<PAGE>

[CONFIDENTIAL TREATMENT REQUESTED, CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.]

                                                                   EXHIBIT 10.13

                      LIVINGSTON HEALTHCARE SERVICES INC.
                        WAREHOUSE DISTRIBUTION CONTRACT
                        -------------------------------

This contract (the "Contract") is made effective the 15th day of March, 2000,
between Livingston Healthcare Services Inc., a Delaware corporation, having its
principal place of business at 220 Lake Drive, Newark, Delaware, 19702,
hereinafter referred "LHSI," and TheraSense, a California corporation, having
its principal place of business at 1360 South Loop Road, Alameda, CA 94502,
hereinafter referred to as "Client."

WITNESSETH

WHEREAS, LHSI is in the business of providing outsource logistics services to
pharmaceutical manufacturers and other similar product manufacturers;

WHEREAS, Client wishes to utilize and engage the services of LHSI for certain of
its logistics requirements, and wishes to utilize LHSI's Premises as more
particularly set forth hereinafter;

WHEREAS, LHSI wishes to provide certain outsource logistics services to Client,
as more particularly set forth hereinafter;

WHEREAS, Client and LHSI wish to memorialize their understanding;

NOW, THEREFORE, in consideration of the premises and covenants hereinafter
contained and other good and valuable consideration each to the other paid and
received, the receipt and sufficiency of which is hereby acknowledged, it is
agreed as follows:

                            ARTICLE I. DEFINITIONS

1.1  "Authorized Customer" means any party so designated and approved in a
     Record by Client.

1.2  "DEA" means the Drug Enforcement Agency.

1.3  "FDA" means the United States Food and Drug Administration.

1.4  "Force Majeure" means acts of war; civil disturbance or riot; shortages of
     materials; earthquake; fire; flood; hurricane; windstorm; or similar
     natural disasters; and other acts defined as Force Majeure in the laws of
     the State of Delaware.

1.5  "LHSI Premises" means the distribution facilities operated by LHSI.

1.6  "Logistics Fees" means those fees listed in Exhibit A attached hereto and
     incorporated herein by reference.

1.7  "Products" means, individually and collectively, those items or
     transactions which the Client has requested LHSI to physically handle for
     the Client.
<PAGE>

1.8  "Record" means information inscribed on a tangible medium or stored in an
     electronic or other medium and retrievable in perceivable form.

1.9  "Remittance Advice" refers to a summary document of all daily remittances
     applied to the Client's bank account at the Client's banking institution.
     This document is provided to LHSI by the banking institution on behalf of
     the Client.

1.10 "Services" means the full scope of services to be provided by LHSI to
     Client, as set forth in Article II.

1.11 "Territory" shall include the 50 States of the United States, and the
     District of Columbia.

1.12 "Work Instructions" means those written procedures maintained and used by
     LHSI in the training of its personnel and execution of services under this
     Contract and accepted by Client and LHSI in a Record. The Work Instructions
     may be amended from time to time by consent of the parties in a Record.
     Such consent shall not be unreasonably withheld or delayed.

1.13 A "Year 2000 Problem" means a data handling problem relating to the Year
     2000 date change that would cause a computer system, software or equipment
     to fail to correctly perform, process and handle date-related data for the
     dates within and between the twentieth and twenty-first centuries and all
     other centuries, including leap year calculations.

                        ARTICLE II. OBLIGATIONS OF LHSI

2.1  LHSI shall use commercially reasonable efforts to train its personnel and
     perform all services required under this Contract substantially in
     accordance with the Work Instructions; provided, however, that if
     provisions of this Contract and the Work Instructions conflict, then the
     provisions of this Contract shall control.

2.2  Receiving and Storage:

     (a)  Upon receipt of inbound Products from the Client, LHSI shall make a
          commercially reasonable visual inspection of each inbound product
          shipment, and shall notify Client as soon as reasonably practicable
          whenever Products do not substantially conform to any specification
          that may be designated by Client and added to the Work Instructions,
          provided such nonconformity is apparent upon a commercially reasonable
          visual inspection. LHSI shall not dispose of any nonconforming
          Products without prior written authorization and instructions from an
          authorized officer of Client.

     (b)  LHSI shall provide commercially reasonable security at the LHSI
          Premises.

     (c)  LHSI shall comply with all requirements of all local, state and
          federal governments and agencies having jurisdiction over the
          Products, their storage in the LHSI Premises, and their distribution,
          including, but not limited to, the FDA, the DEA, the Environmental
          Protection Agency, the Occupational Safety and Health Administration,
          and the Department of Transportation.

                                      -2-
<PAGE>

     (d)  LHSI shall use its best efforts to comply with any reasonable policy,
          procedure or instruction of Client which is set forth in the Work
          Instructions.

     (e)  LHSI shall communicate with Client within the next business day upon
          discovering that any Products do not conform with any specification
          that may be designated in a Record by or as outlined in the Work
          Instructions.

     (f)  LHSI shall provide warehouse, office and management personnel it
          determines is reasonably required to perform its obligations under
          this Contract.

     (g)  LHSI shall maintain written documentation conforming to the Work
          Instructions attesting to the proper receipt and storage of Products.

2.3  Order Receipt and Processing: LHSI shall maintain records of Authorized
     Customers who have opened accounts with Client and shall accept orders on
     Client's behalf only from Authorized Customers as defined in the Work
     Instructions.

2.4  Shipment - In response to orders received from Client or Authorized
     Customers, LHSI shall handle, pick, pack and ship as specified below.

     (a)  LHSI shall handle, pick, pack, and ship each order for Products as
          outlined in the Work Instructions after receipt of the order, unless
          its inventory of Products is insufficient to fill the order. In the
          event of significant daily swings in Client order volume, LHSI shall
          request advance authorization from Client for overtime charges
          necessary to maintain desired service levels.

     (b)  LHSI shall handle, package and ship Products in compliance with the
          Work Instructions and all applicable laws and all regulations of the
          United States Department of Transportation, the FDA, and any other
          applicable agencies.

     (c)  Upon request, LHSI shall include with shipments a flyer or other
          promotional material supplied by Client at a cost to Client agreed
          upon in a Record.

     (d)  For each shipment LHSI shall prepare standard documents and disburse
          as outlined in the Work Instructions.

     (e)  LHSI shall prepare and forward to Client reports summarizing orders
          received, shipments completed and current inventory status, either via
          fax or electronically, as specified by Client in a Record.

     (f)  Shipments of backordered products shall be shipped within the next
          business day after receipt of the backordered Products by LHSI unless
          otherwise specified in the Work Instructions.

     (g)  LHSI shall provide transportation management services, which can
          include the following: negotiation of freight rates; carrier selection
          to commercially reasonable prescribed service standards put forth by
          Client, proof of delivery and damage claim

                                      -3-
<PAGE>

          processing; and audit and processing of freight invoices as agreed to
          in the Work Instructions.

     (h)  Perform all other duties performed by warehousemen.

2.5  Accounts Receivable Management

     (a)  LHSI shall provide accounts receivable management in accordance with
          commercially reasonable standards and as outlined in the Work
          Instructions, including, but not limited to, posting of cash receipts,
          deductions processing, and collection and dispute resolution services.

2.6  Chargeback Processing and Management

     (a)  LHSI shall provide chargeback processing and management in accordance
          with commercially reasonable standards and as outlined in the Work
          Instructions, including, but not limited to, file maintenance, pickup
          from the designated network provider and processing of chargeback data
          on a mutually agreed upon schedule.

2.7  Records and Reports

     (a)  LHSI shall provide inventory records and reports management in
          accordance with commercially reasonable standards and as outlined in
          the Work Instructions, including, but not limited to, inventory
          records, daily and monthly activity reports which shall include
          shipping dates and quantities of Products delivered to Authorized
          Customers.

2.8  Access and Modifications to the LHSI Premises

     (a)  LHSI represents that the LHSI Premises as currently configured and
          equipped are adequate to meet Client's current and projected
          requirements as set forth in the Work Instructions, of Product
          receiving, storage and shipment. LHSI shall maintain such capability
          throughout the term of this contract.

     (b)  LHSI shall promptly notify Client, upon notice to LHSI, of any
          inspection by a federal, state, or local regulatory representative
          concerning the Products and shall provide Client a summary of the
          results of such inspections and of the actions, if any taken to remedy
          conditions cited in such inspections.

2.9  Insurance and Indemnification

     (a)  At all times during the term of this Contract, LHSI shall maintain, at
          its own expense, the following insurance coverage:

          (i)    Workmen's compensation in an amount sufficient to comply with
                 the statutory requirements of the State of Delaware, or any
                 other state in which LHSI performs its obligations hereunder;

                                      -4-
<PAGE>

          (ii)   Warehouseman's legal liability insurance in an amount
                 sufficient to permit LHSI to continue its operations. Client
                 acknowledges that Client has its own insurance sufficient to
                 cover the value of all Products stored at the LHSI Premises
                 under this Contract.

          (iii)  Comprehensive general liability insurance for bodily injury or
                 property damage for any one occurrence or series of occurrences
                 arising out of one cause, designating Client as an additional
                 insured for any losses or damages arising out of LHSI's duties
                 hereunder. The policy shall also cover liabilities specifically
                 assumed under this Contract.

     (b)  The responsibility of LHSI for loss or damage of any Product covered
          by this Contract, including any packaging of such Product, while being
          stored on the LHSI Premises or transported to or from the LHSI
          Premises, is limited to the cost of replacement (including shipping
          charges). LHSI shall not be liable for lost profits.

     (c)  LHSI shall indemnify and hold harmless Client and its affiliates,
          directors, officers, agents, shareholders and employees and defend
          them from and against any and all claims, demands, actions, causes of
          action, losses, judgments and damages, brought or alleged by a third
          party, and any and all costs or expenses relating thereto (including,
          but not limited to, reasonable attorney's fees, court costs, and costs
          of settlement, and the cost of any Product recall, whether voluntary
          or involuntary) whatsoever arising out of or related to the sole
          negligence, fraud, or willful misconduct of LHSI, or the material
          breach of any of LHSI's obligations under this Contract. Client shall
          provide LHSI prompt written notice of any claims, demands, actions,
          causes of action, losses, judgments or damages and Client shall have
          the right, at its discretion and at its cost, to have attorneys of its
          choosing participate with LHSI on the investigation, litigation,
          settlement and all other aspects of such claims, demands, actions,
          causes of action, losses, judgments or damages. In such event LHSI
          shall share, on a timely basis, all such information obtained with
          Client's designated attorneys. It is a condition to the foregoing
          indemnity that Client shall not admit liability nor make any payment,
          settlement or compromise in respect thereof without the prior written
          consent of LHSI, which consent shall not be unreasonably withheld or
          delayed.

2.10 Other Duties

     (a)  Upon a *** advance notice, LHSI shall allow Client's personnel or its
          lenders to perform inventory audits of Products in LHSI's custody,
          possession or control at any time during normal business hours,
          provided such cGMP audit is performed without undue interruption to
          LHSI's normal business activities.

     (b)  LHSI shall accept returned Products and shall process such Products in
          accordance with procedures mutually agreed upon between the parties in
          a Record.

                                      -5-

*** CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

     (c)  LHSI shall provide, with Client's consent, Client's lender with any
          document to which Client is otherwise entitled that such lender may
          reasonably request.

     (d)  LHSI shall maintain all permits, licenses and registrations required
          to store and distribute Products in each of the fifty states of the
          United States, District of Columbia and all other locations in the
          Territory.

     (e)  LHSI shall promptly notify Client as soon as possible, but not later
          than 3 working days following receipt of information of a possible
          adverse event associated with the use of Products.

2.11 Levels of Performance

     (a)  Levels of performance will be based on Key Performance Indicators
          ("KPI's") attached hereto as Exhibit C. LHSI and Client will have
          monthly process and performance reviews for the first six months of
          this Contract. Thereafter, quarterly reviews will be conducted.

2.12 Lot Tracking Data Retention

     (a)  LHSI will retain lot-tracking data on Client's Products for a seven-
          year period. The most recent 2 years of data needs shall be accessible
          on line 24 hours a day, 7 days a week. Data over 2 years accessible as
          defined by the Work Instructions.

                      ARTICLE III. OBLIGATIONS OF CLIENT

3.1  Client shall use commercially reasonable efforts to perform all obligations
     required under this Contract substantially in accordance with the Work
     Instructions.

3.2  Client's Products

     (a)  Client shall deliver Products in reasonable quantities, based upon
          information provided by LHSI as to customer orders and Product
          inventories, to LHSI at the LHSI Premises during normal working hours.

     (b)  Client shall be solely responsible for maintaining a satisfactory
          supply of its Products with LHSI at the LHSI Premises at all times to
          meet the demands of Client's customers, subject to Client's
          manufacturing capacity and the demand, if any, for Client's Products.
          Client and LHSI will further define inventory requirements according
          to the Work Instructions.

     (c)  Client shall deliver Products for storage properly marked and
          packaged, including a manifest showing sizes or specific stock keeping
          units.

     (d)  Client shall be solely responsible for die procurement, marketing and
          sale of the Products and for maintaining regulatory clearance on
          approvals.

                                      -6-
<PAGE>

     (e)  Client shall be solely responsible for ensuring that the Products
          comply with all federal, state, local and other laws and regulations
          with respect to safety, labeling and advertising.

     (f)  Client shall be solely responsible to its customers for all warranties
          express or implied that exist with respect to the Products as required
          by law.

     (g)  Client shall be solely responsible for addressing all regulatory
          issues regarding manufacturing defects or safety issues related to any
          Product and for deciding the necessity, scope, and procedures for any
          Product recall.

     (h)  Client shall pay the Logistics Fees enumerated in Exhibit "A" and
          perform all of its other obligations under this Contract and the Work
          Instructions. If Client does not pay the Logistics Fees enumerated in
          Exhibit "A" within one hundred and twenty (120) days, LHSI reserves
          the right to *** receipt of payment from Client to LHSI.

     (i)  Client agrees that the Logistics Fee Schedule attached as Exhibit "A"
          is conditioned on the accuracy of the Logistics Assumptions attached
          as Exhibit "B". Thus, Client agrees that if the Logistics Assumptions
          attached as Exhibit "B" prove to be inaccurate in any material respect
          greater than *** LHSI may request renegotiation of the Logistics Fee
          Schedule attached as Exhibit "A" both retrospectively and
          prospectively to account for the changed Logistics Assumptions. Client
          shall pay any increased amount due as a result of such adjustment or
          receive credit on decreased amount from a backward look of the
          business from LHSI.

3.3  Accounts Receivable Management

     (a)  Client and LHSI shall mutually agree upon Work Instructions for
          managing Client's accounts receivable with respect to the Products.

3.4  Chargeback Processing and Management

     (a)  Client shall designate a key contact person of Client's who shall be
          available to work with LHSI on chargeback issues.

     (b)  Client shall provide LHSI with information deemed necessary by LHSI to
          perform its obligations under this Contract on a timely basis.

     (c)  Client and LHSI will further agree upon Work Instructions for managing
          Client's chargeback processing and management functions with respect
          to the products.

3.5  Title to and ownership of the Products in possession of LHSI shall always
     be vested in Client and subject to its discretion and control. Title and
     ownership shall pass directly to the purchaser of the Products upon
     delivery by LHSI to a common carrier and all proceeds derived or credits
     arising therefrom shall be the sole property of Client.

                                      -7-

*** CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

3.6  Client shall indemnify and hold harmless LHSI and its affiliates,
     directors, officers, agents, shareholders and employees and defend them
     from and against any and all claims, demands, actions, causes of action,
     losses, judgments and damages, brought or alleged by a third party, and any
     and all costs or expenses relating thereto (including, but not limited to,
     attorney's fees, court costs and costs of settlement) whatsoever resulting
     from the negligence, willful misconduct or fraud of Client, or the material
     breach by Client of Client's obligations under this Contract. LHSI shall
     provide Client prompt written notice of any claims, demands, actions,
     causes of action, losses, judgments or damages and LHSI shall have the
     right, at its discretion and at its cost, to have attorneys of its choosing
     participate with Client on the investigation, litigation, settlement and
     all other aspects of such claims, demands, actions, causes of action,
     losses, judgments or damages. In such event Client shall share, on a timely
     basis, all such information obtained with LHSI's designated attorneys.

3.7  Client shall further indemnify and hold harmless LHSI from and against any
     and all claims, demands, actions, causes of action, losses, judgments and
     damages, brought or alleged by a third party, and any all costs or expenses
     relating thereto (including but not limited to attorneys' fees, court costs
     and costs of settlement) arising as a result of (a) any actual or asserted
     violation of the Federal Food, Drug and Cosmetic Act or any other federal,
     state or local law or regulation by virtue of which Products sold, supplied
     or delivered by Client shall be alleged or determined to be adulterated,
     misbranded, mislabeled or otherwise not in full compliance with any such
     law or regulation through no action or fault of LHSI, (b) the possession,
     distribution, sale and/or use of, or by reason of the seizure of, any
     Client's Products, including any prosecution or action whatsoever by any
     governmental body or agency or by any private party, including claims of
     bodily injury, death or property damage through no action or fault of LHSI,
     or (c) a claim that the Products infringe any patent, trademark, copyright,
     License or other property right or proprietary right of any third party.
     LHSI shall provide Client prompt written notice of any claims, demands,
     actions, causes of action, losses, judgments or damages and LHSI shall have
     the right, at its discretion and at its cost, to have attorneys of its
     choosing participate with Client on the investigation, litigation,
     settlement and all other aspects of such claims, demands, actions, causes
     of action, losses, judgments or damages in such event Client shall share,
     on a timely basis, all such information obtained with LHSI.

3.8  Client shall maintain primary comprehensive first-party insurance
     sufficient to cover the replacement value of Products in the possession of
     LHSI.

3.9  Client shall bear the expense of any inventory taxes that might be assessed
     on its Products from time to time.

3.10 During the term of this Contract, warehouse services and distribution to be
     performed in the Territory with respect to the Products shall be performed
     solely by LHSI. This excludes any services performed by Client at 1360
     South Loop Road, Alameda, CA 94502.

3.11 Client recognizes the rights of LHSI to act and to operate LHSI Premises
     as a public warehouse.

                                      -8-
<PAGE>

3.12 Client shall maintain in effect during the term of this Contract and for a
     period of five (5) years after termination of this Contract, product
     liability insurance in the amount of at least $5,000,000 and general
     liability insurance in the amount of at least $5,000,000, which shall
     include contractual liability coverage for all liability assumed under this
     Contract and shall include LHSI as an additional insured. Such insurance
     shall apply to covered losses of LHSI as additional insured on a primary
     basis and without contribution by other insurance of LHSI. Client will
     supply, at least 30 days prior written notice to LHSI in the event of
     cancellation or material reduction in coverage, and upon request promptly
     submit to LHSI satisfactory evidence of such insurance.

                     ARTICLE IV. AMENDMENT AND ASSIGNMENT

4.1  Effective this 15th day of March, 2000, this Contract together with Exhibit
     "A" hereto, constitute the entire understanding of the parties, and
     supersedes any and all previous understandings, whether written or oral,
     with respect to the subject matter hereof. Effective the 15th day of March,
     2000, all such other understandings are hereby declared null and void and
     of no further force or effect. The terms, conditions and provisions of this
     Contract shall prevail over any inconsistent statements, terms, conditions
     or provisions contained in any documents passing between the parties hereto
     including, but not limited to, any acknowledgment, confirmation or notice.
     This Contract may not be amended, supplemented, or otherwise modified
     except by an instrument in a Record executed by the parties hereto.

4.2  This Contract shall inure to the benefit of the parties and to their
     successors and assigns. This Contract, or any rights hereunder, shall not
     be otherwise sold, assigned, transferred or encumbered by either party
     hereto without first obtaining the written consent of the other party. Such
     consent shall not be unreasonably withheld or delayed.

                           ARTICLE V. FORCE MAJEURE

5.1  Each party to this Contract shall be excused from the performance of its
     obligations hereunder to the extent that such performance is prevented by
     Force Majeure, and such excuse shall continue for so long as the condition
     constituting the Force Majeure continues.

5.2  Notwithstanding the immediately foregoing provision, if the LHSI Premises
     at any time are subject to a condition constituting Force Majeure such that
     LHSI is unable to fulfill its obligations under this Contract, LHSI shall
     give immediate written notice thereof to Client, whereupon Client may, at
     its sole option, immediately terminate this Contract by giving written
     notice of termination to LHSI and make other arrangements for distribution
     of its Products, or permit LHSI to provide other warehousing facilities
     reasonably acceptable to Client for the duration of the Force Majeure.
     Notwithstanding the foregoing, in the event that Client elects to permit
     LHSI to provide a substitute facility and the Force Majeure condition
     continues for more than sixty (60) days, Client may then, at its sole
     option, terminate this Contract by giving written notice of such
     termination to LHSI. In the event of termination during a Force Majeure
     condition, LHSI shall use its best efforts to remove, or enable Client to
     remove Products, shipping and packaging materials, data and information

                                      -9-
<PAGE>

     related to Products, and other property of Client from the LHSI Premises as
     promptly as possible.

                          ARTICLE VI. CONFIDENTIALITY

6.1  LHSI shall not disclose, communicate or divulge to, or use for the direct
     or indirect benefit of any person, corporation, or other entity, other than
     Client, any proprietary information regarding the Products, Product
     specifications, business methods, business policies, procedures,
     techniques, computer programs, research or development projects or results,
     trade secrets, or inventions, used or developed by Client, any names or
     addresses of Client's customers or clients, any data on or relating to
     past, present or prospective customers of Client, information regarding
     Client sales, shipments, costs or inventories, or any other confidential
     information relating to or dealing with the business operations or
     activities of Client or Client's customers (collectively the "Client
     Information"), made known, directly to LHSI, or indirectly learned or
     acquired by LHSI while providing services or while the business
     relationship between LHSI and Client exists under this Contract.

6.2  Client shall not disclose, communicate or divulge to, or use for direct or
     indirect benefit of any person, corporation, or other entity, other than
     LHSI, any proprietary information regarding business methods, business
     policies, procedures, techniques, computer programs, trade secrets, or
     inventions used or developed by LHSI (collectively the "LHSI Information")
     made known to Client or learned or acquired by Client in relation to this
     Contract.

6.3  Client and LHSI acknowledges and agrees that in the event of a violation of
     either paragraphs 1 or 2 of this Article VI, the aggrieved party shall have
     right to seek injunctive relief, in addition to any other rights provided
     in this Contract or by operation of law, without the requirement of posting
     bond.

6.4  Client's duty of confidentiality with regard to LHSI Information and LHSI's
     duty of confidentiality with regard to Client Information shall not extend
     to:

     (a)  any information that, at the time of disclosure, is in, or after
          disclosure becomes a part of the public domain without breach of this
          Contract (but only after it becomes a part of the public domain);

     (b)  any information that, prior to disclosure by the disclosing party, was
          already in the lawful possession of the recipient party, as evidenced
          by written records kept by the recipient part in the ordinary course
          of its business, or as evidenced by proof of actual prior use by the
          recipient party;

     (c)  any information that, subsequent to disclosure, is obtained by the
          recipient party from a third party 1) who is lawfully in possession of
          that Information, 2) who is not in violation of any contractual, legal
          or fiduciary obligation to the disclosing party with respect to that
          Information; and 3) who does not prohibit the recipient party from
          disclosing the Information to others; or

                                      -10-
<PAGE>

     (d)  any information disclosed pursuant to any applicable law or order of
          any court or government agency provided the disclosing party gives the
          other party prompt notice so that it may seek a protective order or
          other appropriate remedy. In the event such protective order or other
          remedy is not obtained, the disclosing party shall furnish only that
          portion of the information that it is legally required and shall use
          its best efforts to assure confidential treatment of any such
          information disclosed.

6.5  ***

6.6  ***

     (a)  ***

     (b)  ***

6.7  *** this Contract.

                       ARTICLE VII. TERM AND TERMINATION

7.1  This Contract shall commence as of the 15th day of March, 2000, and shall
     extend for a period of thirty-six (36) months, to and including the 14th
     day of March, 2003 with a 2 year option agreed to by both parties.

7.2  The obligation of Client to pay fees and expenses earned or incurred by
     LHSI, as the case may be, prior to the effective date of termination, the
     obligations of LHSI under paragraphs 2.9(c), the obligations of Client
     under paragraphs 3.6 and 3.7, and the rights and

                                      -11-

*** CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

     obligations of both parties under Articles VI, VII and IX shall survive the
     termination or expiration of this Contract.

7.3  If either LHSI or Client should fail to discharge fully and promptly any of
     its obligations under this Contract or the Exhibits hereto, including the
     Client's obligation to make payments and LHSI's obligation to meet the
     KPI's, attached hereto as Exhibit "C", and further fail to cure such
     default within a reasonable time not to exceed 60 days (provided that such
     a failure can be cured) after written notice thereof by the non-defaulting
     party, the non-defaulting party shall have the right to immediately
     terminate this Contract upon giving the defaulting party written notice to
     such effect

7.4  Client shall have the right to terminate this Contract before the 15th day
     of March, 2003 for any major business change with ninety (90) days prior
     written notice to LHSI. In the event of early termination under this
     paragraph, Client shall pay LHSI an Early Termination Fee equivalent to ***
     following the effective date of termination. *** at the time of
     notification of early termination by the Client.

7.5  Each party hereto shall have the right to terminate this Contract in the
     event of any proceeding under a Bankruptcy Act or any insolvency,
     receivership or dissolution proceeding involving the other party is
     commenced and not dismissed within 90 days of its commencement.

7.6  Upon termination or expiration of this Contract, LHSI shall promptly return
     to Client at Client's sole expense, all Products then in its possession or
     control, all packaging, shipping and labeling materials related thereto,
     all invoice forms, any equipment or other property purchased by Client, and
     all customer and sales representative lists and other confidential or
     proprietary information provided hereunder by Client or developed by LHSI
     in relation to this Contract, and any information provided in order that
     LHSI may obtain any government licenses and permits. LHSI shall provide an
     electronic copy of lot tracking data, customer history, and addresses to
     Client. LHSI shall be compensated at the accessorial labor rate detailed in
     Exhibit "A" of this Contract in returning property of Client from the last
     effective day of this Contract.

                      ARTICLE VIII. YEAR 2000 COMPLIANCE

8.1  Each party covenants and agrees that it shall not permit a Year 2000
     Problem to computer systems, software or equipment owned by it, its
     affiliates or subsidiaries, or leased or licensed to it, its affiliates or
     subsidiaries, to interfere with such party's performance under this
     Contract. Each party further agrees to request from those of its suppliers
     whose performance may materially affect such party's performance hereunder,
     or to receive assurance from such supplier's Web site, that each such
     supplier undertake the same obligation with respect to such material
     performance. The parties shall use reasonable commercial effort to
     cooperate and share information to further comply with this Article VIII,
     and to minimize the impact of any Year 2000 Problem on performance of this

                                      -12-

*** CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

     Contract. Each Party shall inform the other party of any circumstance
     indicating a possible obstacle to such compliance, and the steps being
     taken to avoid or overcome the obstacle.

8.2  Provided a party complies with section 81, such party shall not be liable
     to the other party for any failure to perform obligations under this
     Contract to the extent such failure arises from a Year 2000 Problem (1)
     affecting one of the non-performing party's suppliers or (2) beyond that
     party's reasonable control (e.g., a Year 2000 Problem affecting a
     governmental entity). In particular, to the extent, a non-performing party
     is not liable to the other party under this section, such non-performing
     party shall have no liability to the other party for any damages, including
     direct, indirect, incidental, special, consequential, punitive or exemplary
     damages.

                              ARTICLE IX. GENERAL

9.1  This Contract shall be interpreted in accordance with the laws of the State
     of Delaware, without regard to its conflict of law principles. The parties
     understand and agree that the provisions of Article 7 of the Uniform
     Commercial Code as enacted by the State Law governing this Contract shall
     apply to this Contract. In the event any terms of this Contract are
     contrary to Article 7 of the Uniform Commercial Code, this Contract shall
     govern.

9.2  Neither party shall be liable to the other under any circumstances for
     consequential, incidental, indirect or special damages, for lost profits,
     savings or revenues of any kind, regardless of whether such party has been
     advised of the possibility of such damages. LHSI's total liability for
     damages under this Contract shall be limited to money damages, and shall
     not exceed an amount equal to the amount actually paid to LHSI by Client.

9.3  Save and except for any provision or covenant contained herein which is
     fundamental to the subject matter of this Contract (including without
     limitation those that relate to the payment of monies), the invalidity or
     unenforceability of any provision or covenant hereof or herein contained
     shall not affect the validity or enforceability of any other provision or
     covenant hereof or herein contained and any such invalid or unenforceable
     provision or covenant shall be deemed to be severable.

9.4  Any notice or other communication required or permitted to be given
     hereunder shall be in a Record addressed to the parties at their respective
     addresses set out above and, if mailed by prepaid first-class mail at any
     time other than during a general discontinuance of postal service due to
     strike, lockout or otherwise, shall be deemed to have been received two
     business days after the post-marked date thereof, or if sent by facsimile,
     shall be deemed to have been received on the next business day following
     dispatch and acknowledgment of receipt by the recipient's facsimile
     machine, or if telecopied, shall be deemed to have been received on the
     next business day following dispatch or if delivered by hand shall be
     deemed to have been received at the time it is delivered. Notice of change
     of address shall also be governed by this paragraph 3.

9.5  This Contract shall be governed by Delaware law.

                                      -13-
<PAGE>

9.6  This Contract and the Exhibits hereto represent the final and entire
     agreement between the Client and LHSI with respect to its subject matter
     and supersedes all prior negotiations, commitments, understandings,
     representations and proposals, written or oral, relating to such subject
     matter.

IN WITNESS WHEREOF, the parties have executed this Contract effective as of the
date first above written.

                                    THERASENSE

                                        /s/ Peter Westermann
                                    By:_____________________________

                                    Name: Peter Westermann
                                          --------------------------

                                    Title: President & CEO
                                           -------------------------

                                    Date:___________________________


                                    LIVINGSTON HEALTHCARE SERVICES INC.

                                        /s/ illegible
                                    By:_____________________________

                                    Name:___________________________

                                    Title:__________________________

                                    Date:___________________________

                                      -14-
<PAGE>

                                   Exhibit A


<TABLE>
<CAPTION>
Fee Schedule:  TheraSense                                                                     ***
<S>                            <C>
Distribution:                  ***

     Inbound Handling:         ***

     Storage:                  ***

     Outbound Handling:        ***

                               ***

                               ***

Return Goods Processing:       ***

Customer Service:              ***

Accounts Receivable:           ***

Chargeback Management:         ***

Sample & Literature            ***
Distribution
                               ***

                               ***

Transportation Management      ***
and Packaging Supplies:

                               ***

Accessorial Labor Rate:        ***
</TABLE>

*** CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

<TABLE>
<S>                           <C>
Overtime Rates:               ***

Communication Charges:        ***

ProCure                       ***
                              ***
                              ***
                              ***
                              ***
                              ***

Credit Card                   ***

IT Programming Fees:          ***

Contract Length:              Three year Contract with a two year auto renewal.

Start-up Fee:                 ***

Commercial Terms:             ***

Pricing Adjustment            ***
</TABLE>

*Percent of FTE will be determined based on activity and will not be assessed
until start-up. Should  1/2 FTF be required Therasense would be charged
accordingly ***.  The monthly charge will be assessed until LHSI
receives chargebacks for processing.

                                      -2-

*** CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

                                   Exhibit B
                                  Assumptions

<TABLE>
<CAPTION>
Shipment Manufacturing Forecast
                                 Units per Pallet           Mar-00     Apr-00     May-00     Jun-00     Jul-00
FreeStyle
---------
Units
<S>                       <C>                              <C>        <C>        <C>        <C>        <C>
 Kits                                                         ***        ***         ***        ***        ***
 Strips (Retail Packs)                                        ***        ***         ***        ***        ***
 Strips (System Kits)                                         ***        ***         ***        ***        ***

Pallets (Total Demand
 Based On Assumptions
 Meters (Warrantee)                                 ***       ***        ***         ***        ***        ***
 System Kits                                        ***       ***        ***         ***        ***        ***
 Test Strips (10, 50,                               ***       ***        ***         ***        ***        ***
  100)
 Control Solution                                   ***       ***        ***         ***        ***        ***
 Lancets (10   & 100)                               ***       ***        ***         ***        ***        ***
 Lancing Device                                     ***       ***        ***         ***        ***        ***
 Packing Materials (4                               ***       ***        ***         ***        ***        ***
  different sizes)
 Meter Cases                                        ***       ***        ***         ***        ***        ***

Order Volume
 Retail                              ***            ***       ***        ***         ***        ***        ***
 Independents/Managed                ***            ***       ***        ***         ***        ***        ***
  Care, etc.
 Internet Orders                     ***            ***       ***        ***         ***        ***        ***
 Warranty Meter                      ***            ***       ***        ***         ***        ***        ***
  Replacements
 Strip Warranty                      ***            ***       ***        ***         ***        ***        ***
  Replacements
 Case Warranty                       ***            ***       ***        ***         ***        ***        ***
  Replacements
        Total Order Volume                          ***       ***        ***         ***        ***        ***

Demand Based On                      ***            ***       ***        ***         ***        ***        ***
 Assumptions
 Meters                              ***            ***       ***        ***         ***        ***        ***
 System Kits
  Retail                             ***            ***       ***        ***         ***        ***        ***
  Independents/Managed               ***            ***       ***        ***         ***        ***        ***
   Care, etc.
  Internet Orders                    ***            ***       ***        ***         ***        ***        ***
  Sales Reps and Samples             ***            ***       ***        ***         ***        ***        ***
        Total System Kits                                     ***        ***         ***        ***        ***

Test Strips
 50's                                ***            ***       ***        ***         ***        ***        ***
 100's                               ***            ***       ***        ***         ***        ***        ***
 Samples - 50's                      ***            ***       ***        ***         ***        ***        ***
 Samples & replacement               ***            ***       ***        ***         ***        ***        ***
  Strips (10)
        Total Strips                                          ***        ***         ***        ***        ***

Ancillary Products
 Control Solution                    ***            ***       ***        ***         ***        ***        ***
 Lancets (10 & 100)                  ***            ***       ***        ***         ***        ***        ***
 Lancing Device                      ***            ***       ***        ***         ***        ***        ***
 Meter Cases                         ***            ***       ***        ***         ***        ***        ***
Total Anciliary Product                                       ***        ***         ***        ***        ***
 Units

<CAPTION>
                                  Aug-00     Sep-00     Oct-00      Nov-00     Dec-00      Total
FreeStyle
---------
Units
<S>                           <C>        <C>        <C>        <C>         <C>        <C>
 Kits                              ***         ***        ***         ***        ***         ***
 Strips (Retail Packs)             ***         ***        ***         ***        ***         ***
 Strips (System Kits)              ***         ***        ***         ***        ***         ***

Pallets (Total Demand
 Based On Assumptions
 Meters (Warrantee)                ***         ***        ***         ***        ***
 System Kits                       ***         ***        ***         ***        ***
 Test Strips (10, 50,              ***         ***        ***         ***        ***
  100)
 Control Solution                  ***         ***        ***         ***        ***         ***
 Lancets (10   & 100)              ***         ***        ***         ***        ***         ***
 Lancing Device                    ***         ***        ***         ***        ***         ***
 Packing Materials (4              ***         ***        ***         ***        ***         ***
  different sizes)
 Meter Cases                       ***         ***        ***                    ***

Order Volume
 Retail                            ***         ***        ***         ***        ***         ***
 Independents/Managed              ***         ***        ***         ***        ***         ***
  Care, etc.
 Internet Orders                   ***         ***        ***         ***        ***         ***
 Warranty Meter                    ***         ***        ***         ***        ***         ***
  Replacements
 Strip Warranty                    ***         ***        ***         ***        ***         ***
  Replacements
 Case Warranty                     ***         ***        ***         ***        ***         ***
  Replacements
        Total Order Volume         ***         ***        ***         ***        ***         ***

Demand Based On                    ***         ***        ***         ***        ***
 Assumptions
 Meters                            ***         ***        ***         ***        ***         ***
 System Kits
  Retail                           ***         ***        ***         ***        ***         ***
  Independents/Managed             ***         ***        ***         ***        ***         ***
   Care, etc.
  Internet Orders                  ***         ***        ***         ***        ***         ***
  Sales Reps and Samples           ***         ***        ***         ***        ***         ***
        Total System Kits          ***         ***        ***         ***        ***         ***

Test Strips
 50's                              ***         ***        ***         ***        ***         ***
 100's                             ***         ***        ***         ***        ***         ***
 Samples - 50's                    ***         ***        ***         ***        ***         ***
 Samples & replacement             ***         ***        ***         ***        ***         ***
  Strips (10)
        Total Strips               ***         ***        ***         ***        ***         ***

Ancillary Products
 Control Solution                  ***         ***        ***         ***        ***         ***
 Lancets (10 & 100)                ***         ***        ***         ***        ***         ***
 Lancing Device                    ***         ***        ***         ***        ***         ***
 Meter Cases                       ***         ***        ***         ***        ***         ***
Total Anciliary Product
 Units                             ***         ***        ***         ***        ***         ***
</TABLE>

*** CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

                                   Exhibit B
                                  Assumptions

<TABLE>
<CAPTION>
   Livingston Logistics Fees                Assumptions                         Fee         Mar-00    Apr-00    May-00   Jun-00
-----------------------------      --------------------------                -------        ------   --------  -------- ---------
<S>                               <C>                                      <C>             <C>       <C>      <C>       <C>
Inbound Pallets
Quantity
  Meters (Warranty)                            ***                                           ***        ***       ***      ***
  System Kits                                  ***                                           ***        ***       ***      ***
  Test Strips (10, 50, 100)                    ***                                           ***        ***       ***      ***
  Control Solution                                                                           ***        ***       ***      ***
  Lancets (10 & 100)                                                                         ***        ***       ***      ***
  Lancing Device                                                                             ***        ***       ***      ***
  Packing Materials                                                                          ***        ***       ***      ***
  Meter Cases                                  ***                                           ***        ***       ***      ***

  Total Pallet a month                                                                       ***        ***       ***      ***

  Handling Fee per month                                                        ***          ***        ***       ***      ***

Storage
  Average On Hand Pallets/mo.                                                                ***        ***       ***      ***
  Meters (Warranty & Samples)                                                                ***        ***       ***      ***
  System Kits                                                                                ***        ***       ***      ***
  Test Strips (10, 50, 100)                                                                  ***        ***       ***      ***
  Control Solution                                                                           ***        ***       ***      ***
  Lancets (10 & 100)                                                                         ***        ***       ***      ***
  Lancing Device                                                                             ***        ***       ***      ***
  Packing Materials                                                                          ***        ***       ***      ***
  Meter Cases                                                                                ***        ***       ***      ***

  Average Number of Total Pallets                                               ***          ***        ***       ***      ***

  Storage Fee ($26.00 pallet)                                                   ***          ***        ***       ***      ***

Outbound Order Processing

Retail
Average Orders/month                           ***                                           ***        ***       ***      ***
Average Line Items/month                       ***                              ***          ***        ***       ***      ***
Average Strip Cartons Picked/mo.               ***                              ***          ***        ***       ***      ***
Average Sys Kits Cartons Picked/mo.            ***                              ***          ***        ***       ***      ***


Independents/Managed Care etc.
Average Orders/mo.                             ***                                           ***        ***       ***      ***
Average Line Items/Order                       ***                                           ***        ***       ***      ***
Average Strip-50's Cartons Picked/mo.          ***                              ***          ***        ***       ***      ***
Average Strip-100's Cartons Picked/mo.         ***                              ***          ***        ***       ***      ***
Average Sys Kits Cartons Picked/mo.            ***                              ***          ***        ***       ***      ***
Average Ancillary Cartons Picked/mo.           ***                              ***          ***        ***       ***      ***

Internet Orders
Average Orders/mo.                             ***                                           ***        ***       ***      ***
Average Line Items/Order                       ***                              ***          ***        ***       ***      ***
Average Units Picked/Order                     ***                              ***          ***        ***       ***      ***


Warranty and Samples
Average Orders/mo.                             ***                                           ***        ***       ***      ***
Average Line Items/Order                       ***                              ***          ***        ***       ***      ***
Average Units Picked/Order                     ***                              ***          ***        ***       ***      ***



Total Outbound OrderProcessing
Average Orders/mo. Fee                                                          ***          ***        ***       ***      ***
Average Line Items/Order Fee                                                    ***          ***        ***       ***      ***
Average Units Picked/Order Fee                                                  ***          ***        ***       ***      ***
TOTAL                                                                           ***          ***        ***       ***      ***

Customer Service


<CAPTION>

   Livingston Logistics Fees                Jul-00    Aug-00    Sep-00    Oct-00    Nov-00    Dec-00         Total
-----------------------------               --------  -------   -------  --------   -------   -------       ------
<S>                                        <C>        <C>       <C>      <C>        <C>       <C>          <C>
Inbound Pallets
Quantity
 Meters (Warranty)                            ***       ***       ***       ***       ***       ***
 System Kits                                  ***       ***       ***       ***       ***       ***
 Test Strips (10, 50, 100)                    ***       ***       ***       ***       ***       ***
 Control Solution                             ***       ***       ***       ***       ***       ***
 Lancets (10 & 100)                           ***       ***       ***       ***       ***       ***
 Lancing Device                               ***       ***       ***       ***       ***       ***
 Packing Materials                            ***       ***       ***       ***       ***       ***
 Meter Cases                                                      ***

 Total Pallet a month                         ***       ***       ***       ***       ***       ***

 Handling Fee per month                       ***       ***       ***       ***       ***       ***          ***

Storage
  Average On Hand Pallets/mo.                           ***       ***       ***       ***       ***
  Meters (Warranty & Samples)                 ***       ***       ***       ***       ***       ***
  System Kits                                 ***       ***       ***       ***       ***       ***
  Test Strips (10, 50, 100)                   ***       ***       ***       ***       ***       ***
  Control Solution                            ***       ***       ***       ***       ***       ***
  Lancets (10 & 100)                          ***       ***       ***       ***       ***       ***
  Lancing Device                              ***       ***       ***       ***       ***       ***
  Packing Materials                           ***       ***       ***       ***       ***       ***
  Meter Cases                                 ***       ***       ***       ***       ***       ***

  Average Number of Total Pallets             ***       ***       ***       ***       ***       ***          ***

  Storage Fee ($26.00 pallet)

Outbound Order Processing
                                                                                                             ***
Retail
Average Orders/month                          ***       ***       ***       ***       ***       ***          ***
Average Line Items/month                      ***       ***       ***       ***       ***       ***          ***
Average Strip Cartons Picked/mo.              ***       ***       ***       ***       ***       ***          ***
Average Sys Kits Cartons Picked/mo.           ***       ***       ***       ***       ***       ***          ***         ***


Independents/Managed Care etc.
Average Orders/mo.                            ***       ***       ***       ***       ***       ***          ***
Average Line Items/Order                      ***       ***       ***       ***       ***       ***          ***
Average Strip-50's Cartoons Picked/mo.        ***       ***       ***       ***       ***       ***          ***
Average Strip-100's Cartons Picked/mo.        ***       ***       ***       ***       ***       ***          ***
Average Sys Kits Cartons Picked/mo.           ***       ***       ***       ***       ***       ***          ***
Average Ancillary Cartons Picked/mo.          ***       ***       ***       ***       ***       ***          ***         ***

Internet Orders
Average Orders/mo.                            ***       ***       ***       ***       ***       ***          ***
Average Line Items/Order                      ***       ***       ***       ***       ***       ***          ***
Average Units Picked/Order                    ***       ***       ***       ***       ***       ***          ***         ***


Warranty and Samples
Average Orders/mo.                            ***       ***       ***       ***       ***       ***          ***
Average Line Items/Order                      ***       ***       ***       ***       ***       ***          ***
Average Units Picked/Order                    ***       ***       ***       ***       ***       ***          ***         ***



Total Outbound OrderProcessing                ***       ***       ***       ***       ***       ***
Average Orders/mo. Fee                        ***       ***       ***       ***       ***       ***
Average Line Items/Order Fee                  ***       ***       ***       ***       ***       ***
Average Units Picked/Order Fee                ***       ***       ***       ***       ***       ***          ***
TOTAL

Customer Service
</TABLE>

                                      -2-

*** CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

<TABLE>
<CAPTION>
Livingston Logistics Fees                  Assumptions                     Fee       Mar-00     Apr-00     May-00    Jun-00
-------------------------                  -----------                     ---       ------     ------     ------    ------
<S>                         <C>                                           <C>        <C>        <C>        <C>       <C>
Order Entry Fee/Line Item   ***                                            ***         ***        ***        ***       ***
TOTAL Order Entry &
 Customer Service                                                                      ***        ***        ***       ***

Accounts Receivable

Order Entry Fee/Line Item   Retail and Independent Orders Only             ***         ***        ***        ***       ***

Total Livingston Charges
 (not including                                                                        ***        ***        ***       ***
Transportation and
 Communications Costs)

Transportation Management
 Cost + 15%
Management Fee

Communications Charges
 Cost + 15%
Management Fee

Packaging Supply
 Management Cost + 15%
Management Fee

<CAPTION>
Livingston Logistics Fees         Jul-00     Aug-00      Sep-00      Oct-00      Nov-00      Dec-00        Total
-------------------------         ------     ------      ------      ------      ------      ------        -----
<S>                               <C>        <C>         <C>         <C>         <C>         <C>           <C>
Order Entry Fee/Line Item            ***       ***         ***         ***         ***         ***
TOTAL Order Entry &
 Customer Service                    ***       ***         ***         ***         ***         ***           ***

Accounts Receivable

Order Entry Fee/Line Item            ***       ***         ***         ***         ***         ***           ***

Total Livingston Charges
 (not including                      ***       ***         ***         ***         ***         ***           ***

Transportation and
 Communications Costs)

Transportation Management
 Cost + 15%
Management Fee


Communications Charges
 Cost + 15%
Management Fee


Packaging Supply
 Management Cost + 15%
Management Fee
</TABLE>

                                      -3-

*** CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

                                   Exhibit C

Key Performance Indicators

Customer Service

1.   Orders placed through LHSI customer service will meet the following minimum
     standards:

     A.  Order Accuracy ***

     B.  Abanded call rate of less than ***

     C.  Call answered within ***

Warehousing & Distribution

2.   Orders received by LHSI prior to 2:00 PM:

     A.  Shipped the same day:  ***

     B.  Shipped with correct product: ***

     C.  Shipped with correct amount: ***

     D.  Received inventory to be put away in 24 hours: ***

     -unless the product is on backorder

Accounts Receivable

3.   All AR data received by 2:00pm:

     A.  Will be posted same day:  ***

     B.  Will be accurately posted:  ***

*** CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

                          FIRST AMENDMENT TO CONTRACT

TheraSense will make the following additions due to changes in ProCure
utilization.

THIS FIRST AMENDMENT ("First Amendment") to the Contract effective January 19,
2000, by and between Livingston Healthcare Services Inc., a Delaware
corporation, having its principal place of business at 220 Lake Drive, Newark,
Delaware 19702 ("LHSI") and TheraSense, a California corporation, having its
principal place of business at 1360 South Loop Road, Alameda, CA 94502,
hereinafter referred to as "Client."

The parties now wish to amend the Contract as set forth below.

Both parties agree that ProCure.com Inc.'s system will remain the Electronic
Commerce vehicle and the following new fees will apply as defined below.


          Description                                  Fee
          --------------------------------------------------------------

          Monthly License Fee                           ***
          --------------------------------------------------------------
          Design Fee (Attached)                         ***
          --------------------------------------------------------------
          Fee per Order                                 ***
          --------------------------------------------------------------
          Fee per Order line                            ***
          --------------------------------------------------------------
          Credit card Processing                        ***
          --------------------------------------------------------------
          E-Mail Confirrnation                          ***
          --------------------------------------------------------------


NOTE:  Any additional miscellaneous services will be governed under the current
Contract between LHSI and Client, dated March 15, 1999.

IN WITNESS WHEREOF, the parties, intending to be legally bound, have caused this
First Amendment to be executed by their respective duly authorized
representatives as of the date first written above.


LIVINGSTON HEALTHCARE SERVICES INC.                THERASENSE

BY: ________________________________________       BY: _____________________

NAME: Peter Westermann                             NAME: ___________________
      --------------------------------------

TITLE: President and Chief Operating Officer       TITLE: __________________
       -------------------------------------

DATE:  _____________________________________       DATE: ___________________

*** CONFIDENTIAL TREATMENT REQUESTED