THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

MannKind Corporation (MNKD)

4/14/2006 Proxy Information

The following is a description of transactions or series of transactions since January 1, 2005 to which we have been a party, in which the amount involved in the transaction or series of transactions exceeds $60,000, and in which any of our directors, executive officers or persons who we know held more than five percent of any class of our capital stock, including their immediate family members, had or will have a direct or indirect material interest, other than compensation arrangements, which are described under ÒManagement.Ó Except as specifically described below regarding loans to former directors and former executive officers, we believe that the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in armÕs-length transactions.

LOANS TO FORMER DIRECTORS AND FORMER EXECUTIVE OFFICERS

On September 15, 2000, October 20, 2000 and April 2, 2001, AlleCure, a former subsidiary of MannKind, sold and issued an aggregate of 1,715,000 shares of its common stock to its CEO, Dr. McCormack, in exchange for three promissory notes in the aggregate principal amount of $1,963,380. In connection with the Merger, Dr. McCormackÕs shares of common stock of AlleCure were exchanged for 110,113 shares of our common stock and we were assigned the benefit of the promissory notes. The full recourse promissory notes were due at various dates from 2005 to 2006 and were collateralized by the underlying shares of common stock issued in connection with the notes. The notes are pre-payable by Dr. McCormack, and he has no service obligation to us under the terms of the stock purchase. The note-for-stock transaction was accounted for as in-substance stock option grants to an employee. As a result, AlleCure recognized stock-based compensation expense of $815,000 during 2001 in connection with these notes, which represented the intrinsic value of the in-substance stock options. This amount was reversed in 2002 because the in-substance options had no intrinsic value as of December 31, 2002. There was no stock-based compensation expense recorded for the in-substance options in 2003 because they had no intrinsic value as of December 31, 2003. The Company recorded approximately $17,000 of stock-based compensation expense relating to the in-substance stock options during the year ended December 31, 2004, which represented the intrinsic value of the in-substance options at year end. This amount was reversed in 2005 because the in-substance stock options had no intrinsic value as of December 31, 2005. In September and October 2005, the principal and interest totaling $1,628,156 on the notes issued in exchange for approximately 78,000 of the 110,000 shares of common stock issued became due and payable. The Company pursued collection and, in January 2006, the debtor tendered 143,949 shares as full repayment of the notes in default and the note issued in exchange for 32,000 shares which would become due in April 2006. These shares were valued at $2.6 million on January 31, 2006 and represented principal and interest due through that date on all notes outstanding. The Company received and cancelled 143,949 shares on January 31, 2006.

COMMON STOCK FINANCINGS

From January 2005 through December 31, 2005, we sold shares of our common stock in financings as follows:

¥ on June 30, 2005, we sold 28,878 shares of common stock through our Employee Stock Purchase Plan at a purchase price of $8.62 per share.

¥ private placement offering of 17,131,682 shares of our common stock and warrants to purchase 3,426,340 shares of our common stock resulting in aggregate gross proceeds of approximately $175.0 million. The Warrants have an exercise price of $12.228 per share, become exercisable beginning February 1, 2006 and expire on August 5, 2010; and

¥ on December 31, 2005, we sold 28,764 shares of common stock through our Employee Stock Purchase Plan at a purchase price of $8.54 per share.

The investors in these financings included the following executive officers, directors, holders of more than five percent of our securities, and the immediate family members and affiliated entities of each:

Purchaser Shares Directors and executive officers

Alfred E. Mann(1) 8,550,546 Hakan S. Edstrom(2) 6,564 Richard L. Anderson 1,610 Kent Kresa 10,500

(1) Consists of 6,944,963 shares held by the Alfred E. Mann Living Trust and 1,605,483 shares held by Biomed Partners, LLC. The Alfred E. Mann Living Trust and MiniMed Infusion, Inc. are each 0.1% managing members of Biomed Partners, LLC. Alfred Mann has voting and dispositive power over the shares set forth..

(2) Hakan S. Edstrom holds 4,895 shares as trustee of The Edstrom Family Trust.

INDEMNIFICATION AGREEMENTS WITH DIRECTORS AND EXECUTIVE OFFICERS

We were incorporated under the laws of the State of Delaware. Section 145 of the Delaware General Corporation Law, or DGCL, generally provides that a Delaware corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that the person is or was an officer, director, employee or agent of the corporation, or is or was serving at the request of the corporation as an officer, director, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneysÕ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, provided that the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporationÕs best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may also indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneysÕ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, provided the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporationÕs best interests, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses which the officer or director has actually and reasonably incurred.

Our amended and restated certificate of incorporation and amended and restated bylaws provide for the indemnification of our directors and executive officers to the fullest extent permitted under the DGCL and other applicable laws.

As permitted by Delaware law, we have entered into indemnity agreements with each of our directors and executive officers. These agreements generally require us to indemnify our directors and executive officers against any and all expenses (including attorneysÕ fees), witness fees, damages, judgments, fines, settlements and other amounts incurred (including expenses of a derivative action) in connection with any action, suit or proceeding, whether actual or threatened, to which any of these individuals may be made a party by reason of the fact that he or she is or was a director, officer, employee, or other agent of ours or serving at our request as a director, officer, employee, or other agent of another corporation or enterprise, provided that he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to our best interests and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. Under the indemnification agreements, all expenses incurred by one of our directors or executive officers in defending any such action, suit or proceeding in advance of its final disposition shall be paid by us upon delivery to us of an undertaking, by or on behalf of the director or executive officer, to repay all advanced amounts if it is ultimately determined that the director or executive officer is not entitled to be indemnified by us under his or her indemnification agreement, our amended and restated bylaws or the DGCL. The indemnification agreements also set forth certain procedures that will apply in the event any of our directors or executive officers brings a claim for indemnification under his or her indemnification agreement.

In addition, Section 102(b)(7) of the DGCL permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director, except for liability for:

¥ any transaction from which the director derives an improper personal benefit;

¥ acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

¥ unlawful payment of dividends or unlawful stock purchase or redemptions of shares; or

¥ any breach of a directorÕs duty of loyalty to the corporation or its stockholders.

Our amended and restated certificate of incorporation includes such a provision.

There is currently no pending litigation or proceeding involving any of our directors or executive officers for which indemnification is being sought. We are not currently aware of any threatened litigation that may result in claims for indemnification against us by any of our directors or executive officers.

We have an insurance policy covering our officers and directors with respect to certain liabilities, including liabilities arising under the Securities Act of 1933, as amended, or Securities Act, or otherwise. The policy expires on July 27, 2006.

OTHER TRANSACTIONS

We issued 8,550,446 shares of our common stock to Mr. Mann during the year ended December 31, 2005 for proceeds of approximately $87.3 million. In connection with this issuance, the board of directors approved the issuance of warrants to purchase 1,710,091 shares of our common stock at $12.228 per share, which expire on August 2, 2010. The issuance of shares and warrants to Mr. Mann was on terms identical to the other purchasers in the private placement, as approved by our board of directors.

In connection with certain meetings of our board of directors and on other occasions when our business necessitated air travel for Mr. Mann and other MannKind employees, we utilized Mr. MannÕs private aircraft and we paid the charter company that manages the aircraft on behalf of Mr. Mann approximately $62,000 in 2005.

The above related-party transactions were approved by a majority or more of the disinterested members of our Board of Directors. We believe that the foregoing agreements were and continue to be in our best interests. It is our current policy that all agreements between us and any of our officers, directors, 5% stockholders, or any of their affiliates, will be entered into only if such agreements are approved by a majority of our disinterested directors and are on terms no less favorable to us than could be obtained from unaffiliated parties.

4/8/2005 Proxy Information

The following is a description of transactions or series of transactions since January 1, 2004 to which we have been a party, in which the amount involved in the transaction or series of transactions exceeds $60,000, and in which any of our directors, executive officers or persons who we know held more than five percent of any class of our capital stock, including their immediate family members, had or will have a direct or indirect material interest, other than compensation arrangements, which are described under ÒManagement.Ó Except as specifically described below regarding loans to former directors and former executive officers, we believe that the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in armÕs-length transactions.

Loans to Former Directors and Former Executive Officers

On September 15, 2000, December 15, 2000 and April 2, 2001, AlleCure, a former subsidiary of MannKind, sold and issued an aggregate of 1,715,000 shares of its common stock to its CEO Dr. McCormack in exchange for three promissory notes in the aggregate principal amount of $1,963,380. The promissory notes are due at various dates from 2005 to 2006, are full recourse as to both principal and interest and are collateralized by the underlying shares of common stock issued in connection with the notes. The notes are pre-payable by Dr. McCormack, and he has no service obligation to us under the terms of the stock purchase. The note-for-stock transaction was accounted for as in-substance stock option grants to an employee. As a result, AlleCure recognized stock-based compensation expense of $815,000 during 2001 in connection with these notes, which represented the intrinsic value of the in-substance stock options. This amount was reversed in 2002 because the in-substance options had no intrinsic value as of December 31, 2002. MannKind recognized $16,873 in stock-based compensation during 2004, which represented the intrinsic value of the in-substance stock option at December 31, 2004. In connection with the Merger, Dr. McCormackÕs shares of common stock of AlleCure were exchanged for 110,113 shares of our common stock and we were assigned the benefit of the promissory notes. As of December 31, 2004, an aggregate of $2,448,590 in principal and accrued interest was outstanding under the notes.

Common Stock Financings

From January 2004 through December 31, 2004, we sold shares of our common stock in financings as follows:

¥ on August 2, 2004, we sold 6,250,000 shares of common stock through our initial public offering for a purchase price of $14.00 per share, less underwriting discounts and commissions of $0.98 per share. On August 28, the underwriters exercised their over-allotment option to purchase 307,100 shares of common stock at the same purchase price per share; and

¥ on December 31, 2004, we sold 36,152 shares of common stock through our Employee Stock Purchase Plan at a purchase price of $11.90 per share.

The investors in these financings included the following executive officers, directors, holders of more than five percent of our securities, and the immediate family members and affiliated entities of each:

Purchaser Shares

Directors and executive officers

Hakan S. Edstrom(1) 11,785

Richard L. Anderson 11,785

Wayman Wendell Cheatham 1,025

David Thomson 1,675

Immediate family members

Claude Girault(2) 25,000

Richard Mann(3) 30,800

Kevin Mann(4) 8,600

Robert Mann(5) 3,000

Rosalind Koff(6) 2,100

(1) Hakan S. Edstrom holds the shares set forth opposite his name in his name or as trustee of the Hakan and Marie Edstrom Family Trust.

(2) Claude Girault is the spouse of Alfred E. Mann.

(3) Richard Mann holds the shares set forth opposite his name as Richard and Cheryl Mann. Richard Mann is the son of Alfred E. Mann.

(4) Kevin Mann is the son of Alfred E. Mann.

(5) Robert Mann holds the shares set forth opposite his name as Robert and Lucy Mann. Robert Mann is the brother of Alfred E. Mann.

(6) Rosalind Koff holds the shares set forth opposite her names as Rosalind and Robert Koff. Rosalind Koff is the sister of Alfred E. Mann.

Series C Convertible Preferred Stock Financing

On December 31, 2003 we sold 980,392 shares of our Series C convertible preferred stock in a private financing at a price of $51.00 per share, including 364,589 shares to the Alfred E. Mann Living Trust. Upon the closing of our initial public offering on August 2, 2004, the outstanding shares of our Series C convertible preferred stock were automatically converted into an aggregate of 4,464,266 shares of our common stock.

Indemnification Agreements With Directors And Executive Officers

We were incorporated under the laws of the State of Delaware. Section 145 of the Delaware General Corporation Law, or DGCL, generally provides that a Delaware corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that the person is or was an officer, director, employee or agent of the corporation, or is or was serving at the request of the corporation as an officer, director, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneysÕ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, provided that the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporationÕs best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may also indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneysÕ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, provided the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporationÕs best interests, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses which the officer or director has actually and reasonably incurred.

Our amended and restated certificate of incorporation and amended and restated bylaws provide for the indemnification of our directors and executive officers to the fullest extent permitted under the DGCL and other applicable laws.

As permitted by Delaware law, we have entered into indemnity agreements with each of our directors and executive officers. These agreements generally require us to indemnify our directors and executive officers against any and all expenses (including attorneysÕ fees), witness fees, damages, judgments, fines, settlements and other amounts incurred (including expenses of a derivative action) in connection with any action, suit or proceeding, whether actual or threatened, to which any of these individuals may be made a party by reason of the fact that he or she is or was a director, officer, employee, or other agent of ours or serving at our request as a director, officer, employee, or other agent of another corporation or enterprise, provided that he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to our best interests and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. Under the indemnification agreements, all expenses incurred by one of our directors or executive officers in defending any such action, suit or proceeding in advance of its final disposition shall be paid by us upon delivery to us of an undertaking, by or on behalf of the director or executive officer, to repay all advanced amounts if it is ultimately determined that the director or executive officer is not entitled to be indemnified by us under his or her indemnification agreement, our amended and restated bylaws or the DGCL. The indemnification agreements also set forth certain procedures that will apply in the event any of our directors or executive officers brings a claim for indemnification under his or her indemnification agreement.

In addition, Section 102(b)(7) of the DGCL permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director, except for liability for:

¥ any transaction from which the director derives an improper personal benefit;

¥ acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

¥ unlawful payment of dividends or unlawful stock purchase or redemptions of shares; or

¥ any breach of a directorÕs duty of loyalty to the corporation or its stockholders.

Our amended and restated certificate of incorporation includes such a provision.

There is currently no pending litigation or proceeding involving any of our directors or executive officers for which indemnification is being sought. We are not currently aware of any threatened litigation that may result in claims for indemnification against us by any of our directors or executive officers. We have an insurance policy covering our officers and directors with respect to certain liabilities, including liabilities arising under the Securities Act of 1933, as amended, or Securities Act, or otherwise. The policy expires on July 27, 2005.

Consulting Services

In 2004, we engaged one of our directors, Llew Keltner, to provide consulting services to our management in connection with our efforts to seek potential partners in the development and commercialization of our Technosphere Insulin System. As of December 31, 2004, we paid Dr. Keltner approximately $47,000 for consulting services rendered.

Other Transactions

In connection with certain meetings of our board of directors and on other occasions when our business necessitated air travel for Mr. Mann and other MannKind employees, we utilized Mr. MannÕs private aircraft and we paid the charter company that manages the aircraft on behalf of Mr. Mann approximately $144,500 in 2004.

The above related-party transactions were approved by a majority or more of the disinterested members of our Board of Directors. We believe that the foregoing agreements were and continue to be in our best interests. It is our current policy that all agreements between us and ay of our officers, directors, 5% stockholders, or any of their affiliates, will be entered into only if such agreements are approved by a majority of our disinterested directors and are on terms no less favorable to us than could be obtained from unaffiliated parties.