Document:

Exhibit 10.6

                                              Bank of America, N.A.
                                              c/o Bank of America Securities LLC
                                              Equity Financial Products
                                              9 West 57th Street, 40th Floor
                                              New York, NY 10019
                                              Telephone: (212) 583-8373

DATE:                September 13, 2006

TO:                  PolyMedica Corporation
ATTENTION:           Keith Jones, Chief Financial Officer
TELEPHONE:           (781) 486-8111
FACSIMILE:           (781) 295-0182

FROM:                Bank of America, N.A.
TELEPHONE:           (212) 583-8373
FACSIMILE:           (212) 230-8610
SUBJECT:             Equity Derivatives Confirmation

REFERENCE NUMBER(S): 24060

The purpose of this facsimile agreement (this "CONFIRMATION") is to confirm the
terms and conditions of the transaction entered into between BANK OF AMERICA,
N.A. ("BOFA") and PolyMedica Corporation ("COUNTERPARTY") on the Trade Date
specified below (the "TRANSACTION"). This Confirmation constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below. This
Confirmation constitutes the entire agreement and understanding of the parties
with respect to the subject matter and terms of the Transaction and supersedes
all prior or contemporaneous written and oral communications with respect
thereto.

The definitions contained in the 2002 ISDA Equity Derivatives Definitions (the
"EQUITY DEFINITIONS"), as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of any
inconsistency between the Equity Definitions and the terms of this Confirmation,
the terms of this Confirmation shall govern. For the purposes of the Equity
Definitions, each reference herein to a Warrant shall be deemed to be a
reference to a Call or an Option, as context requires.

This Confirmation evidences a complete and binding agreement between BofA and
Counterparty as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall supplement, form a part of, and be subject to
an agreement (the "AGREEMENT") in the form of the 2002 ISDA Master Agreement
(the "ISDA FORM") as if BofA and Counterparty had executed an agreement in such
form (without any Schedule but with the elections set forth in this
Confirmation). For the avoidance of doubt, the Transaction shall be the only
transaction under the Agreement.

2.   The Transaction is a Warrant Transaction, which shall be considered a Share
     Option Transaction for purposes of the Equity Definitions, and shall have
     the following terms:

<TABLE>
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GENERAL:

Trade Date:                      September 13, 2006.

Effective Date:                  September 19, 2006.
</TABLE>

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Components:                      The Transaction will be divided into individual
                                 Components, each with the terms set forth in
                                 this Confirmation, and, in particular, with the
                                 Number of Warrants and Expiration Date set
                                 forth in this Confirmation. The payments and
                                 deliveries to be made upon settlement of the
                                 Transaction will be determined separately for
                                 each Component as if each Component were a
                                 separate Transaction under the Agreement.

Warrant Style:                   European.

Warrant Type:                    Call.

Seller:                          Counterparty.

Buyer:                           BofA.

Shares:                          The common stock, par value USD 0.01 per share,
                                 of Counterparty.

Number of Warrants:              For each Component, as provided in Annex B to
                                 this Confirmation.

Strike Price:                    USD 67.2320.

Premium:                         USD 8,294,400.

Premium Payment Date:            The Effective Date.

Exchange:                        The Nasdaq Global Select Market of the Nasdaq
                                 Stock Market, Inc.

Related Exchanges:               All Exchanges.

Calculation Agent:               BofA.

PROCEDURE FOR EXERCISE:

   In respect of any
      Component:

Expiration Date:                 As provided in Annex B to this Confirmation
                                 (or, if such date is not a Scheduled Trading
                                 Day, the next following Scheduled Trading Day
                                 that is not already an Expiration Date for
                                 another Component); provided that if that date
                                 is a Disrupted Day, the Expiration Date for
                                 such Component shall be the first succeeding
                                 Scheduled Trading Day that is not a Disrupted
                                 Day and is not or is not deemed to be an
                                 Expiration Date in respect of any other
                                 Component of the Transaction hereunder; and
                                 provided further that if the Expiration Date
                                 has not occurred pursuant to the preceding
                                 proviso as of the Final Disruption Date for
                                 such Component, such Final Disruption Date
                                 shall be the Expiration Date (irrespective of
                                 whether such date is an Expiration Date in
                                 respect of any other Component for the
                                 Transaction) and, notwithstanding anything to
                                 the contrary in this Confirmation or the Equity
                                 Definitions, the Relevant Price for the
                                 Expiration Date shall be
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<TABLE>
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                                 the prevailing market value per Share
                                 determined by the Calculation Agent in a
                                 commercially reasonable manner. Notwithstanding
                                 the foregoing and anything to the contrary in
                                 the Equity Definitions, if a Market Disruption
                                 Event occurs on any Expiration Date, the
                                 Calculation Agent may determine that such
                                 Expiration Date is a Disrupted Day only in
                                 part, in which case the Calculation Agent shall
                                 make adjustments to the number of Warrants for
                                 the relevant Component for which such day shall
                                 be the Expiration Date and shall designate the
                                 Scheduled Trading Day determined in the manner
                                 described in the immediately preceding sentence
                                 as the Expiration Date for the remaining
                                 Warrants for such Component. Section 6.6 of the
                                 Equity Definitions shall not apply to any
                                 Valuation Date occurring on an Expiration Date.

Final Disruption Date:           For each Component, as provided in Annex B to
                                 this Confirmation.

Automatic Exercise:              Applicable. Solely for purposes of this
                                 provision, Section 3.4 of the Equity
                                 Definitions shall govern, and the Transaction
                                 shall be deemed to be a Cash-settled Call
                                 Option.

Market Disruption Event:         Section 6.3(a) of the Equity Definitions is
                                 hereby amended by deleting the words "during
                                 the one hour period that ends at the relevant
                                 Valuation Time, Latest Exercise Time, Knock-in
                                 Valuation Time or Knock-out Valuation Time, as
                                 the case may be," in clause (ii) thereof, and
                                 by amending and restating clause (a)(iii)
                                 thereof in its entirety to read as follows:
                                 "(iii) an Early Closure that the Calculation
                                 Agent determines is material."

SETTLEMENT TERMS:

   In respect of any
      Component:

Net Share Settlement:            On each Settlement Date, Counterparty shall
                                 deliver to BofA a number of Shares equal to the
                                 Net Share Amount for such Settlement Date to
                                 the account specified by BofA, and cash in lieu
                                 of any fractional shares valued at the Relevant
                                 Price for the Valuation Date corresponding to
                                 such Settlement Date. If, in the good faith
                                 reasonable judgment of BofA, the Shares
                                 deliverable hereunder would not be immediately
                                 freely transferable by BofA under Rule 144(k)
                                 under the Securities Act of 1933, as amended
                                 (the "SECURITIES ACT"), then BofA may elect to
                                 either (x) accept delivery of such Shares
                                 notwithstanding the fact that such Shares are
                                 not freely transferable by BofA under Rule
                                 144(k) or (y) require that such delivery take
                                 place pursuant to the provisions set forth
                                 opposite the caption "REGISTRATION/PRIVATE
                                 PLACEMENT PROCEDURES" below.

Net Share Amount:                For any Exercise Date, a number of Shares, as
                                 calculated by the Calculation Agent, equal to
                                 the product of (i) the number of Warrants being
                                 exercised or deemed exercised on such Exercise
                                 Date, and (ii)
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<TABLE>
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                                 the excess, if any, of the Relevant Price for
                                 the Valuation Date occurring on such Exercise
                                 Date over the Strike Price (such product, the
                                 "NET SHARE SETTLEMENT AMOUNT"), divided by such
                                 Relevant Price.

Relevant Price:                  On any Valuation Date, the Rule 10b-18 volume
                                 weighted average price per Share as displayed
                                 under the heading "Bloomberg VWAP" on Bloomberg
                                 Page PLMD (equity) AQR on such Valuation Date
                                 (or if such volume weighted average price is
                                 not available, the Calculation Agent's
                                 reasonable, good faith estimate of such price
                                 on such Valuation Date).

Settlement Currency:             USD.

Other Applicable Provisions:     The provisions of Sections 9.1(c), 9.8, 9.9,
                                 9.10, 9.11 (except that the Representation and
                                 Agreement contained in Section 9.11 of the
                                 Equity Definitions shall be modified by
                                 excluding any representations therein relating
                                 to restrictions, obligations, limitations or
                                 requirements under applicable securities laws
                                 as a result of the fact that Counterparty is
                                 the Issuer of the Shares) and 9.12 of the
                                 Equity Definitions will be applicable, except
                                 that all references in such provisions to
                                 "Physically-Settled" shall be read as
                                 references to "Net Share Settled". "Net Share
                                 Settled" in relation to any Warrant means that
                                 Net Share Settlement is applicable to such
                                 Warrant.

DIVIDENDS:

   In respect of any
      Component:

Dividend Adjustments:            Counterparty agrees to notify BofA promptly of
                                 the announcement of an ex-dividend date for any
                                 cash dividend by Counterparty. If an
                                 ex-dividend date for any dividend (a
                                 "TRIGGERING DIVIDEND") that differs in amount
                                 from the Regular Dividend occurs at any time
                                 from, but excluding, the Trade Date to, and
                                 including, the Expiration Date, then in lieu of
                                 any adjustments as provided under "Method of
                                 Adjustment" below, the Calculation Agent shall
                                 make such adjustments to the Strike Price as it
                                 deems appropriate to preserve for the parties
                                 the intended economic benefits of the
                                 Transaction.

Regular Dividend:                For the first Triggering Dividend for which the
                                 ex-dividend date occurs within any regular
                                 dividend period (based on quarterly dividends)
                                 of Counterparty, USD 0.15 per Share, and, for
                                 any subsequent Triggering Dividend for which
                                 the ex-dividend date occurs within the same
                                 regular dividend period, zero.

ADJUSTMENTS:

   In respect of any
      Component:
</TABLE>

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Method of Adjustment:            Calculation Agent Adjustment; provided,
                                 however, that the Equity Definitions shall be
                                 amended by replacing the words "diluting or
                                 concentrative" in Sections 11.2(a), 11.2(c) (in
                                 two instances) and 11.2(e)(vii) with the word
                                 "material" and by adding the words "or the
                                 Transaction" after the words "theoretical value
                                 of the relevant Shares" in Sections 11.2(a),
                                 11.2(c) and 11.2(e)(vii); provided further that
                                 adjustments may be made to account for changes
                                 in volatility, expected dividends, expected
                                 correlation, stock loan rate and liquidity
                                 relative to the relevant Share.

CONSEQUENCES OF MERGER EVENTS:

New Shares:                      In the definition of New Shares in Section
                                 12.1(i) of the Equity Definitions, the text in
                                 clause (i) thereof shall be deleted in its
                                 entirety and replaced with "publicly quoted,
                                 traded or listed on any of the New York Stock
                                 Exchange, the American Stock Exchange, the
                                 NASDAQ Global Select Market or the NASDAQ
                                 Global Market (or their respective
                                 successors)".

(a) Share-for-Share:             Modified Calculation Agent Adjustment.

(b) Share-for-Other:             Modified Calculation Agent Adjustment.

(c) Share-for-Combined:          Modified Calculation Agent Adjustment.

Tender Offer:                    Applicable

CONSEQUENCES OF TENDER OFFERS:

(a) Share-for-Share:             Modified Calculation Agent Adjustment.

(b) Share-for-Other:             Modified Calculation Agent Adjustment.

(c) Share-for-Combined:          Modified Calculation Agent Adjustment.

Nationalization, Insolvency      Cancellation and Payment; provided that in
and Delisting:                   addition to the provisions of Section
                                 12.6(a)(iii) of the Equity Definitions, it
                                 shall also constitute a Delisting if the
                                 Exchange is located in the United States and
                                 the Shares are not immediately re-listed,
                                 re-traded or re-quoted on any of the New York
                                 Stock Exchange, the American Stock Exchange,
                                 the NASDAQ Global Select Market or the NASDAQ
                                 Global Market (or their respective successors);
                                 if the Shares are immediately re-listed,
                                 re-traded or re-quoted on any such exchange or
                                 quotation system, such exchange or quotation
                                 system shall be deemed to be the Exchange.

ADDITIONAL DISRUPTION EVENTS:

Change in Law:                   Applicable

Failure to Deliver:              Applicable
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Insolvency Filing:               Applicable

Loss of Stock Borrow:            Applicable

   Maximum Stock Loan Rate:      ****

Increased Cost of Stock          Applicable
Borrow:

   Initial Stock Loan Rate:      ****

Hedging Party:                   BofA for all applicable Additional Disruption
                                 Events

Determining Party:               BofA for all applicable Additional Disruption
                                 Events; provided that in the case of a Change
                                 in Law, Failure to Deliver, Loss of Stock
                                 Borrow or Increased Cost of Stock Borrow, BofA
                                 shall consult with Counterparty in determining
                                 the Cancellation Amount (if applicable), and
                                 shall deliver, within five Exchange Business
                                 Days of a written request by Counterparty, a
                                 written explanation of any calculation made by
                                 it, and including, where applicable, the
                                 methodology and data applied.

Non-Reliance:                    Applicable

Agreements and                   Applicable
Acknowledgements
Regarding Hedging Activities:

Additional Acknowledgements:     Applicable
</TABLE>

MUTUAL REPRESENTATIONS: Each of BofA and Counterparty represents and warrants
to, and agrees with, the other party that:

     (i)  TAX DISCLOSURE. Notwithstanding anything to the contrary herein, in
          the Equity Definitions or in the Agreement, and notwithstanding any
          express or implied claims of exclusivity or proprietary rights, the
          parties (and each of their employees, representatives or other agents)
          are authorized to disclose to any and all persons, beginning
          immediately upon commencement of their discussions and without
          limitation of any kind, the tax treatment and tax structure of the
          Transaction, and all materials of any kind (including opinions or
          other tax analyses) that are provided by either party to the other
          relating to such tax treatment and tax structure.

     (ii) COMMODITY EXCHANGE ACT. It is an "eligible contract participant"
          within the meaning of Section 1a(12) of the U.S. Commodity Exchange
          Act, as amended (the "CEA"). The Transaction has been subject to
          individual negotiation by the parties. The Transaction has not been
          executed or traded on a "trading facility" as defined in Section
          1a(33) of the CEA. It has entered into the Transaction with the
          expectation and intent that the Transaction shall be performed to its
          termination date.

     (iii) SECURITIES ACT. It is a "qualified institutional buyer" as defined in
          Rule 144A under the Securities Act, or an "accredited investor" as
          defined under the Securities Act.

     (iv) INVESTMENT COMPANY ACT. It is a "qualified purchaser" as defined under
          the Investment Company Act of 1940, as amended.

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     (v)  ERISA. The assets used in the Transaction (1) are not assets of any
          "plan" (as such term is defined in Section 4975 of the Internal
          Revenue Code (the "CODE")) subject to Section 4975 of the Code or any
          "employee benefit plan" (as such term is defined in Section 3(3) of
          the Employee Retirement Income Security Act of 1974, as amended
          ("ERISA")) subject to Title I of ERISA, and (2) do not constitute
          "plan assets" within the meaning of Department of Labor Regulation
          2510.3-101, 29 CFR Section 2510-3-101.

COUNTERPARTY REPRESENTATIONS: In addition to the representations and warranties
in the Agreement and those contained elsewhere herein, Counterparty represents,
warrants, acknowledges and covenants that:

     (i)  Counterparty shall immediately provide written notice to BofA upon
          obtaining knowledge of the occurrence of any event that would
          constitute an Event of Default, a Potential Event of Default, a
          Potential Adjustment Event, a Merger Event or any other Extraordinary
          Event; provided, however, that should Counterparty be in possession of
          material non-public information regarding Counterparty, Counterparty
          shall not communicate such information to BofA.

     (ii) (A) Counterparty is acting for its own account, and it has made its
          own independent decisions to enter into the Transaction and as to
          whether the Transaction is appropriate or proper for it based upon its
          own judgment and upon advice from such advisers as it has deemed
          necessary, (B) Counterparty is not relying on any communication
          (written or oral) of BofA or any of its affiliates as investment
          advice or as a recommendation to enter into the Transaction (it being
          understood that information and explanations related to the terms and
          conditions of the Transaction shall not be considered investment
          advice or a recommendation to enter into the Transaction) and (C) no
          communication (written or oral) received from BofA or any of its
          affiliates shall be deemed to be an assurance or guarantee as to the
          expected results of the Transaction.

     (iii) Counterparty is not entering into the Transaction for the purpose of
          (i) creating actual or apparent trading activity in the Shares (or any
          security convertible into or exchangeable for the Shares) or (ii)
          raising or depressing or otherwise manipulating the price of the
          Shares (or any security convertible into or exchangeable for the
          Shares), in either case in violation of Section 9 of the Securities
          Exchange Act of 1934, as amended (the "EXCHANGE ACT").

     (iv) Counterparty's filings under the Securities Act, the Exchange Act, and
          other applicable securities laws that are required to be filed have
          been filed and, as of the respective dates thereof and as of the date
          of this representation, there is no misstatement of material fact
          contained therein or omission of a material fact required to be stated
          therein or necessary to make the statements made therein, in the light
          of the circumstances under which they were made, not misleading.

     (v)  Counterparty has not violated, and shall not directly or indirectly
          violate, any applicable law (including, without limitation, the
          Securities Act and the Exchange Act) in connection with the
          Transaction.

     (vi) The Shares issuable upon exercise of all Warrants (the "WARRANT
          SHARES") have been duly authorized and, when delivered pursuant to the
          terms of such Transaction, shall be validly issued, fully-paid and
          non-assessable, and such issuance of the Warrant Shares shall not be
          subject to any preemptive or similar rights.

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     (vii) Counterparty is not as of the Trade Date, and shall not be after
          giving effect to the transactions contemplated hereby, insolvent.

     (viii) Counterparty is not, and after giving effect to the transactions
          contemplated hereby will not be, an "investment company" as such term
          is defined in the Investment Company Act of 1940, as amended.

     (ix) Without limiting the generality of Section 13.1 of the Equity
          Definitions, Counterparty acknowledges that BofA is not making any
          representations or warranties with respect to the treatment of the
          Transaction under FASB Statements 133, as amended, or 150, EITF Issue
          No. 00-19 (or any successor issue statements) or under FASB's
          Liabilities & Equity Project.

     (x)  Counterparty understands, agrees and acknowledges that no obligations
          of BofA to it hereunder, if any, shall be entitled to the benefit of
          deposit insurance and that such obligations shall not be guaranteed by
          any affiliate of BofA or any governmental agency.

     (xi) Counterparty shall deliver to BofA an opinion of counsel, dated as of
          the Trade Date and reasonably acceptable to BofA in form and
          substance, with respect to the matters set forth in Section 3(a) of
          the Agreement.

MISCELLANEOUS:

     EARLY UNWIND. In the event the sale of Convertible Notes is not consummated
     with the initial purchasers thereof (the "INITIAL PURCHASERS") for any
     reason by the close of business in New York on September 19, 2006 (or such
     later date as agreed upon by the parties) (September 19, 2006 or such later
     date as agreed upon being the "EARLY UNWIND DATE"), the Transaction shall
     automatically terminate (the "EARLY UNWIND") on the Early Unwind Date and
     (a) the Transaction and all of the respective rights and obligations of
     BofA and Counterparty under the Transaction shall be cancelled and
     terminated and (b) each party shall be released and discharged by the other
     party from and agrees not to make any claim against the other party with
     respect to any obligations or liabilities of the other party arising out of
     and to be performed in connection with the Transaction either prior to or
     after the Early Unwind Date; provided that, if the failure to consummate
     the sale of the Convertible Notes results solely from a breach by
     Counterparty of any representation or undertaking by Counterparty contained
     in the Purchase Agreement dated as of September 13, 2006 between
     Counterparty and Deutsche Bank Securities, Inc. and Banc of America
     Securities, LLC as representatives of the Initial Purchasers thereto,
     Counterparty shall purchase from BofA on the Early Unwind Date all Shares
     purchased by BofA or one or more of its affiliates, and assume, or
     reimburse the cost of, derivatives entered into by BofA or one or more of
     its affiliates, in each case, in connection with hedging the Transaction
     and the unwind of such hedging activities. The purchase price paid by
     Counterparty shall be determined by BofA in its reasonable good faith
     discretion, and shall be BofA's (or its affiliates) actual cost of such
     Shares and derivatives and Counterparty shall pay such amount in
     immediately available funds on the Early Unwind Date. BofA and Counterparty
     represent and acknowledge to the other that, subject to the proviso
     included in the preceding sentence, upon an Early Unwind, all obligations
     with respect to the Transaction shall be deemed fully and finally
     discharged.

     "CONVERTIBLE NOTES" means the 1.00% Convertible Subordinated Notes of
     Counterparty due September 15, 2011, offered pursuant to an Offering
     Memorandum to be dated as of September 13, 2006 and issued pursuant to the
     indenture to be dated on or about September 19, 2006, by and between
     Counterparty and LaSalle Bank National Association, as trustee.

     NETTING AND SET-OFF. The parties hereto agree that the Transaction shall
     not be subject to netting or set off with any other transaction.

     QUALIFIED FINANCIAL CONTRACTS. It is the intention of the parties that, in
     respect of Counterparty, (a) the Transaction shall constitute a "qualified
     financial contract" within the meaning of 12 U.S.C. Section
     1821(e)(8)(D)(i) and (b) a Non-Defaulting Party's rights under Sections 5
     and 6 of the Agreement constitute

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     rights of the kind referred to in 12 U.S.C. Section 1821(e)(8)(A).

     STATUS OF CLAIMS IN BANKRUPTCY. BofA acknowledges and agrees that this
     Confirmation is not intended to convey to BofA rights with respect to the
     Transaction that are senior to the claims of common stockholders in any
     U.S. bankruptcy proceedings of Counterparty; provided that nothing herein
     shall limit or shall be deemed to limit BofA's right to pursue remedies in
     the event of a breach by Counterparty of its obligations and agreements
     with respect to the Transaction; provided, further, that nothing herein
     shall limit or shall be deemed to limit BofA's rights in respect of any
     transactions other than the Transaction.

     NO COLLATERAL. Notwithstanding any provision of this Confirmation, the
     Agreement, Equity Definitions, or any other agreement between the parties
     to the contrary, the obligations of Counterparty under the Transaction are
     not secured by any collateral.

     SECURITIES CONTRACT; SWAP AGREEMENT. The parties hereto agree and
     acknowledge that BofA is a "financial institution," "swap participant" and
     "financial participant" within the meaning of Sections 101(22), 101(53C)
     and 101(22A) of Title 11 of the United States Code (the "BANKRUPTCY CODE").
     The parties hereto further agree and acknowledge (A) that this Confirmation
     is (i) a "securities contract," as such term is defined in Section 741(7)
     of the Bankruptcy Code, with respect to which each payment and delivery
     hereunder is a "settlement payment," as such term is defined in Section
     741(8) of the Bankruptcy Code, and (ii) a "swap agreement," as such term is
     defined in Section 101(53B) of the Bankruptcy Code, with respect to which
     each payment and delivery hereunder is a "transfer," as such term is
     defined in Section 101(54) of the Bankruptcy Code, and (B) that BofA is
     entitled to the protections afforded by, among other sections, Section
     362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.

     ALTERNATIVE CALCULATIONS AND COUNTERPARTY PAYMENT ON EARLY TERMINATION AND
     ON CERTAIN EXTRAORDINARY EVENTS. If Counterparty owes BofA any amount in
     connection with a Transaction hereunder pursuant to Sections 12.2, 12.3,
     12.6, 12.7 or 12.9 of the Equity Definitions (except in the case of an
     Extraordinary Event in which the consideration or proceeds to be paid to
     holders of Shares as a result of such event consists solely of cash) or
     pursuant to Section 6(d)(ii) of the Agreement (except in the case of an
     Event of Default in which Counterparty is the Defaulting Party or a
     Termination Event in which Counterparty is the Affected Party, other than
     an (x) Event of Default of the type described in Section 5(a)(iii), (v),
     (vi) or (vii) of the Agreement or (y) a Termination Event of the type
     described in Section 5(b)(i), (ii), (iii), (iv), (v) or (vi) of the
     Agreement that in the case of either (x) or (y) resulted from an event or
     events outside Counterparty's control) (a "COUNTERPARTY PAYMENT
     OBLIGATION"), Counterparty shall have the right, in its sole discretion, to
     satisfy any such Counterparty Payment Obligation by delivery of Termination
     Delivery Units (as defined below) by giving irrevocable telephonic notice
     to BofA, confirmed in writing within one Scheduled Trading Day, between the
     hours of 9:00 a.m. and 4:00 p.m. New York time on the Early Termination
     Date or other date the transaction is terminated, as applicable ("NOTICE OF
     COUNTERPARTY TERMINATION DELIVERY"). Within a commercially reasonable
     period of time following receipt of a Notice of Counterparty Termination
     Delivery, Counterparty shall deliver to BofA a number of Termination
     Delivery Units having a cash value equal to the amount of such Counterparty
     Payment Obligation (such number of Termination Delivery Units to be
     delivered to be determined by the Calculation Agent as the number of whole
     Termination Delivery Units that could be sold over a commercially
     reasonable period of time to generate proceeds equal to the cash equivalent
     of such payment obligation, and the date of such delivery, the "TERMINATION
     PAYMENT DATE"). In addition, if, in the good faith reasonable judgment of
     BofA, for any reason, the Termination Delivery Units deliverable pursuant
     to this paragraph would not be immediately freely transferable by BofA
     under Rule 144(k) under the Securities Act, then BofA may elect either to
     (x) accept delivery of such Termination Delivery Units notwithstanding any
     restriction on transfer or (y) require that such delivery take place
     pursuant to the provisions set forth opposite the caption
     "REGISTRATION/PRIVATE PLACEMENT PROCEDURES" below.

          "TERMINATION DELIVERY UNIT" means (a) in the case of a Termination
          Event, an Event of Default or an Extraordinary Event (other than an
          Insolvency, Nationalization, Merger Event or Tender Offer), one Share
          or (b) in the case of an Insolvency, Nationalization, Merger Event or
          Tender Offer, a unit consisting of the number or amount of each type
          of property received by a holder of one Share (without

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          consideration of any requirement to pay cash or other consideration in
          lieu of fractional amounts of any securities) in such Insolvency,
          Nationalization, Merger Event or Tender Offer. If a Termination
          Delivery Unit consists of property other than cash or New Shares and
          Counterparty provides irrevocable written notice to the Calculation
          Agent on or prior to the Closing Date that it elects to receive cash,
          New Shares or a combination thereof (in such proportion as
          Counterparty designates) in lieu of such other property, the
          Calculation Agent shall replace such property with cash, New Shares or
          a combination thereof as components of a Termination Delivery Unit in
          such amounts, as determined by the Calculation Agent in its discretion
          by commercially reasonable means, as shall have a value equal to the
          value of the property so replaced. If such Insolvency,
          Nationalization, Merger Event or Tender Offer involves a choice of
          consideration to be received by holders, such holder shall be deemed
          to have elected to receive the maximum possible amount of cash.

     REGISTRATION/PRIVATE PLACEMENT PROCEDURES. If, in the reasonable opinion of
     BofA, following any delivery of Shares or Termination Delivery Units to
     BofA hereunder, such Shares or Termination Delivery Units would be in the
     hands of BofA subject to any applicable restrictions with respect to any
     registration or qualification requirement or prospectus delivery
     requirement for such Shares or Termination Delivery Units pursuant to any
     applicable federal or state securities law (including, without limitation,
     any such requirement arising under Section 5 of the Securities Act as a
     result of such Shares or Termination Delivery Units being "restricted
     securities", as such term is defined in Rule 144 under the Securities Act,
     or as a result of the sale of such Shares or Termination Delivery Units
     being subject to paragraph (c) of Rule 145 under the Securities Act) (such
     Shares or Termination Delivery Units, "RESTRICTED SHARES"), then delivery
     of such Restricted Shares shall be effected pursuant to either clause (i)
     or (ii) of Annex A hereto at the election of Counterparty, unless waived by
     BofA. Notwithstanding the foregoing, solely in respect of any Warrants
     exercised or deemed exercised on any Exercise Date, the Counterparty shall
     elect, prior to the first Settlement Date for the first Exercise Date, a
     Private Placement Settlement (as defined in Annex A hereto) or Registration
     Settlement (as defined in Annex A hereto) for all deliveries of Restricted
     Shares for all such Exercise Dates which election shall be applicable to
     all Settlement Dates for such Warrants and the procedures in clause (i) or
     clause (ii) of Annex A hereto shall apply for all such delivered Restricted
     Shares on an aggregate basis commencing after the final Settlement Date for
     such Warrants. The Calculation Agent shall make reasonable adjustments to
     settlement terms and provisions under this Confirmation to reflect a single
     Private Placement Settlement or Registration Settlement for such aggregate
     Restricted Shares delivered hereunder. If the Private Placement Settlement
     or the Registration Settlement shall not be effected as set forth in
     clauses (i) or (ii) of Annex A, as applicable, then failure to effect such
     Private Placement Settlement or such Registration Settlement shall
     constitute an Event of Default with respect to which Counterparty shall be
     the Defaulting Party.

     SHARE DELIVERIES. Counterparty acknowledges and agrees that, to the extent
     that BofA is not then an affiliate, as such term is used in Rule 144 under
     the Securities Act, of Counterparty and has not been such an affiliate of
     Counterparty for 90 days (it being understood that BofA shall not be
     considered such an affiliate of Counterparty solely by reason of its right
     to receive of Shares pursuant to a Transaction hereunder), and otherwise
     satisfies all holding period and other requirements of Rule 144 under the
     Securities Act applicable to it, any Shares or Termination Delivery Units
     delivered hereunder at any time after 2 years from the Premium Payment Date
     shall be eligible for resale under Rule 144(k) under the Securities Act,
     and Counterparty agrees to promptly remove, or cause the transfer agent for
     such Shares or Termination Delivery Units to remove, any legends referring
     to any restrictions on resale under the Securities Act from the
     certificates representing such Shares or Termination Delivery Units.
     Counterparty further agrees that with respect to any Shares or Termination
     Delivery Units delivered hereunder at any time after 1 year from the
     Premium Payment Date but prior to 2 years from the Premium Payment Date, to
     the extent that BofA then satisfies the holding period and other
     requirements of Rule 144 under the Securities Act, Counterparty shall
     promptly remove, or cause the transfer agent for such Shares or Termination
     Delivery Units to remove, any legends referring to any such restrictions or
     requirements from the certificates representing such Share or Termination
     Delivery Units upon delivery by BofA to Counterparty or such transfer agent
     of customary seller's and broker's representation letters in connection
     with resales of such Shares or Termination Delivery Units pursuant to Rule
     144 under the Securities Act, without any further requirement for the
     delivery of any certificate, consent, agreement, opinion of counsel, notice
     or any other document, any transfer tax stamps or payment of any other
     amount or any other action by BofA. Counterparty

                                       10

<PAGE>

     further agrees and acknowledges that BofA shall run a holding period under
     Rule 144 under the Securities Act with respect to the Warrants and/or any
     Shares or Termination Delivery Units delivered hereunder notwithstanding
     the existence of any other transaction or transactions between Counterparty
     and BofA relating to the Shares. Counterparty further agrees that Shares or
     Termination Delivery Units delivered hereunder prior to the date that is 1
     year from the Premium Payment Date may be freely transferred by BofA to its
     affiliates, and Counterparty shall effect such transfer without any further
     action by BofA. Notwithstanding anything to the contrary herein,
     Counterparty agrees that any delivery of Shares or Termination Delivery
     Units shall be effected by book-entry transfer through the facilities of
     the Clearance System if, at the time of such delivery, the certificates
     representing such Shares or Termination Delivery Units would not contain
     any restrictive legend as described above. Notwithstanding anything to the
     contrary herein, to the extent the provisions of Rule 144 under the
     Securities Act or any successor rule are amended, or the applicable
     interpretation thereof by the Securities and Exchange Commission or any
     court changes after the Trade Date, the agreements of Counterparty herein
     shall be deemed modified to the extent necessary, in the opinion of outside
     counsel of Counterparty, to comply with Rule 144 under the Securities Act,
     including Rule 144(k), as in effect at the time of delivery of the relevant
     Shares or Termination Delivery Units.

     NO MATERIAL NON-PUBLIC INFORMATION. On each day during the period beginning
     on the Trade Date and ending on the day on which BofA has informed
     Counterparty in writing that it has completed all purchases or sales of
     Shares to hedge initially its exposure to the Transaction, Counterparty
     represents and warrants to BofA that it is not aware of any material
     nonpublic information concerning itself or the Shares.

     LIMIT ON BENEFICIAL OWNERSHIP. Notwithstanding any other provisions hereof,
     BofA may not exercise any Warrant hereunder, Automatic Exercise shall not
     apply with respect thereto, and no delivery hereunder (including pursuant
     to provisions opposite the headings "ALTERNATIVE CALCULATIONS AND
     COUNTERPARTY PAYMENTS ON EARLY TERMINATION AND ON CERTAIN EXTRAORDINARY
     EVENTS," "REGISTRATION/PRIVATE PLACEMENT PROCEDURES," "LIMITATION ON
     DELIVERY OF SHARES" or Annex A) shall be made, to the extent (but only to
     the extent) that the receipt of any Shares upon such exercise or delivery
     would result in BofA directly or indirectly beneficially owning (as such
     term is defined for purposes of Section 13(d) of the Exchange Act) at any
     time in excess of 9.0% of the outstanding Shares. Any purported delivery
     hereunder shall be void and have no effect to the extent (but only to the
     extent) that such delivery would result in BofA directly or indirectly so
     beneficially owning in excess of 9.0% of the outstanding Shares. If any
     delivery owed to BofA or exercise hereunder is not made, in whole or in
     part, as a result of this provision, Counterparty's obligation to make such
     delivery and BofA's right to exercise a Warrant shall not be extinguished
     and Counterparty shall make such delivery as promptly as practicable after,
     but in no event later than one Clearance System Business Day after, BofA
     gives notice to Counterparty that such exercise or delivery would not
     result in BofA directly or indirectly so beneficially owning in excess of
     9.0% of the outstanding Shares.

     REPURCHASE NOTICES. On any day Counterparty effects any repurchases of
     Shares, Counterparty shall promptly provide BofA with a written notice of
     such repurchase (a "REPURCHASE NOTICE") if the Warrant Equity Percentage
     (as defined below) is (a) equal to or greater than 4.5% and (b) greater by
     0.5% than the Warrant Equity Percentage set forth in the immediately
     preceding Repurchase Notice (or, in the case of the first such Repurchase
     Notice, greater than the Warrant Equity Percentage as of the date hereof).
     The Warrant Equity Percentage as of any day is the fraction of (1) the
     numerator of which is the Number of Warrants, and (2) the denominator of
     which is the number of Shares outstanding on such day. Counterparty agrees
     to indemnify and hold harmless BofA and its affiliates and their respective
     officers, directors, employees, affiliates, advisors, agents and
     controlling person (each, an "INDEMNIFIED PERSON") from and against any and
     all losses (including losses relating to BofA's hedging activities as a
     consequence of becoming, or of the risk of becoming, an "insider" as
     defined under Section 16 of the Exchange Act, including without limitation,
     any forbearance from hedging activities or cessation of hedging activities
     and any losses in connection therewith with respect to this Transaction),
     claims, damages, judgments, liabilities and expense (including reasonable
     attorney's fees), joint or several, which an Indemnified Person actually
     may become subject to, as a result of Counterparty's failure to provide
     BofA with a Repurchase Notice on the day and in the manner specified
     herein, and to reimburse, upon written request, each of such Indemnified
     Persons for any reasonable legal or other expenses incurred in connection
     with investigating, preparing for, providing testimony or other evidence in
     connection with or defending any of the foregoing. If any suit, action,
     proceeding (including any governmental or regulatory investigation), claim
     or demand shall be

                                       11

<PAGE>

     brought or asserted against the Indemnified Person, such Indemnified Person
     shall promptly notify Counterparty in writing, and Counterparty, upon
     request of the Indemnified Person, shall retain counsel reasonably
     satisfactory to the Indemnified Person to represent the Indemnified Person
     and any others Counterparty may designate in such proceeding and shall pay
     the fees and expenses of such counsel related to such proceeding.
     Counterparty shall be relieved from liability to the extent that the
     Indemnified Person fails to promptly notify Counterparty of any action
     commenced against it in respect of which indemnity may be sought hereunder;
     provided, that failure to notify Counterparty (x) shall not relieve
     Counterparty from any liability hereunder to the extent it is not
     materially prejudiced as a result thereof and (y) shall not, in any event,
     relieve Counterparty from any liability that it may have otherwise than on
     account of this indemnity agreement. Counterparty shall not be liable for
     any settlement of any proceeding effected without its written consent, but
     if settled with such consent or if there be a final judgment for the
     plaintiff, Counterparty agrees to indemnify any Indemnified Person from and
     against any loss or liability by reason of such settlement or judgment.
     Counterparty shall not, without the prior written consent of the
     Indemnified Person, effect any settlement of any pending or threatened
     proceeding in respect of which any Indemnified Person is or could have been
     a party and indemnity could have been sought hereunder by such Indemnified
     Person, unless such settlement includes an unconditional release of such
     Indemnified Person from all liability on claims that are the subject matter
     of such proceeding on terms reasonably satisfactory to such Indemnified
     Person. If the indemnification provided for in this paragraph is
     unavailable to an Indemnified Person or insufficient in respect of any
     losses, claims, damages or liabilities referred to therein, then
     Counterparty, in lieu of indemnifying such Indemnified Person thereunder,
     shall contribute to the amount paid or payable by such Indemnified Person
     as a result of such losses, claims, damages or liabilities. The remedies
     provided for in this paragraph are not exclusive and shall not limit any
     rights or remedies that may otherwise be available to any Indemnified
     Person at law or in equity. The indemnity and contribution agreements
     contained in this paragraph shall remain operative and in full force and
     effect regardless of the termination of the Transaction.

     LIMITATION ON DELIVERY OF SHARES. Notwithstanding anything herein or in the
     Agreement to the contrary, in no event shall Counterparty be required to
     deliver Shares in connection with the Transaction in excess of ******
     Shares (the "MAXIMUM DELIVERY AMOUNT"). Counterparty represents and
     warrants (which shall be deemed to be repeated on each day that the
     Transaction is outstanding) that the Maximum Delivery Amount is equal to or
     less than the number of authorized but unissued Shares of Counterparty that
     are not reserved for future issuance in connection with transactions in the
     Shares (other than the Transaction) on the date of the determination of the
     Maximum Delivery Amount (such Shares, the "AVAILABLE SHARES"). In the event
     Counterparty shall not have delivered the full number of Shares otherwise
     deliverable as a result of this paragraph (the resulting deficit, the
     "DEFICIT SHARES"), Counterparty shall be continually obligated to deliver,
     from time to time until the full number of Deficit Shares have been
     delivered pursuant to this paragraph, Shares when, and to the extent, that
     (i) Shares are repurchased, acquired or otherwise received by Counterparty
     or any of its subsidiaries after the Trade Date (whether or not in exchange
     for cash, fair value or any other consideration), (ii) authorized and
     unissued Shares reserved for issuance in respect of other transactions
     prior to such date which prior to the relevant date become no longer so
     reserved and (iii) Counterparty additionally authorizes any unissued Shares
     that are not reserved for other transactions. Counterparty shall
     immediately notify BofA of the occurrence of any of the foregoing events
     (including the number of Shares subject to clause (i), (ii) or (iii) and
     the corresponding number of Shares to be delivered) and promptly deliver
     such Shares thereafter.

     ADDITIONAL TERMINATION EVENT. If BofA reasonably determines that it is
     advisable to terminate a portion of the Transaction so that BofA's related
     hedging activities will comply with applicable securities laws, rules or
     regulations, an Additional Termination Event shall occur in respect of
     which (1) Counterparty shall be the sole Affected Party and (2) the
     Transaction shall be the sole Affected Transaction.

     TRANSFER OR ASSIGNMENT. Notwithstanding any provision of the Agreement to
     the contrary, BofA may, subject to applicable law, freely transfer and
     assign all of its rights and obligations under the Transaction for at least
     fair market value without the consent of Counterparty.

     If, as determined in BofA's sole discretion, (x) its "beneficial ownership"
     (within the meaning of Section 16 of the Exchange Act and rules promulgated
     thereunder) exceeds 8.5% of Counterparty's outstanding Shares and (y) BofA
     is unable, after commercially reasonable efforts, to effect a transfer or
     assignment on pricing terms and

                                       12

<PAGE>

     within a time period reasonably acceptable to it of all or a portion of the
     Transaction to reduce such "beneficial ownership" below 8.5%, BofA may
     designate any Scheduled Trading Day as an Early Termination Date with
     respect to a portion (the "TERMINATED PORTION") of this Transaction, such
     that its "beneficial ownership" following such partial termination will be
     approximately equal to but less than 8.5%. In the event that BofA so
     designates an Early Termination Date with respect to a portion of this
     Transaction, a payment shall be made pursuant to Section 6 of the Agreement
     as if (i) an Early Termination Date had been designated in respect of a
     Transaction having terms identical to this Transaction and a Number of
     Warrants equal to the Terminated Portion (allocated among the Components
     thereof in the discretion of BofA), (ii) the Counterparty shall be the sole
     Affected Party with respect to such partial termination and (iii) such
     Transaction shall be the only Terminated Transaction (and, for the
     avoidance of doubt, the provisions set forth under the caption "ALTERNATIVE
     CALCULATIONS AND COUNTERPARTY PAYMENT ON EARLY TERMINATION AND ON CERTAIN
     EXTRAORDINARY EVENTS" shall apply to any amount that is payable by
     Counterparty to BofA pursuant to this sentence).

     Notwithstanding any other provision in this Confirmation to the contrary
     requiring or allowing BofA to purchase, sell, receive or deliver any shares
     or other securities to or from Counterparty, BofA may designate any of its
     affiliates to purchase, sell, receive or deliver such shares or other
     securities and otherwise to perform BofA's obligations in respect of the
     Transaction and any such designee may assume such obligations. BofA shall
     be discharged of its obligations to Counterparty to the extent of any such
     performance.

     SEVERABILITY; ILLEGALITY. If compliance by either party with any provision
     of the Transaction would be unenforceable or illegal, (a) the parties shall
     negotiate in good faith to resolve such unenforceability or illegality in a
     manner that preserves the economic benefits of the transactions
     contemplated hereby and (b) the other provisions of the Transaction shall
     not be invalidated, but shall remain in full force and effect.

     WAIVER OF JURY TRIAL. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
     APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
     SUIT, ACTION OR PROCEEDING RELATING TO THE TRANSACTION. EACH PARTY (I)
     CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS
     REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
     THE EVENT OF SUCH A SUIT, ACTION OR PROCEEDING, SEEK TO ENFORCE THE
     FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE
     BEEN INDUCED TO ENTER INTO THE TRANSACTION, AS APPLICABLE, BY, AMONG OTHER
     THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS PROVIDED HEREIN.

GOVERNING LAW: The law of the State of New York.

Contact information. For purposes of the Agreement (unless otherwise specified
in the Agreement), the addresses for notice to the parties shall be:

(a) Counterparty

PolyMedica Corporation
701 Edgewater Drive, Suite 360
Wakefield, MA 01880
Attention: Keith Jones, Chief Financial Officer
Fax: (781) 295-0182

(b) BofA

Bank of America, N.A.
c/o Bank of America Securities LLC
Equity Financial Products
9 West 57th Street, 40th Floor
New York, NY 10019

Attention: Chris Hutmaker

                                       13

<PAGE>

This Confirmation may be executed in several counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.

Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BofA a facsimile of the fully-executed
Confirmation to BofA at (212) 230-8610. Originals shall be provided for your
execution upon your request.

We are very pleased to have executed the Transaction with you and we look
forward to completing other transactions with you in the near future.

Very truly yours,

BANK OF AMERICA, N.A.

By: /s/ Eric P. Hambleton
    ---------------------------------
Name: Eric P. Hambleton
      -------------------------------
Title: Authorized Signatory
       ------------------------------

Counterparty hereby agrees to, accepts and confirms the terms of the foregoing
as of the Trade Date.

POLYMEDICA CORPORATION

By: /s/ Keith Jones
    ---------------------------------
Name: Keith W. Jones
      -------------------------------
Title: Chief Financial Officer
       ------------------------------

                                       14

<PAGE>

                                                                         ANNEX A

            REGISTRATION SETTLEMENT AND PRIVATE PLACEMENT SETTLEMENT

(i)  If the Counterparty elects to settle the Transaction pursuant to this
     clause (i) (a "PRIVATE PLACEMENT SETTLEMENT"), then delivery of Restricted
     Shares by the Counterparty shall be effected in customary private placement
     procedures with respect to such Restricted Shares reasonably acceptable to
     BofA; provided that the Counterparty may not elect a Private Placement
     Settlement if, on the date of its election, it has taken, or caused to be
     taken, any action that would make unavailable either the exemption pursuant
     to Section 4(2) of the Securities Act for the sale by the Counterparty to
     BofA (or any affiliate designated by BofA) of the Restricted Shares or the
     exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act
     for resales of the Restricted Shares by BofA (or any such affiliate of
     BofA). The Private Placement Settlement of such Restricted Shares shall
     include customary representations, covenants, blue sky and other
     governmental filings and/or registrations, indemnities to BofA, due
     diligence rights (for BofA or any designated buyer of the Restricted Shares
     by BofA), opinions and certificates, and such other documentation as is
     customary for private placement agreements, all reasonably acceptable to
     BofA. In the event of a Private Placement Settlement, the Net Share
     Settlement Amount or the Counterparty Payment Obligation, respectively,
     shall be deemed to be the Net Share Settlement Amount or the Counterparty
     Payment Obligation, respectively, plus an additional amount (determined
     from time to time by the Calculation Agent in its commercially reasonable
     judgment) attributable to interest that would be earned on such Net Share
     Settlement Amount or the Counterparty Payment Obligation, respectively,
     (increased on a daily basis to reflect the accrual of such interest and
     reduced from time to time by the amount of net proceeds received by BofA as
     provided herein) at a rate equal to the open Federal Funds Rate plus 50
     basis points per annum for the period from, and including, such Settlement
     Date or the date on which the Counterparty Payment Obligation is due,
     respectively, to, but excluding, the related date on which all the
     Restricted Shares have been sold (but in no event may such period exceed
     two years) and calculated on an Actual/360 basis.

(ii) If the Counterparty elects to settle the Transaction pursuant to this
     clause (ii) (a "REGISTRATION SETTLEMENT"), then the Counterparty shall
     promptly (but in any event no later than the beginning of the Resale
     Period) file and use its reasonable best efforts to make effective under
     the Securities Act a registration statement or supplement or amend an
     outstanding registration statement in form and substance reasonably
     satisfactory to BofA, to cover the resale of such Restricted Shares (and
     any Make-whole Shares) in accordance with customary resale registration
     procedures, including covenants, conditions, representations, underwriting
     discounts (if applicable), commissions (if applicable), indemnities, due
     diligence rights, opinions and certificates, and such other documentation
     as is customary for equity resale underwriting agreements, all reasonably
     acceptable to BofA. If BofA, in its sole reasonable discretion, is not
     satisfied with such procedures and documentation, Private Placement
     Settlement shall apply. If BofA is satisfied with such procedures and
     documentation, it shall sell the Restricted Shares (and any Make-whole
     Shares) pursuant to such registration statement during a period (the
     "RESALE PERIOD") commencing on the Exchange Business Day following delivery
     of such Restricted Shares (and any Make-whole Shares) and ending on the
     earliest of (i) the Exchange Business Day on which BofA completes the sale
     of all Restricted Shares or, in the case of settlement of Termination
     Delivery Units, a sufficient number of Restricted Shares so that the
     realized net proceeds of such sales exceed the Counterparty Payment
     Obligation, (ii) the date upon which all Restricted Shares (and any
     Make-whole Shares) have been sold or transferred pursuant to Rule 144 (or
     similar provisions then in force) or Rule 145(d)(1) or (2) (or any similar
     provision then in force) under the Securities Act and (iii) the date upon
     which all Restricted Shares (and any Make-whole Shares) may be sold or
     transferred by a non-affiliate pursuant to Rule 144(k) (or any similar
     provision then in force) or Rule 145(d)(3) (or any similar provision then
     in force) under the Securities Act.

(iii) If (ii) above is applicable and the Net Share Settlement Amount or the
     Counterparty Payment Obligation, as applicable, exceeds the realized net
     proceeds from such resale, or if (i) above is applicable and the Freely
     Tradeable Value of the Shares owed pursuant to Net Share Settlement Amount,
     or the Counterparty Payment Obligation (in each case as adjusted pursuant
     to (i) above), as applicable, exceeds the realized net proceeds from such
     resale,

                                       A-1

<PAGE>

     Counterparty shall transfer to BofA by the open of the regular trading
     session on the Exchange on the Exchange Business Day immediately following
     the last day of the Resale Period the amount of such excess (the
     "ADDITIONAL AMOUNT"), at its option, either in cash or in a number of
     Shares ("MAKE-WHOLE SHARES", provided that the aggregate number of Shares
     and Make-whole Shares delivered shall not exceed the Maximum Delivery
     Amount) that, based on the Relevant Price on the last day of the Resale
     Period (as if such day was the "VALUATION DATE" for purposes of computing
     such Relevant Price), has a value equal to the Additional Amount. If
     Counterparty elects to pay the Additional Amount in Make-whole Shares,
     Counterparty shall elect whether the requirements and provisions for either
     Private Placement Settlement or Registration Settlement shall apply to such
     payment. This provision shall be applied successively until the Additional
     Amount is equal to zero, subject to "LIMITATIONS ON DELIVERY OF SHARES".
     "FREELY TRADEABLE VALUE" means the value of the number of Shares delivered
     to BofA which such Shares would have if they were freely tradeable (without
     prospectus delivery) upon receipt by BofA, as determined by the Calculation
     Agent by reference to the Relevant Price for freely tradeable Shares as of
     the Valuation Date, or other date of valuation used to determine the
     delivery obligation with respect to such Shares, or by other commercially
     reasonable means.

                                       A-2

<PAGE>

                                                                         ANNEX B

For each Component of the Transaction, the Number of Warrants and Expiration
Date is set forth below.

<TABLE>
<CAPTION>
                                                                    Final
Component Number   Number of Warrants     Expiration Date      Disruption Date
----------------   ------------------   ------------------   ------------------
<S>                <C>                  <C>                  <C>
*****                    ******                *****                *****
</TABLE>

                                       B-1<PAGE>

                                                                    Exhibit 10.7

                             POLYMEDICA CORPORATION

                      2000 STOCK INCENTIVE PLAN, AS AMENDED

1.   Purpose

     The purpose of this 2000 Stock Incentive Plan (the "Plan") of PolyMedica
Corporation, a Massachusetts corporation ("PolyMedica" or the "Company"), is to
advance the interests of the Company's stockholders by enhancing the Company's
ability to attract, retain and motivate persons who make (or are expected to
make) important contributions to the Company by providing such persons with
equity ownership opportunities and performance-based incentives and thereby
better aligning the interests of such persons with those of the Company's
stockholders. Except where the context otherwise requires, the term "Company"
shall include any of the Company's present or future subsidiary corporations as
defined in Section 424(f) of the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder (the "Code") and any other business
venture (including, without limitation, joint venture or limited liability
company) in which the Company has a significant interest, as determined by the
Board of Directors of the Company (the "Board").

2.   Eligibility

     All of the Company's employees, officers, directors, consultants and
advisors (and any individuals who have accepted an offer for employment) are
eligible to be granted options and restricted stock awards, (each, an "Award")
under the Plan. Each person who has been granted an Award under the Plan shall
be deemed a "Participant".

3.   Administration, Delegation

     (a) Administration by Board of Directors. The Plan will be administered by
the Board. The Board shall have authority to grant Awards and to adopt, amend
and repeal such administrative rules, guidelines and practices relating to the
Plan as it shall deem advisable. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem expedient to carry the Plan into effect and it
shall be the sole and final judge of such expediency. All decisions by the Board
shall be made in the Board's sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Award. No
director or person acting pursuant to the authority delegated by the Board shall
be liable for any action or determination relating to or under the Plan made in
good faith.

     (b) Appointment of Committees. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee"). All references in the
Plan to the "Board" shall mean the Board or a Committee of the Board to the
extent that the Board's powers or authority under the Plan have been delegated
to such Committee.

4.   Stock Available for Awards

     (a) Number of Shares. Subject to adjustment under Section 7, Awards may be
made under the Plan for up to 7,900,000 shares of common stock, $.01 par value
per share, of the Company (the "Common Stock"). If any Award expires or is
terminated, surrendered or canceled without having been fully exercised or is
forfeited in whole or in part (including as the result of shares of Common Stock
subject to such Award being repurchased by the Company at the original issuance
price pursuant to a contractual repurchase right) or results in any Common Stock
not being issued, the unused Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan, subject, however, in the case
of Incentive Stock

<PAGE>

Options (as hereinafter defined), to any limitations required under the Code.
Shares issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.

     (b) Per-Participant Limit. Subject to adjustment under Section 7, the
maximum number of shares of Common Stock with respect to which Awards may be
granted to any Participant under the Plan shall be 150,000 per calendar year.
The per-Participant limit described in this Section 4(b) shall be construed and
applied consistently with Section 162(m) of the Code ("Section 162(m)").

5.   Stock Options

     (a) General. The Board may grant options to purchase Common Stock (each, an
"Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option". Notwithstanding anything contained herein to the contrary, without the
prior approval of the Company's stockholders, no option issued hereunder shall
be repriced, replaced or regranted through cancellation, or by lowering the
option exercise price of a previously granted award.

     (b) Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of PolyMedica or any of its
present or future subsidiaries as defined in section 424(f) of the code, and
shall be subject to and shall be construed consistently with the requirements of
Section 422 of the Code. The Company shall have no liability to a Participant,
or any other party, if an Option (or any part thereof) which is intended to be
an Incentive Stock Option is not an Incentive Stock Option.

     (c) Exercise Price. The Board shall establish the exercise price at the
time each Option is granted at not less than 100% of the fair market value of
the shares of Common Stock, as determined by the Board, at such time, and shall
specify that exercise price in the applicable option agreement.

     (d) Duration of Options. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Board may specify in the applicable
option agreement, provided, however, that no Option will be granted for a term
in excess of 10 years.

     (e) Exercise of Option. Options may be exercised by delivery to the Company
of a written notice of exercise signed by the proper person or by any other form
of notice (including electronic notice) approved by the Board together with
payment in full as specified in Section 5(f) for the number of shares for which
the Option is exercised.

     (f) Payment Upon Exercise. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:

          (1) in cash or by check, payable to the order of the Company;

          (2) except as the Board may, in its sole discretion, otherwise provide
in an option agreement, by (i) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price and any required tax withholding or
(ii) delivery by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to the
Company cash or a check sufficient to pay the exercise price and any required
tax withholding;

          (3) by delivery of shares of Common Stock owned by the Participant
valued at their fair market value as determined by (or in a manner approved by)
the Board in good faith ("Fair Market Value"),provided (i) such method of
payment is then permitted under applicable law and (ii) such Common

                                      -2-

<PAGE>

Stock, if acquired directly from the Company was owned by the Participant at
least six months prior to such delivery;

          (4) to the extent permitted by the Board, in its sole discretion by
(i) delivery of a promissory note of the Participant to the Company on terms
determined by the Board, or (ii) payment of such other lawful consideration as
the Board may determine; or

          (5) by any combination of the above permitted forms of payment.

     (g) Substitute Options. In connection with a merger or consolidation of an
entity with the Company or the acquisition by the Company of property or stock
of an entity, the Board may grant Options in substitution for any options or
other stock or stock-based awards granted by such entity or an affiliate
thereof. Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Options
contained in the other sections of this Section 5 or in Section 2.

6.   Restricted Stock

     (a) Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, a "Restricted Stock Award").
Subject to adjustment under Section 7, the maximum number of shares of Common
Stock with respect to which Restricted Stock Awards may be granted under the
Plan shall be a maximum of 1,287,613.

     (b) Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.

7.   Adjustments for Changes in Common Stock and Certain Other Events

     (a) Changes in Capitalization. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the per-Participant limit set forth in Section 4(b), (iii) the number and
class of securities and exercise price per share subject to each outstanding
Option, (iv) the repurchase price per share subject to each outstanding
Restricted Stock Award, and (v) the terms of each other outstanding Award shall
be appropriately adjusted by the Company (or substituted Awards may be made, if
applicable) to reflect the impact of such event or distribution. If this Section
7(a) applies and Section 7(c) also applies to any event, Section 7(c) shall be
applicable to such event, and this Section 7(a) shall not be applicable.

     (b) Liquidation or Dissolution. In the event of a proposed liquidation or
dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the

                                      -3-

<PAGE>

extent exercised before such effective date. The Board may specify the effect of
a liquidation or dissolution on any Restricted Stock Award or other Award
granted under the Plan at the time of the grant of such Award.

     (c) Acquisition Events

          (1) Definition. An "Acquisition Event" shall mean: (a) any merger or
consolidation of the Company with or into another entity as a result of which
the Common Stock is converted into or exchanged for the right to receive cash,
securities or other property or (b) any exchange of shares of the Company for
cash, securities or other property pursuant to a share exchange transaction.

          (2) Consequences of an Acquisition Event on Options. Upon the
occurrence of an Acquisition Event, or the execution by the Company of any
agreement with respect to an Acquisition Event, the Board shall provide that all
outstanding Options shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof). For purposes hereof, an Option shall be considered to be assumed if,
following consummation of the Acquisition Event, the Option confers the right to
purchase, for each share of Common Stock subject to the Option immediately prior
to the consummation of the Acquisition Event, the consideration (whether cash,
securities or other property) received as a result of the Acquisition Event by
holders of Common Stock for each share of Common Stock held immediately prior to
the consummation of the Acquisition Event (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding shares of Common Stock); provided, however, that if the
consideration received as a result of the Acquisition Event is not solely common
stock of the acquiring or succeeding corporation (or an affiliate thereof), the
Company may, with the consent of the acquiring or succeeding corporation,
provide for the consideration to be received upon the exercise of Options to
consist solely of common stock of the acquiring or succeeding corporation (or an
affiliate thereof) equivalent in fair market value to the per share
consideration received by holders of outstanding shares of Common Stock as a
result of the Acquisition Event.

     Notwithstanding the foregoing, if the acquiring or succeeding corporation
(or an affiliate thereof) does not agree to assume, or substitute for, such
Options, then the Board shall, upon written notice to the Participants, provide
that all Options will become exercisable in full as of a specified time prior to
the Acquisition Event and will terminate immediately prior to the consummation
of such Acquisition Event, except to the extent exercised by the Participants
before the consummation of such Acquisition Event; provided, however, that in
the event of an Acquisition Event under the terms of which holders of Common
Stock will receive upon consummation thereof a cash payment for each share of
Common Stock surrendered pursuant to such Acquisition Event (the "Acquisition
Price"), then the Board may instead provide that all outstanding Options shall
terminate upon consummation of such Acquisition Event and that each Participant
shall receive, in exchange therefor, a cash payment equal to the amount (if any)
by which (A) the Acquisition Price multiplied by the number of shares of Common
Stock subject to such outstanding Options (whether or not then exercisable),
exceeds (B) the aggregate exercise price of such Options.

          (3) Consequences of an Acquisition Event on Restricted Stock Awards.
Upon the occurrence of an Acquisition Event, the repurchase and other rights of
the Company under each outstanding Restricted Stock Award shall inure to the
benefit of the Company's successor and shall apply to the cash, securities or
other property which the Common Stock was converted into or exchanged for
pursuant to such Acquisition Event in the same manner and to the same extent as
they applied to the Common Stock subject to such Restricted Stock Award.

8.   General Provisions Applicable to Awards

     (a) Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall be exercisable only
by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.

                                      -4-

<PAGE>

     (b) Documentation. Each Award shall be evidenced by a written instrument in
such form as the Board shall determine. Each Award may contain terms and
conditions in addition to those set forth in the Plan.

     (c) Board Discretion. Except as otherwise provided by the Plan, each Award
may be made alone or in addition or in relation to any other Award. The terms of
each Award need not be identical, and the Board need not treat Participants
uniformly.

     (d) Termination of Status. The Board shall determine the effect on an Award
of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.

     (e) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, when the Common Stock is registered under the Exchange Act,
Participants may, to the extent then permitted under applicable law, satisfy
such tax obligations in whole or in part by delivery of shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value; provided, however, that the total tax withholding
where stock is being used to satisfy such tax obligation cannot exceed the
Company's minimum statutory withholding obligations (based on minimum statutory
withholding rates for federal and state taxes including payroll taxes that are
applicable to such supplemental taxable income). The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind
otherwise due to a Participant.

     (f) Amendment of Award. Subject to the provisions of the last sentence of
Section 5(a) hereof, the Board may amend, modify or terminate any outstanding
Award, including but not limited to, substituting therefor another Award of the
same or a different type, changing the date of exercise or realization, and
converting an Incentive Stock Option to a Nonstatutory Stock Option, provided
that the Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.

     (g) Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

     (h) Acceleration. The Board may at any time provide that any Options shall
become immediately exercisable in full or in part, or that any Restricted Stock
Awards shall be free of restrictions in full or in part.

9.   Miscellaneous

     (a) No Right To Employment or Other Status. No person shall have any claim
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

                                      -5-

<PAGE>

     (b) No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.

     (c) Effective Date and Term of Plan. The Plan shall become effective on the
date on which it is adopted by the Board, but no Award granted to a Participant
that is intended to comply with Section 162(m) shall become exercisable, vested
or realizable, as applicable to such Award, unless and until the Plan has been
approved by the Company's stockholders to the extent stockholder approval is
required by Section 162(m) in the manner required under Section 162(m)
(including the vote required under Section 162(m)). No Awards shall be granted
under the Plan after the completion of ten years from the earlier of (i) the
date on which the Plan was adopted by the Board or (ii) the date the Plan was
approved by the Company's stockholders, but Awards previously granted may extend
beyond that date.

     (d) Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, provided that to the extent required by
Section 162(m), no Award granted to a Participant that is intended to comply
with Section 162(m) after the date of such amendment shall become exercisable,
realizable or vested, as applicable to such Award, unless and until such
amendment shall have been approved by the Company's stockholders as required by
Section 162(m) (including the vote required under Section 162(m)).

     (e) Governing Law. The provisions of the Plan and all Awards made hereunder
shall be governed by and interpreted in accordance with the laws of the State of
Massachusetts, without regard to any applicable conflicts of law.

               Adopted by the Board of Directors on June 8, 2000

               Approved by the Shareholders on September 14, 2000

               (Increase from 1,200,000 to 1,800,000 Common Stock authorized for
               issuance under the Plan)

               Amended by the Board of Directors on August 27, 2001

               Approved by the Shareholders on September 13, 2001

               (Increase from 1,800,000 to 2,300,000 shares of Common Stock
               authorized for issuance under the Plan)

               Amended by the Board of Directors on July 24, 2002

               Approved by the Shareholders on September 12, 2002

               (Adjustment from 2,300,000 to 4,600,000 shares of Common Stock
               authorized for issuance under the Plan and from 150,000 to
               300,000 per participant per year as a result of 2 for 1 stock
               split on September 29, 2003)

               (Increase from 4,600,000 to 6,400,000 shares of Common Stock
               authorized for issuance under the Plan)

               Amended by the Board of Directors on June 30, 2004

               Approved by the Shareholders on September 17, 2004

                                      -6-

<PAGE>

               (Increase from 6,400,000 to 7,900,000 shares of Common Stock
               authorized for issuance under the Plan and limiting the number of
               shares that may be issued as restricted stock awards to
               1,287,613)

               Adopted by the Board of Directors on July 22, 2005

               Approved by the Shareholders on September 23, 2005

               (Revised Section 7(a))

               Amended by the Board of Directors on September 10, 2006

                                      -7-

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