Document:

Exhibit 10.3

 

SECOND
AMENDMENT, CONSENT AND WAIVER

 

THIS SECOND
AMENDMENT, CONSENT AND WAIVER dated as of May 6, 2009 (this “Amendment”), among AMYLIN
PHARMACEUTICALS, INC., a Delaware corporation (the “Company”),
each of the Company’s subsidiaries listed on the signature pages hereto
(collectively, together with the Company, the “Borrowers”
and each a “Borrower”), the Lenders (as
defined below) party hereto, and BANK OF AMERICA, N.A., as Administrative Agent, Collateral
Agent and L/C Issuer (in such capacity, the “Administrative
Agent”) for the Lenders.

 

W I T N E S S E T H:

 

WHEREAS, the Borrowers are a party to a Credit Agreement,
dated as of December 21, 2007, among the Borrowers, the lenders from time
to time party thereto (the “Lenders”),
the Administrative Agent, and the other agents, lead arranger and book manager
party thereto (as amended, restated, supplemented or otherwise modified to but
excluding the date hereof, the “Existing Credit Agreement”).
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to such terms in the Existing Credit Agreement;

 

WHEREAS, the Company has proposed a slate of directors (the “Company Nominees”) for election to
the board of directors of the Company (the “Board
of Directors”) at its annual meeting on May 27, 2009 (the “2009 Annual Meeting”), and certain
shareholders of the Company have nominated competing slates of directors (the “Shareholder Nominees”) for election
to the Board of Directors of the Company;

 

WHEREAS, pursuant to Section 8.01(k) of the
Existing Credit Agreement (the “Change of Control
Provision”), an Event of Default would occur if six or more of
the Shareholder Nominees are elected to the Board of Directors at or in
connection with the 2009 Annual Meeting (a “Specified
Change of Control”);

 

WHEREAS, in connection with the nomination of the Shareholder
Nominees, a shareholder of the Company has filed a Verified Fourth Amended Class Action
Complaint for Declaratory and Injunctive Relief (as amended, restated,
supplement, replaced with another complaint or otherwise modified from time to
time, the “Proxy Complaint”) with the
Court of Chancery of the State of Delaware (the “Court”)
challenging the validity and enforceability of the Change of Control Provision
and asking the Court to set aside the Change of Control Provision;

 

WHEREAS, pursuant to Section 8.01(j) of the
Existing Credit Agreement, Lenders believe an Event of Default occurred when
the Proxy Complaint was filed (the “Litigation Event of
Default”);

 

WHEREAS, the Company
has requested that the Lenders waive the Litigation Event of Default and
consent to a Specified Change of Control (if and to the extent that any may
arise);

 

WHEREAS, the
undersigned Required Lenders have agreed to waive the Litigation Event of Default
and consent to the Specified Change of Control upon the terms and conditions
set forth herein and in consideration thereof the parties hereto have agreed,
subject to the terms and conditions hereof, to amend and modify the Existing
Credit Agreement as provided herein;

 

 

NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

 

SECTION 1.01.                    Consent and Waiver.

 

(a)           Limited Consent.  Effective only upon the satisfaction of all
of the Consent Conditions (defined below), the undersigned Required Lenders
hereby (i) consent to the Specified Change of Control, if any shall occur
at or in connection with the 2009 Annual Meeting and (ii) agree that such
Specified Change of Control shall not result in, or be deemed to give rise to,
an Event of Default under the Event of Default provision (the “Limited Consent”).  For purposes hereof, “Consent
Conditions” means the date on which all of the following
conditions have been satisfied or waived in writing by the Administrative Agent
and Required Lenders: (i) the Administrative Agent shall have received (A) a
copy of a final judgment of a court of competent jurisdiction, (B) a
settlement agreement approved by such a court or (C) an opinion of counsel
to the indenture trustee under the Senior 2007 Notes, as the case may be, in
each case providing or opining, as applicable, that the election of any or all
of the Shareholder Nominees to the board of directors of the Company at or in
connection with the 2009 Annual Meeting shall not constitute a “Fundamental
Change” or, in the case of the opinion of counsel or settlement agreement
provided for in clauses (B) and (C) above, otherwise result in a
default or event of default under the Senior 2007 Note Documents, (ii) the
Administrative Agent shall have received a certificate of the Company, signed
by a Responsible Officer of the Company, certifying that as of the effective
date of the Limited Consent (A) no Default (including, without limitation,
as a result of a cross-default under Section 8.01(e) of the Existing
Credit Agreement, but excluding the Litigation Event of Default and any Event
of Default that would arise absent this Amendment as a result of the Change of
Control provisions) shall have occurred and be continuing and (B) no
Default could reasonably be expected to occur as a result of the Specified
Change of Control or any transactions arising with respect thereto, and (iii) the
Second Amendment Effective Date shall have occurred.

 

(b)           Waiver. Effective upon the
Second Amendment Effective Date, the undersigned Required Lenders hereby waive
the Litigation Event of Default.  Except
as otherwise expressly provided in clause (ii) of Section 1.01(a) hereof
and in the first sentence of this Section 1.01(b), the execution,
delivery and effectiveness of this Amendment or the effectiveness of either of
the foregoing waivers shall not operate as a waiver of any other Default or
Event of Default or of any right, power or remedy of the Administrative Agent
or any other Secured Party under any Loan Document.

 

SECTION 1.02.                    Amendment to Section 1.01 of the
Existing Credit Agreement.  Effective immediately upon the
Second Amendment Effective Date, the definition of “Base Rate” set forth in Section 1.01
of the Existing Credit Agreement is hereby deleted in its entirety and replaced
by the following:

 

2

 

“Base Rate”
means for any day a fluctuating rate per annum equal to the highest of (a) the
Federal Funds Rate plus 1⁄2 of 1%, (b) the rate of interest in effect for
such day as publicly announced from time to time by Bank of America as its “prime
rate” and (c) the Eurocurrency Rate for an Interest Period of one month plus 1.00%.  The “prime rate” is a rate set by Bank of
America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.  Any change in such
rate announced by Bank of America shall take effect at the opening of business
on the day specified in the public announcement of such change.  For the purposes of subsection (c) above,
the Eurocurrency Rate shall be determined daily and any change in the
Eurocurrency Rate shall take effect on the day of such change.

 

SECTION 1.03.                    Amendment of Section 2.10 of the
Existing Credit Agreement.  Effective immediately upon the
Second Amendment Effective Date, the first sentence of Section 2.10 of the
Existing Credit Agreement is hereby amended by deleting the phrase “when the
Base Rate is determined by Bank of America’s ‘prime rate’”.

 

SECTION 1.04.                    Representations and Warranties. 
Each Borrower hereby represents and warrants to the Administrative Agent
and the Lenders, as follows:

 

(a)           Except as to matters that are the
subject of this Amendment, the representations and warranties of such Borrower
contained in Article V of the Existing Credit Agreement, as amended hereby
(the “Amended Credit Agreement”),
or any other Loan Document (except for any Secured Hedge Agreements or Secured
Cash Management Agreements) or which are contained in any document furnished at
any time under or in connection therewith are true and correct in all material
respects on and as of the date hereof and on and as of the Second Amendment
Effective Date with the same effect as if made on and as of the date hereof or
the Second Amendment Effective Date, as the case may be, except to the extent
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct in all material respects as of such
earlier date, and except that the representations and warranties contained in
Sections 5.05(a) and (b) of the Existing Credit Agreement shall be
deemed to refer to the most recent statements furnished pursuant to Sections
6.01(a) and (b) thereof, respectively.

 

(b)           After giving effect to this
Amendment, each Loan Party is in compliance in all material respects with all
the terms and conditions of the Amended Credit Agreement and the other Loan
Documents on its part to be observed or performed and no Default or Event of
Default has occurred or is continuing under the Amended Credit Agreement.

 

(c)           The execution, delivery and
performance by such Borrower of this Amendment have been duly authorized by
such Borrower.

 

3

 

(d)           Each of this Amendment and the
Amended Credit Agreement constitutes the legal, valid and binding obligation of
such Borrower, enforceable against such Borrower in accordance with its terms
subject to bankruptcy, insolvency, reorganization, moratorium, or similar laws
of general applicability relating to or affecting creditors’ rights.

 

(e)           The execution, delivery, performance
and compliance with the terms and provisions by such Borrower of this Amendment
and the consummation of the transactions contemplated herein, do not and will
not: (i) contravene the terms of any of such Borrower’s Organization Documents;
(ii) conflict with or result in any breach or contravention of, or (except
for the Liens created under the Loan Documents) the creation of any Lien under,
(A) any material Contractual Obligation to which such Borrower is a party
affecting such Borrower or the properties of such Borrower or its Subsidiaries
or (B) any material order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Borrower or its property is
subject or (C) violate any Law in any material respect.

 

(f)            No default or event of default has
occurred and is continuing under the Senior 2004 Notes, and no default or event
of default shall occur under the Senior 2004 Notes upon the occurrence of a
Specified Change of Control.

 

SECTION 1.05.                    Effectiveness. 
This Amendment shall become effective only upon satisfaction of the
following conditions precedent (the first date upon which each such condition
has been satisfied being herein called the “Second
Amendment Effective Date”):

 

(a)           The Administrative Agent shall have
received duly executed counterparts of this Amendment which, when taken
together, bear the authorized signatures of the Borrower, the Administrative
Agent and the Required Lenders.

 

(b)           All fees due and payable as of the
Second Amendment Effective Date in accordance with the Engagement Letter, dated
as of May 1, 2009 (the “Engagement Letter”),
among the Company, Bank of America and Banc of America Leasing &
Capital, LLC (“BALC”), shall have been paid
in full.

 

(c)           The Administrative Agent on behalf of
the Lenders shall have received such other documents, instruments and
certificates as they shall reasonably request and such other documents,
instruments and certificates shall be satisfactory in form and substance to the
Lenders and their counsel.  All corporate
and other proceedings taken or to be taken in connection with this Amendment
and all documents incidental thereto, whether or not referred to herein, shall
be satisfactory in form and substance to the Lenders and their counsel.

 

SECTION 1.06.                    APPLICABLE LAW. 
THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 1.07.                    Fees, Costs and Expenses.  Unless, within
ten (10) days following the occurrence of a Specified Change of Control,
the Borrowers have (a) repaid in full in cash the aggregate outstanding
Loans under the Amended Credit Agreement, (b) terminated the 

 

4

 

Revolving
Credit Facility, (c) fully Cash Collateralized the Outstanding Amount of
L/C Obligations and the Permitted FX Facility under the Amended Credit
Agreement and (d) terminated the Letter of Credit Sublimit in accordance
with Section 2.06 of the Amended Credit Agreement, the Borrowers will pay,
immediately upon the expiration of such ten day period following the occurrence
of a Specified Change of Control, to the Administrative Agent, for the account
of each consenting Lender (including Bank of America and BALC) party hereto, a
fee (the “Upfront Fee”) in an amount equal
to 50 bps times the aggregate outstanding Loans, participations in
Letters of Credit and available Revolving Credit Commitments of each consenting
Lender.  The Upfront Fee described above
is the same “Upfront Fee” as is described in the Engagement Letter, shall be
for the undersigned Lenders’ consent hereto and shall be payable in full
(without duplication of the “Upfront Fee” described in the Engagement Letter),
so long as the Second Amendment Effective Date has already occurred,
immediately upon the expiration of the ten day period following the occurrence
of a Specified Change of Control. In addition, the Borrowers promptly shall pay all
costs and expenses of the Administrative Agent in connection with the
preparation, execution and delivery of this Amendment and the other instruments
and documents to be delivered hereunder (including, without limitation, the
reasonable fees and expenses of counsel for the Administrative Agent) in
accordance with and to the extent required by the terms of Section 10.04(a) of
the Amended Credit Agreement.

 

SECTION 1.08.                    Loan Document; Counterparts. 
This Amendment is and from and after the Second Amendment Effective Date
shall be deemed to be a “Loan Document” under the Amended Credit Agreement.
This Amendment may be executed in any number of counterparts, each of which
shall constitute an original but all of which when taken together shall
constitute but one agreement. Delivery by facsimile by any of the parties
hereto of an executed counterpart of this Amendment shall be as effective as an
original executed counterpart hereof and shall be deemed a representation that
an original executed counterpart hereof will be delivered, but the failure to
deliver a manually executed counterpart shall not affect the validity, enforceability
or binding effect of this Amendment.

 

SECTION 1.09.                    Existing Credit Agreement. 
Except as expressly set forth herein, the consent, waiver and amendments
provided herein shall not, by implication or otherwise, limit, constitute a
waiver of, or otherwise affect the rights and remedies of the Administrative
Agent or any other Secured Party under the Existing Credit Agreement or any
other Loan Document, nor shall it alter, modify, amend or in any way affect any
of the terms, conditions, obligations, covenants or agreements contained in the
Existing Credit Agreement or any other Loan Document.  Each of the amendments provided herein shall
apply and be effective only with respect to the provisions of the Existing Credit
Agreement specifically referred to by such amendment.  Except to the extent a provision in the
Existing Credit Agreement is expressly amended herein, the Existing Credit
Agreement and the other Loan Documents shall continue in full force and effect
in accordance with the provisions thereof and each of the undersigned Loan
Parties hereby ratifies and confirms in all respects its obligations under and
the continued full force and effect of the Amended Credit Agreement and the
other Loan Documents.

 

[Signature pages follow]

 

5

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized officers, all as of the date first above
written.

 

	
   

  	
  AMYLIN PHARMACEUTICALS, INC., as a Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lloyd A. Rowland

  
	
   

  	
  Name:

  	
  Lloyd A. Rowland

  
	
   

  	
  Title:

  	
  Vice President, Governance and Compliance, and
  Secretary

  
				

 

 

	
   

  	
  AMYLIN OHIO LLC, as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  Amylin Pharmaceuticals, Inc., 

  
	
   

  	
   

  	
   

  	
  its Sole Manager

  

 

 

	
   

  	
  By:

  	
  /s/ Lloyd A. Rowland

  
	
   

  	
  Name:

  	
  Lloyd A. Rowland

  
	
   

  	
  Title:

  	
  Vice President, Governance and Compliance, and
  Secretary

  
				

 

 

	
   

  	
  AMYLIN INVESTMENTS LLC, as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Amylin Pharmaceuticals, Inc.,

  
	
   

  	
   

  	
   

  	
  its Sole Manager

  

 

 

	
   

  	
  By:

  	
  /s/ Lloyd A. Rowland

  
	
   

  	
  Name:

  	
  Lloyd A. Rowland

  
	
   

  	
  Title:

  	
  Vice President, Governance and Compliance, and
  Secretary

  
				

 

Second Amendment, Consent
and Waiver

Signature Page

 

 

	
   

  	
  BANK OF AMERICA, N.A., as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brenda H. Little

  
	
   

  	
  Name:

  	
  Brenda H. Little

  
	
   

  	
  Title:

  	
  Vice President

  
				

 

	
   

  	
  BANK OF AMERICA, N.A., as a Revolving Credit Lender, L/C
  Issuer and Hedge Bank under the Permitted F/X Facility

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karin Barnes

  
	
   

  	
  Name:

  	
  Karin Barnes

  
	
   

  	
  Title:

  	
  Senior Vice President

  
				

 

 

	
   

  	
  BANC OF AMERICA LEASING & CAPITAL, LLC,
  as a Term
  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lori J. Noberini

  
	
   

  	
  Name:

  	
  Lori J. Noberini

  
	
   

  	
  Title:

  	
  Vice President

  
				

 

 

	
   

  	
  SILICON VALLEY BANK, as a Term Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  RBS ASSET FINANCE, INC., as a Term Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lawrence S. Hershoff

  
	
   

  	
  Name:

  	
  Lawrence S. Hershoff

  
	
   

  	
  Title:

  	
  Senior Vice President

  
				

 

 

	
   

  	
  COMERICA BANK, as a Term Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Greg Park

  
	
   

  	
  Name:

  	
  Greg Park

  
	
   

  	
  Title:

  	
  Vice President

  
				

 

 

	
   

  	
  BMO CAPITAL MARKETS FINANCING, INC., as a Term Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  FIRST BANK, as a Term Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

	
   

  	
  UNION BANK OF CALIFORNIA, N.A., as a Term Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce Breslau

  
	
   

  	
  Name:

  	
  Bruce Breslau

  
	
   

  	
  Title:

  	
  Senior Vice President

  
				

 

 

	
   

  	
  AIB DEBT MANAGEMENT, LIMITED, as a Term Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brent Phillips

  
	
   

  	
  Name:

  	
  Brent Phillips

  
	
   

  	
  Title:

  	
  Vice President, Investment Advisor to AIB Debt
  Management, Limited

  
				

 

 

	
   

  	
  By:

  	
  /s/ Mia Bolin

  
	
   

  	
  Name:

  	
  Mia Bolin

  
	
   

  	
  Title:

  	
  Assistant Vice President, Investment Advisor to AIB
  Debt Management, LimitedEXHIBIT 10.4

 

***Text Omitted and Filed Separately with the Securities and
Exchange

Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

EXENATIDE
ONCE WEEKLY PEN SUPPLY AGREEMENT

 

This EXENATIDE ONCE WEEKLY PEN SUPPLY AGREEMENT (“Agreement”)
is entered into as of May 11, 2009 (the “Effective Date”), by and between
Amylin Pharmaceuticals, Inc. (“Amylin”), a Delaware corporation, and Eli
Lilly and Company (“Lilly”), a corporation organized and existing under the laws
of the State of Indiana.  Amylin and
Lilly are sometimes referred to herein individually as a “Party” and
collectively as “Parties”.  References to
“Amylin” and “Lilly” and “Party” or “Parties” shall include their respective
Affiliates.

 

RECITALS

 

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

 

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

 

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

 

4.                                       Amylin and
Lilly are parties to a separate Exenatide Once Weekly Supply Agreement,
effective October 16, 2008, as amended (the “Vial Supply Agreement”), for
the purchase and supply of EQW Product in commercial quantities intended for
commercial sale in the Territory outside the U.S. and for the treatment of cost
and expenses applied and allocated to EQW Product intended for commercial sale
in the U.S.

 

***
Confidential Treatment Requested

 

 

***Text Omitted and Filed Separately with the Securities and
Exchange

Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

AGREEMENT

 

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

 

ARTICLE 1

DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

***
Confidential Treatment Requested

 

2

 

***Text Omitted and Filed Separately with the Securities and
Exchange

Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

(e)                                  depreciation of
any Pen Product specific capital investments at the Facility not included in
the Pen Product Initial Capital Investment and solely funded by Amylin as part
of Capital Investments called out in section 3.8(f) of this Agreement;

 

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

 

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

 

(h)                                 an allocation
of depreciation of those capital investments located at Third Party Suppliers
but owned by Amylin to the extent such capital investments directly support
Manufacture of the Pen Product and have not been previously funded by Lilly;

 

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

 

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

 

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

 

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

 

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

 

***
Confidential Treatment Requested

 

3

 

***Text Omitted and Filed Separately with the Securities and
Exchange

Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

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

 

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

 

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

 

1.3                               “API” will have the
meaning set forth in Section 4.7 of this Agreement.

 

1.4                               “Applicable
Laws” means all applicable U.S. statutes, ordinances, regulations, rules or
orders, including, without limitation, the FD&C Act, the Regulatory Law,
Prescription Drug Marketing Act, Generic Drug Enforcement Act of 1992 (21
U.S.C. §3359, et. seq.), Anti-Kickback Statute
(42 U.S.C. §1320 a-7b, et. seq.),
Resource Conservation and Recovery Act, Clean Water Act, Clean Air Act, the
Drug Enforcement Act, Occupational Safety and Health Act and cGMP, as well as
comparable laws of the European Union, all as amended from time to time.

 

***
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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

1.6                               “Annual
Average Unit Cost” will have the meaning set forth in Section 3.5(a) of
this Agreement.

 

1.7                               “Budget
Summary” means the budget summary for the applicable period
prepared pursuant to Section 3.13(c) of this Agreement.

 

1.8                               “Cartridge
Supply Agreement” means the Cartridge Supply Agreement, by and
between Amylin and Lilly, dated as of April 20, 2007, as such agreement
may be amended from time to time.

 

1.9                               “cGMP” will mean
current Good Manufacturing Practices as detailed in “The Rules Governing
Medicinal Products in the European Community (EC) — Volume IV: Guide to Good
Manufacturing Practice for Medicinal Products” and the “US Current Good
Manufacturing Practices (cGMPs) for Finished Pharmaceuticals: 21 Code of
Federal Regulations (CFR) Parts 11, 210 and 211, and 820, all as amended from
time to time, and any additional cGMPs promulgated by any regulatory authority
not described above and provided to Amylin by Lilly and mutually agreed to
between the Parties.

 

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

 

1.11                        “Components” mean the pen
molded parts including a plunger rod, threaded sleeve, adapter, cartridge
holder and grip.  In addition, the final
assembly will also include a dual chamber cartridge and will include needles,
packaging materials and labeling as may be agreed to by the MSC.

 

1.12                        “Effective
Date” will have the meaning set forth in the introductory paragraph of this
Agreement.

 

1.13                        “EQW
Product” will have the meaning set forth in the Vial Supply
Agreement (previously refered to as the Exenatide Once Weekly Supply
Agreement).

 

*** Confidential
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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

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

 

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

 

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

 

1.18                        “Inspection
Period” will have the meaning set forth in Section 5.8(a) of this
Agreement.

 

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

 

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

 

1.21                        “MRD” means the
Manufacturing Responsibilities Document, which sets forth written instructions
regarding the Manufacture and other technical matters including, without
limitation, testing procedures and supply of the Pen Product under this
Agreement.

 

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

 

1.23                        “OUS” means the
Territory outside the U.S.

 

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

 

1.25                        “Pen
Product” means the Product (whether to be used as trade,
sample or clinical trial material) or placebo developed as a fixed-dose
injection of exenatide administered once per week for diabetes and any other
Indications for which such Product may be approved for use and Manufactured by
Amylin configured for delivery in a dual chamber cartridge pen formulation, in
finished form or in nude pens, including any components thereof and associated
packaging components.

 

***
Confidential Treatment Requested

 

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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

1.26                        “Pen
Product Initial Capital Investment” shall mean the initial
capital investment made by Amylin and Lilly in and for the Facility for the
Manufacture of the Pen Product up to a capacity of [***] units, including, but
not limited to, the filling of the dual chamber cartridge and installing the
cartridge in the pen to support both U.S. and OUS markets.  For Pen Product for sale in the U.S., the
scope of the investments also includes facilities and equipment to package the
current presentation of  pens and needles
into blister packs.  For clarification,
Pen Product Capital Investment shall not include the capital investment made by
Amylin in and for the Facility for EQW Product and compensated in accordance
with the Vial Supply Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

1.33                        “Regulatory
Authority” will have the meaning set forth in the
Collaboration Agreement.

 

1.34                        “Regulatory
Lead” will have the meaning set forth in the Collaboration Agreement.

 

***
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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

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

 

1.37                        “Standard
Cost” means the planned Pen Product Manufacturing costs for each SKU (which
shall not include depreciation of the Pen Product Initial Capital Investments
shared by the Parties) divided by the production volume for such SKU as agreed
to by the Parties as part of the annual plan.

 

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

 

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

 

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

 

ARTICLE 2

GOVERNANCE

 

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

 

(a)                                  output
requirements of the Facility;

 

(b)                                 operational
performance to plan or revised forecast;

 

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

 

(d)                                 major capital
projects;

 

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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

(f)                                    sourcing and
supply agreements.

 

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

 

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

 

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

 

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

 

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

 

***
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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

ARTICLE 3

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

 

3.1                               Pen
Product Manufacturing Development Costs.  Notwithstanding anything to the contrary in
the Collaboration Agreement or any previous formal or informal agreements
between the Parties, the Parties agree that Lilly shall be responsible for 53%
of Pen Product Manufacturing Development Costs incurred up until commercial
Manufacture of Pen Product commences and Amylin shall be responsible for 47% of
Pen Product Manufacturing Development Costs incurred up until commercial
Manufacture of Pen Product commences.

 

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

 

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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

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

 

3.5                               [***] True-Up.

 

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

 

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

 

***
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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

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

 

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

 

3.8                               Pen
Product Capital Investments.

 

(a)                                The Parties
agree that the costs of the Pen Product Initial Capital Investment will be
allocated 40% to Amylin and 60% to Lilly.

 

(b)                               Amylin agrees that if it intends to
refinance any outstanding indebtedness, or incur additional indebtedness, the
aggregate outcome of which would result in an additional Lien (whether an
increase of an existing Lien or a new Lien) being placed on the Facility, then
before entering into any binding commitment in connection therewith Amylin
will:  (1) provide Lilly with no
less than thirty (30) days’ written notice of such intent (which notice shall
include a reasonably detailed description of the proposed financing and
potential encumbrances), (2) consider in good faith any comments Lilly
provides to Amylin on the proposed financing (which comments Lilly must provide
within ten (10) days of Lilly’s receipt of Amylin’s notice), and (3) 
upon Lilly’s request, engage in a discussion between the Alliance Steering
Committee Chairs regarding the proposed financing.  Amylin also agrees that before entering into
any binding commitment to refinance 

 

***
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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

outstanding indebtedness or incur additional
indebtedness, Amylin will: (1) ensure that such refinancing or incurrence
of additional indebtedness will not have any adverse impact on the Actual
Manufacturing Cost or the Product (as applicable in both the Vial Supply
Agreement and this Agreement); (2) ensure that the aggregate amount of all
liens placed on the Facility (as such facility is currently configured and
excluding inventory) do not exceed [***] without Lilly’s consent, which consent
shall not be unreasonably withheld; and (3) use Commercially Reasonable
Efforts to obtain the financing party’s consent to exclude the Pen Equipment
(Pen Equipment meaning the hard assets identified as equipment in lines 2
through 5 on Exhibit B totaling an estimated $[***]) from being subject to any such
Lien.  For the purposes of this Section, “Lien”
means any mortgage, pledge, security interest, hypothecation, assignment,
encumbrance, lease, lien, option, right of use, or other encumbrance of any
kind.

 

(c)                                  If Amylin believes that it may breach an
obligation under any loan or other financing agreement on the Facility, where
such breach could result in an adverse impact on Amylin’s continued ability to
perform its obligations under the Vial Supply Agreement and this Agreement,
then Amylin will promptly notify Lilly thereof and agree to meet with Lilly to
discuss.

 

(d)                                 Amylin agrees that it will not, directly
or indirectly, without Lilly’s prior written consent, which shall not be
unreasonably withheld, enter into any agreement, transaction or other type of
arrangement with a third party involving the Facility which would result in
Lilly, either directly indirectly, being obligated to purchase any minimum
amount of Product from such third party. 
Amylin shall proceed with implementing the Pen Product Initial Capital
Investment project including payment of contractors and suppliers and shall own
the equipment and other assets acquired. 
The Amylin and Lilly Pen team and/ or the SCWT Pen team are responsible
for initiating the review and approval from the MSC, and the ASC of any capital
commitments beyond the project budget of $216 million.  An estimate of the Pen Product Initial
Capital Investment is set forth in Exhibit B.

 

(e)                                  Lilly will
provide to Amylin its cost incurred for such Pen Product Capital Investment,
[***], within [***] of the [***].  Amylin
will prepare a report, in a format mutually agreed to by the Parties,
aggregating the expenses incurred by each party, for such [***], and will invoice
Lilly for their allocation of the costs incurred for such Pen Product Capital
Investment on a [***] basis.  Lilly shall
reimburse Amylin for such billed amounts within [***] of the date of the
invoice.  All past due amounts owed by
Lilly to Amylin under this agreement shall bear interest at the rate set forth
in Section 4.9 of the Collaboration Agreement.

 

***
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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

(f)                                    Any capital
investments beyond the Pen Product Initial Capital Investment required to
establish or maintain production capability for the Pen Product will be based
upon recommendations of the SCWT and the MSC and the approval of such project
by the ASC.  Projects will be grouped
into two categories:  projects with a scope
less than [***] dollars ($[***]) each (collectively, “Minor Projects”), and
projects with a scope greater than or equal to [***] dollars ($[***]) each
(collectively, “Major Projects”).  
Projects classified as Minor but with an anticipated spend greater than
[***] dollars ($[***]) must be listed individually.  Amylin may spend money on Minor Projects
included in the first year Budget Summary without prior approval by MSC.  Amylin at their sole discretion may make
trade-off decisions for Minor Projects not included in the Budget Summary provided
(i) the spend for Minor Projects does not exceed the total approved Minor
Project Budget amount for that year and (ii) the trade-off does not
replace a capital asset required to meet Regulatory requirements.  Spend for Major Projects must be approved by
the MSC prior to initiation of the project regardless of whether the Project
was included in the Budget Summary or not. 
MSC will take action on such requests for approvals on a timely basis.

 

3.9                               Reimbursement
for Costs Incurred.  Lilly will
reimburse Amylin for Lilly’s share, based upon the allocation set forth in Section 3.8(a),
of costs incurred by Amylin prior to the Effective Date for the Pen Product
Initial Capital Investment, as set forth on Exhibit C,
together with interest at the interest rate agreed to in the Letter Agreement
between Amylin and Lilly dated June 12, 2006, by making a cash payment of
such amount to Amylin within 10 working days of the Effective Date.

 

3.10                        True-Up.  [***] following a launch of the Pen Product
in one of the major OUS  markets (United
Kingdom, France, Germany, Italy, Spain, or Japan), or the year in which annual
sales volumes of the Pen Product exceed [***] units (whichever is first), the
Parties agree to true-up the capital split according to the process outlined in
Exhibit E.

 

***
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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

3.11                        Impairment.  To the extent any or all of the Pen Product
assets added as part of this Agreement cannot be used for the Manufacture of
Pen Product, the Parties shall meet to discuss the potential impairment of such
assets.  As the assets covered in the Pen
Product Initial Capital Investment are funded on a pay-as-you-go basis by both
Parties, there would be no financial settlement associated with any such
impairment.  If the Parties agree to take
an impairment charge relating to capital investments for Pen Product other than
the Pen Product Initial Capital Investment, as covered in Section 3.8(f) of
this Agreement, and not funded on a pay-as-you-go basis, Lilly will pay to
Amylin an amount equal to  [***]% of
any impairment charge determined in accordance with GAAP for all  non-depreciated capital investments in and
for the Pen Product assets and the Manufacture of Pen Product (excluding any
impairment charge with respect to which Lilly makes a payment to Amylin as
provided in Section 3.10 of the Vial Supply Agreement), less:  (a) any
other amounts due and payable to Lilly from Amylin at the time of the
impairment charge and not deducted in calculating the payment made by Lilly
under Section 3.10 of the Vial Supply Agreement; and (b) any amounts
for any assets that can otherwise be utilized for other uses by Amylin and are
not deducted in calculating the payment made by Lilly under Section 3.10
of the Vial Supply Agreement; plus any other
amounts due and payable to Amylin from Lilly at the time of impairment charge
that are not added in calculating the payment made by Lilly under Section 3.10
of the Vial Supply Agreement.  In the
event any amounts are recovered by Amylin after the impairment charge, such
amounts shall be allocated between Lilly and Amylin in the same proportions as the
impairment charge.

 

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

 

3.13                        Reporting.

 

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

 

***
Confidential Treatment Requested

 

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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

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

 

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

 

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

 

ARTICLE 4

MANUFACTURING AND QUALITY

 

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

 

***
Confidential Treatment Requested

 

16

 

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Exchange

Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

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

 

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

 

***
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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

(b)                                 In no event
will Amylin be required to make a modification to the Pen Product that is
prohibited by Applicable Laws or Regulatory Authorities.  In no event will Amylin be prohibited from
making a modification to the Pen Product that is required by Applicable Laws or
Regulatory Authorities; provided, however, that Amylin shall consult with Lilly
prior to making any such modification, and provided further that Amylin shall
use its Commercially Reasonable Efforts to implement any such modification.  Any modifications to the Pen Product will be
in accordance with the terms of the Quality Agreement.

 

4.5          Audit; Safety;
Applicable Laws.

 

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

 

(b)                                 Quality Audit
of the Facility by Lilly Representatives.  Lilly shall have the right, upon no less than
thirty (30) days’ notice and in accordance with the Quality Agreement, to
conduct an initial OUS commercial readiness audit of the Facility during
regular business hours for the purpose of conducting a quality control
inspection to assure cGMP compliance of the Facility used in the Manufacturing
of Pen Product to be delivered to Lilly (the “Start-Up Quality Audit”).  Following the Start-Up Quality Audit, upon no
less than thirty (30) days’ advance written notice to Amylin and in accordance
with the terms of the Quality Agreement, no more than one (1) time per
Calendar Year, Amylin will permit Lilly’s representatives (such representatives
to be reasonably acceptable to Amylin) to conduct an audit of the Facility
during regular business hours for the purpose of conducting a quality control
inspection to assure cGMP compliance of the Facility used in the Manufacturing
of Pen Product to be delivered to Lilly (the “Quality Audit”); provided,
however, that such restriction of one (1) such audit per Calendar Year
shall not apply in cases where Lilly attends an audit or inspection conducted
by a

 

***
Confidential Treatment Requested

 

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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

Regulatory Authority.  In addition, Lilly representatives shall have
the right to re-inspect the Facility, upon reasonable advance written notice to
Amylin and during regular business hours: (i) to ensure appropriate
remedial actions are being taken in response to a significant adverse finding
identified during a prior Lilly Quality Audit of the Facility, (ii) if an
audit of the Facility conducted by a Regulatory Authority results in a critical
finding, or (iii) if any Pen Product is, or has the potential to be,
recalled from the market by either Amylin and/or Lilly due to Manufacturing
issues.  Lilly representatives will be
advised of the confidentiality obligations under this Agreement, and will follow
such security, safety and facility access procedures as are reasonably
designated by Amylin.  Amylin may require
that at all times the Lilly representatives be accompanied by an Amylin
representative to assure protection of Amylin Confidential Information or
confidential information of a Third Person, if applicable.   Amylin will respond in writing to any
written audit observation provided by Lilly within sixty (60) days in the form
of a mutually agreed upon action plan.

 

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

 

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

 

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

 

4.6                               Access
to the Facility by Lilly. 
Amylin will permit Lilly to appoint one (1) or more employee(s) to
be its person in the plant at the Facility, who shall have reasonable access
during normal business hours.  The scope
of such person’s role in the Facility with respect to the Pen Product shall be
the same as the role for such person with respect to the EQW Product as set
forth in the Vial Supply Agreement.  The
person in the plant shall have 

 

***
Confidential Treatment Requested

 

19

 

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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

access to information that
impacts budget, operational performance, and timelines. In addition, Amylin
will permit a reasonable number of Lilly employees reasonable access during
normal business hours to the Facility in order to observe and review the
Manufacturing process.  The parties
acknowledge that the foregoing access rights are not intended to permit Lilly
any level of audit rights in addition to those described in Section 4.5
above. Lilly will comply with Amylin’s written instructions established to
enhance the safety or security of the Facility or of persons at or near the
Facility.

 

4.7                               Third
Party Suppliers.  The Parties
acknowledge that Amylin will Manufacture the Pen Product and that certain
materials, including active pharmaceutical ingredient (“API”), diluents and
component parts for the Pen Product and certain testing services will be
purchased by Amylin from third party suppliers (“Third Party Suppliers”).  The MSC shall be responsible for overseeing
negotiations for any supply agreements with Third Party Suppliers not already
in place as of the Effective Date (including any amendments, modifications or
extensions of those already in place) in accordance with the Letter Agreement
between Amylin and Lilly dated January 30, 2004 except that the references
to the Joint Commercialization Committee in the letter are hereby replaced by
MSC.  Amylin shall use its Commercially
Reasonable Efforts to cause all Third Party Suppliers to fulfill their
obligations under their agreements with Amylin. 
The Parties agree that Amylin will not be liable to Lilly, its
Affiliates and their respective directors, officers, shareholders, employees or
agents for any Third Party Suppliers’ failure to deliver or failure of any Pen
Product as a result of materials or components manufactured by Third Party
Suppliers or the failure of such materials or components to comply with
applicable Specifications, any representations or warranties of such Third
Party Supplier or Applicable Laws.  In
the event Amylin receives any indemnification payments or other recovery from
Third Party Suppliers performing services on behalf of Amylin, such amounts shall
be divided between Amylin and Lilly in proportion to their respective shares,
at the time of the payment, of U.S. EQW Gross Profit and OUS EQW Gross Profit
specifically associated with sales of Pen Product (as such terms are defined in
Exhibit E of the Vial Supply Agreement) (less any royalty obligation to
Amylin from Lilly) under the Collaboration Agreement, as amended.  To the extent legally or contractually
permissible, Amylin shall obtain a written assignment of all patent rights and
know-how that such Third Party Suppliers may develop by reason of work
performed under this Agreement.

 

4.8                               Records.  Each of the Parties shall
keep accurate records of its activities under this Agreement to the extent
required by Applicable Laws and in accordance with the Quality Agreement.  Access to such records will be made available
by Amylin to Lilly during 

 

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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

normal business hours upon
Lilly’s reasonable written request. The provisions of this Section 4.8
shall not supersede the audit provisions set forth in Section 4.5  Amylin further agrees to provide Lilly with
such information regarding the Manufacture and testing of Pen Product hereunder
as may be required to obtain or maintain Marketing Approval of Pen Product or
as may otherwise be required or requested by any Regulatory Authority.

 

4.9                               Use of
Facility and Adjusted Costs.

 

(a)                                  Use of Facility.  As of the date hereof, the Parties
acknowledge and agree that the Pen Product assets covered by this Agreement
will be constructed for the commercialization of Pen Product on a
worldwide-demand basis.  At any future
date, Amylin may propose to the MSC that the Pen Product assets be used for a
purpose other than Pen Product.  If the
Parties, through the MSC, cannot come to an agreement regarding such proposal,
then the matter shall be escalated using the dispute resolution procedure set
forth in the Collaboration Agreement.  If
the Parties’ senior executives cannot mutually resolve the matter after good
faith due deliberation, then Amylin shall have the final right to decide how to
use the Pen Product assets subject to Section 4.9(b), below.

 

(b)                                 Adjusted Costs.   Prior to a final decision being reached on
any additional use(s) of the Pen Product assets covered by this Agreement
other than for Pen Product, the Parties shall agree in good faith to modify the
definition of Actual Manufacturing Cost set forth in Section 1.2 and any
other applicable Terms.  Any such
modification to the Agreement shall take into account, among other things:  (1) the actual cost of the portion of
the existing Pen Product assets to be used by Amylin for any use other than for
Pen Product, (2) an allocation of site-wide support facilities and
resources that takes into account the planned use of the Pen Product assets
other than for Pen Product, and (3) a prospective refund of a portion of
Lilly’s up-front funding of the Pen Product Initial Capital Investment.  All capital expenses and costs associated
with the planned use of the Pen Product assets other than for Pen Product shall
be Amylin’s sole responsibility.

 

***
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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

ARTICLE 5

PURCHASE OF PEN PRODUCT; FORECASTS

 

5.1                               Forecasts.

 

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

 

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

 

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

 

5.3                               Limitations
of Supply.  Amylin will use
its Commercially Reasonable Efforts to make available at least [***] of the
Forecast.  If at any time Amylin
anticipates that it will be unable to supply in whole or in part the quantities
of Pen Product set forth in a Lilly Purchase Order for any reason, including
without limitation, Force Majeure, Amylin will inform Lilly as soon as possible
via email of such anticipated shortfall. 
Amylin will also notify Lilly of the underlying reason for the
shortfall, proposed remedial measures, the date

 

***
Confidential Treatment Requested

 

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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

such inability to supply the full order of
Pen Product is expected to end, and a proposed amount of Pen Product to be
delivered to Lilly.  In the event fewer
units of Pen Product are available than the Parties desire to purchase, the
Parties will allocate available Pen Product on a pro rata basis based upon the
Forecasts included in the most recent [***] business plan approved by unanimous
vote of the ASC; provided, however, that if a Party believes that a pro rata
allocation based upon such Forecasts is not the appropriate allocation method,
such Party may request that the Parties meet to discuss the issue, and the
other Party shall agree to meet and consider in good faith the reasonable
comments of the other Party.  If after
such meeting, the Parties are unable to decide on the appropriate method for
allocation, then the matter shall be resolved in accordance with Section 3.1(e)(ii) of
the Collaboration Agreement.

 

(a)                                  Limitations of
API.  In the event of a limitation
of supply of API, Amylin agrees that it shall not adversely impact the supply
of Pen Product to Lilly by unreasonably allocating such limited API
disproportionately to any other exenatide-containing product, and the Parties
agree that API will be allocated as between EQW Product and Pen Product on a
pro rata basis based upon the forecasts for EQW Product and Pen Product
included in the most recent annual business plan approved by unanimous vote of
the ASC.

 

(b)                                 Limitations of
Components.  In the
event of a limitation of supply of any Components, Amylin will inform Lilly as
soon as possible via email of such anticipated shortfall.  Amylin will also notify Lilly of the
underlying reason for the shortfall, proposed remedial measures, the date such
inability to supply the Component is expected to end, and the proposed amount
of the Component to be delivered to Lilly. 
In the event of a limitation of supply of any Component used in both EQW
Product and Pen Product, the Parties agree that such Components will be
allocated as between EQW Product and Pen Product on a pro rata basis based upon
the forecasts for EQW Product and Pen Product included in the most recent
annual business plan approved by unanimous vote of the ASC.  In the event fewer units of the Component are
available than the Parties desire to purchase, the Parties will allocate
available Component on a pro rata basis based upon the Forecasts included in
the most recent [***] business plan approved by unanimous vote of the ASC;
provided, however, that if a Party believes that a pro rata allocation based
upon such Forecasts is not the appropriate allocation method, such Party may
request that the Parties meet to discuss the issue, and the other Party shall
agree to meet and consider in good faith the reasonable comments of the other
Party.  If after such meeting, the
Parties are unable to decide on the appropriate method for allocation, then the
matter shall be resolved in accordance with Section 3.1(e)(ii) of the
Collaboration Agreement.

 

***
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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

***
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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

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

 

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

 

***
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Confidential Treatment Requested Under

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5.8                               Inspection;
Rejection.

 

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

 

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

 

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

 

***
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Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

ARTICLE 6

TRADE DRESS AND PACKAGING

 

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

 

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

 

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

 

ARTICLE 7

REGULATORY AND RECALL

 

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

 

***
Confidential Treatment Requested

 

27

 

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Exchange

Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

ARTICLE 8

INTELLECTUAL PROPERTY

 

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

 

ARTICLE 9

REPRESENTATIONS AND WARRANTIES OF LILLY

 

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

 

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

 

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

 

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

 

***
Confidential Treatment Requested

 

28

 

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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections
200.80(b)(4) and 240.24b-2

 

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

 

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

 

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

 

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

 

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

 

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

 

***
Confidential Treatment Requested

 

29

 

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Exchange

Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections
200.80(b)(4) and 240.24b-2

 

ARTICLE 10

REPRESENTATIONS AND WARRANTIES OF AMYLIN

 

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

 

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

 

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

 

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

 

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

 

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

 

***
Confidential Treatment Requested

 

30

 

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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections
200.80(b)(4) and 240.24b-2

 

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

 

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

 

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

 

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

 

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

 

***
Confidential Treatment Requested

 

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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections
200.80(b)(4) and 240.24b-2

 

ARTICLE 11

TERM OF AGREEMENT; TERMINATION

 

11.1                        Term of
Agreement.  Unless
earlier terminated in accordance with this Article 11, this Agreement will
take effect and commence on the Effective Date and will expire at such time as
the Collaboration Agreement expires.  In
the event of termination of the Collaboration Agreement prior to its
expiration, this Agreement shall continue in effect unless terminated at the
option of either Party as provided in Section 11.2(c) below.  This Agreement may also be terminated by
mutual agreement of the Parties.

 

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

 

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

 

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

 

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

 

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

 

The terminating Party will give the other Party
prior written notice thereof, specifying in reasonable detail the alleged
material breach, and if such alleged material breach or material default
continues unremedied for a period of thirty (30) days after the date of receipt
of the notification or, if the material breach reasonably cannot be corrected or
remedied within thirty (30) days, then if (i) the defaulting Party has not
commenced remedying said material breach within said thirty (30) days and is
not diligently pursuing completion of same, or (ii) said material breach
or material default has not been corrected or remedied within one-hundred
twenty (120) days, then such terminating Party may immediately terminate this
Agreement by again providing written notification to the defaulting Party and
such termination shall be effective as of the date that such notice was
delivered to the other Party.  This Section 11.3
will not be exclusive and will not be in lieu of any other remedies available
to a Party hereto for any breach or default hereunder on the part of the other
Party.

 

***
Confidential Treatment Requested

 

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Confidential Treatment Requested Under

17 C.F.R. Sections
200.80(b)(4) and 240.24b-2

 

11.4                        Effect
of Termination.

 

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

 

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

 

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

 

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

 

***
Confidential Treatment Requested

 

33

 

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Exchange

Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections
200.80(b)(4) and 240.24b-2

 

Lilly and Amylin shall each
pay an amount based upon the calculation of each Party’s share of the Pen
Product Capital Investments (as defined below) as determined pursuant to Exhibit E.  Wind down costs shall include, without
limitation, commitments to Third Party Suppliers that cannot be reasonably
avoided.

 

(c)                                 With respect to
the Pen Product Initial Capital Investment and any additional approved pen
product capital investments covered as outlined in section 3.8(f) (the Pen
Product Initial Capital Investment, and any such additional approved pen
product capital investments, are collectively referred to as the “Pen Product
Capital Investments”) which have not been fully paid for at the time Amylin
ceases to Manufacture Pen Product in accordance with this Article:

 

1.               in the event of termination of this
Agreement by Lilly for Amylin’s breach or termination of this Agreement in the
event of termination of the Collaboration Agreement by Lilly for Amylin’s
material breach, Amylin will be solely responsible for any remaining costs of
completing such Pen Product Capital Investments, regardless of whether such Pen
Product Capital Investments are usable by Amylin; or

 

2.               in the event of
expiration of this Agreement or
termination of this Agreement for any reason other than as provided in Section 11.4(c)(1),
unless otherwise agreed by the Parties, (i) each Party will be responsible
for payment of its share of any remaining costs of completing such Pen Product
Capital Investments as follows: (a) in the event the termination occurs
prior to the True-Up Date (as defined in Exhibit E), Lilly shall pay
[***]% and Amylin [***]%; or (b) in the event such termination occurs
after the True-Up Date, then Lilly and Amylin shall each pay an amount based
upon the calculation of each Party’s share of the Pen Product Capital
Investments (as defined below) as determined pursuant to Exhibit E, or (ii) if
the parties agree, Lilly will pay Amylin the net present value of Lilly’s share
of any remaining costs of completing such Pen Product Capital Investments
within thirty (30) days of invoice provided by Amylin to Lilly for such amount
and, upon receipt of such payment, Lilly will have no further obligation for
any payment of costs of completing such Pen Product Capital Investments.

 

***
Confidential Treatment Requested

 

34

 

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Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections
200.80(b)(4) and 240.24b-2

 

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

 

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

 

***
Confidential Treatment Requested

 

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Confidential Treatment Requested Under

17 C.F.R. Sections
200.80(b)(4) and 240.24b-2

 

Each Party shall use its Commercially Reasonable
Efforts to enable the Successor Manufacturer to Manufacture Pen Product in
accordance with the Specifications on a commercial scale sufficient to fulfill
reasonable anticipated sales of Pen Product as soon as reasonably
practicable.  At Lilly’s request, Amylin
will introduce Lilly and the Successor Manufacturer to Amylin’s vendors of raw
materials or components used in the Manufacture of Pen Product, and will
provide reasonable assistance to Lilly and/or the Successor Manufacturer, as
applicable, in its efforts to enter into supply relationships with such
vendors.  If any such vendor supplies
Amylin with any such raw materials or components on an exclusive basis, Amylin
shall waive compliance with any such condition to allow such vendor to transact
business with Lilly and/or the Successor Manufacturer, as applicable solely in
relation to the Manufacture of Pen Product;

 

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

 

***
Confidential Treatment Requested

 

36

 

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Confidential Treatment Requested Under

17 C.F.R. Sections
200.80(b)(4) and 240.24b-2

 

11.5                        Supply
Following Termination.  In
the event this Agreement is terminated for any reason other than termination of
this Agreement (i) by Amylin pursuant to Section 11.2(b) or (ii) by
Amylin in the event of termination of the Collaboration Agreement for any
reason other than by Lilly for Amylin’s breach thereof, and Lilly intends to
continue to commercialize Pen Product, Amylin shall, if Lilly so requests in
writing, continue to use its Commercially Reasonable Efforts to supply Pen
Product to Lilly pursuant to this Agreement until such time as the Successor
Manufacturer is able to Manufacture Pen Product on a commercial scale
sufficient to fulfill reasonable anticipated sales of Pen Product and obtain or
maintain required Marketing Approvals, except that in the case of termination
of this Agreement by either Party pursuant to Section 11.2(c) hereof
Amylin shall supply Pen Product to Lilly for no longer than thirty-six  (36) months from termination of this
Agreement. Amylin will supply such Pen Product to Lilly, and Lilly shall obtain
such Pen Product from Amylin, in accordance with the terms and conditions of
this Agreement.

 

11.6                        Continuing
Obligations.  Termination
of this Agreement for any reason will not relieve the Parties of any obligation
accruing prior thereto or any antecedent breach of the provisions of this
Agreement, and will be without prejudice to the rights and remedies of either
Party with respect to any antecedent breach of the provisions of this
Agreement.  Without limiting the
generality of the foregoing and in addition to the foregoing, no termination of
this Agreement, whether by lapse of time or otherwise, will serve to terminate
the rights and obligations of the Parties hereto under Articles 1, 7, 8, 9, 10,
11, 12, 13, 14, 15 and 16, and Sections 3.5, 3.9, 3.10, 3.11, 3.12, 4.3, 4.6,
4.8, 5.8 and 5.9, or rights and obligations which otherwise expressly survive
the termination of this Agreement and Sections which are necessary to give
effect to rights and obligations which expressly survive the expiration or termination
of this Agreement.

 

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

 

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

 

ARTICLE 12

DISPUTE RESOLUTION

 

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

 

***
Confidential Treatment Requested

 

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17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

ARTICLE 13

CONFIDENTIALITY

 

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

 

ARTICLE 14

ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES

 

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

 

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

 

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

 

ARTICLE 15

INDEMNIFICATION; LIMITATION OF LIABILITY;
INSURANCE

 

15.1                        Indemnification.  Indemnification obligations
of the Parties will be provided as set forth in the Collaboration Agreement,
For purposes of determining each Party’s indemnification rights and obligations
under Article 8 of the Collaboration Agreement, this Agreement and the
Vial Supply Agreement will be considered Related Agreements (as defined in the
Collaboration Agreement).

 

***
Confidential Treatment Requested

 

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17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

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

 

ARTICLE 16

MISCELLANEOUS PROVISIONS

 

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

 

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

 

***
Confidential Treatment Requested

 

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17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

***
Confidential Treatment Requested

 

40

 

***Text Omitted and Filed
Separately with the Securities and Exchange

Commission.  Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

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

 

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

 

16.14                 Force Majeure.  If either Party is prevented from complying,
either totally or in part, with any of the terms or provisions set forth herein
by reason of an event of Force Majeure, including, by way of example and not of
limitation, fire, flood, explosion, storm, strike, lockout or other labor
dispute, riot, war, rebellion, accidents, terrorist acts, acts of God, acts of
governmental agencies or instrumentalities, inability to obtain materials from
suppliers, or any other similar or dissimilar cause, in each case to the extent
beyond its reasonable control (“Force Majeure”), such Party will provide
written notice of such event to the other Party.  Said notice will be provided within five (5) business
days of the occurrence of such event and will identify the requirements of this
Agreement or such of its obligations as may be affected, and, to the extent so
affected, said obligations will be suspended during the period of such
disability.  The Party prevented from
performing hereunder will use Commercially Reasonably Efforts to remove such
disability as promptly as possible and will continue performance whenever such
causes are removed.  The Party so
affected will give to the other Party a good faith estimate of the continuing effect
of the Force Majeure condition and the duration of the affected Party’s
nonperformance.  If the period of any
previous actual nonperformance of a Party because of Force Majeure conditions
plus the anticipated future period of such Party’s nonperformance because of
such conditions will exceed an aggregate of one hundred twenty (120) days
within any one year period, the other Party may terminate this Agreement by
prior written notice to the nonperforming Party.

 

***
Confidential Treatment Requested

 

41

 

***Text Omitted and Filed
Separately with the Securities and Exchange

Commission.  Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

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

 

[SIGNATURE
PAGE FOLLOWS]

 

***
Confidential Treatment Requested

 

42

 

***Text Omitted and Filed
Separately with the Securities and Exchange

Commission.  Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

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

 

	
   

  	
  ELI LILLY AND COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John C. Lechleiter

  
	
   

  	
   

  
	
   

  	
  Printed Name:

  	
  John C. Lechleiter

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Chairmain, President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMYLIN PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Marshall

  
	
   

  	
   

  
	
   

  	
  Printed Name:

  	
  Paul Marshal

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Sr. Vice President,
  Operations

  
					

 

***
Confidential Treatment Requested

 

 

***Text Omitted and Filed Separately with the Securities and
Exchange

Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

EXHIBIT A

 

DEFINITION OF ALLOCATION OF SERVICE FOR

ACTUAL MANUFACTURING COST CALCULATION

 

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

 

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

 

	
  (1)

  	
  repair
  and maintenance;

  
	
  (2)

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

  
	
  (3)

  	
  manufacturing
  equipment and manufacturing support equipment calibration costs;

  
	
  (4)

  	
  utilities;

  
	
  (5)

  	
  depreciation
  and amortization;

  
	
  (6)

  	
  material
  testing;

  
	
  (7)

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

  
	
  (8)

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

  
	
  (9)

  	
  Other costs that are
  required to support the manufacture of Pen Product in accordance with U.S.
  GAAP

  

 

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

 

***
Confidential Treatment Requested

 

 

***Text Omitted and Filed Separately with the Securities and
Exchange

Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

Exhibit B

 

Pen
Product Estimated Initial Capital Investment

 

	
  Description

  	
   

  	
  Current Estimate

  ($M)

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [[***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***] (1)

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***] (2)

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***] (3)

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  216

  	
   

  

 

(1)          Approximately $[***]
estimated for [***] and $[***]  for [***]

(2)          Will be located at [***]

(3)          Will be located at [***]

        Does not include
capitalized interest

 

***
Confidential Treatment Requested

 

 

***Text Omitted and Filed Separately with the Securities and
Exchange

Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

Exhibit C

 

Reimbursement of Previously Incurred Capital Spending

 

	
  Month

  	
   

  	
  Monthly

  Spend

  	
   

  	
  Lilly Share

  	
   

  	
  Interest

  	
   

  	
  Total Owed

  to Amylin

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

Lilly
share based on a [***]% allocation

Interest
calculation utilizes rates based on June 12, 2006 Letter Agreement

 

***
Confidential Treatment Requested

 

 

***Text Omitted and Filed Separately with the Securities and
Exchange

Commission. 
Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

Exhibit D

 

Estimate of Actual Manufacturing Cost Template

 

Actual Manufacturing Cost

Q1 2XXX

 

	
   

  	
   

  	
  US

  	
   

  	
  OUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Headcount

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Contractors

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Compensation & Benefits

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Depreciation

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Maintenance/Repair/Utilities

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Purchased Services/Professional/Contractors

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Supplies & Materials

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other Site Expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  San Diego QC Lab & Depr of sites in Exh X

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other San Diego Allocations In

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Packaging Depr & Other Related Exp

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Factory & Inventory Losses

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other Variances/PPV/Use Yield

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Royalty Expense

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Expense

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Production Volumes

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per Unit COPS:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Raw Materials Excluding Delivery Device

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Device Delivery

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Packaging Materials & Expense

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Labor

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Depreciation

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Overhead

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Pen Cost

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

***
Confidential Treatment Requested

 

 

Exhibit E

 

Pen Agreement Capital True-up

 

[***]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}]]