for the Territory outside the U.S.;
provided, however, that while the [***] of the [***] Forecast shall be in
[***], [***] of the forecast shall be for [***]. Thereafter, Lilly shall [***]
provide to Amylin a [***] Forecast as part of the long-range planning process.
The Parties agree that each [***] Forecast will be used for planning purposes
only and will not be binding on either Party.


 


(b)                                 Rolling Production
Forecasts. The Parties, through the SCWT, will work together to develop
forecasts, inventory targets, and production capacity requirements for
Manufacture of EQW Product and submit the same to the Amylin Supply Operations.
No later than [***] prior to the commencement of each [***] following the
Effective Date, the Lilly SCWT leader or designee will provide to the Amylin
SCWT leader or designee an estimate of the total quantity of EQW Product
required to be delivered for the following [***] and the succeeding [***] (the “Forecast”).
The Parties agree that the Forecast will be for general planning purposes only
and will not be binding on either Party. Amylin will maintain a level of
inventory of materials and components for the Manufacture of EQW Product as
agreed upon by the SCWT.


 


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5.2                               Safety
Stock.  The SCWT shall mutually agree
upon the appropriate levels of safety stock of EQW Product and Components (as
applicable) to be maintained by each Party for its respective territory. After
the Effective Date, the SCWT shall review safety stock targets of EQW Product,
Components, and other critical raw materials to be used in the Manufacture of
EQW Product on at least [***] and review performance against such targets on at
least [***].


 


5.3                               Limitations
of Supply.  Amylin will use its
Commercially Reasonable Efforts to make available at least [***] of the
Forecast.  If at any time Amylin
anticipates that it will be unable to supply in whole or in part the quantities
of EQW Product set forth in a Lilly purchase order for any reason, including without
limitation, Force Majeure, Amylin will inform Lilly as soon as possible via
email of such anticipated shortfall. 
Amylin will also notify Lilly of the underlying reason for the
shortfall, proposed remedial measures, the date such inability to supply the
full order of EQW Product is expected to end, and a proposed amount of EQW
Product to be delivered to Lilly.  In the
event fewer units of EQW Product are available than the Parties desire to
purchase, the Parties will allocate available EQW Product on a pro rata basis
based upon the Forecasts included in the most recent annual business plan
approved by unanimous vote of the ASC; provided, however, that if a Party
believes that a pro rata allocation based upon such Forecasts is not the
appropriate allocation method, such Party may request that the Parties meet to
discuss the issue, and the other Party shall agree to meet and consider in good
faith the reasonable comments of the other Party.  If after such meeting, the Parties are unable
to decide on the appropriate method for allocation, then the matter shall be
resolved in accordance with Section 3.1(e)(ii) of the Collaboration
Agreement.


 


(a)           Limitations
of API.  In the event of a limitation
of supply of API, Amylin agrees that it shall not adversely impact the supply
of EQW Product to Lilly by unreasonably allocating such limited API
disproportionately to any other exenatide-containing product.


 


(b)           Limitations
of Components.  In the event of a
limitation of supply of any Components, Amylin will inform Lilly as soon as
possible via email of such anticipated shortfall.  Amylin will also notify Lilly of the
underlying reason for the shortfall, proposed remedial measures, the date such
inability to supply the Component is expected to end, and the proposed amount
of the Component to be delivered to Lilly. In the event fewer units of the
Component are available than the Parties desire to purchase, the Parties will
allocate available Component on a pro rata basis based upon the Forecasts
included in the most recent annual business plan approved by unanimous vote of
the ASC;


 


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provided, however, that if a Party believes that a pro rata allocation
based upon such Forecasts is not the appropriate allocation method, such Party
may request that the Parties meet to discuss the issue, and the other Party
shall agree to meet and consider in good faith the reasonable comments of the
other Party.  If after such meeting, the
Parties are unable to decide on the appropriate method for allocation, then the
matter shall be resolved in accordance with Section 3.1(e)(ii) of the
Collaboration Agreement.


 


5.4                               Purchase
Orders.  Lilly will purchase EQW
Product solely by submitting to Amylin written purchase orders (“Purchase
Orders”).  Purchase Orders will be
submitted by Lilly within [***] after the beginning of each [***] using the
Standard Cost.  The SCWT will establish a
reasonable minimum order size for EQW Product prior to submission of the first
Forecast, and Lilly shall not submit Purchase Orders for less than such minimum
order size unless otherwise agreed by the Parties.  The terms and conditions of this Agreement
will be controlling over any terms and conditions in any such purchase orders,
Amylin’s acknowledgement forms, or any other forms.  Upon submission to Amylin in accordance with
this Section 5.4, a Purchase Order shall be deemed accepted by Amylin
except to the extent it exceeds [***]% of the most recent applicable Forecast;
provided however, that acceptance of a Purchase Order shall not guarantee that
Amylin will have supply sufficient to fill such Purchase Order at the time such
Purchase Order is submitted, it being agreed that Amylin shall fill such
Purchase Order as soon as sufficient supply is available.  Lilly will submit each such Purchase Order to
Amylin at least [***] in advance of the date specified in each Purchase Order
by which delivery of the EQW Product is required.  Notwithstanding the foregoing, Amylin will
use Commercially Reasonable Efforts, but will not be obligated, to meet any
request of Lilly for delivery of EQW Product in less than [***], and further,
Amylin will attempt, but will not be obligated, to accommodate any changes
requested by Lilly in delivery schedules for EQW Product following Amylin’s
receipt of Purchase Orders from Lilly in accordance with this Section 5.4.  Amylin will notify Lilly in writing of its
acceptance or rejection of a specific purchase order within [***] of receipt
thereof (e-mail notification is acceptable). 
Amylin shall not have the right to reject a Purchase Order submitted to
Amylin in accordance with this Section 5.4, except to the extent it
exceeds the most recent applicable Forecast by more than [***]%; provided
however, that acceptance of a Purchase Order shall not guarantee that Amylin
will have supply sufficient to fill such Purchase Order at the time such
Purchase Order is submitted, it being agreed that Amylin shall fill such
Purchase Order as soon as sufficient supply is available.  Upon
receipt and acceptance of each Purchase Order by Amylin hereunder, Amylin will
use Commercially Reasonable Efforts to supply the EQW Product in such
quantities on the delivery dates specified in such Purchase Order, unless
otherwise mutually agreed to in writing by the Parties, except to 


 


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the extent such purchase order exceeds the applicable Forecast by more
than [***]%.  Purchase Orders accepted by
Amylin may not be cancelled except by mutual agreement of the Parties.


 


5.5                               Title
Transfer; Shipment of EQW Product. 
Shipment of EQW Product ordered by Lilly will be to one or more
distribution service providers designated by Lilly.  Amylin will not make direct shipments to
final customers in the Territory outside the U.S.  Lilly will select and pay the carrier to be
used.  EQW Product will be shipped FCA
(Amylin Facility) Incoterms 2000 or as may otherwise be required pursuant to
Applicable Laws.  Title and risk of loss
or damage to the EQW Product will remain with Amylin until the EQW Product is
delivered to the carrier, at which time title to EQW Product will rest in, and
risk of loss or damage to EQW Product will pass to Lilly.  Lilly will cause EQW Product to be picked up
at the Facility dock no later than [***] after the later of (i) the
delivery date specified in the applicable Purchase Order, and (ii) the
date Amylin makes such EQW Product available for shipment.  Any discrepancies between quantity shipped
from Amylin and quantity arriving at Lilly will be jointly investigated.


 


5.6.
                         Use of a Single Lot in both US and OUS.  EQW Product from a single production batch or
lot shall not be made available for use by Amylin inside the U.S. and by Lilly
outside the U.S without the prior written consent of Amylin.  No later than [***] prior to the planned date
of the first application for marketing approval to a Regulatory Authority other
than the FDA, the Parties agree to discuss in good faith whether EQW Product
from a single production batch or lot shall be used both in the U.S. and
outside the U.S.  If the Parties agree
that such split uses are appropriate, then the Parties agree to work towards a
procedure that will describe how EQW Product from a single production batch or
lot shall be made available for use by Amylin inside the U.S. and by Lilly
outside the U.S.  If the Parties are not
able to agree that such split uses are appropriate or are unable to agree upon
such a procedure, then Lilly shall be responsible for the first $[***] of
losses per [***] arising from any inventory rendered obsolete solely due to the
fact that a single production batch or lot was not available for use by Amylin
inside the U.S. and by Lilly outside the U.S. 
The remainder of any such losses shall be allocated in accordance with
the last sentence of Section 5.9.


 


5.7.                            Taxes. 
Lilly acknowledges it is responsible for any Value Added Tax and sales
taxes related to the purchase of EQW Product.


 


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5.8                               Inspection;
Rejection.


 


(a)           Lilly
shall be allowed a maximum of [***] days from the date of receipt of any
shipment for inspection and provision of written notice to Amylin of rejection
of any portion or all of that shipment (“Inspection Period”).  If Lilly does not deliver such written notice
to Amylin within such Inspection Period, Lilly shall be deemed to have accepted
the shipment, except in the case of Latent Defects.


 


(b)           Promptly
following notice of rejection, Amylin and Lilly shall mutually determine
whether the rejected shipment conformed to the Specifications and warranties
and, if the rejected shipment did not so conform, in what ways the rejected
shipment did not so conform.  If the
Parties cannot agree upon such issue by the end of the Inspection Period, then
the Head of Quality (or any successor position) of Amylin and the Head of
Quality  (or any successor position) of
Lilly shall mutually determine in good faith whether the rejected shipment
conformed to the Specifications and warranties, using such further testing
procedures as such individuals may agree, including, if such individuals so
determine, submitting the rejected items and Specifications to a mutually
acceptable, independent laboratory for determination of whether such items
conformed to the Specifications and warranties. 
Lilly shall provide to Amylin samples of rejected EQW Product, as Amylin
shall reasonably request for the purpose of performing additional testing
pursuant to this Section 5.8.  The
non-prevailing Party shall bear all reasonable cost of such independent
laboratory assessment.


 


(c)           If
it is determined that the rejected EQW Product was non-conforming, then Amylin
shall replace such EQW Product as promptly as practicable.  The Actual Manufacturing Cost of the rejected
EQW Product, the Actual Manufacturing Cost of the replacement EQW Product and
Lilly’s cost of return or disposal of rejected, non-conforming EQW Product
shall be included in Cost of Product Sold for purposes of Article 4 of the
Collaboration Agreement, unless and to the extent that such costs are a result
of Amylin’s gross negligence or willful misconduct, in which event Amylin shall
pay or reimburse such costs to Lilly in full. 
Rejected or non-conforming EQW Product shall be returned to Amylin or
disposed of, as directed by Amylin.


 


5.9                               Inventory
Obsolescence.   With respect to EQW Product and Components,
Lilly will be responsible for the inventory loss for lots intended for sale in
the Territory outside the U.S., based on 
purchase orders submitted [***] in advance and accepted by Amylin under Section 5.4,
that are delivered to Lilly with the product dating agreed upon by the
SCWT.  Inventory obsolescence related to
all other EQW Product and Components will be shared by the Parties on a pro
rata basis based on the forecasts included in the most 


 


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recent [***] business plan approved by the ASC, with Lilly and Amylin
equally sharing the U.S. allocation and Lilly solely responsible for the OUS
allocation.


 


ARTICLE 6


TRADE DRESS AND PACKAGING


 


6.1                               Trade
Dress and Packaging.  Amylin will
ensure that the EQW Product that is delivered to Lilly hereunder is prepared
and packed for shipment in compliance with applicable Marketing Approvals and
cGMP, and in accordance with the MRD/Quality Agreement.  All trade dress and packaging for EQW
Product, including use of EQW Product Trademarks, Amylin Marks and Lilly Marks
shall be consistent with the requirements of Section 9.5 of the
Collaboration Agreement.


 


6.2                               Lot
Numbering.  Amylin’s lot numbers will
be affixed on the containers for the EQW Product and on each shipping carton in
accordance with Applicable Laws.


 


6.3                               Release
Testing.  The QLT will establish
procedures for release testing EQW Product Manufactured for Lilly to ensure
that EQW Product conforms to Applicable Laws.


 


ARTICLE 7


REGULATORY AND RECALL


 


7.1  Regulatory Responsibility.  All matters related
to the Parties’ regulatory responsibilities, including, without limitation,
recall of EQW Product, regulatory communications, cooperation between the
Parties, quality assurance and manufacturing audits, will be as set forth in
this Agreement, the Quality Agreement and the Collaboration Agreement.  The QLT will also coordinate contacts with
Regulatory Authorities with respect to the EQW Product, it being anticipated
that each Party shall have the right to participate in key regulatory decisions
and meetings.  If any Regulatory Authority
requires the Regulatory Lead to have the ability to institute recalls
unilaterally in a particular Regulatory Jurisdiction, then the Regulatory Lead
shall have such right.  All costs of
recall incurred by the Parties in accordance herewith will be shared by the
Parties in proportion to their respective shares, at the time of the recall, of
U.S. EQW Gross Profit and OUS EQW Gross Profit under the Collaboration
Agreement, as amended, except to the extent due to a Party’s gross negligence
or willful misconduct, in which case that Party will be solely responsible for
such costs of recall


 


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ARTICLE 8


INTELLECTUAL PROPERTY


 


Pursuant to the Collaboration Agreement, the Parties have each granted
to the other all licenses to patents, know-how or other intellectual property
necessary for the performance of the Parties’ obligations under the
Collaboration Agreement.  Any inventions
resulting from the activities contemplated by this Agreement shall also be
governed by the provisions of the Collaboration Agreement, except to the extent
Amylin’s rights to license certain intellectual property may be limited by its
Development and License Agreement with Alkermes Controlled Therapeutics Inc.
II, dated May 15, 2000, as amended.


 


ARTICLE 9

REPRESENTATIONS AND WARRANTIES OF LILLY


 


Lilly hereby
represents and warrants to Amylin that, as of the Effective Date hereof:


 


9.1                               Organization
and Standing. Lilly is a corporation duly organized, validly existing and
in good standing under the laws of the State of Indiana.


 


9.2                               Power
and Authority. Lilly has all requisite corporate power and authority to
execute, deliver, and perform this Agreement and to consummate the transactions
contemplated herein.  The execution,
delivery, and performance of this Agreement by Lilly does not, and the
consummation of the transactions contemplated hereby will not, violate any
provisions of Lilly’s organizational documents, bylaws, or any Applicable Law
applicable to Lilly, or any material agreement, mortgage, lease, instrument,
order, judgment, or decree to which Lilly is a party or by which Lilly is
bound.


 


9.3                               Corporate
Action; Binding Effect. Subject to Section 16.17, below, Lilly has
duly and properly taken all action required by law, its organizational
documents, or otherwise, to authorize the execution, delivery, and performance
of this Agreement and the other instruments to be executed and delivered by it
pursuant hereto and the consummation of the transactions contemplated hereby
and thereby.  Subject to Section 16.17,
below, this Agreement has been duly executed and delivered by Lilly and
constitutes, and the other instruments contemplated hereby when duly executed
and delivered by Lilly will constitute, legal, valid, and binding obligations
of Lilly enforceable against it in accordance with its respective terms, except
as enforcement may be affected by bankruptcy, insolvency, or other similar
laws.


 


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9.4                               Governmental
Approval.  Except as contemplated by
this Agreement, no consent, approval, waiver, order or authorization of, or
registration, declaration or filing with, any Regulatory Authority or any other
Third Person is required in connection with the execution, delivery and
performance of this Agreement, or any agreement or instrument contemplated by
this Agreement, by Lilly or the performance by Lilly of its obligations
contemplated hereby and thereby.


 


9.5                               Brokerage.  No broker, finder or similar agent has been
employed by or on behalf of Lilly, and no Person with which Lilly has had any
dealings or communications of any kind is entitled to any brokerage commission,
finder’s fee or any similar compensation, in connection with this Agreement or
the transactions contemplated hereby.


 


9.6                               Litigation.  There are no pending or, to Lilly’s
knowledge, threatened judicial, administrative or arbitral actions, claims,
suits or proceedings pending as of the date hereof against Lilly relating to
the subject matter of this Agreement, which, either individually or together
with any other, will have a material adverse effect on the ability of Lilly to
perform its obligations under this Agreement or any agreement or instrument
contemplated hereby.


 


9.7                               Not
Debarred.  Lilly is not debarred and
has not and will not use in any capacity the services of any Person debarred
under subsections 306(a) or (b) of the Generic Drug Enforcement Act
of 1992.  If at any time this
representation and warranty is no longer accurate, Lilly will notify Amylin of
such fact.


 


9.8                               Applicable
Laws.  Lilly will comply with
Applicable Laws relating to its distributing, marketing, promoting and selling
of the EQW Product.


 


9.9                               Implied
Warranties.  EXCEPT AS EXPRESSLY
PROVIDED IN THIS ARTICLE 9, LILLY MAKES NO REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR
OTHERWISE, AND LILLY SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY
WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE AND WARRANTY OF NONINFRINGEMENT.


 


26














 


ARTICLE 10

REPRESENTATIONS AND WARRANTIES OF AMYLIN


 


Amylin represents and warrants to Lilly that, as of the Effective Date
hereof:


 


10.1                        Organization
and Standing. Amylin is a company duly organized, validly existing, and in
good standing under the laws of Delaware.


 


10.2                        Power and
Authority. Amylin has all requisite corporate power and authority to
execute, deliver, and perform this Agreement and to consummate the transactions
contemplated herein.  The execution,
delivery, and performance of this Agreement by Amylin does not, and the
consummation of the transactions contemplated hereby will not, violate any
provisions of Amylin’s organizational documents, bylaws, or any Applicable Laws
applicable to Amylin, or any material agreement, mortgage, lease, instrument,
order, judgment, or decree to which Amylin is a party or by which Amylin is
bound.


 


10.3                        Corporate
Action; Binding Effect. Amylin has duly and properly taken all action
required by law, its organizational documents, or otherwise, to authorize the execution,
delivery, and performance of this Agreement and the other instruments to be
executed and delivered by it pursuant hereto and the consummation of the
transactions contemplated hereby and thereby. 
This Agreement has been duly executed and delivered by Amylin and
constitutes, and the other instruments contemplated hereby when duly executed
and delivered by Amylin will constitute, legal, valid, and binding obligations
of Amylin enforceable against it in accordance with its respective terms,
except as enforcement may be affected by bankruptcy, insolvency, or other
similar laws.


 


10.4                        Governmental
Approval.  Except as contemplated by
this Agreement, no consent, approval, waiver, order or authorization of, or
registration, declaration or filing with, any Regulatory Authority or any other
Third Person is required in connection with the execution, delivery and
performance of this Agreement, or any agreement or instrument contemplated by
this Agreement, by Amylin or the performance by Amylin of its obligations
contemplated hereby and thereby.


 


10.5                        Brokerage.  No broker, finder or similar agent has been
employed by or on behalf of Amylin, and no Person with which Amylin has had any
dealings or communications of any kind is entitled to any brokerage commission,
finder’s fee or any similar compensation, in connection with this Agreement or
the transactions contemplated hereby.


 


27

















 


10.6                        Litigation.  There are no pending or, to Amylin’s
knowledge, threatened judicial, administrative or arbitral actions, claims,
suits or proceedings pending as of the date hereof against Amylin relating to
the subject matter of this Agreement, which, either individually or together
with any other, will have a material adverse effect on the ability of Amylin to
perform its obligations under this Agreement or any agreement or instrument
contemplated hereby.


 


10.7                        Not
Debarred. Amylin is not debarred and has not and will not use in any
capacity the services of any Person debarred under subsections 306(a) or (b) of
the Generic Drug Enforcement Act of 1992. 
If at any time this representation and warranty is no longer accurate,
Amylin will immediately notify Lilly of such fact.


 


10.8                        EQW Product Specifications.  Amylin will ensure that as of the date of
delivery, EQW Product delivered by Amylin to Lilly hereunder: (i) will
conform to the Specifications in effect at the time of manufacture, (ii) will
have been Manufactured in accordance with cGMP and cQSR, as applicable, in
effect at the time of manufacture, (iii) will not be adulterated or
misbranded by Amylin within the meaning of the FD&C Act, and (iv) will
not have been knowingly manufactured or sold in violation of any Applicable
Laws of the U.S in any material respect (collectively “EQW Product Warranty”).  Upon delivery to Lilly, FCA (Amylin’s
Facility) Incoterms 2000, Amylin will convey good title to the EQW Product to
Lilly as of the date of shipment, free and clear of any lien or encumbrance.


 


10.9                        Applicable
Laws.  Amylin will comply with
Applicable Laws relating to its supply of the EQW Product.


 


10.10                 Implied
Warranties.  EXCEPT AS EXPRESSLY
PROVIDED IN THIS ARTICLE 10, AMYLIN MAKES NO REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR
OTHERWISE, AND AMYLIN SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY
WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE AND WARRANTY OF NONINFRINGEMENT.


 


ARTICLE 11

TERM OF AGREEMENT; TERMINATION


 


11.1                        Term of
Agreement.  Unless earlier terminated
in accordance with this Article 11, this Agreement will take effect and
commence on the Effective Date and will expire at such 


 


28

















 


time as the Collaboration Agreement expires.  In the event of termination of the
Collaboration Agreement prior to its expiration, this Agreement shall continue
in effect unless terminated at the option of either Party as provided in Section 11.2(c) below.  This Agreement may also be terminated by
mutual agreement of the Parties.


 


11.2                        Termination
for Cause.  In addition to the
Parties’ right to terminate by mutual agreement under Section 11.1 above,
this Agreement may be terminated as follows:


 


(a)           A Party may terminate
this Agreement immediately by providing written notice to the other Party if
the other Party is declared insolvent or bankrupt by a court of competent
jurisdiction, or a voluntary petition of bankruptcy is filed in any court of
competent jurisdiction by the other Party or an involuntary petition for relief
under the United States Bankruptcy Code is filed in a court of competent
jurisdiction against the other Party which is not dismissed within thirty (30)
days of its filing, or the other Party makes or executes any assignment for the
benefit of creditors.


 


(b)           Either Party may
terminate this Agreement in the event of a material breach of this Agreement by
the other; provided that if the breaching Party cures such material breach
within the cure period provided in Section 11.3, then the other Party will
be obligated to continue to perform its obligations under this Agreement, and
this Agreement will continue in full force and effect.


 


(c)           Either Party may
terminate this Agreement immediately in the event the Collaboration Agreement
is terminated for any reason.


 


11.3                        Procedures
for Termination for Material Breach. 
A termination of this Agreement pursuant to Section 11.2(b) shall
not be effective unless the terminating Party complies with the following
procedures:


 


The terminating Party will give the other Party prior written notice
thereof, specifying in reasonable detail the alleged material breach, and if
such alleged material breach or material default continues unremedied for a
period of thirty (30) days after the date of receipt of the notification or, if
the material breach reasonably cannot be corrected or remedied within thirty
(30) days, then if (i) the defaulting Party has not commenced remedying
said material breach within said thirty (30) days and is not diligently
pursuing completion of same, or (ii) said material breach or material
default has not been corrected or remedied within one-hundred twenty (120)
days, then such terminating Party may immediately terminate this Agreement by
again providing written notification to the defaulting Party and such
termination shall be effective as of the date that such notice was 


 


29

















 


delivered to the other Party. 
This Section 11.3 will not be exclusive and will not be in lieu of
any other remedies available to a Party hereto for any breach or default
hereunder on the part of the other Party.


 


11.4                        Effect of
Termination.


 


(a)           Upon
termination of this Agreement for any reason (whether due to breach of either
Party or otherwise), Amylin will furnish to Lilly a complete written inventory
of all work in progress and an inventory of all finished EQW Product.  Unless otherwise agreed to between the
Parties, all stock on hand as of the effective date of any termination of this
Agreement will be dealt with promptly as follows:


 


1.              EQW Product Manufactured and packaged
pursuant to Purchase Orders from Lilly and accepted by Amylin will be delivered
by Amylin to Lilly, whereupon Lilly will pay Amylin therefore in accordance with
the terms hereof.


 


2.              Work in progress commenced by Amylin
against accepted Purchase Orders from Lilly will be completed by Amylin and
delivered to Lilly, whereupon Lilly will pay Amylin therefore in accordance
with the terms hereof.


 


(b)           In the event of
termination of this Agreement by Amylin for Lilly’s material breach or
termination of this Agreement in the event of termination of the Collaboration
Agreement by Amylin for Lilly’s material breach, Lilly shall be solely
responsible for any wind down costs  incurred
by the Parties that cannot be reasonably avoided.  In the event of termination of this Agreement
by Lilly for Amylin’s material breach or termination of this Agreement in the
event of termination of the Collaboration Agreement by Lilly for Amylin’s
material breach, Amylin shall be solely responsible for any wind down costs  incurred by the Parties that cannot be
reasonably avoided.  In the event of
termination of this Agreement by mutual agreement of the Parties or for any
other reason, including Force Majeure, 
the Parties shall share in any wind down costs incurred by the Parties
that cannot be reasonably avoided as follows: 
Lilly shall be responsible for an amount equal to either (i) in the
event termination occurs prior to the True-Up Date (as defined in Exhibit E)
[***]% or (ii) in the event the termination occurs after the True-Up Date,
the Lilly Percentage (as defined in Exhibit E) and Amylin shall be 


 


***Confidential Treatment Requested


 


30

















 


responsible for the balance. 
Wind down costs shall include, without limitation, commitments to Third
Party Suppliers that cannot be reasonably avoided.


 


(c)           With respect to any EQW
Product-specific capital investments incurred as part of EQW Product Manufacturing
made by either Party that have a remaining undepreciated amount at the time
Amylin ceases to Manufacture EQW Product in accordance with this Article 11:


 


1.               if the Collaboration Agreement is in
effect immediately following termination of this Agreement, then: (i) in
the event of termination of this Agreement by Lilly for Amylin’s breach, Amylin
will be solely responsible for such undepreciated amounts, regardless of
whether such capital investments are usable by Amylin; and (ii) in the
event of termination of this Agreement by Amylin for Lilly’s breach, Lilly will
be solely responsible for such undepreciated amounts for capital investments
that are not readily usable by Amylin less salvage value, and Amylin will be
solely responsible for such undepreciated amounts for capital investments that
are readily usable by Amylin; and (iii) in the event of termination of
this Agreement other than for breach by a Party,  the parties shall share such undepreciated
amounts as follows:  Lilly shall be
responsible for an amount equal to either (i) in the event termination
occurs prior to the True-Up Date (as defined in Exhibit E), [***]
([***]%.), or (ii) in the event termination occurs after the True-Up Date,
the Lilly Percentage (as defined in Exhibit E) less (a) such portion of the
financing charge for the Initial Capital Investment that has not yet been
amortized in accordance with Exhibit G, (b) any amount due to
Lilly under the Loan Agreement, plus any and all outstanding interest thereon, (c) any
other amounts due and payable to Lilly from Amylin at the time of termination;
and (d) any amounts for any assets that can otherwise be utilized for
other uses by Amylin; plus any
other amounts due and payable to Amylin from Lilly at the time of termination.


 


***Confidential Treatment Requested


 


31

















 


2.               if this Agreement expires in accordance
with Section 11.1 or is terminated pursuant to Section 11.2(c) of
this Agreement as a result of termination of the Collaboration Agreement, then:
(i) in the event of termination of the Collaboration Agreement by Lilly
pursuant to Section 12.3 thereof or expiration of this Agreement in
accordance with Section 11.1 hereof, the Parties shall share such
undepreciated amounts as follows:  Lilly
shall be responsible for an amount equal to either (i) in the event
termination occurs prior to the True-Up Date (as defined in Exhibit E),
[***] percent ([***]%.), or (ii) in the event termination occurs after the
True-Up Date, the Lilly Percentage (as defined in Exhibit E) less (a) such portion of the
financing charge for the Initial Capital Investment that has not yet been
amortized in accordance with Exhibit G, (b) any amount due to
Lilly under the Loan Agreement, plus any and all outstanding interest thereon, (c) any
other amounts due and payable to Lilly from Amylin at the time of the
termination; and (d) any amounts for any assets that can otherwise be
utilized for other uses by Amylin; plus
any other amounts due and payable to Amylin from Lilly at the time of
termination; (iii) in the event of termination of the Collaboration
Agreement by Lilly for Amylin’s breach, Amylin will be solely responsible for
such undepreciated amounts; and (iv) in the event of termination of the
Collaboration Agreement by Amylin for Lilly’s breach, Lilly will be solely
responsible for such undepreciated amounts which are not readily usable by
Amylin, less salvage value.


 


(d)           To
the extent that a Party is responsible for all or any portion of undepreciated
amounts for a capital investment made by the other Party as described above,
such Party shall reimburse the other Party for its share of such undepreciated
amounts within an agreed-upon number of days, but in no event longer than
ninety (90) days, after the date on which Amylin ceases to Manufacture EQW
Product in accordance with this Article 11; provided, however the Parties
agree to apply appropriate offsets as described in Section 3.10
hereof.  


 


***Confidential Treatment Requested


 


32

















 


(e)           In
addition, upon expiration of this Agreement or termination of this Agreement
for any reason (whether due to breach of this Agreement by either Party, Force
Majeure, or otherwise), in the event Lilly has the right to, and intends to
continue to commercialize EQW Product:


 


1.               Promptly following termination of this
Agreement, and as soon as practicable given Amylin’s continuing obligation to
supply EQW Product until the transfer described in this Section 11.4(e) is
complete, to the extent permissible under its agreements with Alkermes, Amylin
will transfer to a Third Party manufacturer designated by Lilly and approved by
Amylin, such approval not to be unreasonably withheld or delayed (the “Successor
Manufacturer”), such Amylin Rights, Amylin Information, manufacturing records
and EQW Product-specific equipment and test or control procedures with respect
to the Manufacture of EQW Product as is reasonably necessary to permit the
Successor Manufacturer to Manufacture EQW Product meeting the Specifications on
behalf of the Parties or Lilly, and will provide Lilly with a copy (or access
to) such Amylin Rights, Lilly Amylin Information, manufacturing records,
equipment and test or control procedures for use by the Successor Manufacturer
and Lilly solely in relation to Manufacture of EQW Product.  The Parties shall provide the Successor
Manufacturer with commercially reasonable technical and other assistance in
connection with the use of such Amylin Rights and Amylin Information for the
Manufacture of EQW Product and with the scale-up and validation to applicable
regulatory standards of the Successor Manufacturer for the Manufacture of EQW
Product in accordance with the Specifications. 
Each Party shall use its Commercially Reasonable Efforts to enable the
Successor Manufacturer to Manufacture EQW Product in accordance with the
Specifications on a commercial scale sufficient to fulfill reasonable
anticipated sales of EQW Product as soon as reasonably practicable.  At Lilly’s request, 


 


33

















 


Amylin will introduce Lilly and the Successor Manufacturer to Amylin’s
vendors of raw materials or components used in the Manufacture of EQW Product,
and will provide reasonable assistance to Lilly and/or the Successor
Manufacturer, as applicable, in its efforts to enter into supply relationships
with such vendors.  If any such vendor
supplies Amylin with any such raw materials or components on an exclusive
basis, Amylin shall waive compliance with any such condition to allow such
vendor to transact business with Lilly and/or the Successor Manufacturer, as
applicable solely in relation to the Manufacture of EQW Product;


 


2.               The costs and expenses incurred by
Amylin in effecting the technology transfer and providing the assistance
described in Section 11.4(e)(1) (collectively, the “Technology
Transfer”) will be borne solely by Amylin in the event of (i) termination
of this Agreement by Lilly for Amylin’s breach, or (ii) termination of
this Agreement by either Party in the event of termination of the Collaboration
Agreement either by Lilly for Amylin’s breach thereof or by Amylin pursuant to Section 12.3
thereof.  In the event of termination of
this Agreement by Amylin for Lilly’s breach, or voluntary termination of this Agreement
by Lilly pursuant to Section 11.2 of this Agreement, or termination of
this Agreement by either Party in the event of termination of the Collaboration
Agreement by Amylin for Lilly’s breach thereof, Lilly will reimburse Amylin in
full for Amylin’s reasonable and documented costs and expenses of performing
the Technology Transfer within thirty (30) days of invoice by Amylin (such
invoices to be delivered monthly).


 


11.5                        Supply
Following Termination.  In the event
this Agreement is terminated for any reason other than termination of this
Agreement by Amylin pursuant to Section 11.2(b), Amylin shall, if Lilly so
requests in writing, continue to use its Commercially Reasonable Efforts to
supply EQW Product to Lilly pursuant to this Agreement until such time as the
Successor Manufacturer is able to Manufacture EQW Product on a commercial scale



 


34

















 


sufficient to fulfill reasonable anticipated sales of EQW Product and
obtain or maintain required Marketing Approvals, except that in the case of
termination of this Agreement by either Party pursuant to Section 11.2(c) hereof
Amylin shall supply EQW Product to Lilly for no longer than thirty-six  (36) months from termination of this
Agreement. Amylin will supply such EQW Product to Lilly, and Lilly shall obtain
such EQW Product from Amylin, in accordance with the terms and conditions of
this Agreement.


 


11.6                        Continuing
Obligations.  Termination of this
Agreement for any reason will not relieve the Parties of any obligation
accruing prior thereto or any antecedent breach of the provisions of this
Agreement, and will be without prejudice to the rights and remedies of either
Party with respect to any antecedent breach of the provisions of this
Agreement.  Without limiting the
generality of the foregoing and in addition to the foregoing, no termination of
this Agreement, whether by lapse of time or otherwise, will serve to terminate
the rights and obligations of the Parties hereto under Articles 1, 7, 8, 9, 10,
11, 12, 13, 14, 15 and 16, and Sections 3.5, 3.9, 3.10, 3.11, 4.3, 4.6, 4.8 and
5.9, or rights and obligations which otherwise expressly survive the
termination of this Agreement and Sections which are necessary to give effect
to rights and obligations which expressly survive the expiration or termination
of this Agreement.


 


11.7                        Non-Exclusive
Remedies. 
The remedies set forth in this Article 11 or elsewhere
in this Agreement will be in addition to, and will not be to the exclusion of,
any other remedies available to the Parties at law, in equity or under this
Agreement.


 


11.8                        Mitigation
of Damages.  In the event of any
breach of this Agreement by Amylin or Lilly, the other Party shall take
reasonable actions to mitigate its damages.


 


ARTICLE 12


DISPUTE RESOLUTION


 


Disputes between the Parties concerning either Party’s rights or
obligations under this Agreement shall be resolved as set forth in the
Collaboration Agreement.


 


35

















 


ARTICLE 13

CONFIDENTIALITY


 


Confidentiality, nondisclosure and nonuse of information and
publication relating to the activities contemplated by this Agreement shall be
governed by the provisions of the Collaboration Agreement.


 


ARTICLE 14

ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES


 


14.1                        Compliance
with Law.  Each of the Parties will
comply with all Applicable Laws relating to its obligation hereunder.


 


14.2                        Commercially
Reasonable Efforts.  Except as
otherwise provided in this Agreement or the Collaboration Agreement, Lilly and
Amylin each hereby agree to use all Commercially Reasonable Efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
reasonably necessary or proper to make effective the transactions contemplated
by this Agreement, including such actions as may be reasonably necessary to
obtain approvals and consents of any Regulatory Authority and other Persons;
provided, however, that no Party will be required to (i) pay money (other
than as expressly required pursuant to this Agreement or the Collaboration
Agreement or as implicitly required in order for a  Party to carry out its obligations
hereunder), or (ii) assume any other material obligation not otherwise
required to be assumed by this Agreement or the Collaboration Agreement.


 


14.3                        Further
Assurances.  The Parties intend that
this Agreement contain all consents, licenses and authorizations from one Party
to the other necessary to enable each Party to perform its obligations
hereunder.  In the event any further such
consents, licenses or authorizations are necessary, each Party agrees to take
such further actions and execute such further agreements as may be reasonably
necessary to carry out the intent and purposes of this Agreement.


 


ARTICLE 15

INDEMNIFICATION; LIMITATION OF LIABILITY; INSURANCE


 


15.1                        Indemnification. 
Indemnification obligations of the Parties will be provided
as set forth in the Collaboration Agreement.


 


36














 


15.2                        Limitation
of Liability. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN
NO EVENT WILL EITHER PARTY BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL (INCLUDING LOST PROFITS) OR PUNITIVE DAMAGES, HOWEVER CAUSED OR
UPON ANY THEORY OF LIABILITY (INCLUDING A PARTY’S OWN NEGLIGENCE, GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT (OR THE NEGLIGENCE, GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF A PARTY’S EMPLOYEES, AGENTS CONTRACTORS OR
SUBCONTRACTORS)). NOTHING IN THIS SECTION IS INTENDED TO LIMIT OR RESTRICT
INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER THE INDEMNIFICATION
PROVISIONS OF THIS AGREEMENT.


 


15.3                        Insurance.
The Parties will each, throughout the Term of this Agreement, maintain at
its own cost and expense from a qualified insurance company, comprehensive
general liability insurance and product liability insurance in an amount that
is customary in the pharmaceutical and device industries.


 


ARTICLE 16

MISCELLANEOUS PROVISIONS


 


16.1                        Successors
and Assigns. This Agreement will be binding upon and will inure to the
benefit of the Parties hereto and their respective successors and assigns. This
Agreement may not be assigned or otherwise transferred, nor, except as
expressly provided hereunder, may any right or obligation hereunder be assigned
or transferred by either Party without the prior written consent of the other
Party; provided, however, that
either Party may, without such consent, assign the Agreement and its rights and
obligations hereunder to an Affiliate or in connection with the transfer or
sale of all or substantially all of its assets or business to which this
Agreement relates, or in the event of its merger or consolidation or change in
control or similar transaction. In the event of such transaction, however, intellectual
property rights of the acquiring party to such transaction (if other than one
of the Parties to this Agreement) shall not be included in any technology
licensed hereunder. The rights and obligations of the Parties under this
Agreement shall be binding upon and inure to the benefit of the successors and
permitted assigns of the Parties. Any attempted assignment not in accordance
with this Section 16.1 will be void.


 


37

















 


16.2                        Notices. Unless
otherwise stated in this Agreement as to the method of delivery, all notices or
other communications required or permitted to be given hereunder will be as set
forth in Section 14.6 of the Collaboration Agreement.


 


16.3                        Waiver. Any
term or provision of this Agreement may be waived at any time by the Party
entitled to the benefit thereof only by a written instrument executed by such
Party. Except as otherwise provided in this Agreement no delay on the part of
Lilly or Amylin in exercising any right, power or privilege hereunder will
operate as a waiver thereof, nor will any waiver on the part of either Lilly or
Amylin of any right, power or privilege hereunder operate as a waiver of any
other right, power or privilege hereunder nor will any single or partial exercise
of any right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder


 


16.4                        Entire
Agreement. This Agreement, the Collaboration Agreement and Related
Agreements, each of their appendices, exhibits, schedules and certificates, and
all documents and certificates delivered or contemplated in connection herewith
and therewith constitute the entire agreement between the Parties with respect
to the subject matter hereof and supersede all prior agreements or
understandings of the Parties relating thereto.


 


16.5                        Amendment.
This Agreement may be modified or amended only by written agreement of the
Parties hereto signed by authorized representatives of the Parties.


 


16.6                        Counterparts.
This Agreement may be executed in any number of counterparts, each of which
will be deemed an original but all of which together will constitute a single
instrument.


 


16.7                        Governing
Law. This Agreement will be governed and construed in accordance with the
laws of the State of New York excluding any choice of law rules that may
direct the application of the law of another state.


 


16.8                        Headings. All
section titles or headings contained in this Agreement and in any exhibit,
schedule or certificate referred to herein or attached to this Agreement are
for convenience only, will not be deemed a part of this Agreement and will not
affect the meaning or interpretation of this Agreement.


 


16.9                        No Third
Person Rights. No provision of this Agreement will be deemed or construed
in any way to result in the creation of any rights or obligations in any Person
not a Party to this Agreement.


 


38

















 


16.10                 Construction. This
Agreement will be deemed to have been drafted by both Lilly and Amylin and will
not be construed against either Party as the draftsperson hereof. Whenever this
Agreement refers to a number of days, such number shall refer to calendar days
unless business days are specified.


 


16.11                 Appendices,
Exhibits, Schedules and Certificates. Each attachment and exhibit attached
hereto is incorporated herein by reference and made a part of this Agreement.


 


16.12                 No Joint Venture.
Nothing contained in this Agreement will be deemed to create any joint
venture or partnership between the Parties hereto, and, except as is expressly
set forth herein, neither Party will have any right by virtue of this Agreement
to bind the other Party in any manner whatsoever.


 


16.13                 Severability. If
any provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future laws effective while this Agreement
remains in effect, the legality, validity and enforceability of the remaining
provisions will not be affected thereby. In the event a part or provision of
this Agreement is held to be illegal, invalid or unenforceable, the Parties
agree to negotiate in good faith an amendment of such part or provision in a
manner consistent with the intention of the Parties.


 


16.14                 Force Majeure.
If either Party is prevented from complying, either totally or in part, with
any of the terms or provisions set forth herein by reason of an event of Force
Majeure, including, by way of example and not of limitation, fire, flood, explosion,
storm, strike, lockout or other labor dispute, riot, war, rebellion, accidents,
terrorist acts, acts of God, acts of governmental agencies or
instrumentalities, inability to obtain materials from suppliers, or any other
similar or dissimilar cause, in each case to the extent beyond its reasonable
control (“Force Majeure”), such Party will provide written notice of such event
to the other Party. Said notice will be provided within five (5) business
days of the occurrence of such event and will identify the requirements of this
Agreement or such of its obligations as may be affected, and, to the extent so
affected, said obligations will be suspended during the period of such
disability. The Party prevented from performing hereunder will use Commercially
Reasonably Efforts to remove such disability as promptly as possible and will
continue performance whenever such causes are removed. The Party so affected
will give to the other Party a good faith estimate of the continuing effect of
the Force Majeure condition and the duration of the affected Party’s nonperformance.
If the period of any previous actual nonperformance of a Party because of Force
Majeure conditions plus the anticipated future period of such Party’s
nonperformance because of such conditions will exceed an aggregate of one


 


39

















 


hundred twenty (120) days within any one year
period, the other Party may terminate this Agreement by prior written notice to
the nonperforming Party.


 


16.15                 Fundamental
Principle of Good Faith and Fair Dealing. In entering into this Agreement,
Lilly and Amylin each acknowledge and agree that all aspects of the business
relationship and dealings between Lilly and Amylin contemplated by this
Agreement shall be governed by the fundamental principle of good faith and fair
dealing.


 


16.16                 Interpretation. In
the event of any conflict between this Agreement and the Collaboration
Agreement, the terms of this Agreement shall control.


 


16.17                 Effective Date. This
Agreement shall become effective upon the date approved by Lilly’s Board of
Directors (the “Effective Date”). Lilly agrees to cause its management to
recommend approval of this Agreement to its Board of Directors on or before October 20,
2008, and shall promptly notify Amylin of the Lilly Board decision regarding
this Agreement.


 


[signature page to follow]


 


40

















 


IN WITNESS WHEREOF, the Parties hereto have
executed this Agreement as of the date first above  written.


 


 


	
   

  	
  ELI LILLY AND COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ JOHN C.
  LECHLEITER

  
	
   

  	
  Printed Name:

  	
  John C. Lechleiter

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMYLIN PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ MARK G. FOLETTA

  
	
   

  	
  Printed Name:

  	
  Mark G. Foletta

  
	
   

  	
  Title:

  	
  Senior Vice President, Finance and Chief
  Financial Officer

  
					



 


41

















 


EXHIBIT
A


 


DEFINITION
OF ALLOCATION OF SERVICE FOR


ACTUAL
MANUFACTURING COST CALCULATION


 


“Actual Manufacturing Cost”
will include Amylin’s costs for allocation of service, in addition to other
cost elements. Calculation of the Actual Manufacturing Cost will be consistent
with the usual methodology utilized by Amylin to calculate Amylin’s Cost of
Products Sold in accordance with U.S. GAAP.


 


Allocation of services  is
the cost of the indirect materials, indirect labor and all other expenses
incurred in the support of production and for the acquisition of materials
related to production of the EQW Product. The labor related charges included in
the Allocation of Services would be calculated using the actual FTE Rate. To the
extent the costs above are not directly traceable to production of the EQW
Product, Amylin in good faith will apply reasonable allocation methods to such
costs. Examples of items that are incorporated as part of the Allocation of
Services include:


 


(1)         repair and maintenance;


(2)          on-going
qualification/validation/in process testing/ stability testing and
investigations;


(3)          manufacturing equipment
and manufacturing support equipment calibration costs;


(4)          utilities;


(5)          depreciation and
amortization;


(6)          material testing;


(7)          pre-inspection approval
costs (including validation costs), which consists of Amylin’s internal labor
and any out-of-pocket costs on an actual dollar for dollar basis;


(8)          Prorated costs for
manufacturing administration such as complaint handling, customer service,
technical stewardship, logistics, production planning, regulatory support,
training and development, procedure coordination, procurement, finance and IT
support, and


(9)          Other costs that are
required to support the manufacture of EQW Product in accordance with U.S. GAAP


 


The costs of general corporate expenses that are not related to the
Manufacture of EQW Product, are not included in the Allocation of Services.


 

















 


EXHIBIT
B


 


ESTIMATED TOTAL INITIAL CAPITAL INVESTMENT
FOR EQW MANUFACTURING ($MM)


 


	
   

  	
   

  	
  Estimated Total

  	
   

  
	
   

  	
   

  	
  Investment

  	
   

  
	
  Project: Stage I Ohio

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Project: Stage II Ohio

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Project:
  Westchester Site

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SUBTOTAL
  - FACILITY CAPITAL

  	
   

  	
  $

  	
  [***]

  	
   

  
						



 


 


***Confidential Treatment Requested


 

















 


	
  EQW-Dedicated
  Capital Outside of Westchester

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SUBTOTAL
  - CAPITAL OUTSIDE OF THE FACILITY

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL
  ESTIMATED INITIAL CAPITAL INVESTMENT

  	
   

  	
  $

  	
  [***]

  	
   

  



 


Notes:


[***]


[***]


 


All
estimates subject to change, including [***].


Does
not include [***].


 


Does
not include approximately $[***], which will be used in part to [***].


 


Does
not include approximately $[***] that could be used for [***].


 


***Confidential Treatment Requested


 

















 


EXHIBIT
C


 


MANUFACTURING
RESPONSIBILITIES DOCUMENT


 


Table
of Contents


 


	
  I.

  	
  [***]

  	
  2

  
	
  II.

  	
  [***]

  	
  6

  
	
  III.

  	
  [***]

  	
  7

  
	
  IV.

  	
  [***]

  	
  8

  
	
  V.

  	
  [***]

  	
  9

  
	
  VI.

  	
  [***]

  	
  10

  
	
  VII.

  	
  [***]

  	
  11

  
	
  VIII.

  	
  [***]

  	
  11

  
	
  IX.

  	
  [***]

  	
  12

  
	
  X.

  	
  [***]

  	
  16

  
	
  XI.

  	
  [***]

  	
  16

  
	
  XII.

  	
  [***]

  	
  18

  
	
  XIII.

  	
  [***]

  	
  20

  



 


***Confidential Treatment Requested


 

















 


EXHIBIT
D


 


QUALITY
AGREEMENT


Table
of Contents


 


I.                                         [***]


II.                                     [***]


III.                                 [***]


IV.                                 [***]


1.    [***]


2.    [***]


3.    [***]


4.    [***]


5.    [***]


6.    [***]


7.    [***]


8.    [***]


9.    [***]


10.  [***]


11.  [***]


12.  [***]


13.  [***]


14.  [***]


15.  [***]


16.  [***]


17.  [***]


18.  [***]


19.  [***]


20.  [***]


21.  [***]


22.  [***]


23.  [***]


24.  [***]


25.  [***]


26.  [***]


27.  [***]


28.  [***]


29.  [***]


30.  [***]


31.  [***]


32.  [***]


33.  [***]


34.  [***]


V.                               [***]


VI.                           [***]


VII.                       [***]


 


***Confidential Treatment Requested


 






 










 


EXHIBIT E


 


REIMBURSEMENT
AGREEMENT


 


This REIMBURSEMENT
AGREEMENT (this “Agreement”)
is Exhibit E to the Exenatide Once Weekly Supply Agreement entered
into as of October 16, 2008 by and between ELI LILLY AND COMPANY, a corporation organized and existing under
the laws of the State of Indiana, whose principal place of business is Lilly
Corporate Center, Indianapolis, Indiana, 46285, United States of America (“Lilly”) and AMYLIN PHARMACEUTICALS, INC., a corporation
organized and existing under the laws of the State of Delaware, whose principal
place of business is 9360 Towne Centre Drive, San Diego, California 92121,
United States of America (“Amylin”).  Capitalized terms used but not otherwise
defined herein shall have the meanings provided in the Collaboration Agreement
(defined below).


 


WHEREAS,
Lilly and Amylin are a party to that certain Collaboration Agreement, dated September 19,
2002, as amended (the “Collaboration
Agreement”);


 


WHEREAS,
the Collaboration Agreement provides that the Parties will share certain
Development Costs and may agree in writing to share certain equipment and
capital expenditures related to the Collaboration; and


 


WHEREAS,
the Parties now wish to enter into this Agreement to set forth the terms upon
which (i) Lilly will reimburse Amylin for certain capital expenditures
related to the Collaboration and (ii) the Parties will share certain
Development Costs related to EQW Product (as defined below).


 


NOW, THEREFORE,
in consideration of the mutual covenants and agreements set forth herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Lilly and Amylin agree as follows:


 


1.                                      Defined
Terms.  The following terms shall
have the meanings set forth below:


 


(a)                                  
“EQW Cost of Product Sold” means, solely for purposes of calculating U.S.
EQW Gross Profit and OUS EQW Gross Profit under this Agreement and for no other
purpose, the Average Actual Manufacturing Cost as defined in the Exenatide Once
Weekly Supply Agreement between Amylin Ohio LLC and Lilly of even date herewith
(the “Supply Agreement”).


 


(b)                                  “EQW
Manufacturing Development Costs” shall mean those Development Costs
specifically related to developing the ability to Manufacture EQW Product,
including, without limitation, Manufacturing process development and
Manufacturing and quality assurance


 


1

















 


technical support, until such time as
Manufacturing of EQW Product intended for commercial sale commences.  For purposes of clarification, EQW Manufacturing
Development Costs shall not include any Development Costs which are solely
attributable to clinical studies of EQW Product, but may include costs relating
to manufacturing development irrespective of where those costs were incurred.  All Facility personnel costs will be charged
at actual FTE cost.


 


(c)                                  “EQW
Next Generation Pen” shall mean the disposable injection system(s) being
developed by the Parties for administering EQW Product, including any
components thereof, the cartridge, and all associated manufacturing, labeling,
filling, and packaging components, individually or incorporated into
sub-assemblies.


 


(d)                                  “EQW
Product” shall mean the Product developed as a fixed-dose injection of
exenatide administered once per week for diabetes and any other Indications for
which such Product may be approved for use.


 


(e)                                  “Facility”
means that certain manufacturing facility being built by Amylin Ohio LLC and
located at 8814 Trade Point Drive, West Chester, Ohio, as such facility may
from time to time be improved, expanded or altered.


 


(f)                                    “OUS
EQW Anniversary Date” means the date that is 5 years after the Product
Launch of the EQW Product in any of the United Kingdom, France, Germany, Italy,
Spain or Japan.


 


(g)                                 “OUS
EQW Gross Profit” means, for any period, the Net Sales of the EQW Product
Manufactured at the Facility and sold outside the U.S.  less the sum of (a) EQW Cost of Product
Sold for such EQW Product and (b) Lilly’s actual costs (calculated in
accordance with U.S. GAAP) for labeling and packaging EQW Product Manufactured
at the Facility and sold outside the U.S. 
For sake of clarification, for purposes of this Agreement, OUS EQW Gross
Profits shall not include any royalty payments to Amylin.


 


(h)                                 “Total
EQW Gross Profit” means, for any period, the U.S. EQW Gross Profit plus the
OUS EQW Gross Profit.


 


(i)                                    “True
Up Date” shall mean the last day of the [***] in which the OUS EQW
Anniversary Date falls.


 


(j)                                    “U.S.
EQW Gross Profit” means, for any period, the Net Sales of the EQW Product
Manufactured at the Facility and sold in the U.S., less the EQW Cost of Product
Sold for such EQW Product.


 


2.                                      Financing
Payment.  Within five business days
after the Effective Date, Lilly shall pay to Amylin a total of $125,000,000,
representing the amount agreed upon by Amylin and Lilly (subject to the terms
of this Agreement) as an appropriate financing charge for Lilly’s share of the
portion of the Initial Capital Investment for the Facility, which for purposes
of this Exhibit E is currently anticipated to be $510 million.


 


3.                                      EQW
Gross Profit Calculations.  Within
[***] after the True Up Date, Amylin shall prepare a report of U.S. EQW Gross
Profit and Lilly shall prepare a report of OUS EQW Gross


 


***Confidential Treatment
Requested


 


2

















 


Profit, in each case covering the [***]
period preceding the True Up Date.  Such
reports prepared by one Party may be audited by the other Party pursuant to the
provisions of Section 4.9(e) of the Collaboration Agreement (which
audits shall not count towards any maximum number of audits otherwise permitted
pursuant to Section 4.9(e) of the Collaboration Agreement).  Upon completion of such reports, the Parties
shall determine the percentage of Total EQW Gross Profit made up of OUS EQW
Gross Profit and US EQW Gross Profit for the [***] period covered by the
reports (such percentages, the “Current OUS EQW Percentage” and the “Current US EQW Percentage,” respectively).  Promptly following the True Up Date the
Parties shall also attempt in good faith to agree on an a projection of the
percentage of Total EQW Gross Profits that OUS EQW Gross Profits and US EQW
Gross Profits will make up over the [***] period following the True Up Date
(such percentages, the “Projected
OUS EQW Percentage” and the “Projected US EQW Percentage,” respectively).  If the Parties are unable to agree upon the
Projected OUS EQW Percentage and the Projected US EQW Percentage within 30 days
following the True Up Date, the Projected OUS EQW Percentage and the Projected
US EQW Percentage shall be derived from the last global revenue forecast
approved by either the Alliance Steering Committee (ASC) or the Global
Development and Commercialization Committee (GDCC) (or their successor
committees, if applicable), as appropriate. 
The average of the Current OUS EQW Percentage and the Projected OUS EQW
Percentage shall be the “Actual
OUS EQW Percentage.”  The
average of the Current US EQW Percentage and the Projected US EQW Percentage
shall be the “Actual US
EQW Percentage.”  The sum
of (a) [***]% of the Actual OUS EQW Percentage and (b) an amount
equal to [***]% of the Actual U.S. EQW Percentage shall be the “Lilly Percentage.”


 


4.                                      True
Up Payment.


 


(a)                                  If
the Lilly Percentage is less than [***]%, then promptly after the Lilly
Percentage is finally determined pursuant to Section 3 hereof (including
resolution of any audits), Amylin shall pay to Lilly an amount equal to $[***],
minus (ii) the Actual OUS EQW Percentage multiplied by $[***], plus simple
interest calculated at [***]% per year from the Effective Date to the True Up
Date.


 


(b)                                  If
the Lilly Percentage is more than [***]%, then promptly after the Lilly
Percentage is finally determined pursuant to Section 3 hereof (including
resolution of any audits), Lilly shall pay to Amylin an amount equal to (i) the
Actual OUS EQW Percentage multiplied by $[***], minus (ii) $[***] plus
simple interest calculated at [***]% per year from the Effective Date to the
True Up Date.


 


(c)                                  In
the event the portion of the Initial Capital Investments in the Facility is
[***]% more or less than $[***] then the $[***] amount set forth in Sections 4(a) and
4(b) above shall be appropriately adjusted.


 


5.                                      EQW
Manufacturing Development Costs. 
Within five Business Days after the Effective Date, Lilly shall make a
payment to Amylin equal to [***]% of the aggregate EQW Manufacturing
Development Costs from [***] through [***]. 
Beginning with the [***] settlement between the Parties for the [***]
ended [***], Lilly will pay [***]% of EQW Manufacturing Development Costs for
each [***] subsequent to the [***] ended [***]. 
Lilly may audit the capital expenditures allocated to the Facility, as
well as the EQW Manufacturing


 


***Confidential Treatment
Requested


 


3

















 


Development Costs, pursuant to the provisions of Section 4.9(e) of
the Collaboration Agreement (which audits shall not count towards any maximum
number of audits otherwise permitted pursuant to Section 4.9(e) of
the Collaboration Agreement).


 


6.                                      EQW
Next Generation Pen and Device Development and Manufacturing Agreement.  Promptly after the Effective Date the Parties
agree to negotiate in good faith to provide for the treatment of investments
required for the EQW Next Generation Pen and to provide for the treatment of
reimbursement issues to Lilly for investments made by Lilly and not reimbursed
by Amylin under that certain Device Development and Manufacturing Agreement
dated July 1, 2003 and (b) Amylin for investments made by Amylin
directly attributable to exenatide and not reimbursed by Lilly in accordance
with the Collaboration Agreement.  The
resolution of such issues shall occur within 180 days of the Effective Date and
shall either result in a reimbursement structure substantially similar to that
applied to the Facility and contemplated by this Agreement, or shall result in
the Parties paying their respective portions of the Development Costs and
capital investments related to the EQW Next Generation Pen which shall
incorporate a credit for investments previously made by Lilly on behalf of the
Collaboration under such Device Development and Manufacturing Agreement,
including reimbursement of financing charges incurred by Lilly.


 


7.                                      Entire
Agreement.  This Agreement, the Supply Agreement, and the
Collaboration Agreement embody the entire understanding of the Parties and
shall supersede all previous agreements, communications, representations and
understandings, whether oral, written or otherwise, between the Parties
relating to the subject matter hereof.  Except as specifically set forth
in this Agreement, the terms and conditions of the Collaboration Agreement
shall remain in full force and effect.


 


8.                                      Governing
Law.  This Agreement shall be governed by, and construed and enforced
in accordance with, the laws of the State of New York, excluding its conflicts
of laws principles.


 


9.                                      Counterparts. 
This Agreement may be executed in counterparts, each of which shall be deemed
an original document, and all of which, together with this writing, shall be
deemed one instrument.


 


[Signature Page Follows]


 


4

















 


IN WITNESS WHEREOF,
the Parties hereto have duly executed this Reimbursement Agreement as of the
Effective Date.


 


 


	
  ELI LILLY AND COMPANY

  	
   

  	
  AMYLIN PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /S/ JOHN C. LECHLEITER

  	
   

  	
  By:

  	
  /S/ MARK G. FOLETTA

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  John C. Lechleiter

  	
   

  	
  Name:

  	
  Mark G. Foletta

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  President and Chief Executive Officer

  	
   

  	
  Title:

  	
  Senior Vice President, Finance and Chief
  Financial Officer

  
									



 

















 


EXHIBIT F


 


ESTIMATED
EQW MANUFACTURING INITIAL CAPITAL INVESTMENT - OUTSIDE OF THE FACILITY


 


	
  EQW-Dedicated Capital Outside of the Facility

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  [***]

  	
   

  



 


Notes:


 


Does
not include approximately $[***], which will be used in part to [***].


 


***Confidential Treatment
Requested


 

















 


EXHIBIT G


 


INTEREST
AMORTIZATION SCHEDULE


 


	
   

  	
   

  	
  Balance

  	
   

  	
  Cumulative

  Amort

  	
   

  
	
  Dec-05

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-06

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-06

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-06

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-06

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-06

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-06

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-06

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-06

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-06

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-06

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-06

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-06

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-07

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-07

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-07

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-07

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-07

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-07

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-07

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-07

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-07

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-07

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-07

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-07

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-08

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-08

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-08

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-08

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-08

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-08

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-08

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-08

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-08

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-08

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-08

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-08

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-09

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-09

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-09

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-09

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-09

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-09

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-09

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-09

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-09

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-09

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-09

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-09

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-10

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-10

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-10

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-10

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-10

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-10

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-10

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-10

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-10

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-10

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-10

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-10

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-11

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-11

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-11

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-11

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-11

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-11

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-11

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-11

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-11

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-11

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-11

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-11

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-12

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-12

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-12

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-12

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-12

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-12

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-12

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-12

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-12

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-12

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-12

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-12

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-13

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-13

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-13

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-13

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-13

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-13

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-13

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-13

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-13

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-13

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-13

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-13

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-14

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-14

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-14

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-14

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-14

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-14

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-14

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-14

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-14

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-14

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-14

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-14

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-15

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-15

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-15

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-15

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-15

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-15

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-15

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-15

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-15

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-15

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-15

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-15

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-16

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-16

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-16

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-16

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-16

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-16

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-16

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-16

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-16

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-16

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-16

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-16

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-17

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-17

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-17

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-17

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-17

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-17

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-17

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-17

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-17

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-17

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-17

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-17

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-18

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-18

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-18

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-18

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-18

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-18

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-18

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-18

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-18

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-18

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-18

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-18

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-19

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-19

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-19

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-19

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-19

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-19

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-19

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-19

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-19

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-19

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-19

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-19

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jan-20

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Feb-20

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Mar-20

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Apr-20

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  May-20

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jun-20

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Jul-20

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Aug-20

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Sep-20

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Oct-20

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Nov-20

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  
	
  Dec-20

  	
   

  	
  $

  	
  [ ***]

  	
   

  	
  $

  	
  [ ***]

  	
   

  



 


***Confidential Treatment
Requested


 

















 


EXHIBIT H


 


ESTIMATE OF
ACTUAL MANUFACTURING COSTS TEMPLATE


 


Section 1.1 &
1st 3.3 Exhibit


Actual
Manufacturing Costs


Q1 2XXX


 


	
   

  	
   

  	
  US

  	
   

  	
  OUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Headcount

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Contractors

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Compensation & Benefits

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Depreciation

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Maintenance/Repair/Utilities

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Purchased Services/Professional/Contractors

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Supplies & Materials

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other Site Expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  San Diego QC Lab & Depr of sites
  in Exh X

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other San Diego Allocations In

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Packaging Depr & Other Related Exp

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Factory & Inventory Losses

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other Variances/PPV/Use Yield

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Royalty Expense

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Expense

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Production Volumes

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per Unit COPS:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Raw Materials Excluding Delivery Device

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Device Delivery

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Packaging Materials & Expense

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Labor

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Depreciation

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Overhead

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Pen Cost

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


EXHIBIT I


 


SCOPE OF
THE RULE OF LILLY’S PERSON IN THE PLANT


 


Premise: The relationship between Lilly and
Amylin is as collaborative partners. Amylin is responsible for the day to day
manufacturing operations at the Ohio Site and Lilly will have access and rights
that would be expected under a typical collaborative agreement.


 


1. The Lilly Partner in the Plant (the “PIP”)
shall be a member of the Facility senior staff and subsequently involved in
meetings where EQW is discussed. The PIP may elect to involve Lilly subject
matter experts (“SMEs”) and secure their attendance at key meetings in order to
resolve issues or create improvements. Typical use of SMEs may include areas
such as supply chain, technical/process, finance, Quality, etc.


 


2. The PIP shall have complete exposure to
all EQW subjects and information. Said exposure and information shall be open
and immediate between the Parties.


 


3. The PIP will not be involved in Non-EQW
activities or topics such as Human Resources and/or Amylin internal business
activities that do not impact EQW.


 


4. The PIP will abide with all Facility
policies, practices and procedures at all times. Amylin will be responsible to
assure that Facility policies, practices and procedures do not conflict with
this Agreement.


 


5. The PIP will have access to all EQW
processes or functions in so far as said access does not jeopardize personal
safety or process integrity. Amylin and Lilly agree that the PIP will not
direct Amylin employees.


 


6. It is the PIP’s responsibility to engage
and discuss all significant concerns regarding EQW with Amylin’s Facility
General Manager (the “GM”) prior to discussing with the Facility senior staff.


 


7. Lilly acknowledges the GM’s responsibility
of providing direction and accountability of for the Facility. As such, the GM
is expected to have decision making responsibility aligned with meeting the
approved annual plan and other objectives for the Facility. If the GM and the
PIP are not aligned on a significant decision and/or direction, each of them
will seek to involve appropriate SMEs and use of other tools (such as the
decision making tool) to further inform the decision as appropriate. If the GM
and the PIP are still unable to reach alignment on decision/direction, then
they will take the issue to the MSC chairs for resolution. Lilly and Amylin
agree that action will not be taken on the disputed decision/direction until
agreement can be reached.


 


If Product Quality and/or personnel safety
would be jeopardized due to a delay in the decision/direction, then the GM has
the responsibility to make the decision and will notify the PIP and the MSC
chairs of the decision immediately. All efforts will be taken to resolve
time-sensitive issues in an expedient manner.


 


8. It is understood that the management of
the Facility is and will be governed by the good relationship of the Parties.
The parties agree that appointing the appropriate individuals into the GM and the
PIP roles that are adept at working collaborative partnerships will be critical
to the future success of the Facility.


 


While all the above are words to try and
indicate the best behaviors between partners; they are only as strong as the
good will and intentions of the partners to do the best for their company’s and
their patients.