CONFIDENTIAL
Exhibit 10.1
***Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [***]. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
AMENDMENT NO. 1 TO DEVELOPMENT AND LICENSE AGREEMENT
               This Amendment No. 1 (the “Amendment”) dated March 3, 2008
(“Amendment 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
(the “Agreement”). Capitalized terms used herein but not otherwise defined shall
have the meanings ascribed to them in the Agreement.
               WHEREAS, ADC and Insulet desire to amend the Agreement.
               NOW, THEREFORE, in consideration of the premises and mutual
covenants contained in this Amendment and in the Agreement, ADC and Insulet
hereby agree as follows:
     1.      The definitions set forth in Article I are amended as follows:

  1.1   The definition of Affiliate at Section 1.1 is amended and restated as
follows:         “Affiliate” means any corporation, company, partnership, joint
venture and/or firm which controls, is controlled by or is under common control
with a Party. For purposes of this Section 1.1, “control” shall mean (a) in the
case of corporate entities, direct or indirect ownership of at least fifty
percent (50%) of the stock or shares entitled to vote for the election of
directors; and (b) in the case of non-corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the equity interest with the power
to direct the management and policies of such non-corporate entities; provided
that for purposes of this Agreement, TAP Pharmaceutical Products, Inc. and its
subsidiaries shall not be considered an “Affiliate” of ADC. Unless agreed to in
writing by the Parties, in no event shall a Competitor be an Affiliate.     1.2
  The definition of Territory at Section 1.25 is amended and restated as
follows:         “Territory” means the United States of America and Israel.    
1.3   The definition of Therasense Patents at Section 1.30 is amended and
restated as follows:

 

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      “TheraSense Patents” means the patents and patent applications set forth
on Schedule A hereto, all continuations and divisions of such applications, all
patents issuing from such applications, divisions and continuations, and any
reissues, reexaminations and extensions of any such patents, and all foreign
counterparts of such patents and patent applications in the Territory.     1.4  
The following new definition is hereby added at Section 1.32:         “ADC” or
“TheraSense” means Abbott Diabetes Care Inc., a Delaware corporation, formerly
known as TheraSense, Inc.     1.5   The following new definition is hereby added
at Section 1.33:         “Customer Service Event” means [***].     1.6   The
following new definition is hereby added at Section 1.34:         “Discrete
Blood Glucose Monitoring System” or “DBGM” means a blood glucose measurement
device intended for single use diagnostic tests of blood glucose levels in
humans. For the avoidance of doubt, DBGM does not include any form of continuous
glucose monitoring system.     1.7   The following new definition is hereby
added at Section 1.35:         [***].     1.8   The following new definition is
hereby added at Section 1.36:         [***].

     2.      Section 2.11(a) is amended and restated in its entirety as follows:
          (a)      If ADC makes any modification, enhancement or upgrade to 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 rights necessary to make Improvements available to Insulet.
     3.      Section 7.1 is amended and restated in its entirety as follows:
          7.1 Term.      This Agreement shall remain in effect for a period of
five years from the Amendment Effective Date or until terminated in accordance
with the provisions of this Article VII (the “Initial Term”). At the end of the
Initial Term, this Agreement shall automatically renew for subsequent one-year
terms unless written notice of termination is given by either Party to the other
Party at least [***] prior to the Agreement’s then-current expiration date.

 

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     4.      New Section 7.7 is added as follows:
          7.7      Termination by Insulet. In the event that:
          (a) All or substantially all of the business of Insulet, and/or the
Insulet infusion business line to which this Agreement relates, is acquired by
any party other than ADC by merger, sale of assets or otherwise, then Insulet or
the acquiring party shall have the right to terminate this Amendment, except for
Paragraphs 1, 3, 6 and 7 of this Amendment, upon written notice to ADC within
[***] of such acquisition.
          (b) ADC’s managed care access falls below the Managed Care Threshold,
Insulet shall have the right to terminate this Amendment, except for Paragraphs
1, 3, 6 and 7 of this Amendment, upon [***] written notice to ADC. Managed Care
Threshold will be measured by ADC at Insulet’s request, but not more frequently
than [***]. Managed Care Threshold is determined as follows. [***].
For the avoidance of doubt, in the event of termination of this Amendment, ADC
will have no further obligations under Section 9.3.
     5.      Section 8.1 is amended and restated as follows:
          8.1      Competing Systems. Commencing on the Amendment Effective Date
and continuing through the Initial Term, Insulet agrees that it shall not, in
the Territory, market, promote, offer for sale, sell or distribute a Product,
including without limitation the OmniPod infusion pump system, with any DBGM
other than an ADC DBGM.
     6.       Section 8.7 is amended and restated as follows:
          8.7      Notices. Any notice or other communication in connection with
this Agreement must be in writing and by mail, certified, return receipt
requested, by electronic facsimile transmission or courier service, and shall be
effective when delivered to the addressee at the address listed below or such
other address as the addressee shall have specified in a notice actually
received by the address or.
If to ADC:
Abbott Diabetes Care, Inc.
1420 Harbor Bay Parkway, Suite 290
Alameda, CA 94502
Attention: Chief Executive Officer
If to Insulet:
Insulet Corporation
9 Oak Park Drive
Bedford, MA 01730
Attention: Chief Executive Officer

 

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     7.      Section 8.15(b) is amended and restated as follows:
8.15(b) Subject to Section 8.15(a), if the Parties are unable to resolve a
Dispute, the Dispute shall be settled by the alternative dispute resolution
provisions set forth in Schedule C hereto.
     8.      New Article IX is added as follows:
          9.1      One Time Exclusivity Fee. In consideration of the exclusivity
provided at Section 8.1, upon execution of this Amendment, ADC will make a
one-time non-refundable agreement fee payment to Insulet in the amount of [***].
          9.2      Customer Service Training. During the period beginning upon
the Amendment Effective Date and continuing through July 1, 2008, ADC will
provide refresher training to Insulet employees and agents necessary for them to
perform the Customer Service Event support as described in Exhibit B. Such
training will include content agreed jointly by the parties, and will take place
at a location to be agreed jointly by the parties, with each party paying their
own expenses.
          9.3      Customer Service Event Payment. Commencing on July 1, 2008
and continuing through the Initial Term, ADC will pay Insulet, on a calendar
quarterly basis, [***].
     9.      New Article X is added as follows:
          10.1     Audit. Insulet will maintain a record system through which
ADC can determine [***]. Upon ADC’s written request, but no more than [***] per
year during the period in which Insulet is required to maintain records of
[***], Insulet will make such information available for inspection by ADC
designated independent auditors upon [***] advance written notice and during
regular business hours. 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 Insulet
has reported [***] that result in fees paid to Insulet that exceed [***] of the
fees that would have resulted from [***], then Insulet shall also refund ADC’s
reasonable and documented costs of such audit within [***] of issuance of the
audit report.
     10.     Section 5.1 is amended and restated as follows:
          5.1      Patent License. TheraSense hereby grants to Insulet and its
Affiliates a non-exclusive, fully paid, non-transferable (except as otherwise
provided in Section 8.3), non-sublicensable license in the Territory under the
TheraSense Patents for the sole and exclusive purpose of manufacturing, having
manufactured, using, having used, importing, having imported, offering for sale,
selling and having sold the Product in the Territory in conjunction with the
Test Strips. The license granted pursuant to this Section 5.1 shall continue in
effect until the earlier of the termination or expiration of this Agreement (and
thereafter as provided in Article VII) or until the expiration of the last
patent licensed to

 

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Insulet hereunder. TheraSense shall retain all right, title and interest to
TheraSense Patents, subject to the limited license granted to Insulet hereunder.
     11.     New Article XI is added as follows:
          11.1     ADC agrees that Insulet may use or connect a Remote
Controller which includes an ADC DGBM to a continuous glucose monitoring system
not developed or manufactured by ADC; provided, however, that this agreement by
ADC does not and shall not include the granting of any license, express or
implied, to any ADC Technology (formerly referred to as TheraSense Technology)
to Insulet or to any third parties except as expressly set forth in Article V.
For the avoidance of doubt, this agreement is not a license to any ADC
intellectual property rights claiming, or directed to, a continuous glucose
monitoring system or its method of use.

  12.   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       By:    /s/ Robert B. Hance
 
               
 
  Name: Duane DeSisto           Name: Robert B. Hance    
 
  Title: CEO           Title: President    

 

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SCHEDULE B
Customer Service Event
[***]

 

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SCHEDULE C
Alternative Dispute Resolution
          The parties recognize that from time to time a dispute may arise
relating to either party’s rights or obligations under this Agreement. The
parties agree that any such dispute shall be resolved by the Alternative Dispute
Resolution (“ADR”) provisions set forth in this Exhibit, the result of which
shall be binding upon the parties, except the parties further agree that either
party can seek preliminary relief in a court of competent jurisdiction if the
party believes in good faith that irreparable harm will occur.
          To begin the ADR process, a party first must send written notice of
the dispute to the other party [***]. If the matter has not been resolved within
[***] of the notice of dispute, [***], either party may initiate an ADR
proceeding as provided herein. The parties shall have the right to be
represented by counsel in such a proceeding.
          1.      To begin an ADR proceeding, a party shall provide written
notice to the other party of the issues to be resolved by ADR. [***], the other
party may, by written notice to the party initiating the ADR, add additional
issues to be resolved within the same ADR.
          2.      Within [***], the parties shall select a mutually acceptable
independent, impartial and conflicts-free neutral to preside in the resolution
of any disputes in this ADR proceeding. If the parties are unable to agree on a
mutually acceptable neutral within such period, each party will select one
independent, impartial and conflicts-free neutral and those two neutrals will
select a third independent, impartial and conflicts-free neutral within [***]
thereafter. None of the neutrals selected may be [***].
          3.      [***] after selection, the neutral(s) shall hold a hearing to
resolve each of the issues identified by the parties. The ADR proceeding shall
take place [***].
          4.      At least [***], each party shall submit the following to the
other party and the neutral(s):
                    [***].
                    The arbitrator shall determine what discovery will be
permitted, consistent with the goal of limiting the cost and time which the
Parties must expend for discovery; provided the arbitrator shall permit such
discovery as it deems necessary to permit an equitable resolution of the
Dispute.
          5.      The hearing shall be conducted [***] and shall be governed by
the following rules:
                    [***].
          6.      [***].

 

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          7.      The neutral(s) shall rule on each disputed issue within [***]
following completion of the hearing. [***].
          8.      The neutral(s) shall be paid a reasonable fee plus expenses.
These fees and expenses, along with the reasonable legal fees and expenses of
the prevailing party (including all expert witness fees and expenses), the fees
and expenses of a court reporter, and any expenses for a hearing room, shall be
paid as follows:
                    [***].
          9.      The rulings of the neutral(s) and the allocation of fees and
expenses shall be binding, non-reviewable, and non-appealable, and may be
entered as a final judgment in any court having jurisdiction.
          10.     Except as provided in paragraph 9 or as required by law, the
existence of the dispute, any settlement negotiations, the ADR hearing, any
submissions (including exhibits, testimony, proposed rulings, and briefs), and
the rulings shall be deemed Confidential Information. The neutral(s) shall have
the authority to impose sanctions for unauthorized disclosure of Confidential
Information.
          11.     All ADR hearings shall be conducted in the English language.