EXHIBIT 10.3
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(b)(4),
200.83 AND 240.24b-2
LOAN AGREEMENT
BETWEEN
AMYLIN PHARMACEUTICALS, INC.
AND
XXX XXXXX AND COMPANY
SECTION 1. DEFINITIONS...............................................................1
1.1 Defined Terms................................................................1
1.2 Accounting Terms.............................................................6
1.3 Singular and Plural..........................................................6
1.4 Elements of this Agreement...................................................7
SECTION 2. AMOUNT AND TERMS OF CREDIT................................................7
2.1 Commitment...................................................................7
2.2 Requests for Advances........................................................7
2.3 Development Advances.........................................................7
2.4 Commercialization Advances...................................................8
2.5 Disbursement of Advances.....................................................9
2.6 Security for Obligations.....................................................9
2.7 Agreement to Subordinate.....................................................9
SECTION 3. INTEREST AND PAYMENTS....................................................10
3.1 Interest....................................................................10
3.2 Payment Dates...............................................................10
3.3 Early Repayment.............................................................10
3.4 Right of Offset.............................................................11
3.5 Payments on Non-Business Day................................................11
3.6 Payment Procedures..........................................................11
3.7 Optional Prepayments........................................................11
3.8 Collection Costs............................................................11
SECTION 4. CONVERSION...............................................................11
4.1 Exercise of Conversion Rights...............................................11
4.2 Fair Market Value...........................................................12
4.3 Conversion Notice...........................................................12
4.4 Delivery of Loan Conversion Shares; Adjustment of Note......................13
4.5 No Rights as Stockholders...................................................13
4.6 Conditions Precedent to Each Conversion.....................................13
4.7 Amylin Covenants Relating to Conversions....................................14
SECTION 5. CONDITIONS PRECEDENT.....................................................14
5.1 Conditions Precedent to Disbursement of Advances............................14
i
5.2 Closing Documents...........................................................15
SECTION 6. REPRESENTATIONS AND WARRANTIES OF AMYLIN.................................16
6.1 Organization, Good Standing and Qualification...............................16
6.2 Authorization; Due Execution................................................16
6.3 Valid Issuance of Stock.....................................................16
6.4 No Defaults.................................................................16
6.5 SEC Filings.................................................................16
6.6 Governmental Consents.......................................................17
6.7 No Conflict.................................................................17
6.8 Litigation..................................................................17
6.9 Payment of Taxes............................................................17
6.10 Compliance..................................................................18
6.11 Financial Statements........................................................18
6.12 J&J Loan....................................................................18
6.13 Full Disclosure; Survival...................................................18
SECTION 7. REPRESENTATIONS AND WARRANTIES OF LILLY..................................18
7.1 Authorization; Due Execution................................................18
7.2 Purchase Entirely for Own Account...........................................18
7.3 Disclosure of Information...................................................19
7.4 Investment Experience.......................................................19
7.5 Accredited Investor.........................................................19
7.6 Restricted Securities.......................................................19
SECTION 8. COVENANTS................................................................20
8.1 Maintenance of Existence and Rights.........................................20
8.2 Governmental and Other Approvals............................................20
8.3 Compliance with Laws........................................................20
8.4 Use of Proceeds.............................................................20
8.5 Payment of Taxes............................................................20
8.6 Financial and Other Reports.................................................21
8.7 Access to Information.......................................................22
8.8 Litigation..................................................................22
8.9 Notices/Material Developments...............................................22
8.10 No Liens....................................................................22
ii
8.11 No Prepayments of Debt......................................................22
8.12 No Dividends................................................................22
SECTION 9. EVENTS OF DEFAULT........................................................22
9.1 Events of Default...........................................................22
SECTION 10. LILLY'S RIGHTS AND REMEDIES..............................................23
10.1 Rights and Remedies.........................................................23
10.2 Waiver of Defaults..........................................................24
10.3 Remedies Cumulative.........................................................24
10.4 Waiver......................................................................24
SECTION 11. AGREEMENT NOT TO SELL....................................................24
11.1 Agreement Not to Sell.......................................................24
SECTION 12. MISCELLANEOUS............................................................24
12.1 Subordination...............................................................24
12.2 Governing Law...............................................................25
12.3 Assignment..................................................................25
12.4 Entire Agreement............................................................25
12.5 Severability................................................................25
12.6 Titles and Subtitles........................................................25
12.7 Notices.....................................................................25
12.8 Waiver......................................................................26
12.9 Counterparts................................................................26
iii
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "LOAN AGREEMENT") is made as of this 19th day
of September, 2002 (the "EFFECTIVE DATE") by and between AMYLIN PHARMACEUTICALS,
INC., a Delaware corporation, having a principal place of business at 0000 Xxxxx
Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 ("AMYLIN"), and XXX XXXXX AND COMPANY,
an Indiana corporation having a principal place of business at Lilly Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 ("LILLY").
RECITALS
WHEREAS, Amylin and Lilly have entered into that certain Collaboration
Agreement of even date herewith (the "COLLABORATION AGREEMENT");
WHEREAS, in connection with, and as a condition of Amylin and Lilly
entering into, the Collaboration Agreement, Amylin and Lilly have agreed to
enter into this Loan Agreement pursuant to which Amylin may obtain credit from
Lilly, subject to the terms and conditions stated herein, for amounts up to the
Loan Commitment; and
WHEREAS, Lilly is willing to provide such credit to and in favor of
Amylin, subject to the terms and conditions of this Loan Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, do hereby agree
as follows:
AGREEMENT
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. Unless otherwise defined in this Loan Agreement, all
capitalized terms shall have the meanings given them in the Collaboration
Agreement. As used in this Loan Agreement, the following terms shall have the
following respective meanings:
"ADVANCE" means the loans made, or to be made, pursuant to
Section 2 of this Loan Agreement.
"ADVANCE PERIOD" has the meaning specified in Section 2.1.
"AMIGO TRIAL MILESTONE" means the passage of a period of
forty-five (45) days after the Early Termination Date without Lilly having
given, prior to the expiration of such period, notice of election to terminate
the Collaboration Agreement.
"BID COMMERCIALIZATION COSTS" means Commercialization Costs
incurred or to be incurred by Amylin in the performance of its responsibilities
under the Commercialization Plan with respect to the BID Product.
1.
"BID DEVELOPMENT COSTS" means Development Costs incurred or to
be incurred by Amylin in the performance of its responsibilities under the
Development Plan with respect to the BID Product.
"BID PRODUCT" means the Product being studied in the Amigo
Trials.
"BORROWING DATE" means any date on which an Advance occurs.
"BORROWING REQUEST" shall have the meaning set forth in Section
2.2.
"BUSINESS DAY" means any day, other than a Saturday, Sunday or
holiday.
"COLLABORATION AGREEMENT" has the meaning specified in the
Recitals.
"COLLATERAL" means all right, title and interest of Amylin in,
to and under the Amylin Rights and all other personal property of Amylin, other
than Excluded Intellectual Property, now owned and existing or hereafter
acquired or arising, and wherever located including, without limitation, the
following described property of Amylin (each capitalized term used in this
definition shall have in this definition and in this Agreement the meaning given
to it by the UCC): Accounts, General Intangibles, Chattel Paper, Commercial Tort
Claims, Documents, Instruments, Investment Property, letters of credit and
Letter-Of-Credit Rights, Equipment, Inventory, Goods, Software, all cash, and
Deposit Accounts and all demand, time, savings, passbook and like accounts
maintained by Amylin with any bank, savings and loan association, credit union
or like organization, all books and records (including, without limitation,
customer lists, credit files, computer programs, printouts and other computer
materials and records) of Amylin pertaining to any of the foregoing personal
property, and all Products of and Accessions to each and all of the foregoing
and all Proceeds of all and each of the foregoing.
"COMMON STOCK" means Amylin's Common Stock, par value $0.001 per
share.
"CONVERSION DATE" means, with respect to any Conversion, the
date as of which such Conversion is effective, determined in accordance with
Section 4.1.
"CONVERTIBLE INDEBTEDNESS" means, as of any date, all
Indebtedness outstanding as of such date other than Indebtedness representing
the principal amount of any Advance that was made less than two years prior to
such date; provided, however, that all outstanding Indebtedness shall be deemed
to be Convertible Indebtedness immediately upon the occurrence of any Event of
Default.
"DAMAGES" shall include any loss, damage, injury, decline in
value, lost opportunity, liability, claim, demand, settlement, judgment, award,
fine, penalty, tax, fee (including reasonable attorneys' fees), charge, cost
(including costs of investigation) or expense of any nature.
"EFFECTIVE DATE" has the meaning specified in the opening
paragraph hereof.
"EVENT OF DEFAULT" means any of those conditions or events
listed in Section 9 of this Loan Agreement.
2.
"EXCLUDED INTELLECTUAL PROPERTY" means all Intellectual Property
of Amylin, now owned and existing or hereafter acquired, other than the Amylin
Rights.
"FINANCIAL STATEMENTS" means, with respect to any accounting
period for any Person, consolidated statements of income, shareholders' equity
and cash flows of such Person and its subsidiaries for such period, and a
consolidated balance sheet of such Person and its subsidiaries as of the end of
such period, setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year if such period is less than a
full fiscal year or, if such period is a full fiscal year, corresponding figures
from the preceding annual audit, all prepared in reasonable detail and in
accordance with GAAP.
"FIRST PAYMENT DATE" means the earlier of (i) June 30, 2007, or
(ii) the first anniversary of Product Launch in the U.S.
"FUNDAMENTAL CHANGE" means any (i) reclassification or
recapitalization of the outstanding shares of Common Stock, (ii) sale or
disposition of all or substantially all of Amylin's assets, (iii) merger or
similar transaction of Amylin in which Amylin is not the surviving entity or in
which Amylin survives as a wholly owned subsidiary of another entity, (iv)
conversion of Amylin from a corporation to another form of entity, or (v)
redomestication of Amylin from Delaware to any other jurisdiction of
organization.
"GAAP" means United States generally accepted accounting
principles (including principles of consolidation), in effect from time to time,
consistently applied.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"INDEBTEDNESS" means, as of any given time, Amylin's entire
indebtedness to Lilly as of such time arising under any of the Loan Documents in
respect of principal, interest, fees, costs or otherwise.
"INTELLECTUAL PROPERTY" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all rights arising under or in connection with all
Patents and Patent disclosures, (b) all trademarks, service marks, trade dress,
logos, slogans, trade names and corporate names, together with all translations,
adaptations, derivations and combinations thereof (including all goodwill
associated therewith), and all applications, registrations and renewals in
connection therewith, (c) all copyrightable works, all copyrights and all
applications, registrations and renewals in connection therewith, (d) all trade
secrets and confidential business information (including, without limitation,
ideas, research, know-how, techniques, methods, data, clinical and regulatory
strategies, customer lists, and business and marketing plans and proposals), (e)
all computer software (including data and related documentation), and (f) all
copies and tangible embodiments thereof (in whatever form or medium).
"INTERCREDITOR AGREEMENT" has the meaning specified in Section
2.7.
"J&J LOAN" means the Loan and Security Agreement dated June 20,
1995 by and between Amylin and Xxxxxxx & Xxxxxxx.
3.
"LEGAL PROCEEDING" shall mean any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding), hearing, inquiry, audit, examination or
investigation commenced, brought, conducted or heard by or before, or otherwise
involving, any court or other Governmental Authority or any arbitrator or
arbitration panel.
"LEGAL REQUIREMENT" shall mean any federal, state, local,
municipal, foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Authority.
"LIEN" means any mortgage, deed of trust, pledge, security
interest, encumbrance, lien, easement, servitude or charge of any kind,
including, without limitation, any irrevocable license, conditional sale or
other title retention agreement, any lease in the nature thereof, or any other
right of or arrangement with any creditor to have its claim satisfied out of any
specified property or leased asset with the proceeds therefrom prior to the
satisfaction of the claims of the general creditors of the owner thereof,
whether or not filed or recorded, or the filing of, or agreement to execute as
"debtor," any financing or continuation statement under the Uniform Commercial
Code of any jurisdiction.
"LOAN COMMITMENT" means, prior to the achievement of the Amigo
Trial Milestone, the principal amount of $7,500,000 and, thereafter, the
principal amount of $110,000,000.
"LOAN CONVERSION SHARES" means, collectively, the shares of
Common Stock issuable upon conversion of Convertible Indebtedness pursuant to
Section 4 of this Loan Agreement.
"LOAN DOCUMENTS" means collectively, this Loan Agreement, the
Note, the Security Agreement, and any other agreement or instrument executed
pursuant to or in connection with the Obligations, as such documents may be
amended, modified, supplemented or restated from time to time. Loan Documents do
not include the Collaboration Agreement or the Related Agreements.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon
(a) the business, condition (financial or otherwise), operations, performance or
assets of Amylin taken as a whole, (b) the ability of Amylin to perform its
obligations under the Loan Documents, or (c) the ability of Lilly to enforce the
Obligations or any of its rights in the Collateral.
"MATURITY DATE" means, unless earlier converted, the earlier of
(i) thirty-six (36) months following Product Launch in the U.S. and (ii) June
30, 2009.
"MAXIMUM SENIOR WORKING CAPITAL INDEBTEDNESS" has the meaning
specified in Section 2.7.
"NOTE" means the convertible promissory note executed by Amylin
evidencing the Indebtedness, substantially in the form of EXHIBIT A attached
hereto.
4.
"OBLIGATIONS" means all Indebtedness, liabilities, obligations,
covenants and duties arising under any of the Loan Documents owing by Amylin to
Lilly whether direct or indirect, absolute or contingent.
"OTHER INDEBTEDNESS" means any indebtedness of Amylin for
borrowed money other than the Indebtedness.
"PAYMENT DATE" means any of the dates on which payment of
unconverted Indebtedness is due as set forth in Section 2.7, 3.2, 3.3 or 10.1.
"PERMITTED LIENS" means:
(i) Liens securing purchase money indebtedness or obligations
under any lease of property that is capitalized on Amylin's balance
sheet in accordance with GAAP;
(ii) Liens with respect to the payment of taxes, assessments or
governmental charges that are not yet due or that are being contested in
good faith by appropriate proceedings properly instituted and diligently
conducted and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP;
(iii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and similar
Liens imposed by law created in the ordinary course of business for
amounts that are not yet due or that are being contested in good faith
by appropriate proceedings properly instituted and diligently conducted
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP;
(iv) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance or other types of social security benefits;
(v) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of real property which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of Amylin; and
(vi) any interest or title of the lessor in the property subject
to any operating lease entered into by Amylin in the ordinary course of
business.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement between Lilly and Amylin entered into in connection with the execution
of this Loan Agreement and the Collaboration Agreement.
"SEC" means the United States Securities and Exchange
Commission.
5.
"SECOND PAYMENT DATE" means the earlier of (i) June 30, 2008, or
(ii) the second anniversary of Product Launch in the U.S.
"SECURITY AGREEMENT" means the Security Agreement to be
negotiated in good faith by Amylin and Lilly and executed and delivered by
Amylin in favor of Lilly as soon as reasonably practicable following the date
hereof, as the same may be amended, restated, supplemented and/or modified from
time to time.
"SECURITY INTEREST" has the meaning specified in Section 2.6.
"SENIOR INDEBTEDNESS" means, as of any time, all Other
Indebtedness owing at such time pursuant to the J&J Loan in an amount not to
exceed the principal balance of the J&J Loan outstanding as of the Effective
Date plus all interest thereon accrued before, on or after the Effective Date.
"SR DEVELOPMENT COSTS" means Development Costs incurred or to be
incurred by Amylin in the performance of its responsibilities under the
Development Plan with respect to the SR Product.
"TERM" means the period from the Effective Date until the later
of (i) the expiration of the Advance Period, and (ii) the date on which all
outstanding Indebtedness has been repaid in full; provided that Amylin shall be
entitled to terminate this Agreement and the Term hereunder shall expire upon
written notice to Lilly at any time (a) prior to any Advance by Lilly to Amylin
hereunder or (b) following repayment in full of all then outstanding
Indebtedness.
"UCC" means the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York; provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of Lilly's security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
"WORKING CAPITAL LENDER" has the meaning specified in Section
2.7.
"WORKING CAPITAL LOAN" has the meaning set forth in Section 2.7.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined in
this Loan Agreement shall be determined and construed in accordance with GAAP.
1.3 SINGULAR AND PLURAL. Where the context herein requires, the singular
number shall be deemed to include the plural, the masculine gender shall include
the feminine and neuter genders, and vice versa.
6.
1.4 ELEMENTS OF THIS AGREEMENT. When a reference is made in this Loan
Agreement to the Recitals, Articles, Sections, Exhibits or Schedules, such
reference is to a Recital, Article or Section of, or an Exhibit or Schedule to,
this Loan Agreement, unless otherwise indicated.
SECTION 2. AMOUNT AND TERMS OF CREDIT
2.1 COMMITMENT. Subject to the terms and conditions of this Loan
Agreement, Lilly agrees to make Advances to Amylin from time to time beginning
on the dates specified in Sections 2.3 and 2.4 and ending on the Business Day
immediately preceding the First Payment Date (the "ADVANCE PERIOD").
Notwithstanding any other provision of this Loan Agreement, the aggregate
principal amount of all Advances outstanding at any time shall not exceed the
amount of the Loan Commitment as of such time. The Advances shall be evidenced
by the Note executed by Amylin in the original principal amount of the Loan
Commitment.
2.2 REQUESTS FOR ADVANCES. Amylin may request, no more frequently than
once per Calendar Quarter, an Advance (each such request, a "BORROWING REQUEST")
by delivering to Lilly a written request, which must also provide disbursement
instructions and include the certifications referred to in Section 5.1. Amylin
shall provide the amount and date of such Advance (which date must be a Business
Day not earlier than five (5) Business Days following the date of delivery of
such Borrowing Request) with respect to and at the time of each Borrowing
Request; provided, however, that the date of the Advance may follow the date of
delivery of the Borrowing Request by only one (1) Business Day if the full
amount of such Advance is to be applied by Lilly to amounts owing by Amylin to
Lilly pursuant to the Collaboration Agreement (i.e., Amylin's application of the
proceeds of such Advance must be consistent with the use of proceeds covenant
set forth in this Loan Agreement).
2.3 DEVELOPMENT ADVANCES. During the Advance Period, Amylin may request
Advances to pay for Development Costs under the Collaboration Agreement as
follows:
(a) Commencing with the Calendar Year during which the earlier
of the following occur: (i) the date on which the first Amigo Trial meets or
exceeds the primary clinical endpoint for such Phase 3 Clinical Trial, or (ii)
if primary endpoints in any of the Amigo Trials are not met or exceeded, the
date as of which the Amigo Trial Milestone has been achieved, then, subject to
the limit of the Loan Commitment in effect at the time of any Borrowing Request,
Amylin may request, beginning on the earlier of (i) or (ii) above, Advances of
up to [...***...] per Calendar Year (the "ANNUAL BID DEVELOPMENT LOAN AMOUNT")
for that Calendar Year and each of the next [...***...] Calendar Years (the "BID
DEVELOPMENT LOAN PERIOD") for the purpose of paying BID Development Costs (the
"BID DEVELOPMENT ADVANCES"). In any given Calendar Year, if Amylin receives BID
Development Advances totaling less than the Annual BID Development Loan Amount,
then in any subsequent Calendar Year during the BID Development Loan Period the
Annual BID Development Loan Amount applicable to such Calendar Year shall be
increased by the difference between the Annual BID Development Loan Amount
available for the preceding Calendar Year and the actual amount of BID
Development Advances that Amylin receives during such preceding Calendar Year.
Notwithstanding the foregoing or any other provision of this Loan Agreement,
Amylin shall not request, and Lilly shall not be obligated to make, BID
Development Advances in any Calendar Year in an aggregate amount greater than
the amount of BID Development
*CONFIDENTIAL TREATMENT REQUESTED
7.
Costs reasonably anticipated to be incurred by Amylin during that year. The
approved Development Budget for any Calendar Year shall be the basis for
determining the amount of BID Development Costs reasonably anticipated to be
incurred by Amylin during that year, unless and until the JDC approves a
deviation from that budget.
(b) Commencing with the Calendar Year in which Amylin first
enrolls a patient in a Phase 3 Clinical Trial for an SR Product, then, subject
to the limit of the Loan Commitment in effect at the time of any Borrowing
Request, Amylin may request Advances of up to [...***...] per Calendar Year (the
"ANNUAL SR DEVELOPMENT LOAN AMOUNT") for [...***...] Calendar Years (the "SR
DEVELOPMENT LOAN PERIOD") for the purpose of paying SR Development Costs (the
"SR DEVELOPMENT ADVANCES"). In any given Calendar Year, if Amylin receives SR
Development Advances totaling less than the Annual SR Development Loan Amount,
then in any subsequent Calendar Year during the SR Development Loan Period the
Annual SR Development Loan Amount applicable to such Calendar Year shall be
increased by the difference between the Annual SR Development Loan Amount
available for the preceding Calendar Year and the actual amount of SR
Development Advances that Amylin receives during such preceding Calendar Year.
Notwithstanding the foregoing or any other provision of this Loan Agreement,
Amylin shall not request, and Lilly shall not be obligated to make, SR
Development Advances in any Calendar Year in an aggregate amount greater than
the amount of SR Development Costs reasonably anticipated to be incurred by
Amylin during that year. The approved Development Budget for any Calendar Year
shall be the basis for determining the amount of SR Development Costs reasonably
anticipated to be incurred by Amylin during that year, unless and until the JDC
approves a deviation from that budget.
2.4 COMMERCIALIZATION ADVANCES. During the Advance Period, Amylin may
request Advances to pay for BID Commercialization Costs (the "BID
COMMERCIALIZATION ADVANCES") as follows:
(a) Commencing at the time Amylin receives notification from the
FDA of [...***...], then, subject to the limit of the Loan Commitment in effect
at the time of any Borrowing Request, Amylin may request BID Commercialization
Advances of up to [...***...].
(b) Commencing at the time Amylin receives notification from the
FDA of [...***...], then, subject to the limit of the Loan Commitment in effect
at the time of any Borrowing Request, Amylin may request BID Commercialization
Advances of up to an additional [...***...].
(c) Notwithstanding any other provision herein, prior to Product
Launch in the U.S., Amylin shall not request, and Lilly shall not be obligated
to make, BID Commercialization Advances in any Calendar Year in an aggregate
amount greater than the amount of BID Commercialization Costs reasonably
anticipated to be incurred by Amylin during that year. The approved
Commercialization Budget for any Calendar Year shall be the basis for
determining the amount of BID Commercialization Costs reasonably anticipated to
be incurred by Amylin during that year, unless and until the JCC approves a
deviation from that budget.
*CONFIDENTIAL TREATMENT REQUESTED
8.
2.5 DISBURSEMENT OF ADVANCES. Subject to the terms and conditions of
this Loan Agreement, Lilly shall make available to Amylin the amount of the
Advance requested in accordance with the applicable Borrowing Request. All
Advances pursuant to Sections 2.3 and 2.4 are cumulative, but shall not at any
time exceed the Loan Commitment in aggregate outstanding principal amount.
2.6 SECURITY FOR OBLIGATIONS. Payment and performance of the Obligations
at all times shall be secured by a first and prior security interest in favor of
Lilly (the "SECURITY INTEREST") in all of Amylin's right, title and interest in
and to the Collateral, subject only to Permitted Liens and to the provisions of
Section 2.7 below.
2.7 AGREEMENT TO SUBORDINATE. Notwithstanding any contrary provision in
this Loan Agreement or in the Security Agreement, Lilly agrees that:
(a) WORKING CAPITAL LOAN. At any time upon the request of
Amylin, Lilly shall subordinate (a) the Indebtedness to Other Indebtedness
incurred by Amylin for working capital purposes (a "WORKING CAPITAL LOAN"), up
to a maximum aggregate amount of [...***...] (the "MAXIMUM SENIOR WORKING
CAPITAL INDEBTEDNESS"), pursuant to borrowing arrangements entered into from
time to time with one or more commercial lenders or lender groups (each, a
"WORKING CAPITAL LENDER"), and (b) the Security Interest to any security
interest hereafter granted by Amylin to any Working Capital Lender to secure any
Working Capital Loan up to the aggregate amount of the Maximum Senior Working
Capital Indebtedness. In connection with such subordination, Lilly will enter
into an intercreditor agreement with the Working Capital Lender containing terms
and conditions that are reasonably acceptable to both Lilly and the Working
Capital Lender (the "INTERCREDITOR AGREEMENT"). Notwithstanding any other
provision herein to the contrary, except as and to the extent provided in
Section 2.7(b) below, the subordination of the Indebtedness and the Security
Interest provided for herein shall be effective only to the extent of an amount
equal to the Maximum Senior Working Capital Indebtedness and shall not be
effective with respect to any portion of any Working Capital Loan in excess of
such amount. Furthermore, and notwithstanding any other provision herein to the
contrary, the "Maximum Senior Working Capital Indebtedness" shall be
[...***...].
(b) UNLIMITED SENIOR WORKING CAPITAL INDEBTEDNESS. At any time
upon the request of Amylin, Lilly will enter into an amendment to the
Intercreditor Agreement to eliminate the cap on the Maximum Senior Working
Capital Indebtedness so that the Indebtedness and the Security Interest
thereafter will be subordinated to all Working Capital Loans without limitation
on the amount thereof, subject to the conditions precedent, however, that in
connection with such amendment:
(i) OUTSTANDING INDEBTEDNESS. If at the time such amendment
is to be entered into the outstanding amount of the
Indebtedness would, but for the provisions of this
clause (i), exceed [...***...], then Amylin shall make,
concurrently with or prior to the execution of such
amendment, a payment to Lilly in respect of the
Indebtedness in such amount as is necessary to
*CONFIDENTIAL TREATMENT REQUESTED
9.
reduce the outstanding amount of the Indebtedness to an
amount less than or equal to [...***...].
(ii) AMENDMENT TO LOAN AGREEMENT. Lilly and Amylin shall
enter into an amendment to this Loan Agreement, in form
and substance reasonably acceptable to both Lilly and
Amylin, which (x) reduces the amount of the Loan
Commitment applicable after achievement of the Amigo
Trial Milestone from $110,000,000 to [...***...], (y)
modifies the definition of Convertible Indebtedness by
replacing the phrase "other than Indebtedness
representing the principal amount of any Advance that
was made less than two years prior to such date" with
the phrase "other than Indebtedness representing the
principal amount of any Advance that was made less than
one year prior to such date"; and (z) makes such
conforming changes as may be necessary or appropriate,
in the reasonable judgment of Lilly and Amylin, to
effectuate the amendments referred to in clauses (x) and
(y) above.
(iii) CORRESPONDING AMENDMENTS TO OTHER AGREEMENTS. Lilly and
Amylin shall enter into such corresponding amendments,
if any, to the Collaboration Agreement and/or any of the
Related Agreements as may be necessary or appropriate,
in the reasonable judgment of Lilly and Amylin, to
effectuate the provisions of this Section 2.7(b).
SECTION 3. INTEREST AND PAYMENTS
3.1 INTEREST.
(a) ADVANCES. All Indebtedness outstanding from time to time
shall bear interest at a [...***...]; provided, however, that from and during
the continuance of an Event of Default, the outstanding Indebtedness shall bear
interest at a [...***...]. Interest shall be due and payable as provided in
Section 3.2.
(b) INTEREST COMPUTATIONS. All interest chargeable under the
Loan Documents shall be computed on the basis of a three hundred sixty (360) day
year for the actual number of days elapsed.
3.2 PAYMENT DATES. Except as provided in Sections 2.7(b)(i), 3.3 or
10.1, all outstanding Indebtedness shall be due and payable as follows: (i)
fifty percent (50%) of all Indebtedness outstanding as of the First Payment Date
shall be due and payable on the First Payment Date; (ii) sixty percent (60%) of
all Indebtedness outstanding as of the Second Payment Date shall be due and
payable on the Second Payment Date; and (iii) the balance of all outstanding
Indebtedness shall be due and payable on the Maturity Date.
3.3 EARLY REPAYMENT. Notwithstanding Section 3.2 or any other provision
of this Loan Agreement, all outstanding Indebtedness shall be due and payable
immediately without any notice or other action by Lilly upon the occurrence of
any of the following events: (a) the
*CONFIDENTIAL TREATMENT REQUESTED
10.
consummation of a Change in Control with respect to Amylin, or (b) termination
of the Collaboration Agreement by Lilly pursuant to Section 12.2 thereof.
3.4 RIGHT OF OFFSET. If and to the extent that Amylin defaults in the
making of any payment on any Payment Date and such default shall not have been
cured, Lilly may, at its election, withhold from Amylin the amount of any
milestone, royalty, expense reimbursement or other payment of any nature owing
from Lilly to Amylin under the Collaboration Agreement, any Related Agreement,
any Loan Document or otherwise, up to an aggregate amount equal to the amount of
the defaulted payment, and apply all amounts so withheld to the repayment of the
outstanding Indebtedness. Upon such application, Lilly shall be deemed to have
satisfied its obligation to pay the withheld amount to Amylin in respect of the
applicable milestone, royalty, expense reimbursement or other payment, and
Amylin shall be deemed to have discharged outstanding Indebtedness in the amount
so applied.
3.5 PAYMENTS ON NON-BUSINESS DAY. In the event that any payment of any
principal, interest, fees or any other amounts payable by Amylin under or
pursuant to this Loan Agreement, or under any other Loan Document shall become
due on any day which is not a Business Day, such due date shall be extended to
the next succeeding Business Day, and, to the extent applicable, interest shall
continue to accrue and be payable at the applicable rate(s) for and during any
such extension.
3.6 PAYMENT PROCEDURES. All sums payable by Amylin to Lilly under or
pursuant to this Loan Agreement, or any other Loan Document, whether principal,
interest, or otherwise, shall be paid, when due, directly to Lilly at the office
of Lilly identified in the opening paragraph of this Loan Agreement, or at such
other location as Lilly may designate in writing to Amylin from time to time, in
immediately available United States funds, and without setoff, deduction or
counterclaim.
3.7 OPTIONAL PREPAYMENTS. Amylin may prepay the outstanding
Indebtedness, in whole or in part, without premium or penalty, at any time and
from time to time. Any partial prepayment shall be applied first to any
Indebtedness consisting of amounts other than principal and interest, second to
accrued but unpaid interest and finally to outstanding principal. Any partial
prepayment applied to outstanding principal shall be deemed applied to the
outstanding Advances in the order in which they were made.
3.8 COLLECTION COSTS. All amounts payable by Amylin under any of the
Loan Documents shall be payable without relief from valuation and appraisement
laws, and with all collection costs and reasonable attorneys' fees.
SECTION 4. CONVERSION
4.1 EXERCISE OF CONVERSION RIGHTS. At any time and from time to time,
but subject to Section 4.6, Lilly may elect to convert all or any portion of the
Convertible Indebtedness into shares of Common Stock as follows:
(a) CONVERSION AMOUNT. Lilly shall deliver notice to Amylin
pursuant to Section 4.3 (a "CONVERSION NOTICE") specifying the amount of
Convertible Indebtedness to be so converted (the "CONVERSION AMOUNT"). Each
conversion of Convertible Indebtedness pursuant
11.
to such an election by Lilly shall be referred to herein as a "CONVERSION."
Lilly shall be permitted to deliver a Conversion Notice with respect to
Indebtedness that is not yet convertible as of the date of delivery of the
Conversion Notice, so long as such Indebtedness will become Convertible
Indebtedness on or before the applicable Conversion Date.
(b) CONVERSION DATE. The Conversion Notice may include a demand
or request that Amylin file a resale registration statement pursuant to the
Registration Rights Agreement in connection with the Conversion and may specify
that the effectiveness of the Conversion is conditioned upon the prior or
concurrent effectiveness of such registration statement. If effectiveness of the
Conversion is so conditioned, then the Conversion Date shall be the later of (i)
the date on which such registration statement is declared effective by the SEC,
(ii) the date as of which all Section 4.6 conditions have been met, and (iii)
the date as of which Indebtedness in the full amount of the Conversion Amount
has become Convertible Indebtedness. If effectiveness of the Conversion is not
so conditioned, then the Conversion Date shall be the later of (i) the date
specified in the Conversion Notice (which shall be no earlier than the date on
which the Conversion Notice is delivered to Amylin), (ii) the date as of which
all Section 4.6 conditions have been met, and (iii) the date as of which
Indebtedness in the full amount of the Conversion Amount has become Convertible
Indebtedness.
(c) CONVERSION PRICE. The number of shares of Common Stock
issuable in connection with a Conversion shall be equal to the quotient of the
applicable Conversion Amount divided by the Fair Market Value (as defined below)
of one share of Common Stock.
4.2 FAIR MARKET VALUE. For purposes of this Loan Agreement, the "FAIR
MARKET VALUE" of Common Stock shall be determined as follows:
(a) if the Common Stock is then traded on a national securities
exchange or through the Nasdaq National Market or Nasdaq Small Cap Market, the
Fair Market Value of one share of Common Stock shall be deemed to be the average
of the closing sale prices for one share of Common Stock on such exchange or
market, as the case may be, for the twenty (20) Business Days immediately
preceding the Conversion Date;
(b) if the Common Stock is not traded on a national securities
exchange or through the Nasdaq National Market or Nasdaq Small Cap Market, but
is traded in the over-the-counter market, the Fair Market Value of one share of
Common Stock shall be deemed to be the average of the closing bid and asked
prices reported by such market for the twenty (20) Business Days immediately
preceding the Conversion Date; and
(c) if the Common Stock is not traded on any recognized exchange
or market, the Fair Market Value of one share of Common Stock shall be
determined by Amylin's Board of Directors in good faith, which Board of
Directors shall provide Lilly with a written statement of such Fair Market Value
within fifteen (15) Business Days following any request therefor.
4.3 CONVERSION NOTICE. A Conversion Notice to Amylin under this Section
4 shall be delivered to Amylin pursuant to the notice provisions set forth in
Section 12.7 of this Loan Agreement. Each such Conversion Notice shall state the
Conversion Amount applicable to the Conversion, instruct Amylin to deliver a
stock certificate representing the given Loan
12.
Conversion Shares in the name of Lilly or its designee, and contain a
certification by Lilly that its representations and warranties as set forth in
Section 7 of this Loan Agreement are true and correct on and as of the date that
such Conversion Notice is delivered to Amylin.
4.4 DELIVERY OF LOAN CONVERSION SHARES; ADJUSTMENT OF NOTE. On each
Conversion Date, Lilly shall be entitled to receive a certificate for the number
of Loan Conversion Shares applicable to the Conversion determined in accordance
with this Section 4. Such certificate shall be issued, and Lilly shall be deemed
to own the Loan Conversion Shares represented thereby, as of the Conversion
Date. Upon the Conversion Date, but subject to Lilly's receipt of such
certificate, the outstanding Indebtedness prior to said Conversion shall be
deemed repaid to the extent of the applicable Conversion Amount as of the
Conversion Date. No fractional shares or scrip representing fractional shares
shall be issued in connection with a Conversion, and Lilly shall receive a cash
payment in lieu thereof.
4.5 NO RIGHTS AS STOCKHOLDERS. Neither this Loan Agreement nor the Note
entitles Lilly to any voting rights or other rights as a stockholder of Amylin
prior to the time of any Conversion.
4.6 CONDITIONS PRECEDENT TO EACH CONVERSION. The obligation of Amylin to
issue any Loan Conversion Shares shall be further subject to the satisfaction of
each of the following conditions precedent on or before the Conversion Date:
(a) The representations and warranties made by Lilly in Section
7 hereof shall be true and correct on and as of the date that a Conversion
Notice is delivered to Amylin with the same force and effect as if they had been
made as of such date (except that Lilly's representations and warranties in
Section 7.2 may be made subject to Lilly's rights to resell Loan Conversion
Shares pursuant to any Registration Statement filed by the Company with respect
to such Shares pursuant to the Registration Rights Agreement);
(b) Lilly shall have performed and complied in all material
respects with all agreements, obligations and conditions in this Loan Agreement,
if any, that are required to be performed or complied with by it on or before
the date that any Conversion Notice is delivered to Amylin, and no material
default by Lilly shall exist under the Collaboration Agreement or any Related
Agreement or Loan Document as of the date of such Conversion Notice;
(c) No temporary restraining order, preliminary or permanent
injunction or other order preventing the consummation of the proposed Conversion
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the proposed Conversion that makes consummation of the proposed
Conversion illegal;
(d) No Person shall have commenced or threatened to commence any
Legal Proceeding challenging or seeking the recovery of a material amount of
Damages in connection with the proposed Conversion;
(e) Amylin shall not be required to obtain stockholder approval
of the issuance of the Loan Conversion Shares applicable to the given Conversion
in order to comply with Nasdaq Stock Market Marketplace Rules or similar
stockholder voting requirements that
13.
may be imposed on Amylin by any other established stock exchange or national
market system on which the Common Stock is traded or listed (it being understood
that to the extent that and for so long as any such stockholder approval would
be required, Amylin shall not be obligated to make such Conversion or any other
Conversion under this Loan Agreement); and
(f) The waiting period applicable to the consummation of the
transactions contemplated by this Loan Agreement, including any Conversion
hereunder, or under the Collaboration Agreement, under the HSR Act shall have
expired or been terminated.
(g) The issuance of the Loan Conversion Shares shall not result
in Lilly having acquired, pursuant to the Collaboration Agreement, the Loan
Documents, and all of the Related Agreements, an aggregate number of shares of
Common Stock that exceeds the lesser of (i) 19.9% of the number of outstanding
shares of Common Stock as of the applicable Conversion Date or (ii) such number
of shares of Common Stock as would have required Amylin, pursuant to Nasdaq
rules, to obtain shareholder approval with respect to the transactions
contemplated by the Loan Documents, the Collaboration Agreement or the Related
Agreements. If the issuance would have that result, then Lilly may withdraw the
Conversion Notice or elect to reduce the Conversion Amount as necessary in order
to avoid that result (it being understood that to the extent that and for so
long as any such stockholder approval would be required, Amylin shall not be
obligated to make such Conversion or any other Conversion under this Loan
Agreement).
4.7 AMYLIN COVENANTS RELATING TO CONVERSIONS. During the Term, Amylin
covenants and agrees as follows:
(a) RESERVATION OF SHARES. It shall at all times reserve from
its authorized Common Stock a sufficient number of shares to provide for
conversion of all Convertible Indebtedness.
(b) LISTING OF SHARES. It shall take all actions reasonably
necessary to cause all Loan Conversion Shares, upon issuance, to be eligible for
listing or trading on the principal market or exchange on which the Common Stock
is then listed or traded.
(c) REGISTRATION OF SHARES. It shall comply with all of its
obligations under the Registration Rights Agreement.
(d) FUNDAMENTAL CHANGE. In connection with any Fundamental
Change, Amylin shall make equitable provision so that, upon any Conversion
following such Fundamental Change, Lilly shall have the right to receive, in
lieu of shares of Common Stock, the kind and amount of securities and other
property that the holders of Common Stock received in connection with the
Fundamental Change.
SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS PRECEDENT TO DISBURSEMENT OF ADVANCES. The obligation of
Lilly to make any Advance, including the initial Advance hereunder, shall be
subject to the satisfaction of each of the following conditions precedent on or
before any disbursement under such Advance:
14.
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties of Amylin under the Collaboration Agreement (excluding Section
7.6 of the Collaboration Agreement) and this Loan Agreement shall be true and
correct in all material respects on and as of the date of the applicable
Borrowing Request with the same effect as though such representations and
warranties had been made on and as of such date.
(b) PERFORMANCE. Amylin shall have performed all material
obligations and agreements and complied with all material covenants to be
performed or complied with by it on or before the date of the applicable
Borrowing Request pursuant to the Collaboration Agreement, any of the Related
Agreements or any of the Loan Documents.
(c) SECURITY AGREEMENT. The Security Agreement, shall have been
duly authorized, executed and delivered by Amylin, and in compliance with the
terms of this Loan Agreement.
(d) MILESTONES. The event or events required for such Advance
pursuant to Sections 2.3 and 2.4, as the case may be, shall have been achieved.
(e) COLLABORATION AGREEMENT IN EFFECT. The Collaboration
Agreement shall not have been terminated pursuant to its terms, and neither
Lilly nor Amylin shall have given written notice of its intention to terminate
the Collaboration Agreement.
(f) NO DEFAULT. No Event of Default shall have occurred and be
continuing.
(g) CERTIFICATE. The applicable Borrowing Request shall include
a certification by Amylin's chief financial officer, dated the date of the
applicable Borrowing Request, in form and substance reasonably satisfactory to
Lilly, to the effect that the conditions precedent set forth in this Section 5.1
have been satisfied.
(h) MISCELLANEOUS. Amylin shall have provided to Lilly such
documents and instruments as Lilly reasonably shall request for the purpose of
perfecting the Security Interest, including (i) Uniform Commercial Code
financing statements and (ii) filings to be made with the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State thereof or any other country or jurisdiction or any political
subdivision thereof.
5.2 CLOSING DOCUMENTS. Amylin shall provide to Lilly on the Effective
Date each of the following:
(a) NOTE. The Note, duly authorized, executed and delivered by
Amylin, and in compliance with the terms of this Loan Agreement.
(b) REGISTRATION RIGHTS AGREEMENT. The Registration Rights
Agreement, duly authorized, executed and delivered by Amylin, and in compliance
with the terms of this Loan Agreement.
15.
(c) CORPORATE DOCUMENTS. A certificate of good standing with
respect to Amylin, issued by the Delaware Secretary of State and reflecting
Amylin's existence in good standing and payment of all applicable taxes and
fees.
(d) OPINION. A written opinion of Amylin's counsel, addressed to
Lilly, in form and substance acceptable to Lilly.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF AMYLIN
Amylin hereby represents and warrants to Lilly as of the Effective Date
that:
6.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Amylin is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business. Amylin is duly qualified to transact business as a
corporation and is in good standing in each jurisdiction in which the failure so
to qualify would have a material adverse effect upon Amylin's ability to perform
its obligations under any of the Loan Documents or the validity or
enforceability of, or Lilly's rights and remedies under, this Loan Agreement or
any of the other Loan Documents.
6.2 AUTHORIZATION; DUE EXECUTION. Amylin has the requisite corporate
power and authority to enter into each of the Loan Documents and to perform its
obligations under the terms of each of the Loan Documents and, at the time of a
Conversion pursuant to Section 4 of this Loan Agreement, will have the requisite
corporate power to issue and sell the Loan Conversion Shares. All corporate
action on the part of Amylin, its officers, directors and stockholders necessary
for the authorization, execution, delivery and performance of each of the Loan
Documents has been taken. Each of the Loan Documents has been duly authorized,
executed and delivered by Amylin and, upon due execution and delivery by Lilly
of this Loan Agreement, each of the Loan Documents will each be a valid and
binding agreement of Amylin, enforceable in accordance with its respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
or by equitable principles.
6.3 VALID ISSUANCE OF STOCK. The Loan Conversion Shares, when issued,
sold and delivered in accordance with the terms of Section 4 hereof for the
consideration and on the terms and conditions set forth herein, will be duly and
validly authorized and issued, fully paid and nonassessable and, based in part
upon the representations of Lilly in this Loan Agreement, will be issued in
compliance with all applicable federal and state securities laws.
6.4 NO DEFAULTS. There exists no default under the provisions of any
instrument or agreement evidencing, governing or otherwise relating to any Other
Indebtedness, or with respect to any other agreement, a default under which
could have a material adverse effect upon Amylin's ability to perform its
obligations under any of the Loan Documents or the validity or enforceability
of, or Lilly's rights and remedies under, this Loan Agreement or any of the
other Loan Documents.
6.5 SEC FILINGS. Amylin has timely filed with the SEC all reports,
registration statements and other documents required to be filed by it (the "SEC
FILINGS") under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the
16.
"SECURITIES ACT"), and the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the "EXCHANGE ACT"). The SEC
Filings were prepared in accordance with and, as of the date on which each such
SEC Filing was filed with the SEC, complied in all material respects with, the
applicable requirements of the Securities Act or the Exchange Act, as the case
may be. None of such SEC Filings, including, without limitation, any financial
statements, exhibits and schedules included therein and documents incorporated
therein by reference, at the time filed, declared effective or mailed, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Except to the extent information contained in any of the
SEC Filings has been revised, corrected or superseded by a later filing of any
such form, report or document, none of the SEC Filings currently contains an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
6.6 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state, local or provincial governmental authority on the part of Amylin
is required in connection with the consummation of the transactions contemplated
by the Loan Documents, except for such approvals or consents as may be required
under the HSR Act and such other notices as may be required or permitted to be
filed with certain state and federal securities commissions after the Effective
Date and after the issuance of Loan Conversion Shares, which notices will be
filed on a timely basis.
6.7 NO CONFLICT. Amylin's execution, delivery and performance of each of
the Loan Documents does not violate any provision of Amylin's Certificate of
Incorporation or Bylaws, each as amended as of the date hereof (copies of which
have been filed with Amylin's SEC Filings), any provision of any order, writ,
judgment, injunction, decree, determination or award to which Amylin is a party
or by which it is bound, or, to Amylin's knowledge, any law, rule or regulation
currently in effect having applicability to Amylin.
6.8 LITIGATION. Except and to the extent disclosed in Amylin's SEC
Filings, there is no action, litigation or proceeding pending or threatened
against or involving Amylin in any court or before or by any agency or
regulatory body which could result in a material judgment or liability against
Amylin or which could materially and adversely affect (i) any material
intellectual property of Amylin, (ii) any material portion of the Collateral,
(iii) the income of Amylin, or (iv) the right of Amylin to carry on its
businesses as now conducted or as intended to be conducted.
6.9 PAYMENT OF TAXES. Amylin has filed all tax returns which were
required to be filed by it prior to and as of the date of this Loan Agreement.
Amylin has paid all taxes and assessments which to Amylin's knowledge are
payable by it, to the extent that the same have become due and payable and
before they became delinquent, except for any taxes or assessments that are
being contested in good faith by appropriate proceedings properly instituted and
diligently conducted. Amylin does not know of any proposed material tax
assessment against it or any of its properties for which adequate provision has
not been made on its books.
17.
6.10 COMPLIANCE. Amylin is in compliance with and in conformity to all
laws, ordinances, rules, regulations and all other legal requirements, the
violation of which would have a material, adverse effect on its businesses,
financial condition or properties.
6.11 FINANCIAL STATEMENTS. The financial statements of Amylin included
in its SEC Filings correctly and fairly present the financial condition, results
of operations and cash flows of Amylin as of the dates and for the periods shown
and covered thereby, in accordance with GAAP consistently applied, except that
any such financial statements covering less than a full year may not include
normal year-end adjustments or complete footnote disclosures. There has been no
material adverse change in Amylin's business, financial condition, operations or
prospects since the date of the most recent such financial statements.
6.12 J&J LOAN. The copy of the J&J Loan filed with the SEC as an exhibit
to Amylin's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995,
is a true, complete and correct copy of the J&J Loan (as redacted pursuant to an
Order of the SEC granting confidential treatment of certain provisions thereof).
The J&J Loan is in full force and effect, and no default has occurred or with
the passage of time or giving of notice would occur. The total amount of
indebtedness under the J&J Loan at June 30, 2002, was less than $60,000,000.
Amylin is not permitted to make any further principal draws under the J&J Loan.
6.13 FULL DISCLOSURE; SURVIVAL. None of the representations or
warranties furnished by Amylin to Lilly in connection with any of the Loan
Documents contains or will contain any untrue statement or omits or will omit a
material fact necessary to make the statements contained therein, in light of
the circumstances when made, not misleading. All representations and warranties
made by Amylin under or in connection with any of the Loan Documents shall
survive the making of the Advances provided for herein and issuance and delivery
of the Note to Lilly, notwithstanding any investigation made by Lilly or on
Lilly's behalf.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF XXXXX
Xxxxx hereby represents and warrants to Amylin as of the Effective Date
that:
7.1 AUTHORIZATION; DUE EXECUTION. Lilly has the requisite corporate
power and authority to enter into this Loan Agreement and to perform its
obligations under the terms of this Loan Agreement and the Loan Documents and,
at the time of each Conversion pursuant to Section 4 of this Loan Agreement,
will have the requisite corporate power to acquire the Loan Conversion Shares.
All corporate action on the part of Lilly, its officers, directors and
stockholders necessary for the authorization, execution, delivery and
performance of this Loan Agreement and the Loan Documents have been taken. This
Loan Agreement has been duly authorized, executed and delivered by Lilly, and,
upon due execution and delivery by Amylin, this Loan Agreement will be a valid
and binding agreement of Lilly, enforceable in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or by equitable
principles.
7.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Loan Agreement is made with
Lilly in reliance upon Lilly's representation to Amylin, which by Lilly's
execution of this Loan
18.
Agreement it hereby confirms, that the Note and the Loan Conversion Shares, if
any, purchased by Lilly will be acquired for investment for Lilly's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that Lilly has no present intention of selling, granting
any participation in, or otherwise distributing the same. By executing this Loan
Agreement, Lilly further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to the Note or
any of the Loan Conversion Shares, if issued.
7.3 DISCLOSURE OF INFORMATION. Lilly has received all the information
that it has requested and that it considers necessary or appropriate for
deciding whether to enter into this Loan Agreement and to exercise its
conversion rights under Section 4 of this Loan Agreement to acquire the Loan
Conversion Shares. Lilly further represents that it has had an opportunity to
ask questions and receive answers from Amylin regarding the terms and conditions
of the offering of the Note and the Loan Conversion Shares.
7.4 INVESTMENT EXPERIENCE. Lilly is an investor in securities of
companies in the development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Note and the Loan Conversion Shares,
if issued. Lilly also represents it has not been organized solely for the
purpose of acquiring the Note or the Loan Conversion Shares.
7.5 ACCREDITED INVESTOR. Lilly is an "accredited investor" as such term
is defined in Rule 501 of the General Rules and Regulations prescribed by the
SEC pursuant to the Securities Act.
7.6 RESTRICTED SECURITIES. Lilly understands that (a) the Note has not
been, and that the Loan Conversion Shares will not be, registered under the
Securities Act by reason of a specific exemption therefrom, that such securities
must be held by it indefinitely and that Lilly must, therefore, bear the
economic risk of such investment indefinitely, unless a subsequent disposition
thereof is registered under the Securities Act or is exempt from such
registration; (b) any transfer of the Loan Conversion Shares, if issued, will be
subject to the provisions of the Registration Rights Agreement; and (c) each
certificate representing the Loan Conversion Shares, if issued, and the Note
will be endorsed with the following legends:
(i) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT")
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED;
(ii) Any legend required to be placed thereon pursuant to the
Registration Rights Agreement;
19.
(iii) Any legend required to be placed thereon by Amylin's
Bylaws or under applicable state securities laws; and
and (c) Amylin will instruct any transfer agent not to register the transfer of
the Note or the Loan Conversion Shares (or any portion thereof) unless the
conditions specified in the foregoing legends are satisfied, until such time as
a transfer is made in compliance with the Securities Act, the Registration
Rights Agreement and this Loan Agreement.
SECTION 8. COVENANTS
Amylin covenants and agrees that, during the Term, it will:
8.1 MAINTENANCE OF EXISTENCE AND RIGHTS. Maintain and preserve in full
force and effect its existence and all rights, contracts, licenses, leases,
qualifications, privileges, franchises and other authority necessary for the
conduct of its business, and qualify and remain qualified to do business in each
jurisdiction in which such qualification is material to its business and
operations or ownership of its properties, except where the lapsing of any of
the foregoing would not cause or result in a material adverse effect upon
Amylin's ability to perform its obligations under any of the Loan Documents or
the validity or enforceability of, or Lilly's rights and remedies under, this
Loan Agreement or any of the other Loan Documents.
8.2 GOVERNMENTAL AND OTHER APPROVALS. Apply for, obtain and maintain in
effect, as applicable, all material authorizations, consents, approvals,
licenses, qualifications, exemptions, filings, declarations and registrations
(whether with any court, governmental agency, regulatory authority, securities
exchange or otherwise) which are necessary in connection with the execution,
delivery and performance by Amylin of this Loan Agreement, the Collaboration
Agreement, the Related Agreements, the Loan Documents, or any other documents or
instruments to be executed or delivered by Amylin, in connection therewith or
herewith and the transactions consummated or to be consummated hereunder or
thereunder.
8.3 COMPLIANCE WITH LAWS. Comply in all material respects with all laws,
rules and regulations applicable to Amylin, except where Amylin's failure to
comply with any of the foregoing would not cause or result in a material adverse
effect upon Amylin's ability to perform its obligations under the Collaboration
Agreement, the Related Agreements or any of the Loan Documents or the validity
or enforceability of, or Lilly's rights and remedies under, this Loan Agreement
or any of the other Loan Documents.
8.4 USE OF PROCEEDS. Use the proceeds of each BID Development Advance
exclusively to pay for BID Development Costs; use the proceeds of each SR
Development Advance exclusively to pay for SR Development Costs; and use the
proceeds of each BID Commercialization Advance exclusively to pay for BID
Commercialization Costs.
8.5 PAYMENT OF TAXES. Pay and discharge (a) all taxes, assessments and
governmental charges or levies imposed upon it or its income or property prior
to the date on which penalties attach thereto and (b) all lawful claims and
debts which, if unpaid, might become a Lien upon any of its property; provided
that Amylin shall not be required to pay any such tax, assessment, charge, levy,
claim or debt for which Amylin has obtained a bond or insurance, or
20.
for which it has established a reserve, if the payment thereof is being
contested in good faith and by appropriate proceedings which are being
reasonably and diligently pursued.
8.6 FINANCIAL AND OTHER REPORTS. Maintain a standard system of
accounting in accordance with GAAP and, except to the extent publicly available
in the SEC's XXXXX System, furnish or cause to be furnished to Lilly:
(a) As soon as practicable, and in any event within forty-five
(45) days (or such shorter period of time as is required by the SEC for filing
of quarterly financial statements) after the end of each of the first three
fiscal quarters in each fiscal year, the consolidated balance sheet of Amylin
and its subsidiaries as at the end of such period and the related consolidated
statements of income and cash flows of Amylin and its subsidiaries for such
fiscal quarter and for the period from the beginning of the then current fiscal
year to the end of such fiscal quarter, certified by the chief financial officer
or treasurer of Amylin as fairly presenting in all material respects the
consolidated financial position of Amylin and its subsidiaries as at the dates
indicated and the consolidated results of their operations and cash flows for
the periods indicated in accordance with GAAP. Delivery within the time period
specified above of copies of Amylin's Quarterly Reports on Form 10-Q prepared in
compliance with the requirements of the Exchange Act, in the form filed with the
SEC, shall be deemed to satisfy the requirements of this paragraph.
(b) As soon as practicable, and in any event within ninety (90)
days (or such shorter period of time as is required by the SEC for filing of
annual financial statements) after the end of each fiscal year, (i) the
consolidated balance sheet of Amylin and its subsidiaries as at the end of such
fiscal year and the related consolidated statements of income, stockholders'
equity and cash flows of Amylin and its subsidiaries for such fiscal year and,
in comparative form the corresponding figures for the previous fiscal year and
(ii) an audit report on the items listed in clause (i) hereof of independent
certified public accountants of recognized national standing, which audit report
shall be unqualified and shall state that such financial statements fairly
present in all material respects the consolidated financial position of Amylin
and its subsidiaries as at the dates indicated and the consolidated results of
their operations and cash flows for the periods indicated in conformity with
GAAP and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards. Delivery within the time period specified above of
Amylin's Annual Report on Form 10-K for such fiscal year (together with Amylin's
annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the
Exchange Act) prepared in accordance with the requirements of the Exchange Act,
in the form filed with the SEC, shall be deemed to satisfy the foregoing
requirements of this paragraph; provided that the auditors' report contained
therein satisfies the requirements specified in clause (ii) above.
(c) Such other reports and additional financial and other
information relating to the business, affairs and financial condition of Amylin
as Lilly reasonably may request in writing from time to time (subject to
Amylin's obligations to third parties and provided that Amylin shall have no
obligation to provide access to information that it deems highly confidential).
Any information disclosed to Lilly pursuant to this Agreement shall be deemed
21.
Amylin Confidential Information subject to the provisions of Article 6 of the
Collaboration Agreement.
8.7 ACCESS TO INFORMATION. At all reasonable times and as often as Lilly
may reasonably request, permit authorized representatives of Lilly to: (a) have
access to the financial records of Amylin and other records relating to the
Collateral or the operations and procedures of Amylin; and (b) discuss the
affairs, finances and accounts of Amylin with, and be advised as to the same by,
the officers of Amylin, all as shall be relevant to the performance or
observance of the terms, covenants and conditions of this Loan Agreement or the
other Loan Documents or the financial condition of Amylin; provided, however,
that the foregoing shall be subject to Amylin's obligations to third parties and
in no event shall Amylin be required to provide access to information that it
deems highly confidential. Any information disclosed to Lilly pursuant to this
Agreement shall be deemed Amylin Confidential Information subject to the
provisions of Article 6 of the Collaboration Agreement. In exercising its rights
under this Section 8.7, Lilly shall take reasonable precautions so that
information provided to Lilly concerning aspects of Amylin's business,
operations, properties and assets unrelated to the Collaboration are used solely
for purposes of administering this Loan Agreement and are not disclosed to Lilly
personnel who have no need to know such information for such purpose.
8.8 LITIGATION. Notify Lilly in writing, promptly upon learning thereof,
of any litigation commenced against Amylin which may have a Material Adverse
Effect.
8.9 NOTICES/MATERIAL DEVELOPMENTS. Promptly (and in any event within
three (3) calendar days) after obtaining knowledge of the occurrence of any
event that has resulted in or may result in a Material Adverse Effect or a
material diminution in the value of the Collateral, deliver to Lilly a statement
of the chief executive officer or chief financial officer of Amylin setting
forth the details of each such event and the action which Amylin has taken and
proposes to take with respect thereto. In addition, Amylin shall immediately
inform Lilly by written notice of the occurrence of any event or condition of
any nature which may constitute or result in an Event of Default.
8.10 NO LIENS. Not create or permit any Lien upon any part of the
Collateral other than those created by the Security Agreement and Permitted
Liens (as such term is defined in the Security Agreement), and other than any
Lien contemplated by Section 2.7.
8.11 NO PREPAYMENTS OF DEBT. At any time while an Event of Default shall
exist, not prepay any debt to any person other than Lilly.
8.12 NO DIVIDENDS. Not pay any dividends on, or make any distributions
with respect to, its Common Stock other than distributions payable solely in
additional shares of Common Stock.
SECTION 9. EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT. The occurrence or existence of any of the
following conditions or events shall constitute an "Event of Default" hereunder:
22.
(a) FAILURE TO PAY. Amylin shall fail to pay, when due any
principal, interest or other sums due to Lilly under this Loan Agreement;
(b) OTHER DEFAULTS UNDER THE LOAN DOCUMENTS. Any default in the
observance or performance of any of the other conditions, covenants or
agreements of Amylin set forth in this Loan Agreement or in any Loan Document,
and continuance thereof for a period of [...***...];
(c) INSOLVENCY; BANKRUPTCY. If (i) Amylin becomes insolvent or
generally fails to pay, or admits in writing its inability to pay, its debts as
they mature, or applies for, consents to, or acquiesces in the appointment of a
trustee, receiver, liquidator, conservator or other custodian for itself, or a
substantial part of its property, or makes a general assignment for the benefit
of creditors; (ii) Amylin files a voluntary petition in bankruptcy or a trustee,
receiver, liquidator, conservator or other custodian is appointed for Amylin or
for a substantial part of its property; (iii) any bankruptcy, reorganization,
debt arrangement, or other proceedings under any bankruptcy or insolvency law,
or any dissolution or liquidation proceeding, is instituted by or against
Amylin, and the same is consented to or acquiesced by Amylin, or otherwise
remains undismissed for sixty (60) days; or (iv) any warrant of attachment is
issued against any substantial part of the property of Amylin which is not
released within thirty (30) days of service thereof.
(d) REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made by Amylin in any Loan Document or in the Collaboration Agreement
shall fail to be true and correct in any material respect when made or deemed to
have been made.
(e) DEFAULT WITH RESPECT TO OTHER INDEBTEDNESS. Amylin shall
default with respect to (i) any payment of principal of or interest on any Other
Indebtedness beyond any period of grace provided with respect thereto in an
amount greater than [...***...], or (ii) the performance of any other covenant,
term or condition contained in any agreement or instrument under which any Other
Indebtedness is created or governed if the effect of such performance default is
to accelerate the maturity of any Other Indebtedness in an amount greater than
[...***...] or to permit the holder of any such Other Indebtedness to accelerate
the maturity of an amount of Other Indebtedness greater than [...***...].
SECTION 10. LILLY'S RIGHTS AND REMEDIES
10.1 RIGHTS AND REMEDIES. Upon the occurrence and during the continuance
of an Event of Default, Lilly may, at its election, without notice of its
election and without demand, do any one or more of the following, all of which
are authorized by Amylin:
(a) Declare all Obligations, whether evidenced by this Loan
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable (provided, that upon the occurrence of an Event of Default described in
SECTION 9.1(c), all Obligations shall become immediately due and payable without
any action by Lilly);
(b) Cease advancing money or extending credit to or for the
benefit of Amylin under this Loan Agreement; and
*CONFIDENTIAL TREATMENT REQUESTED
23.
(c) Terminate this Loan Agreement as to any future liability or
obligation of Lilly, but without affecting the Obligations of Amylin to Lilly.
10.2 WAIVER OF DEFAULTS. No Event of Default shall be waived by Lilly
except in a written instrument specifying the scope and terms of such waiver and
signed by an authorized officer of Lilly, and such waiver and shall be effective
only for the specific times and purposes given. No single or partial exercise of
any right, power or privilege hereunder, nor any delay in the exercise thereof,
shall preclude other or further exercise of Lilly's rights. No waiver of any
Event of Default shall extend to any other or further Event of Default. No
forbearance on the part of Lilly in enforcing any of Lilly's rights or remedies
hereunder or under any of the other Loan Documents shall constitute a waiver of
any of its rights or remedies.
10.3 REMEDIES CUMULATIVE. Lilly's rights and remedies under this Loan
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Lilly shall have all other rights and remedies not expressly set forth herein as
provided under applicable law, or in equity. No exercise by Lilly of one right
or remedy shall be deemed an election, and no waiver by Lilly of any Event of
Default on Amylin's part shall be deemed a continuing waiver. No delay by Lilly
shall constitute a waiver, election, or acquiescence by it. No waiver by Lilly
shall be effective unless made in a written document signed on behalf of Lilly
and then shall be effective only in the specific instance and for the specific
purpose for which it was given.
10.4 WAIVER. Amylin waives demand, protest, notice of protest, notice of
default or dishonor, notice of payment and nonpayment, notice of any default,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of accounts, documents, instruments, chattel paper, and guarantees at any time
held by Lilly on which Amylin may in any way be liable.
SECTION 11. AGREEMENT NOT TO SELL
11.1 AGREEMENT NOT TO SELL. Lilly hereby agrees that, from the Effective
Date until such time as the parties have received the final report of the
results of all Amigo Trials, Lilly shall not, without the prior written consent
of Amylin, directly or indirectly, sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer
or dispose of any securities of Amylin held by it at any time during such
period. In order to enforce the provisions of this Section 11.1, Amylin may
impose stop-transfer instructions with respect to the securities held by Lilly
that are subject to the foregoing restriction until the end of such period.
SECTION 12. MISCELLANEOUS
12.1 SUBORDINATION. To the extent set forth herein, the Indebtedness
shall be subordinate and junior in right of payment to the Senior Indebtedness.
Notwithstanding the foregoing, Lilly may receive from Amylin and Amylin may pay
to Lilly all payments with respect to the Indebtedness as and when called for or
permitted hereunder unless and until such time as any holder of Senior
Indebtedness notifies Lilly that a default has occurred with respect to such
Senior Indebtedness and that such defaulted Senior Indebtedness has been
accelerated pursuant to its terms; thereafter, Lilly may not receive payments
with respect to the Indebtedness
24.
so long as such holder is diligently pursuing collection of the defaulted Senior
Indebtedness by formal legal proceedings, until such time as the default with
respect to such Senior Indebtedness has been cured or waived or such Senior
Indebtedness has been discharged in full.
12.2 GOVERNING LAW. This Loan Agreement, and each of the other Loan
Documents shall be governed by and construed in accordance with the laws of the
State of New York.
12.3 ASSIGNMENT. This Loan Agreement will inure to the benefit and be
binding upon each party, its successors and assigns. The Loan Agreement may not
be assigned or otherwise transferred, nor, except as expressly provided
hereunder, may any right or obligation hereunder be assigned or transferred by
either party without the prior written consent of the other party; provided,
however, that either party may, without such consent, assign this Loan Agreement
and its rights and obligations hereunder to an Affiliate or in connection with
the transfer or sale of all or substantially all of its assets or business to
which this Loan Agreement relates, or in the event of its merger or
consolidation or change in control or similar transaction. The rights and
obligations of the parties under this Loan Agreement shall be binding upon and
inure to the benefit of the successors and permitted assigns of the parties. Any
attempted assignment not in accordance with this Section will be void.
12.4 ENTIRE AGREEMENT. This Loan Agreement, the exhibits and schedules
hereto, the other Loan Documents, the Collaboration Agreement, the Related
Agreements and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof.
12.5 SEVERABILITY. In case any provision of this Loan Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
12.6 TITLES AND SUBTITLES. The titles of the sections and subsections of
the Loan Agreement are for convenience of reference only and are not to be
considered in construing this Loan Agreement.
12.7 NOTICES. All notices which are required or permitted hereunder will
be in writing and sufficient if delivered personally, sent by facsimile or email
to a current fax number or e-mail address for the recipient (and promptly
confirmed by personal delivery, registered or certified mail or overnight
courier), sent by nationally-recognized overnight courier or sent by registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:
if to Amylin, to: Amylin Pharmaceuticals, Inc.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chairman and Chief Executive Officer
Fax No.: (000) 000-0000
E-Mail: xxxxx@xxxxxx.xxx
25.
with a copy to: Attention: General Counsel
Fax No.: (000) 000-0000
E-Mail: xxxxxxxx@xxxxxx.xxx
if to Lilly, to: Xxx Xxxxx and Company
Lilly Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such notice
will be deemed to have been given when delivered if personally delivered or sent
by facsimile on a Business Day, on the Business Day after dispatch if sent by
nationally-recognized overnight courier and on the third Business Day following
the date of mailing if sent by mail.
12.8 WAIVER. The waiver by either party hereto of any right hereunder,
or the failure to perform, or a breach by the other party will not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other party whether of a similar nature or otherwise.
12.9 COUNTERPARTS. This Loan Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
[THE SIGNATURE PAGE FOLLOWS.]
26.
WITNESS the due execution hereof as of the day and year first above
written.
XXX XXXXX AND COMPANY AMYLIN PHARMACEUTICALS, INC.
By: /s/ AUGUST X. XXXXXXXX By: /s/ XXXXXX X. XXXX, XX.
---------------------------------- -------------------------------------
Name: August X. Xxxxxxxx Name: Xxxxxx X. Xxxx
------------------------------- -----------------------------------
Title: Executive Vice President Title: Chairman and Chief
Science/Technology Executive Officer
[SIGNATURE PAGE TO LOAN AGREEMENT]
EXHIBIT A
THIS CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN
COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A
NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
CONVERTIBLE PROMISSORY NOTE
$110,000,000 San Diego, California
September __, 2002
AMYLIN PHARMACEUTICALS , INC., a Delaware corporation ("AMYLIN"), for
value received, hereby promises to pay to the order of XXX LILLY AND COMPANY, an
Indiana corporation ("LILLY"), in lawful money of the United States of America,
the principal amount of $110,000,000 or the aggregate principal amount of all
outstanding Advances, together with interest as provided for below, payable on
the dates, in the amounts and in the manner set forth below.
1. LOAN AGREEMENT. This Convertible Promissory Note is the Note referred
to in that certain Loan Agreement, dated as of the date hereof, by and between
Amylin and Lilly (as the same may be amended, supplemented, restated or
otherwise modified from time to time, the "LOAN AGREEMENT"). Capitalized terms
used herein without definitions shall have the meanings given to such terms in
the Loan Agreement.
2. REQUESTS FOR ADVANCES. Amylin may request an Advance by delivering to
Lilly a Borrowing Request pursuant to Section 2.2 of the Loan Agreement.
3. PRINCIPAL PAYMENTS. Subject to the terms and conditions of the Loan
Agreement, the total outstanding balance of all Indebtedness not earlier
converted in accordance with the terms of the Loan Agreement shall be due and
payable in accordance with the terms of the Loan Agreement.
4. INTEREST. The outstanding Indebtedness shall accrue interest at the
rate or rates per annum set forth in the Loan Agreement.
5. CONVERSION. The outstanding Indebtedness is convertible into Common
Stock of Amylin in accordance with Section 4 of the Loan Agreement.
6. PAYMENT ON NON-BUSINESS DAY. In the event that any payment of
principal, interest, fees or any other amounts payable by Amylin under or
pursuant to this Note shall become due on any day which is not a Business Day,
such due date shall be extended to the next succeeding
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Business Day, and, to the extent applicable, interest shall continue to accrue
and be payable at the applicable rate for and during any such extension.
7. DEFAULT. Upon the occurrence of an Event of Default under the Loan
Agreement or any of the other Loan Documents, all unpaid principal, accrued
interest and other amounts owing hereunder shall become immediately due and
payable as provided in the Loan Agreement, the other Loan Documents and
applicable law.
8. WAIVERS. Amylin hereby waives presentment, demand, protest, notice of
dishonor, notice of demand or intent to demand, notice of acceleration or intent
to accelerate, and all other notices, and Amylin agrees that no extension or
indulgence to Amylin or the release, substitution or nonenforcement of any
security, or the release or substitution of Amylin, whether with or without
notice, shall affect the obligations of Amylin. The right to plead any and all
statutes of limitation as a defense to any demands hereunder is hereby waived by
Amylin to the full extent permitted by law. In addition, Amylin waives all
defenses or rights to discharge available to it and waives all other suretyship
defenses or rights to discharge.
9. GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of New York.
AMYLIN: AMYLIN PHARMACEUTICALS, INC.
/s/ XXXXXX X. XXXX, XX.
-----------------------------------------
By: Xxxxxx X. Xxxx, Xx.
--------------------------------------
Its: Chairman and Chief Executive Officer
-------------------------------------
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