Document:

Exhibit
10.214

 

FIRST
AMENDMENT TO THE

SALES,
MARKETING AND DISTRIBUTION AGREEMENT

 

THIS FIRST AMENDMENT (the
“First Amendment”) to the Sales, Marketing and Distribution Agreement (the
“Agreement”), having an effective date of July 8, 2002, is made and entered
into as of January 23, 2003, by and between CYGNUS, INC., a Delaware
corporation with its principal place of business at 400 Penobscot Drive,
Redwood City, California 94063 (“Cygnus”) and SANKYO PHARMA INC., a Delaware
corporation with its place of business at Two Hilton Court, Parsippany, New
Jersey 07054 (“Sankyo”).  Cygnus and
Sankyo are referred to herein individually as a “party” and collectively as the
“parties.”

RECITALS

WHEREAS:

 

A.                                   The parties entered into a Sales,
Marketing and Distribution Agreement having an effective date of July 8, 2002
(the “Agreement”);

 

B.                                     The parties now wish to amend the
Agreement pursuant to Section 15.1 of the Agreement as set forth below;

 

NOW, THEREFORE, for good and valid consideration, the
parties agree to the following terms and conditions set forth herein:

 

 

1.               In Section 1.13 of the Agreement, the following
paragraph is added following subsection (c):

 

After the first ***
following Product Launch, the following item is also deducted from the gross
revenues:

 

(d)                                 customer and consumer rebates, including
but not limited to consumer incentives, coupons and rebates.

 

Prior to the end of the
first *** following Product Launch, Cygnus will reimburse Sankyo for *** of the
cost of such customer and consumer rebates, but these customer and consume
rebates will not be deducted from Net Sales by Sankyo.

 

2.               In Section 2.5 of the Agreement, second sentence,
“Calendar Quarter” is deleted and replaced with “calendar month” and “thirty
(30) calendar days” is replaced with “fifteen (15) calendar days.”  Thus, the second sentence of amended Section
2.5 reads, “Thereafter, within fifteen (15) calendar days of the end of each
calendar month, Sankyo shall provide Cygnus a written statement of Net Sales by
Sankyo of the Product in the Territory during such calendar month.”  The remainder of Section 2.5 is not amended.

 

3.               In Section 4.2 of the Agreement, first sentence,
“quarterly” is deleted and replaced with “monthly”.  In the second sentence, “daily” is deleted and replaced with “monthly”.  After the third sentence, the following
sentence is added:  “Upon reasonable
request, Sankyo will 

 

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

 

 

provide Cygnus with
informal updates on sales information on a more frequent basis.”  The remainder of Section 4.2 is not amended.

 

4.               In Section 5.4(a) of the Agreement, the requirement
that the parties will execute “within thirty (30) calendar days from the
Effective Date of the Agreement” a supply agreement “containing the terms and
conditions set forth in the Agreement and other terms and conditions that are
customarily found in an agreement of this nature” is amended so that the time
of execution is to be within seven (7) months of the Effective Date of the
Agreement.

 

5.               In Section 5.4(c) of the Agreement, the following
language is added to the existing section:

 

                                                The price at which Cygnus will sell the
GlucoWatch® Analyzer and the GlucoWatch® QC Test kit to Sankyo will be $*** and
$***, respectively.  Payment will be due
and made as set forth in the Supply agreement. 
Additionally, Analyzer and QC Test Kit sales by Sankyo will not be
included in Net Sales by Sankyo, and no Sales and Marketing Fee shall be due on
Analyzer and QC Test Kit sales.

 

6.               The parties hereby acknowledge and agree that Sankyo
has paid in full the milestones of ten million dollars ($10,000,000) set forth
in Section 2.2 of the Co-Promotion Agreement, dated November 28, 2001, between
Cygnus and Sankyo.

 

7.               All other terms and conditions of the Agreement shall
remain in full force and effect and are unchanged by this Amendment.

 

8.               This First Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

 

IN
WITNESS WHEREOF,
the undersigned have caused this First Amendment to be executed by their duly
authorized officers as of the date first written above.

 

	
  CYGNUS, INC.

  	
   

  	
  SANKYO PHARMA INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John C
  Hodgman

  	
   

  	
  By:

  	
  /s/ John P.
  Gargiulo

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  John C Hodgman

  	
   

  	
  Name:

  	
  John P. Gargiulo

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Pres & CEO

  	
   

  	
  Title:

  	
  VP Marketing
  & Commercial OPS

  

 

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

 

2Exhibit
10.215

SUPPLY AGREEMENT

THIS SUPPLY AGREEMENT
(the “Supply Agreement”) is made and entered into as of January 23, 2003, by
and between CYGNUS, INC., a Delaware corporation with its principal place of
business at 400 Penobscot Drive, Redwood City, California 94063 (“Cygnus”) and
SANKYO PHARMA INC., a Delaware corporation with its place of business at Two
Hilton Court, Parsippany, New Jersey 07054 (“Sankyo”).  Cygnus and Sankyo are referred to herein
individually as a “party” and collectively as the “parties.”

RECITALS

WHEREAS:

A.            The
parties entered into a Sales, Marketing and Distribution Agreement on and
effective July 8, 2002 relating to the sales, marketing and distribution in the
United States of Cygnus’ reverse iontophoresis glucose monitoring products (the
“Sales, Marketing and Distribution Agreement”); and

B.            The
Sales, Marketing and Distribution Agreement provides for a Supply Agreement to
be executed, containing the terms and conditions set forth in Section 5.4 of
the Sales, Marketing and Distribution Agreement and other such terms and
conditions that are customarily found in an agreement of this nature;

NOW,
THEREFORE, for
good and valid consideration, the parties agree to the following terms and
conditions set forth herein:

1.             DEFINITIONS

1.1           Except
as specifically provided otherwise, capitalized terms used in this Supply
Agreement, whether used in the singular or plural, shall have the meanings set
forth in the Sales, Marketing and Distribution Agreement unless specifically
defined in this Supply Agreement.

2.                                      SUPPLY OF PRODUCT

2.1           Exclusive
Supply. Except as set forth in Section 2.1(i) of the Sales, Marketing and
Distribution Agreement and Section 2.12 of this Supply Agreement, Cygnus shall
exclusively supply Sankyo the Product for sale in the Territory as provided in,
and during the Term of, the Sales, Marketing and Distribution Agreement.

2.2           Forecasts and Purchase Orders.  Section 5.4(d) of the Sales, Marketing and
Distribution Agreement notwithstanding, commencing on September 1, 2002, on a
monthly basis thereafter on the first day of each calendar month, Sankyo will
provide Cygnus a written binding, noncancellable and non-changeable Purchase
Order (PO), referencing this Supply Agreement, for the fourth subsequent
calendar month from the date of the PO and a written rolling twenty-four (24)
month forecast for the fifth (5th) through twenty-eighth (28th)
subsequent calendar months from the date of the PO for the Product in the
Territory. (By way of explanation and 

 

 

example,
on January 1, 2003, the PO is for the calendar month of April 2003, and the
rolling twenty-four (24) month forecast will be for the months of May 1, 2003
through April 30, 2005.)   If a written
PO for the fourth subsequent month is not received after eight (8) calendar
days following the first day of the calendar month, then the forecast amount
for that corresponding month as specified on the most recent twenty-four (24)
month rolling forecast will automatically become the amount of the PO and such
amount will be binding, noncancellable and non-changeable, unless both parties
mutually agreed in writing. Except as specified above, the rolling twenty-four
(24) month forecasts for the fifth (5th) through twenty-eighth (28th)
subsequent months are nonbinding; provided, however, that for long-lead time
components (i.e., such components having an ordering lead time of greater than
four (4) months) Sankyo shall be responsible for covering the costs of
noncancellable, commercially reasonable orders for long-lead time components in
the event that such components cannot be utilized.  Additionally, any POs for a period of time not covered by the
then-current Sales, Marketing and Distribution Plan cannot exceed the highest
monthly forecast in the prior three (3) calendar months within the then-current
Sales, Marketing and Distribution Plan. The parties recognize that forecasting
for the first Sales Year is potentially variable.  Sankyo Pharma Inc. will use its commercially reasonable efforts
to provide accurate forecasting during the first Sales Year and throughout the
Term of the Sales, Marketing and Distribution Agreement, and Cygnus agrees to
use its commercially reasonable efforts using equipment capacity and staffing
current at the time the PO is provided to accommodate requirements beyond one
hundred and twenty percent (120%) of firm orders during the first Sales Year
and throughout the Term of the Sales, Marketing and Distribution Agreement,
subject to Section 2.11 of this Supply Agreement.

 

2.3           Acceptance of POs.
Within seven (7) calendar days after receipt of a PO from Sankyo or within
seven (7) calendar days after the first day of a calendar month in which no
written PO is received, as set forth in Section 2.2 of this Supply Agreement,
Cygnus will provide Sankyo a written acceptance of the PO and a firm delivery
schedule.  In the event that there is no
response from Cygnus and if the PO is not greater by twenty percent (20%) or
less by ten percent (10%) than the amount for that corresponding month as
specified on the most recent twenty-four (24) month rolling forecast, the PO
shall be deemed accepted.

 

2.4           Payment
and Acceptance of Product. Sankyo will pay Cygnus fifty percent (50%) of the
Transfer Price at the time of acceptance of the POs by Cygnus, the acceptance
of which will be indicated by written notice from Cygnus, as set forth in
Section 2.3 of this Supply Agreement, accompanied by an invoice for this
initial fifty percent (50%) of payment. Cygnus will issue additional invoices
to Sankyo for the remaining amounts, which Sankyo will pay upon Sankyo’s
acceptances of shipments, provided however, that, if Cygnus does not ship
Product in the scheduled month as set forth on an accepted PO, and such delay
in shipment is not at the request of Sankyo, then Sankyo is not obligated to
pay Cygnus for any further shipments set forth on this PO until all Product
covered by this PO has been received and accepted by Sankyo.

2.5           Invoices
for shipments must contain specific lot information. Sankyo will pay Cygnus
only for amounts of Product actually accepted by Sankyo.  Sankyo shall have seven (7) calendar days
following the date on which the Product is received to reject such Product only
in the event that all or part of the shipment fails to conform to the
applicable specification documentation. 
Sankyo shall provide written notice to Cygnus within such seven (7)
calendar day period specifying the manner in which all or part of such shipment
fails to meet the specification 

2

 

documentation. 
If Cygnus and Sankyo disagree on whether a rejection is valid, the
matter will be determined by an independent third-party expert and the parties
shall bear equally the costs and expenses of such independent third-party
expert. In the event that no such notification is received, the Product shall
be deemed accepted and payment shall be due. 
If, however, Sankyo rejects a shipment or portion thereof within such
seven (7) calendar day period in accordance with the terms hereof, Cygnus, at
Cygnus’ sole election, may replace the rejected Product or correct any
deficiencies in the Product.  The
warranties given by Cygnus in the Sales, Marketing and Distribution Agreement
shall survive any failure by Sankyo to reject the Product under this Section
2.4.

2.5           Shipping.  Cygnus will use its reasonable commercial efforts to ship and
deliver such ordered Product on or before the date requested.  Cygnus will ship the Product F.O.B. destination,
freight prepaid to Sankyo or to Sankyo’s designated agent.  An Advance Shipping Notice (ASN) must be
sent to Sankyo and to Sankyo’s agent prior to the shipment of any goods.

 

2.6           Pricing
and Payments. The Transfer Price at which Cygnus will sell trade Product to
Sankyo will be for the first *** following the Product Launch, the greater of
*** of the published Wholesale Acquisition Cost or the amounts set forth in
Exhibit A hereto, for the subsequent ***, the greater of *** of the
published Wholesale Acquisition Cost or the amounts set forth in Exhibit A
hereto, and thereafter for the remaining Calendar Quarters in the initial Term,
the greater of *** of the published Wholesale Acquisition Cost or the amounts
set forth in Exhibit A hereto.   From
time to time, the parties may amend the amounts set forth in Exhibit A as
mutually agreed to in writing. If this Agreement is extended pursuant to
Section 11.1 of the Sales, Marketing and Distribution Agreement, the parties
will negotiate in good faith the Transfer Price for subsequent periods.

2.7           Pricing
and Payments for Professional Samples and Practice Units. The price at which
Cygnus will sell professional sample Product and practice unit Product to
Sankyo will be Cygnus’ Product material and labor costs as set forth in Exhibit
A hereto.  It is assumed that such
Products are not intended for resale and that Sankyo will be responsible for
reporting and paying any sales tax due on such Product.  Payment will be due and made as set forth in
Section 2.4 of this Supply Agreement. Sankyo will distribute such professional
sample Product and practice unit Product in accordance with applicable laws and
regulations.

2.8           Inventory.
To ensure that there is no interruption of supply of Product to Sankyo’s
customers, Sankyo will maintain a minimum of three (3) months inventory during
the first three (3) Sales Years and a minimum of two (2) months inventory
during the next three (3) Sales Years. 
From time to time, as reasonably requested by Cygnus, Sankyo will
provide Cygnus with inventory level updates.

2.9           Product Changes.  For all changes to the Product, including
Product packaging, requested by Sankyo, Sankyo will provide Cygnus a request
for such change.  Cygnus will then
provide within thirty (30) calendar days after receipt of such request for
change the following items:  (a) the
implementation date, which may then be negotiated upon by the parties and which
shall be mutually agreed upon by the parties in writing, (b) the impact to
Cygnus’ on-hand and on-order

 

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

 

3

 

Product
and components, and (c) the associated costs. 
Sankyo will then advise Cygnus of its acceptance or rejection within
fifteen (15) calendar days after receipt of such information for the desired
implementation plan. If accepted, Sankyo may provide funding for such
implementation plan, subject to a separate agreement between the parties.

 

2.10         Minimum Product Trade Quantities for
2002.  For the three Calendar Quarters
after the Product Launch in the Calendar Year 2002, Sankyo will purchase the
minimum Product Trade amounts set forth in Exhibit B hereto.

 

2.11         Equipment Capacity. In the event that
Sankyo’s twenty-four (24) month rolling forecasts would require Cygnus to add
plant and/or equipment with costs in an excess of ***, then Cygnus will notify
Sankyo of any such proposal to add plant and/or equipment in writing as well as
the anticipated regulatory timeline, and Sankyo will notify Cygnus of its
acceptance or rejection of such capacity expenditure and/or expansion in
writing within thirty (30) calendar days of such notification. The parties
recognize that such capacity expenditure and/or expansion may result in
regulatory filings and significant waiting periods for regulatory
approvals.  Cygnus and Sankyo will
mutually agree in advance in writing prior to any material capacity expenditure
and/or expansion, timing and implementation, and any cost sharing associated
with such capital expenditure and/or expansion.  In the event that such capacity expenditure and/or expansion is
not agreed upon, then Sankyo’s forecasts cannot exceed the equipment capacity
and staffing current at the time the forecast requiring such additional plant
and/or equipment is provided by Sankyo.

 

2.12         Spare
Parts.  Sankyo will not sell or
distribute spare parts (wherein spare parts excludes the Biographer and the
AutoSensor) to its customers. 
Notwithstanding any provision to the contrary in the Sales, Marketing
and Distribution Agreement and/or this Supply Agreement, Cygnus may (a) market,
sell and distribute such spare parts, (b) any such sales of spare parts will
not be included in Net Sales, and (c) no Sales and Marketing Fee will be due on
any such sales of spare parts.

 

2.13         Consigned
Inventory.  Sankyo will cause at least
one of its customers to hold consigned inventory for Cygnus to cover (i)
warranty replacements as set forth in Section 4.1 of this Supply Agreement and
(ii) complimentary Product as directed by Cygnus.  Cygnus will pay Sankyo a handling fee and shipping costs when
such consigned inventory is distributed. 
Sankyo will provide Cygnus with monthly reports on the status of such
consigned inventory.

 

3.             QUALITY

 

3.1           Quality Control Testing.  Prior to each shipment of the Product to
Sankyo, Cygnus shall perform, or cause to be performed, quality control
procedures that are executed to verify that the Product to be shipped conform
to the Product specifications.  Each
shipment of such Product to Sankyo shall be accompanied by the documentation
set forth in the Quality Agreement. 
Cygnus will provide the current Product specifications within ten (10)
calendar days after execution of this Supply Agreement and will provide updated
Product specifications to Sankyo within ten (10) calendar days of any change.

 

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

 

4

 

3.2           Quality Agreement.  The parties have developed and will
periodically review a Quality Agreement that establishes the detailed
expectations and procedures that govern the manufacturing, testing, release,
sale and distribution of the Product. This Quality Agreement shall be
incorporated into this Supply Agreement as Exhibit C.

 

4.             WARRANTY AND RETURNED PRODUCT

 

4.1           Cygnus shall not be responsible for
any returns of the Product to Sankyo unless the Product is returned due to one
or more of the following: (a) a defect in workmanship or materials; (b) any
reason covered by the Product warranty; and (c) stale dating on the Product,
defined as Product with less than six (6) months dating left until the printed
expiration date, and said defect, reason or stale dating has been confirmed by
Cygnus.  Sankyo will provide notice to
Cygnus of all patient end user requests based on a defect in workmanship or
materials and/or Product warranty reasons, and all patient end user requests
based on a defect in workmanship or materials and/or Product warranty requests
will be referred to Cygnus’ Technical Support, who will issue Return
Merchandise Authorizations (RMAs) to Sankyo and/or its designee if appropriate.
Product returned because of a defect in workmanship or materials or any reason
covered by the Product warranty will be shipped to Cygnus for assessment of
condition and processing of replacement or repair, at Cygnus’ sole discretion.
In the event that Product having an expiration date are returned solely because
of stale dating by Sankyo, Cygnus will provide replacement Product to
Sankyo.  Sankyo will ship out Product
having an expiration date on a first-expired, first-out basis.    The parties agree that returned Product
may be remanufactured for use as samples or practice Product. Any such returns
will not be deducted from Net Sales by Sankyo since Cygnus is providing free
Product to Sankyo in such instances. 
This Section 4.1 shall not supersede or otherwise limit the indemnity
provisions in the Sales, Marketing and Distribution Agreement.

 

4.2           In the event that Product is returned
to Sankyo by patient end users for reasons other than those set forth in
Section 4.1 of this Agreement and such returns result in a refund from Sankyo
that is passed on to the patient end user, Cygnus will provide replacement
Product to Sankyo; however such returns will not be deducted from Net Sales by
Sankyo since Cygnus is providing free Product to Sankyo in such instances.

 

5.             FAILURE TO SUPPLY

 

5.1           Supply
of the Product. Cygnus shall use its commercially reasonable efforts to supply
the Product (for trade purposes, practice units and professional samples)
during the Term in sufficient quantities to meet forecasted amounts of demand
set forth in the Sales, Marketing and Distribution Plan.  Cygnus will notify Sankyo in writing within
ten (10) calendar days of becoming aware of any material problems relating to
Cygnus’ inventory levels and/or ability to continue supply of the Product that
would prevent Cygnus from fulfilling any accepted and open POs.  Additionally, on a monthly basis, Cygnus
will provide Sankyo with a written shipping schedule for all accepted and open
POs.   Additionally, Cygnus will, on a
quarterly basis, inform Sankyo in writing of any material and unresolved
problems relating to Cygnus’ inventory levels 

5

 

and ability to continue supply of the Products to meet
the amount of Product for the next twelve (12) months as set forth in the most
recent twenty-four (24) month rolling forecast.

5.2           Failure of Supply. Option to
Manufacture.  In the event that for any
reason (other than by a Force Majeure Act, as defined in Section 15.10 of the
Sales, Marketing and Distribution Agreement), (i) Cygnus is unable to supply on
a timely basis at least seventy-five percent (75%) of the volume of all ordered
Product during a Calendar Quarter and (ii) such orders are not greater than the
forecasted Product requirements included in the then current Sales, Marketing
and Distribution Plan, then the Term of the Sales, Marketing and Distribution
Agreement will be extended for twice the number of days Cygnus is unable to
supply on a timely basis at least seventy-five percent (75%) of the volume of all
ordered Product.  In the event that the
failure to supply continues for six (6) months, then Sankyo has the option, at
its sole discretion, to either terminate the Sales, Marketing and Distribution
Agreement and thus this Supply Agreement pursuant to Section 11.4 of the Sales,
Marketing and Distribution Agreement or exercise its right to manufacture or
have manufactured the Product for sale in the Territory during the Term
pursuant to Section 2.1 of the Sales, Marketing and Distribution Agreement.

 

6.             TERM AND TERMINATION

 

6.1           This Supply Agreement is coterminous
with the Sales, Marketing and Distribution Agreement and the Term and
Termination provisions set forth in that agreement govern this Supply
Agreement.

 

7.                                      GENERAL

7.1           Amendment
and Waiver.  Except as otherwise
provided herein, any provision of this Supply Agreement may be amended and the
observance of any provision of this Supply Agreement may be waived (either
generally or in any particular instance and either retroactively or
prospectively) only with the written consent of the parties.  The failure of either party to enforce its
rights under this Supply Agreement at any time for any period shall not be
construed as a waiver of such rights.

7.2           Entire
Agreement. Extension of Time. This Supply Agreement supersedes all proposals,
oral or written, all negotiations, conversations or discussions between or
among parties relating to the subject matter of this Supply Agreement and all
past dealing or industry custom, with the sole exception of a PO for 2002
second Calendar Quarter already submitted by Sankyo to Cygnus prior to the
Effective Date of this Supply Agreement. 
Furthermore, the parties agree that the execution of this Supply
Agreement outside of the thirty (30) calendar day period set forth in Section
5.4(a) of the Sales, Marketing and Distribution Agreement does not constitute a
breach of the Sales, Marketing and Distribution Agreement and that such
execution date is acceptable to both parties.

7.3           Severability.  If any provision of this Agreement is held
to be illegal or unenforceable, that provision shall be limited or eliminated
to the minimum extent necessary so that this Supply Agreement shall otherwise
remain in full force and effect and enforceable.

6

 

7.4           Interpretation.  The parties agree that the rule of
construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Supply
Agreement and that the terms and conditions of this Supply Agreement shall be
construed fairly with respect to the parties hereto and shall not be construed
in favor or against any one party regardless of which party was generally
responsible for the preparation of this Supply Agreement.

7.5           Other General Provisions.  The General provisions set forth in the
Sales, Marketing and Distribution Agreement shall also govern this Supply
Agreement.

 

7.6           Conflicting Terms.  In ordering and delivering the Product,
Sankyo and Cygnus may use their standard forms, however, nothing in such forms
shall be construed to amend or modify the terms of this Supply Agreement.  In the event that there is a contradiction
in terms and conditions between this Supply Agreement and the Sales, Marketing
and Distribution Agreement terms and conditions, the terms and conditions of
the Sales, Marketing and Distribution Agreement shall govern unless
specifically designated herein.

 

IN
WITNESS WHEREOF,
the undersigned have caused this Supply Agreement to be executed by their duly
authorized officers as of the date first written above.

 

	
  CYGNUS, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John C
  Hodgman

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  John C Hodgman

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Pres & CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SANKYO PHARMA
  INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John P.
  Gargiulo

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  John P. Gargiulo

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  VP Marketing
  & Commercial OPS

  	
   

  

 

 

7

 

EXHIBIT A

 

MINIMUM AMOUNT OF CYGNUS’ TRANSFER PRICE

 FOR TRADE
PRODUCT

 

 

 

	
   

  	
   

  	
  First
  Sales Year

  	
   

  	
  Second
  Sales Year

  	
   

  	
  Third
  Sales Year

  and all Sales Years

  thereafter in the Term

  	
   

  
	
  GlucoWatchÒ G2TM
  Biographer Starter Kit

  	
   

  	
  ***
  

  	
   

  	
  ***
  

  	
   

  	
  ***
  

  	
   

  
	
  GlucoWatchÒ AutoSensors

  (price per individual AutoSensor)

  	
   

  	
  ***
  

  	
   

  	
  ***
  

  	
   

  	
  ***
  

  	
   

  

 

 

CYGNUS’ TRANSFER PRICES FOR

PROFESSIONAL SAMPLES AND PRACTICE UNITS

 

	
  GlucoWatch® G2TM  Biographer Starter Kit

  	
  *** 

  
	
  AutoSensors
  (each)

  	
  *** 

  
	
  Practice G2TM  Biographer

  	
  *** 

  

 

 

 

 

 

 

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

 

 

EXHIBIT B

 

2002 MINIMUM PRODUCT TRADE AMOUNTS

 

 

	
  Second Calendar
  Quarter:

  	
  *** Biographer
  Starter Kits

  
	
   

  	
  *** AutoSensors

  
	
   

  	
   

  
	
  Third Calendar
  Quarter:

  	
  *** Biographer
  Starter Kits

  
	
   

  	
  *** AutoSensors

  
	
   

  	
   

  
	
  Fourth Calendar
  Quarter:

  	
  *** Biographer
  Starter Kits

  
	
   

  	
  *** AutoSensors

  
	
   

  	
   

  
	
  Resulting Total
  for 2002:

  	
  *** Biographer
  Starter Kits

  
	
   

  	
  *** AutoSensors

  

 

 

 

 

 

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

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