Exhibit 10.1
This Facility Agreement (the “Facility Agreement”) contains representations and
warranties that the Lenders (“Lenders”) and Insulet Corporation (“Insulet”) made
to each other. These representations and warranties were made only for the
purposes of the signing of the Facility Agreement and solely for the benefit of
the Lenders and Insulet as of specific dates, may be subject to important
limitations and qualifications agreed to by the Lenders and Insulet in
connection with the signing of the Facility Agreement, and may not be complete.
Furthermore, these representations and warranties may have been made for the
purposes of allocating contractual risk between the Lenders and Insulet instead
of establishing these matters as facts, and may or may not have been accurate as
of any specific date and do not purport to be accurate as of the date of the
filing of the Facility Agreement by Insulet with the Securities and Exchange
Commission. Accordingly, you should not rely upon the representations and
warranties contained in the Facility Agreement as characterizations of the
actual state of facts, since they were intended to be for the benefit of, and to
be limited to, the Lenders and Insulet.
FACILITY AGREEMENT
     FACILITY AGREEMENT (this “Agreement”), dated as of March 13, 2009 (the
“Agreement Date”), between Insulet Corporation, a Delaware corporation (the
“Borrower”), and those lenders set forth on Schedule 1 attached hereto
(individually, a “Lender” and together, the “Lenders” and, together with the
Borrower, the “Parties”).
W I T N E S S E T H:
     WHEREAS, the Borrower wishes to borrow from the Lenders up to Sixty Million
Dollars ($60,000,000) for the purpose described in Section 2.1; and
     WHEREAS, the Lenders desire to make loans to the Borrower from time to time
for such purpose.
     NOW, THEREFORE, in consideration of the mutual agreements set forth herein,
the Lenders and the Borrower agree as follows:
ARTICLE 1
DEFINITIONS
     Section 1.1 General Definitions. Wherever used in this Agreement, the
Exhibits or the Schedules attached hereto, unless the context otherwise
requires, the following terms have the following meanings:
     “Additional Amounts” has the meaning given to it in Section 2.6(b).
     “Affiliate” means, with respect to any Person, any other Person:
     (a) that owns, directly or indirectly, in the aggregate of more than fifty
percent (50%) of the beneficial ownership interest of such Person; or
     (b) that directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such Person; or
     (c) that directly or indirectly is a general partner, controlling
shareholder, or managing member of such Person.
     “Approved Fund” means, with respect to any Lender, any Person (other than a
natural Person) that (a) is or will be engaged in making, purchasing, holding or
otherwise investing in notes, commercial loans and similar extensions of credit
in the ordinary course of its business or (b) is advised or managed by (i) such
Lender, (ii) any Affiliate of such Lender or (iii) any Person (other than an
individual) or any Affiliate of any Person (other than an individual) that
administers or manages such Lender.
     “Business Day” means a day on which banks are open for business in The City
of New York.

 

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     “Cash and Cash Equivalents” means with respect to any date of
determination, the amount shown as such on the consolidated balance sheet of the
Borrower and its Subsidiaries at the time such balance sheet is filed with the
SEC on Form 10-Q or Form 10-K under the Exchange Act or otherwise made available
to the Borrower’s stockholders.
     “Code” means the Internal Revenue Code of 1986, as amended, and any
Treasury Regulations promulgated thereunder.
     “Common Stock” means the common stock, par value $0.001 per share, of the
Borrower.
     “Default” means any event which, at the giving of notice, lapse of time or
fulfillment of any other applicable condition (or any combination of the
foregoing), would constitute an Event of Default.
     “Disbursement” has the meaning given to it in Section 2.2.
     “Disbursement Date” means the date on which a Disbursement occurs.
     “Disbursement Request” has the meaning given to it in Section 2.2.
     “Dollars” and the “$” sign mean the lawful currency of the United States of
America.
     “Event of Default” has the meaning given to it in Section 5.5.
     “Evidence of Disbursement” has the meaning given to it in Section 2.2.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended,
including the rules and regulations promulgated thereunder.
     “Excluded Taxes” means all income taxes, minimum or alternative minimum
income taxes, any tax determined based upon income, capital gains, gross income,
sales, net profits, windfall profits or similar items, franchise taxes (or any
other tax measured by capital, capital stock or net worth), gross receipts
taxes, branch profits taxes, margin taxes (or any other taxes imposed on or
measured by net income, or imposed in lieu of net income) payable by the Lenders
in any jurisdiction to any Government Authority (or political subdivision or
taxing authority thereof) in connection with any payments received under this
Agreement by the Lenders, or any similar tax imposed in connection with the
execution and delivery of, and the performance of its obligations under, this
Agreement.
     “Final Payment” means such amount as may be necessary to repay the Loan in
full and any other amounts owing by the Borrower to the Lenders pursuant to the
Financing Documents.
     “Final Payment Date” means the earlier of (i) the date on which the
Borrower repays the outstanding principal of the Loan (together with any other
amounts accrued and unpaid under this Agreement) to the Lenders pursuant to this
Agreement and (ii) September 16, 2012.
     “Financing Documents” means this Agreement, the Notes, the Registration
Rights Agreement, the Security Agreement, the Warrants and any other document or
instrument delivered by the Borrower in connection with any of the foregoing
whether or not specifically mentioned herein or therein.

 

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     “Finished Goods Inventory” means with respect to any date of determination,
the amount shown as such in the footnotes to the consolidated financial
statements of the Borrower and its Subsidiaries at the time such financial
statement are filed with the SEC on Form 10-Q or Form 10-K under the Exchange
Act or otherwise made available to the Borrower’s stockholders.
     “GAAP” means generally accepted accounting principles consistently applied
as set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession).
     “Government Authority” means any government, governmental department,
ministry, cabinet, commission, board, bureau, agency, tribunal, regulatory
authority, instrumentality, judicial, legislative, fiscal, or administrative
body or entity, whether domestic or foreign, federal, state or local, having
jurisdiction over the matter or matters and Person or Persons in question,
including, without limitation, the SEC.
     “Gross Profit” means, for any fiscal quarter of the Borrower, the gross
profit (loss) for such quarter as reported in the Borrower’s filings with the
SEC, provided that (i) any gross profit recorded in any single fiscal quarter
from the sale of the OmniPod System Starter Kits solely for investigational use
shall be capped at $1 million and (ii) any gross profit recorded in any fiscal
quarter related to the favorable settlement of a legal dispute or proceeding
between the Borrower and a third party shall be excluded in its entirety.
     “Indebtedness” means the following, whether direct or contingent:
     (a) all indebtedness for borrowed money;
     (b) the deferred purchase price of assets or services which in accordance
with GAAP would be shown to be a liability (or on the liability side of a
balance sheet);
     (c) all guaranty obligations;
     (d) the maximum amount of all letters of credit issued or acceptance
facilities established for the account of the Borrower and, without duplication,
all drafts drawn thereunder (other than letters of credit supporting other
indebtedness of Borrower and which are otherwise permitted hereunder);
     (e) all capitalized lease obligations;
     (f) all indebtedness of another Person secured by any Lien on any property
of the Borrower, whether or not such indebtedness has been assumed or is
recourse;
     (g) all obligations under take-or-pay or similar arrangements or under any
interest rate swaps, caps, floors, collars and other interest hedge or
protection agreements, treasury locks, equity forward contracts, currency
agreements or commodity purchase or option agreements or other interest or
exchange rate or commodity price hedging agreements and any other derivative
instruments, in each case, whether the Borrower is liable contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which
obligations the Borrower otherwise assures a creditor against loss;

 

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     (h) indebtedness created or arising under any conditional sale or title
retention agreement; and
     (i) obligations of the Borrower with respect to withdrawal liability to or
on behalf of any “multi employer plan” as defined in Section 4001(a) of ERISA.
     “Indemnified Person” has the meaning given to it in Section 6.11.
     “Indemnity” has the meaning given to it in Section 6.11.
     “Interest Rate” means 9.75% simple interest per annum, payable on the
outstanding principal amount of each of the Notes.
     “Lien” means any lien, pledge, preferential arrangement, mortgage, security
interest, deed of trust, charge, assignment, hypothecation, title retention,
privilege or other encumbrance on or with respect to property or interest in
property having the practical effect of constituting a security interest, in
each case with respect to the payment of any obligation with, or from the
proceeds of, any asset or revenue of any kind.
     “Loan” means the loan to be made available by the Lenders to the Borrower
pursuant to Section 2.2 in the maximum aggregate amount of sixty million Dollars
($60,000,000) or, as the context may require, the principal amount thereof from
time to time outstanding.
     “Loss” has the meaning given to it in Section 6.11.
     “Major Transaction” has the meaning set forth in the Warrants.
     “Material Adverse Effect” means a material adverse effect on (a) the
business, operations, condition (financial or otherwise) or property of the
Borrower, (b) the validity or enforceability of any provision of any Financing
Document, (c) the ability of the Borrower to timely perform its Obligations or
(d) the rights and remedies of the Lenders under any Financing Document.
     “Notes” means the notes issued to the Lenders evidencing the Loan in the
form attached hereto as Exhibit A.
     “Obligations” means all obligations (monetary or otherwise) of the Borrower
arising under or in connection with the Financing Documents.
     “Organizational Documents” means the Certificate of Incorporation and
Bylaws, each as in effect from time to time, of the Borrower.
     “Permitted Indebtedness” means the principal of (and premium, if any),
interest on, and all fees and other amounts (including, without limitation, any
reasonable out-of-pocket costs, enforcement expenses (including reasonable
out-of-pocket legal fees and disbursements), collateral protection expenses and
other reimbursement or indemnity obligations relating thereto) payable by
Borrower and/or its Subsidiaries under or in connection with: (i) Indebtedness
of Borrower in favor of the Lenders arising under this Agreement or any other
Financing Document, (ii) Indebtedness existing as of the date hereof and set
forth in a schedule to this Agreement (which the Borrower represents to not be
in excess of $105,734,375 and any Permitted Refinancing Indebtedness used to
refinance such Indebtedness, (iii) future Indebtedness in respect of purchase
money financing, capital

 

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lease obligations and equipment financing and letters of credit, in each case in
the ordinary course of business, (iv) Indebtedness to trade creditors incurred
in the ordinary course of business, (v) intercompany Indebtedness,
(vi) Indebtedness in respect of workers’ compensation claims, self-insurance
obligations, indemnities, bankers’ acceptances, performance and surety bonds,
appeal or other similar bonds, in each case in the ordinary course of business,
in any such case, any reimbursement obligations in connection therewith
(vii) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn against
insufficient funds, so long as such Indebtedness is covered within 15 Business
Days and (viii) Indebtedness arising from agreements providing for
indemnifications, provided that the amount of such Indebtedness does not exceed
$1,000,000.
     “Permitted Liens” means: (i) [Intentionally omitted]; (ii) Liens in favor
of the Lenders; (iii) statutory Liens created by operation of applicable law;
(iv) Liens arising in the ordinary course of business and securing obligations
that are not overdue or are being contested in good faith by appropriate
proceedings; (v) Liens for Taxes not yet due and payable or that are being
contested in good faith by appropriate proceedings; (vi) licenses and
sub-licenses granted in the ordinary course of Borrower’s business and, with
respect to any licenses where Borrower is the licensee or sublicensee, any
interest or title of a licensor or sublicensor under any such license or
sublicense; (vii) any option or other agreement to purchase any asset of the
Borrower or any Subsidiary the disposition of which is not otherwise prohibited
hereby; (viii) Liens in favor of the Borrower and/or any of its Subsidiaries;
(ix) survey exceptions, easements or reservations of, or rights of others for,
licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines
and other similar purposes, or zoning or other restrictions as to the use of
real property that were not incurred in connection with Indebtedness; (x) Liens
incurred in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security,
(xi) Liens resulting from operation of law with respect to any judgments, awards
or orders to the extent such judgments, awards or orders do not cause of
constitute an Event of Default; (xii) Liens upon specific items of inventory or
other goods and proceeds of any Person securing such Person’s obligations in
respect of bankers’ acceptances issued or created for the account of such Person
to facilitate the purchase, shipment or storage of such inventory or other
goods; (xiii) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(xiv) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of the Borrower or
any of its Subsidiaries, including rights of offset and set-off; (xv) Liens
securing Indebtedness represented by the accrual of interest, the payment of
interest on any Permitted Indebtedness in the form of additional Permitted
Indebtedness with the same terms; (xvi) Liens on raw materials or on
manufactured products or other goods as security for any drafts or bills of
exchange drawn in connection with the importation of such raw materials or
manufactured products; (xvii) Liens arising from precautionary UCC financing
statements regarding operating leases or consignments; (xviii) Liens occurring
solely by filing of a UCC statement which filing has not been consented to by
the Borrower or any Subsidiary; (xix) Liens to secure the performance of
statutory obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business, as
well as obligations under bids, trade contracts and leases (exclusive of
obligations for the payment of borrowed money) and cash deposits in connection
with acquisitions otherwise permitted hereby; (xx) Liens in favor of financial
institutions arising in connection with Borrower’s accounts maintained in the
ordinary course of Borrower’s business held at such institutions to secure
standard fees for services charged by, but not financing made available by, such
institutions.

 

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     “Permitted Refinancing Indebtedness” means any Indebtedness of the Borrower
or any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to renew, refund, refinance, replace, defease or discharge Permitted
Indebtedness of the Borrower or any of its Subsidiaries; provided that:
     (1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness renewed, refunded,
refinanced, replaced, defeased or discharged (plus all accrued interest on the
Indebtedness and the amount of all fees and expenses, including premiums,
incurred in connection therewith);
     (2) such Permitted Refinancing Indebtedness is unsecured or has a final
maturity date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged; and
     (3) if the Indebtedness being renewed, refunded, refinanced, replaced,
defeased or discharged is subordinated in right of payment to the Loan, such
Permitted Refinancing Indebtedness is subordinated in right of payment to the
Loan on terms at least as favorable to the Lenders as those contained in the
documentation governing the Indebtedness being renewed, refinanced, replaced,
defeased or discharged.
     “Person” means and includes any natural person, individual, partnership,
joint venture, corporation, trust, limited liability company, limited company,
joint stock company, unincorporated organization, government entity or any
political subdivision or agency thereof, or any other entity.
     “Receivables” means with respect to any date of determination, the amount
shown as such on the consolidated balance sheet of the Borrower and its
Subsidiaries at the time such balance sheet is filed with the SEC on Form 10-Q
or Form 10-K under the Exchange Act or otherwise made available to the
Borrower’s stockholders.
     “Registration Rights Agreement” means the Registration Rights Agreement,
dated as of the date hereof, among the Borrower and the Lenders.
     “Requisite Lenders” shall mean at any time Lenders then holding more than
50% of the sum of the aggregate unpaid principal amount of the Loan then
outstanding.
     “SEC” means the United States Securities and Exchange Commission.
     “Securities Act” means the Securities Act of 1933, as amended, including
the rules and regulations promulgated thereunder.
     “Security Agreement” means the Security Agreement, dated as of the date
hereof, among the Borrower and the Lenders granting to the Lenders a first
priority security interest in the collateral identified therein.
     “Subsidiary” means with respect to any Person, any corporation,
partnership, trust, limited liability company, association or other business
entity of which more than 50% of the total voting power of shares of stock or
other ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the members of the board of directors or
equivalent

 

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governing body is at the time owned or controlled, directly or indirectly by
that Person or one or more of the other Subsidiaries or Affiliates of that
Person or a combination thereof.
     “Taxes” means all deductions or withholdings for any and all present and
future taxes, levies, imposts, stamp or other duties, fees, assessments,
deductions, withholdings, all other similar governmental charges, and all
liabilities with respect thereto.
     “Warrants” means the warrants attached hereto as part of Exhibit C issued
pursuant to Section 2.9.
     Section 1.2 Interpretation. In this Agreement, unless the context otherwise
requires, all words and personal pronouns relating thereto shall be read and
construed as the number and gender of the party or parties requires and the verb
shall be read and construed as agreeing with the required word and pronoun; the
division of this Agreement into Articles and Sections and the use of headings
and captions is for convenience of reference only and shall not modify or affect
the interpretation or construction of this Agreement or any of its provisions;
the words “herein,” “hereof,” “hereunder,” “hereinafter” and “hereto” and words
of similar import refer to this Agreement as a whole and not to any particular
Article or Section hereof; the words “include,” “including,” and derivations
thereof shall be deemed to have the phrase “without limitation” attached thereto
unless otherwise expressly stated; references to a specified Article, Exhibit,
Section or Schedule shall be construed as a reference to that specified Article,
Exhibit, Section or Schedule of this Agreement; and any reference to any of the
Financing Documents means such document as the same shall be amended,
supplemented or modified and from time to time in effect.
     Section 1.3 Business Day Adjustment. If the day by which a payment is due
to be made is not a Business Day, that payment shall be made by the next
succeeding Business Day unless that next succeeding Business Day falls in a
different calendar month, in which case that payment shall be made by the
Business Day immediately preceding the day by which such payment is due to be
made.
ARTICLE 2
AGREEMENT FOR THE LOAN
     Section 2.1 Use of Proceeds. The Borrower shall use the proceeds from the
Loan for operating expenses and general corporate purposes.
     Section 2.2 Disbursements. The Lenders agree to advance to Borrower Loans
(a “Disbursement”) in the amount for the first Disbursement of $27,500,000 and
subsequent Disbursements (without duplication) as set forth in Exhibit B, upon
the Borrower’s request (a “Disbursement Request”) in the form of Schedule 2,
delivered to the Lenders not less than 15 Business Days prior to the date
designated by the Borrower in the Disbursement Request for such Disbursement.
Against each Disbursement, the Borrower shall deliver to the Lenders a completed
receipt (the “Evidence of Disbursement”) in the form of Schedule 3, which
receipt shall not be effective until the Disbursement is actually advanced to
the Borrower. The Borrower’s ability to issue Disbursement Requests shall
terminate on November 15, 2010. The Lenders shall fulfill each Disbursement
Request in accordance with their respective allocations set forth on Schedule 1
attached hereto.

 

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     Section 2.3 Payment. (a) The Borrower shall remit the Final Payment to the
Lenders on the earlier to occur of (i) the Final Payment Date and (ii) except as
contemplated by Section 5.6, upon the written request of the Requisite Lenders,
an Event of Default. The Borrower may prepay the Loan at any time without
premium or penalty.
     Section 2.4 Transaction Fee. On the date hereof, the Borrower has paid to
Deerfield Management Company, L.P. a transaction fee of $1,200,000.
     Section 2.5 Payments. Payments of any amounts due to the Lenders under this
Agreement shall be made in Dollars in immediately available funds prior to 11:00
a.m New York City time on such date that any such payment is due, at such bank
or places, as the Lenders shall from time to time designate in writing at least
5 Business Days prior to the date such payment is due. The Borrower shall pay
all and any costs (administrative or otherwise) imposed by banks, clearing
houses, or any other financial institution, in connection with making any
payments under any of the Financing Documents, except for any costs imposed by
the Lenders’ banking institutions.
     Section 2.6 Taxes, Duties and Fees.
     (a) The Borrower shall pay or cause to be paid all present and future Taxes
(other than Excluded Taxes, if any), if any, now or at any time hereafter levied
or /imposed by any Government Authority, by any department, agency, political
subdivision or taxing or other authority thereof or therein, by any organization
of which the applicable Government Authority is a member, or by any jurisdiction
through which the Borrower makes payments hereunder, on all amounts due under
this Agreement, and all payments of principal and other amounts due under this
Agreement shall be made without deduction for or on account of any such Taxes,
except for Excluded Taxes, which may be deducted or withheld from payments made
by the Borrower only if such deduction or withholding is required by applicable
law.
     (b) If the Borrower is required to withhold any such non-excluded Taxes or
is prevented by operation of law or otherwise from paying or causing to be paid
such non-excluded Taxes except for Excluded Taxes, the principal or other
amounts due under this Agreement (as applicable) shall be increased to such
amount as shall be necessary to remit to the Lenders the full amount they would
have received (taking into account any such non-excluded Taxes except for
Excluded Taxes imposed on amounts payable by the Borrower under this
Section 2.6(b)) had such payment been made without deduction of such
non-excluded Taxes (all and any of such additional amounts, herein referred to
as the “Additional Amounts”).
     (c) Notwithstanding anything to the contrary herein, Additional Amounts
shall not be payable to the extent the obligation to withhold or deduct
(i) exists on the day a Lender becomes a party to this Agreement or the date a
new lending office is designated except to the extent that such Lender was
entitled at the time of such assignment or designation to receive Additional
Amounts, or (ii) would not have arisen but for the failure of a Lender or
assignee to deliver a properly completed and duly executed form establishing an
exemption from or reduction in Tax required under applicable law as a condition
to the exemption or reduction absent a change in applicable law (including
treaties), which such Lender is eligible to provide.

 

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     (d) If Section 2.6(b) above applies and the Lenders so require the Borrower
shall deliver to the Lenders official tax receipts evidencing payment (or
certified copies of them) of the Additional Amounts within thirty (30) days of
the date of payment.
     (e) If the Lenders receive a refund from a Government Authority to which
the Borrower has paid withholding Taxes pursuant to this Section 2.6, the
Lenders shall pay such refund to the Borrower.
     Section 2.7 Costs, Expenses and Losses.
     (a) If, as a result of any failure by the Borrower to pay any sums due
under this Agreement on the due date therefor (after the expiration of any
applicable grace periods), or to borrow in accordance with a Disbursement
Request made pursuant to Section 2.2, the Lenders shall incur costs, expenses
and/or losses, by reason of the liquidation or redeployment of deposits from
third parties or in connection with obtaining funds to make or maintain any
Disbursement, the Borrower shall pay to the Lenders upon request by the Lenders,
the amount of such costs, expenses and/or losses within fifteen (15) days after
receipt by it of a certificate from the Lenders setting forth in reasonable
detail such costs, expenses and/or losses, along with supporting documentation.
For the purposes of the preceding sentence, “costs, expenses and/or losses”
shall include, without limitation, any interest paid or payable to carry any
unpaid amount and any loss, premium, penalty or expense which may be incurred in
obtaining, liquidating or employing deposits of or borrowings from third parties
in order to make, maintain or fund the Loan or any portion thereof.
     (b) If any Lender fails to disburse any additional portion of the Loan in
accordance with a Disbursement Request made pursuant to Section 2.2, the Loan
amount then outstanding shall be reduced by Disbursement Amount specified in the
Disbursement Request.
     Section 2.8 Interest Rate. The principal amount outstanding under the Loan
shall bear interest at the Interest Rate (calculated on the basis of the actual
number of days elapsed in each month). Interest shall be paid quarterly in
arrears commencing on June 1, 2009 and on the first Business Day of each
September, December, March and June thereafter.
     Section 2.9 Delivery of Warrants
     (a) On the date hereof, the Borrower shall issue to the Lenders Warrants to
purchase an aggregate of 3,750,000 shares of Common Stock at an initial Exercise
Price (as defined in the Warrants) of $3.13.
     (b) Concurrently with each Disbursement, the Borrower shall issue to
Lenders Warrants to purchase three hundred thousand (300,000) shares of Common
Stock in the form annexed hereto as Exhibit C containing an initial Exercise
Price equal to 120% of the average of the Volume Weighted Average Price (as
defined in subsection (c) below) of the Common Stock for each of the fifteen
(15) consecutive Trading Days beginning with the first full Trading Day
following receipt by the Lenders of a Disbursement Request.

 

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     (c) As used herein, the “Volume Weighted Average Price” for the Common
Stock as of any date means the volume weighted average price (based on regular
hours trading) of the Common Stock on the NASDAQ Global Select Market (“NASDAQ”)
as reported by Bloomberg Financial L.P. using the AQR function or an equivalent,
reliable reporting service mutually acceptable to and hereafter designated by
the Lenders and the Borrower (“Bloomberg”) or, if NASDAQ is not the principal
trading market for the Common Stock, the volume weighted average sale price of
the Common Stock on the principal trading market for the Common Stock on the
principal securities exchange or trading market where the Common Stock is listed
or traded as reported by Bloomberg, or, if no volume weighted average sale price
is reported for the Common Stock, then the last closing trade price of the
Common Stock as reported by Bloomberg, or, if no last closing trading price is
reported for the Common Stock by Bloomberg, the average of the bid prices of any
market makers for the Common Stock in the over the counter market maintained by
the Financial Industry Regulatory Authority, Inc. or in the “pink sheets”
maintained by the Pink OTC Market, Inc. If the Volume Weighted Average Price
cannot be calculated for the Common Stock on such date in the manner provided
above, the Volume Weighted Average Price shall be the fair market value as
mutually determined by the Lenders and the Borrower.
     (d) All Warrants issued pursuant to this Section 2.9 shall be allocated
among the Lenders as set forth on Schedule 1.
     (e) Notwithstanding anything herein to the contrary, the number of shares
of Common Stock into which a Warrant is exercisable and the Exercise Price of
any such Warrant on any relevant issue date pursuant to subsection (b) above
shall be adjusted to reflect any adjustments in the number of shares of Common
Stock into which such Warrant is exercisable that would have taken effect
pursuant to the terms of the Warrant had such Warrant been issued on the date
hereof and remained outstanding through the date of such issuance.
     Section 2.9(A) Interest on Late Payments. Without limiting the remedies
available to the Lenders under the Financing Documents or otherwise, to the
maximum extent permitted by applicable law, if the Borrower fails to make any
payment of principal or interest with respect to the Loan when due (after the
expiration of any applicable grace periods), the Borrower shall pay, in respect
of the outstanding principal amount and overdue interest of the Loan, interest
at the rate per annum equal to the Interest Rate plus eight percent (8%) for so
long as such payment remains outstanding. Such interest shall be payable on
demand.
     Section 2.9 (B) Commitment to Provide Funding Fee. On each date interest is
required to be paid to the Lenders under this Agreement, the Borrower shall pay
to the Lenders a fee (calculated on the basis of the actual days elapsed in each
month) of the product of (i) 2.75% per annum and (ii) the difference between
$60,000,000 and the aggregate principal amount of the Notes outstanding on each
day of the month, in accordance with their respective allocations set forth on
Schedule 1 hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES

 

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     Section 3.1 Representations and Warranties of the Borrower. The Borrower
represents and warrants as of the date hereof and as of each Disbursement Date
as follows:
     (a) The Borrower is a corporation duly incorporated and validly existing
under the laws of the State of Delaware.
     (b) The Borrower is conducting its business in compliance with its
Organizational Documents. The Organizational Documents of the Borrower
(including all amendments thereto) as currently in effect have been made
available to the Lenders and remain in full force and effect with no defaults
outstanding thereunder.
     (c) The Borrower has full power and authority to enter into each of the
Financing Documents and to make the borrowings and the other transactions
contemplated thereby.
     (d) All authorizations, consents, approvals, registrations, exemptions and
licenses with or from Government Authorities or other Persons that are necessary
for the conduct of its business as currently conducted, for the borrowing
hereunder, the execution and delivery of the Financing Documents and the
performance by the Borrower of the Obligations, have been obtained and are in
full force and effect, except (i) for such registrations and filings in
connection with the issuance of the Warrants and shares of Common Stock pursuant
the Financing Documents that are necessary to comply with federal and state
securities laws, rules and regulations, and (ii) filings contemplated by the
Security Agreement.
     (e) Each Financing Document has been duly authorized, executed and
delivered by the Borrower and constitutes the valid and legally binding
obligation of the Borrower, enforceable in accordance with its terms, except as
such enforceability may be limited by (i) applicable insolvency, bankruptcy,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally, and (ii) applicable equitable principles (whether considered in a
proceeding at law or in equity).
     (f) No Default or Event of Default (or any other default or event of
default, however described) has occurred under any of the Financing Documents.
     (g) Neither the entering into any of the Financing Documents nor the
compliance with any of its terms conflicts with, violates or results in a breach
of any of the terms of, or constitutes a default or event of default (however
described) or requires any consent under, any agreement to which the Borrower is
a party or by which it is bound, or violates any of the terms of the
Organizational Documents or any judgment, decree, resolution, award or order or
any statute, rule or regulation applicable to the Borrower or its assets.
     (h) The Borrower is not engaged in or the subject of any litigation,
arbitration, administrative regulatory compliance proceeding, or investigation,
nor are there any litigation, arbitration, administrative regulatory compliance
proceedings or investigations pending or, to the knowledge of the Borrower,
threatened before any court or arbitrator or before or by any Government
Authority against the Borrower, except for those that have been publicly
disclosed in reports filed with the SEC and the Borrower is not aware of any
facts reasonably likely to give rise to any such proceedings other than as may
have been publicly disclosed in such reports.

 

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     (i) The Borrower (i) is capable of paying its debts as they fall due, is
not unable and has not admitted its inability to pay debts as they fall due,
(ii) is not bankrupt or insolvent and (iii) has not taken action, and no such
action has been taken by a third party, for the Borrower’s winding up,
dissolution, or liquidation or similar executory or judicial proceeding or for
the appointment of a liquidator, custodian, receiver, trustee, administrator or
other similar officer for the Borrower or any or all of its assets or revenues.
     (j) No Lien exists on Borrower’s property, except for Permitted Liens.
     (k) The obligation of the Borrower to make any payment under this Agreement
(together with all charges in connection therewith) is absolute and
unconditional, and there exists no right of setoff or recoupment, counterclaim,
cross-claim or defense of any nature whatsoever to any such payment.
     Section 3.2 Borrower Acknowledgment. The Borrower acknowledges that it has
made the representations and warranties referred to in Section 3.1 with the
intention of persuading the Lenders to enter into the Financing Documents and
that the Lenders have entered into the Financing Documents on the basis of, and
in full reliance on, each of such representations and warranties. The Borrower
represents and warrants to the Lenders that none of such representations and
warranties omits any matter the omission of which makes any of such
representations and warranties misleading.
     Section 3.3 Representations and Warranties of the Lenders. Each of the
Lenders represents and warrants to the Borrower as of the date hereof and as of
each date Warrants are granted pursuant to this Agreement that:
     (a) It is acquiring the Warrants and the shares of Common Stock issued upon
exercise of the Warrants (the “Exercise Shares”) solely for its account for
investment and not with a view to or for sale or distribution of the Warrants or
Exercise Shares or any part thereof. The entire legal and beneficial interests
of the Warrants and Exercise Shares such Lender is acquiring is being acquired
for, and will be held for, its account only.
     (b) The Warrants and the Exercise Shares have not been registered under the
Securities Act on the basis that no distribution or public offering of the stock
of the Borrower is to be effected. It realizes that the basis for the exemptions
may not be present if, notwithstanding its representations, such Lender has a
present intention of acquiring the securities for a fixed or determinable period
in the future, selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the securities. None of
the Lenders has such present intention.
     (c) The Warrants and the Exercise Shares must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption for
such registration is available.
     (d) Neither the Warrants nor the Exercise Shares may be sold pursuant to
Rule 144 adopted under the Securities Act unless certain conditions are met,
including, among other things, the existence of a public market for the shares,
the availability of certain current public information about the Borrower, the
resale following the required holding period

 

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under Rule 144 and the number of shares being sold during any three month period
not exceeding specified limitation.
     (e) It will not make any disposition of all or any part of the Warrants or
Exercise Shares until:
     (i) The Borrower shall have received a letter secured by such Lender from
the SEC stating that no action will be recommended to the SEC with respect to
the proposed disposition;
     (ii) There is then in effect a registration statement under the Securities
Act covering such proposed disposition and such disposition is made in
accordance with said registration statement; or
     (iii) Such Lender shall have notified the Borrower of the proposed
disposition and, in the case of a sale or transfer in a so-called “4(1) and a
half” transaction, shall have furnished counsel for the Borrower with an opinion
of counsel, substantially in the form annexed as Exhibit C to the Warrant. The
Borrower agrees that it will not require an opinion of counsel with respect to
transactions under Rule 144 of the Securities Act.
     (f) It understands and agrees that all certificates evidencing the shares
to be issued to the Lenders upon exercise of the Warrants may bear the following
legend:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT INCLUDING, WITHOUT LIMITATION,
PURSUANT TO RULES 144 OR 144A UNDER SAID ACT OR PURSUANT TO A PRIVATE SALE
EFFECTED UNDER APPLICABLE FORMAL OR INFORMAL SEC INTERPRETATION OR GUIDANCE,
SUCH AS A SO-CALLED “4(1) AND A HALF” SALE.”
“THE SALE, TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE TERMS OF A CERTAIN REGISTRATION RIGHTS AGREEMENT
DATED AS OF MARCH 13, 2009, AS AMENDED FROM TIME TO TIME, AMONG THE COMPANY AND
CERTAIN HOLDERS OF ITS OUTSTANDING SECURITIES. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF THE COMPANY.”
     (g) Such Lender is an “accredited investor” as defined in Regulation D
promulgated the Securities Act.
     (h) Such Lender is a limited partnership duly organized and validly
existing under the laws of the jurisdiction of its formation.

 

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     (i) Each Financing Document to which it is a party has been duly
authorized, executed and delivered by such Lender and constitutes the valid and
legally binding obligation of such Lender, enforceable in accordance with its
terms, except as such enforceability may be limited by (i) applicable
insolvency, bankruptcy, reorganization, moratorium or other similar laws
affecting creditors’ rights generally, and (ii) applicable equitable principles
(whether considered in a proceeding at law or in equity).
     (j) Such Lender agrees that (i) it does not hold a short position in the
Common Stock on the date hereof, (ii) it shall not enter into a short selling
transaction with respect to the Common Stock during the period commencing on
receipt of a Disbursement Request and ending on the date of the specific
Disbursement that is the subject of the Disbursement Request.
ARTICLE 4
[Intentionally omitted]
ARTICLE 5
BORROWER COVENANTS AND EVENTS OF DEFAULT
     Section 5.1 Affirmative Covenants. Unless the Lenders shall otherwise
agree:
     (a) The Borrower shall (i) maintain its corporate existence and qualify and
remain qualified to do its business as currently conducted, except where the
failure to so maintain such qualification would not reasonably be expected to
have a Material Adverse Effect and (ii) maintain all approvals necessary for the
Financing Documents to be in effect.
     (b) The Borrower shall comply in all material respects with all applicable
laws, rules, regulations and orders of any Government Authority, except where
the necessity of compliance therewith is contested in good faith by appropriate
proceedings or where the failure to so comply, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.
     (c) The Borrower shall obtain, make and keep in full force and effect all
licenses, contracts, consents, approvals and authorizations from and
registrations with Government Authorities that may be required to conduct its
business, except to the extent that the failure to do so would not reasonably be
expected to have a Material Adverse Effect.
     (d) The Borrower shall promptly notify the Lenders of the occurrence of
(i) any Default or Event of Default; or (ii) any claims, litigation,
arbitration, mediation or administrative or regulatory proceedings that are
instituted or threatened against the Borrower; or (iii) each event which, at the
giving of notice, lapse of time, determination of materiality or fulfillment of
any other applicable condition (or any combination of the foregoing), would
constitute an event of default (however described) under any of the Financing
Documents.

 

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     (e) The Borrower shall comply with the terms of each of the Financing
Documents.
     (f) (i) If the Borrower is not required to file reports pursuant to
Sections 13 or 15(d) of the Exchange Act, the Borrower will provide quarterly
financial statements for itself and its Subsidiaries within 45 days after the
end of each quarter, and annual financial statements within 120 days after the
end of each year; (ii) the Borrower will timely file with the SEC (subject to
appropriate extensions made under Rule 12b-25 of the Exchange Act) any annual
reports, quarterly reports and other periodic reports pursuant to Section 13 or
15(d) of the Exchange Act; and (iii) the Borrower and its Subsidiaries will
provide to the Lenders copies of all documents, reports, financial data and
other information as the Lenders may reasonably request, and permit the Lenders
to visit and inspect any of the properties of the Borrower and its Subsidiaries,
and to discuss its and their affairs, finances and accounts with its and their
officers, all at such times as the Lenders may reasonably request; and (iv) the
Lenders shall have the right to consult with and advise the management of the
Borrower and its Subsidiaries on matters relating to the operation of the
Borrower and it Subsidiaries.
     (g) The Borrower shall not issue any shares of Common Stock or securities
convertible or exercisable for Common Stock (an “Equity Financing”); except
(i) in a registered public offering or shelf takedown, (ii) in a transaction
that does not require shareholder approval, (iii) to partners in connection with
a joint venture, distribution or other partnering arrangement in a transaction
that does not require shareholder approval, (iv) upon the exercise of options
granted to the Borrower’s employees, officers, directors and consultants,
(v) issuances of restricted stock to, or purchase of common stock under the
Borrower’s employee stock purchase plan by, employees, officers, directors or
consultants or (vi) upon the exercise of the Warrants. Borrower agrees to notify
the Lenders as soon as reasonably practicable prior to the consummation of an
Equity Financing and in any event simultaneously with the public announcement of
any Equity Financing.
     Section 5.2 Negative Covenants. Unless the Requisite Lenders shall
otherwise agree:
     (a) The Borrower shall not (i) liquidate or dissolve; (ii) enter into any
merger, consolidation or reorganization or transaction that has the same effect
or (iii) sell or transfer the Company’s assets in one transaction or a series of
transactions for a purchase price of more than $50,000,000, or (iv) sell or
transfer more than 50% of the Company’s assets.
     (b) The Borrower shall not (i) enter into any partnership, joint venture,
syndicate, pool, profit-sharing or royalty agreement or other combination, or
engage in any transaction with an Affiliate, whereby its income or profits are,
or might be, shared with another Person or enter into any management contract or
similar arrangement whereby a substantial part of its business is managed by
another Person, (ii) distribute, or permit the distribution of, any assets of
the Borrower or its Subsidiaries, including its intangibles, to any shareholders
of the Borrower or the holder of any equity interest in any Subsidiary of the
Borrower or any of its Affiliates (other than the Borrower or a Subsidiary of
the Borrower); provided, however, that (A) with respect to the restrictions in
clause (i), the Borrower may enter into any collaborative arrangement, licensing
agreement, joint venture or partnership providing for the research, development
or commercial exploitation of compounds, products or services whereby payments
received therefrom or its income or profits are, or might be, shared in the
ordinary course of business with another Person; and (B) with respect to the
restrictions in

 

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clause (ii), royalties and other payments made by any partnership, joint
venture, syndicate, pool, profit-sharing or royalty agreement or other
combination, to the parties thereto in the ordinary course of business shall not
be deemed to be a distribution of assets. For purposes of clarity, the foregoing
restrictions shall not limit the Borrower’s ability to enter into international
partnering arrangements, U.S. or international distribution arrangements.
     (c) The Borrower shall not: (i) create, incur or suffer any Lien upon any
of its assets, now owned or hereafter acquired, except Permitted Liens; or
(ii) assign, sell, transfer or otherwise dispose of, any of the Financing
Documents, or the rights and obligations thereunder.
     (d) The Borrower shall not create, incur assume, guarantee or be remain
liable with respect to any Indebtedness, other than Permitted Indebtedness, or
prepay any Indebtedness (other than Permitted Indebtedness) or take any actions
which impose on the Borrower an obligation to prepay any Indebtedness, except
Permitted Indebtedness.
     Section 5.3 Reimbursement of Taxes. The Borrower shall pay all Taxes,
duties, fees or other charges payable on or in connection with the execution,
issue, delivery, registration, notarization or enforcement of the Financing
Documents and shall, upon notice from the Lenders, reimburse the Lenders for any
such Taxes, duties, fees or other charges paid by the Lenders thereon; provided,
however, that notwithstanding the foregoing, under no circumstances shall the
Borrower have any obligation to reimburse the Lenders for Excluded Taxes.
     Section 5.4 Major Transaction. If a Major Transaction occurs, the Lenders,
in the exercise of their sole discretion, may deliver a written notice to the
Borrower (the “Put Notice”) within 10 Business Days after the date of the
announcement of such Major Transaction, that (a) 106% of the outstanding
principal of the Notes and (b) accrued and unpaid interest on the Notes, and (c)
any other amounts accrued or payable under the Financing Documents ((a), (b) and
(c) together, the “Put Price”) is immediately due and payable upon consummation
of the Major Transaction. If the Lenders deliver a Put Notice, then upon such
consummation, the Borrower shall pay the Put Price to the Lenders and the
Obligations shall terminate.
     Section 5.5 General Acceleration Provision upon Events of Default. If one
or more of the events specified in this Section 5.5 shall have happened and be
continuing beyond the applicable cure period (each, an “Event of Default”), the
Requisite Lenders, by written notice to the Borrower, may cancel the Borrower’s
right to request Disbursements and declare the principal of, accrued and unpaid
interest on, the Notes or any part of any of them (together with any other
amounts accrued or payable under this Agreement) to be, and the same shall
thereupon become, immediately due and payable, without any further notice and
without any presentment, demand, or protest of any kind, all of which are hereby
expressly waived by the Borrower, and take any further action available at law
or in equity, including, without limitation, the sale of the Loan and all other
rights acquired in connection with the Loan:
     (a) A Lender shall have failed to receive payment of (i) principal when
due, or (ii) interest and any other amounts due under the Loan or the Notes
within five (5) Business Days of their due date.
     (b) The Borrower shall have failed to comply with the due observance or
performance of any other covenant contained in this Agreement or any Note and
such failure

 

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could reasonable be expected to result in a Material Adverse Effect and shall
not have been cured by Borrower within 30 days after receiving written notice of
such failure from the Lenders.
     (c) Any representation or warranty made by the Borrower in any Financing
Document shall be have been incorrect, false or misleading as of the date it was
made, deemed made, reaffirmed or confirmed and as a result thereof, the Borrower
could reasonably be expected to incur a Material Adverse Effect.
     (d) (i) The Borrower shall generally be unable to pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts as
they come due or shall make a general assignment for the benefit of creditors;
(ii) the Borrower shall declare a moratorium on the payment of its debts;
(iii) the commencement by the Borrower of proceedings to be adjudicated bankrupt
or insolvent, or the consent by it to the commencement of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization, intervention or other similar relief under
any applicable law, or the consent by it to the filing of any such petition or
to the appointment of an intervenor, receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of all or substantially all of its
assets; (iv) the commencement against the Borrower of a proceeding in any court
of competent jurisdiction under any bankruptcy or other applicable law (as now
or hereafter in effect) seeking its liquidation, winding up, dissolution,
reorganization, arrangement, adjustment, or the appointment of an intervenor,
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official), and any such proceeding shall continue undismissed, or any order,
judgment or decree approving or ordering any of the foregoing shall continue
unstayed or otherwise in effect, for a period of ninety (90) days; (v) the
making by the Borrower of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debt generally as they
become due; or (vi) any other event shall have occurred which under any
applicable law would have an effect analogous to any of those events listed
above in this subsection.
     (e) One or more judgments against the Borrower taken as a whole or
attachments against any of its property, which in the aggregate exceed $250,000,
or which could have a Material Adverse Effect remain(s) unpaid, unstayed on
appeal, undischarged, unbonded or undismissed for a period of thirty (30) days
from the date of entry of such judgment.
     (f) Any license, permit or approval held by the Borrower from any
Government Authority shall have been suspended, canceled or revoked and such
suspension, cancellation or revocation could reasonably be expected to have a
Material Adverse Effect, and such suspension, cancellation or revocation shall
not have been cured within 30 days.
     (g) Any authorization necessary for the execution, delivery or performance
of any Financing Document or for the validity or enforceability of any of the
Obligations under any Financing Document is not given or is withdrawn or ceases
to remain in full force or effect.
     (h) The validity of or any Financing Document shall be contested by any
legislative, executive or judicial body of any jurisdiction, or any treaty, law,
regulation, communiqué, decree, ordinance or policy of any jurisdiction shall
purport to render any material provision of any Financing Document invalid or
unenforceable or shall purport to

 

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prevent or materially delay the performance or observance by the Borrower of the
Obligations, and the parties are unable to negotiate a replacement provision
pursuant to Section 6.7 below.
     (i) The Borrower has failed to comply in any material respect with the
reporting requirements of the Exchange Act, unless corrected by the Borrower
promptly (if capable of such correction) through the filing of an amendment to
an existing report or making an appropriate subsequent filing with the SEC.
     (j) There is a failure to perform in any agreement to which the Borrower is
a party with a third party or parties resulting in a right by such third party
or parties to accelerate the maturity of any Indebtedness for borrowed money in
an amount in excess of $250,000.
     (j) If an Event of Default pursuant to the Warrants (as such term is
defined in the Warrants) shall have occurred.
     (k) The sum of Cash, Cash Equivalents, Receivables and Finished Goods
Inventory on the last day of each calendar quarter is less than the greater of
$15,000,000 or fifty percent (50%) of the Loan then outstanding.
     (l) The shares of Common Stock cease to be listed, traded or publicly
quoted on the NASDAQ Global Market and are not promptly re-listed or requoted on
either the New York Stock Exchange, the NYSE Arca or the NASDAQ Stock Market LLC
(or their respective successors).
     Section 5.6 Automatic Acceleration on Dissolution or Bankruptcy.
Notwithstanding any other provisions of this Agreement, if an Event of Default
under Section 5.5(d) shall occur, the principal of the Loan (together with any
other amounts accrued or payable under this Agreement) shall thereupon become
immediately due and payable without any presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived by the Borrower.
     Section 5.7 Recovery of Amounts Due. If any amount payable hereunder is not
paid as and when due, the Borrower hereby authorizes each Lender to proceed, to
the fullest extent permitted by applicable law, without prior notice, by right
of set-off, banker’s lien or counterclaim, against any moneys or other assets of
the Borrower to the full extent of all amounts payable to the Lenders.
ARTICLE 6
MISCELLANEOUS
     Section 6.1 Notices. Any notice, request or other communication to be given
or made under this Agreement shall be in writing. Such notice, request or other
communication shall be deemed to have been duly given or made when it shall be
delivered by hand, overnight mail, international courier (confirmed by
facsimile), or facsimile (with a hard copy delivered within two (2) Business
Days) to the Party to which it is required or permitted to be given or made at
such Party’s address specified below or at such other address as such Party
shall have designated by notice to the other Parties.

 

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For the Borrower:
Insulet Corporation
9 Oak Parks Drive
Bedford, MA 01730
Facsimile: (781) 457-5011
Attention: R. Anthony Diehl
with a courtesy copy to:
Goodwin Procter LLP
Exchange Place
Boston, MA 02109
Facsimile: (617) 523-1231
Attention: Raymond C. Zemlin
                  Jocelyn M. Arel
For the Lenders c/o:
Deerfield Private Design Fund, L.P.
780 Third Avenue, 37th Floor
New York, New York 10017
Facsimile: (212) 573-8111
Attention: James E. Flynn
with a courtesy copy to:
Katten Muchin Rosenman LLP
575 Madison Avenue
New York, New York 10022-2585
Facsimile: (212) 894-5827
Attention: Robert I. Fisher
     Section 6.2 Waiver of Notice. Whenever any notice is required to be given
to the Lenders or the Borrower under the any of the Financing Documents, a
waiver thereof in writing signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
     Section 6.3 Reimbursement of Legal and Other Expenses. If any amount owing
to the Lenders under any Financing Document shall be collected through
enforcement of this Agreement, any refinancing or restructuring of the Loan in
the nature of a work-out, settlement, negotiation, or any process of law, or
shall be placed in the hands of third Persons for collection, the Borrower shall
pay (in addition to all monies then due in respect of the Loan or otherwise
payable under any Financing Document) reasonable, documented attorneys’ and
other fees and expenses reasonably incurred by the Lenders in respect of such
collection.
     Section 6.4 Applicable Law and Consent to Non-Exclusive New York
Jurisdiction. This Agreement shall be governed by and construed in accordance
with the laws of the State of New

 

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York, without giving effect to the conflicts of laws principles thereof other
than Sections 5-1401 and 5-1402 of the General Obligations Law of such State.
     (a) Any rights of the Lenders arising out of or relating to any Financing
Document, may, at the option of the Lenders, be enforced by the Lenders in the
courts of the United States of America located in the Southern District of the
State of New York or in any other courts having jurisdiction. For the benefit of
the Lenders, the Borrower hereby irrevocably agrees that any legal action, suit
or other proceeding arising out of any Financing Document may be brought in the
courts of the State of New York or of the United States of America for the
Southern District of New York. The Borrower irrevocably consents to the service
of any and all process in any such legal action, suit or other proceeding by the
mailing of copies of such process to the Borrower at its address specified in
Section 6.1 by registered mail, return receipt requested. By the execution and
delivery of this Agreement, the Borrower hereby irrevocably consents and submits
to the jurisdiction of any such court in any such action, suit or other
proceeding. Final judgment against the Borrower in any such action, suit or
other proceeding shall be conclusive and may be enforced in any other
jurisdiction by suit on the judgment. Nothing contained in any Financing
Document shall affect the right of the Lenders to commence legal proceedings in
any court having jurisdiction, or concurrently in more than one jurisdiction, or
to serve process, pleadings and other legal papers upon the Borrower in any
manner authorized by the laws of any such jurisdiction.
     (b) The Borrower irrevocably waives, to the fullest extent permitted by
applicable law, any objection which it may now or hereafter have to the laying
of venue of any action, suit or other proceeding arising out of or relating to
any Financing Document, brought in the courts of the State of New York or in the
United States District Court for the Southern District of New York, and any
claim that any such action, suit or other proceeding brought in any such court
has been brought in an inconvenient forum.
     (c) The Borrower hereby waives any and all rights to demand a trial by jury
in any action, suit or other proceeding arising out of any Financing Document or
the transactions contemplated by any Financing Document.
     (d) To the extent that the Parties may, in any suit, action or other
proceeding brought in any court arising out of or in connection with any
Financing Document, be entitled to the benefit of any provision of law requiring
the Borrower or the Lenders, as applicable, in such suit, action or other
proceeding to post security for the costs of the Borrower or the Lenders, as
applicable, or to post a bond or to take similar action, the Parties hereby
irrevocably waive such benefit, in each case to the fullest extent now or
hereafter permitted under any applicable laws.
     Section 6.5 Successor and Assigns. This Agreement shall bind and inure to
the respective successors and assigns of the Parties, except that the Borrower
may not assign or otherwise transfer all or any part of its rights under this
Agreement or the Obligations without the prior written consent of each Lender.
Notwithstanding anything to the contrary contained herein, if any assignment or
participation is to any Person that is not a “United States person” within the
meaning of Section 7701(a)(30) of the Code, then such Person shall submit to the
Borrower, on or before the date of such assignment or participation an IRS Form
W-8BEN (or any successor form) certifying as to such Person’s status for
purposes of determining exemption from United States

 

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withholding tax, information reporting and backup withholding with respect to
all payments to be made to such Person. Any attempted assignment or
participation in violation of this Section 6.5 shall be void and of no force and
effect.
     Section 6.6 Entire Agreement. The Financing Documents contain the entire
understanding of the Parties with respect to the matters covered thereby and
supersede any and all other written and oral communications, negotiations,
commitments and writings with respect thereto. The provisions of this Agreement
may be waived, modified, supplemented or amended only by an instrument in
writing signed by the authorized officer of each Party.
     Section 6.7 Severability. If any provision contained in this Agreement
shall be invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby. The Parties shall endeavor in good
faith negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provision.
     Section 6.8 Counterparts. This Agreement may be executed in several
counterparts, and by each Party on separate counterparts, each of which and any
photocopies and facsimile copies thereof shall be deemed an original, but all of
which together shall constitute one and the same agreement.
     Section 6.9 Survival.
     (a) This Agreement and all agreements, representations and warranties made
in the Financing Documents, and in any document, certificate or statement
delivered pursuant thereto or in connection therewith shall be considered to
have been relied upon by the other Parties and shall survive the execution and
delivery of this Agreement and the making of the Loan hereunder regardless of
any investigation made by any such other Party or on its behalf, and shall
continue in force until all amounts payable under the Financing Documents shall
have been fully paid in accordance with the provisions hereof and thereof, and
the Lenders shall not be deemed to have waived, by reason of making the Loan,
any Default that may arise by reason of such representation or warranty proving
to have been false or misleading, notwithstanding that the Lenders may have had
notice or knowledge of any such Default or may have had notice or knowledge that
such representation or warranty was false or misleading at the time any
Disbursement was made hereunder.
     (b) The obligations of the Borrower under Section 2.6 and the obligations
of the Borrower and the Lenders under this Article VI hereof shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loan, or the termination
of this Agreement or any provision hereof.
     Section 6.10 Waiver. Neither the failure of, nor any delay on the part of,
any Party in exercising any right, power or privilege hereunder, or under any
agreement, document or instrument mentioned herein, shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder, or under any agreement, document or instrument mentioned
herein, preclude other or further exercise thereof or the exercise of any other
right, power or privilege; nor shall any waiver of any right, power, privilege
or default hereunder, or under any agreement, document or instrument mentioned
herein, constitute a waiver of any other right, power,

 

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privilege or default or constitute a waiver of any default of the same or of any
other term or provision. No course of dealing and no delay in exercising, or
omission to exercise, any right, power or remedy accruing to the Lenders upon
any default under this Agreement, or any other agreement shall impair any such
right, power or remedy or be construed to be a waiver thereof or an acquiescence
therein; nor shall the action of the Lenders in respect of any such default, or
any acquiescence by it therein, affect or impair any right, power or remedy of
the Lenders in respect of any other default. All rights and remedies herein
provided are cumulative and not exclusive of any rights or remedies otherwise
provided by law.
     Section 6.11 Indemnity.
     (a) The Parties shall, at all times, indemnify and hold each other harmless
(the “Indemnity”) and each of their respective directors, partners, officers,
employees, agents, counsel and advisors (each, an “Indemnified Person”) in
connection with any losses, claims (including the cost of defending against such
claims), damages, liabilities, penalties, or other expenses arising out of, or
relating to, the Financing Documents, the extension of credit hereunder or the
Loan or the use or intended use of the Loan, which an Indemnified Person may
incur or to which an Indemnified Person may become subject (each, a “Loss”). The
Indemnity shall not apply to the extent that a court or arbitral tribunal with
jurisdiction over the subject matter of the Loss, and over the Lenders or the
Borrower, as applicable, and such other Indemnified Person that had an adequate
opportunity to defend its interests, determines that such Loss resulted from the
gross negligence or willful misconduct of the Indemnified Person, which
determination results in a final, non-appealable judgment or decision of a court
or tribunal of competent jurisdiction. The Indemnity is independent of and in
addition to any other agreement of any Party under any Financing Document to pay
any amount to the Lenders or the Borrower, as applicable, and any exclusion of
any obligation to pay any amount under this subsection shall not affect the
requirement to pay such amount under any other section hereof or under any other
agreement.
     (b) Without prejudice to the survival of any other agreement of any of the
Parties hereunder, the agreements and the obligations of the Parties contained
in this Section 6.11 shall survive the termination of each other provision
hereof and the payment of all amounts payable to the Lenders hereunder.
     Section 6.12 No Usury. The Financing Documents are hereby expressly limited
so that in no contingency or event whatsoever, whether by reason of acceleration
or otherwise, shall the amount paid or agreed to be paid to the Lenders for the
Loan exceed the maximum amount permissible under applicable law. If from any
circumstance whatsoever fulfillment of any provision hereof, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, then, ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity, and if from any such
circumstance the Lenders shall ever receive anything which might be deemed
interest under applicable law, that would exceed the highest lawful rate, such
amount that would be deemed excessive interest shall be applied to the reduction
of the principal amount owing on account of the Loan, or if such deemed
excessive interest exceeds the unpaid balance of principal of the Loan, such
deemed excess shall be refunded to the Borrower. All sums paid or agreed to be
paid to the Lenders for the Loan shall, to the extent permitted by applicable
law, be deemed to be amortized, prorated, allocated and spread throughout the
full term of the Loan until payment in full so that the deemed rate of interest
on account of the Loan is uniform throughout the

 

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term thereof. The terms and provisions of this paragraph shall control and
supersede every other provision of this Agreement and the Notes.
     Section 6.13 Further Assurances. From time to time, the Borrower shall
perform any and all acts and execute and deliver to the Lenders such additional
documents as may be necessary or as requested by the Lenders to carry out the
purposes of any Financing Document or any or to preserve and protect the
Lenders’ rights as contemplated therein.
     Section 6.14 Amendments and Waivers. This Agreement may be amended and any
provision waived only in writing signed by the Borrower and the Requisite
Lenders.
     Section 6.15 Right to Assign. No Lender may at any time, sell, transfer, or
assign all or a portion of its rights and obligations hereunder (including all
or a portion of its rights and obligations with respect to the Notes), except to
(i) any existing Lender, (ii) any Affiliate or Approved Fund of any existing
Lender or (iii) any other Person acceptable (which acceptance shall not be
reasonably withheld or delayed) to the Borrower; provided, however, that prior
to the disbursement of the full amount of the Loan the aggregate outstanding
principal amount (determined as of the effective date of the applicable
Assignment) of the Notes subject to any such sale, transfer or assignment shall
be in a minimum amount of $7,000,000, unless such transfer is made to an
existing Lender or an Affiliate or Approved Fund of any existing Lender, is of
the assignor’s (together with its Affiliates and Approved Funds) entire interest
hereunder or is made with the prior consent of the Borrower.
[SIGNATURE PAGE FOLLOWS]

 

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     IN WITNESS WHEREOF, the undersigned Lender and the Borrower have caused
this Agreement to be duly executed as of the 13th day of March, 2009.

                  BORROWER       LENDER INSULET CORPORATION.       DEERFIELD
PRIVATE DESIGN FUND, L.P.
 
               
By:
  /s/ Duane DeSisto       By:   /s/ James Flynn
 
               
 
  Name: Duane DeSisto           Name James Flynn
 
  Title: President and Chief Executive Officer           Title General Partner
 
                            DEERFIELD PRIVATE DESIGN INTERNATIONAL, L.P.
 
               
 
          By:   /s/ James Flynn
 
               
 
              Name James Flynn
 
              Title General Partner
 
                            DEERFIELD PARTNERS, L.P.
 
          By:   /s/ James Flynn
 
               
 
              Name James Flynn
 
              Title General Partner
 
                            DEERFIELD INTERNATIONAL LIMITED
 
               
 
          By:   /s/ James Flynn
 
               
 
              Name James Flynn
 
              Title General Partner

The following Exhibits and Schedules to the Facility Agreement have been omitted
in accordance with Item 601(b)(2) of Regulation S-K.
EXHIBITS
Exhibit A   Form of Note
Exhibit B   Disbursements
SCHEDULE
Schedule 1   Schedule of Lenders
Schedule 2   Form of Disbursement Request
Schedule 3   Form of Evidence of Disbursement
Insulet Corporation will furnish supplementally a copy of any omitted or
partially omitted schedule or exhibit to the Securities and Exchange Commission
upon request; provided, however, that Insulet Corporation may request
confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of
1934, as amended, for any schedule or exhibit so furnished.