EX-10.19



 Exhibit 10.19 

 

					
	



	  		  	

 LOAN AGREEMENT 
 This Agreement dated as of February 17, 2012, is between Bank of America, N.A. (the “Bank”) and Insys Therapeutics, Inc. (the “Borrower”). 

1. FACILITY NO. 1: LINE OF CREDIT AMOUNT AND TERMS 
 1.1 Line of Credit Amount. 
  

	(a)	During the availability period described below, the Bank will provide a line of credit to the Borrower. The amount of the line of credit (the “Facility No. 1
Commitment”) is Fifteen Million and 00/100 Dollars ($15,000,000.00). 

  

	(b)	This is a revolving line of credit. During the availability period, the Borrower may repay principal amounts and reborrow them. 


 

	(c)	The Borrower agrees not to permit the principal balance outstanding to exceed the Facility No. 1 Commitment. If the Borrower exceeds this limit, the Borrower will
immediately pay the excess to the Bank upon the Bank’s demand. 

 1.2 Availability Period. The line of credit is
available between the date of this Agreement and February 15, 2013, or such earlier date as the availability may terminate as provided in this Agreement (the “Facility No. 1 Expiration Date”). 

1.3 Repayment Terms. 
  

	(a)	The Borrower will pay interest on March 31, 2012, and then on the last day of each month thereafter until payment in full of any principal outstanding under this
facility. 

  

	(b)	The Borrower will repay in full any principal, interest or other charges outstanding under this facility no later than the Facility No. 1 Expiration Date.


 1.4 Interest Rate. 
  

	(a)	The interest rate is a rate per year equal to the BBA LIBOR Daily Floating Rate plus 1 percentage point(s). 


 

	(b)	The BBA LIBOR Daily Floating Rate is a fluctuating rate of interest which can change on each banking day. The rate will be adjusted on each banking day to equal the
British Bankers Association LIBOR Rate (“BBA LIBOR”) for U.S. Dollar deposits for delivery on the date in question for a one month term beginning on that date. The Bank will use the BBA LIBOR Rate as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as selected by the Bank from time to time) as determined at approximately 11:00 a.m. London time two (2) London Banking Days prior to the date in question, as adjusted from time to
time in the Bank’s sole discretion for reserve requirements, deposit insurance assessment rates and other regulatory costs. If such rate is not available at such time for any reason, then the rate will be determined by such alternate method as
reasonably selected by the Bank. A ‘‘London Banking Day” is a day on which banks in London are open for business and dealing in offshore dollars. 

 1.5 Optional Interest Rates. Instead of the interest rate based on the rate stated in the paragraph entitled “Interest Rate” above, the Borrower may elect the optional interest rates
listed below for this Facility No. 1 during interest periods agreed to by the Bank and the Borrower. The optional interest rates shall be subject to the terms and conditions described later in this Agreement. Any principal amount bearing
interest at an optional rate under this Agreement is referred to as a “Portion.” The following optional interest rates are available: 
  

	(a)	The LIBOR Rate plus 1 percentage point(s). 


  
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 1.6 Letters of Credit. 

 

	(a)	During the availability period, at the request of the Borrower, the Bank will issue standby letters of credit with a maximum maturity of three hundred sixty-five
(365) days but not to extend more than three hundred sixty-five (365) days beyond the Facility No. 1 Expiration Date. The standby letters of credit may include a provision providing that the maturity date will be automatically
extended each year for an additional year unless the Bank gives written notice to the contrary. Any letters of credit outstanding as of the Facility No. 1 Expiration Date shall be cash collateralized on terms and conditions acceptable to the
Bank. 

  

	(b)	The amount of the letters of credit outstanding at any one time (including the drawn and unreimbursed amounts of the letters of credit) may not exceed Two Million and
00/100 Dollars ($2,000,000.00). 

  

	(c)	In calculating the principal amount outstanding under the Facility No. 1 Commitment, the calculation shall include the amount of any letters of credit outstanding,
including amounts drawn on any letters of credit and not yet reimbursed. 

  

	(d)	The Borrower agrees: 

  

	 	(i)	Any sum drawn under a letter of credit may, at the option of the Bank, be added to the principal amount outstanding under this Agreement. The amount will bear interest
and be due as described elsewhere in this Agreement. 

  

	 	(ii)	If there is a default under this Agreement (that is not cured within any applicable cure period), to immediately prepay and make the Bank whole for any outstanding
letters of credit. 

  

	 	(iii)	The issuance of any letter of credit and any amendment to a letter of credit is subject to the Bank’s written approval and must be in form and content satisfactory
to the Bank and in favor of a beneficiary acceptable to the Bank. 

  

	 	(iv)	To sign the Bank’s form Application and Agreement for Commercial Letter of Credit or Application and Agreement for Standby Letter of Credit, as applicable.


  

	 	(v)	To pay any issuance and/or other fees that the Bank notifies the Borrower will be charged for issuing and processing letters of credit for the Borrower.


  

	 	(vi)	To allow the Bank to automatically charge its checking account for applicable fees, discounts, and other charges. 


 

	 	(vii)	To pay the Bank a non-refundable fee equal to 1% per annum of the outstanding undrawn amount of each standby letter of credit, payable annually in advance,
calculated on the basis of the face amount outstanding on the day the fee is calculated. If there is a default under this Agreement, at the Bank’s option, the amount of the fee shall be increased to 6% per annum, effective starting on the
day the Bank provides notice of the increase to the Borrower. 

 2. OPTIONAL INTEREST RATES 

2.1 Optional Rates. Each optional interest rate is a rate per year. Interest will be paid on March 31, 2012, and then on the last day of each
month thereafter until payment in full of any principal outstanding under this Agreement. No Portion will be converted to a different interest rate during the applicable interest period. Upon the occurrence of an event of default under this
Agreement, the Bank may terminate the availability of optional interest rates for interest periods commencing after the default occurs. At the end of each interest period, the interest rate will revert to the rate stated in the paragraph(s) entitled
“Interest Rate” above, unless the Borrower has designated another optional interest rate for the Portion. 
 2.2 LIBOR Rate.
The election of LIBOR Rates shall be subject to the following terms and requirements: 
  

	(a)	 The interest period during which the LIBOR Rate will be in effect will be one month, two months or three months. The first day of the interest period
must be a day other than a Saturday or a Sunday on which banks are open for business in New York and London and dealing in offshore dollars (a “LIBOR Banking Day”). The last day of the




  
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interest period and the actual number of days during the interest period will be determined by the Bank using the practices of the London inter-bank market. 


 

	(b)	Each LIBOR Rate portion will be for an amount not less than One Hundred Thousand and 00/100 Dollars ($100,000.00). 


 

	(c)	A LIBOR Rate may be elected only for the entire principal amount outstanding under the applicable facility. 


 

	(d)	The “LIBOR Rate” means the interest rate determined by the following formula. (All amounts in the calculation will be determined by the Bank as of the first
day of the interest period.) 

  

							
		  	LIBOR Rate =	  	
London Inter – Bank Offered Rate
	  	
		  	  	(1.00 – Reserve Percentage)	  	

 Where, 
  

	 	(i)	“London Inter-Bank Offered Rate” means for any applicable interest period, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as selected by the Bank from time to time) at approximately 11:00 a.m. London time two (2) London Banking Days before the
commencement of the interest period for U.S. Dollar deposits (for delivery on the first day of such interest period) with a term equivalent to such interest period. If such rate is not available at such time for any reason then the rate for
that interest period will be determined by such alternate method as reasonably selected by the Bank. A “London Banking Day” is a day on which banks in London are open for business and dealing in offshore dollars. 


 

	 	(ii)	“Reserve Percentage” means the total of the maximum reserve percentages for determining the reserves to be maintained by member banks of the Federal Reserve
System for Eurocurrency Liabilities, as defined in Federal Reserve Board Regulation D, rounded upward to the nearest 1/100 of one percent. The percentage will be expressed as a decimal, and will include, but not be limited to, marginal, emergency,
supplemental, special, and other reserve percentages. 

  

	(e)	The Borrower shall irrevocably request a LIBOR Rate Portion no later than 12:00 noon Central time on the LIBOR Banking Day preceding the day on which the London
Inter-Bank Offered Rate will be set, as specified above. For example, if there are no intervening holidays or weekend days in any of the relevant locations, the request must be made at least three days before the LIBOR Rate takes effect.


  

	(f)	The Bank will have no obligation to accept an election for a LIBOR Rate Portion if any of the following described events has occurred and is continuing:


  

	 	(i)	Dollar deposits in the principal amount, and for periods equal to the interest period, of a LIBOR Rate Portion are not available in the London inter-bank market; or


  

	 	(ii)	The LIBOR Rate does not accurately reflect the cost of a LIBOR Rate Portion. 


 

	(g)	Each prepayment of a LIBOR Rate Portion, whether voluntary, by reason of acceleration or otherwise, will be accompanied by the amount of accrued interest on the amount
prepaid and a prepayment fee as described below. A “prepayment” is a payment of an amount on a date earlier than the scheduled payment date for such amount as required by this Agreement. 


 

	(h)	The prepayment fee shall be in an amount sufficient to compensate the Bank for any loss, cost or expense incurred by it as a result of the prepayment, including any
loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Portion or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall
also pay any customary administrative fees charged by the Bank in connection with the foregoing. For purposes of this paragraph, the Bank shall be deemed to have funded each Portion by a matching deposit or other borrowing in the applicable
interbank market, whether or not such Portion was in fact so funded. 


  
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 3. COLLATERAL 
 3.1 Kapoor Trust Letter of Credit. The Kapoor Trust Letter of Credit issued by Bank of America, N.A., with John N. Kapoor Trust, as applicant, dated on or before the date hereof in an aggregate
principal amount equal to $15,500,000.00 (the “Kapoor Trust Letter of Credit”) will secure the Borrower’s obligations to the Bank under this Agreement. All personal property collateral securing any other present or future obligations
of the Borrower to the Bank shall also secure this Agreement. The Bank acknowledges and agrees that the Bank will, at the Borrower’s written request, provide notice of termination of the Kapoor Trust Letter of Credit to Bank of America, N.A.,
as issuer of the Kapoor Trust Letter of Credit, on or before the date that is thirty (30) days after the obligations of this Agreement have been paid in full and terminated. 
 4. FEES AND EXPENSES 
 4.1 Fees. 

 

	(a)	Waiver Fee. If the Bank, at its discretion, agrees to waive or amend any terms of this Agreement, the Borrower will, at the Bank’s option, pay the Bank a
fee for each waiver or amendment in an amount advised by the Bank at the time the Borrower requests the waiver or amendment. Nothing in this paragraph shall imply that the Bank is obligated to agree to any waiver or amendment requested by the
Borrower. The Bank may impose additional requirements as a condition to any waiver or amendment. 

  

	(b)	Late Fee. To the extent permitted by law, the Borrower agrees to pay a late fee in an amount not to exceed four percent (4%) of any payment that is more
than fifteen (15) days late. The imposition and payment of a late fee shall not constitute a waiver of the Bank’s rights with respect to the default. 

 4.2 Expenses. The Borrower agrees to immediately repay the Bank for expenses that include, but are not limited to, filing, recording and search fees, appraisal fees, title report fees, and
documentation fees. 
 4.3 Reimbursement Costs. The Borrower agrees to reimburse the Bank for any expenses it incurs in the preparation
of this Agreement and any agreement or instrument required by this Agreement. Expenses include, but are not limited to, reasonable attorneys’ fees, including any allocated costs of the Bank’s in-house counsel to the extent permitted by
applicable law. 
 5. DISBURSEMENTS, PAYMENTS AND COSTS 
 5.1 Disbursements and Payments. 
  

	(a)	Each payment by the Borrower will be made in U.S. Dollars and immediately available funds, without setoff or counterclaim. Payments will be made by debit to a deposit
account, if direct debit is provided for in this Agreement or is otherwise authorized by the Borrower. For payments not made by direct debit, payments will be made by mail to the address shown on the Borrower’s statement, or by such other
method as may be permitted by the Bank. 

  

	(b)	The Bank may honor instructions for advances or repayments given by the Borrower (if an individual), or by any one of the individuals authorized to sign loan agreements
on behalf of the Borrower, or any other individual designated by any one of authorized signers (each an “Authorized Individual”). 

  

	(c)	For any payment under this Agreement made by debit to a deposit account, the Borrower will maintain sufficient immediately available funds in the deposit account to
cover each debit. If there are insufficient immediately available funds in the deposit account on the date the Bank enters such debit authorized by this Agreement, the Bank may reverse the debit. 


 

	(d)	Each disbursement by the Bank and each payment by the Borrower will be evidenced by records kept by the Bank. In addition, the Bank may, at its discretion, require the
Borrower to sign one or more promissory notes. 

  

	(e)	 Prior to the date each payment of principal and interest and any fees from the Borrower becomes due (the “Due Date”), the Bank will send to
the Borrower a statement of the amounts that will be due on that Due Date (the “Billed Amount”). The calculations in the bill will be made on the assumption that no new extensions of credit or payments will be made between the date of the
billing statement and the Due Date, and that there will be no 



  
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changes in the applicable interest rate. If the Billed Amount differs from the actual amount due on the Due Date (the “Accrued Amount”), the discrepancy will be treated as follows:


  

	 	(i)	if the Billed Amount is less than the Accrued Amount, the Billed Amount for the following Due Date will be increased by the amount of the discrepancy. The Borrower will
not be in default by reason of any such discrepancy. 

  

	 	(ii)	If the Billed Amount is more than the Accrued Amount, the Billed Amount for the following Due Date will be decreased by the amount of the discrepancy.


 Regardless of any such discrepancy, interest will continue to accrue based on the actual amount of principal
outstanding without compounding. The Bank will not pay the Borrower interest on any overpayment. 
 5.2 Telephone and Telefax
Authorization. 
  

	(a)	The Bank may honor telephone or telefax instructions for advances or repayments and telefax requests for the issuance of letters of credit given, or purported to be
given, by any one of the Authorized Individuals. 

  

	(b)	Advances will be deposited in and repayments will be withdrawn from account number
                         owned by Insys Therapeutics, Inc. or such other of the Borrowers accounts with the Bank as designated in
writing by the Borrower. 

  

	(c)	The Borrower will indemnify and hold the Bank harmless from all liability, loss, and costs in connection with any act resulting from telephone or telefax instructions
the Bank reasonably believes are made by any Authorized Individual. This paragraph will survive this Agreement’s termination, and will benefit the Bank and its officers, employees, and agents. 


5.3 Direct Debit. 
  

	(a)	The Borrower agrees that on the Due Date the Bank will debit the Billed Amount from deposit account number
                         owned by Insys Therapeutics, Inc. or such other of the Borrower’s accounts with the Bank as
designated in writing by the Borrower (the “Designated Account”). 

  

	(b)	The Borrower may terminate this direct debit arrangement at any time by sending written notice to the Bank at the address specified at the end of this Agreement. If the
Borrower terminates this arrangement, then the principal amount outstanding under this Agreement will at the option of the Bank bear interest at a rate per annum which is 0.5 percentage point(s) higher than the rate of interest otherwise provided
under this Agreement. 

 5.4 Banking Days. Unless otherwise provided in this Agreement, a banking day is a day other than a
Saturday, Sunday or other day on which commercial banks are authorized to close, or are in fact closed, in the state where the Bank’s lending office is located, and, if such day relates to amounts bearing interest at an offshore rate (if any),
means any such day on which dealings in dollar deposits are conducted among banks in the offshore dollar interbank market. All payments and disbursements which would be due on a day which is not a banking day will be due on the next banking day. All
payments received on a day which is not a banking day will be applied to the credit on the next banking day. 
 5.5 Interest Calculation.
Except as otherwise stated in this Agreement, all interest and fees, if any, will be computed on the basis of a 360-day year and the actual number of days elapsed. This results in more interest or a higher fee than if a 365-day year is used.
Installments of principal which are not paid when due under this Agreement shall continue to bear interest until paid. 
 5.6 Default
Rate. Upon the occurrence of any default or after maturity or after judgment has been rendered on any obligation under this Agreement, all amounts outstanding under this Agreement, including any unpaid interest, fees, or costs, will at the
option of the Bank bear interest at a rate which is 6.0 percentage point(s) higher than the rate of interest otherwise provided under this Agreement. This may result in compounding of interest. This will not constitute a waiver of any default.

 5.7 Additional Costs. 

  
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 The Borrower will pay the Bank, on demand, for the Bank’s costs or losses arising from any Change in
Law which are allocated to this Agreement or any credit outstanding under this Agreement. The allocation will be made as determined by the Bank, using any reasonable method. The costs include, without limitation, the following: 

 

	(a)	any reserve or deposit requirements (excluding any reserve requirement already reflected in the calculation of the interest rate in this Agreement); and


  

	(b)	any capital requirements relating to the Bank’s assets and commitments for credit. 

 “Change in Law” means the occurrence, after the date of this Agreement, of the adoption or taking effect of any new or changed law, rule, regulation or treaty, or the issuance of any request,
rule, guideline or directive (whether or not having the force of law) by any governmental authority; provided that (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives issued
in connection with that Act, and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor authority) or the United States regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued. 
 6. CONDITIONS 
 Before the Bank is required to extend any credit to the Borrower under this
Agreement, it must receive any documents and other items it may reasonably require, in form and content acceptable to the Bank, including any items specifically listed below. 
 6.1 Authorizations. If the Borrower or any guarantor is anything other than a natural person, evidence that the execution, delivery and performance by the Borrower and/or such guarantor of this
Agreement and any instrument or agreement required under this Agreement have been duly authorized. 
 6.2 Governing Documents. If
required by the Bank, a copy of the Borrower’s organizational documents. 
 6.3 Kapoor Trust Letter of Credit. The Bank shall have
received the Kapoor Trust Letter of Credit, which shall be in form and substance satisfactory to the Bank. 
 6.4 Good Standing.
Certificates of good standing for the Borrower from its state of formation and from any other state in which the Borrower is required to qualify to conduct its business. 
 6.5 Insurance. Evidence of insurance coverage, as required in the “Covenants” section of this Agreement. 
 7. REPRESENTATIONS AND WARRANTIES 
 When the Borrower signs this Agreement, and until the Bank is
repaid in full, the Borrower makes the following representations and warranties. Each request for an extension of credit constitutes a renewal of these representations and warranties as of the date of the request: 

7.1 Formation. If the Borrower is anything other than a natural person, it is duly formed and existing under the laws of the state or other
jurisdiction where organized. 
 7.2 Authorization. This Agreement, and any instrument or agreement required hereunder, are within the
Borrower’s powers, have been duly authorized, and do not conflict with any of its organizational papers. 
 7.3 Enforceable
Agreement. This Agreement is a legal, valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms, and any instrument or agreement required hereunder, when executed and delivered, will be similarly
legal, valid, binding and enforceable. 
 7.4 Good Standing. In each state in which the Borrower does business, it is properly licensed,
in good standing, and, where required, in compliance with fictitious name statutes. 
 7.5 No Conflicts. This Agreement does not conflict
with any law, agreement, or obligation by which the Borrower is bound. 

  
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 7.6 Financial Information. All financial and other information that has been or will be supplied to
the Bank is sufficiently complete to give the Bank accurate knowledge of the Borrower’s (and any guarantor’s) financial condition, including all material contingent liabilities. Since the date of the most recent financial statement
provided to the Bank, there has been no material adverse change in the business condition (financial or otherwise), operations, properties or prospects of the Borrower (or any guarantor). If the Borrower is comprised of the trustees of a trust, the
foregoing representations shall also pertain to the trustor(s) of the trust. 
 7.7 Lawsuits. There is no lawsuit, tax claim or other
dispute pending or threatened against the Borrower which, if lost, would impair the Borrower’s financial condition or ability to repay the loan, except as have been disclosed in writing to the Bank. 

7.8 Intentionally Omitted. 
 7.9
Permits, Franchises. The Borrower possesses all permits, memberships, franchises, contracts and licenses required and all trademark rights, trade name rights, patent rights, copyrights and fictitious name rights necessary to enable it to
conduct the business in which it is now engaged. 
 7.10 Other Obligations. The Borrower is not in default on any obligation for borrowed
money, any purchase money obligation or any other material lease, commitment, contract, instrument or obligation, except as have been disclosed in writing to the Bank. 
 7.11 Tax Matters. The Borrower has no knowledge of any pending assessments or adjustments of its income tax for any year and all taxes due have been paid, except as have been disclosed in writing
to the Bank. 
 7.12 No Event of Default. There is no event which is, or with notice or lapse of time or both would be, a default under
this Agreement. 
 7.13 Insurance. The Borrower has obtained, and maintained in effect, the insurance coverage required in the
“Covenants” section of this Agreement. 
 7.14 ERISA Plans. 

 

	(a)	Each Plan (other than a multiemployer plan) is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law.
Each Plan has received a favorable determination letter from the IRS and to the best knowledge of the Borrower, nothing has occurred which would cause the loss of such qualification. The Borrower has fulfilled its obligations, if any, under the
minimum funding standards of ERISA and the Code with respect to each Plan, and has not incurred any liability with respect to any Plan under Title IV of ERISA. 


 

	(b)	There are no claims, lawsuits or actions (including by any governmental authority), and there has been no prohibited transaction or violation of the fiduciary
responsibility rules, with respect to any Plan which has resulted or could reasonably be expected to result in a material adverse effect. 

  

	(c)	With respect to any Plan subject to Title IV of ERISA: 

  

	 	(i)	No reportable event has occurred under Section 4043(c) of ERISA tor which me PBUU requires 30-day notice. 


 

	 	(ii)	No action by the Borrower or any ERISA Affiliate to terminate or withdraw from any Plan has been taken and no notice of intent to terminate a Plan has been filed under
Section 4041 of ERISA. 

  

	 	(iii)	No termination proceeding has been commenced with respect to a Plan under Section 4042 of ERISA, and no event has occurred or condition exists which might
constitute grounds for the commencement of such a proceeding. 

  

	(d)	The following terms have the meanings indicated for purposes of this Agreement: 


 

	 	(i)	“Code” means the Internal Revenue Code of 1986, as amended from time to time. 


 

	 	(ii)	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time. 


  
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	 	(iii)	“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b)
or (c) of the Code. 

  

	 	(iv)	“PBGC” means the Pension Benefit Guaranty Corporation. 

  

	 	(v)	“Plan” means a pension, profit-sharing, or stock bonus plan intended to qualify under Section 401(a) of the Code, maintained or contributed to by the
Borrower or any ERISA Affiliate, including any multiemployer plan within the meaning of Section 4001(a)(3) of ERISA. 

 8.
COVENANTS 
 The Borrower agrees, so long as credit is available under this Agreement and until the Bank is repaid in full: 

8.1 Financial Information. To provide the following financial information and statements in form and content acceptable to the Bank, and such
additional information as requested by the Bank from time to time. The Bank reserves the right, upon written notice to the Borrower, to require the Borrower to deliver financial information and statements to the Bank more frequently than otherwise
provided below, and to use such additional information and statements to measure any applicable financial covenants in this Agreement. 
  

	(a)	Within 150 days of the fiscal year end, the annual financial statements of the Borrower, certified and dated by an authorized financial officer. These financial
statements must be audited (with an opinion satisfactory to the Bank) by a Certified Public Accountant acceptable to the Bank. 

  

	(b)	Within 45 days of the period’s end, quarterly financial statements of the Borrower, certified and dated by an authorized financial officer. These financial
statements may be company prepared. 

 8.2 Bank as Principal Depository. To maintain the Bank or one of its affiliates as
its principal depository bank, including for the maintenance of business, cash management, operating and administrative deposit accounts. 
 8.3
Intentionally Omitted. 
 8.4 Intentionally Omitted. 
 8.5 Intentionally Omitted. 
 8.6 Intentionally Omitted. 

8.7 Change of Management. Not to make any substantial change in the present executive or management personnel of the Borrower. 

8.8 Change of Ownership. Not to cause, permit, or suffer any change in capital ownership such that there is a change of more than 25% in the
direct or indirect capital ownership of the Borrower. 
 8.9 Additional Negative Covenants. Not to, without the Bank’s written
consent: 
  

	(a)	Enter into any consolidation, merger, or other combination, or become a partner in a partnership, a member of a joint venture, or a member of a limited liability
company. 

  

	(b)	Acquire or purchase a business or its assets. 

  

	(c)	Engage in any business activities substantially different from the Borrower’s present business. 


 

	(d)	Liquidate or dissolve the Borrower’s business. 

  

	(e)	Voluntarily suspend the Borrower’s business. 

 8.10 Notices to Bank. To promptly notify the Bank in writing of: 
  

	(a)	Any lawsuit over Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) against the Borrower or any Obligor. 


  
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	(b)	Any substantial dispute between any governmental authority and the Borrower or any Obligor. 


 

	(c)	Any event of default under this Agreement, or any event which, with notice or lapse of time or both, would constitute an event of default. 


 

	(d)	Any material adverse change in the Borrower’s or any Obligor’s business condition (financial or otherwise), operations, properties or prospects, or ability to
repay the credit. 

  

	(e)	Any change in the Borrower’s or any Obligor’s name, legal structure, principal residence (for an individual), state of registration (for a registered entity),
place of business, or chief executive office if the Borrower or any Obligor has more than one place of business. 

  

	(f)	Any actual contingent liabilities of the Borrower or any Obligor, and any such contingent liabilities which are reasonably foreseeable. 


For purposes of this Agreement, “Obligor” shall mean any guarantor, or any party pledging collateral to the Bank, or, if the Borrower is
comprised of the trustees of a trust, any trustor. 
 8.11 Insurance. To maintain insurance satisfactory to the Bank as to amount, nature
and carrier covering property damage (including loss of use and occupancy) to any of the Borrower’s properties, business interruption insurance, public liability insurance including coverage for contractual liability, product liability and
workers’ compensation, and any other insurance which is usual for the Borrower’s business. Each policy shall provide for at least 30 days prior notice to the Bank of any cancellation thereof. 

8.12 Compliance with Laws. To comply with the laws (including any fictitious or trade name statute), regulations, and orders of any government
body with authority over the Borrower’s business. The Bank shall have no obligation to make any advance to the Borrower except in compliance with all applicable laws and regulations and the Borrower shall fully cooperate with the Bank in
complying with all such applicable laws and regulations. 
 8.13 ERISA Plans. Promptly during each year, to pay and cause any
subsidiaries to pay contributions adequate to meet at least the minimum funding standards under ERISA with respect to each and every Plan; file each annual report required to be filed pursuant to ERISA in connection with each Plan for each year; and
notify the Bank within ten (10) days of the occurrence of any Reportable Event that might constitute grounds for termination of any capital Plan by the Pension Benefit Guaranty Corporation or for the appointment by the appropriate United States
District Court of a trustee to administer any Plan. “ERISA” means the Employee Retirement income Security Act of 1974, as amended from time to time. Capitalized terms in this paragraph shall have the meanings defined within ERISA.

 8.14 ERISA Plans-Notices. With respect to a Plan subject to Title IV of ERISA, to give prompt written notice to the Bank of:

  

	(a)	The occurrence of any reportable event under Section 4043(c) of ERISA for which the PBGC requires 30-day notice. 


 

	(b)	Any action by die Borrower or any ERISA Affiliate to terminate or withdraw from a Plan or the tiling of any notice of intent to terminate under Section 4041 of
ERISA. 

  

	(c)	The commencement of any proceeding with respect to a Plan under Section 4042 of ERISA. 

 8.15 Books and Records. To maintain adequate books and records. 
 8.16 Audits. To
allow the Bank and its agents to inspect the Borrower’s properties and examine, audit, and make copies of books and records at any reasonable time. If any of the Borrower’s properties, books or records are in the possession of a third
party, the Borrower authorizes that third party to permit the Bank or its agents to have access to perform inspections or audits and to respond to the Bank’s requests for information concerning such properties, books and records. 

8.17 Use of Proceeds. To only use the Facility No. 1 Commitment for general corporate purposes. 

  
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 8.18 Cooperation. To take any action reasonably requested by the Bank to carry out the intent of this
Agreement. 
 9. DEFAULT AND REMEDIES 

If any of the following events of default occurs, the Bank may do one or more of the following: declare the Borrower in default, stop making any
additional credit available to the Borrower, and require the Borrower to repay its entire debt immediately and without prior notice. If an event which, with notice or the passage of time, will constitute an event of default has occurred and is
continuing, the Bank has no obligation to make advances or extend additional credit under this Agreement. In addition, if any event of default occurs, the Bank shall have all rights, powers and remedies available under any instruments and agreements
required by or executed in connection with this Agreement, as well as all rights and remedies available at law or in equity. If an event of default occurs under the paragraph entitled “Bankruptcy,” below, with respect to the Borrower, then
the entire debt outstanding under this Agreement will automatically be due immediately. 
 9.1 Failure to Pay. The Borrower fails to make
(a) a principal payment under this Agreement when due, (b) any interest payment required under this Agreement during the first ninety (90) days after the date of this Agreement within five (5) days of the due date of such
interest payment (the “Interest Cure Period”); provided that the Bank, at its sole option, may draw on the Kapoor Trust Letter of Credit within the Interest Cure Period to cure such default, (c) any interest payment required
under this Agreement after the first ninety (90) days after the date of this Agreement within the Interest Cure Period; provided that any draw made by the Bank on the Kapoor Trust Letter of Credit to pay any interest not paid within such
Interest Cure Period shall not waive any event of default caused by the failure to pay any interest payment required under this Agreement and not paid within the Interest Cure Period and (d) any other payment required under this Agreement when
due. 
 9.2 Other Bank Agreements. Any default occurs under any other agreement the Borrower (or any Obligor) or any of the
Borrower’s related entities or affiliates has with the Bank or any affiliate of the Bank. 
 9.3 Cross-default. Any default occurs
under any agreement in connection with any credit the Borrower (or any Obligor) or any of the Borrower’s related entities or affiliates has obtained from anyone else or which the Borrower (or any Obligor) or any of the Borrower’s related
entities or affiliates has guaranteed. 
 9.4 False Information. The Borrower or any Obligor has given the Bank false or misleading
information or representations. 
 9.5 Bankruptcy. The Borrower, any Obligor, or any general partner of the Borrower or of any Obligor
files a bankruptcy petition, a bankruptcy petition is filed against any of the foregoing parties, or the Borrower, any Obligor, or any general partner of the Borrower or of any Obligor makes a general assignment for the benefit of creditors.

 9.6 Receivers. A receiver or similar official is appointed for a substantial portion of the Borrowers or any Obligor’s business,
or the business is terminated, or, if any Obligor is anything other than a natural person, such Obligor is liquidated or dissolved. 
 9.7
Revocation or Termination. If the Borrower is comprised of the trustee(s) of a trust, the trust is revoked or otherwise terminated or all or a substantial part of the Borrower’s assets are distributed or otherwise disposed of.

 9.8 Lion Priority. The Bank fails to have an enforceable first lien (except for any prior liens to which the Bank has consented in
writing) on or security interest in any property given as security for this Agreement (or any guaranty). 
 9.9 Lawsuits. Any lawsuit or
lawsuits are filed on behalf of one or more trade creditors against the Borrower or any Obligor in an aggregate amount of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) or more in excess of any insurance coverage. 

9.10 Judgments. Any judgments or arbitration awards are entered against the Borrower or any Obligor, or the Borrower or any Obligor enters into
any settlement agreements with respect to any litigation or arbitration, in an aggregate amount of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) or more in excess of any insurance coverage. 

9.11 Material Adverse Change. A material adverse change occurs, or is reasonably likely to occur, in the Borrower’s (or any Obligor’s)
business condition (financial or otherwise), operations, properties or prospects, or ability to repay the credit; or the Bank determines that it is insecure for any other reason. 

  
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 9.12 Government Action. Any government authority takes action that the Bank believes materially
adversely affects the Borrowers or any Obligor’s financial condition or ability to repay. 
 9.13 Default under Related Documents.
Any default occurs under any guaranty, subordination agreement, security agreement, deed of trust, mortgage, or other document required by or delivered in connection with this Agreement or any such document is no longer in effect, or any guarantor
purports to revoke or disavow the guaranty. 
 9.14 ERISA Plans. Any one or more of the following events occurs with respect to a Plan of
the Borrower subject to Title IV of ERISA, provided such event or events could reasonably be expected, in the judgment of the Bank, to subject the Borrower to any tax, penalty or liability (or any combination of the foregoing) which, in the
aggregate, could have a material adverse effect on the financial condition of the Borrower: 
  

	(a)	A reportable event shall occur under Section 4043(c) of ERISA with respect to a Plan. 


 

	(b)	Any Plan termination (or commencement of proceedings to terminate a Plan) or the full or partial withdrawal from a Plan by the Borrower or any ERISA Affiliate.


 9.15 Other Breach Under Agreement. A default occurs under any other term or condition of this Agreement not specifically
referred to in this Article. This includes any failure or anticipated failure by the Borrower (or any other party named in the Covenants section) to comply with the financial covenants set forth in this Agreement, whether such failure is evidenced
by financial statements delivered to the Bank or is otherwise known to the Borrower or the Bank. 
 9.16 Kapoor Trust Letter of Credit.
The Kapoor Trust Letter of Credit shall become unenforceable or shall otherwise be terminated or is no longer in effect. 
 10. ENFORCING THIS
AGREEMENT; MISCELLANEOUS 
 10.1 GAAP. Except as otherwise stated in this Agreement, all financial information provided to the Bank and
all financial covenants will be made under generally accepted accounting principles, consistently applied. 
 10.2 Governing Law. This
Agreement is governed by and shall be interpreted according to federal law and the laws of Delaware. If state or local law and federal law are inconsistent, or if state or local law is preempted by federal law, federal law governs. If the Bank has
greater rights or remedies under federal law, whether as a national bank or otherwise, this paragraph shall not be deemed to deprive the Bank of such rights and remedies as may be available under federal law. 

10.3 Successors and Assigns. This Agreement is binding on the Borrower’s and the Bank’s successors and assignees. The Borrower agrees
that it may not assign this Agreement without the Bank’s prior consent. The Bank may sell participations in or assign this loan, and may exchange information about the Borrower (including, without limitation, any information regarding any
hazardous substances) with actual or potential participants or assignees. If a participation is sold or the loan is assigned, the purchaser will have the right of set-off against the Borrower. 

10.4 WAIVER OF JURY TRIAL  

THE PARTIES TO THIS AGREEMENT WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THEY MAY BE PARTIES, ARISING OUT OF, IN CONNECTION WITH OR IN
ANY WAY PERTAINING TO, THIS AGREEMENT. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTION OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS
AGREEMENT. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE. 
 10.5 Severability Waivers. If any part of this Agreement is
not enforceable, the rest of the Agreement may be enforced. The Bank retains all rights, even if it makes a loan after default. If the Bank waives a default, it may enforce a later default. Any consent or waiver under this Agreement must be in
writing. 
 10.6 Attorneys’ Fees. The Borrower shall reimburse the Bank for any reasonable costs and attorneys’ fees, not in
excess of the highest amount of attorneys’ fees permitted by law, incurred by the Bank in connection with the enforcement or preservation of any rights or remedies under this Agreement and any other documents executed in connection with this
Agreement, and in connection with any amendment, waiver, “workout” or restructuring under this Agreement. In the event of a lawsuit or arbitration proceeding, the prevailing party is entitled to recover costs and reasonable attorneys’
fees incurred in connection with the lawsuit or arbitration proceeding, as determined by the court or arbitrator. In the event that any case is commenced by or against the Borrower under the Bankruptcy Code (Title 11, United States Code) or any


  
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similar or successor statute, the Bank is entitled to recover costs and reasonable attorneys’ fees, not in excess of the highest amount of attorneys’ fees permitted by law, incurred by
the Bank related to the preservation, protection, or enforcement of any rights of the Bank in such a case. As used in this paragraph, “attorneys’ fees” includes the allocated costs of the Bank’s in-house counsel. 

10.7 Set-Off. 
  

	(a)	In addition to any rights and remedies of the Bank provided by law, upon the occurrence and during the continuance of any event of default under this Agreement, the
Bank is authorized, at any time, to set off and apply any and all Deposits of the Borrower or any Obligor held by the Bank or its affiliates against any and all Obligations owing to the Bank. The set-off may be made irrespective of whether or not
the Bank shall have made demand under this Agreement or any guaranty, and although such Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable Deposits and without regard for the availability or
adequacy of other collateral. Any Deposits may be converted, sold or otherwise liquidated at prevailing market prices in order to effect such set-off. 

  

	(b)	The set-off may be made without prior notice to the Borrower or any other party, any such notice being waived by the Borrower (on its own behalf and on behalf of each
Obligor) to the fullest extent permitted by law. The Bank agrees promptly to notify the Borrower after any such set-off and application; provided, however, that the failure to give such notice shall not affect the validity of such
set-off and application. 

  

	(c)	For the purposes of this paragraph, “Deposits” means any deposits (general or special, time or demand, provisional or final, individual or joint) as well as
any money, instruments, securities, credits, claims, demands, income or other property, rights or interests owned by the Borrower or any Obligor which come into the possession or custody or under the control of the Bank or its affiliates.
“Obligations” means all obligations, now or hereafter existing, of the Borrower to the Bank under this Agreement and under any other agreement or instrument executed in connection with this Agreement, and the obligations to the Bank of any
Obligor. 

  

	10.8	One Agreement. This Agreement and any related security or other agreements required by this Agreement, collectively: 


 

	(a)	represent the sum of the understandings and agreements between the Bank and the Borrower concerning this credit; 


 

	(b)	replace any prior oral or written agreements between the Bank and the Borrower concerning this credit; and 


 

	(c)	are intended by the Bank and the Borrower as the final, complete and exclusive statement of the terms agreed to by them. 


In the event of any conflict between this Agreement and any other agreements required by this Agreement, this Agreement will prevail. Any reference in
any related document to a “promissory note” or a “note” executed by the Borrower and dated as of the date of this Agreement shall be deemed to refer to this Agreement, as now in effect or as hereafter amended, renewed, or
restated. 
 10.9 Indemnification. The Borrower will indemnify and hold the Bank harmless from any loss, liability, damages, judgments,
and costs of any kind relating to or arising directly or indirectly out of (a) this Agreement or any document required hereunder, (b) any credit extended or committed by the Bank to the Borrower hereunder, and (c) any litigation or
proceeding related to or arising out of this Agreement, any such document, or any such credit. This indemnity includes but is not limited to attorneys’ fees (including the allocated cost of in-house counsel). This indemnity extends to the Bank,
its parent, subsidiaries and all of their directors, officers, employees, agents, successors, attorneys, and assigns. This indemnity will survive repayment of the Borrower’s obligations to the Bank. All sums due to the Bank hereunder shall be
obligations of the Borrower, due and payable immediately without demand. 
 10.10 Notices. Unless otherwise provided in this Agreement or
in another agreement between the Bank and the Borrower, all notices required under this Agreement shall be personally delivered or sent by first class mail, postage prepaid, or by overnight courier, to the addresses on the signature page of this
Agreement, or sent by facsimile to the fax numbers listed on the signature page, or to such other addresses as the Bank and the Borrower may specify from time to time in writing. Notices and other communications shall be effective (i) if
mailed, upon the earlier of receipt or five (5) days after deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied, when transmitted, or (iii) if hand-delivered, by courier or otherwise (including telegram,
lettergram or mailgram), when delivered. 

  
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 10.11 Headings. Article and paragraph headings are for reference only and shall not affect the
interpretation or meaning of any provisions of this Agreement. 
 10.12 Counterparts. This Agreement may be executed in as many
counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same agreement. Delivery of an
executed counterpart of this Agreement (or of any agreement or document required by this Agreement and any amendment to this Agreement) by telecopy or other electronic imaging means shall be as effective as delivery of a manually executed
counterpart of this Agreement; provided, however, that the telecopy or other electronic image shall be promptly followed by an original if required by the Bank. 
 10.13 Borrower Information; Reporting to Credit Bureaus. The Borrower authorizes the Bank at any time to verify or check any information given by the Borrower to the Bank, check the Borrower’s
credit references, verify employment, and obtain credit reports. The Borrower agrees that the Bank shall have the right at all times to disclose and report to credit reporting agencies and credit rating agencies such information pertaining to the
Borrower and/or all guarantors as is consistent with the Bank’s policies and practices from time to time in effect. 

  
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 The Borrower executed this Agreement as of the date stated at the top of the first page, intending to create
an instrument executed under seal. 
  

					
	Bank:
	
	Bank of America, N.A.
		
	By:	 	/s/ Erin Frey
		 	Erin Frey, Vice President


					
	
	Borrower:
	
	Insys Therapeutics, Inc.
			
	By:	 	/s/ Michael L. Babich	 	(Seal)
		 	Michael L. Babich, Vice President

  

			
	Address where notices to Insys Therapeutics, Inc. are to be sent:	  	Address where notices to the Bank are to be sent:
	  
 10220 S 51 St

Ste 2
 Phoenix, AZ 80544

 
 Telephone:        (847)
887-0800
	  	  
 Doc Retention – GCF

MO1-800-08-11
 800 Market Street, 8th
Floor
 St. Louis, MO 63101-2510
  

Facsimile:        (866) 255-9922


 Federal law requires Bank of America, N.A. (the “Bank”) to provide the following notice. The notice is
not part of the foregoing agreement or instrument and may not be altered. Please read the notice carefully. 
  

	(1)	USA PATRIOT ACT NOTICE 

 Federal law
requires all financial institutions to obtain, verify and record information that identifies each person who opens an account or obtains a loan. The Bank will ask for the Borrower’s legal name, address, tax ID number or social security number
and other identifying information. The Bank may also ask for additional information or documentation or take other actions reasonably necessary to verify the identity of the Borrower, guarantors or other related persons. 

  
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