Document:

Exhibit 4.6

 

Amylin Pharmaceuticals, Inc.

 

2.50% Convertible Senior Notes due 2011

 

Registration Rights Agreement

 

April 6, 2004

 

Morgan Stanley & Co. Incorporated

Goldman, Sachs & Co.

c/o Morgan Stanley & Co. Incorporated

1585 Broadway

New York, NY 10036

 

Ladies and Gentlemen:

 

Amylin
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), proposes to
issue and sell to the Purchasers (as defined herein) upon the terms set forth
in the Purchase Agreement (as defined herein) its 2.50% Convertible Senior
Notes due 2011 (the “Securities”).  As
an inducement to the Purchasers to enter into the Purchase Agreement and in
satisfaction of a condition to the obligations of the Purchasers thereunder,
the Company agrees with the Purchasers for the benefit of Holders (as defined
herein) from time to time of the Registrable Securities (as defined herein) as
follows:

 

1.             Definitions.

 

(a)           Capitalized
terms used herein without definition shall have the meanings ascribed to them
in the Purchase Agreement.  As used in this
Agreement, the following defined terms shall have the following meanings:

 

“Act” or “Securities Act”
means the United States Securities Act of 1933, as amended.

 

“Affiliate”
of any specified person means any other person which, directly or indirectly,
is in control of, is controlled by, or is under common control with such
specified person.  For purposes of this
definition, control of a person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such person whether by
contract or

 

 

otherwise; and the
terms “controlling” and “controlled” have meanings correlative to the
foregoing.

 

“Closing
Date” means the First Time of Delivery as defined in the Purchase
Agreement.

 

“Commission”
means the United States Securities and Exchange Commission, or any other
federal agency at the time administering the Exchange Act or the Securities
Act, whichever is the relevant statute for the particular purpose.

 

“Common
Stock” means the Company’s common stock, par value $0.001 per share,
together with any associated preferred share purchase rights.

 

“DTC” means The Depository Trust Company.

 

“Effective Failure” has the meaning assigned thereto in
Section 7(b) hereof.

 

“Effectiveness Period” has the meaning assigned thereto in
Section 2(b)(i) hereof.

 

“Effective Time” means the time at which the Commission
declares the Shelf Registration Statement effective or at which the Shelf
Registration Statement otherwise becomes effective.

 

“Electing Holder” has the meaning assigned thereto in
Section 3(a)(iii) hereof.

 

“Exchange Act” means the United States Securities
Exchange Act of 1934, as amended.

 

“Holder” means, any Record Holder and any person
that has a beneficial interest in any Registrable Security in book-entry form.

 

“Indenture” means the Indenture, dated as of April 6,
2004, between the Company and J.P. Morgan Trust Company, National Association,
as amended and supplemented from time to time in accordance with its terms.

 

“Liquidated Damages” has the meaning assigned thereto in
Section 7(a) hereof.

 

“Managing Underwriters” means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, conducted pursuant to Section 6 hereof.

 

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“NASD Rules” means the Rules of the National
Association of Securities Dealers, Inc., as amended from time to time.

 

“Notice and Questionnaire” means a Notice of Registration Statement
and Selling Securityholder Questionnaire substantially in the form of Appendix
A hereto.

 

The term “person” means
an individual, partnership, corporation, trust or unincorporated organization,
or a government or agency or political subdivision thereof.

 

“Prospectus” means the prospectus (including, without
limitation, any preliminary prospectus, any final prospectus and any prospectus
that discloses information previously omitted from a prospectus filed as part
of an effective registration statement in reliance upon Rule 430A under
the Act) included in the Shelf Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by the Shelf
Registration Statement and by all other amendments and supplements to such
prospectus, including all material incorporated by reference in such prospectus
and all documents filed after the date of such prospectus by the Company under
the Exchange Act and incorporated by reference therein.

 

“Purchase Agreement” means the purchase agreement, dated as
of March 31, 2004, between the Purchasers and the Company relating to the
Securities.

 

“Purchasers” means the Purchasers named in
Schedule I to the Purchase Agreement.

 

“Record Holders”
means any person that is the record owner of Registrable Securities.

 

“Registrable Securities” means all or any portion of the
Securities issued from time to time under the Indenture in registered form and
the shares of Common Stock issuable upon conversion, repurchase or redemption
of such Securities; provided, however, that a security ceases to
be a Registrable Security when it is no longer a Restricted Security.

 

“Registration Default” has the meaning assigned thereto in
Section 7(a) hereof.

 

“Restricted Security” means any Security or share of Common
Stock issuable upon conversion thereof except any such Security or share of
Common Stock that (i) has been effectively registered under the Securities
Act and sold in a manner contemplated by the Shelf Registration Statement, (ii) has
been transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k)
of such Rule 144 (or any successor provision thereto), or (iii) has
otherwise been transferred and a new Security or share of Common Stock not
subject to transfer restrictions under the

 

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Securities Act has
been delivered by or on behalf of the Company in accordance with the Indenture.

 

“Rules and Regulations” means the published rules and
regulations of the Commission promulgated under the Securities Act or the
Exchange Act, as in effect at any relevant time.

 

“Shelf Registration” means a registration effected pursuant
to Section 2 hereof.

 

“Shelf Registration Statement” means a “shelf” registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar
rule that may be adopted by the Commission, filed by the Company pursuant to
the provisions of Section 2 of this Agreement, including the Prospectus
contained therein, any amendments and supplements to such registration
statement, including post-effective amendments, and all exhibits and all
material incorporated by reference in such registration statement.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939,
or any successor thereto, and the rules, regulations and forms promulgated
thereunder, as the same shall be amended from time to time.

 

The term “underwriter”
means any underwriter of Registrable Securities in connection with an offering
thereof under a Shelf Registration Statement.

 

(b)           Wherever
there is a reference in this Agreement to a percentage of the “principal
amount” of Registrable Securities or to a percentage of Registrable Securities,
Common Stock shall be treated as representing the principal amount of
Securities that was surrendered for conversion or exchange in order to receive
such number of shares of Common Stock.

 

2.             Shelf Registration.

 

(a)           The Company shall, no later than 90
calendar days following the Closing Date, file with the Commission a Shelf
Registration Statement relating to the offer and sale of the Registrable
Securities by the Holders from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such Shelf Registration
Statement and, thereafter, shall use its reasonable best efforts to cause such
Shelf Registration Statement to be declared effective under the Act no later
than 180 calendar days following the Closing Date;  provided,
however,
that the Company may, upon written notice to all Electing Holders, postpone
having the Shelf Registration Statement declared effective for a reasonable
period not to exceed 90 days after the 180th calendar day following the Closing
Date if the Company possesses material non-public information, the disclosure
of which would have a material adverse effect on the Company and its
subsidiaries taken as a whole; provided, further,

 

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however, that no
Holder shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement or to use the Prospectus forming a part thereof for
resales of Registrable Securities unless such Holder is an Electing
Holder.  The Company may furnish any
notice to any Holder pursuant to this Section 2(a) by furnishing the notice to
the Holder’s e-mail address indicated on the Notice and Questionnaire.

 

(b)           The
Company shall use its reasonable best efforts:

 

(i)            to keep the Shelf
Registration Statement continuously effective in order to permit the Prospectus
forming a part thereof to be usable by Holders until the earlier of (1) the
sale of all Registrable Securities registered under the Shelf Registration
Statement; or (2) the expiration of the period referred to in Rule 144(k) under
the Act with respect to all Registrable Securities held by Persons that are not
Affiliates of the Company, or any successor provision (such period being
referred to herein as the “Effectiveness Period”);

 

(ii)           after the Effective
Time of the Shelf Registration Statement, as promptly as practicable upon the
request of any Holder of Registrable Securities that is not then an Electing
Holder, to take any action reasonably necessary to enable such Holder to use
the Prospectus forming a part thereof for offers and resales of Registrable
Securities, including, without limitation, any action necessary to identify
such Holder as a selling securityholder in the Shelf Registration Statement; provided,
however, that nothing in this subparagraph shall relieve such Holder
of the obligation to return a completed and signed Notice and Questionnaire to
the Company in accordance with Section 3(a)(ii) hereof; and

 

(iii)          if at any time the
Securities, pursuant to Article XIV of the Indenture, are convertible into
securities other than Common Stock, to cause, or to cause any successor under
the Indenture to cause, such securities to be included in the Shelf
Registration Statement or otherwise registered under the Act no later than the
date on which the Securities may then be convertible into such securities.

 

The Company shall be
deemed not to have used its reasonable best efforts to keep the Shelf
Registration Statement effective during the requisite period if the Company
voluntarily takes any action that would result in Holders of Registrable
Securities covered thereby not being able to offer and sell any of such
Registrable Securities during that period, unless such action is (A)
required by applicable law and the Company thereafter promptly complies with
the requirements of paragraph 3(j) below or (B) permitted pursuant to Section
2(c) below.

 

(c)           The Company may suspend the use of
the Prospectus for a period not to exceed 30 days in any 90-day period or an
aggregate of 90 days in any 12-month period if the Board of Directors of the
Company shall have determined in good faith that because of valid business
reasons (not including avoidance of the Company’s obligations hereunder),
including the

 

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acquisition or
divestiture of assets, pending corporate developments and similar events, it is
in the best interests of the Company to suspend such use, and prior to
suspending such use the Company provides the Electing Holders with written
notice of such suspension, which notice need not specify the nature of the
event giving rise to such suspension. 
The Company may furnish any notice to any Holder pursuant to this
Section 2(c) by furnishing the notice to the Holder’s e-mail address indicated
on the Notice and Questionnaire.

 

3.             Registration Procedures.  In connection with the Shelf Registration
Statement, the following provisions shall apply:

 

(a) (i)       Not less than 30 calendar days prior to
the Effective Time of the Shelf Registration Statement, the Company shall mail
the Notice and Questionnaire to the Holders of Registrable Securities that it
has been able to identify from information provided by DTC.  No Holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement as of the Effective
Time, and no Holder shall be entitled to use the Prospectus forming a part
thereof for offers and resales of Registrable Securities at any time, unless
such Holder has returned a completed and signed Notice and Questionnaire to the
Company by the deadline for response set forth therein; provided, however, Holders
of Registrable Securities shall have at least 28 calendar days from the date on
which the Notice and Questionnaire is first mailed to such Holders to return a
completed and signed Notice and Questionnaire to the Company.  As a result of comments from the Commission,
the Company may be required to send out a Supplemental Notice and
Questionnaire.  In connection with any
such Supplemental Notice and Questionnaire, Holders of Registrable Securities
may have less than 28 calendar days from the date on which the Supplemental
Notice and Questionnaire is first mailed to such Holders to return a completed
and signed Supplemental Notice and Questionnaire to the Company.

 

(ii)           After the Effective
Time of the Shelf Registration Statement, the Company shall, upon the request
of any Holder of Registrable Securities that is not then an Electing Holder,
promptly send a Notice and Questionnaire to such Holder.  The Company shall not be required to take
any action to name such Holder as a selling securityholder in the Shelf
Registration Statement or to enable such Holder to use the Prospectus forming a
part thereof for offers and resales of Registrable Securities until such Holder
has returned a completed and signed Notice and Questionnaire to the Company.

 

(iii)          The term “Electing
Holder” shall mean any Holder of Registrable Securities that has returned a
completed and signed Notice and Questionnaire to the Company in accordance with
Section 3(a)(i) or 3(a)(ii) hereof.

 

(b)           The Company shall furnish to each
Electing Holder, prior to the Effective Time, a copy of the Shelf Registration
Statement initially filed with the Commission, and shall furnish to such
Holders, prior to the filing thereof with the Commission, copies of each
amendment

 

6

 

thereto and each amendment or supplement, if any, to the Prospectus
included therein, and shall use its reasonable best efforts to reflect in each
such document, at the Effective Time or when so filed with the Commission, as
the case may be, such comments as such Holders and their respective counsel
reasonably may propose.  The Company may
furnish any document to any Holder pursuant to this Section 3(b) by furnishing
the document to the Holder’s e-mail address indicated on the Notice and
Questionnaire.

 

(c)           The Company shall promptly take such
action as may be necessary so that (i) subject to Section 2(c), each
of the Shelf Registration Statement and any amendment thereto and the
Prospectus forming a part thereof and any amendment or supplement thereto (and
each report or other document incorporated therein by reference in each case)
complies in all material respects with the Securities Act and the Exchange Act
and the respective rules and regulations thereunder, (ii) each of the Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) subject to Section 2(c), each of the
Prospectus forming a part of the Shelf Registration Statement, and any
amendment or supplement to such Prospectus, does not at any time during the
Effectiveness Period include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

 

(d)           The Company shall promptly
advise each Electing Holder, and shall confirm such advice in writing if
so requested by any such Electing Holder:

 

(i)            when a Shelf
Registration Statement and any amendment thereto has been filed with the
Commission and when a Shelf Registration Statement or any post-effective
amendment thereto has become effective, in each case by making a public
announcement thereof by release made to PR Newswire;

 

(ii)           of any request by
the Commission for amendments or supplements to the Shelf Registration
Statement or the Prospectus included therein or for additional information;

 

(iii)          of the issuance by
the Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement or the initiation of any proceedings for such purpose;

 

(iv)          of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the securities included in the Shelf Registration Statement
for sale in any jurisdiction or the initiation of any proceeding for such
purpose; and

 

(v)             of
the happening of any event or the existence of any state of facts that

 

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requires the
making of any changes in the Shelf Registration Statement or the Prospectus
included therein so that, as of such date, such Shelf Registration Statement
and Prospectus do not contain an untrue statement of a material fact and do not
omit to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading (which advice shall be
accompanied by an instruction to such Holders to suspend the use of the
Prospectus until the requisite changes have been made).

 

The Company may
furnish any notice to any Electing Holder pursuant to this Section 3(d) by
furnishing the notice to such Holder’s e-mail address indicated on the Notice
and Questionnaire.

 

(e)           The Company shall use its reasonable
best efforts to prevent the issuance, and if issued to obtain the withdrawal at
the earliest possible time, of any order suspending the effectiveness of the
Shelf Registration Statement.

 

(f)            The Company shall furnish to each
Electing Holder, without charge, at least one copy of the Shelf Registration
Statement (excluding materials incorporated therein by reference) and all
post-effective amendments thereto, including financial statements and schedules
(other than financial statements and schedules and other materials incorporated
by reference), and, if such Electing Holder so requests in writing, all
reports, other documents and exhibits that are filed with or incorporated by reference
in the Shelf Registration Statement.

 

(g)           The Company shall, during the
Effectiveness Period, deliver to each Electing Holder, without charge, as many
copies of the Prospectus (including each preliminary Prospectus) included in
the Shelf Registration Statement and any amendment or supplement thereto as
such Electing Holder may reasonably request; and the Company consents (except
during the periods specified in Section 2(c) above or during the continuance of
any event described in Section 3(d)(v) above) to the use of the Prospectus and
any amendment or supplement thereto by each of the Electing Holders in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus and any amendment or supplement thereto during the Effectiveness
Period.

 

(h)           Prior to any offering of Registrable
Securities pursuant to the Shelf Registration Statement, the Company shall (i)
register or qualify or cooperate with the Electing Holders and their respective
counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or “blue sky”
laws of such jurisdictions within the United States as any Electing Holder may
reasonably request, (ii) keep such registrations or qualifications in effect
and comply with such laws so as to permit the continuance of offers and sales
in such jurisdictions for so long as may be necessary to enable any Electing
Holder or underwriter, if any, to complete its distribution of Registrable
Securities pursuant to the Shelf Registration Statement, and (iii) take any and
all other actions necessary or advisable to enable

 

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the disposition in
such jurisdictions of such Registrable Securities; provided, however,
that in no event shall the Company be obligated to (A) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to so qualify but for this Section 3(h) or (B) file any
general consent to service of process or become subject to taxation in any
jurisdiction where it is not as of the date hereof so subject.

 

(i)            Unless any Registrable Securities
shall be in book-entry only form, the Company shall cooperate with the Electing
Holders to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to the Shelf
Registration Statement, which certificates, if so required by any securities
exchange upon which any Registrable Securities are listed, shall be penned,
lithographed or engraved, or produced by any combination of such methods, on
steel engraved borders, and which certificates, upon certification by the
applicable Electing Holder of satisfaction of the prospectus delivery
requirements of the Securities Act in connection with transfers of the
Securities evidenced by such certificates, shall be free of any restrictive
legends and in such permitted denominations and registered in such names as
Electing Holders may request in connection with the sale of Registrable
Securities pursuant to the Shelf Registration Statement.

 

(j)            Upon the occurrence of any fact or
event contemplated by paragraph 3(d)(v) above, the Company shall promptly
prepare a post-effective amendment to any Shelf Registration Statement or an
amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to purchasers of the Registrable
Securities included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.  If the
Company notifies the Electing Holders of the occurrence of any fact or event contemplated
by paragraph 3(d)(v) above, the Electing Holder shall suspend the use of the
Prospectus until the requisite changes to the Prospectus have been made.

 

(k)           Not later than the Effective Time of
the Shelf Registration Statement, the Company shall provide a CUSIP number for
the Registrable Securities that are debt securities.

 

(l)            The Company shall use its reasonable
best efforts to comply with all applicable Rules and Regulations, and to make
generally available to its securityholders as soon as practicable, but in any
event not later than eighteen months after (i) the effective date (as defined
in Rule 158(c) under the Securities Act) of the Shelf Registration Statement,
(ii) the effective date of each post-effective amendment to the Shelf Registration
Statement, and (iii) the date of each filing by the Company with the Commission
of an Annual Report on Form 10-K that is incorporated by reference in the Shelf
Registration Statement, an earning statement of the Company and its
subsidiaries complying with Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158).

 

9

 

(m)          Not later than the Effective Time of
the Shelf Registration Statement, the Company shall cause the Indenture to be
qualified under the Trust Indenture Act; in connection with such qualification,
the Company shall cooperate with the Trustee under the Indenture and the
Holders (as defined in the Indenture) to effect such changes to the Indenture
as may be required for such Indenture to be so qualified in accordance with the
terms of the Trust Indenture Act; and the Company shall execute, and shall use
all reasonable efforts to cause the Trustee to execute, all documents that may
be required to effect such changes and all other forms and documents required
to be filed with the Commission to enable such Indenture to be so qualified in
a timely manner.  In the event that any
such amendment or modification referred to in this Section 3(m) involves
the appointment of a new trustee under the Indenture, the Company shall appoint
a new trustee thereunder pursuant to the applicable provisions of the
Indenture.

 

(n)           In the event of an underwritten
offering conducted pursuant to Section 6 hereof, the Company shall, if
requested, promptly include or incorporate in a Prospectus supplement or
post-effective amendment to the Shelf Registration Statement such information
as the Managing Underwriters reasonably agree should be included therein and to
which the Company does not reasonably object and shall make all required
filings of such Prospectus supplement or post-effective amendment as soon as
practicable after it is notified of the matters to be included or incorporated in
such Prospectus supplement or post-effective amendment.

 

(o)           The Company shall take all other
appropriate action (including entering into an underwriting agreement in
customary form in the event of an underwritten offering conducted pursuant to
Section 6 hereof) in order to expedite and facilitate the registration and
disposition of the Registrable Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures substantially identical to those set
forth in Section 5 hereof with respect to all parties to be indemnified
pursuant to Section 5 hereof.

 

(p)           The Company shall:

 

(i)(A)  upon receipt of an
executed confidentiality agreement from the applicable party satisfactory to
the Company, make reasonably available for inspection by the Electing Holders,
any underwriter participating in any disposition pursuant to the Shelf
Registration Statement, and any attorney, accountant or other agent retained by
such Electing Holders or any such underwriter all relevant financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and (B) cause the Company’s officers, directors and employees to
supply all information reasonably requested by such Electing Holders or any
such underwriter, attorney, accountant or agent in connection with the Shelf
Registration Statement, in each case, as is customary for similar due diligence
examinations;  provided however that, if
the foregoing inspection and information gathering would otherwise disrupt the
Company’s conduct of its business, such inspection and information gathering
shall, to the greatest extent possible, be coordinated on behalf of the
Electing Holders and the other parties

 

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entitled thereto by one counsel designated by and on
behalf of the Electing Holders and other parties;

 

(ii)           in connection with any underwritten
offering conducted pursuant to Section 6 hereof, make such representations and
warranties to the Managing Underwriters, in form, substance and scope as are
customarily made by issuers to underwriters in primary underwritten offerings
of equity and convertible debt securities and covering matters including, but
not limited to, those set forth in the Purchase Agreement;

 

(iii)          in connection with any underwritten
offering conducted pursuant to Section 6 hereof, obtain opinions of counsel to
the Company (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the Managing Underwriters) addressed to the
underwriters, covering such matters as are customarily covered in opinions
requested in primary underwritten offerings of equity and convertible debt
securities (it being agreed that the matters to be covered by such opinions
shall include, without limitation, as of the date of the opinion and as of the
Effective Time of the Shelf Registration Statement or most recent
post-effective amendment thereto, as the case may be, the absence from the Shelf
Registration Statement and the Prospectus, including the documents incorporated
by reference therein, of an untrue statement of a material fact or the omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading);

 

(iv)          in connection with any underwritten
offering conducted pursuant to Section 6 hereof, obtain “cold comfort” letters
and updates thereof from the independent public accountants of the Company
(and, if necessary, from the independent public accountants of any subsidiary
of the Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the Shelf
Registration Statement), addressed to the underwriters, in customary form and
covering matters of the type customarily covered in “cold comfort” letters in
connection with primary underwritten offerings;

 

(v)           in connection with any underwritten
offering conducted pursuant to Section 6 hereof, deliver such documents and
certificates as may be reasonably requested by the Managing Underwriters, if
any, including, without limitation, certificates to evidence compliance with
Section 3(j) hereof and with any conditions contained in the underwriting
agreement or other agreements entered into by the Company.

 

(q)           The Company will use its reasonable
best efforts to cause the Common Stock issuable upon conversion of the
Securities to be listed for quotation on the Nasdaq National Market System or
other stock exchange or trading system on which the Common Stock primarily
trades on or prior to the Effective Time of the Shelf Registration Statement
hereunder.

 

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(r)            In the event that any broker-dealer
registered under the Exchange Act shall be an “affiliate” (as defined in
Rule 2720(b)(1) of the NASD Rules (or any successor provision thereto)) of
the Company or has a “conflict of interest” (as defined in Rule 2720(b)(7)
of the NASD Rules (or any successor provision thereto)) and such broker-dealer
shall underwrite, participate as a member of an underwriting syndicate or
selling group or assist in the distribution of any Registrable Securities
covered by the Shelf Registration Statement, whether as a Holder of such
Registrable Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, the Company shall assist
such broker-dealer in complying with the requirements of the NASD Rules,
including, without limitation, by (A) if required by the NASD Rules, engaging a
“qualified independent underwriter” (as defined in Rule 2720(b)(15) of the
NASD Rules (or any successor provision thereto)) to participate in the
preparation of the registration statement relating to such Registrable Securities,
to exercise usual standards of due diligence in respect thereto and to
recommend the public offering price of such Registrable Securities, (B)
indemnifying such qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 5 hereof, and (C) providing
such information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the NASD Rules.

 

(s)           The Company shall use its reasonable
best efforts to take all other steps necessary to effect the registration,
offering and sale of the Registrable Securities covered by the Shelf
Registration Statement contemplated hereby.

 

4.             Registration Expenses.  Except as otherwise provided in Section 3,
the Company shall bear all fees and expenses incurred in connection with
performance of its obligations under Sections 2, 3 and 6 hereof and shall bear
or reimburse the Electing Holders for the reasonable fees and disbursements of
a single counsel selected by a plurality of all Electing Holders who own an
aggregate of not less than 25% of the Registrable Securities covered by the
Shelf Registration Statement to act as counsel therefor in connection
therewith.  Each Electing Holder shall
pay all underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Electing Holder’s Registrable
Securities pursuant to the Shelf Registration Statement.

 

5.             Indemnification and Contribution.

 

(a)           Indemnification by the Company. Upon the
registration of the Registrable Securities pursuant to Section 2 hereof, the
Company shall  indemnify and hold harmless each Electing Holder and each
underwriter, dealer or selling agent, if any, which facilitates the disposition
of Registrable Securities, and each of their respective officers and directors
and each person who controls such Electing Holder, underwriter, dealer or
selling agent within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act (each such person being sometimes referred to as an
“Indemnified Person”) against any losses, claims, damages or liabilities, joint
or several, to which such Indemnified Person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue

 

12

 

statement of a
material fact contained in any Shelf Registration Statement under which such
Registrable Securities are to be registered under the Securities Act, or any
Prospectus contained therein or furnished by the Company to any Indemnified
Person relating to such Registrable Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Company hereby agrees to
reimburse such Indemnified Person for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company
shall not be liable to any such Indemnified Person in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such Shelf Registration Statement or Prospectus, or amendment
or supplement, in reliance upon and in conformity with written information
furnished to the Company by such Indemnified Person expressly for use therein.

 

(b)           Indemnification by the Electing Holders and any
Agents and Underwriters. 
Each Electing Holder agrees, as a consequence of the inclusion of any of
such Electing Holder’s Registrable Securities in such Shelf Registration
Statement, and each underwriter, dealer or selling agent, if any, which
facilitates the disposition of Registrable Securities shall agree, as a
consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors, officers who sign any Shelf Registration Statement and each person,
if any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which the Company or such other persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement or Prospectus, or any amendment
or supplement, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Electing
Holder, underwriter, dealer or selling agent expressly for use therein, and
(ii) reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
action or claim as such expenses are incurred.

 

(c)           Notices of Claims, Etc.  Promptly after receipt by an indemnified
party under subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under this Section 5, notify such
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under the indemnification
provisions of or contemplated by subsection (a) or (b) above.  In case any such action shall be brought
against

 

13

 

any indemnified party and it shall notify an indemnifying party of the
commencement thereof, such indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party with
respect to such action), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party under this
Section 5 for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified
party.

 

(d)           Contribution.  If the indemnification provided for in this Section 5 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the indemnifying party and the indemnified party in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. 
The relative fault of such indemnifying party and indemnified party
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by such indemnifying
party or by such indemnified party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.  The parties
hereto agree that it would not be just and equitable if contribution pursuant
to this Section 5(d) were determined by pro rata allocation (even if the
Electing Holders or any underwriters, dealers or selling agents or all of them
were treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 5(d).  The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Electing
Holders and any underwriters, dealers or selling agents in this Section 5(d) to
contribute shall be several

 

14

 

in proportion to
the percentage of principal amount of Registrable Securities registered or
underwritten, as the case may be, by them and not joint.

 

(e)           Notwithstanding any other provision
of this Section 5, in no event will any (i) Electing Holder be required to
undertake liability to any person under this Section 5 for any amounts in
excess of the dollar amount of the proceeds to be received by such Holder from
the sale of such Holder’s Registrable Securities (after deducting any fees,
discounts and commissions applicable thereto) pursuant to any Shelf
Registration Statement under which such Registrable Securities are to be
registered under the Securities Act and (ii) underwriter, dealer or
selling agent be required to undertake liability to any person hereunder for
any amounts in excess of the discount, commission or other compensation payable
to such underwriter, dealer or selling agent or with respect to the Registrable
Securities underwritten by it and distributed to the public.

 

(f)            The obligations of the Company under
this Section 5 shall be in addition to any liability which the Company may
otherwise have to any Indemnified Person and the obligations of any Indemnified
Person under this Section 5 shall be in addition to any liability which
such Indemnified Person may otherwise have to the Company.  The remedies provided in this Section 5
are not exclusive and shall not limit any rights or remedies which may
otherwise be available to an indemnified party at law or in equity.

 

6.             Underwritten Offering.  Any Holder of Registrable Securities who
desires to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided that  (i) the Electing Holders of at least 33-1/3% in aggregate
principal amount of the Registrable Securities then covered by the Shelf
Registration Statement shall request such an offering and (ii) at least such
aggregate principal amount of such Registrable Securities shall be included in
such offering; and provided further that the Company shall
not be obligated to cooperate with more than one underwritten offering during
the Effectiveness Period.  Upon receipt
of such a request, the Company shall provide all Electing Holders of
Registrable Securities written notice of the request, which notice shall inform
such Electing Holders that they have the opportunity to participate in the
offering. The Company may furnish any notice to any Holder pursuant to this
Section 6 by furnishing the notice to the Holder’s e-mail address indicated on
the Notice and Questionnaire. In any such underwritten offering, the investment
banker or bankers and manager or managers that will administer the offering
will be selected by, and the underwriting arrangements with respect thereto
(including the size of the offering) will be approved by, the holders of a
majority of the Registrable Securities to be included in such offering; provided,
however,
that such investment bankers and managers and underwriting arrangements must be
satisfactory to the Company.  No Holder
may participate in any underwritten offering contemplated hereby unless (a)
such Holder agrees to sell such Holder’s Registrable Securities to be included
in the underwritten offering in accordance with any approved underwriting
arrangements, (b) such Holder completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved underwriting
arrangements, and (c) if such Holder is not then an Electing Holder, such
Holder returns a completed and signed Notice and Questionnaire to

 

15

 

the Company in accordance with Section 3(a)(ii) hereof within a
reasonable amount of time before such underwritten offering.  The Holders participating in any
underwritten offering shall be responsible for any underwriting discounts and
commissions and fees and, subject to Section 4 hereof, expenses of their own
counsel.  The Company shall pay all
expenses customarily borne by issuers in an underwritten offering, including
but not limited to filing fees, the fees and disbursements of its counsel and
independent public accountants and any printing expenses incurred in connection
with such underwritten offering. 
Notwithstanding the foregoing or the provisions of Section 3(n) hereof,
upon receipt of a request from the Managing Underwriter or a representative of
holders of a majority of the Registrable Securities to be included in an
underwritten offering to prepare and file an amendment or supplement to the
Shelf Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Board of Directors of the Company shall have
determined in good faith that the Company has a bona fide business reason for
such delay.

 

7.                                      Liquidated Damages.

 

(a)           Pursuant to Section 2(a) hereof, the
Company may, upon written notice to all the Electing Holders, postpone having
the Shelf Registration Statement declared effective for a reasonable period not
to exceed 90 days if the Company possesses material non-public information, the
disclosure of which would have a material adverse effect on the Company and its
subsidiaries taken as a whole. 
Notwithstanding any such postponement, if (i) on or prior to the 90th
day following the Closing Date, a Shelf Registration Statement has not been filed
with the Commission or (ii) on or prior to the 180th day following the Closing
Date, such Shelf Registration Statement is not declared effective by the
Commission (each, a “Registration Default”), the Company shall be required to
pay liquidated damages (“Liquidated Damages”), from and including the day
following such Registration Default until, but excluding the date on which,
such Shelf Registration Statement is either so filed or so filed and
subsequently declared effective, as applicable, at a rate per annum equal to an
additional one-quarter of one percent (0.25%) of the principal amount of
Registrable Securities, to and including the 90th day following such
Registration Default and one-half of one percent (0.5%) thereof from and after
the 91st day following such Registration Default.

 

(b)           In the event that the Shelf
Registration Statement ceases to be effective (or the Holders of Registrable
Securities, subject to Section 2(b)(ii) and 3(a)(i) and (ii), are otherwise
prevented or restricted by the Company from effecting sales pursuant thereto)
(an “Effective Failure”) for more than 30 days, whether or not consecutive, in
any 90-day period, or for more than 90 days, whether or not consecutive, during
any 12-month period, then the Company shall pay Liquidated Damages at a rate
per annum equal to an additional one-half of one percent (0.5%) of the
principal amount of Registrable Securities from the 31st day upon which an
Effective Failure occurs in any 90-day period or the 91st day upon which an
Effective Failure occurs in any 12-month period, as the case may be, until the
earlier of (i) the time the Shelf Registration Statement again becomes
effective or the Holders of Registrable Securities are again able to make sales
under the Shelf Registration Statement or (ii) the time the

 

16

 

Effectiveness
Period expires. For the purpose of determining an Effective Failure, days on
which the Company has been obligated to pay Liquidated Damages in accordance
with the foregoing in respect of a prior Effective Failure within the
applicable 90-day or 12-month period, as the case may be, shall not be
included.

 

 (c)          In
the event the Company fails to file a post-effective amendment to the Shelf
Registration Statement, or the post-effective amendment is not declared
effective, to the extent required by Section 3, and the effect of such failure
to file or to become effective is to cause the Shelf Registration Statement (x)
to fail to become effective in a timely fashion as provided in Section 7(a), or
(y) to cease to be effective (or the Holders to be prevented or restricted from
effecting sales pursuant thereto) as provided in Section 7(b), then the Company
shall pay Liquidated Damages on the same basis as provided in Section 7(a) or
7(b), as applicable.

 

(d)           Any amounts to be paid as Liquidated
Damages pursuant to paragraphs (a), (b) or (c) of this Section 7 shall be paid
semi-annually in arrears, with the first semi-annual payment due on the first
Interest Payment Date (as defined in the Indenture), as applicable, following
(i) in the case of said paragraphs (a) and (c), the date of such
Registration Default or (ii) in the case of said paragraph (b), the 31st
day upon which an Effective Failure occurs in any 90-day period or the 91st day
upon which an Effective Failure occurs in any 12-month period, as the case may
be.  Such Liquidated Damages will accrue
(1) in respect of the Registrable Securities at the rates set forth in
paragraphs (a), (b) or (c) of this Section 7, as applicable, on the principal
amount of the Registrable Securities and (2) in respect of the Common
Stock issued upon conversion of the Securities that remains a Registrable
Security, at the rates set forth in paragraphs (a), (b) or (c) of this Section
7, as applicable, applied to the Conversion Price (as defined in the Indenture)
at that time.

 

(e)           The Liquidated Damages as set forth
in this Section 7 shall be the exclusive monetary remedy available to the
Holders of Registrable Securities for such Registration Default or Effective
Failure. In no event shall the Company be required to pay Liquidated Damages in
excess of the applicable maximum rate per annum of one-half of one percent
(0.5%) set forth above, regardless of whether one or multiple Registration
Defaults exist.  Notwithstanding the
foregoing, the parties agree that the Purchasers and Holders may pursue
specific performance of this Agreement under Section 8(b).

 

8.             Miscellaneous.

 

(a)           Other Registration Rights.  The Company may grant or may have granted
registration rights that would permit any person that is a third party the
right to piggy-back on any Shelf Registration Statement, provided that if the
Managing Underwriter of any underwritten offering conducted pursuant to
Section 6 hereof notifies the Company and the Electing Holders that the
total amount of securities which the Electing Holders and the holders of such
piggy-back rights intend to include in any Shelf Registration Statement is so
large as to materially threaten the success of such offering (including the
price at which such securities can

 

17

 

be sold), then the
amount, number or kind of securities to be offered for the account of holders
of such piggy-back rights will be reduced to the extent necessary to reduce the
total amount of securities to be included in such offering to the amount,
number and kind recommended by the Managing Underwriter prior to any reduction
in the amount of Registrable Securities to be included in such Shelf
Registration Statement.

 

(b)           Specific Performance.  The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Purchasers and the Holders from time to time
may be irreparably harmed by any such failure, and accordingly agree that the
Purchasers and such Holders, in addition to any other remedy to which they may
be entitled at law or in equity and without limiting the remedies available to
the Electing Holders under Section 7 hereof, shall be entitled to compel
specific performance of the obligations of the Company under this Registration
Rights Agreement in accordance with the terms and conditions of this
Registration Rights Agreement, in any court of the United States or any State
thereof having jurisdiction.

 

(c)           Amendments and Waivers.  This Agreement, including this Section 8(c),
may be amended, and waivers or consents to departures from the provisions
hereof may be given, only by a written instrument duly executed by the Company
and the Holders of a majority in aggregate principal amount of Registrable
Securities then outstanding.  Each
Holder of Registrable Securities outstanding at the time of any such amendment,
waiver or consent or thereafter shall be bound by any amendment, waiver or
consent effected pursuant to this Section 8(c), whether or not any notice,
writing or marking indicating such amendment, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

 

(d)           Notices. 
Except as otherwise provided herein, all notices and other
communications provided for or permitted hereunder shall be given as provided
in the Indenture.

 

(e)           Parties in Interest.  The parties to this Agreement intend that
all Holders of Registrable Securities shall be entitled to receive the benefits
of this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities which are included in a Shelf Registration Statement.  All the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the respective successors and assigns of the parties hereto and
any Holder from time to time of the Registrable Securities to the aforesaid
extent.  In the event that any
transferee of any Holder of Registrable Securities shall acquire Registrable
Securities, in any manner, whether by gift, bequest, purchase, operation of law
or otherwise, such transferee shall, without any further writing or action of any
kind, be entitled to receive the benefits of and, if an Electing Holder, be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement to the aforesaid extent.

 

18

 

(f)            Counterparts.  This Agreement may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall constitute
one and the same agreement.

 

(g)           Headings. 
The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

 

(h)           Governing Law.  This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.

 

(i)            Severability.  In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

 

(j)            Survival. 
The respective indemnities, agreements, representations, warranties and
other provisions set forth in this Agreement or made pursuant hereto shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Electing
Holder, any director, officer or partner of such Holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or
any controlling person of any of the foregoing, and shall survive the transfer
and registration of the Registrable Securities of such Holder.

 

19

 

Please confirm that the
foregoing correctly sets forth the agreement between the Company and you.

 

	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Amylin
  Pharmaceuticals, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Lloyd A. Rowland

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President, General

  Counsel and Secretary

  

 

 

	
  Accepted as of the date hereof:

  	
   

  
	
   

  	
   

  
	
  Morgan
  Stanley & Co. Incorporated

  Goldman, Sachs & Co.

  	
   

  
	
   

  	
   

  
	
  By: Morgan Stanley & Co. Incorporated

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  On behalf of each of the Purchasers.

  
					

 

20

 

Appendix A

 

AMYLIN PHARMACEUTICALS, INC.

 

NOTICE OF REGISTRATION STATEMENT

 

AND

 

SELLING SECURITYHOLDER QUESTIONNAIRE

 

                        ,
2004

 

Amylin Pharmaceuticals, Inc.

 

INSTRUCTION TO DTC
PARTICIPANTS

 

(Date of Mailing)

 

URGENT –IMMEDIATE ATTENTION REQUESTED

 

DEADLINE FOR RESPONSE: 
                      

 

 

The Depository Trust Company (“DTC”) has identified
you as a DTC Participant through which beneficial interests in the Amylin
Pharmaceuticals, Inc. (the “Company”) 2.50% Convertible Senior Notes due 2011
(the “Securities”) are held.

 

The Company is in the process of registering the
Securities under the Securities Act of 1933 for resale by the beneficial owners
thereof.  In order to have their
Securities included in the registration statement, beneficial owners must
complete and return the enclosed Notice of Registration Statement and Selling
Securityholder Questionnaire.

 

It is important that beneficial owners of the
Securities receive a copy of the enclosed materials as soon as possible
as their rights to have the Securities included in the registration statement
depend upon their returning the Notice and Questionnaire by
                             .
Please forward a copy of the enclosed documents to each beneficial owner that
holds interests in the Securities through you. 
If you require more copies of the enclosed materials or have any
questions pertaining to this matter, please contact the Company’s counsel,
Cooley Godward LLP, 4401 Eastgate Mall, San Diego, CA  92121, Attention:  Charles
Kim, Esq. ((858) 550-6045).

 

A-1

 

AMYLIN PHARMACEUTICALS, INC.

 

NOTICE OF REGISTRATION STATEMENT

 

AND

 

SELLING SECURITYHOLDER QUESTIONNAIRE

 

                        ,
2004

 

Amylin
Pharmaceuticals, Inc. (the “Company”) has filed with the United States Securities
and Exchange Commission (the “Commission”) a registration statement on Form S-3
(the “Shelf Registration Statement”)
for the registration and resale under Rule 415 of the United States Securities
Act of 1933, as amended (the “Securities Act”), of the Company’s 2.50% Convertible
Senior Notes due 2011 (the “Securities”) and the shares of common stock, par value
$0.001 per share (the “Common Stock”), issuable upon conversion thereof, in
accordance with the Registration Rights Agreement, dated as of the date of
original issuance of the Securities (the “Registration Rights Agreement”), between the Company
and the purchasers named therein.  A
copy of the Registration Rights Agreement is attached hereto.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.

 

In order
to have Registrable Securities included in the Shelf Registration Statement (or
a supplement or amendment thereto), this Notice of Registration Statement and
Selling Securityholder Questionnaire (“Notice and Questionnaire”) must be completed, executed
and delivered to the Company at the address set forth herein for receipt ON OR BEFORE
               ,
2004.  Beneficial owners of Registrable
Securities who do not complete, execute and return this Notice and
Questionnaire by such date (i) will not be named as selling
securityholders in the Shelf Registration Statement and (ii) may not use the
Prospectus forming a part thereof for resales of Registrable Securities.

 

Certain
legal consequences arise from being named as a selling securityholder in the
Shelf Registration Statement and related Prospectus.  Accordingly, holders and beneficial owners of Registrable
Securities are advised to consult their own securities law counsel regarding
the consequences of being named or not being named as a selling securityholder
in the Shelf Registration Statement and related Prospectus.

 

The term
“Registrable Securities” is defined in the Registration Rights Agreement to
mean all or any portion of the Securities issued from time to time under the
Indenture in registered form and the shares of Common Stock issuable upon
conversion, repurchase or redemption of such Securities; provided, however, that a
security ceases to be a Registrable Security when it is no longer a Restricted
Security.

 

The term
“Restricted Security” is defined in the Registration Rights Agreement to mean
any Security or share of Common Stock issuable upon conversion thereof except
any such Security or share of Common Stock which (i) has been effectively
registered under the Securities Act and sold in a manner contemplated by the
Shelf Registration Statement, (ii) has been transferred in compliance with
Rule 144 under the Securities Act (or any successor provision thereto) or
is transferable pursuant to paragraph (k) of such Rule 144 (or any successor
provision thereto), or (iii) has otherwise been transferred and a new Security
or share of Common Stock not subject to transfer restrictions under the
Securities Act has been delivered by or on behalf of the Company in accordance
with the Indenture.

 

A-2

 

ELECTION

 

The
undersigned holder (the “Selling Securityholder”) of Registrable Securities
hereby elects to include in the Shelf Registration Statement the Registrable
Securities beneficially owned by it and listed below in Item (3).  The undersigned, by signing and returning
this Notice and Questionnaire, agrees to be bound with respect to such
Registrable Securities by the terms and conditions of this Notice and
Questionnaire and the Registration Rights Agreement, including, without
limitation, Section 5 of the Registration Rights Agreement, as if the
undersigned Selling Securityholder were an original party thereto.

 

Upon any
sale of Registrable Securities pursuant to the Shelf Registration Statement,
the Selling Securityholder will be required to deliver to the Company and the
Trustee the Notice of Transfer (completed and signed) set forth in
Exhibit 1 to this Notice and Questionnaire.

 

The
Selling Securityholder hereby provides the following information to the Company
and represents and warrants that such information is accurate and complete:

 

A-3

 

QUESTIONNAIRE

 

(1)  (a)              Full legal name of Selling Securityholder:

 

 

 

(b)         Full legal name of registered holder
(if not the same as in (a) above) of Registrable Securities listed in Item (3)
below:

 

 

 

(c)          Full legal name of DTC participant
(if applicable and if not the same as (b) above) through which Registrable
Securities listed in Item (3) below are held:

 

 

 

(d)         State whether the Selling
Securityholder is a publicly-held entity or a subsidiary of a publicly-held
entity (i.e. an entity that has a class of securities registered under the
Securities Exchange Act of 1934, as amended):

 

Yes
      No       

 

If a subsidiary, please identify the publicly-held
parent entity:
                                         

 

(e)          State whether the Selling
Securityholder is an investment company, or a subsidiary of an investment
company, registered under the Investment Company Act of 1940:

 

Yes
      No       

 

If a subsidiary, please identify the investment
company parent
entity:                                         

 

(f)            If you answered “No” to questions (d)
and (e), state the number of natural persons who have or share
voting or investment control over the Registrable Securities:
                                         .

 

If your answer is 5 or fewer, please identify those
natural persons:

 

 

 

 

Please note that the SEC requires that these natural persons
be named in the prospectus.

 

(2)                                  Address for notices to Selling
Securityholder:

 

 

 

 

	
  Telephone:

  	
   

  
	
   

  	
   

  
	
  E-mail:

  	
   

  
	
   

  	
   

  
	
  Fax:

  	
   

  

 

A-4

 

Contact
Person:                 

 

(3)                                  Beneficial ownership of Securities:

 

Except as set forth below in this Item (3), the undersigned
Selling Securityholder does not beneficially own any Securities or shares of
Common Stock issued upon conversion, repurchase or redemption of any
Securities.

 

(a)          Principal amount of Registrable
Securities (as defined in the Registration Rights Agreement) beneficially
owned: 

 

CUSIP
No(s). of such Registrable Securities: 

 

Number
of shares of Common Stock (if any) issued upon conversion, repurchase or
redemption of Registrable Securities: 

 

(b)         Principal amount of Securities other
than Registrable Securities beneficially owned:

 

 

CUSIP
No(s). of such other Securities: 

 

Number
of shares of Common Stock (if any) issued upon conversion of such other
Securities:

 

 

 

(c)          Principal amount of Registrable
Securities which the undersigned wishes to be included in the Shelf
Registration Statement:      

 

CUSIP
No(s). of such Registrable Securities to be included in the Shelf Registration
Statement:

 

 

 

Number
of shares of Common Stock (if any) issued upon conversion of Registrable
Securities which are to be included in the Shelf Registration Statement:       

 

 

 

(4)                                  Beneficial ownership of other
securities of the Company:

 

Except as set forth below in this Item (4), the undersigned
Selling Securityholder is not the beneficial or registered owner of any shares
of Common Stock or any other securities of the Company, other than the
Securities and shares of Common Stock listed above in Item (3).

 

State
any exceptions here:

 

 

 

(5)                                  Relationships with the Company:

 

Except as set forth below, neither the Selling
Securityholder nor any of its affiliates, officers, directors or principal
equity holders (5% or more) has held any position or office or has had any
other material relationship with the Company (or its predecessors or
affiliates) during the past three years.

 

State
any exceptions here:

 

 

 

(6)                                  Plan of Distribution:

 

Except as set forth below, the undersigned Selling
Securityholder intends to distribute the Registrable Securities listed above in
Item (3) only as follows (if at all): 
Such Registrable Securities may be sold from time to time directly by
the undersigned Selling Securityholder or,

 

A-5

 

alternatively, through underwriters, broker-dealers or
agents.  If the Registrable Securities
are sold through underwriters or broker-dealers, the Selling Securityholder
will be responsible for underwriting discounts or commissions.  Such Registrable Securities may be sold in
one or more transactions at fixed prices, at prevailing market prices at the
time of sale, at varying prices determined at the time of sale, or at
negotiated prices.  Such sales may be
effected in transactions (which may involve crosses or block transactions) (i)
on any national securities exchange or quotation service on which the
Registrable Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such exchanges
or services or in the over-the-counter market, or (iv) through the writing of
options.  In connection with sales of
the Registrable Securities or otherwise, the Selling Securityholder may enter
into hedging transactions with broker-dealers, which may in turn engage in short
sales of the Registrable Securities in the course of hedging the positions they
assume.  The Selling Securityholder may
also sell Registrable Securities short and deliver Registrable Securities to
close out such short positions, or loan or pledge Registrable Securities to
broker-dealers that in turn may sell such securities.  The Selling Securityholder may pledge or grant security interest
in some or all of the Registrable Securities owned by it and, if it defaults in
the performance of its secured obligations, the pledgees or secured parties may
offer and sell the Registrable Securities from time to time pursuant to the
prospectus. The Selling Securityholder also may transfer and donate shares in
other circumstances in which case the transferees, donees, pledgees or other
successors in interest will be the selling security holder for purposes of the
prospectus.

 

State
any exceptions here:

 

Note:  Underwritten offerings of the Registrable
Securities are subject to limitations set forth in the Registration Rights
Agreement.

 

(7)  (a)     State whether the undersigned Selling Securityholder has or will
enter into “hedging transactions.”

 

Yes
      No      

 

If yes, you must provide
a complete description of the hedging transactions into which the undersigned
Selling Securityholder has entered or will enter and the purpose of such
hedging transactions, including the extent to which such hedging transactions
remain in place.

 

 

 

 

 

Please
note that the SEC may deem short sales of securities covered by a registration
statement prior to the effectiveness of such registration statement as a
violation of Section 5 of the Securities Act.

 

(b)         State whether the undersigned
Selling Securityholder has sold any of the Registrable Securities or shares of
common stock of the Company short since the date of original issuance of the
Registrable Securities.

 

Yes
      No       

 

A-6

 

If yes, you must provide a complete description of the
short sale, including the number of shares of common stock of the Company
involved and whether the short position remains in place.

 

 

 

 

 

(8)  (a)     State whether the undersigned Selling Securityholder is a
registered broker-dealer.

 

Yes
      No      

 

(b)         State whether the undersigned
Selling Securityholder received the Registrable Securities as compensation for
underwriting activities and, if so, provide a brief description of the
transaction(s) involved.

 

Yes
      No      

 

 

 

The SEC
requires that all Selling Securityholders that are broker-dealers, even if they
did not receive the Registrable Securities as compensation for underwriting
activities, must be named as underwriters in the prospectus for the Registrable
Securities.  Selling Securityholders,
including those named as underwriters, must deliver copies of the prospectus to
purchasers at or prior to the time of any sale of the Registrable Securities.

 

(c)          State whether the undersigned
Selling Securityholder is an affiliate of a registered broker-dealer and if so,
list the name(s) of the broker-dealer affiliate(s).

 

Yes
      No       

 

 

 

If the
answer is “Yes,” you must answer question (d) below.

 

(d)         If the undersigned Selling
Securityholder is an affiliate of a registered broker-dealer:

 

(i) Did the undersigned Selling Securityholder
purchase the Registrable Securities in the ordinary course of business?

 

Yes
      No       

 

A-7

 

If the answer is “No,” to
question (i) state any exceptions below:

 

 

 

(ii) At the time of the
purchase of the Registrable Securities, did the undersigned Selling
Securityholder have any agreements or understandings, directly or indirectly,
with any person to distribute the Registrable Securities?

 

Yes
      No       

 

If the answer is “Yes” to
question (ii), state any exceptions below:

 

 

 

If the answer is “No” to
question (i) or “Yes” to question (ii), you will be named as an underwriter in
the prospectus relating to the Registrable Securities.

 

By
signing below, the Selling Securityholder acknowledges that it understands its
obligation to comply, and agrees that it will comply, with the prospectus
delivery and other provisions of the Securities Act and the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, particularly
Regulation M.

 

In the
event that the Selling Securityholder transfers all or any portion of the
Registrable Securities listed in Item (3) above after the date on which such
information is provided to the Company, the Selling Securityholder agrees to
notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Registration Rights
Agreement.

 

By
signing below, the Selling Securityholder consents to the disclosure of the
information contained herein in its answers to Items (1) through (8) above and
the inclusion of such information in the Shelf Registration Statement and
related Prospectus.  The Selling
Securityholder understands that such information will be relied upon by the
Company in connection with the preparation of the Shelf Registration Statement
and related Prospectus.

 

In
accordance with the Selling Securityholder’s obligation under Section 3(a)
of the Registration Rights Agreement to provide such information as may be
required by law for inclusion in the Shelf Registration Statement, the Selling
Securityholder agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains in
effect.  Except as otherwise provided in
the Registration Rights Agreement, all notices hereunder and pursuant to the
Registration Rights Agreement shall be made in writing, by hand-delivery,
first-class mail, or air courier guaranteeing overnight delivery as follows:

 

(i)    To the Company:

 

Amylin
Pharmaceuticals, Inc.

9360
Towne Centre Drive, Suite 110

San
Diego, CA  92121

Attention:
Lloyd A. Rowland, Esq., General Counsel

 

A-8

 

(ii)   With a copy to:

 

Cooley
Godward LLP

4401
Eastgate Mall

San
Diego, CA  92121-9109

Attention:  Charles Kim, Esq.

 

Once
this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company, the terms of this Notice and Questionnaire, and the
representations and warranties contained herein, shall be binding on, shall
inure to the benefit of and shall be enforceable by the respective successors,
heirs, personal representatives, and assigns of the Company and the Selling
Securityholder (with respect to the Registrable Securities beneficially owned
by such Selling Securityholder and listed in Item (3) above).  This Agreement shall be governed in all
respects by the laws of the State of New York.

 

A-9

 

IN WITNESS WHEREOF, the undersigned, by authority duly
given, has caused this Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Selling
  Securityholder

  
	
   

  	
   

  
	
   

  	
  (Print/type
  full legal name of beneficial owner of

  Registrable Securities)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

PLEASE
RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR
BEFORE
              ,
2004 TO THE COMPANY AT:

 

Amylin
Pharmaceuticals, Inc.

9360
Towne Centre Drive, Suite 110

San
Diego, CA  92121

Attention:
Lloyd A. Rowland, Esq., General Counsel

 

WITH A
COPY TO:

 

Cooley
Godward LLP

4401
Eastgate Mall

San
Diego, CA  92121-9109

Attention:  Charles Kim, Esq.

 

A-10

 

Exhibit 1

to Appendix A

 

NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

 

Amylin
Pharmaceuticals, Inc.

9360
Towne Centre Drive, Suite 110

San
Diego, CA  92121

Attn:  Lloyd A. Rowland, Esq., General Counsel

 

J.P.
Morgan Trust Company, National Association

 

	
  Re:

  	
   

  	
  Amylin
  Pharmaceuticals, Inc. (the “Company”)

  
	
   

  	
   

  	
  2.50%
  Convertible Senior Notes due 2011 (the “Notes”)

  

 

Dear
Sirs:

 

Please
be advised that
                        
has transferred
$                        
aggregate principal amount of the above-referenced Notes or shares of the
Company’s common stock, issued upon conversion, repurchase or redemption of
Notes, pursuant to an effective Registration Statement on Form S-3 (File
No. 333-                        )
filed by the Company.

 

We
hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied with respect to the
transfer described above and that the above-named beneficial owner of the Notes
or common stock is named as a selling securityholder in the Prospectus dated [date],
or in amendments or supplements thereto, and that the aggregate principal
amount of the Notes or number of shares of common stock transferred are [a portion
of] the Notes or shares of common stock listed in such Prospectus as
amended or supplemented opposite such owner’s name.

 

	
  Dated:

  	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  (Authorized
  Signature)

  
						

 

A-11Exhibit
10.1

 

[TRAMMELL CROW COMPANY LETTERHEAD]

 

November 24,
2003

 

William F.
Concannon

[XXXXXXXXXX]

[XXXXXXXXXX]

 

Re:          Employment Agreement

 

Dear Bill:

 

We are pleased to present
you with this employment letter agreement (“Agreement”) which sets forth the
terms upon which you will continue to be employed by Trammell Crow Company (the
“Company”, or “we”, or “us”).

 

1.             Employment Period.  Subject to the terms and provisions of this
Agreement, we agree to continue to employ you, and you agree to continue to be
employed by us, for a period (the “Employment Period”) commencing
effective as of November 24, 2003 and expiring March 31, 2006; provided,
that on March 31, 2006 and on each subsequent March 31, this Agreement will
automatically be extended for one additional year unless, during the four  month period beginning June 1 and ending
October 1 immediately prior to the next scheduled extension, you or we
will have given written notice (a “Non-Renewal Notice”) that the
Employment Period will not be extended (a “Non-Renewal”).

 

2.             Employment Terms and Conditions.

 

(a)           Position and Duties; Extent of Services; Location.  During the Employment Period, you will serve
as Vice Chairman of the Company and from time to time will serve in such other
positions as the Board of Directors of the Company (the “Board”) may
from time to time determine.  In so
doing, you will, under the general oversight and supervision of the Company’s
Chief Executive Officer, (i) serve on the Executive Officer Committee (as
defined herein), (ii) serve as a senior strategist and spokesman for the
Company in connection with the Company’s operations in the outsourcing
industry, (iii) assist in the development of business for the Company,
especially in the outsourcing industry, (iv) assist in high-level special
Company projects assigned to you by, and under the general supervision of, the
Company’s Chief Executive Officer, and
(v) have such other powers and duties (including holding officer positions with
one or more Subsidiaries of the Company) as may be assigned from time to time
by the Chief Executive Officer of the Company. 
During the Employment Period, you will devote your full business time,
energy, and best efforts to the business and affairs of the Company.  You agree not to engage, directly or
indirectly, in any other business, investment, or activity that interferes with
your performance of your duties under this

 

 

Agreement, is
contrary to the interests of the Company or requires any portion of your
business time, provided, however, that (A) you may serve on the board of
directors (or similar governing body) of one public company other than the
Company if the Board has provided prior approval for such service and (B)
unless it would unreasonably interfere with your performance of your duties to
the Company, you may serve on the board of directors (or similar governing
body) of no more than one
other organization that does not directly or indirectly conduct a Competing Business (as
defined herein),
in each case which boards shall be in addition to the boards of directors (or
similar governing bodies) on which you serve at the request of the
Company.  The Board is aware that you
currently serve as a director of Charles River Associates Incorporated and also,
at our request and direction, as a director of Savills PLC, both of which
previously have been approved by the Board and may be continued notwithstanding
the limitation contained in clause (A) of the immediately preceding sentence.
The location of your principal work office will be Dallas, Texas.  “Subsidiary”
means any entity 50% or more of the voting securities of which are owned,
directly or indirectly, by the Company.

 

(b)           Compensation.  During the Employment Period, you will receive an annual base
salary of $310,000 (“Annual Base Salary”), payable in accordance with
the customary payroll practices of the Company for executive officers.  The Board, in its sole discretion, may at
any time increase the amount of the Annual Base Salary as it may deem appropriate.  The term “Annual Base Salary” will
refer to the Annual Base Salary as it may be so increased from time to
time.  In addition, during the
Employment Period, you will (i) be eligible to receive an annual bonus
payment of up to 175% of your Annual Base Salary for the applicable year (such
dollar amount for the applicable year, the “Annual Bonus Target”),
subject to any terms or conditions as may be established by the Board or its
Compensation Committee, provided, that you will be provided an individual
“annual incentive plan” for each year and any performance criteria included in
such plan must be reasonably achievable (the satisfaction of such terms and
conditions to be determined by the Board or its Compensation Committee in its
sole good faith discretion) (each an “Annual Bonus”); (ii) be entitled
to participate in all incentive, savings, stock option, profit sharing and
retirement plans, practices, policies and programs applicable generally to
other executives of the Company (“Investment Plans”), subject to all of
the terms and conditions of such Investment Plans; and (iii) be eligible to
participate in all health, life and disability insurance policies, all death
and disability plans, practices, policies and programs and all other welfare
benefit plans, practices, policies and programs which are in each such case
applicable generally to other executives of the Company (“Welfare Plans”),
subject to all of the terms and conditions of such Welfare Plans.  Subject to Sections 4 and 5, any
Annual Bonus awarded to you by the Board or the Compensation Committee of the
Board for any calendar year will be payable in March of the following year,
whether or not you are employed by the Company at such time.  The term “Executive Officer Committee”
will refer to the Company’s Executive Officer Committee, any successor
committee thereto, and if there is no longer such a committee at the time in
question, then a comparable group of the Company’s executive officers (as
defined in Rule 3b-7 promulgated under the Securities Exchange Act of 1934).

 

(c)           Relocation Payments.  We hereby memorialize our prior agreement to
pay you the unpaid balance of a relocation bonus of $450,000 in support of your
relocation

 

2

 

from Stamford,
Connecticut to Dallas, Texas in 2002, which relocation bonus was originally
payable in 36 monthly payments of $12,500 per month in the first pay cycle of
each month and which monthly payments commenced on September 3, 2002.  Except as otherwise provided in Sections 4(a), 4(b)(iv),
4(c)(v), 5(a),
5(b)(iv) and 5(c)(v),
our obligation to make these monthly payments to you, or a lump sum payment to
you in satisfaction thereof, will cease at such time as you are no longer
employed by us for any reason.  Such
monthly relocation bonus payments are referred to herein as the “Relocation Payments.”

 

(d)           Vesting of Equity Awards.  Notwithstanding the provisions of any plan
or agreement governing such an Award (as defined in Section
4(c)), all Awards granted to you that remain outstanding and
unvested immediately prior to the occurrence of a Change in Control
automatically shall vest in full upon the occurrence of the Change in Control.

 

(e)           As used in this
Agreement:

 

(i)            “Change in
Control” has the meaning given such term in the Trammell Crow Long-Term
Incentive Plan (as such plan is in effect on the date of this Agreement, the “LTIP”);
provided, however, that the occurrence of a Rule 13e-3 transaction (within the
meaning of Rule 13e-3 promulgated under the Securities Exchange Act of 1934 or
any similar successor rule thereto) that has been approved by the Board and
subsequent to which you are part of a group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 or any similar
successor rule thereto) that owns more than 50%, respectively, of the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors of the Company will not be deemed to be a Change in Control;
provided, further, if, prior to any Change in Control, you terminate your
employment for Good Reason or your employment is terminated by the Company
without Cause or as a result of a Non-Renewal Notice delivered by the Company
prior to such Change in Control and a Change in Control occurs within 180 days
after such termination, or within 180 days after such Non-Renewal Notice
delivery in the case of a Non-Renewal (excluding a Change in Control that
occurs pursuant to an unsolicited tender or exchange offer by any person, in
response to which the Company does not recommend acceptance of the person’s
tender or exchange offer), then for all purposes hereof, the date of the Change
in Control with respect to your employment shall mean the date immediately prior
to such termination, or immediately prior to such Non-Renewal Notice delivery
in the case of a Non-Renewal; provided, further that notwithstanding that any
such transaction does not constitute a Change in Control as defined in the
LTIP, a Change in Control shall be deemed to have occurred for all purposes
under this Agreement upon either (A) the consummation of a Business Combination
(as defined in the LTIP) with a National Competitor, unless, following such
Business Combination, the conditions in clauses (B) and (C) of Section 1.6
(iii) of the LTIP are satisfied and all or substantially all of the individuals
and entities who were the beneficial owners of, respectively, the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities (each as
defined in the LTIP) immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60%, respectively, of the
then outstanding shares of common stock and the combined

 

3

 

voting power
of the then outstanding voting securities entitled to vote generally in the
election of directors of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company, or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Corporation Common Stock and Outstanding
Corporation Voting Securities, as the case may be, or (B) the acquisition by
any National Competitor (or any group (as defined in the LTIP) of which a
National Competitor is a controlling (within the meaning of Rule 12b-2
promulgated under the Securities Exchange Act of 1934) member of the group) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934) of 40% or more of either the Outstanding
Corporation Common Stock or the Outstanding Corporation Voting Securities.  By way of clarification, any transaction
with a National Competitor that constitutes a Change in Control as defined in
the LTIP shall be considered a Change in Control for all purposes under this Agreement.

 

(ii)           “National
Competitor” means any one of the companies known as Jones Lange LaSalle,
Inc., Grubb and Ellis Co. and CB Richard Ellis or their respective successors.

 

3.             Termination of Employment.

 

(a)           Death.  Your employment hereunder will terminate
automatically upon your death.

 

(b)           Disability. 
If your Disability occurs, we may give you a written Notice of
Termination (herein so called), and your employment will terminate effective 30
days later if you have not returned to perform, with or without reasonable
accommodation, the essential functions of your position on a full-time
basis.  “Disability” means
your inability, due to physical or mental incapacity or impairment, to perform
the material duties of your position(s)
with the Company for any period of more than 120 consecutive days, or for more
than 180 days, regardless of how consecutively they occur, during any 360-day
period.

 

(c)           Termination by Us.  We may terminate your employment hereunder at any time (A),
subject to Section 6(b), for Cause or (B) for any reason other than
Cause.  “Cause” means (i) your
continued failure to substantially perform your obligations and duties, as
determined in good faith by the Board, and which is not remedied within 30 days
after your receipt of written notice thereof; (ii) commission of an act of
fraud, embezzlement, misappropriation, willful misconduct or breach of
fiduciary duty against the Company or other conduct materially harmful or
potentially materially harmful to the Company’s best interest, as determined in
good faith by the Board; (iii) material breach of Section 7 or 8 which is not cured within 30 days after
your receipt of notice thereof, if such breach is capable of being cured; (iv)
conviction, plea of no contest or nolo contendere, deferred adjudication or
unadjudicated probation for any felony or any crime involving moral turpitude;
(v) failure to carry out, or comply with, in any material respect, any lawful
directive of the Board consistent with the terms of this Agreement,

 

4

 

which is not
remedied within 30 days after receipt of written notice thereof; or (vi)
unlawful use (including being under the influence) or possession of illegal
drugs.

 

(d)           Resignation by You.  You may terminate your employment hereunder at any time (i)
subject to Section 6(a), for Good Reason or (ii) without Good
Reason.  Prior to a Change in Control
and following the second anniversary of such Change in Control, “Good Reason”
means (A) any material diminution (considering all previous diminutions during
the Employment Period in the aggregate, including all previous diminutions
during the Employment Period which are not material when considered separately)
in your position, authority, powers, functions, duties or responsibilities,
including your removal from the Executive Officer Committee; provided, however, that Good Reason
may not be asserted by you under this clause (A) after a Non-Renewal Notice has
been given or on the basis that your term as a director of the Company expired
and you were not nominated for election to the Board in 2006 or at any time
thereafter; (B) the relocation or transfer of your principal office to a
location more than 50 miles from your regular work address as of the date
hereof without your consent; (C) any
reduction in your Annual Base Salary;  (D) any reduction in your Annual
Bonus Target from your Annual Bonus Target for the calendar year 2003; (E) the
receipt by you of Awards in any calendar year that differ (as to number, terms
or type of Awards), in a manner adverse to you, from the Awards received by you
in calendar year 2002, unless either (1) such adverse differences are in the
same manner and to the same proportional extent as the average (mean) changes
made to the Awards received by all other members of the Executive Officer
Committee in such calendar year or (2) such adverse differences are directly
related to the Board’s good faith assessment of your relative contribution to
the Company or your relative performance as compared to other members of the
Executive Officer Committee; provided, however, that in the case of
adverse differences pursuant to clause (2), the receipt by you of a number of
any type of Award in such calendar year that is less than one-half of the Final
Average Number of Awards of such type for such calendar year shall constitute
Good Reason; or (F) any failure by the Company to comply with any of the
provisions of Section 2(b) which failure is not contemplated
previously within this definition, excluding in all such cases any isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
you.  Upon or after a Change in Control
but prior to the second anniversary of such Change in Control, “Good Reason”
means (A) any material diminution (considering all previous diminutions
during the Employment Period in the aggregate, including all previous
diminutions during the Employment Period which are not material when considered
separately) in your position, authority, powers, functions, duties or
responsibilities in effect immediately prior to the Change in Control,
including your removal from the Executive Officer Committee (subject to the
same exclusions as provided above prior to a Change in Control and following
the second anniversary of such Change in Control); (B) any reduction in
your Annual Base Salary; (C) (i) any reduction in your Annual Bonus Target
from your Annual Bonus Target for the calendar year 2003 or (ii) the
awarding to you of an Annual Bonus that is less in amount than the Annual Bonus
awarded to you for the calendar year immediately preceding the year during
which the Change in Control occurs; (D) the receipt by you of Awards in
any calendar year that differ (as to number, terms or type of Awards), in a
manner adverse to you, from the Awards received by you in calendar year 2002,
unless either (1) such adverse differences are in the same manner and to the
same

 

5

 

proportional
extent as the average (mean) changes made to the Awards received by all other
members of the Executive Officer Committee in such calendar year or (2) such
adverse differences are directly related to the Board’s good faith assessment
of your relative contribution to the Company or your relative performance as
compared to other members of the Executive Officer Committee; provided,
however, that in the case of adverse differences pursuant to clause (2), the
receipt by you of a number of any type of Award in such calendar year that is
less than one-half of the Final Average Number of Awards of such type for such
calendar year shall constitute Good Reason; or (E) any failure by the
Company to comply with any of the provisions of Section  2(b)
which failure is not contemplated previously within this definition; or
(F) the relocation or transfer of your principal office to a location more
than 50 miles from your regular work address as of the date hereof without your
consent, excluding in all such cases any isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by you.  As used in this Agreement:

 

(i)            “Final Average Number of Awards” means, for any
calendar year and for each type of Award granted during such year, the quotient
(rounded up to the nearest whole number) equal to the aggregate number of
Awards of such type received by all members of the Adjusted EOC Group in such
calendar year, divided by the number of members of the Adjusted EOC Group in
such calendar year.

 

(ii)           “Adjusted EOC Group” means, for any calendar
year and for each type of Award granted during such year, the members of the
Executive Officer Committee who are eligible to receive Awards of such type in
such calendar year, excluding the Chief Executive Officer of the Company and
each Outlier Award Recipient in such calendar year; provided, however, that if
more than 50% of the members of the Executive Officer Committee for any calendar
year are determined to be Outlier Award Recipients in such calendar year, then,
notwithstanding the foregoing, all members of the Executive Officer Committee
(excluding the Chief Executive Officer of the Company) who are eligible to
receive Awards of such type in such calendar year shall be included in the
Adjusted EOC Group for such calendar year with respect to such type.

 

(iii)          “Outlier Award Recipient”
means, for any calendar year and for each type of Award granted during such
year, each member of the Executive Officer Committee (excluding
the Chief Executive Officer of the Company) who is eligible to receive Awards
of such type in such calendar year and who receives a number of Awards of such
type in such calendar year that is (i) 150% or more of the Preliminary Average
Number of Awards or (ii) 66 2/3% or less of the Preliminary Average Number of
Awards.

 

(iv)          “Preliminary Average Number of Awards” means,
for any calendar year and for each type of Award granted during such year, the
quotient (rounded up to the nearest whole number) equal to the aggregate number
of Awards of such type received by all members of the Executive Officer
Committee (excluding the Chief Executive Officer of the Company) in such
calendar year, divided by the number of members of the Executive Officer
Committee (excluding the Chief Executive Officer of the Company) who are
eligible to receive Awards of such type in such calendar year.

 

6

 

(v)           The phrase “number
of Awards” refers to the underlying number of shares of capital stock of the
Company to which the applicable Award relates.

 

(e)           Expiration of Term.  Your employment will end at the expiration of the Employment
Period as a result of any Non-Renewal. 
Except as described in Sections 3(e)(i), (ii), and (iii)
and in the definition of Change in Control, a termination of your employment
under this Agreement due to the expiration of the Employment Period as a result
of any Non-Renewal will not be deemed a termination of your employment
entitling you to any benefits described in Section 4 or Section
5.

 

(i)            If the Company
delivers a Non-Renewal Notice to you prior to any Change in Control or after
the first anniversary of such Change in Control, upon the effectiveness of such
Non-Renewal you will be entitled to receive (A) the compensation and benefits
that you would be entitled to receive if you resigned without Good Reason as
described in Section 4(b)
(other than the compensation and benefits described in Section 4(b)(v)),
(B) an amount equal to your Pro Rata Bonus, which will be paid at such time as
the Company pays its other members of the Executive Officer Committee their
annual cash incentive bonuses with respect to the calendar year in which
termination of your employment occurs, and (C) the severance or separation
benefits (including continuation of any welfare benefits) provided generally by
us to the members of the Executive Officer Committee under our general policies
in effect from time to time upon termination by the Company of their employment
(excluding any other severance or separation benefits available to any member
of the Executive Officer Committee pursuant to an employment agreement and not
under our general policies in effect from time to time).

 

(ii)           If the Company
delivers a Non-Renewal Notice to you after a Change in Control but prior to the
first anniversary of such Change in Control, upon the effectiveness of such
Non-Renewal you will be entitled to receive the compensation and benefits that
you would be entitled to receive if you were terminated without Cause or you
resigned with Good Reason as described in Section 5(c).

 

(iii)          If any Non-Renewal
is effected at your election, upon the effectiveness of such Non-Renewal you
will be entitled to receive (i) an amount equal to your Pro Rata Bonus, which
will be paid at such time as the Company pays its other members of the
Executive Officer Committee their annual cash incentive bonuses with respect to
the calendar year in which termination occurs, and (ii) as applicable, (A) if
your Non-Renewal Notice is delivered prior to any Change in Control or after
the first anniversary of such Change in Control, the compensation and benefits
that you would be entitled to receive if you resigned without Good Reason as
described in Section 4(b)
(other than the compensation and benefits described in Section 4(b)(v)),
or (B) if your Non-Renewal Notice is delivered after a Change in Control but
prior to the first anniversary of such Change in Control, the compensation and
benefits that you would be entitled to receive if you resigned without Good
Reason as described in Section 5(b)
(other than the compensation and benefits described in Section 5(b)(v)).

 

Except as
described in this Section 3(e)  in
the event of your termination due to a Non-Renewal election by us or you, you
will forfeit all rights to any other compensation.

 

7

 

4.             Compensation Upon
Termination Prior to a Change in Control and After the Second Anniversary of
such Change in Control (Other than as a Result of a Non-Renewal Election).  Prior to a Change in Control and after the
second anniversary of such Change in Control, conditioned on the effectiveness
of a Release and, where indicated below, your written resignation from the
Board signed by you or your legal representative, you will be entitled to the
following compensation from the Company upon the termination of your
employment, which shall be in lieu of any other severance pay or employment
benefits to which you might otherwise be entitled (whether contractual, under a
severance plan, the WARN Act, any other applicable law, or otherwise):

 

(a)           Death or Disability.  If your employment is terminated by reason
of your death or Disability, the Company will pay you or your legal
representative, as applicable, (A) in a cash lump sum within thirty (30) days
after the effective date of the Release and, in the case of your Disability,
your resignation from the Board pursuant to Section 6(e), the following
amounts:  (1) the sum of your unpaid
Annual Base Salary through the date of termination and any compensation
previously deferred by you (together with any accrued interest or earnings
thereon) (“Accrued Obligations”); (2) the amount of any unpaid Annual
Bonus that was awarded to you prior to the date of termination; and (3) all
remaining unpaid Relocation Payments; (B) any amounts arising from your
participation in any Investment Plan (“Accrued Investments”), which
amounts will be payable in accordance with the terms and conditions of such
Investment Plan; (C) any amounts to which you are entitled from your
participation in, or benefits under, any Welfare Plan (“Accrued Welfare
Benefits”), which amounts will be payable in accordance with the terms and
conditions of such Welfare Plan; and (D) an amount equal to your Pro Rata
Bonus, which will be paid at such time as the Company pays its other members of
the Executive Officer Committee their annual cash incentive bonuses with
respect to the calendar year in which termination of your employment
occurs.  Prior to a Change in Control
and following the second anniversary of such Change in Control, “Pro Rata Bonus” means the amount
equal to the product of (i) the dollar amount of your Annual Bonus Target
for the calendar year in which your employment is terminated that the Board or
its Compensation Committee determines in its sole good faith discretion you
would have been entitled to for such year pursuant to Section 2(b) if you had been employed by us for such entire calendar
year, multiplied
by (ii) a fraction, the numerator of which is the number of days that have
elapsed in such calendar year as of the date of termination, and the
denominator of which is 365.  Upon or
after a Change in Control but prior to the second anniversary of such Change in
Control, “Pro Rata Bonus” means the amount equal to the product of
(i) your Annual Bonus Target for the calendar year in which your
employment is terminated (or your Annual Bonus Target for the immediately
preceding year if you resign for Good Reason as defined in the second clause
(C)(i) of Section 3(d)), multiplied by (ii)  the average (mean)
percentage of annual cash incentive bonus targets actually paid as bonuses to
the members of the Executive
Officer Committee  as a group for such year, and multiplied by
(iii) a fraction, the numerator of which is the number of days that have
elapsed in such calendar year as of the date of termination, and the
denominator of which is 365.  Except as
described in this Section 4(a), in the
event of your termination by reason of your death or Disability, you and your
legal representatives, as applicable, will forfeit all rights to any other
compensation.

 

8

 

(b)           For Cause; Resignation by You Without Good Reason.  If your employment is terminated by us for
Cause or by you without Good Reason, we will have no further obligations to you
other than the obligation for payment of (i) Accrued Obligations (which will be
payable within the time period set forth in Section 4(a)(A) above),
(ii) the Accrued Investments and the Accrued Welfare Benefits (which will be
payable in accordance with the terms and conditions of the Investment Plans and
the Welfare Plans, as applicable), (iii) the amount of any unpaid Annual Bonus
that was awarded to you prior to the date of termination (which will be payable
in a lump sum in cash within thirty (30) days after the effective date of the
Release and your resignation from the Board pursuant to Section 6(e)),
(iv) only if your employment is terminated by you without Good Reason (and not
if your employment is terminated by us for Cause), all remaining unpaid
Relocation Payments (which will be payable in a lump sum in cash within thirty
(30) days after the effective date of the Release and your resignation from the
Board pursuant to Section 6(e)), and (v) only if your employment is
terminated by you before June 1, 2004 without Good Reason (and not if your
employment is terminated by us for Cause), $300,000 (which will be payable in a
lump sum in cash within thirty (30) days after the effective date of the
Release and your resignation from the Board pursuant to Section 6(e)).  If your employment is terminated by you
after May 31, 2004, you will not be entitled to receive the payment described
in Section 4(b)(v).  Except as described in this Section 4(b), in the event
of your termination by the Company for Cause or due to your resignation without
Good Reason, you will forfeit all rights to any other compensation.

 

(c)           Without Cause; Resignation for Good Reason.  If we terminate your employment without
Cause or you resign for Good Reason, then we will pay or provide to you:

 

(i)            a cash lump sum
within thirty (30) days after the effective date of the Release and your
resignation from the Board pursuant to Section 6(e)  equal
to the aggregate of the following amounts: 
(A) the Accrued Obligations; (B) an amount equal to the highest Annual
Base Salary to which you were entitled during the twelve months immediately
preceding the date of termination; (C) the sum of (i) one-half of your average
(mean) Annual Bonus awarded to you for the three years preceding termination
(including any unpaid Annual Bonus payable to you pursuant to Section
4(c)(i)(D)) plus (ii) one-half of the dollar amount of your current
Annual Bonus Target (or your Annual Bonus Target for the immediately preceding
year if you resign for Good Reason as defined in the first clause (D) of
Section 3(d)); and (D) the amount of any unpaid Annual Bonus that was awarded
to you prior to the date of termination;

 

(ii)           an amount equal to
your Pro Rata Bonus, which will be paid at such time as the Company pays its
other members of the Executive Officer Committee their annual cash incentive
bonuses with respect to the calendar year in which termination of your
employment occurs;

 

(iii)          the Accrued
Investments and the Accrued Welfare Benefits, which amounts will be payable in
accordance with the terms and conditions of the Investment Plans and the
Welfare Plans, as applicable;

 

9

 

(iv)          if you are entitled
on the date of termination to coverage under the healthcare portion of the
Trammell Crow and Associated Companies Welfare Benefits Plan or a similar
Company group health arrangement (the “Health Plan”), continuation of
such coverage for you and your dependents for a period ending on the 180th
day following the second anniversary of the date of termination, at the active
employee cost payable by you with respect to those costs paid by you prior to
your termination; provided, however, that this coverage will count towards the
depletion of any continued health care coverage rights that you and your
dependents may have pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“COBRA”); provided further, however, that you
or your dependents’ rights to continued health care coverage pursuant to this
Section will terminate at the time you or your dependents become covered, as
described in COBRA, under another group health plan, and will also terminate as
of the date the Company ceases to provide coverage to its senior executives
generally under any such Health Plan; and

 

(v)           all remaining unpaid
Relocation Payments.

 

Notwithstanding the
provisions of any plan or agreement governing such an Award, the Company will
also continue to vest all of your outstanding Awards that would have otherwise
vested during the twelve (12) month period beginning on the date of termination
and such Awards will continue to vest and, if applicable, be exercisable during
such twelve (12) month period; provided, however, that nothing set forth herein
shall result in an extension of the term of any Award beyond the term of the Award that would be applicable absent any
termination of your employment; provided, further, however, that, in the
case of a termination of your employment pursuant to this Section 4(c),
if the terms of the plan or agreement governing such Award are more favorable
to you as to vesting or exercisability than the terms of this paragraph, then
the more favorable term(s) of such Award agreement or plan (in lieu of the
corresponding less favorable term(s) in this paragraph) shall govern the
vesting or exercisability, as the case may be, of such Award upon your
termination.  “Award” means any
option to acquire common stock, restricted stock award, stock appreciation
right or similar equity-based award granted under the Trammell Crow Long-Term
Incentive Plan or any other option or equity-based incentive plan sponsored by
the Company.  Except as described in this
Section 4(c), in the event of your
termination by us without Cause or by you for Good Reason, you will forfeit all
rights to any other compensation.

 

5.             Compensation Upon Termination Occurring On or
Within Two Years After a Change in Control (Other than as a
Result of a Non-Renewal Election).  After a Change in Control and on or before the second anniversary
of such Change in Control, conditioned on the effectiveness of a Release and,
where indicated below, your resignation from the Board signed by you or your
legal representative, you will be entitled to the following compensation from
the Company upon termination of your employment, which shall be in lieu of any
other severance pay or employment benefits to which you might otherwise be
entitled (whether contractual, under a severance plan, the WARN Act, any other
applicable law, or otherwise):

 

(a)           Death or Disability.  If your employment is terminated by reason
of your death or Disability, the Company will pay you or your legal
representative, as applicable, (A) in a cash lump sum within thirty (30) days
after the effective date of the Release and, in the case of your Disability,
your resignation from the Board pursuant to Section 6(e),

 

10

 

the following
amounts:  (1) the Accrued Obligations;
(2) the amount of any unpaid Annual Bonus that was awarded to you prior to the
date of termination; and (3) all remaining unpaid Relocation Payments;
(B) the Accrued Investments, which amounts will be payable in accordance
with the terms and conditions of such Investment Plan; (C) the Accrued
Welfare Benefits, which amounts will be payable in accordance with the terms
and conditions of the Welfare Plans; and (D) an amount equal to your Pro
Rata Bonus, which will be paid at such time as the Company pays its other
members of the Executive Officer Committee their annual cash incentive bonuses
with respect to the calendar year in which termination of your employment
occurs.  Except as described in this Section 5(a), in the event of your
termination by reason of your death or Disability, you and your legal
representatives, as applicable, will forfeit all rights to any other
compensation.

 

(b)           For Cause; Resignation by You Without Good Reason.  If your employment is terminated by us for
Cause or by you without Good Reason, we will have no further obligations to you
other than the obligation for payment of (i) Accrued Obligations (which will be
payable within the time period set forth in Section 5(a)(A) above),
(ii) the Accrued Investments and the Accrued Welfare Benefits (which will be
payable in accordance with the terms and conditions of the Investment Plans and
the Welfare Plans, as applicable), (iii) the amount of any unpaid Annual Bonus
that was awarded to you prior to the date of termination (which will be payable
in a lump sum in cash within thirty (30) days after the effective date of the
Release and your resignation from the Board pursuant to Section 6(e)),
(iv) only if your employment is terminated by you without Good Reason (and not
if your employment is terminated by us for Cause), all remaining unpaid
Relocation Payments (which will be payable in a lump sum in cash within thirty
(30) days after the effective date of the Release and your resignation from the
Board pursuant to Section 6(e)), and (v) only if your employment is
terminated by you before June 1, 2004 without Good Reason (and not if your
employment is terminated by us for Cause), $300,000 (which will be payable in a
lump sum in cash within thirty (30) days after the effective date of the
Release and your resignation from the Board pursuant to Section 6(e)).  If your employment is terminated by you
after May 31, 2004, you will not be entitled to receive the payment described
in Section 5(b)(v).  Except as described in this Section 5(b), in the event
of your termination by the Company for Cause or due to your resignation without
Good Reason, you will forfeit all rights to any other compensation.

 

(c)           Without Cause; Resignation for Good Reason.  If your employment is terminated by the
Company without Cause or by you for Good Reason (taking into account in each
such case the definition of Change in Control), then, in lieu of any other
severance pay or benefits, and conditioned on the effectiveness of a Release
and your resignation from the Board signed by you, the Company will pay or
provide to you:

 

(i)            a cash lump sum
within thirty (30) days after the effective date of the Release and your
resignation from the Board pursuant to Section 6(e)  equal
to the aggregate of the following amounts: 
(A) the Accrued Obligations; (B) an amount equal to the product of one
and one-half (1.5) multiplied by the sum of (x) the highest Annual Base Salary
to which you were entitled during the twelve months immediately preceding the
date of termination, and (y) the sum of (i) one-half of your average (mean)
Annual

 

11

 

Bonus awarded
to you for the three years preceding termination (or the three years preceding
the year to which the Annual Bonus in question relates if you resign for Good
Reason as defined in the second clause (C)(ii) of Section 3(d)), including any
unpaid Annual Bonus payable to you pursuant to Section 4(c)(i)(D)) plus
(ii) one-half of the dollar amount of your current Annual Bonus Target (or
your Annual Bonus Target for the immediately preceding year if you resign for
Good Reason as defined in the second clause (C)(i) of Section 3(d)); and
(D) the amount of any unpaid Annual Bonus that was awarded to you prior to the date
of termination;

 

(ii)           an amount equal to
your Pro Rata Bonus, which will be paid at such time as the Company pays its
other members of the Executive Officer Committee their annual cash incentive
bonuses with respect to the calendar year in which termination of your
employment occurs;

 

(iii)          the Accrued
Investments and the Accrued Welfare Benefits, which amounts will be payable in
accordance with the terms and conditions of the Investment Plans and the
Welfare Plans, as applicable;

 

(iv)          if you are entitled
on the date of termination to coverage under the healthcare portion of the
Health Plan, continuation of such coverage for you and your dependents for a
period ending on the 180th day following the second anniversary of
the date of termination, at the active employee cost payable by you with
respect to those costs paid by you prior to your termination; provided,
however, that this coverage will count towards the depletion of any continued
health care coverage rights that you and your dependents may have pursuant to
COBRA; provided further, however, that you or your dependents’ rights to
continued health care coverage pursuant to this Section will terminate at the
time you or your dependents become covered, as described in COBRA, under
another group health plan, and will also terminate as of the date the Company
ceases to provide coverage to its senior executives generally under any such
Health Plan; and

 

(v)           all remaining unpaid
Relocation Payments.

 

Notwithstanding the
provisions of any plan or agreement governing such an Award and without
limiting Section 2(d), (A) the Company will also continue to vest all of
your outstanding Awards granted on or after a Change in Control that would have
otherwise vested during the twelve (12) month period beginning on the date of
termination and such Awards will continue to vest and, if applicable, be
exercisable during such twelve (12) month period and (B) all of your
outstanding Awards that are vested immediately prior to the date of termination
shall be exercisable during the twelve (12) month period beginning on the date
of termination; provided, however, that nothing set forth herein shall result
in an extension of the term of any Award beyond the term of the Award that would be applicable absent any
termination of your employment; provided, further, however, that, in the
case of a termination of your employment pursuant to this Section 5(c),
if the terms of the plan or agreement governing such Award are more favorable
to you as to vesting or exercisability than the terms of this paragraph, then
the more favorable term(s) of such Award agreement or plan (in lieu of the
corresponding less favorable term(s) in this paragraph) shall govern the
vesting or exercisability, as the case may be, of such Award upon your
termination.  Except as described in
this Section 5(c), in the event of

 

12

 

your termination
by us without Cause or by you for Good Reason (taking into account in each such
case the definition of Change in Control), you will forfeit all rights to any
other compensation.

 

6.             Other Provisions Relating to Termination.

 

(a)           Good Reason. 
Upon you learning of any event described in the definition of Good
Reason, you may terminate your employment for Good Reason by giving a Notice of
Termination (describing, if applicable, the action required to cure the basis
for termination) to us within 60 days thereafter. If the event constituting
Good Reason may be cured, we will have the opportunity to cure any such event
for a period of 60 days following receipt of your Notice of Termination.  If you do not give a Notice of Termination
to us within 60 days after learning of an event giving rise to Good Reason,
then this Agreement will remain in effect and, without any further act on your
part, you will have waived your right to terminate your employment hereunder
for Good Reason in respect of such event.

 

(b)           Cause. 
Upon the Company learning of any event described in the definition of
Cause, we may terminate your employment for Cause by giving a Notice of
Termination (describing, if applicable, the action required to cure the basis
for termination) to you within 60 days thereafter. If we do not give you a
Notice of Termination within 60 days after learning of an event giving rise to
Cause, then this Agreement will remain in effect and, without any further act
on our part, we will have waived our right to terminate your employment for
Cause in respect of such event.

 

(c)           Full Settlement; Mitigation.  In no event will you be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to you under any of the provisions of this Agreement and such amounts will not
be reduced whether or not you obtain other employment.  The Company will not be liable to you for
any damages for breach of this Agreement arising out of the termination of your
employment other than for amounts payable under Section 3(e), 4
or 5, which amounts will be payable subject to the terms and conditions
set forth therein.  The Company will be
entitled to seek damages from you for any breach of Section 7 or 8
by you or for your criminal misconduct.

 

(d)           Release and Other Agreements.  Notwithstanding any other provision in this
Agreement to the contrary, as a condition to receiving the benefits described
in this Agreement, upon any termination of your employment hereunder you hereby
agree to execute (and not revoke) a release in substantially the form attached
hereto as Exhibit A (the “Release”)
and such other documents and agreements as required by the Company, in the form
and pursuant to the procedures reasonably established by the Company.  For purposes of this Agreement, the Release
will be considered to have been executed by you if it is signed by your legal
representative in the case of your legal incompetence or on behalf of your
estate in the case of your death.  Upon
your execution and delivery of the Release, the Company will also promptly
execute and deliver the Release.

 

(e)           Resignation from
the Board.  In connection with any
termination of your employment with the Company, whether by you or the Company
and whether during or after the Employment Period, you agree to resign from the
Board and the boards of

 

13

 

directors (or
similar governing bodies) of our subsidiaries in writing, effective immediately
after your receipt of any oral or written request from the Chairman of the
Board of the Company for such resignation.

 

7.             Confidential Information.

 

(a)           You acknowledge that
the Company has trade, business and financial secrets and other confidential
and proprietary information regarding the Company and its business, in whatever
form, tangible or intangible (collectively, the “Confidential
Information”), and that during the course of your employment with
the Company you have received, will receive or will contribute to the
Confidential Information.  Confidential
Information includes sales materials, technical information, processes and
compilations of information, records, specifications and information concerning
customers, prospective customers or vendors, customer and prospective customer
lists, and information regarding methods of doing business.  However, Confidential Information does not
include information that (i) is obtained by you from a source other than
the Company or its affiliates who is not under a duty of non-disclosure to the
Company or such affiliate or (ii) becomes generally available to the
public other than through disclosure by you in violation of the provisions of
this Agreement.

 

(b)           You are aware of
those policies implemented by the Company to keep its Confidential Information
secret.  You acknowledge that the
Confidential Information has been developed or acquired by the Company through
the expenditure of substantial time, effort and money and provides the Company
with an advantage over competitors who do not know or use such Confidential
Information.

 

(c)           During and following
your employment by the Company, you will hold in confidence and will not
directly or indirectly disclose, use, copy, make lists of, or make available to
others any Confidential Information except in the good faith performance of
your duties to the Company or to the extent authorized in writing by the Board
or required by law or compelled by legal process.  You agree to use reasonable efforts to give the Company notice
(accompanied by a copy of the subpoena, order or other process used to compel
disclosure) of any and all attempts to compel disclosure of any Confidential
Information, in such a manner so as to provide the Company with written notice
within one (1) business day after you are informed that such disclosure is
being or will be compelled.

 

(d)           You further agree
not to use any Confidential Information for the benefit of any person or entity
other than the Company.

 

(e)           Upon termination of
your employment, you agree that all Confidential Information and other files,
documents, materials and other repositories containing information concerning
the Company or the business of the Company (including all copies thereof) in
your possession, custody or control, whether prepared by you or others, will
remain with or be returned to the Company promptly (within twenty-four (24)
hours) after the date of such termination.

 

(f)            Notwithstanding
anything herein to the contrary, you may disclose to any and all persons,
without limitation of any kind, the U.S. federal income tax treatment and

 

14

 

tax structure
of the transactions contemplated in this Agreement and all materials of any
kind (including opinions and other tax analyses) that are provided to you
relating to such tax treatment and tax structure.  For this purpose, “tax structure” is limited to facts relevant to
the U.S. federal income tax treatment of the transactions contemplated in this
Agreement and does not include information relating to the identity of the
parties hereto.

 

8.             Non-Competition; Non-Solicitation.

 

(a)           You acknowledge and
agree that your use of Confidential Information and our lists of, and
information concerning, customers and prospective customers in the conduct of
business on behalf of a competitor of the Company would constitute unfair
competition with the Company and would adversely affect the business goodwill
of the Company.  Accordingly, as a
material inducement to the Company to enter into this Agreement; to protect the
Company’s Confidential Information, including lists of, and information
concerning, customers and prospective customers of the Company, that may be
disclosed or entrusted to you (the disclosure of which by you in violation of
this Agreement would adversely affect the business goodwill of the Company),
the business goodwill of the Company that may be developed in you and the
business opportunities that may be disclosed or entrusted to you by the
Company; in consideration for the compensation and other benefits payable
hereunder to you, for the benefits to you of having access to Confidential
Information, including lists of, and information concerning, customers and
prospective customers of the Company, during the Employment Period (the
disclosure of which by you in violation of this Agreement would adversely
affect the business goodwill of the Company); and for other good and valuable
consideration, you hereby covenant and agree that, during the Term of
Non-Competition, you will not directly or indirectly, individually or as an
officer, director, manager, employee, shareholder, consultant, contractor,
partner, member, joint venturer, agent, equity owner or in any capacity
whatsoever:

 

(i)            own, engage in,
manage, operate, join, control, be employed by, provide Competing Services to,
or participate in the ownership, management, operation or control of or
provision of Competing Services to, a Competing Business operating in the
Geographic Area;

 

(ii)           recruit, hire,
assist in hiring, attempt to hire, or contact or solicit with respect to hiring
any person who, at any time during the twelve (12) month period ending on the
date of termination, was an employee of the Company; provided, that you may
hire any person that served as an administrative or clerical employee at the
time their employment with the Company terminates so long as you do not
recruit, contact or solicit such employee;

 

(iii)          induce or attempt
to induce any employee of the Company to terminate, or in any way interfere
with, the relationship between the Company and any employee thereof; or

 

(iv)          induce or attempt to
induce any customer, client, supplier, service provider, or other business
relation of the Company in the Geographic Area to cease doing business with the
Company, or in any way interfere with the relationship between the Company and
any such person.

 

15

 

Notwithstanding the foregoing, the Company agrees
that you may own less than one percent of the outstanding voting securities of
any publicly traded company that is a Competing Business so long as you do not
otherwise participate in such competing business in any way prohibited by this
Section.

 

(b)           You acknowledge that
the geographic boundaries, scope of prohibited activities, and time duration of
the preceding paragraphs in this Section are reasonable in nature and are no
broader than are necessary to maintain the goodwill of the Company and the confidentiality
of its Confidential Information and to protect the goodwill and other
legitimate business interests of the Company, and also that the enforcement of
such covenants would not cause you any undue hardship or unreasonably interfere
with your ability to earn a livelihood. 
If you violate the covenants and restrictions in this Section and the
Company brings legal action for injunctive or other equitable relief, you agree
that the Company will not be deprived of the benefit of the full period of the restrictive
covenant, as a result of the time involved in obtaining such relief.  Accordingly, you agree that the provisions
in this Section will have a duration determined pursuant to Subsection (a)
above, computed from the date the legal or equitable relief is granted.

 

(c)           As used in this
Agreement:

 

(i)            “Competing
Business” means a business that competes in any material respect with the
business, or any line of business, engaged in by the Company or any of its
Subsidiaries (A) at the time in question in respect of the Term of
Non-Competition occurring prior to the date of termination of your employment
and (B) as of the date of termination of your employment in respect of the Term
of Non-Competition occurring on and after the date of termination of your employment.

 

(ii)           “Competing
Services” means services that, if provided to a business other than a
Competing Business, would constitute the conduct of a Competing Business.

 

(iii)          “Geographic Area”
means the geographic area in which the Company or any of its Subsidiaries
engages in its respective business or any line of its business (A) at the time
in question in respect of the Term of Non-Competition occurring prior to the
date of termination of your employment and (B) as of the date of termination of
your employment in respect of the Term of Non-Competition occurring on and
after the date of termination of your employment.

 

(iv)          “Term of
Non-Competition” means the period of time beginning on the date hereof and
continuing until 5:00 p.m., Dallas, Texas time, on:

 

(A)          the date of
termination if your employment is terminated (1) by the Company for any reason
other than Cause, (2) by you for Good Reason, (3) due to a Non-Renewal election
by you prior to a Change in Control or after the first anniversary of such
Change in Control, or (4) due to a Non-Renewal election made by the Company at
any time, or

 

16

 

(B)           the date that is
twelve (12) months after the date of termination if your employment is
terminated (1) by the Company for Cause, (2) by you for  any reason other than Good Reason, or (3)
due to any Non-Renewal election made by you after a Change in Control and on or
before the first anniversary of such Change in Control.

 

(d)           If any court or
arbitrator determines that any portion of this Section 8 is invalid or
unenforceable, the remainder of this Section 8 will not thereby be
affected and will be given full effect without regard to the invalid or
unenforceable provisions.  If any court
or arbitrator construes any of the provisions of this Section 8 to be
invalid or unenforceable because of the duration or scope of such provision,
such court or arbitrator will be required to reduce the duration or scope of
such provision, to the minimum extent necessary so as to be enforceable, and to
enforce such provision as so reduced.

 

9.             Successors;
Binding Agreement.

 

(a)           This Agreement may
not be assigned by you other than by will or by the laws of descent and
distribution.  This Agreement will inure
to the benefit of and be enforceable by your personal and legal
representatives, executors, administrators, heirs, distributees, devisees and
legatees. This Agreement will inure to the benefit of and be binding upon the
Company and its successors and assigns.

 

(b)           The Company will
require any successor to all or substantially all of the business and/or assets
of the Company, by a written agreement in form and substance reasonably
satisfactory to you, to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.  Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession will be considered grounds for you to
terminate your employment for Good Reason, and if you do so terminate your
employment, you will be entitled to compensation from the Company in the same
amount and on the same terms as you would be entitled to pursuant to Section 5(c) if you terminated your employment
for Good Reason thereunder after, but before the second anniversary of, a
Change in Control.  As used in this
Agreement and after any such succession, “Company” will mean the Company as
hereinbefore defined and any successor and/or assigns which assumes and agrees
to perform this Agreement by operation of law, or otherwise.

 

10.          Miscellaneous.

 

(a)           Construction.  This Agreement will be deemed drafted equally by both the
parties.  Any presumption or principle
that the language is to be construed against any party will not apply.

 

(b)           Notices. 
For purposes of this Agreement, notices and all other communications
provided for in this Agreement will be in writing and will be deemed to have
been duly given when (i) delivered personally; (ii) sent by facsimile or
similar electronic device and confirmed; (iii) delivered by overnight express;
or (iv) if sent by any other means, upon receipt.  Any notice or other communication shall be delivered to the
address set forth below the Company’s or your signature hereto, as applicable,
or to

 

17

 

such other
address as either party will have furnished to the other in writing in
accordance herewith.

 

(c)           Severability.  Except as otherwise provided in Section 8(d), if any provision
of this Agreement is held to be illegal, invalid or unenforceable, such
provision will be fully severable; this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a portion of this Agreement; and the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance from this
Agreement.  Furthermore, except as
otherwise provided in Section 8(d), in lieu of such illegal,
invalid or unenforceable provision there will be added automatically as part of
this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

 

(d)           Withholding. 
The Company may withhold from any amounts payable under this Agreement
such Federal, state or local taxes as are required to be withheld pursuant to
any applicable law or regulation.

 

(e)           No Waiver. 
Except as expressly set forth in this Agreement, no waiver by either
party at any time of any breach by the other party of, or compliance with, any
condition or provision of this Agreement to be performed by the other party
will be deemed a waiver of similar or dissimilar provisions or conditions at
any time.

 

(f)            Equitable and Other Relief.  You acknowledge that money damages would be
both incalculable and an insufficient remedy for a breach of Section 7
or 8 by you and that any such breach would cause the Company irreparable
harm.  Accordingly, the Company, in
addition to any other remedies at law or in equity it may have, will be
entitled, without the requirement of posting of bond or other security, to
equitable relief, including injunctive relief and specific performance, in
connection with a breach of Section 7 or 8 by you.  The parties agree that the only
circumstances in which disputes between them will not be subject exclusively to
arbitration pursuant to the provisions in Section 10(h) are in
connection with a breach of Section 7 or 8 by you.  If the Company files a pleading with a court
seeking immediate injunctive relief and this pleading is challenged by you and
injunctive relief sought is not awarded, the Company will pay all of your costs
and attorneys’ fees.  The parties
consent to venue in Dallas County, Texas and to the exclusive jurisdiction of
competent state courts or federal courts in the state or district in Dallas
County, Texas for all litigation which may be brought, subject to the
requirement for arbitration hereunder, with respect to the terms of, and the
transactions and relationships contemplated by, this Agreement.

 

(g)           Entire Agreement.  The provisions of
this Agreement constitute the entire and complete understanding and agreement
between the parties with respect to the subject matter hereof.  Specifically, you and the Company hereby
agree that this Agreement amends, restates and supercedes in its entirety that
certain employment letter agreement effective as of November 13, 2003, between
you and the Company.

 

(h)           Arbitration. 
Except as otherwise provided in Section 10(f), in the event any
claim, demand, cause of action, dispute, controversy or other matter in
question (“Claim”) arises out of this
Agreement (or its termination) or your employment (or

 

18

 

termination of
employment) by the Company or its Subsidiaries, then, upon the written request
of you or us, such dispute or controversy will be submitted to binding
arbitration.  Any arbitration will be conducted
in accordance with the Federal Arbitration Act (“FAA”)
and, to the extent an issue is not addressed by the FAA or the FAA does not
apply, with the then-current National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (“AAA”)
or other rules of the AAA as applicable to the claims asserted.  The results of arbitration will be binding
and conclusive on the parties hereto. 
All parties agree that venue for arbitration will be in Dallas County,
Texas.  If you are the prevailing party,
then you will be entitled to reimbursement by the Company for reasonable
attorneys fees, reasonable costs and other reasonable expenses pertaining to
the arbitration.  All proceedings
conducted pursuant to this Section 10(h) will be kept confidential by
all parties.  THE ARBITRATORS SHALL HAVE NO AUTHORITY TO
AWARD PUNITIVE DAMAGES UNDER ANY CIRCUMSTANCES (WHETHER IT BE EXEMPLARY
DAMAGES, TREBLE DAMAGES, OR ANY OTHER PENALTY OR PUNITIVE TYPE OF
DAMAGES).  REGARDLESS OF WHETHER SUCH
DAMAGES MAY BE AVAILABLE UNDER TEXAS LAW, YOU AND THE COMPANY EACH HEREBY WAIVE
THE RIGHT, IF ANY, TO RECOVER PUNITIVE DAMAGES IN CONNECTION WITH ANY
CLAIMS.  YOU AND THE COMPANY ACKNOWLEDGE
THAT BY SIGNING THIS AGREEMENT YOU AND THE COMPANY ARE WAIVING ANY RIGHT THAT
YOU OR THE COMPANY MAY HAVE TO A JURY TRIAL OR, OTHER THAN AS EXPRESSLY
PROVIDED BY SECTION 10(f), A TRIAL BEFORE A JUDGE IN CONNECTION WITH, OR
RELATING TO, A CLAIM.

 

(i)            Survival. 
Sections 3(e), 4, 5, 6, 7, 8, 9
and 10 of this Agreement will survive the termination of this Agreement.

 

(j)            Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT
OF LAWS OF TEXAS OR ANY OTHER JURISDICTION, AND, WHERE APPLICABLE, THE LAWS OF
THE UNITED STATES.

 

(k)           Amendments. 
This Agreement may not be amended or modified at any time except by a
written instrument approved by the Board and executed by the Company and you.

 

(l)            Acknowledgement.  You acknowledge that you have read and understand this Agreement
(including its legal effect), have had an opportunity to consult legal counsel
regarding it, have not acted in reliance upon any representations or promises
made by the Company not contained herein, and have entered into this Agreement
freely.

 

(m)          Counterparts.  This Agreement may be executed (including by facsimile
transmission) in any number of counterparts.

 

19

 

By signing and
countersigning this Agreement in the appropriate space set forth below, we and
you have agreed to be bound by the terms and conditions set forth herein,
effective as of November 24, 2003.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  TRAMMELL CROW COMPANY,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  ROBERT E. SULENTIC

  
	
   

  	
  Name:

  	
   

  	
  Robert E. Sulentic

  
	
   

  	
  Title:

  	
   

  	
  Chairman and CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
  Trammell Crow Company

  
	
   

  	
   

  	
   

  	
  2001 Ross Avenue, Suite 3400

  
	
   

  	
   

  	
   

  	
  Dallas, Texas  75201

  
	
   

  	
   

  	
   

  	
  Attention: 
  General Counsel

  
	
   

  	
   

  	
   

  	
  Telephone: 
  (214) 863-3000

  
	
   

  	
   

  	
   

  	
  Fax: 
  (214) 863-3125

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACKNOWLEDGED AND AGREED BY EXECUTIVE:

  	
   

  
	
   

  	
   

  
	
  /s/ WILLIAM F. CONCANNON

  	
   

  	
   

  
	
  Name: William F. Concannon

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  [XXXXXXXXXX]

  	
   

  
	
   

  	
  [XXXXXXXXXX]

  	
   

  
	
   

  	
  Telephone:

  	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  	
   

  
								

 

20

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