Document:

exv10w2

 

Exhibit 10.2

MICRUS ENDOVASCULAR CORPORATION

INDEMNIFICATION AGREEMENT

     This Indemnification Agreement (“Agreement”) is made as of                      by and
between Micrus Endovascular Corporation, a Delaware corporation (the “Company”), and
                     (“Indemnitee”).

RECITALS

     WHEREAS, the Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve the Company;

     WHEREAS, in order to induce Indemnitee to continue to provide services to the Company, the
Company wishes to provide for the indemnification of, and advancement of expenses to, Indemnitee to
the maximum extent permitted by law;

     WHEREAS, the Certificate of Incorporation of the Company (the “Charter”) requires
indemnification of the officers and directors of the Company, and Indemnitee may also be entitled
to indemnification pursuant to the General Corporation Law of the State of Delaware (the
“DGCL”);

     WHEREAS, the Charter and the DGCL expressly provide that the indemnification provisions set
forth therein are not exclusive, and thereby contemplate that contracts may be entered into between
the Company and members of the board of directors, officers and other persons with respect to
indemnification;

     WHEREAS, the Company and Indemnitee recognize the continued difficulty in obtaining liability
insurance for the Company’s directors, officers, employees, agents and fiduciaries, the significant
and continual increases in the cost of such insurance and the general trend of insurance companies
to reduce the scope of coverage of such insurance;

     WHEREAS, the Company and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting directors, officers, employees, agents and fiduciaries to
expensive litigation risks at the same time as the availability and scope of coverage of liability
insurance provide increasing challenges for the Company;

     WHEREAS, Indemnitee does not regard the protection currently provided by applicable law, the
Company’s governing documents and available insurance as adequate under the present circumstances,
and the Indemnitee and certain other directors, officers, employees, agents and fiduciaries of the
Company may not be willing to continue to serve in such capacities without additional protection;

     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the
increased difficulty in attracting and retaining highly qualified persons such as Indemnitee is
detrimental to the best interests of the Company’s stockholders and that the Company should act to
assure such persons that there will be increased certainty of such protection in the future;

 

 

     WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the Company free from
undue concern that they will not be so indemnified; and

     WHEREAS, this Agreement is a supplement to and in furtherance of the indemnification provided
in the Charter and any resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     Section 1. Services to the Company. Indemnitee agrees to serve as an officer or
director of the Company. Indemnitee may at any time and for any reason resign from such position
(subject to any other contractual obligation or any obligation imposed by operation of law), in
which event the Company shall have no obligation under this Agreement to continue Indemnitee in
such position. This Agreement shall not be deemed an employment contract between the Company (or
any of its subsidiaries or any Enterprise) and Indemnitee. The foregoing notwithstanding, this
Agreement shall continue in force after Indemnitee has ceased to serve as an officer or director of
the Company.

     Section 2. Definitions

     As used in this Agreement:

          (a) “Corporate Status” describes the status of a person who is or was a director,
officer, employee or agent of the Company or of any other corporation, partnership or joint
venture, trust, employee benefit plan or other enterprise which such person is or was serving at
the request of the Company.

          (b) “Enterprise” shall mean the Company and any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at
the request of the Company as a director, officer, employee, agent or fiduciary.

          (c) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding. Expenses also shall include Expenses incurred in connection with
any appeal resulting from any Proceeding, including without limitation the premium, security for,
and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent.
Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of
judgments or fines against Indemnitee.

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          (d) “Independent Counsel” means a law firm, or a partner (or, if applicable, member)
of such a law firm, that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters concerning the Indemnitee under
this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any
other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term “Independent Counsel” shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under
this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent
Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its engagement pursuant
hereto.

          (e) The term “Proceeding” shall include any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding, whether brought in the right of
the Company or otherwise and whether of a civil, criminal, administrative or investigative nature,
in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that
Indemnitee is or was an officer or director of the Company, by reason of any action taken by him or
of any action on his part while acting as an officer or director of the Company, or by reason of
the fact that he is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, in each case whether or not serving in such capacity at the time any liability or
expense is incurred for which indemnification, reimbursement, or advancement of expenses can be
provided under this Agreement; provided, however, that the term “Proceeding” shall
not include any action, suit or arbitration initiated by Indemnitee to enforce Indemnitee’s rights
under this Agreement.

     Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened
to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee
shall be indemnified against all Expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company and, in the case of a
criminal proceeding, had no reasonable cause to believe that his conduct was unlawful. Indemnitee
shall not enter into any settlement in connection with a Proceeding without ten (10) days prior
notice to the Company.

     Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or
is threatened to be made, a party to or a participant in any Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by him or

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on his behalf in connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company. No indemnification for Expenses shall be made under this
Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally
adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware
Court of Chancery (the “Delaware Court”) or any court in which the Proceeding was brought
shall determine upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such
expenses as the Delaware Court or such other court shall deem proper.

     Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement, to the extent that Indemnitee is a party
to or a participant in and is successful, on the merits or otherwise, in any Proceeding or in
defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith.
If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the
Company shall indemnify Indemnitee against (a) all Expenses actually and reasonably incurred by him
or on his behalf in connection with each successfully resolved claim, issue or matter and (b) any
claim, issue or matter related to any such successfully resolved claim, issue or matter. For
purposes of this Section and without limitation, the termination of any claim, issue or matter in
such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful
result as to such claim, issue or matter.

     Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a
witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

     Section 7. Additional Indemnification.

          (a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify
Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or is threatened to
be made a party to any Proceeding (including a Proceeding by or in the right of the Company to
procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.

          (b) For purposes of Section 7(a), the meaning of the phrase “to the fullest extent permitted
by law” shall include, but not be limited to:

               (i) to the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL or such provision thereof; and

               (ii) to the fullest extent authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement that increase the extent to which a corporation may
indemnify its officers and directors.

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     Section 8. Exclusions. Notwithstanding any provision in this Agreement to the
contrary, the Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:

          (a) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision;

          (b) for an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law; or

          (c) for which payment is prohibited by applicable law.

     Section 9. Advances of Expenses. The Company shall advance, to the extent not
prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding, and such
advancement shall be made within thirty (30) days after the receipt by the Company of a statement
or statements requesting such advances (which shall include invoices received by Indemnitee in
connection with such Expenses but, in the case of invoices in connection with legal services, any
references to legal work performed or to expenditures made that would cause Indemnitee to waive any
privilege accorded by applicable law shall not be included with the invoice) from time to time,
whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and
interest free. Advances shall be made without regard to Indemnitee’s ability to repay the expenses
and without regard to Indemnitee’s ultimate entitlement to indemnification under the other
provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred
pursuing an action to enforce this right of advancement, including Expenses incurred preparing and
forwarding statements to the Company to support the advances claimed. The Indemnitee shall qualify
for advances upon the execution and delivery to the Company of this Agreement which shall
constitute an undertaking providing that the Indemnitee undertakes to the fullest extent required
by law to repay the advance if and to the extent that it is ultimately determined by a court of
competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled
to be indemnified by the Company. This Section 9 shall not apply to any claim made by Indemnitee
for which indemnity is excluded pursuant to Section 8. The right to advances under this paragraph
shall in all events continue until final disposition of any Proceeding, including any appeal
therein.

     Section 10. Procedure for Notification and Defense of Claim.

          (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a
written request therefor.

          (b) The Company will be entitled to participate in the Proceeding at its own expense.

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     Section 11. Procedure Upon Application for Indemnification.

          (a) Upon written request by Indemnitee for indemnification pursuant to Section 10(a), a
determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto
shall be made in the specific case by Independent Counsel in a written opinion to the Board, a copy
of which shall be delivered to Indemnitee and, if it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten (10) days after such
determination. Indemnitee shall cooperate with the Independent Counsel making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such counsel
upon reasonable advance request any documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the Independent Counsel shall be borne
by the Company (irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.

          (b) The Independent Counsel shall be selected by Indemnitee. The Company may, within ten (10)
days after written notice of such selection, deliver to the Indemnitee a written objection to such
selection; provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection is without merit.
If, within twenty (20) days after the later of submission by Indemnitee of a written request for
indemnification pursuant to Section 10(a) hereof, and the final disposition of the Proceeding,
including any appeal therein, no Independent Counsel shall have been selected and not objected to,
the Indemnitee may petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Company to the selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the court or by such other person as the
court shall designate, and the person with respect to whom all objections are so resolved or the
person so appointed shall act as Independent Counsel under Section 11(a) hereof. Upon the due
commencement of any judicial proceeding or arbitration pursuant to Section 13(a) of this Agreement,
Independent Counsel shall be discharged and relieved of any further responsibility in such capacity
(subject to the applicable standards of professional conduct then prevailing).

     Section 12. Presumptions and Effect of Certain Proceedings.

          (a) In making a determination with respect to entitlement to indemnification hereunder, the
Independent Counsel making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making by the Independent Counsel of any
determination contrary to that presumption. Neither the failure of

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the Company or of Independent Counsel to have made a determination prior to the commencement
of any action pursuant to this Agreement that indemnification is proper in the circumstances
because Indemnitee has met the applicable standard of conduct, nor an actual determination by the
Company or by Independent Counsel that Indemnitee has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct.

          (b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of guilty, nolo contendere or its
equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee
did not act in good faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.

          (c) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted
in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise,
including financial statements, or on information supplied to Indemnitee by the officers of the
Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or
the Board or counsel selected by any committee of the Board or on information or records given or
reports made to the Enterprise by an independent certified public accountant or by an appraiser,
investment banker or other expert selected with reasonable care by the Company or the Board or any
committee of the Board. The provisions of this Section 12(c) shall not be deemed to be exclusive
or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met
the applicable standard of conduct set forth in this Agreement.

          (d) The knowledge and/or actions, or failure to act, of any director, officer, agent or
employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right
to indemnification under this Agreement.

     Section 13. Remedies of Indemnitee.

          (a) Subject to Section 13(e), in the event that (i) a determination is made pursuant to
Section 11 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9 of this Agreement,
(iii) no determination of entitlement to indemnification shall have been made pursuant to Section
11(a) of this Agreement within ninety (90) days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Section 5 or 6 or the last
sentence of Section 11(a) of this Agreement within ten (10) days after receipt by the Company of a
written request therefor, or (v) payment of indemnification pursuant to Section 3, 4 or 7 of this
Agreement is not made within ten (10) days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication by a court of his
entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his
option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence
such proceeding seeking an adjudication or an award in arbitration within 180 days following the
date on which Indemnitee

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first has the right to commence such proceeding pursuant to this Section 13(a);
provided, however, that the foregoing clause shall not apply in respect of a
proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The
Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

          (b) In the event that a determination shall have been made pursuant to Section 11(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 13 shall be conducted in all respects as a de novo
trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that
adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section
13 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be.

          (c) If a determination shall have been made pursuant to Section 11(a) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 13, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.

          (d) The Company shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 13 that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement. The Company shall
indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within
ten (10) days after receipt by the Company of a written request therefor) advance, to the extent
not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection
with any action brought by Indemnitee for indemnification or advance of Expenses from the Company
under this Agreement or under any directors’ and officers’ liability insurance policies maintained
by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advancement of Expenses or insurance recovery, as the case may be.

          (e) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding, including any appeal therein.

     Section 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

          (a) The rights of indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Charter, the Company’s Bylaws, any agreement, a vote of
stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status
prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether
by statute or judicial decision, permits greater

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indemnification or advancement of Expenses than would be afforded currently under the Charter,
Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by
this Agreement the greater benefits so afforded by such change. No right or remedy herein
conferred is intended to be exclusive of any other right or remedy, and every other right and
remedy shall be cumulative and in addition to every other right and remedy given hereunder or now
or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any
other right or remedy.

          (b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents of the Company or of any other
Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available for any such director, officer, employee or
agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant
to the terms hereof, the Company has director and officer liability insurance in effect, the
Company shall give prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee,
all amounts payable as a result of such proceeding in accordance with the terms of such policies.

          (c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.

          (d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the
extent that Indemnitee has otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise.

          (e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is
or was serving at the request of the Company as a director, officer, employee or agent of any other
corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be
reduced by any amount Indemnitee has actually received as indemnification or advancement of
Expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise.

     Section 15. Duration of Agreement. This Agreement shall continue until and terminate
upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as
an officer or director of the Company or (b) one (1) year after the final termination of any
Proceeding, including any appeal, then pending in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 13 of this Agreement relating thereto. This Agreement shall be binding upon the
Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs,
executors and administrators. The Company shall

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require and cause any successor (whether direct or indirect by purchase, merger, consolidation
or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to the Indemnitee, expressly to
assume and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.

     Section 16. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including without limitation,
each portion of any Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by
law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform
to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.

     Section 17. Enforcement.

          (a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer
or director of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as an officer or director of the Company.

          (b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof; provided,
however, that this Agreement is a supplement to and in furtherance of the Charter of the
Company, the Bylaws of the Company and applicable law, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

     Section 18. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement nor shall any waiver constitute a continuing waiver.

     Section 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in
writing upon being served with any summons, citation, subpoena, complaint, indictment, information
or other document relating to any Proceeding or matter which may be subject to indemnification or
advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall
not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement
or otherwise.

     Section 20. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered

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by hand and receipted for by the party to whom said notice or other communication shall have
been directed, (b) mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and
receipted for by the party to whom said notice or other communication shall have been directed or
(d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has
been received:

          (a) If to Indemnitee, at such address as Indemnitee shall provide to the Company.

          (b) If to the Company to:

Micrus Endovascular Corporation

821 Fox Lane

San Jose, CA 95131

or to any other address as may have been furnished to Indemnitee by the Company.

     Section 21. Contribution. To the fullest extent permissible under applicable law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to
be paid in settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in
light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits
received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).

     Section 22. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 13(a) of this Agreement, the
Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought only in the
Delaware Court, and not in any other state or federal court in the United States of America or any
court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware
Court for purposes of any action or proceeding arising out of or in connection with this Agreement,
(iii) appoint, to the extent such party is not otherwise subject to service of process in the State
of Delaware, The Corporation Trust Company, Wilmington, Delaware as its agent in the State of
Delaware as such party’s agent for acceptance of legal process in connection with any such action
or proceeding against such party with the same legal force and validity as if served upon such
party personally within the State of Delaware, (iv) waive any objection to the laying of venue of
any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Delaware Court has been brought
in an improper or inconvenient forum.

-11-

 

     Section 23. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.

     Section 24. Miscellaneous. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this Agreement or to
affect the construction thereof.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.

	 	 	 	 	 	 	 
	 	 	MICRUS ENDOVASCULAR CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	INDEMNITEE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

-12-<PAGE>

                                                                    Exhibit 10.1

                        DEVELOPMENT AND LICENSE AGREEMENT

                                     BETWEEN

                                THERASENSE, INC.

                                       AND

                               INSULET CORPORATION

                          DATED AS OF JANUARY 23, 2002

*** Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [***]. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
RECITALS.................................................................     1

ARTICLE I................................................................     2

   DEFINITIONS...........................................................     2
      1.1  "AFFILIATE"...................................................     2
      1.2  "CLAIMS"......................................................     2
      1.3  "COMPETITOR"..................................................     2
      1.4  "CONFIDENTIAL INFORMATION"....................................     2
      1.5  "DEVELOPMENT COMMITTEE".......................................     2
      1.6  "DEVELOPMENT PROGRAM".........................................     2
      1.7  "DEVELOPMENT PROGRAM TECHNOLOGY"..............................     2
      1.8  "EFFECTIVE DATE"..............................................     2
      1.9  "FDA".........................................................     2
      1.10 "FREESTYLE METER".............................................     2
      1.11 "IMPROVEMENT".................................................     2
      1.12 "INITIAL TERM"................................................     2
      1.13 "INSULET".....................................................     2
      1.14 "INSULET LIABILITY"...........................................     2
      1.15 "INSULET MARKS"...............................................     3
      1.16 "INSULET TECHNOLOGY"..........................................     3
      1.17 "PARTY".......................................................     3
      1.18 "PRODUCT".....................................................     3
      1.19 "PRODUCT TECHNOLOGY"..........................................     3
      1.20 "PUMP"........................................................     3
      1.21 "REMOTE CONTROLLER"...........................................     3
      1.22 "RIGHT".......................................................     3
      1.23 "SPECIFICATIONS"..............................................     3
      1.24 "TECHNICAL INFORMATION........................................     3
      1.25 "TERRITORY"...................................................     3
      1.26 "TEST STRIPS".................................................     3
      1.27 "THERASENSE"..................................................     3
      1.28 "THERASENSE LIABILITY"........................................     3
      1.29 "THERASENSE MARKS"............................................     3
      1.30 "THERASENSE PATENTS"..........................................     3
      1.31 "THERASENSE TECHNOLOGY".......................................     3

ARTICLE II...............................................................     3

   THE DEVELOPMENT PROGRAM...............................................     4
      2.1  GENERAL.......................................................     4
      2.2  OVERSIGHT AND SPECIFICATIONS..................................     4
      2.3  TECHNICAL INFORMATION.........................................     4
      2.4  WORK, COSTS AND FACILITIES....................................     4
      2.5  PATENT AND CONFIDENTIAL INFORMATION AGREEMENTS................     4
      2.6  COMPLIANCE WITH SPECIFICATIONS................................     4
      2.7  GOVERNMENTAL APPROVALS........................................     5
      2.8  MANUFACTURING RIGHTS..........................................     5
      2.9  TECHNICAL ASSISTANCE..........................................     5
      2.10 THERASENSE COMPONENTS.........................................     5
      2.11 MODIFICATIONS.................................................     5
</TABLE>

                                       -i-

<PAGE>

<TABLE>
<S>                                                                         <C>
ARTICLE III..............................................................     6

   CONFIDENTIAL INFORMATION..............................................     6
      3.1  TREATMENT OF CONFIDENTIAL INFORMATION.........................     6
      3.2  RELEASE FROM RESTRICTIONS.....................................     6

ARTICLE IV...............................................................     7

   INTELLECTUAL PROPERTY RIGHTS..........................................     7
      4.1  THERASENSE TECHNOLOGY.........................................     7
      4.2  INSULET TECHNOLOGY............................................     7
      4.3  DEVELOPMENT PROGRAM TECHNOLOGY................................     7
      4.4  RESPONSIBILITY FOR PROTECTION OF TECHNOLOGY...................     7
      4.5  RIGHT OF OTHER PARTY TO PROSECUTE APPLICATIONS................     8
      4.6  ASSISTANCE....................................................     9
      4.7  CLAIMED INFRINGEMENT..........................................     9
      4.8  WARRANTY......................................................    11

ARTICLE V................................................................    12

   LICENSES..............................................................    12
      5.1  PATENT LICENSE................................................    12
      5.2  TECHNICAL INFORMATION LICENSE.................................    12
      5.3  DEVELOPMENT PROGRAM TECHNOLOGY LICENSE........................    12
      5.4  TRADEMARK LICENSES............................................    13

ARTICLE VI...............................................................    14

   MARKETING, SALES PROMOTION AND CUSTOMER SUPPORT.......................    14
      2.8  COMMERCIALIZATION.............................................    14
      6.2  MARKETING AND CUSTOMER SUPPORT ASSISTANCE.....................    14
      6.3  LABELING......................................................    14
      6.4  REPORTING AND NOTICE..........................................    15
      6.5  COMPLAINTS AND RECALLS........................................    16
      6.6  PUBLICITY.....................................................    16

ARTICLE VII..............................................................    17

   TERMINATION...........................................................    17
      7.1  TERM..........................................................    17
      7.2  TERMINATION FOR CAUSE.........................................    17
      7.3  TERMINATION FOR LACK OF PROGRESS..............................    17
      7.4  DISPOSITION OF LICENSED PRODUCTS..............................    18
      7.5  SURVIVAL OF OBLIGATIONS; RETURN OF CONFIDENTIAL INFORMATION...    18
      7.6  ACCRUED OBLIGATIONS...........................................    18

ARTICLE VIII.............................................................    19

   MISCELLANEOUS.........................................................    19
      8.1  COMPETING SYSTEMS.............................................    19
      8.2  LIMITATION OF LIABILITY; INSURANCE............................    19
      8.3  ASSIGNMENT....................................................    19
      8.4  GOVERNING LAW.................................................    20
      8.5  FORCE MAJEURE.................................................    20
      8.6  WAIVER........................................................    20
      8.7  NOTICES.......................................................    20
      8.8  NON-SOLICITATION..............................................    21
      8.9  NO AGENCY.....................................................    21
      8.10 ENTIRE AGREEMENT..............................................    21
      8.11 HEADINGS......................................................    21
</TABLE>

                                      -ii-

<PAGE>

<TABLE>
<S>                                                                         <C>
      8.12 SEVERABILITY..................................................    21
      8.13 SUCCESSORS AND ASSIGNS........................................    21
      8.14 COUNTERPARTS..................................................    22
      8.15 DISPUTE RESOLUTION............................................    22
      8.16 INSULET LIABILITY; THERASENSE LIABILITY.......................    23
</TABLE>

                                      -iii-
<PAGE>

                        DEVELOPMENT AND LICENSE AGREEMENT

     AGREEMENT dated as of January 23, 2002, between TheraSense, Inc., a
Delaware corporation, having its principal place of business at 1360 South Loop
Road, Alameda, CA 94502 (hereinafter referred to as "TheraSense") and Insulet
Corporation, a Delaware corporation having its principal place of business at
100 Cummings Center, Suite 231G, Beverly, MA 01915 (hereinafter referred to as
"Insulet").

                                    RECITALS

     WHEREAS, TheraSense has developed electronic hardware and software capable
of coulometrically measuring glucose in a human blood sample that is currently
marketed by TheraSense as its "FreeStyle" meter (the "FreeStyle Meter");

     WHEREAS, TheraSense has developed and currently markets glucose test strips
for use in conjunction with the FreeStyle Meter (the "Test Strips");

     WHEREAS, Insulet desires to design, develop, manufacture and market a
patient drug delivery system (the "Product") consisting of an insulin infusion
pump (the "Pump") and a hand held electronic device for controlling the Pump
(the "Remote Controller"), which includes a wireless transceiver for
communicating with the Pump, diabetes management software and a meter capable of
coulometrically measuring glucose in a human blood sample;

     WHEREAS, Insulet desires to adapt the FreeStyle Meter for use with the
Remote Controller;

     WHEREAS, TheraSense is willing, for the consideration and upon the terms
set forth herein, to facilitate the adaptation of the FreeStyle Meter for use
with the Remote Controller; and

     WHEREAS, the Parties desire to coordinate on Insulet's marketing of the
Product and TheraSense's marketing of the Test Strips for use with the Product;

     NOW, THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement and other good and valuable consideration,
TheraSense and Insulet agree as follows:

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

     As used in this Agreement, the following terms, whether used in the
singular or plural, shall have the following meanings:

     1.1 "AFFILIATE" means any corporation, company, partnership, joint venture
and/or firm which controls, is controlled by or is under common control with a
Party. For purposes of this Section 1.1, "control" shall mean (a) in the case of
corporate entities, direct or indirect ownership of at least fifty percent (50%)
of the stock or shares entitled to vote for the election of directors; and (b)
in the case of non-corporate entities, direct or indirect ownership of at least
fifty percent (50%) of the equity interest with the power to direct the
management and policies of such non-corporate entities. Unless agreed to in
writing by the Parties, in no event shall a Competitor be an Affiliate.

     1.2 "CLAIMS" is defined in Section 8.16(a).

     1.3 "COMPETITOR" means, (i) regarding Insulet, ***.

     1.4 "CONFIDENTIAL INFORMATION" means the Technical Information and any
other information designated in writing by the disclosing Party as confidential
or proprietary, whether or not related to the subject matter hereof.

     1.5 "DEVELOPMENT COMMITTEE" is defined in Section 2.2.

     1.6 "DEVELOPMENT PROGRAM" means the collaborative effort conceived,
planned, organized, controlled and performed by the Parties to enable Insulet to
produce, manufacture and market a Product that includes the FreeStyle Meter, as
adapted for this purpose.

     1.7 "DEVELOPMENT PROGRAM TECHNOLOGY" is defined in Section 4.3.

     1.8 "EFFECTIVE DATE" means January 23, 2002.

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

     1.10 "FREESTYLE METER" is defined in the Recitals.

     1.11 "IMPROVEMENT" is defined in Section 2.11.

     1.12 "INITIAL TERM" is defined in Section 7.1.

     1.13 "INSULET" means Insulet Corporation, a Delaware corporation.

     1.14 "INSULET LIABILITY" is defined in Section 8.16(a).

                                      -2-

<PAGE>

     1.15 "INSULET MARKS" means the trademarks owned and used by Insulet in
connection with the promotion, marketing and sale of the Product in the
Territory and such other trademarks as the Parties may stipulate in writing.

     1.16 "INSULET TECHNOLOGY" is defined in Section 4.2.

     1.17 "PARTY" means TheraSense or Insulet; "PARTIES" means TheraSense and
Insulet.

     1.18 "PRODUCT" is defined in the Recitals.

     1.19 "PRODUCT TECHNOLOGY" is defined in Section 4.4.

     1.20 "PUMP" is defined in the Recitals.

     1.21 "REMOTE CONTROLLER" is defined in the Recitals.

     1.22 "RIGHT" is defined in Section 4.7(a).

     1.23 "SPECIFICATIONS" is defined in Section 2.2.

     1.24 "TECHNICAL INFORMATION means electrical and mechanical designs,
manufacturing processes, component lists, software, algorithms, technical
advice, know-how, and other technical information utilized in the design and
manufacture of the FreeStyle Meter (as unaltered and unmodified, and
specifically excluding all works derived therefrom).

     1.25 "TERRITORY" means the United States of America.

     1.26 "TEST STRIPS" is defined in the Recitals.

     1.27 "THERASENSE" means TheraSense, Inc., a Delaware corporation.

     1.28 "THERASENSE LIABILITY" is defined in Section 8.16(b).

     1.29 "THERASENSE MARKS" means the "TheraSense" mark, the "FreeStyle"
trademark and such other TheraSense trademarks as the Parties may stipulate in
writing.

     1.30 "THERASENSE PATENTS" means the patents and patent applications set
forth on Schedule A hereto, all continuations and divisions of such
applications, all patents issuing from such applications, divisions and
continuations, and any reissues, reexaminations and extensions of any such
patents.

     1.31 "THERASENSE TECHNOLOGY" is defined in Section 4.1.

                                   ARTICLE II

                                      -3-

<PAGE>

                             THE DEVELOPMENT PROGRAM

     2.1 GENERAL. Subject to the terms and conditions contained in this
Agreement, the Parties agree to undertake the Development Program and shall use
all commercially reasonable efforts to ensure that the Development Program is
completed in a timely fashion.

     2.2 OVERSIGHT AND SPECIFICATIONS.

          (a) The Parties shall establish a committee (the "Development
     Committee"), comprised of one designee of TheraSense and one designee of
     Insulet, to oversee the Development Program. All actions of the Development
     Committee shall require the concurrence of both designees. If both
     designees do not concur, then the matter shall be referred to the Vice
     President of Business Development of TheraSense and the Chief Executive
     Officer of Insulet for resolution.

          (b) The Development Committee shall undertake commercially reasonable
     efforts to produce complete performance specifications (the
     "Specifications") of the Remote Controller, including the FreeStyle Meter
     as adapted for use with the Remote Controller, within sixty (60) days of
     the Effective Date. The Specifications shall include both accuracy and
     precision specifications, which shall meet or exceed such specifications as
     applicable to the FreeStyle Meter as then used independent of the Remote
     Controller.

     2.3 TECHNICAL INFORMATION. TheraSense shall provide the Technical
Information to Insulet and the Development Committee. If the Development
Committee determines that the Development Program could be facilitated by use of
existing TheraSense hardware and/or software (other than software provided as
part of Technical Information), then the Parties shall enter into good-faith
negotiations regarding mutually acceptable terms under which such hardware or
software may be utilized by Insulet.

     2.4 WORK, COSTS AND FACILITIES. Insulet shall undertake all engineering,
development, prototyping and manufacturing work and bear all costs incurred in
the Development Program and the production of the Product, other than costs
incurred by TheraSense in providing Technical Information and as otherwise set
forth herein or as the Parties may otherwise agree. Insulet shall provide the
facilities and staff to be utilized for the Development Program, except as
otherwise set forth herein or as the Parties may otherwise agree.

     2.5 PATENT AND CONFIDENTIAL INFORMATION AGREEMENTS. Each Party shall
require its designee to the Development Committee and all engineers, assistants,
technicians and technical personnel, including consultants, assigned to the
Development Program to execute an agreement for the assignment of inventions in
accordance with Sections 4.2 and 4.3 and for the protection of Confidential
Information in such reasonable form as may from time to time be used by the
Party for such purpose.

     2.6 COMPLIANCE WITH SPECIFICATIONS.

                                      -4-

<PAGE>

          (a) The Development Committee shall ensure that the Product complies
     with the Specifications before commercial sales of the Product commence. If
     the Development Committee is unable to verify such compliance, or its
     members are not in agreement and the matter is not resolved following the
     referral procedures set forth in Section 2.2, then Insulet shall refer the
     Product to an independent testing facility selected by Insulet, but
     reasonably acceptable to TheraSense, which shall evaluate such compliance.
     The costs of such evaluation shall be borne equally by the Parties. The
     Parties agree that Insulet shall not commence commercial sales of the
     Product until TheraSense concurs that the Product complies with the
     Specifications, provided that such concurrence shall not be unreasonably
     withheld or delayed.

          (b) TheraSense shall undertake commercially reasonable efforts to
     ensure that the Test Strips will permit the Product to function within the
     Specifications.

     2.7 GOVERNMENTAL APPROVALS.

          (a) TheraSense acknowledges that the Product has not been reviewed or
     approved for sale or use for any purpose by governmental or regulatory
     bodies in the Territory. Insulet shall be solely responsible for satisfying
     all regulatory requirements necessary for the sale by it of the Product in
     the Territory, including the conduct of all necessary clinical trials;
     provided, however, that TheraSense shall provide to Insulet or appropriate
     regulatory authority, at TheraSense's expense, all information, data,
     materials and product samples in its possession reasonably necessary to
     obtain such approvals.

          (b) TheraSense shall be solely responsible for satisfying all
     regulatory requirements necessary for all of the Test Strips in the
     Territory, including the conduct of all necessary clinical trials.

     2.8 MANUFACTURING RIGHTS. Insulet shall have sole rights and options with
respect to the manufacture of the Product. TheraSense shall have sole rights and
options with respect to the manufacture of the Test Strips.

     2.9 TECHNICAL ASSISTANCE. During the Development Program and throughout the
term of this Agreement, TheraSense shall make available to Insulet members of
TheraSense's technical staff and consultants to advise Insulet on the scale-up
of operations; the obtaining of government approvals necessary to produce,
manufacture, distribute and market the Product in the Territory; the start-up of
Insulet's commercial production of the Product; and manufacturing of the
Product, including training of Insulet personnel, as all such advice relates to
the FreeStyle Meter and the Test Strips. ***.

     2.10 THERASENSE COMPONENTS. If the Development Program could be facilitated
by using existing TheraSense components, then the Parties shall negotiate
mutually acceptable terms under which such components may be used by Insulet.

     2.11 MODIFICATIONS.

                                      -5-

<PAGE>

          (a) If TheraSense makes any modification, enhancement, bug-fix or
     upgrade to the FreeStyle Meter that (i) enhances the blood glucose
     measurement accuracy of the FreeStyle Meter, (ii) increases the blood
     glucose measurement speed of the FreeStyle Meter or (iii) reduces the size
     of the blood sample required for the FreeStyle Meter to measure blood
     glucose levels (individually hereinafter referred to as an "Improvement"),
     then, if TheraSense has the right to do so, TheraSense shall make such
     Improvement available to Insulet, and such Improvement shall be deemed to
     be part of the Technical Information for all purposes of this Agreement.
     TheraSense shall undertake commercially reasonable efforts to secure the
     rights necessary to make Improvements available to Insulet.

          (b) Insulet shall not, without prior consultation with TheraSense,
     modify the Product if such modification would result in a failure to
     conform with the Specifications.

                                   ARTICLE III

                            CONFIDENTIAL INFORMATION

     3.1 TREATMENT OF CONFIDENTIAL INFORMATION. Each Party shall maintain the
Confidential Information of the other Party in confidence, and shall not
disclose, divulge or otherwise communicate such Confidential Information to
others, or use it for any purpose, except pursuant to, and in order to carry
out, the terms and objectives of this Agreement, and hereby agrees to exercise
the same standard of care it employs to protect its own Confidential Information
(and in no event less than a reasonable standard of care) to prevent and
restrain the unauthorized disclosure of such Confidential Information by any of
its directors, officers, employees, consultants, subcontractors, sublicensees,
agents or Affiliates. Without limiting the foregoing, each Party agrees not to
make any disclosure of the other party's Confidential Information that will
impair the other Party's ability to obtain U.S. or foreign patents on any
patentable invention or discovery described in such Confidential Information.
The Confidential Information of each Party includes information about third
parties disclosed by one Party to the other Party.

     3.2 RELEASE FROM RESTRICTIONS. The provisions of Section 3.1 shall not
apply to any Confidential Information disclosed hereunder which:

          (a) was known or used by the receiving Party prior to its date of
     disclosure to the receiving Party, as evidenced by the prior written
     records of the receiving Party; or

          (b) either before or after the date of this disclosure to the
     receiving Party, is lawfully disclosed to the receiving Party by an
     independent, unaffiliated third party rightfully in possession of the
     Confidential Information; or

                                      -6-

<PAGE>

          (c) either before or after the date of the disclosure to the receiving
     Party, becomes published or generally known to the public through no fault
     or omission on the part of the receiving Party or its Affiliates and under
     no obligation of confidentiality; or

          (d) was developed by employees or agents of the receiving Party, as
     evidenced by the written records of the receiving party, such employees
     having had no access to any Confidential Information communicated to the
     receiving Party.

The receiving Party shall not be in violation of this Article III if
Confidential Information of the disclosing Party is required to be disclosed by
the receiving Party in response to a valid order by a court or other
governmental body, provided that the receiving Party provides the disclosing
Party with prior written notice of such disclosure in order to permit the
disclosing Party to seek confidential treatment of such information.

                                   ARTICLE IV

                          INTELLECTUAL PROPERTY RIGHTS

     4.1 THERASENSE TECHNOLOGY. TheraSense shall own the entire right, title and
interest in and to all TheraSense Patents, Technical Information and to all
patents, patent applications, know-how and other intellectual property rights to
any product, method or apparatus conceived, reduced to practice or developed
solely by employees or consultants of TheraSense at any time which relates to
the FreeStyle Meter and the Test Strips or their use or manufacture, including
those developed for and in the course of the Development Program (referred to,
collectively hereunder, as the "TheraSense Technology"), subject, however, to
the limited licenses granted hereunder to Insulet.

     4.2 INSULET TECHNOLOGY. Insulet shall own the entire right, title and
interest in and to all patents, patent applications, know-how and other
intellectual property rights to any product, method or apparatus conceived,
reduced to practice or developed solely by employees or consultants of Insulet
at any time which relates to the Product or its use or manufacture, including
those developed for and in the course of the Development Program (the "Insulet
Technology").

     4.3 DEVELOPMENT PROGRAM TECHNOLOGY. *** in and to all patents, patent
applications, know-how and other intellectual property rights in any product,
method or apparatus conceived, reduced to practice or developed jointly by
TheraSense and Insulet in the course of the Development Program (hereinafter,
the "Development Program Technology"), subject to the limited license thereto
granted to TheraSense under this Agreement.

     4.4 RESPONSIBILITY FOR PROTECTION OF TECHNOLOGY.

          (a) Except as otherwise provided in this Agreement, Insulet shall have
     the right and responsibility, at Insulet's expense and in its sole,
     commercially reasonable judgement, to:

                                      -7-

<PAGE>

               (i) decide whether or not to seek or continue patent protection
          in any country on any Insulet Technology and Development Program
          Technology (referred to collectively hereinafter as the "Product
          Technology");

               (ii) file for, procure and maintain patents in any country on any
          Product Technology; and

               (iii) protect and enforce any patents issued on any Product
          Technology, subject to Section 4.5.

          (b) TheraSense hereby authorizes and empowers Insulet and hereby
     grants to Insulet its permission and consent for Insulet and its authorized
     attorneys, agents or representatives to assume the responsibilities set
     forth in Section 4.4(a). Insulet agrees to assume responsibilities and to
     pay all costs and expenses incurred in carrying out such responsibilities.

          (c) Except as otherwise provided in this Agreement, TheraSense shall
     have the right and responsibility, at TheraSense's expense and in its sole,
     commercially reasonable judgement, to:

               (i) decide whether or not to seek or continue patent protection
          in any country on any TheraSense Technology and the Test Strips;

               (ii) file for, procure and maintain patents in any country on any
          TheraSense Technology and the Test Strips; and

               (iii) protect and enforce any patents issued on any TheraSense
          Technology and the Test Strips, subject to Section 4.5.

          (d) Insulet hereby authorizes and empowers TheraSense and hereby
     grants to TheraSense its permission and consent for TheraSense and its
     authorized attorneys, agents or representatives to assume the foregoing
     responsibilities. TheraSense agrees to assume all responsibilities and to
     pay all costs and expenses incurred in carrying out such responsibilities.

     4.5 RIGHT OF OTHER PARTY TO PROSECUTE APPLICATIONS. If Insulet elects not
to file a patent application or application for a certificate of invention, not
to maintain a patent or certificate of invention, or to abandon a pending patent
application or application for a certificate of invention in the Territory
regarding any Development Program Technology, Insulet shall advise TheraSense of
such election in a timely manner, and TheraSense shall have the right, at the
expense of TheraSense, of filing such application, maintaining such patent or
certificate of invention or continuing to attempt to obtain protection on the
subject matter disclosed in such pending application. In such case, TheraSense
will grant to Insulet a fully paid up, worldwide, nonexclusive license to any
such issued patent for the purpose of manufacturing, having manufactured, using,
having used, importing, having imported, selling and having sold any

                                      -8-

<PAGE>

Insulet product or service without the right to sublicense such issued patent,
except as set forth below. If TheraSense elects to file and prosecute such
application, it shall provide Insulet with written notice and Insulet shall have
*** from receipt of such notice to deliver to TheraSense Insulet's agreement
to pay ***. Upon Insulet's payment of the Shared Expenses, Insulet's license to
the issued patent described above in this Section 4.5 shall include the right to
sublicense without restriction.

     4.6 ASSISTANCE. TheraSense shall make available to Insulet or its
authorized attorneys, agents or representatives, such of TheraSense's employees
as reasonably necessary to assist Insulet in obtaining patent protection for the
Product Technology. Insulet shall reimburse TheraSense for all reasonable costs
incurred in rendering this assistance to Insulet. Insulet shall make available
to TheraSense or its authorized attorneys, agents or representatives, such of
Insulet's employees as reasonably necessary to assist TheraSense in protecting
the Development Program Technology pursuant to Section 4.5. TheraSense shall
reimburse Insulet for all reasonably costs incurred in rendering this assistance
to TheraSense. Each Party shall sign or use its best efforts to have signed all
legal documents necessary to file and prosecute patent applications or
applications for certificates of invention or to obtain or maintain patents or
certificates of invention at no charge to the other Party.

     4.7 CLAIMED INFRINGEMENT.

          (a) In the event that any claim, suit or proceeding is brought against
     TheraSense that the manufacture, use, sale or import of the Product
     infringes any patent, copyright, trade secret or similar proprietary right
     ("Right") of any third party, Insulet will defend TheraSense at Insulet's
     expense against such claim or, at Insulet's option, settle such claim
     (provided that such settlement includes a general release of all claims in
     favor of TheraSense), and will pay any settlements or judgments ultimately
     awarded against TheraSense as a result of such claim, provided that:

               (i) Insulet is notified in writing promptly after TheraSense has
          received notice of such a claim and Insulet has received a copy of all
          communications received by TheraSense in connection with such claim;

               (ii) Insulet is allowed to exercise sole control over the defense
          of the claim and all related settlement negotiations; and

               (iii) TheraSense provides to Insulet, at Insulet's expense, all
          reasonably necessary assistance, information and authority to perform
          the above.

          (b) Insulet will not be obligated to indemnify TheraSense, or
     undertake the defense, of any part of a claim under Section 4.7(a) which
     part asserts liability arising from a Right which would be infringed by the
     FreeStyle Meter alone or the Test Strips alone or the FreeStyle Meter in
     combination with the Test Strips alone.

          (c) In the event that any claim, suit or proceeding is brought against
     Insulet that the manufacture, use, sale or import of the Product infringes
     any Right of any third

                                      -9-

<PAGE>

     party, TheraSense will defend Insulet at TheraSense's expense against such
     claim or, at TheraSense's option, settle such claim (provided that such
     settlement included a general release of all claims against Insulet), and
     will pay all settlements or judgements ultimately awarded against Insulet
     as a result of such claims, provided that:

               (i) TheraSense shall only be obligated to indemnify Insulet, or
          undertake the defense, of that part of a claim under Section 4.7(c)
          which part asserts liability arising from a Right which would be
          infringed by the FreeStyle Meter alone or the Test Strips alone or the
          FreeStyle Meter in combination with the Test Strips alone;

               (ii) TheraSense is notified in writing promptly after Insulet has
          received notice of such a claim and TheraSense has received a copy of
          all communications received by Insulet in connection with such claim;

               (iii) TheraSense is allowed to exercise sole control over defense
          of the claim and all settlement negotiations; and

               (iv) Insulet provides to TheraSense, at TheraSense's expense, all
          reasonably necessary assistance, information and authority to perform
          the above.

          (d) In the event that sale of the Product is enjoined based on a
     determination that the Product, or its manufacture or use, infringes a
     Right, but where there has been no determination that any Right is
     infringed by the FreeStyle Meter (or its manufacture or use) alone or the
     Test Strips (or their manufacture or use) alone or the FreeStyle Meter in
     combination with the Test Strips (or their use in such combination) alone,
     then Insulet will use commercially reasonably efforts, at its expense and
     in its sole discretion, to:

               (i) obtain a license from any third party necessary to permit
          Insulet to continue making, selling, using and importing the Product;
          and/or

               (ii) replace or modify the Product (or its manner of manufacture
          or use) in such a manner that the injunction is no longer effective to
          stop sales of the Product.

          If, after commercially reasonable efforts, Insulet is unable to effect
     a satisfactory solution to any such infringement claim under paragraphs (i)
     or (ii) of this Section 4.7(d), it will have the right to terminate this
     Agreement upon *** notice to TheraSense.

          (e) In the event that sale of the Product is enjoined based on a
     determination that a Right is infringed by the FreeStyle Meter (or its
     manufacture or use) alone or the Test Strips (or their manufacture or use)
     alone or the FreeStyle Meter in combination with the Test Strips (or their
     use in such combination) alone, then TheraSense will use commercially
     reasonable efforts, at its expense and in its sole discretion, to:

                                      -10-

<PAGE>

               (i) obtain a license from any third party necessary to permit
          Insulet to continue making, selling, using and importing the Product;
          and/or

               (ii) replace or modify the Technical Information and/or the Test
          Strips in such a manner that the injunction is no longer effective to
          stop sales of the Product.

          If, after commercially reasonable efforts, TheraSense is unable to
     effect a satisfactory solution to any such infringement claim under
     paragraphs (i) or (ii) under this Section 4.7(e), it will have the right to
     terminate this Agreement upon *** written notice to Insulet.

          (f) This Section 4.7 constitutes the sole and exclusive remedies and
     liabilities of the Parties in respect to this subject matter hereof.

          (g) For purposes of this Section 4.7, TheraSense hereby represents and
     warrants that all components of the Technical Information, as delivered to
     Insulet and unaltered subsequently, are embedded in the FreeStyle Meter.

     4.8 WARRANTY.

          (a) TheraSense warrants that it owns the TheraSense Technology as in
     existence on the Effective Date and that TheraSense has the full power and
     right to grant the rights and licenses granted to Insulet under Sections
     5.1, 5.2 and 5.4(a) of this Agreement.

          (b) TheraSense warrants that the Test Strips and the Technical
     Information will (as applicable):

               (i) be free from defects in design, materials or workmanship;

               (ii) be of merchantable quality and fit for the purpose for which
          it or they is or are intended; and

               (iii) with respect to the Test Strips only, will conform to all
          applicable laws and regulations in the place of manufacture relating
          to the manufacture thereof.

          (c) Insulet warrants that it owns the Insulet Technology as in
     existence on the Effective Date and that Insulet has the full power and
     right to grant the rights and licenses granted to TheraSense under Section
     5.4(b) of this Agreement.

          (d) Insulet warrants that the Products:

               (i) will perform within the Specifications;

                                      -11-

<PAGE>

               (ii) will be free from defects in design (except as such defect
          may be solely related to the Technical Information), materials and
          workmanship;

               (iii) will be of merchantable quality and fit for the purposes
          for which they are intended; and

               (iv) will conform to all applicable laws and regulations in the
          place of manufacture relating to the manufacture thereof.

          (e) THIS SECTION 4.8 STATES THE PARTIES' SOLE AND EXCLUSIVE
     WARRANTIES. EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS SECTION 4.8,
     THE PARTIES MAKE NO ADDITIONAL WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR
     OTHERWISE, AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, AND OF
     MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY
     EXCLUDED.

                                    ARTICLE V

                                    LICENSES

     5.1 PATENT LICENSE. TheraSense hereby grants to Insulet and its Affiliates
a non-exclusive, fully paid, non-transferable (except as otherwise provided in
Section 8.3), non-sublicensable license in the Territory under the TheraSense
Patents for the sole and exclusive purpose of manufacturing, having
manufactured, using, having used, importing, having imported, selling and having
sold the Product in the Territory in conjunction with the Test Strips. The
license granted pursuant to this Section 5.1 shall continue in effect until the
earlier of the termination or expiration of this Agreement (and thereafter as
provided in Article VII) or until the expiration of the last patent licensed to
Insulet hereunder. TheraSense shall retain all right, title and interest to
TheraSense Patents, subject to the limited license granted to Insulet hereunder.

     5.2 TECHNICAL INFORMATION LICENSE. TheraSense hereby grants to Insulet and
its Affiliates a non-exclusive, fully paid, non-transferable (except as
otherwise provided in Section 8.3), non-sublicensable license to use the
Technical Information in the Territory for the sole and exclusive purpose of
manufacturing, having manufactured, using, having used, importing, having
imported, selling and having sold the Product in the Territory in conjunction
with the Test Strips. The license granted pursuant to this Section 5.2 shall
continue in effect during the term of this Agreement (and thereafter as provided
in Article VII). TheraSense shall retain all right, title and interest to the
Technical Information, subject to the limited license granted to Licensed
hereunder.

     5.3 DEVELOPMENT PROGRAM TECHNOLOGY LICENSE. Insulet hereby grants to
TheraSense a perpetual, non-exclusive, fully paid, non-transferable (except as
otherwise provided herein) license under the Development Program Technology,
including the right to grant sublicenses without restriction. Insulet shall
retain all right, title and interest to the

                                      -12-

<PAGE>

Development Program Technology, subject to the limited license granted to
TheraSense hereunder.

     5.4 TRADEMARK LICENSES.

     (a) TheraSense hereby grants to Insulet and its Affiliates a limited, fully
paid, non-exclusive, non-transferable (except as otherwise provided in Section
8.3), non-sublicensable license to use and reproduce the TheraSense Marks for
the sole and exclusive purpose of marketing, distributing, selling and having
sold the Product in the Territory in conjunction with the Test Strips. The
license granted pursuant to this Section 5.4(a) shall continue in effect during
the term of this Agreement (and thereafter as provided in Article VII).
TheraSense shall retain all right, title and interest in TheraSense Marks,
subject to the limited license granted to Insulet hereunder. TheraSense shall
provide Insulet with copies of the TheraSense Marks in an appropriate form for
the uses contemplated herein. TheraSense shall have the right to approve the
appearance and placement of the TheraSense Marks in advance of their use, which
approval shall not be unreasonably withheld.

     (b) Insulet hereby grants to TheraSense and its Affiliates a limited, fully
paid, non-exclusive, non-transferable (except as otherwise provided in Section
8.3), non-sublicensable license to use and reproduce the Insulet Marks for the
sole and exclusive purpose of promoting the Products and marketing,
distributing, selling and having sold the Test Strips in the Territory. The
license granted pursuant to this Section 5.4(b) shall continue in effect during
the term of this Agreement (and thereafter as provided in Article VII). Insulet
shall retain all right, title and interest in the Insulet Marks, subject to the
limited license granted to TheraSense hereunder. Insulet shall provide
TheraSense with copies of the Insulet Marks in an appropriate form for the uses
contemplated herein. Insulet shall have the right to approve the appearance and
placement of the Insulet Marks in advance of their use, which approval shall not
be unreasonably withheld.

     (c) TheraSense agrees and acknowledges that, if it has obtained or obtains
in the future, in any country, any right, title or interest in any mark, symbol,
phrase or domain name that is identical to, includes, is similar to, or likely
to be confused with any Insulet Mark, then TheraSense has acted or will act as
an agent for the benefit of Insulet for the limited purpose of obtaining the
registration of and all right, title and interest in such mark, domain name,
symbol or phrase in favor of Insulet. Insulet agrees and acknowledges that, if
it has obtained or obtains in the future, in any country, any right, title or
interest in any mark, symbol, phrase or domain name that is identical to,
includes, is similar to, or likely to be confused with any TheraSense Mark, then
Insulet has acted or will act as an agent and for the benefit of TheraSense for
the limited purpose of obtaining the registration of and all right, title and
interest in such domain name, symbol or phrase in favor of TheraSense. Each
Party agrees to execute any and all instruments deemed by the other Party to be
necessary to satisfy its rights under this Section 5.4(c).

                                      -13-

<PAGE>

                                   ARTICLE VI

                 MARKETING, SALES PROMOTION AND CUSTOMER SUPPORT

     6.1 COMMERCIALIZATION. Promptly and diligently upon the completion of the
appropriate phase of the Development Program, Insulet shall, at its expense, or
at the expense of its Affiliates and distributors, exert commercially reasonable
efforts to:

          (a) conduct any and all necessary and appropriate animal and human
     testing on the Product, and control the manner and extent of such testing;

          (b) provide for commercial scale production of the Product;

          (c) satisfy all regulatory requirements as set forth in Section
     2.7(a);

          (d) promote and market the Product in the Territory on a diligent
     commercial basis, after approval by the FDA and other applicable regulatory
     authorities; and

          (e) provide sales and service support to customers of the Product
     within the Territory on a regular basis consistent with good business
     practices.

     6.2 MARKETING AND CUSTOMER SUPPORT ASSISTANCE.

          (a) TheraSense will, at its own expense, provide Insulet with
     marketing and technical assistance and promotional materials (in English)
     that TheraSense, in its sole discretion, considers reasonably necessary to
     assist with the promotion of the Product. Insulet may, when required,
     translate and localize any illustration, diagrams and texts furnished by
     TheraSense into other appropriate languages used in the Territory, and
     Insulet shall be entitled to distribute such literature within the
     Territory solely for the purpose of promoting sales of the Product after
     any such translations have been submitted to and approved by TheraSense,
     such approval not to be unreasonably withheld or delayed. TheraSense agrees
     to assign and hereby assigns to Insulet all rights, title and interests,
     including, but not limited to, copyright rights, in all such translations.

          (b) TheraSense will, at its own expense, provide

               (i) Insulet's support personnel with reasonable access to
          TheraSense support personnel to assist Insulet in providing customer
          support relating to the Technical Information and the Test Strips; and

               (ii) provide a reasonable level of assistance regarding the
          training of Insulet employees with respect to the Technical
          Information.

     6.3 LABELING.

          (a) Insulet shall *** label each Remote Controller commercially
     delivered in the Territory with TheraSense's "FreeStyle" trademark and such
     other of the TheraSense Marks as the Parties may determine and such
     trademarks of Insulet as Insulet may

                                      -14-

<PAGE>

     determine. The appearance and placement of such trademarks shall be at
     Insulet's reasonable discretion, subject to TheraSense's rights under
     Section 5.4(a).

          (b) TheraSense may, at its discretion, label Test Strips delivered in
     the Territory with Insulet Marks and such trademarks of TheraSense as
     TheraSense shall determine. The appearance and placement of such trademarks
     shall be at TheraSense's reasonable discretion, subject to, with respect to
     the Insulet Marks, Insulet's rights under Section 5.4(b).

     6.4 REPORTING AND NOTICE.

          (a) At the end of each calendar quarter after commercial distribution
     of the Product has commenced, Insulet shall provide TheraSense with a
     quarterly report, which shall include the following information: unit sales
     of the Remote Controller to customers in the Territory and monthly
     placements of the Remote Controller in the Territory made free of charge.

          (b) The Parties shall meet at least quarterly to discuss the
     development status of the Product (such discussions to include a reasonably
     comprehensive report on such status) developments regarding the market,
     competitors, government authorities and other material developments
     important to the success of the Product or the Test Strips, or otherwise of
     material importance to the other Party.

          (c) Insulet shall promptly notify TheraSense of any adverse events or
     customer complaints related to TheraSense's products, including the Test
     Strips, of which it becomes aware. TheraSense shall promptly notify Insulet
     of any adverse events or customer complaints related to the Product of
     which it becomes aware.

          (d) If Insulet considers granting distribution rights to the Product
     to a third party (including by virtue of a sale of Insulet's assets or
     capital stock) other than to an Affiliate of Insulet, then Insulet shall so
     notify TheraSense, provided that

               (i) such notice would not violate any contractual obligation by
          which Insulet is bound;

               (ii) Insulet need provide such notice only one time; and

               (iii) such obligation shall not preclude Insulet from entering
          into a "no shop" or other exclusivity agreement, if such an agreement
          is specifically requested by a third party.

          (e) TheraSense will, as soon as reasonably practicable, notify Insulet
     of any planned:

               (i) Improvement to the FreeStyle Meter;

                                      -15-
<PAGE>

               (ii) material change to Test Strips that may adversely affect the
          performance of the Product with the Test Strips; and

               (iii) discontinuance of the FreeStyle Meter or the Test Strips.

     Insulet will, as soon as reasonably practicable, notify TheraSense of any
     planned:

               (i) material change that relates to the Remote Controller; or

               (ii) discontinuance of the Product.

          Nothing in this Section 6.4(e) shall be construed to constrain Insulet
     from improving or in any way altering the Product or to constrain
     TheraSense from improving on or in any way altering the FreeStyle Meter or
     the Test Strips, provided that, in each case, the Product would continue to
     perform with the Test Strips within the Specifications.

          (f) TheraSense shall notify Insulet (provided such notice would not
     violate any contractual obligation by which TheraSense is bound) of any
     newly developed glucose monitoring technology that TheraSense has
     determined that it intends to commercialize, and the Parties shall
     negotiate in good faith to determine if and under what terms such
     technology shall be incorporated into the Product.

     6.5 COMPLAINTS AND RECALLS. Insulet shall manage all complaints, failure
analysis and recalls related to the Product in the Territory in a commercially
reasonably manner. In the event of a recall or potential recall of the Product
in the Territory, Insulet shall notify and consult with TheraSense with regard
to the measures to be taken consistent with good business practice. Such
undertaking shall be at Insulet's expense; provided, however, that if the cause
of such complaint, failure or recall is a flaw that is also present in the
FreeStyle Meter or the Test Strips, then TheraSense shall reimburse Insulet for
all reasonable costs incurred. TheraSense shall render commercially reasonable
support and information to assist Insulet in managing any complaints, failures
or recalls related to the Test Strips or the functioning of the Test Strips with
the Remote Controller.

     6.6 PUBLICITY.

          (a) Neither Party shall originate any publicity, news release or other
     public announcement, written or oral, relating to this Agreement, the
     Development Program or the existence of an arrangement between the Parties,
     without the prior approval of the other Party, which shall not be
     unreasonably withheld, except as otherwise required by law.

          (b) After the Effective Date, when mutually agreeable to the Parties,
     the Parties shall agree on the language of a press release to be used by
     the Parties to publicize the relationship established under this Agreement.
     The Parties agree to jointly promote

                                      -16-

<PAGE>

     each other services by providing hypertext lines to each other's web sites
     on their own web site and by undertaking such other joint promotional
     activities as may be mutually agreed by the Parties.

                                   ARTICLE VII

                                   TERMINATION

     7.1 TERM. This Agreement shall remain in effect for seven years or until
terminated in accordance with the provisions of this Article VII (the "Initial
Term"). At the end of the Initial Term, this Agreement shall automatically renew
for subsequent three-year terms unless written notice of termination is given by
either Party to the other Party at least ninety (90) days prior to the
Agreement's then-current expiration date.

     7.2 TERMINATION FOR CAUSE. Each Party shall be entitled to terminate this
Agreement if:

          (a) the other Party shall be in material breach of any of its
     obligations hereunder (except as described in Section 7.2(e)) and shall
     fail to remedy any such breach within *** after receiving written notice
     thereof by the non-breaching Party (in which case the Agreement will
     automatically terminate at the end of such *** period),

          (b) the other Party is acquired by a Competitor of the first Party (in
     which case the Agreement shall automatically terminate upon the other
     Party's receipt of written notice of termination by the first Party, which
     notice must be received by the other Party no later than *** of the date on
     which the first Party first learns of the closing of such acquisition),

          (c) (i) insolvency, receivership or bankruptcy proceedings or any
     other proceedings for the settlement of the other Party's debts under
     United States, California or Massachusetts law are instituted by or against
     the other Party, unless the other Party timely contests such proceedings,
     (ii) the other Party's makes an assignment for the benefit of creditors, or
     (iii) the other Party dissolves or ceases to do business,

          (d) the first Party receives a notice of discontinuance of the
     commercialized Product or the FreeStyle Meter or the Test Strips from the
     other Party pursuant to Section 6.4(e), or

          (e) Insulet violates Section 8.1 of this Agreement (in which case the
     Agreement shall automatically terminate upon Insulet's receipt of written
     notice of termination by the TheraSense, which notice must be received by
     Insulet within *** of the date on which TheraSense first learns of such
     breach).

     7.3 TERMINATION FOR LACK OF PROGRESS. Either Party shall be entitled to
terminate this Agreement in the event that the development of the Product is not
proceeding reasonably

                                      -17-

<PAGE>

within the schedule and resources specified by the Development Committee, with
*** notice to the other Party; provided, however, that the Parties agree to
undertake in good faith commercially reasonable efforts to remedy the situation
during such *** period; and provided further, however, that Insulet shall not
seek to employ such right of termination, in whole or in part, for purpose of
nullifying its obligations under Section 8.1.

     7.4 DISPOSITION OF LICENSED PRODUCTS.

          (a) Upon any termination of this Agreement pursuant to Sections 7.1 or
     7.2, Insulet shall within thirty (30) days of the effective date of such
     termination notify TheraSense of the amount of Products that Insulet, its
     Affiliates and distributors then have completed on hand, and Insulet, its
     Affiliates and distributors shall thereupon be permitted during the ***
     following such termination to sell that amount of Products. All licenses
     granted pursuant to Article V shall remain in effect until the last sale or
     the expiration of such *** period (whichever is earlier).

          (b) Upon the termination of this Agreement pursuant to Sections 7.1 or
     7.2, TheraSense shall notify Insulet of the amount of Test Strips that
     TheraSense has on hand that bear any Insulet Marks, and TheraSense and its
     Affiliates and Distributors shall thereupon be permitted during the ***
     following such termination to sell that amount of Test Strips with Insulet
     Marks. TheraSense may sell Test Strips without restriction upon removal of
     all Insulet Marks. The license granted pursuant to Section 5.4(b) shall
     remain in effect until the last sale of the Test Strips with Insulet Marks
     or all the expiration of such *** period (whichever is earlier).

          (c) Except as permitted in this Section 7.4, TheraSense shall cease
     all use of the Insulet Marks, and Insulet shall cease all use of the
     TheraSense Marks, upon termination of this Agreement.

     7.5 SURVIVAL OF OBLIGATIONS; RETURN OF CONFIDENTIAL INFORMATION.
Notwithstanding any termination of this Agreement, the obligations of the
Parties under Article III, Section 4.7, Sections 5.1, 5.2 and 5.4 (to the extent
specifically provided in Section 7.4), Section 5.3, Section 7.4, Section 8.2,
Section 8.8, Section 8.15 and Section 8.16 shall survive and continue to be
enforceable. Upon any termination of this Agreement, each Party upon request of
the other Party shall promptly return to the other Party all written
Confidential Information, and all copies thereof, of the other Party.

     7.6 ACCRUED OBLIGATIONS. Expiration or 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 shall not be deemed to be the
exclusive remedy for any such

                                      -18-

<PAGE>

breach of this Agreement, but shall be in addition to all other remedies
available at law or in equity.

                                  ARTICLE VIII

                                  MISCELLANEOUS

     8.1 COMPETING SYSTEMS. Insulet agrees that it shall not market, promote,
display or commercially ship a Remote Controller with any glucose monitoring
system other than pursuant to this Agreement or to another agreement to which
Insulet and TheraSense are parties for a period of ***.

     8.2 LIMITATION OF LIABILITY; INSURANCE.

          (a) Except for the obligations or representations set forth in Article
     III, Section 4.7 or Section 8.16, in no event shall a Party's liability to
     the other Party for damages of any nature arising out of or in connection
     with this Agreement, regardless of the form of action, whether for breach
     of warranty or contract, in tort (including negligence) or otherwise,
     exceed ***. In no event shall a Party be liable to the other Party or to
     any third party for any special, incidental, indirect or consequential
     damages of any kind, or for the loss of its or any third party's (including
     customers of such Party) profits, revenue, data or property arising out of
     or in connection with this Agreement for expenses incurred, even if such
     Party shall have been advised of or known of or such have known of the
     possibility of such potential loss, damage or expenses.

          (b) It is agreed that the limitation and exclusions of liability set
     forth in this Section 8.2 and elsewhere in this Agreement are intended by
     the Parties to be a reflection of the agreed allocation of the commercial
     risks that may arise out of or occur in connection with this Agreement.
     Further, the Parties hereto agree that the provisions above that exclude
     liability for any consequential damages and limit liability of TheraSense
     for other damages shall in no event be invalidated or deemed unenforceable
     under this Agreement should any limited warranty or remedy set forth in
     this Agreement fail of its essential purpose.

          (c) During the term of this Agreement, each Party shall maintain
     liability insurance policies, including without limitation, product
     liability insurance coverage, in commercially adequate amounts. Each
     Party's policy shall name the other Party as an additional insured and
     contain an endorsement to provide the other Party with at least thirty (30)
     days prior written notice of any cancellation or nonrenewal of such policy.
     Each Party shall furnish to the other Party copies of such Party's
     policies.

     8.3 ASSIGNMENT. Neither this Agreement nor any of the rights, licenses or
obligations hereunder may be assigned by either Party without the prior written
consent of the other Party, except (i) to an Affiliate of a Party or (ii) to a
party who acquires all or substantially all of the

                                      -19-

<PAGE>

business of the assigning Party by merger, sale of assets or otherwise, provided
that such acquiring party is not a Competitor of the non-assigning Party.

     8.4 GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof and except as otherwise set forth in
Section 8.15(b).

     8.5 FORCE MAJEURE. In the event that either Party is prevented from
performing or is unable to perform any of its obligations under this Agreement
(other than the payment of money) due to any act of God; fire; casualty; flood;
war; act of terrorism; strike; lockout; failure of public utilities; injunction
or any act, exercise, assertion or requirement of governmental authority,
including any governmental law, order of regulation permanently or temporarily
prohibiting or reducing the level of research, development or production work
hereunder or the manufacture, use or sale of Products; epidemic; destruction of
production facilities; riots; insurrection; inability to procure or use
materials, labor, equipment, transportation or energy sufficient to meet
experimentation or manufacturing needs; or any other cause beyond the reasonable
control of the Party invoking this Section 8.5 if such Party shall have used its
best efforts to avoid such occurrence, such Party shall give notice to the other
Party in writing promptly, and thereupon the affected Party's performance shall
be excused and the time for performance shall be extended for the period of
delay or inability to perform due to such occurrence.

     8.6 WAIVER. The waiver by either Party of a breach or a default of any
provision of this Agreement by the other Party shall not be construed as a
waiver of any succeeding breach of the same or any other provision, nor shall
any delay or omission on the part of either Party to exercise or avail itself of
any right, power or privilege that it has or may have hereunder operate as a
waiver of any right, power or privilege by such Party.

     8.7 NOTICES. Any notice or other communication in connection with this
Agreement must be in writing and by mail, certified, return receipt requested,
by electronic facsimile transmission or courier service, and shall be effective
when delivered to the addressee at the address listed below or such other
address as the addressee shall have specified in a notice actually received by
the address or.

     If to TheraSense:

          TheraSense, Inc.
          1360 South Loop Road
          Alameda, CA 94502
          Attention: Vice President, General Counsel

     If to Insulet:

          Insulet Corporation
          100 Cummings Center
          Suite 231G

                                      -20-

<PAGE>

          Beverly, MA 01915
          Attention: Chief Executive Officer

     With a copy to:

          Testa, Hurwitz & Thibeault, LLP
          125 High Street
          Boston, MA 02110
          Attention: Lawrence S. Wittenberg, Esq.

     8.8 NON-SOLICITATION. During the term of the Agreement and for a period of
*** after the termination of this Agreement for any reason, neither Party will
directly or indirectly solicit the employment of any employee of the other Party
without such other Party's prior written consent; provided, however, that either
Party may, without the prior written consent of the other Party, engage in
general recruiting not specifically directed to any of the other Party's
employees, including, without limitation, placing "help-wanted" type
advertisements in newspapers and trade journals and on radio programs and
Internet-based recruiting services, participating in job fairs and similar
events open to the public, and the like.

     8.9 NO AGENCY. Nothing herein shall be deemed to constitute either Party as
the agent or representative of the other Party, or both Parties as joint
venturers or partners for any purpose. Neither Party shall be responsible for
the acts or omissions of the other party, and neither Party will have authority
to speak for, represent or obligate the other Party in any way without prior
written authority from the other Party.

     8.10 ENTIRE AGREEMENT. This Agreement and the Schedules hereto (which
Schedules are deemed to be a part of this Agreement for all purposes) contain
the full understanding of the Parties with respect to the subject matter hereof
and supersede all prior understandings and writings relating thereto. No waiver,
alteration or modification of any of the provisions hereof shall be binding
unless made in writing and signed by the Parties by their respective officers
thereunto duly authorized.

     8.11 HEADINGS. The headings contained in this Agreement are for convenience
of reference only and shall not be considered in construing this Agreement.

     8.12 SEVERABILITY. In the event that any provision of this Agreement is
held by a court of competent jurisdiction to be unenforceable because it is
invalid or in conflict with any law of any relevant jurisdiction, the validity
of the remaining provisions shall not be affected, and the rights and
obligations of the Parties shall be construed and enforced as if the Agreement
did not contain the particular provisions held to be unenforceable.

     8.13 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the Parties hereto and their successors and permitted assigns.

                                      -21-

<PAGE>

     8.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

     8.15 DISPUTE RESOLUTION.

          (a) In the event that a dispute arises under this Agreement (a
     "Dispute"), the Dispute shall first be referred to the Vice President of
     Business Development of TheraSense and the Chief Executive Officer of
     Insulet for resolution.

          (b) Subject to Section 8.15(a), if the Parties are unable to resolve a
     Dispute, the Dispute shall be settled by binding arbitration conducted in
     San Francisco, California (if Insulet shall bring such Dispute to
     arbitration) or in Boston, Massachusetts (if TheraSense shall bring such
     Dispute to arbitration) or in such location upon which the Parties may
     otherwise agree, pursuant to the Commercial Arbitration Rules of the
     American Arbitration Association then in effect by one (1) arbitrator
     appointed in accordance with such rules. The decision and/or award rendered
     by the arbitrator shall be written (specifically stating the arbitrator's
     findings of facts as well as the reasons upon which the arbitrator's
     decision is based), final and nonappealable (except for an alleged act of
     corruption or fraud on the part of the arbitrator) and may be entered in
     any court of competent jurisdiction. The Parties agree that, any provision
     of applicable law notwithstanding, they will not request, and the
     arbitrator shall have no authority to award, punitive or exemplary damages
     against any Party. The arbitrator shall have the authority to grant
     injunctive relief and order specific performance. The arbitrator shall
     determine what discovery will be permitted, consistent with the goal of
     limiting the cost and time which the Parties must expend for discovery;
     provided the arbitrator shall permit such discovery as it deems necessary
     to permit an equitable resolution of the Dispute. Evidence need not be
     obtained in the presence of the arbitrator. At the arbitration hearing,
     each Party may make written and oral presentations to the arbitrator,
     present testimony and written evidence, and examine witnesses. The costs of
     any arbitration, including administrative fees and fees of the arbitrator,
     shall be shared equally by the Parties. Each Party shall bear the cost of
     its own attorneys' fees and expert fees. The Parties and the arbitrator
     shall use their best efforts to complete any such arbitration within one
     (1) year after the appointment of the arbitrator, unless a Party can
     demonstrate to the arbitrator that the complexity of the issues or other
     reasons warrant the extension of the time table. In such case, the
     arbitrator may extend such time table as reasonably required. The
     arbitrator shall, in rendering its decision, apply the substantive law of
     the State of Delaware, without regard to its conflict of laws provisions,
     except that the interpretation of and enforcement of this Section 8.15(b)
     shall be governed by the U.S. Federal Arbitration Act. Pending the
     establishment of the arbitral tribunal or pending the arbitral tribunal's
     determination of the merits of the controversy, either Party may seek from
     a court of competent jurisdiction any interim or provisional relief that
     may be necessary to protect the rights or property of that Party.

                                      -22-

<PAGE>

     8.16 INSULET LIABILITY; THERASENSE LIABILITY

          (a) Insulet agrees unconditionally, at its expense, to defend,
     indemnify, and hold harmless TheraSense and its Affiliates and any
     directors, officers, agents, and employees of the foregoing, for any and
     all losses, costs, liabilities, or expenses (including, without limitation,
     reasonable attorneys' and expert witnesses' fees) incurred or arising from
     any claims, proceedings, criminal investigations, or suits ("Claims") that
     are based on or arise out of the negligence, strict liability in tort or
     willful misconduct of Insulet, its Affiliates or agents relating to the
     design, manufacture, production, sale, import or use of the Product
     ("Insulet Liability"). Insulet's obligations subject to this Section
     8.16(a) shall be subject to the following:

               (i) Insulet is notified in writing promptly after TheraSense has
          received notice of a Claim for Insulet Liability and Insulet has
          received a copy of all communications received by TheraSense in
          connection with such Claim;

               (ii) Insulet is allowed to exercise sole control over the defense
          of the Claim and all related settlement negotiations (provided that
          any settlement includes a general release of all claims (including any
          Claims) in favor of TheraSense); and

               (iii) TheraSense provides to Insulet, at Insulet's expense, all
          reasonably necessary assistance, information and authority to perform
          the above.

          (b) Insulet will not be obligated to defend, indemnify, and hold
     harmless TheraSense and its Affiliates and any directors, officers, agents,
     and employees of the foregoing pursuant to Section 8.16(a) for any Claim
     for Insulet Liability to the extent aspects of such Claim are based on or
     arise out of the negligence, strict liability in tort or willful misconduct
     of TheraSense, its Affiliates or agents relating to (i) TheraSense's design
     of the FreeStyle Meter, (ii) the manufacture, production, sale, import or
     use of the FreeStyle Meter (provided that the FreeStyle Meter has been
     manufactured, produced, sold, imported and used in accordance with the
     Specifications) or (iii) the design, manufacture, production, sale, import
     or use of the Test Strips (collectively referred to as "TheraSense
     Liability").

          (c) TheraSense agrees unconditionally, at its expense, to defend,
     indemnify, and hold harmless Insulet and its Affiliates and any directors,
     officers, agents, and employees of the foregoing, for any Claims for
     TheraSense Liability. TheraSense's obligations subject to this Section
     8.16(c) shall be subject to the following:

               (i) TheraSense is notified in writing promptly after Insulet has
          received notice of a Claim for TheraSense Liability and TheraSense has
          received a copy of all communications received by Insulet in
          connection with such Claim;

               (ii) TheraSense is allowed to exercise sole control over the
          defense of the Claim and all related settlement negotiations (provided
          that any settlement includes a general release of all claims
          (including any Claims) in favor of Insulet); and

                                      -23-

<PAGE>

               (iii) Insulet provides to TheraSense, at TheraSense's expense,
          all reasonably necessary assistance, information and authority to
          perform the above.

          (d) TheraSense will not be obligated to defend, indemnify, and hold
     harmless Insulet and its Affiliates and any directors, officers, agents,
     and employees of the foregoing pursuant to Section 8.16(c) for any Claim
     for Insulet Liability.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -24-

<PAGE>

     IN WITNESS WHEREOF, the Parties hereto have caused this Development and
License Agreement to be executed as a sealed instrument in their names by their
properly and duly authorized officers or representatives as of the date first
above written.

                                   THERASENSE, INC.

                                   By: /s/ Ephraim Heller
                                       -----------------------------------------
                                   Name: Ephraim Heller
                                   Title: Vice President of Business Development

                                   INSULET CORPORATION

                                   By: /s/ Thomas E. Wood
                                       -----------------------------------------
                                   Name: Thomas E. Wood
                                   Title: Chief Executive Officer

                                      -25-

<PAGE>

                                   SCHEDULE A

                               TheraSense Patents

                                       ***

                                      -26-

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