exv10w1






Exhibit 10.1




 





DISTRIBUTION AGREEMENT




dated as of January 4, 2010



between



Insulet Corporation



and



Ypsomed Distribution AG



 








 









 








Table of Contents




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I Appointment of Distributor
	 	 	1	 
	 
	Section 1.1 Appointment
	 	 	1	 
	Section 1.2 Exclusivity
	 	 	2	 
	Section 1.3 Limitations on Appointment
	 	 	2	 
	Section 1.4 No Compensation
	 	 	2	 
	Section 1.5 Relationship
	 	 	2	 
	 
	ARTICLE II Marketing and Promotion
	 	 	3	 
	 
	Section 2.1 Steering Committee
	 	 	3	 
	Section 2.2 Promotion, Advertising and Marketing
	 	 	3	 
	Section 2.3 Sub-Distributors
	 	 	4	 
	Section 2.4 Customer Information
	 	 	4	 
	Section 2.5 Rights and Obligations of Distributor
	 	 	5	 
	Section 2.6 Competing Products
	 	 	6	 
	 
	ARTICLE III Distribution of Products
	 	 	6	 
	 
	Section 3.1 Distributor Covenants
	 	 	6	 
	Section 3.2 Branding
	 	 	7	 
	Section 3.3 Insurance
	 	 	7	 
	 
	ARTICLE IV Purchase, Sale and Delivery of Products
	 	 	7	 
	 
	Section 4.1 Supply of Products
	 	 	7	 
	Section 4.2 Calendar Year Minimums
	 	 	8	 
	Section 4.3 Forecasts
	 	 	9	 
	Section 4.4 Transfer Pricing
	 	 	9	 
	Section 4.5 Orders
	 	 	9	 
	Section 4.6 Order of Precedence
	 	 	9	 
	Section 4.7 Taxes and Governmental Charges
	 	 	9	 
	Section 4.8 Shipment, Delivery and Title
	 	 	9	 
	Section 4.9 Rejection of Delivery
	 	 	10	 
	Section 4.10 Terms of Payment
	 	 	10	 
	Section 4.11 Late Charges
	 	 	10	 
	Section 4.12 Audits
	 	 	10	 
	Section 4.13 Trade Price
	 	 	11	 
	 
	ARTICLE V Compliance with Laws; Regulatory Matters; Recycling
	 	 	11	 
	 
	Section 5.1 Export and Trade Regulations
	 	 	11	 
	Section 5.2 Customer Complaints and Product Safety
	 	 	11	 
	Section 5.3 Recalls
	 	 	11	 
	Section 5.4 Regulatory Interface
	 	 	12	 
	Section 5.5 Failure to Maintain
	 	 	12	 
	Section 5.6 Regulatory Requirements
	 	 	12	 
	Section 5.7 Labeling
	 	 	12	 






 









 






	 	 	 	 	 
	 	 	Page	 
	Section 5.8 Local Laws
	 	 	13	 
	Section 5.9 Recycling
	 	 	13	 
	 
	ARTICLE VI Intellectual Property Rights
	 	 	13	 
	 
	Section 6.1 Grant of License; Ownership of Intellectual Property Rights
	 	 	13	 
	Section 6.2 Use of Intellectual Property Rights
	 	 	13	 
	Section 6.3 Assistance
	 	 	13	 
	Section 6.4 Notice of Claims of Infringement
	 	 	13	 
	Section 6.5 Notice of Infringement
	 	 	14	 
	Section 6.6 Reservation of Rights
	 	 	14	 
	 
	ARTICLE VII Confidentiality
	 	 	14	 
	 
	Section 7.1 Non-Disclosure Obligations
	 	 	14	 
	Section 7.2 Ownership of Material
	 	 	14	 
	Section 7.3 Exceptions
	 	 	14	 
	 
	ARTICLE VIII Representations, Warranties and Liabilities
	 	 	15	 
	 
	Section 8.1 By Insulet
	 	 	15	 
	Section 8.2 By Distributor
	 	 	15	 
	Section 8.3 Product Warranty and Remedies
	 	 	15	 
	Section 8.4 No Implied Warranties
	 	 	16	 
	Section 8.5 Limitation of Liability
	 	 	16	 
	 
	ARTICLE IX Indemnification
	 	 	17	 
	 
	Section 9.1 Insulet Indemnity
	 	 	17	 
	Section 9.2 Indemnification Procedure
	 	 	17	 
	 
	ARTICLE X Term and Termination
	 	 	18	 
	 
	Section 10.1 Term and Renewal
	 	 	18	 
	Section 10.2 Termination for Cause
	 	 	19	 
	Section 10.3 Termination for Calendar Year Minimum Default
	 	 	20	 
	Section 10.4 Termination for Patent Challenge
	 	 	20	 
	Section 10.5 Termination or Expiration Fee
	 	 	20	 
	 
	ARTICLE XI Rights and Obligations upon Termination
	 	 	21	 
	 
	Section 11.1 Cessation of Rights
	 	 	21	 
	Section 11.2 No Penalties; Survival
	 	 	21	 
	Section 11.3 Return of Products and Information
	 	 	21	 
	Section 11.4 Obligations of Distributor upon Termination
	 	 	21	 
	 
	ARTICLE XII General Provisions
	 	 	22	 
	 
	Section 12.1 Notices
	 	 	22	 
	Section 12.2 Definitions
	 	 	23	 
	Section 12.3 Descriptive Headings; Certain Interpretations
	 	 	25	 
	Section 12.4 Waivers
	 	 	25	 
	Section 12.5 Entire Agreement and Amendments
	 	 	25	 
	Section 12.6 Severability
	 	 	25	 






 









 






	 	 	 	 	 
	 	 	Page	 
	Section 12.7 Assignments
	 	 	26	 
	Section 12.8 Force Majeure
	 	 	26	 
	Section 12.9 No Third-Party Beneficiaries
	 	 	26	 
	Section 12.10 Counterparts
	 	 	26	 
	Section 12.11 Further Assurance
	 	 	27	 
	Section 12.12 Governing Law
	 	 	27	 
	Section 12.13 Governing Language
	 	 	27	 
	Section 12.14 Arbitration
	 	 	27	 
	Section 12.15 Press Releases
	 	 	27	 






	 	 	 

	EXHIBITS:
	 	 
	 
	 	 
	Exhibit I:
	 	Products
	Exhibit II:
	 	Territory
	Exhibit III:
	 	Calendar Year Minimums and Pricing
	Exhibit IV: 
	 	Variances
	Exhibit V:
	 	Business Plans











 









 









Distribution Agreement (this “Agreement”),
dated as of January 4, 2010 (the “Effective Date”), between
Insulet Corporation, a Delaware corporation (“Insulet”) and
Ypsomed Distribution AG, Brunnmattstrasse 6, CH-3401 Burgdorf,
Switzerland (“Distributor”). Each of Insulet and Distributor
are referred to herein as a “Party” or the “Parties.”



Introduction




     Insulet has rights to market, distribute and sell certain products set forth in Exhibit I (as
updated by Insulet from time to time in writing) (the “Products”). Insulet wishes to distribute
the Products by appointment of distributors to make sales in certain territories.



     Insulet wishes to appoint Distributor as its exclusive distributor to promote, advertise,
market, distribute and sell the Products in the territory referred to in Exhibit II (the
“Territory”) and Distributor wishes to act as distributor on the terms and conditions set forth in
this Agreement.



     Capitalized terms shall have the meanings ascribed to such terms in Section 12.2 or as
otherwise provided in this Agreement.



     For good and valuable consideration, and in reliance upon the covenants, promises, and
representations and warranties contained herein, the Parties, intending legally to be bound, hereby
agree as follows:



ARTICLE I

Appointment of Distributor




          Section 1.1 Appointment.



          (a) Subject to the terms and conditions of this Agreement, Insulet hereby appoints
Distributor to act as its exclusive distributor to promote, advertise, market, distribute and sell
the Products in the Territory during the Term. Distributor hereby accepts the appointment and
agrees to use commercially reasonable efforts to promote, advertise, market, distribute and sell
the Products in the Territory during the Term in accordance with the terms and conditions of this
Agreement.



          (b) Subject to Exhibit II, Sections III and IV, Insulet hereby retains all rights outside
the Territory with respect to the Products in all respects, including the right to appoint other
distributors.



          (c) Insulet shall forward to Distributor all inquiries, requests for information and
purchase orders from Persons in the Territory relating to the Products.













 





          Section 1.2 Exclusivity. The appointment in Section 1.1(a) shall be exclusive to
Distributor in the Territory during the Term until the Exclusivity Termination Date (if any).
Subject to Section 4.2, during the Term until the Exclusivity Termination Date, Insulet shall not
(directly or indirectly) appoint as its distributor any Person to, nor shall itself, promote,
advertise, market, distribute or sell the Products, or any versions thereof, or any competitive
products in the Territory, nor shall supply any Third Party for promotion, advertisement,
marketing, distribution or sale of the Products, or any versions thereof, or any competitive
products, in the Territory.



          Section 1.3 Limitations on Appointment. Distributor shall not, and, if permitted
under applicable Laws, shall cause each of its Sub-Distributors not to, (i) actively promote,
advertise, market, distribute or sell the Products outside the Territory; or (ii) support by its
own actions any Third Party in doing any of the foregoing (which support includes, for example and
without limitation, providing any written marketing materials, conducting or financing any clinical
trials or otherwise providing any consideration in support of same). In addition, once Distributor
learns of any conduct by a Sub-Distributor of these prohibited activities, Distributor shall, if
permitted under applicable Laws, use commercially reasonable efforts to end all such prohibited
activities by such Sub-Distributor within a commercially reasonable time period, which in all
events shall be within 6 months of first learning of any such prohibited activities by such
Sub-Distributor, and if unable to end all such prohibited activities by such efforts: if permitted
under applicable Laws, (a) terminate the appointment of such Sub-Distributor; and (b) stop selling
(directly or indirectly through other Sub-Distributors or otherwise) the Products to such
Sub-Distributor. If Insulet notifies Distributor in writing of any conduct by a non-Affiliated
Sub-Distributor of any such prohibited activities, Distributor shall thereafter confirm in writing
to Insulet that Distributor has complied with the immediately preceding sentence with respect to
such Sub-Distributor. The Parties agree that if Distributor breaches its obligations under this
Section 1.3, Insulet shall have the right, in Insulet’s sole discretion, to either (a) provide
written notice to convert Distributor’s appointment pursuant to Section 1.1 from exclusive
distributor to non-exclusive distributor and the date of receipt of such notice shall be treated as
an Exclusivity Termination Date; or (b) terminate this Agreement pursuant to Section 10.2.



          Section 1.4 No Compensation. Insulet is not obligated to pay compensation for
Distributor’s performance of its obligations hereunder, and Distributor’s sole compensation shall
arise from its resale of the Products. Insulet shall not provide Distributor with any other
compensation or benefits, and Insulet shall not be responsible for reimbursement of any
out-of-pocket expenses, except as expressly set forth herein.



          Section 1.5 Relationship. In the exercise of their respective rights and the
performance of their respective obligations hereunder, the Parties are and shall remain independent
contractors. Nothing in this Agreement shall be construed:



          (a) to give either Party the right or power to direct or control the daily activities of
the other Party;



2









 





          (b) to create the relationship between the Parties of principal and agent, franchiser and
franchisee, partners, joint ventures, co-owners or otherwise as participants in a joint
undertaking;



          (c) to authorize either Party to bind the other Party to, or assume or create any contract
and obligation of any kind, express or implied, on behalf of the other Party or to any other
Person; or



          (d) to waive any right, interest and claim that one of the Parties may have against any
other Person.



ARTICLE II

Marketing and Promotion




          Section 2.1 Steering Committee.



          (a) The Parties shall appoint a committee (the “Steering Committee”) comprised of one
member designated by Insulet and one member designated by Distributor. The initial members of the
Steering Committee shall be the Vice President International Operations, for Insulet and the Senior
Vice President Marketing and Sales, for Distributor. Each Party may replace its Steering Committee
member at any time upon written notice to the other Party.



          (b) The Steering Committee shall meet at least on a calendar quarterly basis, which
meeting can be a teleconference, and shall be responsible for reviewing and steering the promotion,
advertising and marketing activities relating to the Products and the performance of the Agreement
by the Parties.



          (c) Each Party may invite, with the approval of the other Party (which shall not be
unreasonably withheld), additional individuals to attend one or more meetings of the Steering
Committee as ad hoc guests.



          Section 2.2 Promotion, Advertising and Marketing.



          (a) During the Term, Distributor shall actively promote, advertise, market, distribute and
sell the Products only in the Territory.



          (b) Distributor shall commercialize the Products in accordance with the Business Plans
attached as Exhibit V and such additional Business Plans to be developed by Distributor during the
Term of this Agreement. Distributor shall update the Business Plans at least annually and present
them to Insulet for review no later than October 1 of each year preceding the implementation of
such plan. Such Business Plan shall include, at a minimum: (i) Distributor’s proposed promotion,
advertising and marketing efforts; and (ii) a list of planned promotional activities, such as
training sessions for the education and training of Customers.



          (c) Distributor shall produce promotion, advertising and marketing materials for the
Products in the Territory. In connection therewith, Distributor shall conduct such activities,
including development, translation, printing and communication of marketing, sales,



3









 




medical education or other related materials (e.g., sales literature, advertising materials
and promotional programs) as commercially necessary for the distribution and sale of the Products
in the Territory (along with all other documents and other materials intended for public
distribution created by or on behalf of Distributor or any Sub-Distributor regarding Insulet or any
Products, collectively, “Distributor Materials”). Insulet shall provide such support (e.g.,
regarding technical information relating to the Products or printed materials such as product
labels) as is reasonably necessary to permit Distributor to fulfill any relevant regulatory
requirements with regard to the Distributor Materials. Distributor shall bear its own costs
associated with Distributor Materials, and shall provide all Distributor Materials that would
entail public communication regarding the Products to Insulet (translated in English, if
applicable) for its prior review and prompt approval insofar as the material relates to the
Products, which approval shall not be unreasonably withheld, provided that any accurate translation
of any such materials previously approved by Insulet, or any materials provided by Insulet, shall
not require Insulet’s separate approval. Unless Insulet has notified Distributor of any objections
within [***] Business Days after receipt of such Distributor Materials], Insulet shall be deemed to
have approved the Distributor Materials.




          (d) To facilitate Distributor’s performance of its obligations under this Section 2.2,
Insulet shall, at [***] cost to Distributor, make available to Distributor the following materials
written in English: (i) commercial, informational and educational materials or publications created
by or on behalf of Insulet relating to the Products; and (ii) samples of artwork created by or on
behalf of Insulet, in each case which Insulet may have in its possession or control, sufficient to
allow Distributor to translate (where necessary) and print, at Distributor’s expense, sales
literature, advertising materials, promotional programs or other materials required to promote,
advertise, market, sell and distribute the Products.



          Section 2.3 Sub-Distributors. Distributor shall be entitled to appoint one or more
Sub-Distributors to promote, advertise, market, distribute or sell the Products in the Territory in
accordance with the terms and conditions of this Agreement; provided, however, that Distributor
shall not utilize or engage any Competitor of Insulet as a Sub-Distributor, without the prior
written consent of Insulet. Distributor shall remain jointly and severally liable under this
Agreement for the actions and omissions of each of its Sub-Distributors, and Distributor shall be
solely responsible for any commitments, obligations or liabilities made by any of its
Sub-Distributors.



          Section 2.4 Customer Information.



          (a) Within [***] days of the end of each Calendar Quarter during the Term, Distributor
shall provide Insulet with a quarterly report, which shall include the following information: (i)
the number of new Customers added in the Calendar Quarter by country; (ii) the number of unit sales
of each Product by country; (iii) the average price paid by each Customer for each Product by
country; (iv) any information required by Law, such as Customer complaint information; and (v) any
such other information that may be reasonably requested by Insulet. Notwithstanding anything to
the contrary in this Agreement, Distributor shall not be obliged to disclose Customer data to
Insulet.



4









 





          Section 2.5 Rights and Obligations of Distributor. Consistent with applicable Laws,
Distributor shall actively promote the sale and distribution of the Products in the Territory. In
particular, Distributor shall:



          (a) appoint and train appropriately qualified staff to carry out its duties under this
Agreement;



          (b) undertake debtor collection;



          (c) check product availability and confirm delivery dates to Customers;



          (d) take orders from Customers and place such orders with Insulet;



          (e) track Customers’ orders and respond to Customers’ inquiries on orders;



          (f) undertake key account management;



          (g) provide other customer service activities as requested by Insulet and agreed to by
Distributor;



          (h) assume no obligation or liability in Insulet’s name;



          (i) refrain from acting in such a manner as to be construed an employee or agent of
Insulet;



          (j) make no representations or claims with respect to the Products, except in accordance
with Section 3.1;



          (k) maintain sufficient inventory to fulfill its obligations under this Agreement and to
Customers;



          (l) keep Insulet informed on a reasonably regular basis on sales activity, and promptly
disclose to Insulet all material information relating to the Products obtained concerning
purchasing plans of existing and prospective Customers, provided, that Distributor shall not be
obliged to provide Insulet with Customer data;



          (m) within 30 days of expiration or termination of this Agreement, return to Insulet, at
Insulet’s expense, all samples, catalogs, literature, correspondence, sales records, market data or
information and other similar documents or materials on hand relating to the Products; and



          (n) submit marketing materials relating to the Products, if any, to local Governmental
Authorities only in those countries in the Territory where such submissions are required or
necessary, or as directed by Insulet or any Governmental Authority in the Territory, and provide
reasonable assistance to Insulet in connection with Insulet’s submission of marketing materials
relating to the Products in any country or jurisdiction in which Insulet is required by Laws to
make such submissions.



5









 




Distributor may agree to provide other incidental services and perform other administrative
functions in connection with or incidental to its duties hereunder, consistent with applicable
Laws.




          Section 2.6 Competing Products. During the Term (i) until the Exclusivity
Termination Date (if any) or, (ii) with respect to individual country(ies), until conversion of
Distributor’s exclusive appointment pursuant to Section 1.1 from exclusive distributor to
non-exclusive distributor in such country(ies), Distributor shall not, and, if permitted under
applicable Laws, shall cause its Sub-Distributors not to, directly or indirectly engage in the
manufacture, sale, offer for sale, marketing, promotion, distribution, solicitation of order or
service of any Competitive Insulin Infusion Device in the Territory or in the individual
country(ies) referred to in clause (ii) of this Section 2.6, other than the Products as provided in
this Agreement. In addition, once Distributor learns of any conduct by a Sub-Distributor of such
activities, Distributor shall, unless such activities have been approved by Insulet and unless
prohibited by applicable Laws, use commercially reasonable efforts to promptly end all such
activities by such Sub-Distributor within a commercially reasonable time period, which in all
events shall be within 6 months of first learning of any such prohibited activities by such
Sub-Distributor, and if unable to end all such prohibited activities by such efforts: if permitted
under applicable Laws (a) terminate the appointment of such Sub-Distributor; and (b) stop selling
(directly or indirectly through other Sub-Distributors or otherwise) the Products to such
Sub-Distributor. If Insulet notifies Distributor in writing of any conduct by a non-Affiliated
Sub-Distributor of any such prohibited activities, Distributor shall thereafter confirm in writing
to Insulet that Distributor has complied with the immediately preceding sentence with respect to
such Sub-Distributor. The Parties agree that if Distributor breaches its obligations under this
Section 2.6, Insulet shall have the right, in Insulet’s sole discretion, to either (a) provide
written notice to convert Distributor’s appointment pursuant to Section 1.1 from exclusive
distributor to non-exclusive distributor the date of receipt of such notice shall be treated as an
Exclusivity Termination Date; or (b) terminate this Agreement pursuant to Section 10.2.



ARTICLE III

Distribution of Products




          Section 3.1 Distributor Covenants. Distributor hereby covenants and agrees for the
benefit of Insulet that Distributor shall:



          (a) conduct any promotion, advertising, marketing, distribution or sale of the Products in
accordance with all applicable Laws and in material conformance with applicable industry codes,
guidelines and standards, including each as amended and in force from time to time, and shall
cultivate good relationships with Customers and potential customers in the Territory in accordance
with sound commercial principles;



          (b) observe and comply with such storage, stock control and operational practices and
procedures with respect to the Products as may be legally required and as Insulet may specify or
approve from time to time;



6









 





          (c) not make any representation to Customers nor give any warranties other than those
printed on the Products’ packaging or labeling or included within marketing or sales aid material
or other Product information provided or agreed to by Insulet;



          (d) during the Term of this Agreement and for 3 years following expiration or termination
of this Agreement, or such longer period as may be required by applicable Laws, maintain complete
and accurate books of account and records showing orders placed, sales and services stock with
respect to the Products;



          (e) promote the Products solely for the indications and other conditions of use approved
by the United States Food and Drug Administration (“FDA”) (or other Governmental Authority) as
described in the Products’ package inserts or FDA-approved labeling;



          (f) not use the services of any Person debarred or suspended under section 306 of the
Federal Food, Drug, and Cosmetic Act, as amended, in performing its obligations or exercising its
rights under this Agreement. Distributor shall promptly notify Insulet if any Person whose
services Distributor is using in the performance of its obligations or exercise of its rights under
this Agreement becomes debarred or suspended;



          (g) submit marketing materials relating to the Products, if any, to local Governmental
Authorities only in those countries in the Territory where such submissions are required or
necessary or as directed by Insulet or any Governmental Authority;



          (h) be responsible for all reimbursement activity relating to the Products;



          (i) promote, advertise, market, distribute and sell the Products in the Territory in
substantially the same manner as other of Distributor’s businesses; and



          (j) execute trade terms, quantity discount, settlement terms, etc. in substantially the
same manner as other of Distributor’s businesses.



          Section 3.2 Branding. Distributor shall have the right to choose the trademarks,
logos and/or trade dress (the “Product Branding”) pursuant to which the Products are marketed and
sold in the Territory, provided, however, that Insulet’s “OMNIPOD” trademark shall be included in
the Product Branding in a manner to be mutually agreed upon by the Steering Committee.



          Section 3.3 Insurance. The Parties shall maintain adequate insurance, in such
amounts and with such insurance companies as is customary in accordance with sound business
practices consistent with the nature of the Products. Each Party shall upon the request of the
other Party furnish certificates of such insurance.



ARTICLE IV

Purchase, Sale and Delivery of Products




          Section 4.1 Supply of Products.



7









 





          (a) Insulet shall use commercially reasonable efforts to manufacture and supply the
Products with the Product Branding for Distributor during the Term with such quantities of the
Products as Distributor shall order from Insulet on the terms and conditions set forth in this
Agreement.



          (b) Insulet shall have the right to satisfy its supply obligations under this Agreement
either in whole or in part through arrangements with Affiliates or Third Parties engaged by
Insulet, provided that Insulet remains solely liable for the performance of such obligations.



          (c) Insulet shall notify Distributor as soon as commercially reasonable, taking due
account of Distributor’s need to be informed, in the event Insulet anticipates any problems with
supplying the quantities of the Products set forth in any forecast provided pursuant to Section
4.3, and the Parties shall agree on appropriate measures to address any such problems, including if
Insulet is not able to supply Product to meet the Calendar Year Minimum once ordered by
Distributor, then the Parties shall meet to discuss in good faith and agree on appropriate and
reasonable downward reductions in the Calendar Year Minimum to reflect the amount of Product
Insulet reasonably believes Insulet will be able to supply Distributor hereunder on a going forward
basis. Should Insulet fail to deliver the Products in the amounts specified in an Order within 45
days of its acceptance of such Order, then the Calendar Year Minimum shall be reduced accordingly.



          Section 4.2 Calendar Year Minimums. The Parties agree to establish Calendar Year
Minimums for the Products in accordance with the following process:



          (a) Exhibit III sets forth the Calendar Year Minimums for the Products. All Calendar
Year Minimums [must be satisfied by Orders that have been initiated by Distributor and accepted by
Insulet pursuant to Section 4.5 by no later than December 15 of the applicable Calendar Year.



          (b) A “Calendar Year Minimum Default” shall be deemed to occur if Distributor fails to
purchase the Calendar Year Minimums for the Products in any Calendar Year. For clarification, a
Calendar Year Minimum Default shall not be considered a breach of this Agreement that gives right
to Insulet to terminate this Agreement under Section 10.2(b) or to claim damages; rather, any such
Calendar Year Minimum Default may be addressed by Insulet pursuant Sections 4.2(c) and 10.3;
Sections 4.2(c) and 10.3 being Insulet’s exclusive remedy in case of a Calendar Year Minimum
Default.



          (c) If a Calendar Year Minimum Default occurs, Insulet shall give written notice thereof
to Distributor, stating in reasonable detail the basis for determining that a Calendar Year Minimum
Default has occurred. Distributor shall have a period of [***] days from the date of receipt of
such notice to cure any Calendar Year Minimum Default. If the Calendar Year Minimum Default is not
cured within such [***]-day period, Insulet may (but is not obligated to) provide written notice to
convert Distributor’s appointment pursuant to Section 1.1 from exclusive distributor to
non-exclusive distributor, which conversion shall be effective upon receipt of such notice (the
“Exclusivity Termination Date”).



8









 





          Section 4.3 Forecasts. Upon execution of this Agreement, and for each Calendar
Quarter thereafter, Distributor shall provide to Insulet, [***] days before the start of each
Calendar Quarter a written forecast of its best estimate Order forecast for the 12-month period
beginning with the start of the next Calendar Quarter, such forecast to be broken down
Product-by-Product, month-by-month and country-by-country. Except as provided in Section 4.5(c),
the forecasted amounts for the first 4 quarters of the forecast shall be deemed a binding and firm
purchase order subject to the Variance Table in Exhibit IV.



          Section 4.4 Transfer Pricing. The transfer prices to be paid by Distributor for
purchases of Products from Insulet for each Calendar Year of the initial Term shall be fixed as set
forth in Exhibit III.



          Section 4.5 Orders.



          (a) All orders from Distributor to Insulet shall be initiated by a written purchase order
specifying the quantities of the Products and requested dates of shipment (each, an “Order”) and
shall be deemed accepted within [***] Calendar Days after receipt by Insulet, unless Insulet
notifies Distributor in writing within those [***] Calendar Days.



          (b) Insulet shall not refuse to accept an Order which falls within the committed forecasts
and the Variance Table in Exhibit IV. Insulet shall be entitled to reject or reschedule any Order
that does not fall within the Variance Table in Exhibit IV, provided, that Insulet shall not refuse
to accept an Order which exceeds the flexibility up variance set forth in the Variance Table in
Exhibit IV, if such excess is necessary for Distributor to meet the applicable Calendar Year
Minimums.



          (c) Contemporaneous with the execution of this Agreement, Distributor shall issue to
Insulet an Order for Products that is equal to at least the Calendar Year Minimums for the PODs for
Calendar Year 1, provided, that Distributor shall be free to request partial deliveries and to
define the delivery dates of each partial delivery within Calendar Year 1, and Insulet must accept
such partial deliveries and delivery dates.



          Section 4.6 Order of Precedence. Any inconsistency in any documents relating to the
purchase of the Products shall be resolved by giving precedence in the following order: (i) the
terms and conditions of this Agreement (including the Exhibits attached hereto); (ii) the
provisions and text appearing on the face of the applicable Order insofar as they refer to the
specific Order; and (iii) other documents, exhibits and attachments which accompany such Order.



          Section 4.7 Taxes and Governmental Charges. Prices do not include any taxes or
other governmental charges, including import or export duties, value-added, sales, use or
privileges taxes, property or excise, or similar taxes levied by any government. Distributor shall
pay all such taxes or charges on or before the due date.



          Section 4.8 Shipment, Delivery and Title. Insulet shall deliver the Products EXW
(Incoterms 2000) at a facility designated by Insulet in the free-trade zone in Shenzhen China or in
Massachusetts, U.S.A. on the date as specified in the Order, provided, that such



9









 




dates specified in the Orders shall allow for a delivery time of at least [***] days from date
of Order. Title to each of the Products shall pass to Distributor (or to the Customer, where
Insulet ships direct to a Customer) when delivery is made to the carrier at such point of shipment.
Insulet shall be entitled to change the point of shipment, provided, however, that Insulet shall
be responsible for any additional costs or expenses incurred by Ypsomed in connection with such
changed point of shipment.




          Section 4.9 Rejection of Delivery.



          (a) Within [***] days of delivery of the Products to Distributor, Distributor shall notify
Insulet in writing of any physical damage or issue which is apparent from an external review of the
packaged Products, and within [***] days of Distributor’s receipt of notice from a Customer that
any Product has a defect and/or does not conform to the Specifications for the Product, Distributor
shall notify Insulet in writing of such claims by the Customer. In each case, Distributor shall,
if possible, include with its notice sufficient samples to permit Insulet to evaluate Distributor’s
or the Customer’s claims.



          (b) Within [***] days of receipt of those samples, Insulet will inform Distributor in
writing whether it accepts or rejects Distributor’s or the Customer’s claims. If the claim is
accepted, then Insulet shall [***] Distributor shall return all non-conforming Products (less
reasonable samples) in its possession at Insulet’s expense within [***] days of the date of
Insulet’s written confirmation that it accepts the claim, provided that such shipment can be made
in accordance with applicable Laws, including export Laws.



          (c) If Insulet does not accept the claim, the Parties shall submit samples of the
non-conforming Products for testing to an independent expert agreed upon by both Parties acting
reasonably. If the Parties are unable to agree on the identity of the expert, the Parties shall
jointly apply to a mutually agreed Third Party for the appointment of an expert. The expert’s
determination will be final absent of manifest error. The costs associated with such expert
determination shall be [***].



          Section 4.10 Terms of Payment. Insulet shall issue invoices for each shipment upon
delivery in accordance with Section 4.8. Terms of payment shall be net [***] days from date of the
invoice. All payments shall be in United States Dollars and shall be fully net, without set-off,
deduction or counterclaim.



          Section 4.11 Late Charges. If Distributor fails to pay the price or any other
payment due to Insulet promptly and when due, Insulet may recover, in addition to the price or
payment, interest thereon at a rate of [***] per annum.



          Section 4.12 Audits. All records relating to regulatory issues in connection with
the Products will be available for audit by Insulet and Governmental Authorities biannually at all
reasonable times and upon reasonable notice, and for a period of three (3) years following the
expiration or termination of this Agreement; provided, however, that any such inspection by Insulet
or its designees shall be conducted in a manner that does not unreasonably interfere with the
operation of the day-to-day business affairs of the Party being inspected. Insulet shall pay all
costs and expenses with respect to any such inspection or audit. For clarification, Customer data



10









 




and other trade secrets will not be disclosed by Distributor, unless required by applicable
Law, in which case such Customer data will only be disclosed to Governmental Authorities.




          Section 4.13 Trade Price. Distributor shall be free to set its own trade prices.
Distributor shall keep Insulet informed as to the trade prices so determined.



ARTICLE V

Compliance with Laws; Regulatory Matters; Recycling




          Section 5.1 Export and Trade Regulations. Both Parties shall endeavor to at all
times carry out the transactions contemplated by this Agreement in conformity with all applicable
Laws (including the United States Export Administration Acts), and shall obtain all necessary
permits and licenses required in connection with the purchase, installation, sale, shipment,
service or use of the Products. Shipments by Insulet are or may be subject to restrictions and
limitations imposed by United States export controls and other trade sanctions. Each Party shall
at all times use commercially reasonable efforts to keep the other Party informed of, and both
Parties shall at all times use commercially reasonable efforts to comply with, such sanctions,
controls and regulations, as well as the United States Foreign Corrupt Practices Act, in its
respective use and disposition of the Products. If Insulet learns, or has reasonable cause to
believe, or if any branch or agency of the government of the United States claims that a violation
of any applicable export regulation or other trade sanction, export control or trade regulation by
Distributor has occurred or is likely to occur because of any shipment by Insulet to Distributor,
Insulet shall promptly notify Distributor and may, in addition to any other remedy it may have,
suspend all shipments to Distributor until Insulet is satisfied that such violation did not occur
or has ceased to occur, or such claim is withdrawn or otherwise resolved in favor of Insulet.



          Section 5.2 Customer Complaints and Product Safety. The Parties will cooperate in
and each Party is responsible for full compliance with its requirements regarding Vigilance,
Product complaint, Field Safety Notices, Product Recall requirements set forth in MEDDEV 2.12-1
rev. 5 and/ any future revisions as well as corresponding regulatory requirements in all countries
of the Territory listed in Section II of Exhibit II and internal corporate procedures and policies.
Distributor shall promptly notify Insulet of any customer complaints of which it may become aware
in relation to the Products or any component thereof. Distributor will provide such Products to
Insulet for evaluation. Insulet will perform evaluations of such customer complaints and supply
the results of such evaluations to Distributor, including, but not limited to, corrective action(s)
and investigations. Distributor will respond directly to the Customer regarding the results of
these evaluations. Insulet will be responsible for creating and implementing any corrective or
preventive action that concerns the Products, [***]. Insulet is responsible to file all necessary
filings with Governmental Authorities.



          Section 5.3 Recalls. In the event any component of the Products is subject to a
recall in the Territory, the Parties will cooperate, under overall Insulet oversight, to manage the
process in a commercially reasonable manner. In the event of a recall or potential recall of any
component of the Products, Insulet will notify and consult with Distributor with regard to the
measures to be taken consistent with good business practices. Insulet shall be responsible for



11









 




implementing any recall that concerns the Products, and shall bear all cost relating to such
recall, [***], and Insulet will provide all replacement Products to Distributor or to Customers
free of charge DDP (Incoterms 2000) destination as indicated by Distributor in writing.




          Section 5.4 Regulatory Interface. Insulet shall exercise commercially reasonable
efforts to obtain and Maintain any Product Registrations in the countries of the Territory as set
forth in Section II of Exhibit II during the Term. As used in this Section 5.4, the term
“Maintain” means that: (a) Insulet shall exercise commercially reasonable efforts to maintain the
Product Registrations as valid and in force with the appropriate Governmental Authorities, (b)
Insulet shall use commercially reasonable efforts to the extent possible to minimize the number and
extent of any changes to the Product Registrations, and (c) Insulet shall notify Distributor of any
change to any of the Product Registrations during the Term and any such change requested or
required by appropriate Governmental Authorities in the Territory. As between the Parties hereto,
it is agreed that the Product Registrations shall be held in the name of Insulet, who shall be the
beneficial owner of all Product Registrations and Distributor may not use the Product
Registrations, or any of them, on or in respect of any product other than the Products or use any
authorization other than one or more of the Product Registrations on or in respect of the Products,
except as may be approved in writing by Insulet. Distributor agrees to use its commercially
reasonable efforts to assist Insulet, [***] in obtaining and Maintaining the Product Registrations.
[***] If any Governmental Authority gives notice to Insulet that its Product Registration may be
invalid or may be revoked, limited, or conditioned, Insulet shall promptly inform Distributor, but
in any case not more than [***] Business Days following Insulet’s receipt of such notice.



          Section 5.5 Failure to Maintain. At any time during the Term, if Insulet fails to
Maintain an existing Product Registration or any of the Product Registrations becomes invalid or
not in full force and effect with the appropriate authorities in any country in the Territory, then
Distributor may either assume Insulet’s responsibilities under this Article V at Insulet’s costs or
terminate this Agreement with regard to such Product in such affected country(ies) with immediate
effect, provided that Distributor shall not be entitled to exercise such rights under this Section
5.5 if such failure to Maintain a Product Registration in any country(ies) is as a result of or in
connection with either (a) a breach of this Agreement by Distributor or (b) any negligence or
willful misconduct by Distributor or any Sub-Distributor.



          Section 5.6 Regulatory Requirements. Distributor shall at all times promote,
advertise, market distribute and sell the Products in accordance with all applicable Laws.
Distributor shall also follow (a) all relevant current written regulatory, quality assurance
instructions and guidelines agreed by the Parties.



          Section 5.7 Labeling. Subject to Section 3.2 hereof, all labeling and package
inserts used in any way in connection with the Products shall comply with the Product labeling
supplied or approved in writing by Insulet and with all applicable Laws. Distributor shall
promptly inform Insulet of any local requirements affecting the labeling and package inserts of the
Products; provided, however, that Insulet remains independently obligated to be aware of regulatory
requirements in all jurisdictions where it has obtained and Maintains a Product Registration.



12









 





          Section 5.8 Local Laws. Distributor shall keep Insulet informed of any Laws of the
Territory which might be applicable to, or affect the use or sale of, the Products in the
Territory. Distributor shall inform Insulet of any instructions or requests inconsistent with
these Laws, provided, however, that Insulet remains independently obligated to be aware of
regulatory requirements in all jurisdictions where it has obtained and Maintains a Product
Registration.



          Section 5.9 Recycling. The Parties shall collaborate and agree upon an acceptable
recycling program for the Products. The costs associated with such program shall be borne by
Distributor.



ARTICLE VI

Intellectual Property Rights




          Section 6.1 Grant of License; Ownership of Intellectual Property Rights. Insulet
hereby grants Distributor a non-exclusive, royalty-free, limited license during the Term and under
the Intellectual Property Rights of Insulet relating to the Products solely to purchase Products
from Insulet and to promote, advertise, market, distribute and sell Products to Customers in the
Territory in accordance with the terms and conditions of this Agreement. Distributor hereby grants
Insulet a non-exclusive, royalty-free, limited license during the Term and under the Intellectual
Property Rights of Distributor to use the Product Branding solely for labeling of the Products
pursuant to this Agreement and for no other purpose whatsoever.



          Section 6.2 Use of Intellectual Property Rights. Distributor shall not alter,
deface, remove, cover, mutilate, or add to, in any manner whatsoever, any patent notice, copyright
notice, trademark, trade name, serial number, model number or legend that Insulet may attach or
affix to the Products. Distributor also agrees that during the Term, it will not otherwise
register or use any of Insulet’s Intellectual Property Rights or any word, symbol or design
confusingly similar thereto, unless agreed by Insulet.



          Section 6.3 Assistance. Distributor shall, at the expense of Insulet, take such
steps as Insulet may reasonably require to assist Insulet in maintaining the validity and
enforceability of the Intellectual Property Rights of Insulet, and Distributor will not do, or
allow or authorize any Person to do, any act which could invalidate or be inconsistent with the
Intellectual Property Rights of Insulet and shall not omit, or allow or authorize any Person to
omit, to do any act which, by its omission, could invalidate or be inconsistent with the
Intellectual Property Rights.



          Section 6.4 Notice of Claims of Infringement. Distributor shall promptly notify
Insulet of (a) any claims or objections that its use of the Intellectual Property Rights in
connection with the promotion, advertising, marketing, distribution or sale of the Products may or
will infringe the copyrights, patents, trademarks or other proprietary rights of another Person,
and (b) any and all infringements, imitations, illegal use, or misuse, by any Person, of the
Intellectual Property Rights of Insulet which come to its attention; provided, however, that
Distributor will not take any legal action relating to the protection of any Intellectual Property
Rights of Insulet without the prior written approval of Insulet; and provided further, that
Distributor shall render Insulet, [***], all reasonable assistance in connection with any matter



13









 




pertaining to the protection of the Intellectual Property Rights, whether in courts,
administrative agencies, or otherwise.




          Section 6.5 Notice of Infringement. Distributor shall promptly notify Insulet of
any infringement, violation, claim or objection in the Territory of or relating to the Intellectual
Property Rights, Confidential Information or Product Registrations (including trademarks, patents,
know-how, government licenses and health registrations) of Insulet which come to Distributor’s
attention, and shall, [***], cooperate in taking such action as Insulet may reasonably deem
necessary in connection with any such infringement, violation, claim or objection.



          Section 6.6 Reservation of Rights. Except as otherwise expressly set forth herein,
either Party reserves all right, title and interest in the Intellectual Property Rights of it or
any of its Affiliates, and the other Party shall not acquire, or be deemed to have acquired, any
right, title or interest whatsoever as a result of this Agreement in the Intellectual Property
Rights of either Party or any of its Affiliates. Subject to Section 11.3, upon expiration or
termination of this Agreement for any reason, the Parties agree to immediately discontinue any
further use of the Intellectual Property Rights of the other Party granted under this Agreement.



ARTICLE VII

Confidentiality




          Section 7.1 Non-Disclosure Obligations. During the Term, a Party may, at its sole
discretion, disclose certain Confidential Information to the other Party. This information will be
used solely to permit the receiving Party to exercise its rights and perform its obligations under
this Agreement. The receiving Party shall not disclose any Confidential Information to a Third
Party and shall refrain from using or exploiting any and all Confidential Information for any
purpose or activities other than those specifically authorized in this Agreement. The receiving
Party shall keep such Confidential Information secret during the Term of this Agreement and for 10
years after the expiration or termination hereof.



          Section 7.2 Ownership of Material. Except as otherwise expressly provided for
herein, all files, lists, records, documents, drawings and specifications which incorporate or
refer to all or a portion of the Confidential Information shall remain the sole property of the
disclosing Party. Such materials shall be promptly returned upon the earlier of (a) the disclosing
Party’s reasonable request, or (b) expiration or termination of this Agreement.



          Section 7.3 Exceptions. The provisions of this Article VII shall not apply, or
shall cease to apply, to data and information supplied by a Party if such data or information (a)
was already known to the receiving Party, (b) becomes part of the public domain without a breach of
confidence by the receiving Party or any other Person, (c) was received by the receiving Party from
a Third Party without restrictions on such Third Party’s use in favor of the disclosing Party, or
(d) was required to be disclosed pursuant to any statutory or regulatory provision or court order
(in which case only such portion of Confidential Information shall be disclosed as is required, and
the provisions of this Article VII shall not apply for disclosure in



14









 




accordance with the respective statutory or regulatory provision or court order only),
provided that the receiving Party shall have the burden of establishing any of the foregoing
exceptions.




ARTICLE VIII

Representations, Warranties and Liabilities 




          Section 8.1 By Insulet. Insulet represents and warrants to Distributor that (i)
Insulet has the full right and authority to enter into this Agreement and grant the rights granted
herein; (ii) Insulet has not previously granted and will not grant any right in conflict with any
of the rights granted herein; and (iii) to Insulet’s knowledge on the Effective Date, there is no
existing or threatened action, suit or claim pending against it with respect to its right to enter
into and perform any of its obligations under this Agreement.



          (a) Insulet represents and warrants to Distributor that all applicable Laws and the
scientific and technical state of the art are observed and fulfilled.



          (b) Insulet represents and warrants to Distributor that no Products delivered are
encumbered in any form by Third Party rights (pledge, ownership, co-ownership, joint ownership and
the like).



          (c) Insulet represents and warrants to Distributor that the Products, the manufacture of
Products and all documentation related to the manufacture and the Products will conform to any
regulatory requirements in the countries of the Territory listed in Section II of Exhibit II.



          (d) Insulet represents and warrants to Distributor that to the best of Insulet’s knowledge
no intellectual property rights of Third Parties bar the use of the Products in the Territory as
contemplated by this Agreement.



          Section 8.2 By Distributor. Distributor represents and warrants to Insulet that (i)
Distributor has the full right and authority to enter into this Agreement and grant the rights
granted herein; (ii) Distributor has not previously granted and will not grant any right in
conflict with any of the rights granted herein; and (iii) to Distributor’s knowledge on the
Effective Date, there is no existing or threatened action, suit or claim pending against it with
respect to its right to enter into and perform its obligations under this Agreement.



          Section 8.3 Product Warranty and Remedies.



          (a) Subject to Section 8.3(b), Insulet hereby (i) warrants that the PDM shall be free from
material defects in material and workmanship under normal use and maintenance as provided in the
applicable instructions and fulfills the Specifications, for a period of [***] months from the date
of shipment of the PDM; (ii) warrants that the POD shall have an expiration date at least [***]
months from the date of shipment of the POD; and (iii) undertakes to use commercially reasonable
efforts to deliver PODs with an expiration date at least [***] months from the date of shipment of
the POD by June 1, [***].



15









 





          (b) Distributor shall maintain inventory of Products on a first in, first out (FIFO)
basis. For Products with expiration date, Distributor shall distribute such Products by lowest
expiration date first.



          (c) Subject to Section 4.9, the obligation of Insulet under the warranties set forth in
this Section 8.3 is limited to replacement or credit of parts and materials that prove defective.
The foregoing notwithstanding, Insulet shall not be responsible for damage to any Product resulting
from misuse, negligence or accident, or resulting from repairs or alterations made by any Person
not duly authorized by Insulet in writing.



          Section 8.4 No Implied Warranties. THE EXPRESS REPRESENTATIONS AND WARRANTIES GIVEN
IN THIS AGREEMENT ARE THE ONLY REPRESENTATIONS OR WARRANTIES GIVEN BY INSULET WITH RESPECT TO THE
PRODUCTS AND ARE GIVEN IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING THOSE OF NONINFRINGEMENT, TITLE, MERCHANTABILITY, COURSE OF DEALING, USAGE OF TRADE, AND
FITNESS FOR A PARTICULAR PURPOSE. DISTRIBUTOR’S EXCLUSIVE REMEDIES AND INSULET’S SOLE LIABILITY
FOR ANY NONCONFORMITY OR DEFECT IN ANY PRODUCT SHALL BE THOSE EXPRESSED IN THIS AGREEMENT.



          Section 8.5 Limitation of Liability. An essential purpose of the limited exclusive
liabilities and remedies in this Agreement is allocation of risk between Insulet and Distributor,
which allocation of risks is reflected in the purchase price for the Products. EXCEPT FOR
INSULET’S INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 9 AND/OR INSULET’S LIABILITY ARISING OUT
OF TERMINATION OF THIS AGREEMENT BY DISTRIBUTOR PURSUANT TO SECTION 10.2, OR AS A RESULT OF A
BREACH OF SECTION 7, UNDER NO CIRCUMSTANCES SHALL INSULET’S LIABILITY ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR INSULET’S PERFORMANCE OR ASSERTED FAILURE TO PERFORM HEREUNDER,
IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED [***] THE PURCHASE PRICE OF THE
PRODUCT OR PART THEREOF TO WHICH SUCH LIABILITY RELATES. EXCEPT FOR LIABILITY ARISING AS A RESULT
OF A PARTY’S INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 9 OR AS A RESULT OF A BREACH OF
SECTIONS 6.1 AND/OR 7, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL, PUNITIVE,
CONSEQUENTIAL, TORT OR ANALOGOUS DAMAGES, INCLUDING DAMAGES RESULTING FROM LOSS OF USE, PROFITS,
REVENUES, BUSINESS OR GOODWILL, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
THEREOF.



16









 





ARTICLE IX

Indemnification




          Section 9.1 Insulet Indemnity.



          (a) Insulet will indemnify, defend, and hold harmless Distributor, and each of its
officers, directors, agents, employees, representatives, successors, and assigns (collectively,
“Distributor Indemnitees”), from and against any and all liabilities, losses, damages, and expenses
        , including without limitation reasonable attorney’s fees and expenses (the “Losses”) relating to
any demand, claim, suit or proceeding brought by a Third Party to the extent arising from or
occurring as a result of: (i) Insulet’s material breach of this Agreement, (ii) any negligent or
willful act or omission by or on behalf of Insulet, (iii) violation of any applicable Law by
Insulet, (iv) the actual or alleged infringement of a claim of a patent or the actual or alleged
infringement or misappropriation of a Third Party Intellectual Property Right by the Products, (v)
physical injury (including death) and/or property damage actually or allegedly caused by the
Products, or (vi) any other representation, act or omission by or on behalf of Insulet, including
Insulet’s performance of or failure to perform any term or condition of this Agreement. Insulet
shall not be liable for any Losses resulting from the negligent or willful misconduct of any
Distributor Indemnitee.



          (b) Distributor Indemnity. Insulet shall not be liable for any Losses to the
extent incurred by Distributor or any other person or entity, and Distributor shall indemnify,
defend, and hold harmless Insulet and its Affiliates and their officers, directors, agents,
employees, representatives, successors, and assigns (collectively, “Insulet Indemnitees”) from and
against any and all Losses relating to any demand, claim, suit or proceeding brought by a Third
Party to the extent arising from or occurring as a result of (i) Distributor’s material breach of
this Agreement, (ii) any negligent or willful act or omission by or on behalf of Distributor; (iii)
violation of any applicable Law by Distributor, (iv) the use of any Product or part thereof
furnished in combination with products, software or data not supplied by Insulet, (v) any
modification made to the Products without Insulet’s prior written consent, (vi) any termination or
expiration of any Sub-Distributor (to the extent not attributable to any direct relationship,
including any relationship preceding this Agreement, entered into between Insulet and such
Sub-Distributor independently from this Agreement), or (vii) any other representation, act or
omission by or on behalf of Distributor, including Distributor’s performance of or failure to
perform any term or condition of this Agreement. Distributor shall not be liable for any Losses
resulting from the negligent or willful misconduct of any Insulet Indemnitee.



          Section 9.2 Indemnification Procedure.



          (a) A Party that intends to claim indemnification under this Section 9 shall promptly
notify the indemnifying Party of any such claims in respect of which such Party intends to claim
such indemnification, and if applicable such indemnifying Party shall assume the defense thereof
with counsel mutually satisfactory to the Parties; provided that such Party shall have the right to
retain its own counsel and, in case compensation for fees and expenses are not otherwise awarded,
compensation for such reasonable costs shall be paid by such indemnifying Party provided such
indemnifying Party is responsible for the defense thereof, if



17









 




representation of such Party by the counsel retained by such indemnifying Party would be
inappropriate due to actual or potential conflicting interests between such Party and any other
Party represented by such counsel. The indemnification provided for by this Section 9 shall not
apply to amounts paid in settlement of any such claim if such settlement is effected without the
consent of the indemnifying Party, which consent shall not be unreasonably withheld. The failure
to deliver notice to the indemnifying Party within a reasonable time after the commencement of any
such action, if materially prejudicial to its ability to defend such action, shall relieve the
indemnifying Party of any liability to the other Party under this Section 9.3 to the extent so
prejudiced, but the omission so to deliver notice to such indemnifying Party shall not otherwise
relieve it of any liability that it may have to such other Party. The indemnified Party shall
cooperate fully with the other Party in the investigation of any such claim covered by this
indemnification.




          (b) If Distributor receives a demand, claim, suit or proceeding subject to Insulet
indemnification under Section 9.1(a)(iv), Distributor shall notify Insulet promptly in writing and
give Insulet information, assistance and exclusive authority to evaluate, defend and settle such
claim. Insulet shall then at its own expense and option, (i) settle the claim (which settlement
shall include for Distributor the right to sell and use the Products pursuant to this Agreement);
(ii) procure for Distributor the right to sell and use the Product pursuant to this Agreement;
(iii) replace or modify the Product to avoid infringement; (iv) defend against such claim; or (v)
remove the Product and indemnify and hold harmless Distributor. Should any court of competent
jurisdiction hold in a final decision that the sale, manufacture, or use of such Product
constitutes infringement, Insulet shall pay any costs and damages finally awarded against
Distributor on the account of such infringement, and if the use of such Product is enjoined,
Insulet shall take one more of the actions under clauses (ii), (iii) or (v) above. Insulet
reserves the right, at its sole option, to notify Distributor in writing that as a result of a
claim, suit or proceeding or threat of same in any given country, Distributor may not market or
sell the Products in such country, effective as of such written notice, subject to full
indemnification of Distributor. The foregoing states the entire and complete liability of Insulet
for any patent infringement or claimed infringement by reason of the sale, manufacture or use of
the Products or any part thereof. This Section 9.3(b) shall also apply in the event Insulet
receives a claim, suit or proceeding relating to an actual or alleged infringement of a claim of a
patent or an actual or alleged infringement or misappropriation of a Third Party Intellectual
Property Right by the Products.



ARTICLE X

Term and Termination




          Section 10.1 Term and Renewal.



          (a) The initial term of this Agreement shall be for a period of 5 years from the date of
the first commercial delivery of Products, unless earlier terminated under the provisions of this
Agreement (the “Term”).



18









 





          (b) Fifteen months prior to the end of the Term, the Parties shall negotiate in good faith
to enter into an amendment of this Agreement to include a renewal term for this Agreement.



          Section 10.2 Termination for Cause. This Agreement may be terminated by Insulet or
Distributor in the event of any of the following:



          (a) immediately upon written notice to the other, if the other Party becomes insolvent or
seeks protection under any bankruptcy, receivership, trust deed, creditors arrangement, composition
or comparable proceeding, or if any such proceeding is instituted against the other Party which
proceeding remains undismissed for a period of 30 days; or



          (b) in the event that the other Party fails to perform or otherwise materially breaches
any of its obligations hereunder, and does not cure such failure or breach within 60 days of
receipt of written notice from the non-breaching Party of such failure or breach. In no event,
however, shall such notice of intention to terminate be deemed to waive any rights to damages or
any other remedy which the Party giving notice of breach may have as a consequence of such failure
or breach.



     For clarity, the date of any notice of termination for cause under this Section 10.2 shall
also be an Exclusivity Termination Date notwithstanding any wind-down period provided herein.



     Notwithstanding the foregoing, Insulet shall have the right, in its sole discretion to in lieu
of terminating the Agreement in full pursuant to Section 10.2, to either (a) convert Distributor’s
appointment pursuant to Section 1.1 from exclusive to non-exclusive in any countries in the
Territory upon written notice to Distributor and the date of receipt of such notice shall be
treated as an Exclusivity Termination Date, in which case the Calendar Year Minimums shall be
adjusted as set forth in Exhibit III; or (b) in lieu of terminating the Agreement in full pursuant
to Section 10.2, selectively terminate Distributor’s appointment as distributor in the country(ies)
in the Territory to which Distributor’s material breach relates, in which case the Calendar Year
Minimums shall be adjusted as set forth in Exhibit III.



     If Insulet terminates this Agreement pursuant to this Section 10.2 due to Distributor’s breach
of Section 2.6 hereof, Insulet shall have, the right to collect damages equal to the quantity of
Products as set forth in the most recent Forecast multiplied by [***] of the Transfer Price;
further claims are excluded. In the event the Parties have not entered into an amendment of this
Agreement to include a renewal term for this Agreement as set forth in Section 10.1(b) hereof and
Distributor breaches Section 2.6 hereof in the last 12 months of the Term, and if Insulet
terminates this Agreement pursuant to this Section 10.2 due to Distributor’s breach of Section 2.6
hereof, Insulet shall have the right to collect damages equal to the quantity of Products as set
forth in the most recent Forecast multiplied by [***] of the Transfer Price; further claims are
excluded. For clarification, the damages defined in the first sentence of this clause and the
damages defined in the second sentence of this clause shall not apply cumulatively.



19









 





          Section 10.3 Termination for Calendar Year Minimum Default.



          (a) Insulet may terminate this Agreement upon 12 months written notice if a Calendar Year
Minimum Default occurs in two (2) consecutive Calendar Years, provided, that Insulet did not
convert Distributor’s appointment pursuant to Section 1.1 from exclusive distributor to
non-exclusive distributor in accordance with Section 4.2(c) after the first Calendar Year Minimum
Default, and provided further, that for purposes of this Section 10.3 the Calendar Year Minimum of
Calendar Year 1 shall not apply, i.e. a Calendar Year Minimum Default in Calendar Year 1 shall not
be taken into consideration for the purposes of Section 10.3.



          (b) Insulet may terminate this Agreement upon 12 months written notice if Distributor
submits a forecast pursuant to Section 4.3 that would result in Orders or purchases of Products
equal to less than [***] of the applicable Calendar Year Minimum for the applicable Calendar Year.



     For clarity, the date of any notice of termination under this Section 10.3 shall also be an
Exclusivity Termination Date notwithstanding any wind-down period provided herein.



     Notwithstanding the foregoing in this Section 10.3, Insulet shall have the right, in its sole
discretion to in lieu of terminating the Agreement in full pursuant to Section 10.3, to convert
Distributor’s appointment pursuant to Section 1.1 from exclusive to non-exclusive in any countries
in the Territory upon written notice to Distributor and the date of receipt of such notice shall be
treated as an Exclusivity Termination Date.



          Section 10.4 Termination for Patent Challenge. If Distributor directly or
indirectly initiates any challenges of Insulet’s patent rights, Insulet shall have the right to (i)
immediately terminate this Agreement; and (ii) collect, as damages, [***] of the amounts due under
the Calendar Year Minimums for the remainder of the Term.



          Section 10.5 Termination or Expiration Fee.



          (a) In the event of any termination of this Agreement by Insulet or Distributor or upon
the expiration of this Agreement, Insulet shall pay Distributor a Termination/Expiration Fee
calculated as follows:




Termination/Expiration Fee = [***]



     [***] twelve (12) month [***].



          (b) In the event of termination of this Agreement by Insulet or Distributor with regard to a
Product in any individual country(ies), Insulet shall pay Distributor a Termination/Expiration Fee
calculated as follows:



     Termination/Expiration Fee = [***] in the respective country(ies) during the twelve (12) month
period following such termination to Customers who purchased PODS or PDMs from Distributor during
the Term of this Agreement.



20









 





     The Termination/Expiration Fee shall be determined on a quarterly basis and paid to
Distributor within sixty (60) days after the close of each Calendar Quarter after the expiration or
termination of this Agreement.



     The Parties agree that the Termination/Expiration Fee set forth in this Section 10.5 is based
on the assumption that [***] the twelve (12) month period following termination or expiration of
this Agreement. In the event that [***] the twelve (12) month period following termination or
expiration of this Agreement due to reasons in Insulet’s responsibility, including, without
limitation, [***], the Parties shall negotiate in good faith and agree on a fair and equitable
adjustment of the Termination/Expiration Fee of [***].



ARTICLE XI

Rights and Obligations upon Termination




          Section 11.1 Cessation of Rights. Upon expiration, non-renewal or termination
(collectively, “Termination”) of this Agreement for any reason whatsoever, no Party and none of its
directors, officers, stockholders or Affiliates shall have any further liability or obligation to
the other Party under this Agreement, except with respect to Sections 2.5(m), 3.1(d), 4.6, 4.7,
4.9, 4.10, 4.11, 4.12, 5.2, 5.3, 6.2, 6.6, 8.3, 8.4, 8.5, 10.2, 10.4 and 10.5, Articles 7, 9, 11
and 12 and the definitions in Exhibit I (which shall survive Termination of this Agreement), except
that nothing in this Section 11.1 shall prejudice any rights, claims, or causes of action that may
have accrued hereunder or with respect hereto prior to the date of such Termination, including for
breach of this Agreement (whether based upon the Termination or otherwise).



          Section 11.2 No Penalties; Survival. Without prejudice to any rights or right of
action which may have accrued during the Term, and subject to Sections 10.2, 10.4 and 10.5, neither
Party shall be entitled to any compensation or other penalty arising out of Termination, provided
this Agreement has expired or been terminated in accordance with its terms. Any claim, the cause of
which has arisen during the Term of this Agreement, and which is not submitted and properly
substantiated within [***] years following Termination shall be deemed waived and shall be
conclusively barred from assertion by the claimant unless the delay in submission or substantiation
is due to circumstances beyond the claimant’s control.



          Section 11.3 Return of Products and Information. Upon Termination of this
Agreement, Distributor shall promptly and at the cost of Insulet return to Insulet or a Third Party
designated by Insulet, all Products samples, Confidential Information and all other information
supplied by Insulet; provided that in the event that this Agreement terminates as a result of a
material uncured breach by Distributor, Insulet shall not be responsible for such return costs; and
provided further, that Distributor may maintain a copy of Insulet’s Confidential Information for as
long as reasonably necessary to comply with applicable Laws. Upon Termination of this Agreement,
Insulet may, at its option, elect to purchase any remaining Products from Distributor at cost or
allow Distributor to sell its remaining supply of Products in the Territory within reasonable time.



          Section 11.4 Obligations of Distributor upon Termination. Upon Termination of this
Agreement and subject to Section 11.3, Distributor shall immediately cease any and all use of the
Product Registrations and transfer to Insulet or its designee any Product Registration



21









 




not already in the name of Insulet or an Affiliate of Insulet with any rights thereto that
Distributor may then hold. To the extent not already owned by Insulet, Distributor shall use
commercially reasonable efforts to transfer such Product Registration and rights without
interruption or disruption to the distribution, marketing or sales of the Products in the
Territory.




ARTICLE XII

General Provisions




          Section 12.1 Notices All notices, requests, claims, demands, waivers and other
communications under this Agreement shall be in writing and shall be by facsimile, courier services
or personal delivery to the following addresses, or to such other addresses as shall be designated
from time to time by a Party in accordance with this Section 12.1:



     if to Distributor:


Ypsomed Distribution AG

Brunnmattstrasse 6

CH-3401 Burgdorf

Switzerland

Attention: General Counsel

Facsimile: ++41/ 34 424 41 55




     with a copy (which shall not constitute notice) to:


Ypsomed Distribution AG

Brunnmattstrasse 6

CH-3401 Burgdorf

Switzerland

Attention: Product Manager Infusion Systems

Facsimile: ++41/ 34 424 32 92”




     if to Insulet:


Insulet Corporation

9 Oak Park Drive

Bedford, MA 01730

Attention: General Counsel

Facsimile: 781-357-4281








22









 








     with a copy (which shall not constitute notice) to:


Goodwin Procter LLP

Exchange Place

Boston, MA 02109

Attention: Ray Zemlin

Facsimile: 617-523-1231



All notices and communications under this Agreement shall be deemed to have been duly given (x)
when delivered by hand, if personally delivered, (y) 1 Business Day after when delivered to a
courier, if delivered by commercial one-day overnight courier service or (z) when sent, if sent by
facsimile, with an acknowledgment of sending being produced by the sending facsimile machine.




          Section 12.2 Definitions. For the purposes of this Agreement, the following terms
have the following meanings:



          “Affiliate” means, with respect to any Person, any other Person controlling, controlled by or
under direct or indirect common control with such first Person. For purposes of this definition, a
Person shall be deemed to control another Person if it owns or controls 50% or more of the voting
equity of the other Person (or other comparable ownership if the Person is not a corporation), or
otherwise possesses the power to direct the management or policies of the other Person, whether
through ownership of voting securities or by contract or otherwise; provided that solely for
purposes of this Agreement, no Party shall be deemed to be an “Affiliate” of any other Party (or
any of its Affiliates).



          “Business Day” means any day other than a Saturday or Sunday or a day on which banking
institutions at the domicile of Insulet or Distributor are permitted or required by Law, executive
order or decree of a Governmental Authority to remain closed.



          “Business Plan” means a description of the plan for marketing the Products in one or more
countries of the Territory (or proposed Territory) during the Term, including at least: (1) the
projected minimum sales quantities per quarter during the Term; (2) the distribution route (direct
or indirect), (3) the projected reimbursement for the Products, (4) and any other information
reasonably necessary for the Parties to assess the commercialization of the Products in the
specified portions of the Territory or proposed Territory.



          “Calendar Year” means the period of 12 consecutive months starting on January 1, 2010, and
each twelve (12) months period thereafter.



          “Calendar Quarter” means the respective periods of 3 consecutive calendar months commencing on
the first day of the first Calendar Year.



          “Calendar Year Minimums” means the minimum quantities as set forth in Section 4.2 and Exhibit
III.



23









 





          “Competitor” means any Third Party which, by itself or through any of its Affiliates, is
engaged or otherwise participating in any business or other activity involving the manufacture for
commercial sale or distribution of products that compete with Products.



          “Confidential Information” means all data and information of a confidential or proprietary
nature, including know-how and trade secrets relating to the business, the affairs and the products
of a Party. Confidential Information may be communicated orally, in writing or in any other
recorded or tangible form. Data and information shall be considered to be Confidential
Information, (a) if a Party has advised the receiving Party of such confidential nature, or (b) if,
due to such character or nature, a reasonable person in a like position and under like
circumstances as the receiving Party would treat such as secret and confidential.



          “Competitive Insulin Infusion Device” means an insulin infusion device comprising [***].



          “Customer” means a Person an individual who (a) is resident in the Territory; and (b) has
entered into an agreement (oral or written, including purchase orders) for the purchase of Products
with Distributor.



          “Force Majeure” has the meaning as set forth in Section 12.8.



          “Governmental Authority” means any nation, state, province, county, city or political
subdivision and any official, agency, arbitrator, authority, court, department, commission, board,
bureau, instrumentality or other governmental entity of any thereof, whether domestic or foreign.



          “Intellectual Property Rights” means, collectively, all rights in, to and under patents, trade
secret rights, copyrights, mask works, trademarks, service marks, trade dress and similar rights of
any type under the laws of any Governmental Authority, including, without limitation, all
applications and registrations relating to the foregoing, which either Party may at any time own,
control, license, adopt, use or register with respect to the Products.



          “Laws” shall mean any law, statute, rule, regulation, guideline, ordinance or other
pronouncement of any Governmental Authority having the effect of law or guidances of any
Governmental Authority in the United States and in the countries of the Territory, or any province,
county, city or other political sub-division thereof.



          “Person” means and includes any individual, corporation, trust, estate, partnership, limited
liability company, joint venture company, association, league, governmental bureau or agency, or
any other entity regardless of the type or nature thereof.



          “Product Registrations” means existing and future marketing and regulatory authorizations
relating to the Products in the Territory including such authorizations relating to any and all
existing and future uses for the Products, necessary for import, advertisement, marketing,
distribution and sale of the Products.



          “Products” means certain products as set forth in Exhibit I.



24









 





          “Specifications” shall mean the specifications for the Products that are included in the User
Manual for such Products.



          “Sub-Distributor” means any Third Party or any Affiliate of Distributor that has entered into
a written agreement with Distributor for the distribution of Products anywhere in the Territory.



          “Third Party” means any Person other than Insulet, Distributor or their respective Affiliates.



          Section 12.3 Descriptive Headings; Certain Interpretations. The table of contents
and headings contained in this Agreement are for reference purposes only and shall not control or
affect the meaning or construction of this Agreement. Except where expressly stated otherwise in
this Agreement, the following rules of interpretation apply to this Agreement: (a) “or” is not
exclusive and “include,” “includes” and “including” are not limiting; (b) “hereof,” “hereto,”
“hereby,” “herein” and “hereunder” and words of similar import when used in this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement; (c) “date hereof”
refers to the date of this Agreement; (d) “extent” in the phrase “to the extent” means the degree
to which a subject or other thing extends, and such phrase does not mean simply “if”; (e)
definitions contained in this Agreement are applicable to the singular as well as the plural forms
of such terms; (f) references to an agreement or instrument mean such agreement or instrument as
from time to time amended, modified or supplemented, and all exhibits, appendices, schedules or
other attachments thereto; (g) references to a Person are also to its permitted successors and
assigns; (h) references to an “Article,” “Section,” “Clause,” “Exhibit” or “Schedule” refer to an
Article, Section or Clause of, or an Exhibit or Schedule to, this Agreement; (i) words importing
the masculine gender include the feminine or neuter and, in each case, vice versa; (j) references
to a Law include any amendment or modification to such Law and any rules or regulations issued
thereunder, whether such amendment or modification is made, or issuance of such rules or
regulations occurs, before or after the date of this Agreement; and (k) references to monetary
amounts shall be denominated in United States Dollars.



          Section 12.4 Waivers. The waiver by either Party of a breach or default in any of
the provisions of this Agreement by the other Party shall not be construed as a waiver of any
succeeding breach of the same of either Party to exercise or avail itself of any right, power or
privilege that it has or may have hereunder nor operates as a waiver of any breach or default by
the other Party.



          Section 12.5 Entire Agreement and Amendments. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter hereof and supersedes all prior
agreements between the Parties, whether written or oral, relating to the same subject matter. No
modification, amendment or supplements to this Agreement shall be effective for any purpose unless
in writing, signed by each Party. Approvals or consents hereunder of a Party shall also be in
writing.



          Section 12.6 Severability. In the event that any provision herein shall be
determined to be void or unenforceable in whole or in part for any reason whatsoever, such
unenforceability or invalidity shall not affect the enforceability or validity of the remaining



25









 




provisions or part thereof contained in this Agreement and such void or unenforceable
provisions shall be deemed to be severable from any other provisions or part thereof herein
contained. In the event that any of the provisions herein contained are held to be unreasonable by
reason of the duration or type or scope of services covered by the said provision then the said
provision shall be given effect only to the extent as may be enforceable or deemed enforceable by
any court of competent jurisdiction.




          Section 12.7 Assignments. Neither Party shall transfer or assign the Agreement or
delegate the performance of its obligations hereunder without the express written consent of the
other Party. Notwithstanding the foregoing, either Party may assign this Agreement (a) to any of
its Affiliates; or (b) to any Third Party in connection with the sale or transfer, by merger,
reorganization, consolidation or otherwise, of all or substantially all of the Party’s business or
assets to which this Agreement relates. This Agreement and the provisions hereof shall be binding
upon and inure to the benefit of the Parties hereto and their respective successors and permitted
assigns.



          Section 12.8 Force Majeure.



          (a) Neither Party shall be liable to the other Party for any delay or omission in the
performance of any obligation hereunder, where the delay or omission is due to any cause or
conditions beyond the reasonable control of the Party obligated to perform, including strike or
other labor difficulties, acts of God, acts of government, war (declared or undeclared), acts of
terrorism, fire, epidemic of disease, riots, civil commotion, embargoes, government requisition or
impoundment or other acts of any Governmental Authority or inability to obtain supplies (“Force
Majeure”). For clarification, failure to obtain or Maintain a Product Registration shall not be
considered a Force Majeure event. If Force Majeure prevents or delays the performance by a Party of
any obligation under this Agreement, then the Party claiming Force Majeure shall notify the other
Party thereof in writing within 15 days of the occurrence of such Force Majeure.



          (b) If the performance of this Agreement shall be prevented for a period exceeding six
months from the date of notice given pursuant to Section 12.8(a) due to an event of Force Majeure,
the Party receiving notice of an event of Force Majeure shall be entitled to immediately terminate
all obligations regarding the supply, purchase or distribution of Products for the affected period
by giving written notice to the other. Distributor, if it is the Party receiving notice of an
event of Force Majeure, (instead of exercising its rights in the preceding sentence) may elect to
extend the Term of this Agreement for one additional year. As regards the supply of Product for
the remainder of the Term, absent termination by the Party receiving notice of an event of Force
Majeure, this Agreement shall continue in full force and effect in accordance with its terms.



          Section 12.9 No Third-Party Beneficiaries. This Agreement is for the sole benefit
of the Parties hereto and their permitted successors and assigns and nothing herein express or
implied shall give or be construed to give to any Person, other than the Parties hereto and such
successors and assigns, any legal or equitable rights or remedies.



          Section 12.10 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which shall constitute one and the same



26









 




instrument. Delivery of an executed counterpart of this Agreement by facsimile or other
electronic transmission shall be as effective as delivery of a manually executed counterpart of
this Agreement.




          Section 12.11 Further Assurance. Each Party undertakes, at the request and cost and
expense of the other Party, to sign all documents and to do all other acts, which may be necessary
to give full effect to this Agreement.



          Section 12.12 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the substantive Laws of Switzerland, excluding its conflicts of laws principles.
The UN Convention on Contracts for the International Sale of Goods is not applicable to this
Agreement nor to purchase orders and deliveries based hereon. General terms of sale of Insulet and
general order terms or purchase terms of Distributor are not applicable to this Agreement nor to
Orders based hereon



          Section 12.13 Governing Language. The official text of this Agreement shall be the
English language, and any interpretation or construction of this Agreement shall be based thereon.
If this Agreement or any documents or notices relating to it are translated into another language
the English version shall be controlling in the event of discrepancy between the two.



          Section 12.14 Arbitration.



          (a) In the event of a dispute between the Parties, the Parties shall first attempt in good
faith to resolve such dispute by negotiation and consultation between themselves. In the event
that such dispute is not resolved on an informal basis within 30 days for attempted resolution by
good faith negotiations within 30 days after such notice is received.



          (b) All disputes arising out of or in connection with this Agreement shall be finally
settled under the Rules of Arbitration of the International Chamber of Commerce by one or more
arbitrators appointed in accordance with the said Rules. Such arbitration shall take place in
Zurich, Switzerland. The language of the arbitration shall be English. The arbitration award so
given shall be a final and binding determination of the dispute and shall not include any damages
expressly prohibited by Section 8.5. Except in a proceeding to enforce the results of the
arbitration or as otherwise required by Law, neither Party nor any arbitrator may disclose the
existence, content or results of any arbitration hereunder without the prior written consent of
both Parties.



          (c) Notwithstanding the foregoing dispute resolution procedure, in the event of an actual
or threatened breach hereunder, the aggrieved Party may seek equitable relief (including
restraining orders, specific performance or other injunctive relief) without submitting to such
dispute resolution procedure if there is a reasonable likelihood of the occurrence of irreparable
harm during the period of the dispute resolution procedure.



          Section 12.15 Press Releases.



          (a) Subject to Section 12.15(b), press releases or other similar public communications by
a Party relating to this Agreement shall be subject to a right of reasonable



27









 




prior review and approval by the other Party, which approval shall not be unreasonably
withheld or delayed, provided that such right of approval shall not apply to communications
required by applicable Law, disclosures of information for which consent has previously been
obtained, or information that has been previously disclosed publicly, and provided, further, that
any draft press release or other public communication submitted to a Party for its approval shall
be deemed approved if such Party fails to notify the submitting Party within 5 Business Days of
receipt thereof as to whether or not it has been approved.




          (b) Distributor understands and agrees that Insulet may submit a copy of this Agreement to
the United States Securities and Exchange Commission.



[Signature Page Follows]







28









 







The Parties have caused this Agreement to be executed by their respective duly authorized officers
as of the date first above written.




	 	 	 	 	 
	 	Insulet Corporation

 	 
	 	By:  	/s/ Duane DeSisto
 	 
	 	 	Name:  	Duane DeSisto 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	Ypsomed Distribution AG

 	 
	 	By:  	/s/ Richard Fritschi
 	 
	 	 	Name:  	Richard Fritschi 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	 	 
	 	By:  	   /s/ Simon Michel
 	 
	 	 	Name:  	Simon Michel 	 
	 	 	Title:  	Senior Vice President Marketing & Sales 	 
	 



[Signature Page to Distribution Agreement]








 









 








Exhibit I




Products




	1.	 	Insulet’s OmniPod System, an insulin delivery system designed and manufactured by Insulet
and, pursuant to this Agreement, supplied to and distributed by Distributor, each OmniPod
System comprising a PDM (as defined hereafter) and PODs (as defined hereafter). The term
“Product(s)” includes improvements, enhancements, new versions of and accessories to the
Products. Insulet shall use reasonable commercial efforts to make any improved, enhanced or
new versions of Products available to Distributor for distribution in the Territory. The
OmniPod System includes:






	 	a.	 	Personal Diabetes Manager or PDM, the handheld portion of the OmniPod
System, containing the user interface for controlling the POD portion of the OmniPod
System, optionally including an integrated blood glucose meter.






	 	b.	 	POD, the wearable, disposable insulin pump portion of the OmniPod System
(including filling system), controlled by the PDM.






	2.	 	“YM OmniPod System” means a version of the OmniPod System, designed and manufactured by
Insulet and, pursuant to this Agreement, supplied to and distributed by Distributor, each YM
OmniPod System comprising a YM PDM (as defined hereafter) and YM PODs (as defined hereafter).
Insulet shall use reasonable commercial efforts to make the YM OmniPod System ready for supply
to Distributor and ready for distribution in the Territory by the dates set forth in Exhibit
II.
	 
	 	 	“YM PDM” means versions of Insulet’s PDM adapted and labeled for sale in the countries of
the Territory listed in Section II of Exhibit II.
	 
	 	 	“YM POD” ” means versions of Insulet’s POD adapted and labeled for sale in the countries of
the Territory listed in Section I of Exhibit II.
	 
	 	 	“YM Integrated BGM” means a blood glucose meter that uses blood glucose strips manufactured
by [***] and is integrated into the YM PDM.




The terms “PDM” and “POD” include the terms “YM PDM” and “YM POD” where appropriate.










 









 








Exhibit II




Territory



I. TERRITORY



Those countries listed below in Section II of this Exhibit II.



II. LIST OF COUNTRIES



The following countries shall be ready for distribution of Products by Distributor on the dates
specified below, i.e. Insulet shall have obtained and maintain Product Registrations in these
countries and shall have the country specific version of Products ready for supply and ready for
distribution by Distributor as of the date specified below.




     -   Germany: [***] 2010



     -   Netherlands: [***] 2010



     -   France: [***] 2010



     -   Australia: [***] 2010



     -   Belgium: [***] 2010



     -   China: [***] 2011



     -   UK: [***] 2010



     -   Norway: [***] 2010



     -   Sweden: [***] 2010



     -   Finland: [***] 2010



     -   Switzerland: [***] 2010




	III.	 	INCLUSION OF ADDITIONAL COUNTRIES FOR DISTRIBUTION
	 
	1.	 	At any time during the term, Distributor may request
Insulet in writing to add further countries to the list of
countries in the Territory in Section II of Exhibit II.
Distributor shall present a Business Plan for the distribution of
the Products in each such additional country(ies). Insulet and
Distributor shall negotiate in good faith to enter into an
amendment of this Exhibit II relating to the addition of each
such country(ies) to the Territory and an adjustment of the
Calendar Year Minimums as set forth in Exhibit III. If the
Parties agree to add any such country(ies) to the list of
countries in the Territory in Section II of Exhibit II, the
Parties shall share development costs equally, provided that




 









 












	 	 	Distributor’s share of such develop costs shall not exceed [***]
for any country added to the list of countries in Territory in
Section II of Exhibit II.

	 
	IV.	 	RIGHT OF FIRST REFUSAL
	 
	1.	 	During the Term, in the event that (i) Insulet desires to
enter into a distribution agreement with respect to the Products
in a country outside the Territory, (ii) Insulet desires to
itself promote, advertise, market, distribute and sell Products
in a country outside the Territory, or (iii) Insulet desires to
supply any Third Party for promotion, advertisement, marketing,
distribution and sale of Products in a country outside the
Territory, before itself promoting, advertising, marketing,
distributing or selling the Product in such country outside the
Territory or before entering into negotiations with any Third
Party with respect to such agreement, Insulet will notify
Distributor (a “Notice”). If Distributor would like to amend the
Territory to include such country, Distributor shall notify
Insulet in writing of such request and provide a Business Plan
for such country within sixty (60) days after Distributor’s
receipt of such Notice. Insulet shall enter into good faith
negotiations with Distributor with respect to such amendment of
the Territory and an equitable adjustment of the Calendar Year
Minimums for a period of sixty (60) days (the “Negotiation
Period”) following receipt of such request and Business Plan from
Distributor. If Distributor does not request to pursue an
amendment within the sixty (60) day period set forth above, or if
Distributor does not provide Insulet with a Business Plan for
such country during such sixty (60) day period, Insulet will then
be free to itself promote, advertise, market, distribute and sell
Products in such country outside the Territory or to enter into
negotiations with any Third Party regarding an agreement for
Products for such country, and free to enter into any such
agreement. If Distributor does request an amendment to the
Territory and provide a Business Plan to Insulet within the sixty
(60) day period set forth above, but the Parties do not conclude
an amendment within the Negotiation Period, Insulet will then be
free to enter into negotiations with any Third Party regarding an
agreement for Products for such country, and free to enter into
any such agreement, subject to the provisions set forth below.
For clarification, if Distributor does request an amendment to
the Territory and provide a Business Plan to Insulet within the
sixty (60) day period set forth above, but the Parties do not
conclude an amendment within the Negotiation Period, then Insulet
shall refrain from itself promoting, advertising, marketing,
distributing or selling the Product in such country without prior
written approval of Distributor, but shall have the right to
proceed in accordance with Section 2 below.
	 
	2.	 	Insulet shall not enter into an agreement with any Third
Party with respect to such country under terms and conditions
financially less favorable taken as a whole (including transfer
prices, Calendar Year Minimums and volume requirements for the
Products) to Insulet than the last counteroffer from Insulet to
Distributor (a “Financially Less Favorable Offer”). If Insulet
intends to enter into a Financially Less Favorable Offer with a
Third Party, then Insulet shall not enter into an agreement with
such Third Party without first offering such terms and conditions
in the Financially Less Favorable Offer to Distributor. In the
event that Insulet makes such offer to Distributor, Distributor
will have an additional fifteen (15) days to provide Insulet with
notice that Distributor desires




 









 








	 	 	to enter into an amendment with Insulet on substantially the same
terms and conditions as set out in the Financially Less Favorable
Offer. If such notice is provided by Distributor, the Parties
will work diligently to expeditiously complete such an amendment.
If such notice is not provided by Distributor within such
fifteen (15) day period, Insulet will be free to enter into an
agreement with such Third Party having the terms and conditions
set forth in the Financially Less Favorable Offer.

	 
	V.	 	COUNTRIES EXCLUDED FROM THE TERRITORY
	 
	1.	 	The Parties agree the countries listed below shall not be
part of the Territory and Distributor waives its right to (a) add
such countries to the Territory under Section III of this Exhibit
II, and (b) negotiate and have a right of first refusal with
respect to such countries under Section IV of this Exhibit II.





     -   USA



     -   Israel



     -   Canada



 









 





Exhibit III




Calendar Year Minimums And Pricing


I. CALENDAR YEAR MINIMUMS AND PRICING




	 	 	 	 	 	 	 	 	 
	[Calendar	 	Minimum	 	PDM Transfer	 	Minimum	 	POD Transfer
	Year	 	Quantity: PDMS	 	Price($US)	 	Quantity: PODS	 	Price ($US)]
	2010
	 	[***]	 	[***]	 	[***]	 	[***]
	2011
	 	[***]	 	[***]	 	[***]	 	[***]
	2012
	 	[***]	 	[***]	 	[***]	 	[***]
	2012
	 	 	 	 	 	[***]	 	[***]
	2013
	 	[***]	 	[***]	 	[***]	 	[***]
	2013
	 	 	 	 	 	[***]	 	[***]
	2014
	 	[***]	 	[***]	 	[***]	 	[***]
	2014
	 	 	 	 	 	[***]	 	[***]
	2015
	 	 	 	 	 	[***]	 	[***]





For the avoidance of doubt the Minimum Quantity for a Calendar Year is the sum of the values
expressed in the table above for each Calendar Year. For example, the Minimum Quantity of PODS for
2012 is [***], where [***] are purchased by Distributor at a Transfer Price of [***] and [***] are
purchased by Distributor at a Transfer Price of [***]. Distributor must purchase the Minimum
Quantity of PODS at the higher Transfer Price in each Calendar Year before purchasing PODS at the
lower Transfer Price.



SAMPLE PRICING




	 	 	 

	Demonstration POD

	 	[***]





II. PRICING OF PRODUCTS WITHOUT YM INTEGRATED BGM AFTER [***]



In the event Insulet is not able to supply Distributor with YM PDM with YM Integrated BGM for
distribution in the Territory by [***], the transfer price to be paid by Distributor for purchases
of PDMs after [***] shall be reduced to [***]. As soon as Insulet is able to supply an YM PDM with
[***] for distribution in the Territory, the transfer price to be paid by Distributor for purchase
of PDMs shall be as set forth in Section I of this Exhibit III. Alternatively, if Insulet is able
to supply a YM PDM with an alternative integrated BGM, the transfer price to be paid by Distributor
for purchase of PDFS shall be [***] and Insulet shall share [***] of any [***] that Insulet
actually receives from a Third Party provider of the [***].



III. EQUITABLE ADJUSTMENT TO CALENDAR YEAR MINIMUMS






 









 







The Parties shall negotiate and implement a fair and equitable adjustment to the Calendar Year
Minimums, which adjustment shall be agreed to by the Parties and referenced in an amendment to this
Exhibit III, if (a) the Parties amend the list of countries in the Territory in Section II of
Exhibit II as permitted in this Agreements; (b) if Insulet exercises its rights under Section 10.2
or 10.3; (c) if Insulet, pursuant to this Agreement, converts Distributor’s appointment as
exclusive distributor to non-exclusive in any country(ies); (d) if Insulet, pursuant to this
Agreement, selectively terminates Distributor’s appointment as distributor in any country(ies); (e)
if Insulet fails to obtain and maintain Product Registrations in the countries listed in Section II
of Exhibit II or fails to have country specific versions of Products ready for supply and
distribution by Distributor by the dates set forth in Section II of Exhibit II; or (f) if any of
the following events occurs during the Term of this Agreement:





(i) an injunction based on Third Party patent infringement by the Products is issued
and pending;




(ii) Insulet does not hold a Product Registration in a country of the Territory, or
such Product Registration, has been revoked, or an injunction or warning letter (or the
like) based on regulatory problems with a Product is issued and pending;




(iii) a corrective or preventive action or a recall is requested or voluntarily
performed;




(iv) Insulet materially breaches its obligations under Section 1.2;




(v) Distributor, having used commercially reasonable efforts, does not obtain listing
of the Products with reimbursement authorities in a country of the Territory;




(vi) Insulet is in material breach of this Agreement;




(vii) deliveries of Products are delayed by Insulet by more than thirty (30) days after
the delivery date specified in the Order;




(vii) Insulet suspends shipments of Products in accordance with Section 5.1;




(viii) the number of PODs delivered per Customer decreases during the Term due to
reasons in Insulet’s responsibility including, without limitation, new version of PODs
containing more insulin; or




(viii) a Force Majeure event prevents the supply, purchase, distribution, import,
marketing or sale of Products under this Agreement.


Upon occurrence of an event listed in this Section III of Exhibit III and until the amendment to
this Exhibit III containing the adjusted Calendar Year Minimums is in effect, the Calendar Year
Minimums shall not apply.



Any equitable adjustment to the Calendar Year Minimum agreed to by the Parties shall be
proportional to the share of the market in the Territory affected by the reason for the equitable
adjustment. The share of the market in the Territory affected by the reason for the






 









 







equitable adjustment shall be the greater of: (a) the projected market share set forth in the table
below; (b) the actual market share during the most recent twelve months; and (c) the market share
set forth in the most recent forecast pursuant to Section 4.3.




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	[# of Pods	 	Year 1	 	 	Year 2	 	 	Year 3	 	 	Year 4	 	 	Year 5]	 
	Germany
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	France
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	Netherlands
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	Australia
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	UK
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	Nordics
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	Switzerland
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	China
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	Total
	 	 	100	%	 	 	100	%	 	 	100	%	 	 	100	%	 	 	100	%






 









 






EXHIBIT IV




Variances


As set forth in Sections 4.3 of this Agreement, the forecasted amounts for the 4 quarters of the
forecast shall constitute a binding and firm purchase order, provided, however, that the Orders
actually issued to Insulet pursuant to Section 4.5 vary in accordance with the following table.




	 	 	 	 	 
	 	 	Order Flexibility Up	 	Order Flexibility
	 	 	(expressed as a	 	Down (expressed as a
	Period of Forecast in	 	percentage of the	 	percentage of the
	any Calendar Year	 	forecasted amount)	 	forecasted amount)
	Calendar Quarter 1
	 	[***]	 	[***]
	Calendar Quarter 2
	 	[***]	 	[***]
	Calendar Quarter 3
	 	[***]	 	[***]
	Calendar Quarter 4
	 	[***]	 	[***]











 









 








EXHIBIT V




Business Plans