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                                                                    EXHIBIT 10.1

                              TERMINATION AGREEMENT



     This TERMINATION AGREEMENT (the "Termination Agreement") is made as of this
14th day of September, 2001, by and between MICRO THERAPEUTICS, INC., a Delaware
corporation ("MTI") and GUIDANT CORPORATION, an Indiana corporation ("Guidant").

                                 R E C I T A L S

     A.  MTI and Guidant previously entered into that certain Distribution
Agreement dated November 17, 1997 (as amended on August 17, 1998, July 23, 1999,
and August 24, 2000, the "Distribution Agreement"), attached hereto as Exhibit
A.

     B.  Effective July 26, 2001, MTI experienced a Change in Control Event (as
that term is defined in Section 1.4 of the Distribution Agreement), and MTI
desires to terminate the Distribution Agreement and to set forth herein all of
the outstanding obligations of either party to the other, and Guidant is willing
to do so subject to the terms and conditions contained in this Termination
Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the mutual terms and
conditions hereinafter set forth, Guidant and MTI agree as follows (all
capitalized terms not otherwise defined in this Termination Agreement shall have
the meaning assigned to them in the Distribution Agreement):

1.   TERMINATION OF DISTRIBUTION AGREEMENT; TRANSITION PERIOD.

     (a)  TERMINATION. Notwithstanding anything to the contrary in the
Distribution Agreement, including any termination provisions or requirements
therein which shall be deemed automatically amended by the mutual agreement of
the parties hereto to the extent such provisions are in conflict with the terms
hereof, the parties hereto agree that, effective as of December 31, 2001, the
Distribution Agreement, and any and all terms, rights and obligations of the
parties thereunder, shall terminate and be of no further force or effect other
than as expressly set forth or as otherwise amended herein. Without limiting the
foregoing, except as set forth in Section 1(h) below, the parties agree that
Guidant shall have no right or obligation whatsoever to distribute the Products
in the Territory from and after December 31, 2001.

     (b)  TRANSITION PERIOD. Beginning as of the date hereof and continuing
until December 31, 2001 (the "Transition Period"), Guidant and MTI shall work
together in good faith and use their commercially reasonable efforts to effect
the transfer, without interruption in sales and service to the Customers of the
Products in the Territory, of the distribution of the Products in the Territory.
During the Transition Period, unless otherwise requested by MTI in writing,
Guidant shall continue to distribute the Products in the Territory except as
otherwise described herein. MTI will use its commercially reasonable efforts to
take over all attributes of selling, marketing and distributing it's products in
the Territory on a country by country basis. Once MTI is prepared and able to
take over the sales, marketing, and distribution of the Products in a country
within the Territory (other than the


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United Kingdom), MTI will so indicate to Guidant in writing thirty (30) days
prior to such date as MTI will take over such duties with respect to the
Products in such country, and Guidant will no longer have any responsibilities
for such duties with respect to the Products in such country (an "MTI Assumed
Country").

     (c)  HD ONYX. MTI may immediately commence to directly offer and sell to
customers (i) MTI's high density Onyx(R), which is Onyx containing over twenty
percent (20%) , or greater, by volume, of the polymer ("HD Onyx"), and (ii)
MTI's bifurcation balloon products yet to be commercially released (the
"Bifurcation Balloon Products," and together with HD Onyx, the "Aneurysm
Products"), used for the treatment of brain aneurysms in Europe, independent
from the terms or provisions of the Distribution Agreement.

     (d)  PUBLICITY. MTI and Guidant shall mutually agree upon the language of a
press release describing the termination of the Distribution Agreement and the
plan of the transition.

     (e)  EXPIRATION OF TRANSITION PERIOD. Upon the expiration of the Transition
Period, except as provided for in Section 1(h) below, the parties agree that (i)
Guidant shall have no further obligation to sell or distribute the Products or
service any Customers of the Products in the Territory (including any
distribution obligations set forth in Section 1(b) of this Termination
Agreement), (ii) each party shall immediately discontinue any and all use and
distribution of any trademarks, service marks, trade names or logos of the other
party, and (iii) each party shall immediately return to the other all
Confidential Information (as defined in the Distribution Agreement), or upon the
other party's written consent, destroy such Confidential Information, and
certify in writing such destruction to the other party other than to the extent
such Confidential Information is necessary to perform under this Termination
Agreement, and except for one copy of such Confidential Information which may be
kept in the legal files of such party to demonstrate compliance with the
obligations of this Termination Agreement and the Distribution Agreement.

     (f)  SURVIVAL OF TERMS. Except as otherwise set forth in Section 1(h) and
3(a) below, Sections 1, 4.7, 6.5, 9 through 12, inclusive, 13.5 and 14 of the
Distribution Agreement shall survive the termination thereof and, furthermore,
are hereby incorporated by reference and shall have full force and effect as if
expressly set forth herein (provided, however, as such Sections are amended by
this Termination Agreement, and to the extent any such Sections are in conflict
with the terms of this Termination Agreement, the terms of this Termination
Agreement shall take precedence).

     (g)  FIRST COMMERCIAL SALE. The parties acknowledge that, based upon
written documentation provided to MTI by Guidant, the First Commercial Sale, as
defined in the Distribution Agreement, occurred on August 31, 1999.

     (h)  TENDERS; STOCKIST SERVICES. If required by applicable law (including
tender laws) within any country within the Territory that Guidant continue to
distribute Products to customers under existing contracts, then following the
termination of the Transition Period, pursuant to the applicable contract or
contracts, Guidant will continue to (i) purchase Products from and remit payment
to MTI, (ii) distribute such Products, (iii) provide billing and collection
services with respect to such Products, and (iv) provide customer service for
such Products (the "Stockist Services"). Following the termination of the
Transition Period, Guidant shall perform such Stockist Services for a fee in the
amount of ten percent (10%) of Net Sales by Guidant until such time as MTI can,
subject to applicable tender laws and contracts, itself perform such Stockist
Services. In such


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event, Guidant and MTI should make all commercially reasonable efforts to save
business and successfully convert tenders to MTI. MTI shall not pay Guidant any
fees described in Section 3 of this Termination Agreement with respect to the
Stockist Services. The timing, payment and delivery terms of the purchase,
distribution, billing, collection and customer service aspects of the Stockist
Services shall be performed in accordance with the provisions of Sections 6, 7
and 8 of the Distribution Agreement, the applicable provisions of which are
hereby incorporated herein by reference for the purpose of this Section 1(h) and
which shall survive termination of the Distribution Agreement for the purpose of
the Stockist Services. Upon the termination of Guidant's obligation to perform
the Stockist Services, Guidant may sell to MTI all or any part of its remaining
inventory of the Products that were sold to Guidant following the termination of
the Transition Period for the purpose of the Stockist Services, and MTI agrees
to repurchase all of such Products from Guidant within forty-five (45) days of
the termination of Guidant's obligation to perform the Stockist Services. The
price for such repurchase shall be the Cost paid by Guidant to MTI pursuant to
the terms of the Distribution Agreement, plus applicable freight charges,
insurance and other costs of shipping and handling, taxes, duties and the like.

2.   GUIDANT PERSONNEL; NON-SOLICITATION; OWNERSHIP OF PROPERTY.

     (a)  GUIDANT PERSONNEL. MTI shall evaluate and consider for hire, all
Guidant neuro personnel in the Territory who have been presented to MTI by
Guidant in writing as available for hire, together with Guidant's written
consent to MTI so hiring. MTI, however, shall have no obligation to hire any
such persons.

     (b)  NON-SOLICITATION. From the date hereof and ending on the second
anniversary of the date hereof, without the prior written consent of Guidant,
MTI shall not solicit for employment any employee of Guidant in the Territory,
and, without the prior written consent of MTI, Guidant shall not solicit for
employment any employee of MTI in the Territory.

     (c)  OWNERSHIP OF PROPERTY. As between MTI and Guidant, MTI shall retain
possession and full and complete title to all Products and intellectual property
related to the Products; except that Guidant shall own Products purchased by
Guidant from MTI as inventory which are not repurchased by MTI.

3.   FEES.

     (a)  TERMINATION FEE. In consideration of the obligations to be performed
by Guidant pursuant to this Termination Agreement, and in full satisfaction of
MTI's payment obligations pursuant to the Distribution Agreement, MTI shall pay
to Guidant the termination fee described in Section 13.3.2 of the Distribution
Agreement, subject to the following (as modified by this Section 3, the
"Termination Fee"):

          (i) the twelve (12) month period described in Section 13.3.2 of the
Distribution Agreement shall be the twelve (12) months of operations ending
December 31, 2001;

          (ii) "Net Sales," shall include MTI sales of Products in the Territory
(including the MTI Assumed Countries) during the Transition Period, provided,
however, that "Net Sales," shall not include MTI sales of the Aneurysm Products;


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          (iii) within thirty (30) days of the end of each month during the
Transition Period, Guidant shall provide MTI with a report of Guidant's Net
Sales by country during such month;

          (iv) within thirty (30) days of the end of the Transition Period, MTI
and Guidant shall provide each other with reports of their respective Net Sales
(excluding MTI sales of the Aneurysm Products) over the twelve (12) month period
ending December 31, 2001, and MTI agrees to provide Guidant with a summary of
the two reports; and

          (v) MTI shall pay the Termination Fee to Guidant on or before February
15, 2002.

     (b)  ANEURYSM FEE. Beginning as of the date hereof, through December 31,
2001, MTI shall pay Guidant twenty percent (20%) of the net end user selling
price for all Aneurysm Products sold in the Territory, (such net end user
selling pricing being defined for the purpose of this Section 3(b) as the price
paid by end users for such Aneurysm Products, less applicable shipping and
administrative costs, which shipping and administrative costs shall not exceed
six percent (6%) of the aggregate net end user selling price), (the "Aneurysm
Fee"). For the purpose of calculating the Aneurysm Fee, MTI agrees to provide
Guidant with a reconciliation of end user Aneurysm Product revenues in the
Territory during the applicable period. MTI shall pay the Aneurysm Fee to
Guidant within thirty (30) calendar days of the end of the previous sales month.
The Aneurysm Fee is in lieu of any other fees that may have been available to
Guidant if the Aneurysm Products were deemed to be Products, as such term is
defined in the Distribution Agreement.

4.   INVENTORY.

     (a)  REPLACEMENT OF CERTAIN PRODUCTS IN INVENTORY. In the event that,
during the Transition Period, MTI launches for commercial sale any new Product
line that is designated to replace an existing Product line (a "New Generation
Product"), MTI agrees that during the Transition Period it will replace, on a
unit for unit no charge basis, such existing Products with New Generation
Products. For example, if MTI launches the Ultraflow catheter for commercial
sale during the Transition Period, MTI will replace, on a unit for unit basis,
each FlowRider(R) and FlowRider(R) Plus unit in Guidant's inventory with units
of the Ultraflow catheter.

     (b)  REPURCHASE OF INVENTORY. Within thirty (30) days of the termination of
the Transition Period, Guidant may sell to MTI certain of its remaining
inventory of the Products, up to a dollar amount (the "Repurchase Ceiling")
equal to the aggregate Cost (paid by Guidant to MTI pursuant to the terms of the
Distribution Agreement) of those Products sold to Guidant by MTI during the
period beginning on the execution date of this Termination Agreement and ending
on December 31, 2001. (New Generation Products provided to Guidant pursuant to
Section 4(a) hereof shall not be included in such calculation, as such New
Generation Products are provided at no cost).

          (i) MTI shall first repurchase those Products most recently sold to
Guidant by MTI, pursuant to the pricing set forth in Section 4(c), but MTI shall
have no obligation to repurchase any Products after the aggregate amount paid to
Guidant pursuant to this Section 4(b) equals the Repurchase Ceiling.

          (ii) Notwithstanding any of the foregoing, MTI shall have no
obligation to repurchase any Products pursuant to this Section 4(b) that are not
"Saleable Inventory" (as


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hereinafter defined), regardless of any amount remaining under the Repurchase
Ceiling, and MTI shall have no liability to Guidant with respect to any amount
remaining under the Repurchase Ceiling as a result.

     (c)  REPURCHASE PRICE. The price paid by MTI for the Products described in
Section 4(b) shall be the Cost paid by Guidant to MTI pursuant to the terms of
the Distribution Agreement plus applicable freight charges, insurance and other
costs of shipping and handling, taxes, duties and the like.

     (d)  SALEABLE INVENTORY. "Saleable Inventory" includes those Products that
are current products, have a minimum of one-third of their shelf life remaining,
continue to be in physically saleable condition, that are not demonstration
units, and that were originally purchased by Guidant from MTI after June 30,
2001 (using the inventory reports described in Section 4(e)). The date of
purchase of New Generation Products provided to Guidant pursuant to Section 4(a)
hereof shall be based upon the date that the Products replaced by the New
Generation Products were originally sold to Guidant.

     (e)  PHYSICAL COUNT OF PRODUCTS. Within seven (7) days of December 31,
2001, Guidant shall perform a physical count of its inventory of the Products,
and shall permit MTI to have present representatives at each such counting of
inventory. In the event any counting is actually performed prior to or following
December 31, 2001 (within the limitations of the preceding sentence), Guidant
shall cooperate with MTI and provide MTI with such documentation as reasonably
necessary to establish such inventory as of December 31, 2001. Such counting of
inventory shall include all consigned products and Guidant shall permit MTI to
have present representatives at any counting of consigned inventory. Within ten
(10) days of each such counting, Guidant shall provide MTI with a listing of
such counted inventory, priced at Guidant's cost, organized by location and
including product identification numbers, Product quantities and lot numbers.

     (f)  REMAINING POST TRANSITION PERIOD INVENTORY. Within thirty (30) days of
the termination of the Transition Period, Guidant shall sell to MTI its
remaining inventory of the Products that are not repurchased by MTI pursuant to
Section 4(b) hereof, at the Cost paid by Guidant to MTI for such Products
pursuant to the terms of the Distribution Agreement plus applicable freight
charges, insurance and other costs of shipping and handling, taxes, duties and
the like, up to an aggregate repurchase amount under this Section 4(f) of One
Hundred Thousand Dollars ($100,000). At the same time, all Products remaining in
Guidant's inventory following such repurchase described in this Section 4(f)
shall be given to MTI free of charge.

5.   REPAYMENT OF NOTES. No later than September 30, 2001, (i) MTI shall pay
Guidant $5,000,000 plus all interest accrued and unpaid through the dates of
payment in exchange for and in full satisfaction of all outstanding principal
and interest under that certain 5% Convertible Subordinated Note dated November
17, 1997 in the principal amount of $5,000,000 (the "1997 Note"), issued under
the Convertible Subordinated Note Agreement by and between MTI and Guidant dated
November 17, 1997 and, (ii) MTI shall pay Guidant $2,000,000 plus all interest
accrued and unpaid through the date of payment in exchange for and in full
satisfaction of all outstanding principal and interest under that certain
Promissory Note dated May 28, 1998 in the principal amount of $2,000,000 (the
"1998 Note" and, together with the 1997 Note, the "Notes"), issued under the
Credit Agreement by and between MTI and Guidant dated November 17, 1997.


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6.   MUTUAL RELEASE; WAIVER.

     (a)  MUTUAL RELEASE. Except for the obligations of the parties set forth in
this Termination Agreement, effective as of December 31, 2001 each of MTI on
behalf of itself and its representatives, officers, directors, successors,
assigns and agents on the one hand, and Guidant on behalf of itself and its
representatives, officers, directors, successors, assigns and agents on the
other hand, do hereby fully release and forever discharge the other party and
its representatives, officers, directors, successors, assigns and agents of and
from any and all manner of actions, suits, liens, debts, damages, claims,
obligations, liabilities and demands of every nature, kind and description
whatsoever, whether known or unknown and whether suspected or unsuspected,
either at law, in equity or otherwise, which such party has, has had or may have
or may claim to have, against the other party, its representatives, officers,
directors, successors, assigns or agents, arising prior to the date hereof and
related to or arising out of the Distribution Agreement (including any fees
arising therefrom, except as provided for in this Termination Agreement). The
parties intend that the foregoing shall be a general mutual release and shall
extend to all claims related to or arising out of the Distribution Agreement
(including any fees arising therefrom, except as provided for in this
Termination Agreement) which the other party does not know of or suspect to
exist in its favor. In connection therewith, each party waives the benefits
afforded by any statute or regulation in connection therewith.

     (b)  WAIVER. Each party hereto, on behalf of itself and its Related
Parties, hereby irrevocably and forever waives all rights it may have under
California Civil Code Section 1542, with respect to the foregoing release and
waiver in this Section 6. Each party understands that Section 1542 provides
that:

     A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW
OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME EXECUTING THE RELEASE WHICH, IF
KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

     Each party acknowledges that is has been fully informed by its counsel
concerning the effect and import of this Termination Agreement under California
Civil Section 1542 and the other requirements of law.

7.   GENERAL.

     (a)  Each of the parties represents and warrants to the other party that it
has not assigned or transferred to any person, corporation or other entity, any
claim, liability or cause of action based on or arising out of, or in connection
with any matter, claim or cause of action which is being released pursuant to
the provisions of this Termination Agreement.

     (b)  This Termination Agreement shall be binding upon, and shall inure to
the benefit of the parties hereto and their respective heirs, successors,
representatives and assigns.

     (c)  This Termination Agreement shall be governed and construed by the laws
of the State of California, without reference to choice of law principles, as to
all matters.


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     (d)  This Termination Agreement sets forth the entire agreement between the
parties with respect to the subject matter hereof and supercedes all other
agreements or understanding with respect to the subject matter hereof.

     (e)  The terms of this Termination Agreement, together with the
Distribution Agreement as amended herein and to the extent incorporated by
reference herein, may be amended, modified or eliminated only upon the mutual
written agreement of the parties hereto. The waiver by either party hereto of
any breach of any of the terms or provisions of this Termination Agreement shall
not be construed as a waiver of any subsequent breach.

     (f)  Each of the parties to this Termination Agreement represents and
warrants that the persons executing this Termination Agreement are authorized
and empowered to enter and to execute this Termination Agreement for and on
behalf of such party.

     (g)  This Termination Agreement may be executed in one or more
counterparts, each of which shall be deemed an original all of which together
shall be deemed one in the same agreement.

     IN WITNESS WHEREOF, the undersigned have executed this Termination
Agreement as of the date herein first above written.


                                                  MICRO THERAPEUTICS, INC.

                                                  By:  /s/ John Rush
                                                       -------------------------
                                                  Its: President and Chief
                                                       Executive Officer


                                                  GUIDANT CORPORATION

                                                  By:  /s/ Mary J. Bellack
                                                       -------------------------
                                                  Its: Vice President & General
                                                       Manager, Neurovascular


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