LICENSE AGREEMENT

This License Agreement (the "Agreement") effective as of  February 9, 1998 (the
"Effective Date") is entered into by  and between ArthroCare Corporation, on
its own behalf and on  behalf of its Affiliates ("ArthroCare"), a Delaware 
corporation having an address at 595 North Pastoria Avenue,  Sunnyvale,
California 94086, and Boston Scientific  Corporation, on its own behalf and on
behalf of its  Affiliates ("BSC"), a Delaware corporation having an address  at
One Boston Scientific Place, Natick, Massachusetts 01760- 1537,

                                   BACKGROUND
A.      ArthroCare owns certain Patent Rights (as defined in  Article 1)
relating to radio frequency ("RF") energy and  Revascularization;

B.      BSC is a  worldwide leader in the sale of medical  devices to the
interventional cardiology market through its  subsidiary SCIMED Life Systems,
Inc., and in the sale of  textile vascular grafts to the cardio-thoracic
surgery  market through its subsidiary Meadox Medicals, Inc.;

C.      BSC desires to obtain a license under the Patent  Rights in order to
commercialize RF based Revascularization  (as such terms are defined  in
Article 1) products, and  ArthroCare desires to grant such a license to BSC,
all on  the terms and conditions set forth herein; and

D.      On even date herewith, the parties are entering into a  Development and
Supply Agreement pursuant to which  ArthroCare shall be BSC's exclusive third
party contract  manufacturer for certain products and/or components of such 
products (the "Development and Supply Agreement").

NOW, THEREFORE, in consideration of the promises and the  mutual covenants
contained herein, the parties agree as  follows:

                                   ARTICLE 1
                                  DEFINITIONS

1.1     "Affiliate" means any corporation or other entity  which is directly or
indirectly controlling, controlled by  or under the common control with a party
hereto.  For the  purpose of this Agreement, "control" shall mean the direct 
or indirect ownership of at least 50% of the outstanding  shares or other
voting rights of the subject entity to elect  directors, or if not meeting the
preceding definition, any  entity owned or controlled by or owning or
controlling at  the maximum control or ownership right permitted in the 
country where such entity exists.

1.2     "Confidential Information" shall mean any: (i)  information or material
in tangible form disclosed hereunder  that is marked as "Confidential" at the
time it is delivered  to the receiving party; or (ii)  information disclosed 
orally hereunder which is identified as confidential or  proprietary when
disclosed and such disclosure of  confidential information is confirmed in
writing within 30  days after disclosure by the disclosing party.

1.3     "Controller(s)" shall mean an RF power supply, which  is specifically
designed for use in Revascularization  procedures.

1.4     "Dominating Patent" shall mean an unexpired patent  which is owned by a
third party covering Licensed Products  made or sold by BSC or its sublicensee
under circumstances  such that, in BSC's reasonable opinion, it would be most 
commercially reasonable for BSC to obtain a license under  such patent in order
to make, use or commercialize a  Licensed Product under this Agreement.

1.5     "Field" shall mean the use of RF energy in a procedure  that is
intended to promote Revascularization of the heart  or other muscle tissue.  

1.6     "Licensed Product" will mean any product within the  scope of a Valid
Claim as determined on the date of sale,  any product sold for use in
practicing a process within the  scope of a Valid Claim as determined on the
date of sale or  any product produced using any method within the scope of a 
Valid Claim as determined on the date of sale  in each case,  in the country of
manufacture or sale.

1.7     "Net Sales" shall mean revenues on an accrual basis,  in accordance
with U.S. generally accepted accounting  principles, as follows:  the invoice
price of Licensed  Products sold by BSC or its sublicensees to third parties 
(including sales made in connection with clinical trials),  less, to the extent
included in such invoice price the total  of:  (a) ordinary and customary trade
discounts actually  allowed; (b) credits, rebates and returns (including, but 
not limited to, wholesaler and retailer returns); (c)  freight, postage,
insurance and duties paid for and  separately identified on the invoice or
other documentation  maintained in the ordinary course of business, and (d) 
excise taxes, other consumption taxes, customs duties and  compulsory payments
to governmental authorities actually  paid and separately identified on the
invoice or other  documentation maintained in the ordinary course of business. 
 Net Sales shall also include the fair market value of all  other consideration
received by BSC in respect of Licensed  Products, whether such consideration is
in cash, payment in  kind, exchange or another form, provided, however, that if
such consideration would constitute royalty payments under a  sublicense from
BSC, such royalty payments to BSC shall not  be included in Net Sales, but
shall instead be subject to  sublicense payments under Section 3.5 of this
Agreement.   

1.8     "Patent Rights" shall mean all patents and patent  applications in the
Field owned by or licensed to  ArthroCare, including the patent applications
and patents  listed on Exhibit A hereto; all priority applications, 
divisionals, continuations, continuations-in-part, and  substitutions thereof;
all patent applications and patents  relating to improvements thereof; all
foreign patent  applications corresponding to the preceding applications;  and
all U.S. and foreign patents issuing on any of the  preceding applications,
including extensions, reissues, and  re-examinations. 

1.9     [*****]

1.10    "RF" shall mean radiofrequency.

1.11    "Trademark Rights" shall mean all registered  trademarks, trademark
applications, common law trademarks,  domestic or foreign, to the marks listed
in Exhibit B, and  all marks similar thereto.

1.12    "Valid Claim" shall mean a claim of an issued and  unexpired patent
included within the Patent Rights which has  not been held invalid or
unenforceable in a final decision  of a court or government agency of competent
jurisdiction  and which has not been disclaimed or admitted to be invalid  or
unenforceable through reissue or otherwise; provided,  however, that if the
holding of such court or agency is  later reversed by a court or agency with
overriding  authority, the claim shall be reinstated as a Valid Claim  with
respect to Net Sales made after the date of such  reversal.

                                   ARTICLE 2
                                    LICENSE

2.1     Grant.  Subject to the terms and conditions of this  Agreement,
ArthroCare and its Affiliates hereby grant to BSC  and its Affiliates an
exclusive, non-transferable, worldwide  license under the Patent Rights, with
the right to grant and  authorize sublicenses, to make, have made, import, have
imported, use, offer for sale and sell Licensed Products in  the Field. 
ArthroCare hereby grants to BSC and its  Affiliates an exclusive,
non-transferable, worldwide license  under the Trademark Rights, with the right
to grant  sublicenses and to use marks within the Trademark Rights in 
connection with the sale of Licensed Products in the Field.

2.2     No Implied Rights.  Only the license granted pursuant  to the express
terms of this Agreement shall be of any legal  force or effect.  No other
license rights shall be granted  or created by implication, estoppel or
otherwise.

                                   ARTICLE 3
                                 CONSIDERATION

3.1     License Fee.  In partial consideration for the license  granted herein,
BSC shall pay ArthroCare a license fee of  [*****] within five business days
after the Effective Date.

3.2     Milestone Payments.  Within 30 days following the  first achievement by
BSC of each of the following  milestones, BSC shall make the applicable
payments to  ArthroCare as follows:

        Milestone                                      Payment
      -----------                                    ----------
        [*****]                                        [*****]


Each of such payments are due only upon the first  achievement of the
respective milestone.  Each of such  payments shall be deemed prepaid
royalties, which shall be  applied against royalties due from BSC as described
in  Section 4.2.

3.3     Royalties.  

A.      As additional consideration of the rights and licenses  granted by
ArthroCare to BSC herein, BSC shall pay to  ArthroCare the following running
royalties on Net Sales of  Licensed Products sold by BSC or any of its
Affiliates in  the countries where a Valid Claim covering a Licensed  Product
is established, subject to clauses (i) through (v)  below:

        Cumulative Royalties                           Royalty Rate
      ----------------------                         ---------------
        [*****]                                        [*****]

        (i)     If and when ArthroCare establishes and for so  long as
ArthroCare maintains a Valid Claim  covering a Licensed Product in the United
States  , BSC shall pay royalties on Net Sales of  Licensed Products sold in
the United States.

        (ii)    If and when ArthroCare establishes and for  as long as
ArthroCare maintains a Valid Claim  covering a Licensed Product in Europe
[*****], BSC shall pay royalties on Net Sales of  Licensed Products sold in
Europe.

        (iii)   If and when ArthroCare establishes and for  as long as
ArthroCare maintains a Valid Claim  covering a Licensed Product in Japan, BSC
shall  pay royalties on Net Sales of Licensed Products  sold in Japan.

        (iv)    If and when ArthroCare establishes and for  as long as
ArthroCare maintains a Valid Claim  covering a Licensed Product in each of the 
United States, Japan and Europe [*****] , BSC shall pay royalties on Net Sales
of  Licensed Products sold anywhere in the world.

        (v)     If ArthroCare fails to establish or if  ArthroCare fails to
maintain a Valid Claim  covering a Licensed Product in at least one of  the
United States, Japan and Europe [*****] , BSC shall not pay any royalties.

B.      BSC will have no obligation to pay any royalties on  the Net Sales of
any Controllers with respect to any  Controller that is:  (i) manufactured by
ArthroCare and sold  to BSC or any of its Affiliates under the Development and 
Supply Agreement; or (ii) manufactured by BSC or any of its  Affiliates and
with respect to which a payment has been made  to ArthroCare pursuant to
Section 2.1.C. of the Development  and Supply Agreement.

3.4     Minimum Annual Royalty.  In addition, commencing on  the  [*****] and
annually thereafter, BSC will pay  an annual minimum royalty payment of
[*****].  Such first  annual minimum royalty payment shall be due within 60
days  of the end of the calendar year [*****] and prorated based on the  actual
number of days from the date of  [*****]l to  the end of such calendar year. 
Thereafter, annual minimum  royalty payments shall be due within 60 days of the
end of  each calendar year following  [*****].  Prior to the earlier date
referenced in the last sentence of  this Section 3.4, BSC may elect not to make
any minimum  annual royalty payment, in which case, after written notice  to
BSC and an opportunity to pay the minimum annual royalty  within 30 days of
such notice, ArthroCare shall have the  right to purchase from BSC, at any time
prior to the  termination of this Agreement, for [*****], a worldwide non-
exclusive license under the Patent Rights, with the right to  grant and
authorize sublicenses, to make, have made, import,  have imported, use, offer
for sale and sell Licensed  Products in the Field, but all royalties which have
been  prepaid prior to any such purchase shall continue to be  applied against
royalties due thereafter as described in  Section 4.2.  No further annual
minimum royalties shall be  due upon the earlier to occur of the date that: 
(i) the  last Valid Claim in the United States, Europe [*****] [*****] and
Japan  covering a Licensed Product expires; or (ii) until BSC's  sales of
Licensed Products reach [*****] in any trailing 12- month period.

3.5     Sublicense Payments.  In addition to the payments made  under  Sections
3.1, 3.2, 3.3 and 3.4 above, BSC shall pay  to ArthroCare [*****] of royalties,
license fees, milestone  fees or other compensation received by BSC or its
Affiliates from  sublicensees to the Patent Rights within the Field.  

3.6     Royalty Term.  Royalties due under this Article 3  shall be payable
until the last to expire of a Valid Claim  in the United States, Europe [*****]
 or Japan covering a Licensed Product. 

                                   ARTICLE 4
                                   PAYMENTS

4.1     Payments; Currency.  All payments due hereunder shall  be paid by wire
transfer in United States dollars in  immediately available funds to an account
designated by  ArthroCare.  If any currency conversion shall be required in 
connection with the payment of any royalties hereunder, such  conversion shall
be made by using BSC's financial accounting  practices applicable to sales by
its foreign Affiliates  which are then in effect and used by BSC for financial 
reporting purposes.  Royalty payments due hereunder shall be  payable annually
within 60 days of the end of each calendar  year following [*****] as
referenced in  Section 3.4 of this Agreement.

4.2     Prepaid Royalties.  The following payments shall be  considered
prepayments of royalties due from BSC under  Section 3.3.A and 3.5: (i) all
payments made by BSC under  Section 3.2; and (ii) that portion of any payment
made by  BSC under Section 3.4 which exceeds the actual amount of  royalties
due for the applicable year.  Such prepaid  royalties may be applied by BSC
against any royalties due  from BSC; provided, however, that the first [*****]
in  royalties due from BSC during each year that the minimum  royalty payments
are due as described in Section 3.4 shall  be paid by BSC by wire transfer and
only those royalties due  in excess of such [*****] shall be offset by the
prepaid  royalties.

                                   ARTICLE 5
                              REPORTS AND RECORDS

5.1     Royalty Reports and Payments.  After the first  commercial sale of a
Licensed Product on which royalties are  required hereunder, BSC shall make
quarterly written reports  to ArthroCare within 60 days after the end of each
calendar  quarter, stating in each such report, by region, the number, 
description, and aggregate Net Sales of each Licensed  Product sold during the
calendar quarter.  ArthroCare shall  treat all such reports as Confidential
Information of BSC.   Concurrently with the making of such reports, BSC shall
pay  ArthroCare the royalties specified in Article 3.

5.2     Records; Inspection.  BSC shall keep complete, true  and accurate books
of account and records for the purpose of  determining the royalty amounts
payable under this  Agreement.  Such books and records shall be kept for at 
least five years following the end of the calendar quarter  to which they
pertain and will be open for inspection during  such period by a representative
of ArthroCare for the  purpose of verifying the royalty reports and payments. 
Such  inspections shall be made during ordinary business hours.   The
representative may be obliged to execute a reasonable  confidentiality
agreement prior to commencing any such  inspection.  Inspections conducted
under this Section 5.2  shall be at the expense of ArthroCare, unless an 
underpayment exceeding  [*****] of the amount stated for any  period covered by
the inspection is identified, in which  case all costs relating to the
inspection and any unpaid  amounts will be paid by BSC, with interest from the
date  such amounts were due at  [*****].

                                   ARTICLE 6
                                 DUE DILIGENCE

6.1     Obligation to Commercialize.  BSC shall use reasonable  efforts to
develop at least one commercially viable Licensed  Product, in a manner
consistent with other BSC development  programs, and thereafter to:  (i)
maintain and obtain such  approvals as may be necessary for the sales of at
least one  Licensed Product in commercially significant countries; and  (ii)
use reasonable efforts to produce and sell reasonable  quantities of at least
one Licensed Product and maintain and  obtain such approvals as may be
necessary for the sale of at  least one Licensed Product in commercially
significant  countries.  [*****] In such cases, ArthroCare will not be 
required to refund any license fees, milestone payments or  royalties under
Article 3. 

6.2     Reports to ArthroCare.  During the term of this  Agreement, BSC shall
keep ArthroCare fully informed of its  activities subject to this Agreement,
including without  limitation, the achievement of the milestones set forth in 
Section 6.1 and the commercialization of the Licensed  Products.  On or around
January 31 of each year following  the Effective Date of this Agreement, BSC
shall either: (a)  provide ArthroCare with a written report detailing such 
events and activities; or (b) meet with ArthroCare and  orally report such
events and activities.  When the  registration package requesting approval for
commercial sale  of the Licensed Product is first filed in each of the U.S., 
the European Union and Japan, and in each case when approval  is received
therefor, BSC will promptly notify ArthroCare.   BSC shall notify ArthroCare
within 30 days after the first  commercial sale of each Licensed Product.

                                   ARTICLE 7
                                CONFIDENTIALITY

7.1     Confidential Information.  Except as expressly  provided herein, the
parties agree that, for the term of  this Agreement and for  [*****]
thereafter, the receiving  party shall keep completely confidential and shall
not  publish or otherwise disclose and shall not use for any  purpose except
for the purposes contemplated by this  Agreement any Confidential Information
furnished to it by  the disclosing party hereto, except that to the extent that
it  can be established by the receiving party by written proof  that such
Confidential Information:

        (i)     was already known to the receiving party,  other than under an
obligation of  confidentiality, at the time of disclosure;

        (ii)    was available to the public or otherwise  part of the public
domain at the time of its  disclosure to the receiving party;

        (iii)   became available to the public or otherwise  part of the public
domain after its disclosure  and other than through any act or omission of  the
receiving party in breach of this Agreement; 

        (iv)    was subsequently lawfully disclosed to the  receiving party by
a person other than a party  hereto; or

        (v)     was independently developed by a person  having no knowledge of
or access to any of the  other party's Confidential Information.

7.2     Permitted Use and Disclosures.  Each party hereto may  use or disclose
information disclosed to it by the other  party to the extent such use or
disclosure is reasonably  necessary in complying with applicable law or
governmental  regulations, conducting clinical trials, or exercising its 
rights hereunder to develop or commercialize Licensed  Products, provided that
if a party is required to make any  such disclosure of another party's
confidential information,  other than pursuant to a confidentiality agreement,
it will  give reasonable advance notice to the latter party of such  disclosure
and, will use its best efforts to secure  confidential treatment of such
information prior to its  disclosure (whether through protective orders or
otherwise).

7.3     Confidential Terms.  Except as expressly provided  herein, each party
agrees not to disclose any terms of this  Agreement to any third party without
the consent of the  other party; provided, disclosures may be made as required 
by securities or other applicable laws, or to Affiliates, or  to a party's
accountants, attorneys and other professional  advisors provided that such
accountants, attorneys and other  professional advisors are bound to retain the
terms of this  Agreement as confidential.  Disclosure to prospective  corporate
partners or Affiliates is prohibited absent  written consent from the
non-disclosing party.  Neither  party shall issue a press release or other
public  announcement concerning this Agreement, the transactions  contemplated
herein or the relationship between BSC and  ArthroCare without the prior
written consent of an  authorized representative of the other party.

7.4     Other Prohibited Uses.  Other than as contemplated by  this Agreement
or the Development and Supply Agreement,  neither party shall appropriate or
use the other party's  Confidential Information in its own manufacture of
products  or for any other purpose.  Other than as contemplated by  this
Agreement or the Development and Supply Agreement,  neither party shall, by
virtue of either this Agreement or  the Development and Supply Agreement,
obtain any title to,  or any interest or license in, any of the other party's 
Confidential Information.

                                   ARTICLE 8
                             INTELLECTUAL PROPERTY

8.1     Enforcement.  If either party hereto becomes aware  that any Patent
Rights in the Field are being or have been  infringed by any third party, such
party shall promptly  notify the other party hereto in writing describing the 
facts relating thereto in reasonable detail.  BSC shall have  the initial
right, but not the obligation, to institute,  prosecute and control any action,
suit or proceeding with  respect to such infringement, including any
declaratory  judgment action (each an "Action"), at its expense, using  counsel
of its choice.  In any such event, ArthroCare shall  cooperate reasonably with
BSC, at BSC's expense; including  without limitation, by joining such Action as
a party if  requested by BSC. Any amounts recovered by BSC in such  Action
shall be used first to reimburse ArthroCare and BSC  for the expenses and fees
incurred in connection with such  Action and any remainder shall be subject to
Sublicense  Payments pursuant to Section 3.5.   In the event BSC fails  to
initiate or defend any Action involving the Patent Rights  within four months
of receiving notice of any infringement,  ArthroCare shall have the right, but
not the obligation, to  initiate and control such an Action, at its expense 
provided, however, that the four month period shall be  extended up to four
additional months if BSC elects to  initiate negotiations with the infringing
party.  In any  such event, BSC shall cooperate reasonably with ArthroCare  in
connection with any such Action, at ArthroCare's expense;  including without
limitation, by joining such Action as a  party if requested by ArthroCare. 

8.2     Infringement Claims.  If the practice by BSC of the  license granted
herein results in any allegation or claim of  infringement of an intellectual
property right of any third  party against BSC, BSC shall have the exclusive
right to  defend any such claim, suit or proceeding, at its own  expense, by
counsel of its own choice and shall have the  sole right and authority to
settle any such suit; provided,  however, ArthroCare shall cooperate with BSC,
at BSC's  reasonable request and expense, in connection with the  defense of
such claim.

8.3     [*****]

8.4     Prosecution of Patent Applications.     BSC will have the  right to
access, obtain copies, review and comment on the  prosecution of any patent
applications directly related to  the Patent Rights within the Field. 
ArthroCare shall  cooperate with BSC's patent counsel and proactively provide 
copies of all papers relating to patent applications  directly related to the
Patent Rights within the Field.   ArthroCare will follow the reasonable advice
of BSC's patent  counsel regarding such prosecution, and BSC will have the 
right to control patent prosecution if patent applications   primarily related
to the Field within the Patent Rights are  jeopardized in any country.  In the
event that BSC elects to  control the patent prosecution of any patent
applications  under the Patent Rights, BSC will pay for all costs related  to
such patent prosecution.  ArthroCare shall not abandon,  disclaim, or otherwise
jeopardize any Patent Rights  primarily related to the Field.  ArthroCare shall
establish  and maintain Patent Rights related to the Field in all  commercially
significant countries, including, but not  limited to the United States,
Germany, France and Japan.

8.5     Other Intellectual Property.

A.      ArthroCare acknowledges and agrees that BSC has the  sole and exclusive
rights to use all trademarks, service  marks, trade names, patents, copyrights
and trade secrets  owned by, registered in the name of, licensed to or used in 
BSC's business (collectively, "BSC's Intellectual  Property"), other than as
expressly contemplated by this  Agreement or the Development and Supply
Agreement.   ArthroCare also acknowledges and agrees that it does not now  have
and shall not gain any right, title, or interest in  BSC's Intellectual
Property, other than as expressly  contemplated by this Agreement or the
Development and Supply  Agreement.  Any use by ArthroCare of BSC's Intellectual
Property shall be in accordance with this Agreement and the  Development and
Supply Agreement.

B.      BSC acknowledges and agrees that ArthroCare has the  sole and exclusive
rights to use all trademarks, service  marks, trade names, patents, copyrights
and trade secrets  owned by, registered in the name of, licensed to or used in 
ArthroCare's business (collectively, "ArthroCare's  Intellectual Property"),
other than as expressly  contemplated by this Agreement or the Development and
Supply  Agreement.  BSC also acknowledges and agrees that it does  not now have
and shall not gain any right, title, or  interest in ArthroCare's Intellectual
Property, other than  as expressly contemplated by this Agreement or the 
Development and Supply Agreement.  Any use by BSC of  ArthroCare's Intellectual
Property shall be in accordance  with this Agreement and the Development and
Supply  Agreement.

8.6  Inventions.

A.      All ideas, discoveries and inventions, whether  patentable or not,
related to the Field which are conceived  by either BSC or ArthroCare after the
Effective Date and are  based on collaborative work between BSC and ArthroCare
shall  be jointly owned by BSC and ArthroCare and subject to the  exclusive
license provided in Section 2.1 of this Agreement.

B.      All ideas, discoveries and inventions, whether  patentable or not,
related to the Field which are conceived  by ArthroCare after the Effective
Date and are not based on  collaborative work between BSC and ArthroCare shall
be  exclusively owned by ArthroCare and subject to the exclusive  license
provided in Section 2.1 of this Agreement.

C.      All ideas, discoveries and inventions, whether  patentable or not,
related to the Field which are conceived  by BSC after the Effective Date and
are not based on  collaborative work between BSC and ArthroCare shall be 
exclusively owned by BSC.

                                   ARTICLE 9
                        REPRESENTATIONS AND WARRANTIES

9.1     Representations and Warranties.  ArthroCare represents  and warrants,
to the best of its knowledge, that:  (i) it is  the sole and exclusive owner of
all right, title and  interest in the Patent Rights and the Trademark Rights;
(ii)  it has the right to grant the rights and licenses granted  herein; (iii)
it has not previously granted any right,  license or interest in and to the
Patent Rights or the  Trademark Rights inconsistent with the license granted to
BSC herein; (iv) as of the Effective Date, there are no  threatened or pending
actions, suits, claims or proceedings  against ArthroCare relating to the
Patent Rights or the  Trademark Rights; (v) it has disclosed to BSC's patent 
counsel all material matters relating to the prosecution and  maintenance of
the Patent Rights prior to the Effective  Date; (vi) the subject matter
disclosed in U.S. serial no.  562,331 is pending in a U.S. patent application
claiming  priority to U.S. serial no. 562,331; (vii) [*****]; (viii)  the
Patent Rights and the Trademark Rights remain  enforceable or pending in all
countries as indicated in  Exhibit A for the Patent Rights and Exhibit B for
the  Trademark Rights; (ix) its execution and delivery of this  Agreement will
not result in a violation of or default under  the policies of ArthroCare's
employees' past employers or  under the terms of any employment, consulting, 
nondisclosure, confidentiality, research or other agreement  to which
ArthroCare or its employees are or may become a  party; (x) it independently
developed the subject matter  described and claimed in the Patent Rights, which
subject  matter was not copied from a third party; and (xi) to the  best of its
knowledge and belief, there is no other person,  firm or corporation claiming
to have, through ArthroCare,  any title or interest in or to any of the Patents
Rights or  the Trademark Rights.

9.2     Representations and Warranties of BSC.  BSC hereby  represents and
warrants to ArthroCare and its Affiliates  that:  (a) BSC is a corporation duly
organized, validly  existing and in good standing under the laws of the state
of  Delaware;  (b) it has full power and authority required to  enter into,
execute and deliver this Agreement and to carry  out its obligations under this
Agreement and to perform the  transactions contemplated therein; (c) this
Agreement has  been duly executed and delivered by, is the valid and  binding
obligation of and is enforceable against it in  accordance with its terms; (d)
the execution, delivery and  performance of this Agreement by it does not
violate any  other agreement to which it is a party or by which it is  bound,
or any applicable law to which it is bound or  subject; and (e) it has the
unrestricted right to disclose  any information it submits to ArthroCare, free
of all claims  of third parties, and that such disclosures do not breach or 
conflict with any confidentiality provisions of any  agreement to which it is a
party.  

9.3     Other Representations and Warranties of ArthroCare.   ArthroCare hereby
represents and warrants to BSC and its  Affiliates that:  (a) ArthroCare is a
corporation duly  organized, validly existing and in good standing under the 
laws of the state of Delaware; it has full power and  authority required to
enter into, execute and deliver this  Agreement and to carry out its
obligations under this  Agreement and to perform the transactions contemplated 
therein; (c) this Agreement has been duly executed and  delivered by, is the
valid and binding obligation of and is  enforceable against it in accordance
with its terms; (d) the  execution, delivery and performance of this Agreement
by it  does not violate any other agreement to which it is a party  or by which
it is bound, or any applicable law to which it  is bound or subject; (e) it has
the unrestricted right to  disclose any information it submits to BSC, free of
all  claims of third parties, and that such disclosures do not  breach or
conflict with any confidentiality provisions of  any agreement to which it is a
party; (f) to the best of its  knowledge, any and all consents, waivers,
authorizations and  approvals of any federal, state, local or foreign 
governmental or regulatory authority and of any other  person, firm or
corporation, required in connection with the  execution, delivery and
performance of this Agreement or any  of the transactions contemplated under
this Agreement have  been duly obtained and are in full force and effect as of 
the Effective Date; and (g) to the best of its knowledge,  there is not in
effect on the Effective Date any statutes,  rule, regulation, decree, executive
order, preliminary or  permanent injunction or other order issued, promulgated
or  enacted by any governmental or regulatory authority or court  which
declares this Agreement invalid in any respect or  prevents the transactions
contemplated under this Agreement,  or which materially and adversely affects
the assets,  properties, operations, prospects, net income or financial 
condition of ArthroCare; and no action or proceeding before  any federal,
state, local or foreign court or regulatory or  governmental authority shall
have been instituted or  threatened by any federal, state, local or foreign 
governmental or regulatory authority, or by an other person,  entity or
organization which seeks to prevent or delay the  transactions contemplated by
this Agreement or any term or  provision of this Agreement.

9.4     Disclaimer.  Except as expressly provided in this  Agreement or the
Development and Supply Agreement, nothing  in this Agreement is or shall be
construed as: (i) a  warranty or representation by ArthroCare as to the
validity  or scope of any claim or patent within the Patent Rights;  (ii) a
warranty or representation that anything made, used,  sold, or otherwise
disposed of under any license granted in  this Agreement is or will be free
from infringement of any  patent rights or other intellectual property right of
any  third party; (iii) an obligation to bring or prosecute  actions or suits
against third parties for infringement of  any of the Patent Rights; or (iv)
granting by implication,  estoppel, or otherwise any licenses or rights under
patents  or other rights of ArthroCare or third parties, regardless  of whether
such patents or other rights are dominant or  subordinate to any patent within
the Patent Rights.

9.5     No Warranties.  EXCEPT AS EXPRESSLY PROVIDED IN THIS  AGREEMENT OR THE
DEVELOPMENT AND SUPPLY AGREEMENT,  ARTHROCARE GRANTS NO WARRANTIES WITH RESPECT
TO THE PATENT  RIGHTS EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF 
LAW, BY STATUE OR OTHERWISE, AND ARTHROCARE SPECIFICALLY  DISCLAIMS ANY EXPRESS
OR IMPLIED WARRANTY OF  MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
VALIDITY  OF THE PATENT RIGHTS OR NON-INFRINGEMENT OF THE INTELLECTUAL 
PROPERTY RIGHTS OF ANY THIRD PARTY.

                                   ARTICLE 10
                            INDEMNIFICATION; INSURANCE

10.1    BSC Indemnity.  BSC agrees to indemnify, defend and  hold ArthroCare
and its directors, officers, employees,  insurers, shareholders and agents
harmless from and against  any and all liabilities, claims, suits, demands,
expenses  (including, without limitation, attorneys and professional  fees and
other costs of handling such claim or litigation),  losses or causes of action
(each, a "Liability") arising out  of or based upon:  (a) injury to or death of
any person or  damage to property arising out of or in connection with the 
distribution or use of any Products (unless such injury or  death arises from
or relates to any matter which would give  rise to a claim by BSC of indemnity
from ArthroCare under  Section 10.2 of this License Agreement or Section 10.2
of  the Development and Supply Agreement); (b) any material  breach of this
Agreement by BSC; or (c) BSC's negligence or  misconduct, or violation of any
state, federal, or  international law or regulation, in connection with the 
performance of its obligations hereunder; provided, however,  that ArthroCare
shall:  (i) give BSC prompt notice of any  such Liability; (ii) permit BSC to
participate in the  defense of the same through its counsel; (iii) give BSC all
information in its possession relating to such Liability;  and (iv) give its
authorization for and assistance in such  defense.

10.2    ArthroCare Indemnity. ArthroCare agrees to indemnify,  defend and hold
BSC and its Affiliates, and its and their  respective directors, officers,
employees, insurers,  shareholders, and agents harmless from and against any
and  all Liabilities arising out of or relating in any way to:   (a) any
misrepresentation or knowing omission of any fact  necessary to make true any
statement contained in Article 9;  (b) ArthroCare's negligence or misconduct,
or violation of  any state, federal, or international law or regulation, in 
connection with the performance of its obligations  hereunder; or (c) any
material breach of this Agreement by  ArthroCare, except to the extent, in each
case, that such  Liability is caused by the negligence or willful misconduct 
by BSC as determined by a court of competent jurisdiction;  provided, however,
that BSC shall:  (i) give ArthroCare  prompt notice of any such Liability; (ii)
permit ArthroCare  to participate in the defense of the same through its 
counsel; (iii) give ArthroCare all information in its  possession relating to
such Liability; and (iv) give its  authorization for and assistance in such
defense.

                                   ARTICLE 11
                              TERM AND TERMINATION

11.1    Term.  The term of this Agreement will commence on the  Effective Date
of this Agreement and remain in full force  and effect until the expiration of
the last patent within  the Patent Rights, unless earlier terminated in
accordance  with this Article 11.

11.2    Permissive Termination.  BSC may terminate this  Agreement at any time
by providing ArthroCare notice in  writing at least 60 days prior to the
effective date of  termination.  Upon permissive termination of this Agreement 
by BSC, ArthroCare shall retain all payments and prepaid  royalties paid by BSC
as of the date of termination.

11.3    Termination for Cause.  Either party may terminate  this Agreement in
the event the other party has materially  breached or defaulted in the
performance of any of its  obligations hereunder, and such default has
continued for 60  days after written notice thereof was provided to the 
breaching party by the non-breaching party.  Any termination  shall become
effective at the end of such 60-day period  unless the breaching party has
cured any such breach or  default prior to the expiration of  such period.  
Notwithstanding the above, in the case of a failure to pay  any amount due
hereunder the period for cure of any such  default following notice thereof
shall be 60 days and,  unless payment is made within such period, the
termination  shall become effective at the end of such period.  A  termination
of the Development and Supply Agreement shall  not give either party the right
to terminate this Agreement. 

11.4    Termination for Insolvency.  If voluntary or  involuntary proceedings
by or against a party are instituted  in bankruptcy under any insolvency law,
or a receiver or  custodian is appointed for such party, or proceedings are 
instituted by or against such party for corporate  reorganization or the
dissolution of such party, which  proceedings, if involuntary, shall not have
been dismissed  within 60 days after the date of filing, or if such party 
makes an assignment for the benefit of creditors, or  substantially all of the
assets of such party are seized or  attached and not released within 60 days
thereafter, the  other party may immediately terminate this Agreement 
effective upon notice of such termination. 

11.5    Effect of Termination. 

A.      Accrued Rights and Obligations.  Termination of this  Agreement for any
reason shall not release any party hereto  from any liability which, at the
time of such termination,  has already accrued to the other party or which is 
attributable to a period prior to such termination nor  preclude either party
from pursuing any rights and remedies  it may have hereunder or at law or in
equity with respect to  any breach of this Agreement.  It is understood and
agreed  that monetary damages may not be a sufficient remedy for any  breach of
this Agreement and that the non-breaching party  may be entitled to injunctive
relief as a remedy for any  such breach.  Such remedy, in addition to any other
remedy  provided in this Agreement, shall not be deemed to be the  exclusive
remedy for any such breach of this Agreement, but  shall be in addition to all
other remedies available at law  or in equity.  ArthroCare will not be
required, under any  circumstances, to refund any license fees, milestone 
payments, royalties or other compensation to BSC upon  Termination of this
Agreement.

B.      Return of Confidential Information.  Upon any  termination or
expiration of this Agreement, BSC and  ArthroCare shall promptly return to the
other party all  Confidential Information and copies of which may be retained 
for archival purposes.

C.      Stock on Hand.  In the event this Agreement is  terminated for any
reason, BSC shall have the right to sell  or otherwise dispose of the stock of
any Licensed Product  then on hand until six months after such termination, 
subject to Articles 3 and 4 and the other applicable terms  of this Agreement.

D.      Licenses.  

        (i)     If this Agreement terminates for cause  under Section 11.3 due
to material and  substantial breach by ArthroCare, or if  this Agreement
terminates due to  ArthroCare's insolvency under Section  11.4, then, in
addition to other remedies  available at law, BSC shall retain the  exclusive
license granted under Section  2.1 of this Agreement.

        (ii)    If this Agreement terminates for cause  under Section 11.3 due
to material and  substantial breach by BSC, or if this  Agreement terminates
due to BSC's  insolvency under Section 11.4, then, in  addition to other
remedies available at  law, ArthroCare shall obtain a non- exclusive license to
the exclusive license  granted under Section 2.1 of this  Agreement.

11.6    Dispute Resolution.  The parties shall make all  reasonable efforts to
resolve any dispute concerning this  Agreement, its construction or its actual
or alleged breach  by face-to-face negotiations.  Should such negotiation fail 
to resolve the matter, the matter shall be finally decided  by arbitration by
and in accordance with the Rules then in  effect of the American Arbitration
Association, and judgment  upon the award rendered may be entered in the
highest court  of the forum, state or federal, having jurisdiction.  Any 
arbitration will be conducted in the Chicago, Illinois  metropolitan area and
the arbitrator shall be mutually  agreed upon.  If the parties cannot agree on
a single  arbitrator, the dispute shall be arbitrated by a three  member panel,
with each party selecting one arbitrator who  shall mutually agree upon and
select the third arbitrator.

11.7    Force Majeure.  Neither party shall be in default in  the performance
of its obligations under this Agreement if  such performance is prevented or
delayed because of war or  similar unrest, labor dispute or strike,
transportation  difficulties, unavailability of necessary raw materials, 
epidemic, fire, natural disaster, any law, rule or  regulation of any
governmental or other authority, acts of  God, or other similar cause, that is
beyond the control of  the party whose performance is affected. 

11.8    Survival.  Sections 2.1 (in the case of clause (i) of  Section
11.5.D.), 2.2, 5.2, 8.5, 8.6, 11.5, 11.6, 11.7 and  11.8, and Articles 1, 4, 7,
9, 10 and 12, of this Agreement  shall survive the expiration or termination of
this  Agreement for any reason.

                                   ARTICLE 12
                             MISCELLANEOUS PROVISIONS

12.1    Governing Law; Venue.  This Agreement and any dispute,  including
without limitation any arbitration, arising from  the performance or breach
hereof shall be governed by and  construed and enforced in accordance with the
laws of the  Commonwealth of Massachusetts, without reference to  conflicts of
laws principles.  

12.2    Assignment.  BSC may not transfer or assign this  Agreement or any of
BSC's rights hereunder to non-Affiliates  without the written consent of
ArthroCare.  Any such  attempted transfer or assignment shall be void. 
ArthroCare  may assign this Agreement or its rights hereunder.  This  Agreement
shall be binding upon and inure to the benefit of  the parties and their
present and past agents, servants,  officers, directors, partners, related
companies, and the  predecessors, employees, franchisees, trustees, 
representatives, shareholders, successors and assigns of  each.  In addition,
BSC's rights under this Agreement are  intended to be for the benefit of BSC as
well as its  Affiliates.

12.3    Waiver.  No waiver of any rights, shall be effective  unless consented
to in writing by the party to be charged  and the waiver of any breach of
default shall not constitute  a waiver of any other right hereunder or any
subsequent  breach or default.

12.4    Severability.  In the event that any provisions of  this Agreement are
determined to be invalid or unenforceable  by a court of competent
jurisdiction, the remainder of the  Agreement shall remain in full force and
effect without said  provision.

12.5    Notices. All notices, requests and other  communications hereunder
shall be in writing and shall be  personally delivered or sent by telecopy or
other electronic  facsimile transmission or by registered or certified mail, 
return receipt requested, postage prepaid, in each case to  the respective
address specified below, or such other  address as may be specified in writing
to the other parties  hereto:

BSC:            Boston Scientific Corporation
                One Boston Scientific Place,
                Natick, Massachusetts 01760-1537
                Attn: John Pedersen
                Fax: 508-650-8922

                with a copy to:

                SCIMED Life Systems, Inc.
                One SCIMED Place
                Maple Grove, MN 55311-1566
                Attn:  Jean Lance
                Fax:  612-494-2616

ArthroCare:     ArthroCare Corporation
                595 North Pastoria Avenue
                Sunnyvale, California 94086
                Attn:  Michael Baker, C.E.O.
                Fax:  408-732-2752

                with a copy to:

                ArthroCare Corporation
                595 North Pastoria Avenue
                Sunnyvale, California 94086
                Attn:  John Raffle
                Fax:  408-736-0226 (cover page marked confidential)

12.6    Independent Contractors.  Both parties are independent  contractors
under this Agreement.  Nothing contained in this  Agreement is intended nor is
to be construed so as to  constitute ArthroCare or BSC as partners or joint
venturers  with respect to this Agreement.  Neither party shall have  any
express or implied right or authority to assume or  create any obligations on
behalf of or in the name of the  other party or to bind the other party to any
other  contract, agreement, or undertaking with any third party.

12.7    Patent Marking.  BSC agrees to mark (or cause to be  marked) all
Licensed Products sold pursuant to this  Agreement in accordance with the
applicable statute or  regulations relating to patent marking in the country or
countries of manufacture and sale thereof.

12.8    Compliance with Laws.  In  performing their respective  obligations
under this Agreement , the parties shall fully  comply in all material respects
with the requirements of any  and all applicable laws, regulations, rules and
orders of  any governmental body having jurisdiction over the exercise  of
rights under this Agreement.

12.9    Use of Name.  Neither party shall use the name or  trademarks of the
other party without the prior written  consent of such other party.

12.10   Entire Agreement; Amendment.  This Agreement  constitutes the entire
and exclusive Agreement between the  parties with respect to the subject matter
hereof and  supersedes and cancels all previous discussions, agreements, 
commitments and writings in respect thereof except the  Development and Supply
Agreement.  No amendment or addition  to this Agreement shall be effective
unless reduced to  writing and executed by the authorized representatives of 
the parties.

12.11   Conditions to Effectiveness of Agreement.  The  obligations of the
parties to consummate the transactions  contemplated in this Agreement are
conditioned on each of  the parties executing and delivering to the other party
both  executed copies of this Agreement and the Development and  Supply
Agreement via facsimile no later than 6:00 p.m.  (Central time) on February 9,
1998.  Such delivery shall  constitute effective delivery of such Agreements,
and such  Agreements shall then be immediately binding on the parties.   In
addition, the parties shall execute and exchange  multiple original copies of
the Agreements; provided,  however, that the parties' delay or failure to so
exchange  such documents shall not affect the validity or  enforceability of
the Agreements and it shall not negate the  validity of the execution and
delivery of the Agreements  that were accomplished via the delivery by
facsimile.

12.12  Counterparts.  This Agreement may be executed in any  number of
counterparts and on separate signature pages by  each party, each copy of which
shall for all purposes be  deemed an original.

IN WITNESS WHEREOF, ArthroCare and BSC have executed this  Agreement in
duplicate originals by duly authorized  officers.


ARTHROCARE CORPORATION                  BOSTON SCIENTIFIC CORPORATION
By: /s/Michael A. Baker                 By:  /s/Michael Berman
----------------------------            --------------------------
Print Name: Michael A. Baker            Print Name: Michael Berman   
----------------------------            --------------------------
Title: President & CEO                  Title: President, SciMed
----------------------------            --------------------------


<PAGE>
                                   EXHIBIT A
                                 PATENT RIGHTS

U.S. PATENTS:
                [*****]
                [*****]
                [*****]
                [*****]
                [*****]
                [*****]

U.S. APPLICATIONS:
                [*****]

INTERNATIONAL PATENTS
                AU 33357/93 (4-1)
                NZ 246503 (4-1)
                AU 68296/94 (4-4)
                NZ 266678 (4-4)

INTERNATIONAL APPLICATIONS
                CA 2129745 (4-1)
                EP 93901090.6 (4-1)
                CA 2162395 (4-4)
                EP 94916716.7 (4-4)
                JP 6-525637 (4-4)
                AU 24724/97 (4-4-1)
                NZ 314153 (4-4-1)
                PCT 96/32051 (AU CA EP JP NZ) (4-5)
                PCT 96/08077 (JP,CA,EP,AU)  (-6)
                PCT 96/18505 (JP,CA,EP,AU,NZ) (-7)
                PCT 96/18651 (JP,CA,EP,AU,NZ) (-22)


<PAGE>
                                   EXHIBIT B
                                TRADEMARK RIGHTS


        Trademark                       Registration No.
        ---------                       ----------------
        [*****]                          [*****]
        [*****]                          [*****]



--------------------------------------------
*****  Certain information in this document has been  omitted and filed
separately with the  Commission.  Confidential treatment has been  requested
with respect to the omitted portions.