EXHIBIT 10.1
AMENDMENT NO. 2 TO DEVELOPMENT AND LICENSE AGREEMENT
     This Amendment No. 2 (the “Amendment”) dated June 30, 2010 (“Amendment
No. 2 Effective Date”) is entered into by and between Abbott Diabetes Care Inc.,
formerly known as TheraSense, Inc., (“ADC”) and Insulet Corporation (“Insulet”)
to amend the Development and License Agreement entered into between TheraSense,
Inc. (“Therasense”) and Insulet, effective as of January 23, 2002 and as amended
on March 3, 2008 (together with this Amendment No. 2 hereinafter referred to
collectively as the “Agreement”). Capitalized terms used herein but not
otherwise defined shall have the meanings ascribed to them in the Agreement.
     WHEREAS, pursuant to that Amendment No. 1 to Development and License
Agreement dated March 3, 2008, ADC and Insulet amended their original
Development and License Agreement to provide for an exclusive relationship in
the United States and Israel pursuant to which Insulet would not market,
promote, offer for sale, sell or distribute a Product with any DBGM other than
an ADC DBGM; and
     WHEREAS, in connection with that same Amendment No. 1 the parties agreed on
certain commercial terms and conditions pursuant to which ADC would compensate
Insulet for certain services performed by Insulet for New Customers and Upgrade
Customers in the United States and Israel; and
     WHEREAS, ADC and Insulet now desire to further amend the Agreement to
enable Insulet to, directly or indirectly, market and sell, on a non-exclusive
basis in the Expansion Territory, the Product (which as of the Amendment No. 2
Effective Date is marketed and sold by Insulet as the OmniPod Insulin Management
System) with a Remote Controller that includes an ADC DBGM (which as of the
Amendment No. 2 Effective Date is (i) made up of the FreeStyle Glucose Engine
and the FreeStyle Test Strip Port, and (ii) uses the FreeStyle Test Strip or the
FreeStyle Lite Test Strip to measure blood glucose values); and
     WHEREAS, ADC and Insulet have also decided that they wish for Insulet to
provide certain services for New Customers in the Expansion Territory, on such
commercial terms and conditions as the parties deem appropriate in the Expansion
Territory in consideration of the nature of the services and the markets and
conditions in which they will be provided; and
     WHEREAS, ADC and Insulet desire to incorporate into the Agreement certain
of the terms of that letter agreement dated May 27, 2010, and agreed and
acknowledged on June 8, 2010 (“Letter Agreement”) regarding the provision by ADC
to Insulet of certain no-charge meters for Insulet to provide to its end-user
customers in the United States; and
     WHEREAS, ADC and Insulet desire to update certain other provisions of the
Agreement including the requirements and commitments with respect to labeling
and branding of the Product;
     NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Amendment and in the Agreement, and expressly incorporating
the foregoing recitals, ADC and Insulet hereby agree as follows:

 

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1.   The definition of “FreeStyle Meter” in the Recitals of the Agreement is
amended as follows:       “FreeStyle Meter” means that certain discrete blood
glucose monitoring device owned and developed by ADC which (i) is made up of
certain circuitry to measure glucose based on coulometric glucose measurement
technology (the “FreeStyle Glucose Engine”) and the FreeStyle Test Strip Port,
(ii) uses a FreeStyle Test Strip or FreeStyle Lite Test Strip to measure blood
glucose values and (iii) is commercialized by ADC under the tradename “FreeStyle
Blood Glucose Monitor” and/or such other tradename as ADC may determine. For
avoidance of doubt, the definition of a FreeStyle Meter does not include the
FreeStyle Lite Blood Glucose Monitor.   2.   The definition of “Test Strips” in
the Recitals of the Agreement is amended as follows:       “Test Strips” means
those certain blood glucose test strips commercialized by ADC as the FreeStyle
Test Strip and/or the FreeStyle Lite Test Strip.   3.   The definition of “New
Customer” at Section 1.35 is amended and restated as follows:       “New
Customer” is an end-user customer (i) who has not previously purchased or
received a Remote Controller with an ADC DBGM, or (ii) who purchases or receives
a Remote Controller that includes an ADC DBGM having connectivity to an ADC
continuous glucose monitoring system.   4.   The definition of Territory at
Section 1.25 is amended and restated as follows:       “Territory” means the
United States of America, Canada and Israel.   5.   The following new definition
is hereby added at Section 1.37:       “Expansion Territory” means Germany,
France, UK, Netherlands, Switzerland, Belgium, Finland, Norway, and Sweden.
Except as otherwise set forth herein, the Expansion Territory shall be
considered a part of the Territory.   6.   The following new definition is
hereby added at Section 1.38:       “Expansion Territory Customer Service Event”
means [***].

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7.   Section 2.7(a) is amended and restated in its entirety as follows:      
(a) Insulet represents and warrants that is has all regulatory approvals
necessary for, or has submitted for regulatory approval for, the sale by it of
the Product with ADC DBGM in the United States, Israel and Germany. Insulet
shall be solely responsible for satisfying all regulatory requirements
(including without limitation the obtaining and maintaining of all regulatory
approvals) necessary for the sale by it of the Product with ADC DBGM in the
Territory, including the conduct of all necessary clinical trials; provided
that, upon request by Insulet, ADC shall provide to Insulet or the appropriate
regulatory authorities, at ADC’s expense, and pursuant to such commercially
reasonable timelines as agreed to by both Parties, such information, data,
materials and product samples in its possession as reasonably necessary to
obtain such approvals; and, provided further, that (i) in the event ADC
determines in its reasonable discretion that any information or documentation to
be provided pursuant to this Section 2.7(a) contains information of a sensitive
nature, ADC shall have the right to provide any such information or
documentation in confidence directly to the applicable Regulatory Authorities
provided it notifies Insulet of such submission, and (ii) ADC shall have no
obligation to provide any information or documentation beyond that which has
already been provided by ADC to the applicable regulatory authorities. Insulet
shall keep ADC reasonably informed with respect to any regulatory filings and
clinical trials that Insulet has conducted or is conducting regarding the
Product and at a minimum shall provide ADC with written notice of all filings
for regulatory approvals commensurate with Insulet’s submission of such filings.
  8.   Section 2.11(a) is amended and restated in its entirety as follows:      
(a) If ADC introduces to the market in the Territory a FreeStyle Meter that
incorporates any modification, enhancement or improvement to the FreeStyle
Glucose Engine or FreeStyle Test Strip Port in the FreeStyle Meter (hereinafter
referred to as an “Improvement”), then, if ADC has the right to do so, ADC shall
make such Improvement available to Insulet, and such Improvement shall be deemed
to be part of the Technical Information for all purposes of this Agreement. ADC
shall undertake commercially reasonable efforts to secure the right to make
Improvements available to Insulet. For the avoidance of doubt, an Improvement
does not include any new features or new functionality which ADC may bring to
market for the FreeStyle Meter.   9.   Section 2.11(b) is amended and restated
in its entirety as follows:       (b) Insulet shall not, without prior
consultation with ADC, modify the Product with ADC DBGM.

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10.   Section 6.3(a) is amended and restated as follows:       (a) Insulet will
ensure that:       (i) by [***] the Product with ADC DBGM marketed and sold in
the United States, Canada and Israel will contain the ADC “FreeStyle” trademark
on the front bezel of the Remote Controller in a size and configuration as
agreed in writing between ADC and Insulet, such size and configuration at a
minimum requiring that the mark be clearly legible, prominent and visible, and
in no event [***]; and       (ii) prior to any commercialization in the
Expansion Territory, the Product with ADC DBGM marketed and sold in the
Expansion Territory will contain the ADC “FreeStyle” trademark on the Remote
Controller in such appearance and placement as finally determined by Insulet;
provided that (1) the size of the mark shall be such that it is clearly legible
and in no event [***], and (2) to the extent possible, [***].   11.  
Section 6.4(f) of Agreement is deleted in its entirety.   12.   New Section 6.7
is added as follows:       6.7 Notice of Commercialization in Expansion
Territories. Insulet will notify ADC in writing of its intent to begin marketing
and selling the Product with ADC DBGM in each country in the Expansion Territory
at least [***] prior to any such planned launch; provided that Insulet may
launch [***].   13.   New Section 6.8 is added as follows:       6.8 [***]
Meters for New Customers       (a) At Insulet’s request, and solely for
inclusion as a sample with Insulet’s OmniPod Insulin Management System system
starter kit for the Product with ADC DBGM for New Customers, ADC will supply
Insulet [***], up to the amount of the Kit Forecast (defined below), with kits
containing an ADC meter system and a vial of up to [***] test strips (the
“Kits”); provided, that Insulet shall provide ADC with a [***] rolling forecast
of its Kit requirements for New Customers, on a country by country basis, at
least [***] in advance of any month in which such Kits are required (the “Kit
Forecast”), which Kit Forecast shall be subject to ADC’s approval and acceptance
in its sole discretion. ADC may terminate its obligation to provide Kits at any
time upon [***] prior written notice to Insulet. ADC and Insulet agree that the
Letter Agreement, and for the avoidance of doubt the letters dated March 3, 2005
and September 19, 2005 referenced therein, are hereby terminated and of no
further force and effect.

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(b) Insulet represents, warrants and covenants as follows:
     i. Insulet will not provide any Kits other than to a New Customer (or to a
third party only for distribution to a New Customer) as part of an OmniPod
Insulin Management System starter kit for the Product with ADC DBGM; and
     ii. Insulet will provide Kits at no charge and will not bill any third
party for such Kits.
(c) Insulet and ADC each agree to comply with laws applicable to their
respective operations and the transactions contemplated hereby, including but
not limited to the Federal Social Security Act and applicable regulations
thereunder related to the Federal Medicare and Medicaid Programs.
(d) EXCEPT FOR THE LIMITED WARRANTIES PROVIDED IN KIT LABELING OR INSERTS, ADC
GRANTS NO OTHER WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED, BY STATUTE, IN ANY
COMMUNICATION WITH INSULET OR ITS CUSTOMERS OR END-USERS, OR OTHERWISE,
REGARDING THE KITS. ADC SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF FITNESS
FOR PARTICULAR PURPOSE, MERCHANTABILITY, AND NONINFRINGEMENT, ADC DOES NOT
WARRANT THAT OPERATION OF THE KITS WILL BE INTERRUPTED OR ERROR-FREE. ADC
NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME ANY OTHER LIABILITIES
ARISING OUT OF OR IN CONNECTION WITH THE SALE OR USE OF ANY KIT. ANY OTHER
REPRESENTATIONS OR WARRANTIES MADE BY ANY PERSON OR ENTITY, INCLUDING EMPLOYEES
OR REPRESENTATIVES OF ADC, THAT ARE INCONSISTENT HEREWITH WILL BE DISREGARDED
AND WILL NOT BE BINDING UPON ADC. ADC WILL HAVE NO LIABILITY FOR INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RELATING TO THE SALE OR USE OF ANY
OF THE KITS AND ADC’S LIABILITY THEREFOR WILL BE LIMITED TO [***].

14.   For the avoidance of doubt, discontinuance of the FreeStyle Test Strips,
or notice of discontinuance of the FreeStyle Test Strips pursuant to
Section 6.4(e)(iii), does not entitle either Party to terminate the Agreement;

15.   For the avoidance of doubt, Section 8.1 of the Agreement shall not apply
to sales of the Product in the Expansion Territory and Insulet may offer
versions of the Product with a DBGM other than ADC DBGM, or no DBGM, in the
Expansion Territory.

16.   For the avoidance of doubt, Section 9.3 of the Agreement shall apply [***]
and it is hereby agreed between ADC and Insulet that [***].

17.   New Section 9.4 is added as follows:

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     9.4 Customer Service Event Payments — Expansion Territory. For each
Expansion Territory Customer Service Event during the term, ADC will pay Insulet
on a calendar quarterly basis: [***].
For avoidance of doubt, Insulet will assign to each New Customer a unique
patient identification number (“PIN”) that will be used to identify such
customer in all reports submitted by Insulet. Insulet will (A) not change the
PIN for any such New Customer during the term of this Agreement, and (B) ensure
that in the event of an audit as provided in Section 10.2, such PIN will enable
ADC or its designated auditors to verify the information provided by Insulet to
ADC on the reports submitted pursuant to this Section 9.4. [***].

18.   New Section 9.5 is added as follows:

     9.5 Customer Service Event Payments (United States, Canada and Israel) Upon
Expiration of Initial Term. Commencing on the first day following expiration of
the Initial Term and continuing through the expiration of the term, for each
Customer Service Event in the United States, Canada and Israel (except for
Upgrade Customers), ADC will pay Insulet on a calendar quarterly basis: [***].
For avoidance of doubt, Insulet will assign to each New Customer a PIN that will
be used to identify such customer in all reports submitted by Insulet. Insulet
will (A) not change the PIN for any such New Customer during the term of this
Agreement, and (B) ensure that in the event of an audit as provided in
Section 10.3, such PIN will enable ADC or its designated auditors to verify the
information provided by Insulet to ADC on the reports submitted pursuant to this
Section 9.5. [***].

19.   For the avoidance of doubt, Section 10.1 shall apply only to audits of
[***].

20.   New Section 10.2 is added as follows:

10.2 Audit of Expansion Territory Customer Service Events. Insulet will maintain
a record system through which ADC can determine [***]. Insulet will make such
information available for inspection by ADC’s designated independent auditors
[***] during the term, and for [***] thereafter, on such dates as reasonably
agreed between the Parties but no later than [***] following ADC’s request. Such
information shall be made available during regular business hours. Except as set
forth below, ADC shall be solely responsible for the costs of any such audit. If
ADC’s designated independent auditors discover that Insulet has reported [***]
in excess of those calculated by the audit, Insulet will refund to ADC the
excess amounts paid by ADC within [***] of issuance of the audit report. If
ADC’s designated independent auditors discover that any end-user customer data
submitted by Insulet pursuant to Section 9.4 was inaccurate, Insulet will refund
to ADC all amounts paid by ADC for any such end-user customer for which
inaccurate data was provided within [***] of issuance of the audit report. If
ADC’s designated independent auditors discover that Insulet has reported [***]
in excess of [***] of those calculated by the audit, and/or that inaccurate data
was provided for more

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than [***] of end-user customers during the period for which reports were
audited, Insulet will, in addition to refunding to ADC the amounts set forth
above, reimburse ADC for the reasonable and documented costs of the audit
yielding such results within [***] of issuance of the audit report.

21.   New Section 10.3 is added as follows:

10.3 Audit of Customer Service Events (United States, Canada and Israel) After
Initial Term. Insulet will maintain a record system through which ADC can
determine [***]. Insulet will make such information available for inspection by
ADC’s designated independent auditors [***] during the term, and for [***]
thereafter, on such dates as reasonably agreed between the Parties but no later
than [***] following ADC’s request. Such information shall be made available
during regular business hours. Except as set forth below, ADC shall be solely
responsible for the costs of any such audit. If ADC’s designated independent
auditors discover that Insulet has reported [***] in excess of those calculated
by the audit, Insulet will refund to ADC the excess amounts paid by ADC, within
[***] of issuance of the audit report. If ADC’s designated independent auditors
discover that any end-user customer data submitted by Insulet pursuant to
Section 9.5 was inaccurate, Insulet will refund to ADC all amounts paid by ADC
for any such end-user customer for which inaccurate data was provided within
[***] of issuance of the audit report. If ADC’s designated independent auditors
discover that Insulet has reported [***] in excess of [***] of those calculated
by the audit, and/or that inaccurate data was provided for more than [***] of
end-user customers during the period for which reports were audited, Insulet
will, in addition to refunding to ADC the amounts set forth above, reimburse ADC
for the reasonable and documented costs of the audit yielding such results
within [***] of issuance of the audit report.

22.   Except as specifically modified or amended hereby, the Agreement shall
remain in full force and effect, and as so modified or amended, is hereby
approved. No provision of this Amendment may be modified or amended except
expressly in a writing signed by both parties.

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IN WITNESS WHEREOF, the parties have caused this Amendment to be signed by a
duly authorized representative effective as of the date set forth above.

                     
 
  Insulet Corporation           Abbott Diabetes Care Inc.    
 
                   
By:
  /s/ Duane DeSisto
 
Name: Duane DeSisto       By:   /s/ Robert Ford
 
Name: Robert Ford    
 
  Title: CEO           Title: Vice President    

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