Exhibit 10.44


 


LOAN
AGREEMENT


 


BETWEEN


 


AMYLIN
PHARMACEUTICALS, INC.


 


AND


 


ELI
LILLY AND COMPANY


 

















 


LOAN AGREEMENT


 


THIS LOAN AGREEMENT (the “Loan Agreement”) is made as of this 16th day of October, 2008 by and between AMYLIN PHARMACEUTICALS, INC., a Delaware corporation, having
a principal place of business at 9360 Towne Center Drive, San Diego,
California 92121 (“Amylin”), and ELI LILLY AND COMPANY, an Indiana corporation having a
principal place of business at Lilly Corporate Center, Indianapolis, Indiana 46285
(“Lilly”).


 


RECITALS


 


WHEREAS, Amylin and Lilly have
entered into that certain Collaboration Agreement dated as of September 19,
2002 as the same has, and shall hereafter be, amended from time to time  (the “Collaboration Agreement”);


 


WHEREAS, Amylin and Lilly have
agreed to enter into this Loan Agreement pursuant to which Amylin may obtain
credit from Lilly, subject to the terms and conditions stated herein, for
amounts up to the Loan Commitment; and


 


WHEREAS, Lilly is willing to
provide such credit to and in favor of Amylin, subject to the terms and
conditions of this Loan Agreement.


 


NOW, THEREFORE, in consideration
of the foregoing recitals and the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:


 


AGREEMENT


 


Section 1.                                          DEFINITIONS


 


1.1                               Defined
Terms. Unless otherwise defined in this Loan Agreement, all capitalized
terms shall have the meanings given them in the Collaboration Agreement. As
used in this Loan Agreement, the following terms shall have the following
respective meanings:


 


“Advance” means
the loans made, or to be made, pursuant to Section 2 of this Loan
Agreement.


 


“Advance Period”
has the meaning specified in Section 2.1.


 


“Amylin Ohio
LLC” means Amylin’s wholly-owned subsidiary organized as a Delaware
Limited Liability Company.


 


“Borrowing Request”
has the meaning set forth in Section 2.2.


 


“Business Day”
means any day, other than a Saturday, Sunday or holiday.


 


2

















 


“Change in
Control” means a transaction other than a bona fide equity financing
or series of financings in which any “person” or “group” (within the meaning of
Section 13(d) and 14(d)(2) of the Securities Exchange Act of
1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of a sufficient
number of shares of all classes of stock then outstanding of Amylin ordinarily
entitled to vote in the election of directors, empowering such “person” or “group”
to elect a majority of the Board of Directors of Amylin, who did not have such
power before such transaction


 


“Collaboration Agreement”
has the meaning specified in the Recitals.


 


“Effective Date”
has the meaning specified in Section 10.9.


 


“EQW Product”
means the Product developed as a fixed-dose injection of exenatide administered
once per week for any Indication for which such Product may be approved for
use.


 


“Event of Default”
means any of those conditions or events listed in Section 8 of this Loan
Agreement.


 


“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.


 


“GAAP” means
United States generally accepted accounting principles (including
principles of consolidation), in effect from time to time, consistently
applied.


 


“HSR Act” means
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.


 


“Impairment Charge”
means any impairment or write-off recorded by Amylin or Amylin Ohio LLC under
GAAP of all or substantially all of the non-depreciated capital investments in
and for the Facility.


 


“Indebtedness”
means, as of any given time, Amylin’s entire indebtedness to Lilly as of such
time arising under any of the Loan Documents in respect of principal, interest,
fees, costs or otherwise.


 


“LIBOR” means the
average of the 3-month London Inter-Bank Offer Rate compiled by the British
Bankers’ Association for deposits denominated in dollars (as reflected on the
applicable Telerate screen) for the five (5) business days prior to the
day Lilly disburses an Advance(s) to Amylin.


 


“Loan Commitment”
means the principal amount of $165,000,000.


 


“Loan Documents”
means collectively, this Loan Agreement, the Note, and any other agreement or
instrument executed pursuant to or in connection with the Obligations, as such
documents may be amended, modified, supplemented or restated from time to
time.  Loan Documents do not include the
Collaboration Agreement.


 


3

















 


“Material Adverse Effect”
means a material adverse effect upon: (a) the business, condition
(financial or otherwise), operations, performance or assets of Amylin taken as
a whole, (b) the ability of Amylin to perform its obligations under the
Loan Documents, or (c) the ability of Lilly to enforce the Obligations.


 


“Maturity Date”
means thirty-six (36) months following the date on which the Loan
Commitment shall have been fully advanced; provided, however, that the Maturity Date shall be no earlier than December 1,
2012 and no later than June 30, 2014.


 


“Note” means
the promissory note executed by Amylin evidencing the Indebtedness,
substantially in the form of Exhibit A attached
hereto.


 


“Obligations”
means all Indebtedness, liabilities, obligations, covenants and duties arising
under any of the Loan Documents owing by Amylin to Lilly whether direct or
indirect, absolute or contingent.


 


“Other Material Indebtedness”
means any indebtedness of Amylin for borrowed money other than the
Indebtedness, to the extent the aggregate amount outstanding, together with all
unfunded amounts committed in connection therewith, exceeds $30,000,000.


 


 “SEC” means the
United States Securities and Exchange Commission.


 


“Supply Agreement”
means the Exenatide Once Weekly Supply Agreement between Amylin Ohio LLC and
Lilly of even date herewith.


 


“Term” means
the period from the Effective Date until the later of (i) the expiration
of the Advance Period, and (ii) the date on which all outstanding
Indebtedness has been repaid in full; provided that
Amylin shall be entitled to terminate this Agreement and the Term hereunder
shall expire upon written notice to Lilly at any time (a) prior to any
Advance by Lilly to Amylin hereunder or (b) following repayment in full of
all then outstanding Indebtedness.


 


1.2                               Accounting
Terms.  All accounting terms not specifically
defined in this Loan Agreement shall be determined and construed in accordance
with GAAP.


 


1.3                               Singular
and Plural.  Where the context herein
requires, the singular number shall be deemed to include the plural, the
masculine gender shall include the feminine and neuter genders, and vice versa.


 


1.4                               Elements
of this Agreement.  When a reference
is made in this Loan Agreement to the Recitals, Articles, Sections, Exhibits or
Schedules, such reference is to a Recital, Article or Section of, or
an Exhibit or Schedule to, this Loan Agreement, unless otherwise
indicated.


 


Section 2.                                          AMOUNT
AND TERMS OF CREDIT


 


2.1                               Commitment.
Subject to the terms and conditions of this Loan Agreement, Lilly agrees to
make Advances to Amylin from time to time beginning on December 1, 2009
and ending on June 30, 2011 (the “Advance Period”).
Notwithstanding any other provision of this


 


4

















 


Loan Agreement, the aggregate principal amount of all Advances
outstanding at any time shall not exceed the amount of the Loan Commitment as
of such time.  The Advances shall be
evidenced by the Note executed by Amylin in the original principal amount of
the Loan Commitment, and may be used by Amylin for general corporate purposes.


 


2.2                               Requests
for Advances.  Amylin may request, no
more frequently than two (2) times in any calendar year, an Advance (each
such request, a “Borrowing Request”) by delivering
to Lilly a written request, which must also provide disbursement instructions
and include the certifications referred to in Section 4.1.  Amylin shall provide the amount (which amount
shall not be less than $50,000,000) and date of such Advance (which date must
be a Business Day not earlier than forty-five (45) Business Days following the
date of delivery of such Borrowing Request) with respect to and at the time of
each Borrowing Request; provided, however, that the date of the Advance may follow the date
of delivery of the Borrowing Request by only one (1) Business Day if the
full amount of such Advance is to be applied by Lilly to amounts owing by
Amylin to Lilly pursuant to the Collaboration Agreement (i.e.,
Amylin’s application of the proceeds of such Advance must be consistent with
the use of proceeds covenant set forth in this Loan Agreement).


 


2.3                               Disbursement
of Advances.  Subject to the terms
and conditions of this Loan Agreement, Lilly shall make available to Amylin the
amount of the Advance requested in accordance with the applicable Borrowing
Request.


 


Section 3.                                          INTEREST
AND PAYMENTS


 


3.1                               Interest.  All Indebtedness outstanding from time to
time shall bear interest at a rate per annum equal to LIBOR plus five and one
quarter percent (LIBOR + 5.25%) compounded annually; provided, however, that from and during the continuance of an Event
of Default, the outstanding Indebtedness shall bear interest at a rate per
annum equal to the greater of (a) eleven percent (11.0%) per annum, or (b) LIBOR
plus five and one quarter percent (LIBOR + 5.25%).  Interest shall be due and payable quarterly in
arrears on the first Business Day of each calendar quarter.  All interest chargeable under the Loan
Documents shall be computed on the basis of a three hundred sixty (360) day
year for the actual number of days elapsed.


 


3.2                               Principal
Repayment.  All outstanding
principal, together with all accrued and unpaid interest, shall be due and
payable on the Maturity Date.


 


3.3                               Early
Repayment.  Notwithstanding Section 3.2
or any other provision of this Loan Agreement, all outstanding Indebtedness
shall be due and payable immediately without any notice or other action by
Lilly upon the occurrence of any of the following events:  (a) the consummation of a Change in
Control with respect to Amylin, or (b) termination of the Collaboration
Agreement by Lilly pursuant to Section 12.2 thereof.


 


3.4                               Right
of Offset.  If and to the extent that
Amylin defaults in the making of any payment on its due date and such default
shall not have been cured, Lilly may, at its election, withhold from Amylin the
amount of any milestone, royalty, expense reimbursement or other payment of any
nature owing from Lilly to Amylin under the Collaboration Agreement, the 


 


5

















 


Supply Agreement, any Loan Document or otherwise, up to an aggregate
amount equal to the amount of the defaulted payment, and apply all amounts so
withheld to the repayment of the outstanding Indebtedness.  Upon such application, Lilly shall be deemed
to have satisfied its obligation to pay the withheld amount to Amylin in respect
of the applicable milestone, royalty, expense reimbursement or other payment,
and Amylin shall be deemed to have discharged outstanding Indebtedness in the
amount so applied.


 


3.5                               Right
to Apply Against Impairment Charge.  If and to the extent Amylin or Amylin
Ohio LLC incurs an Impairment Charge at any time during which any Indebtedness
remains outstanding, then Lilly may, at its election, instruct Amylin to apply
any or all of the Indebtedness outstanding against Lilly’s share of the
Impairment Charge under the Supply Agreement. 
Upon such application, Amylin shall be deemed to have discharged
outstanding Indebtedness in an amount equal to that applied against Lilly’s
share of the Impairment Charge. 
Notwithstanding anything to the contrary, if Amylin or Amylin Ohio LLC
incurs an Impairment Charge at any time during the Advance Period, Amylin shall
be deemed, without any further action or notice required hereunder, to have
forfeited its right to make any additional Borrowing Requests of Lilly.


 


3.6                               Payments
on Non-Business Day.  In the event
that any payment of any principal, interest, fees or any other amounts payable
by Amylin under or pursuant to this Loan Agreement, or under any other Loan
Document shall become due on any day which is not a Business Day, such due date
shall be extended to the next succeeding Business Day, and, to the extent
applicable, interest shall continue to accrue and be payable at the applicable
rate(s) for and during any such extension.


 


3.7                               Payment
Procedures.  All sums payable by
Amylin to Lilly under or pursuant to this Loan Agreement, or any other Loan
Document, whether principal, interest, or otherwise, shall be paid, when due,
directly to Lilly at the office of Lilly identified in the opening paragraph of
this Loan Agreement, or at such other location as Lilly may designate in
writing to Amylin from time to time, in immediately available United States
funds, and without setoff, deduction or counterclaim.


 


3.8                               Optional
Prepayments.  Amylin may prepay the
outstanding Indebtedness, in whole or in part, without premium or penalty, at
any time and from time to time.  Any
partial prepayment shall be applied first to any Indebtedness consisting of
amounts other than principal and interest, second to accrued but unpaid
interest and finally to outstanding principal. 
Any partial prepayment applied to outstanding principal shall be deemed
applied to the outstanding Advances in the order in which they were made.


 


3.9                               Collection
Costs.  All amounts payable by Amylin
under any of the Loan Documents shall be payable with all collection costs and
reasonable attorneys’ fees.


 


Section 4.                                          CONDITIONS
PRECEDENT


 


4.1                               Conditions
Precedent to Disbursement of Advances. The obligation of Lilly to make any
Advance, including the initial Advance hereunder, shall be subject to the
satisfaction


 


6














 


of each of the following conditions precedent on or before any
disbursement under such Advance:


 


(a)                                  Representations
and Warranties.  Each of the
representations and warranties of Amylin in this Loan Agreement shall be true
and correct in all material respects on and as of the date of the applicable
Borrowing Request with the same effect as though such representations and
warranties had been made on and as of such date, except that representations
and warranties made as of a particular date shall be true and correct in all
material respects only as of such particular date.


 


(b)                                  Performance.  Amylin shall have performed all material
obligations and agreements and complied with all material covenants to be
performed or complied with by it on or before the date of the applicable
Borrowing Request pursuant to the Loan Documents.


 


(c)                                  Collaboration
Agreement In Effect.  The
Collaboration Agreement shall not have been terminated pursuant to its terms,
and neither Lilly nor Amylin shall have given written notice of its intention
to terminate the Collaboration Agreement.


 


(d)                                  No
Default.  No Event of Default shall
have occurred and be continuing.


 


(e)                                  Certificate.  The applicable Borrowing Request shall
include a certification by Amylin’s chief financial officer, dated the date of
the applicable Borrowing Request, in form and substance reasonably satisfactory
to Lilly, to the effect that the conditions precedent set forth in this Section 4.1
have been satisfied.


 


4.2                               Closing
Documents.  Amylin shall provide to
Lilly on the Effective Date each of the following:


 


(a)                                  Note.  The Note, duly authorized, executed and
delivered by Amylin, and in compliance with the terms of this Loan Agreement.


 


(b)                                  Corporate
Documents.  A certificate of good
standing with respect to Amylin, issued by the Delaware Secretary of State and
reflecting Amylin’s existence in good standing and payment of all applicable
taxes and fees.


 


(c)                                  Opinion.   The written opinion of Amylin’s counsel,
addressed to Lilly, in form and substance acceptable to Lilly.


 


Section 5.                                          REPRESENTATIONS
AND WARRANTIES OF AMYLIN


 


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


 


5.1                               Organization,
Good Standing and Qualification. 
Amylin is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business.  Amylin is duly qualified to transact business
as a corporation and is in good standing in each jurisdiction in which the
failure so to qualify would have a material adverse effect upon Amylin’s
ability to perform its 


 


7

















 


obligations under any of the Loan Documents or the validity or
enforceability of, or Lilly’s rights and remedies under, this Loan Agreement or
any of the other Loan Documents.


 


5.2                               Authorization;
Due Execution.  Amylin has the
requisite corporate power and authority to enter into each of the Loan
Documents and to perform its obligations under the terms of each of the Loan
Documents.  All corporate action on the
part of Amylin, its officers, directors and stockholders necessary for the
authorization, execution, delivery and performance of each of the Loan
Documents has been taken.  Each of the
Loan Documents has been duly authorized, executed and delivered by Amylin and,
upon due execution and delivery by Lilly of this Loan Agreement, each of the
Loan Documents will each be a valid and binding agreement of Amylin,
enforceable in accordance with its respective terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors’ rights generally or by equitable principles.


 


5.3                               No
Defaults.  There exists no default
under the provisions of any instrument or agreement evidencing, governing or
otherwise relating to any Other Material Indebtedness, or with respect to any
other agreement, a default under which would reasonably be expected to have a
material adverse effect upon Amylin’s ability to perform its obligations under
any of the Loan Documents or the validity or enforceability of, or Lilly’s
rights and remedies under, this Loan Agreement or any of the other Loan
Documents.


 


5.4                               SEC
Filings.  Amylin has timely filed
with the SEC all reports, registration statements and other documents required
to be filed by it (the “SEC Filings”)
under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the “Securities Act”),
and the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the “Exchange Act”).  The SEC Filings were prepared in accordance
with and, as of the date on which each such SEC Filing was filed with the SEC,
complied in all material respects with, the applicable requirements of the
Securities Act or the Exchange Act, as the case may be.  None of such SEC Filings, including, without
limitation, any financial statements, exhibits and schedules included therein
and documents incorporated therein by reference, at the time filed, declared
effective or mailed, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. 
Except to the extent information contained in any of the SEC Filings has
been revised, corrected or superseded by a later filing of any such form,
report or document, none of the SEC Filings currently contains an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.


 


5.5                               Governmental
Consents.  No consent, approval,
order or authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state, local or provincial
governmental authority on the part of Amylin is required in connection with the
consummation of the transactions contemplated by the Loan Documents, except for
such approvals or consents as may be required under the HSR Act and such other
notices as may be required or permitted to be filed with certain state and
federal securities commissions after the Effective Date, which notices will be
filed on a timely basis.


 


8

















 


5.6                               No
Conflict.  Amylin’s execution,
delivery and performance of each of the Loan Documents does not violate any
provision of Amylin’s Certificate of Incorporation or Bylaws, each as amended
as of the date hereof (copies of which have been filed with Amylin’s SEC
Filings), any provision of any order, writ, judgment, injunction, decree,
determination or award to which Amylin is a party or by which it is bound, or,
to Amylin’s knowledge, any law, rule or regulation currently in effect
having applicability to Amylin.


 


5.7                               Litigation.  Except and to the extent disclosed to Lilly’s
Deputy General Counsel by Amylin’s Deputy General Counsel or in Amylin’s SEC
Filings, there is no action, litigation or proceeding pending or threatened
against or involving Amylin in any court or before or by any agency or
regulatory body which would reasonably be expected to result in a material
judgment or liability against Amylin or which would materially and adversely
affect (i) any material intellectual property of Amylin, (ii) any
material portion of Amylin’s assets, (iii) the income of Amylin, or (iv) the
right of Amylin to carry on its businesses as now conducted or as intended to
be conducted.


 


5.8                               Payment
of Taxes.  Amylin has filed all tax
returns which were required to be filed by it prior to and as of the date of
this Loan Agreement.  Amylin has paid all
taxes and assessments which to Amylin’s knowledge are payable by it, to the
extent that the same have become due and payable and before they became
delinquent, except for any taxes or assessments that are being contested in
good faith by appropriate proceedings properly instituted and diligently conducted.  Amylin does not know of any proposed material
tax assessment against it or any of its properties for which adequate provision
has not been made on its books.


 


5.9                               Compliance.  Amylin is in compliance with and in
conformity to all laws, ordinances, rules, regulations and all other legal
requirements, the violation of which would have a material, adverse effect on
its businesses, financial condition or properties.


 


5.10                        Financial
Statements.  The financial statements
of Amylin included in its SEC Filings correctly and fairly present the
financial condition, results of operations and cash flows of Amylin as of the
dates and for the periods shown and covered thereby, in accordance with GAAP
consistently applied, except that any such financial statements covering less
than a full year may not include normal year-end adjustments or complete
footnote disclosures.  Since the date of
the most recent such financial statements, there has been no Material Adverse
Effect.


 


5.11                        Full
Disclosure; Survival.  None of the
representations or warranties furnished by Amylin to Lilly in connection with
any of the Loan Documents contains or will contain any untrue statement or
omits or will omit a material fact necessary to make the statements contained
therein, in light of the circumstances when made, not misleading.  All representations and warranties made by
Amylin under or in connection with any of the Loan Documents shall survive the
making of the Advances provided for herein and issuance and delivery of the
Note to Lilly, notwithstanding any investigation made by Lilly or on Lilly’s
behalf.


 


9

















 


Section 6.                                          REPRESENTATIONS
AND WARRANTIES OF LILLY


 


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


 


6.1                               Authorization;
Due Execution.  Subject to Section 10.9,
Lilly has the requisite corporate power and authority to enter into this Loan
Agreement and to perform its obligations under the terms of this Loan Agreement
and the Loan Documents.  Subject to Section 10.9,
all corporate action on the part of Lilly, its officers, directors and
stockholders necessary for the authorization, execution, delivery and
performance of this Loan Agreement and the Loan Documents have been taken.  Subject to Section 10.9, this Loan
Agreement has been duly authorized, executed and delivered by Lilly, and, upon
due execution and delivery by Amylin, this Loan Agreement will be a valid and
binding agreement of Lilly, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally or by
equitable principles.


 


6.2                               Purchase
Entirely for Own Account.  This Loan
Agreement is made with Lilly in reliance upon Lilly’s representation to Amylin,
which by Lilly’s execution of this Loan Agreement it hereby confirms, that the
Note will be acquired for investment for Lilly’s own account, not as a nominee
or agent, and not with a view to the resale or distribution of any part
thereof, and that Lilly has no present intention of selling, granting any
participation in, or otherwise distributing the same.  By executing this Loan Agreement, Lilly
further represents that it does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to the Note.


 


6.3                               Disclosure
of Information.  Lilly has received
all the information that it has requested and that it considers necessary or
appropriate for deciding whether to enter into this Loan Agreement.  Lilly further represents that it has had an
opportunity to ask questions and receive answers from Amylin regarding the
terms and conditions of the offering of the Note.


 


6.4                               Investment
Experience.  Lilly is an investor in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Note.  Lilly also represents it has not been
organized solely for the purpose of acquiring the Note.


 


6.5                               Accredited
Investor.  Lilly is an “accredited
investor” as such term is defined in Rule 501 of the General Rules and
Regulations prescribed by the SEC pursuant to the Securities Act.


 


6.6                               Restricted
Securities.  Lilly understands that (a) the
Note has not been registered under the Securities Act by reason of a specific
exemption therefrom, that such securities must be held by it indefinitely and
that Lilly must, therefore, bear the economic risk of such investment
indefinitely, unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration; and (b) each
certificate representing the Note will be endorsed with the following legend:


 


10

















 


THIS PROMISSORY
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  NO SALE OR DISPOSITION MAY BE EFFECTED
EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY
TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT
OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.;


 


and (c) Amylin will
instruct any transfer agent not to register the transfer of the Note (or any
portion thereof) unless the conditions specified in the foregoing legend are
satisfied, until such time as a transfer is made in compliance with the
Securities Act and this Loan Agreement.


 


Section 7.                                          COVENANTS


 


Amylin covenants and agrees that, during the Term, it
will:


 


7.1                               Maintenance
of Existence and Rights.  Maintain and preserve in full
force and effect its existence and all rights, contracts, licenses, leases,
qualifications, privileges, franchises and other authority necessary for the
conduct of its business, and qualify and remain qualified to do business in
each jurisdiction in which such qualification is material to its business and
operations or ownership of its properties, except where the lapsing of any of
the foregoing would not cause or result in a material adverse effect upon
Amylin’s ability to perform its obligations under any of the Loan Documents or
the validity or enforceability of, or Lilly’s rights and remedies under, this
Loan Agreement or any of the other Loan Documents.


 


7.2                               Governmental
and Other Approvals.  Apply for,
obtain and maintain in effect, as applicable, all material authorizations,
consents, approvals, licenses, qualifications, exemptions, filings,
declarations and registrations (whether with any court, governmental agency,
regulatory authority, securities exchange or otherwise) which are necessary in
connection with the execution, delivery and performance by Amylin of this Loan
Agreement, the Loan Documents, or any other documents or instruments to be
executed or delivered by Amylin, in connection therewith or herewith and the
transactions consummated or to be consummated hereunder or thereunder.


 


7.3                               Compliance
with Laws.  Comply
in all material respects with all laws, rules and regulations applicable
to Amylin, except where Amylin’s failure to comply with any of the foregoing
would not cause or result in a material adverse effect upon Amylin’s ability to
perform its obligations under any of the Loan Documents or the validity or
enforceability of, or Lilly’s rights and remedies under, this Loan Agreement or
any of the other Loan Documents.


 


7.4                               Use
of Proceeds.  Use the proceeds of the
Advances solely for business purposes and not for personal, family, household
or agricultural purposes.


 


7.5                               Payment
of Taxes.  Pay and discharge (a) all
taxes, assessments and governmental charges or levies imposed upon it or its
income or property prior to the date on which penalties attach thereto and (b) all
lawful claims and debts which, if unpaid, might become 


 


11

















 


a lien upon any of its property; provided that
Amylin shall not be required to pay any such tax, assessment, charge, levy,
claim or debt for which Amylin has obtained a bond or insurance, or for which
it has established a reserve, if the payment thereof is being contested in good
faith and by appropriate proceedings which are being reasonably and diligently
pursued.


 


7.6                               Financial
and Other Reports.  Maintain a
standard system of accounting in accordance with GAAP and, except to the extent
publicly available in the SEC’s EDGAR System, furnish or cause to be furnished
to Lilly:


 


(a)                                  As
soon as practicable, and in any event within forty-five (45) days (or such
shorter period of time as is required by the SEC for filing of quarterly
financial statements) after the end of each of the first three fiscal quarters
in each fiscal year, the consolidated balance sheet of Amylin and its
subsidiaries as at the end of such period and the related consolidated
statements of income and cash flows of Amylin and its subsidiaries for such
fiscal quarter and for the period from the beginning of the then current fiscal
year to the end of such fiscal quarter, certified by the chief financial
officer or treasurer of Amylin as fairly presenting in all material respects
the consolidated financial position of Amylin and its subsidiaries as at the
dates indicated and the consolidated results of their operations and cash flows
for the periods indicated in accordance with GAAP.  Delivery within the time period specified
above of copies of Amylin’s Quarterly Reports on Form 10-Q prepared in
compliance with the requirements of the Exchange Act, in the form filed with
the SEC, shall be deemed to satisfy the requirements of this paragraph.


 


(b)                                  As
soon as practicable, and in any event within ninety (90) days (or such shorter
period of time as is required by the SEC for filing of annual financial
statements) after the end of each fiscal year, (i) the consolidated
balance sheet of Amylin and its subsidiaries as at the end of such fiscal year
and the related consolidated statements of income, stockholders’ equity and
cash flows of Amylin and its subsidiaries for such fiscal year and, in
comparative form the corresponding figures for the previous fiscal year and (ii) an
audit report on the items listed in clause (i) hereof of independent
certified public accountants of recognized national standing, which audit
report shall be unqualified and shall state that such financial statements
fairly present in all material respects the consolidated financial position of
Amylin and its subsidiaries as at the dates indicated and the consolidated
results of their operations and cash flows for the periods indicated in
conformity with GAAP and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards. 
Delivery within the time period specified above of Amylin’s Annual
Report on Form 10-K for such fiscal year prepared in accordance with the
requirements of the Exchange Act, in the form filed with the SEC, shall be
deemed to satisfy the foregoing requirements of this paragraph; provided that the auditors’ report contained therein
satisfies the requirements specified in clause (ii) above.


 


(c)                                  Such
other reports and additional financial and other information relating to the
business, affairs and financial condition of Amylin as Lilly reasonably may
request in writing from time to time (subject to Amylin’s obligations to third
parties and provided that Amylin shall have no obligation to provide access to information
that it deems highly confidential).  Any
information disclosed to Lilly pursuant to this Agreement shall be deemed


 


12














 


Amylin Confidential Information subject to the provisions of Article 6
of the Collaboration Agreement.


 


7.7                               Litigation.  Notify Lilly in writing, promptly upon
learning thereof, of any litigation commenced against Amylin which would
reasonably be expected to have a Material Adverse Effect.


 


7.8                               Notices/Material
Developments.  Promptly (and in any
event within three (3) calendar days) after obtaining knowledge of the
occurrence of any event that has resulted in or would reasonably be expected to
result in a Material Adverse Effect, deliver to Lilly a statement of the chief
executive officer or chief financial officer of Amylin setting forth the
details of each such event and the action which Amylin has taken and proposes
to take with respect thereto.  In addition,
Amylin shall immediately inform Lilly by written notice of the occurrence of
any event or condition of any nature which constitutes an Event of Default.


 


Section 8.                                          EVENTS
OF DEFAULT


 


8.1                               Events
of Default.  The occurrence or
existence of any of the following conditions or events shall constitute an “Event
of Default” hereunder:


 


(a)                                  Failure
to Pay.  Amylin shall fail to pay,
when due, any principal, interest or other sums due to Lilly under this Loan
Agreement and such failure shall continue for a period of five (5) days;


 


(b)                                  Other
Defaults Under the Loan Documents. 
Any default in the observance or performance of any of the other
conditions, covenants or agreements of Amylin set forth in this Loan Agreement
or in any Loan Document, and continuance thereof for a period of thirty (30)
days;


 


(c)                                  Insolvency;
Bankruptcy.  If (i) Amylin
becomes insolvent or generally fails to pay, or admits in writing its inability
to pay, its debts as they mature, or applies for, consents to, or acquiesces in
the appointment of a trustee, receiver, liquidator, conservator or other
custodian for itself, or a substantial part of its property, or makes a general
assignment for the benefit of creditors; (ii) Amylin files a voluntary
petition in bankruptcy or a trustee, receiver, liquidator, conservator or other
custodian is appointed for Amylin or for a substantial part of its property; (iii) any
bankruptcy, reorganization, debt arrangement, or other proceedings under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is
instituted by or against Amylin, and the same is consented to or acquiesced by
Amylin,  or otherwise remains undismissed
for sixty (60) days; or (iv) any warrant of attachment is issued against
any substantial part of the property of Amylin which is not released within
thirty (30) days of service thereof.


 


(d)                                  Representations
and Warranties.  Any representation
or warranty made by Amylin in any Loan Document shall fail to be true and
correct in any material respect when made or deemed to have been made.


 


(e)                                  Default
with Respect to Other Material Indebtedness.  Amylin shall default with respect to (i) any
payment of principal of or interest on any Other Material 


 


13

















 


Indebtedness and fails to cure such default within the required cure
period, or (ii) the performance of any other covenant, term or condition
contained in any agreement or instrument under which any Other Material
Indebtedness is created or governed if the effect of such performance default
is to accelerate the maturity of any Other Material Indebtedness or to permit
the holder of any such Other Material Indebtedness to accelerate the maturity
of any Other Material Indebtedness.


 


Section 9.                                          LILLY’S
RIGHTS AND REMEDIES


 


9.1                               Rights
and Remedies.  Upon the occurrence
and during the continuance of an Event of Default, Lilly may, at its election,
without notice of its election and without demand, do any one or more of the
following, all of which are authorized by Amylin:


 


(a)                                  Declare
all Obligations immediately due and payable (provided,  that
upon the occurrence of an Event of Default described in Section 8.1(c),
all Obligations shall become immediately due and payable without any action by
Lilly);


 


(b)                                  Cease
advancing money or extending credit to or for the benefit of Amylin under this
Loan Agreement; and


 


(c)                                  Terminate
this Loan Agreement as to any future liability or obligation of Lilly, but
without affecting the Obligations of Amylin to Lilly.


 


9.2                               Waiver
of Defaults.  No Event of Default
shall be waived by Lilly except in a written instrument specifying the scope
and terms of such waiver and signed by an authorized officer of Lilly, and such
waiver shall be effective only for the specific times and purposes given.  No single or partial exercise of any right,
power or privilege hereunder, nor any delay in the exercise thereof, shall
preclude other or further exercise of Lilly’s rights.  No waiver of any Event of Default shall
extend to any other or further Event of Default.  No forbearance on the part of Lilly in
enforcing any of Lilly’s rights or remedies hereunder or under any of the other
Loan Documents shall constitute a waiver of any of its rights or remedies.


 


9.3                               Remedies
Cumulative.  Lilly’s rights and
remedies under this Loan Agreement, the Loan Documents, and all other
agreements shall be cumulative.  Lilly
shall have all other rights and remedies not expressly set forth herein as
provided under applicable law, or in equity. 
No exercise by Lilly of one right or remedy shall be deemed an election,
and no waiver by Lilly of any Event of Default on Amylin’s part shall be deemed
a continuing waiver.  No delay by Lilly
shall constitute a waiver, election, or acquiescence by it.  No waiver by Lilly shall be effective unless made
in a written document signed on behalf of Lilly and then shall be effective
only in the specific instance and for the specific purpose for which it was
given.


 


9.4                               Waiver.  Amylin waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
notice of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Lilly on which Amylin may in any way be liable.


 


14

















 


Section 10.                                   MISCELLANEOUS


 


10.1                        Governing
Law.  This Loan Agreement, and each
of the other Loan Documents shall be governed by and construed in accordance
with the laws of the State of New York.


 


10.2                        Assignment.  This
Loan Agreement will inure to the benefit and be binding upon each party, its
successors and assigns.  The Loan
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 this Loan Agreement and its
rights and obligations hereunder to an affiliate of such party or in connection
with the transfer or sale of all or substantially all of its assets or business
to which this Loan Agreement relates, or in the event of its merger or
consolidation or Change in Control or similar transaction.  The rights and obligations of the parties
under this Loan 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 will be void.


 


10.3                        Entire Agreement.  This Loan
Agreement, the exhibits and schedules hereto, the other Loan Documents, the
Collaboration Agreement and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof.


 


10.4                        Severability.  In case any
provision of this Loan Agreement shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.


 


10.5                        Titles and Subtitles.  The titles of
the sections and subsections of the Loan Agreement are for convenience of
reference only and are not to be considered in construing this Loan Agreement.


 


10.6                        Notices.  All
notices which are required or permitted hereunder will be in writing and
sufficient if delivered personally, sent by facsimile or email to a current fax
number or e-mail address for the recipient (and promptly confirmed by personal
delivery, registered or certified mail or overnight courier), sent by
nationally-recognized overnight courier or sent by registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:


 


	
  if to Amylin, to:

  	
   

  	
  Amylin Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  9360 Towne Centre Drive

  
	
   

  	
   

  	
  San Diego, California 92121

  
	
   

  	
   

  	
  Attention: President and Chief Executive Officer

  
	
   

  	
   

  	
  Fax No.: (858) 334-1237

  
	
   

  	
   

  	
  E-Mail: daniel.bradbury@amylin.com

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Fax No.: (858) 754-0973

  
	
   

  	
   

  	
  E-Mail: marcea.lloyd@amylin.com

  



 


15

















 


	
  if to Lilly, to:

  	
   

  	
  Eli Lilly and Company

  
	
   

  	
   

  	
  Lilly Corporate Center

  
	
   

  	
   

  	
  Indianapolis, IN 46285

  
	
   

  	
   

  	
  Attention: General Counsel

  



 


or to
such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such notice
will be deemed to have been given when delivered if personally delivered or
sent by facsimile on a Business Day, on the Business Day after dispatch if sent
by nationally-recognized overnight courier and on the third Business Day
following the date of mailing if sent by mail.


 


10.7                        Waiver.  The waiver by either party hereto of any right
hereunder, or the failure to perform, or a breach by the other party will not
be deemed a waiver of any other right hereunder or of any other breach or
failure by said other party whether of a similar nature or otherwise.


 


10.8                        Counterparts.  This
Loan Agreement may be executed in two or more counterparts, each of which will
be deemed an original, but all of which together will constitute one and the
same instrument.


 


10.9                        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.


 


[The signature page follows.]


 


16

















 


WITNESS the due execution hereof
as of the day and year first above written.


 


	
  ELI LILLY AND COMPANY

  	
  AMYLIN PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John C. Lechleiter

  	
  By:

  	
  /s/ Mark G. Foletta

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  John C. Lechleiter

  	
  Name:

  	
  Mark Foletta

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President and Chief
  Executive Officer

  	
  Title:

  	
  Senior Vice President,
  Finance and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
						



 


[SIGNATURE PAGE TO LOAN
AGREEMENT]


 

















 


EXHIBIT A


 


THIS PROMISSORY NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  NO SALE OR DISPOSITION MAY BE EFFECTED
EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY
TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT
OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.


 


PROMISSORY
NOTE


 


	
  $165,000,000

  	
  San Diego,
  California

  
	
   

  	
                  ,
  2008

  



 


AMYLIN
PHARMACEUTICALS , INC., a Delaware corporation (“Amylin”),
for value received, hereby promises to pay to the order of ELI LILLY
AND COMPANY, an Indiana corporation (“Lilly”),
in lawful money of the United States of America, the principal amount of
$165,000,000 or the aggregate principal amount of all outstanding Advances,
together with interest as provided for below, payable on the dates, in the
amounts and in the manner set forth below.


 


1.              Loan Agreement.  This Promissory Note is the Note referred
to in that certain Loan Agreement, dated as of October     ,
2008, by and between Amylin and Lilly (as the same may be amended,
supplemented, restated or otherwise modified from time to time, the “Loan Agreement”).  Capitalized terms used herein without
definitions shall have the meanings given to such terms in the Loan Agreement.


 


2.              Requests for Advances.  Amylin may request an Advance by
delivering to Lilly a Borrowing Request pursuant to Section 2.2 of the
Loan Agreement.


 


3.              Principal
Payments.  Subject to the terms and
conditions of the Loan Agreement, the total outstanding balance of all
Indebtedness shall be due and payable in accordance with the terms of the Loan
Agreement.


 


4.              Interest.  The outstanding Indebtedness shall accrue
interest at the rate or rates per annum set
forth in the Loan Agreement.


 


5.              Payment on
Non-Business Day.  In the event that
any payment of principal, interest, fees or any other amounts payable by Amylin
under or pursuant to this Note shall become due on any day which is not a
Business Day, such due date shall be extended to the next succeeding Business
Day, and, to the extent applicable, interest shall continue to accrue and be
payable at the applicable rate for and during any such extension.


 


6.              Default.  Upon the occurrence of an Event of
Default under the Loan Agreement or any of the other Loan Documents, all unpaid
principal, accrued interest and other amounts owing 


 


1

















 


hereunder shall
become immediately due and payable as provided in the Loan Agreement, the other
Loan Documents and applicable law.


 


7.              Waivers.  Amylin hereby waives presentment, demand,
protest, notice of dishonor, notice of demand or intent to demand, notice of
acceleration or intent to accelerate, and all other notices, and Amylin agrees
that no extension or indulgence to Amylin or the release or substitution of
Amylin, whether with or without notice, shall affect the obligations of
Amylin.  The right to plead any and all
statutes of limitation as a defense to any demands hereunder is hereby waived
by Amylin to the full extent permitted by law. 
In addition, Amylin waives all defenses or rights to discharge available
to it and waives all other suretyship defenses or rights to discharge.


 


8.              Governing Law.  This Note shall be governed by and construed
in accordance with the laws of the State of New York.


 


	
  AMYLIN:

  	
  AMYLIN PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  



 


2