Document:

RECKSON ASSOCIATES REALTY CORP.

                          AMENDED AND RESTATED BYLAWS

                         (amended as of August 2000)

                                  ARTICLE I

                                  OFFICES

     Section 1. PRINCIPAL OFFICE. The principal office of the Corporation
shall be located at such place or places as the Board of Directors may
designate.

     Section 2. ADDITIONAL OFFICES. The Corporation may have additional
offices at such places as the Board of Directors may from time to time
determine or the business of the Corporation may require.

                                  ARTICLE II

                           MEETINGS OF STOCKHOLDERS

     Section 1. PLACE. All meetings of stockholders shall be held at the
principal office of the Corporation or at such other place within the United
States as shall be stated in the notice of the meeting.

     Section 2. ANNUAL MEETING. An annual meeting of the stockholders for the
election of directors and the transaction of any business within the powers of
the Corporation shall be held on a date and at the time set by the Board of
Directors during the month of May in each year.

     Section 3. SPECIAL MEETINGS. The president, chief executive officer or
Board of Directors may call special meetings of the stockholders. Special
meetings of stockholders shall also be called by the secretary of the
Corporation upon the written request of the holders of shares entitled to cast
not less than a majority of all the votes entitled to be cast at such meeting.
Such request shall state the purpose of such meeting and the matters proposed
to be acted on at such meeting. The secretary shall inform such stockholders
of the reasonably estimated cost of preparing and mailing notice of the
meeting and, upon payment to the Corporation by such stockholders of such
costs, the secretary shall give notice to each stockholder entitled to notice
of the meeting. Unless requested by the stockholders entitled to cast a
majority of all the votes entitled to be cast at such meeting, a special
meeting need not be called to consider any matter which is substantially the
same as a matter voted on at any special meeting of the stockholders held
during the preceding twelve months.

     Section 4. NOTICE. Not less than ten nor more than 90 days before each
meeting of stockholders, the secretary shall give to each stockholder entitled
to vote at such meeting and to each stockholder not entitled to vote who is
entitled to notice of the meeting written or printed notice stating the time
and place of the meeting and, in the case of a special meeting or as otherwise
may be required by any statute, the purpose for which the meeting is called,
either by mail or by presenting it to such stockholder personally or by
leaving it at his residence or usual place of business. If mailed, such notice
shall be deemed to be given when deposited in the United States mail addressed
to the stockholder at his post office address as it appears on the records of
the Corporation, with postage thereon prepaid.

     Section 5. SCOPE OF NOTICE. Any business of the Corporation may be
transacted at an annual meeting of stockholders without being specifically
designated in the notice, except such business as is required by any statute
to be stated in such notice. No business shall be transacted at a special
meeting of stockholders except as specifically designated in the notice.

     Section 6. ORGANIZATION. At every meeting of stockholders, the Chairman
of the Board, if there be one, shall conduct the meeting or, in the case of
vacancy in office or absence of the Chairman of the Board, one of the
following officers present shall conduct the meeting in the order stated: the
Vice Chairman of the Board, if there be one, the President, the Vice
Presidents in their order of rank and seniority, or a Chairman chosen by the
stockholders entitled to cast a majority of the votes which all stockholders
present in person or by proxy are entitled to cast, shall act as Chairman, and
the Secretary, or, in his absence, an assistant secretary, or in the absence
of both the Secretary and assistant secretaries, a person appointed by the
Chairman shall act as Secretary.

     Section 7. QUORUM. At any meeting of stockholders, the presence in person
or by proxy of stockholders entitled to cast a majority of all the votes
entitled to be cast at such meeting shall constitute a quorum; but this
section shall not affect any requirement under any statute or the charter of
the Corporation for the vote necessary for the adoption of any measure. If,
however, such quorum shall not be present at any meeting of the stockholders,
the stockholders entitled to vote at such meeting, present in person or by
proxy, shall have the power to adjourn the meeting from time to time to a date
not more than 120 days after the original record date without notice other
than announcement at the meeting. At such adjourned meeting at which a quorum
shall be present, any business may be transacted which might have been
transacted at the meeting as originally notified.

     Section 8. VOTING. A plurality of all the votes cast at a meeting of
stockholders duly called and at which a quorum is present shall be sufficient
to elect a director. Each share may be voted for as many individuals as there
are directors to be elected and for whose election the share is entitled to be
voted. A majority of the votes cast at a meeting of stockholders duly called
and at which a quorum is present shall be sufficient to approve any other
matter which may properly come before the meeting, unless more than a majority
of the votes cast is required by statute or by the charter of the Corporation.
Unless otherwise provided in the charter, each outstanding share, regardless
of class, shall be entitled to one vote on each matter submitted to a vote at
a meeting of stockholders.

     Section 9. PROXIES. A stockholder may vote the stock owned of record by
him, either in person or by proxy executed in writing by the stockholder or by
his duly authorized attorney in fact. Such proxy shall be filed with the
secretary of the Corporation before or at the time of the meeting. No proxy
shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.

     Section 10. VOTING OF STOCK BY CERTAIN HOLDERS. Stock of the Corporation
registered in the name of a corporation, partnership, trust or other entity,
if entitled to be voted, may be voted by the president or a vice president, a
general partner or trustee thereof, as the case may be, or a proxy appointed
by any of the foregoing individuals, unless some other person who has been
appointed to vote such stock pursuant to a bylaw or a resolution of the
governing body of such corporation or other entity or agreement of the
partners of a partnership presents a certified copy of such bylaw, resolution
or agreement, in which case such person may vote such stock. Any director or
other fiduciary may vote stock registered in his name as such fiduciary,
either in person or by proxy.

          Shares of stock of the Corporation directly or indirectly owned by
it shall not be voted at any meeting and shall not be counted in determining
the total number of outstanding shares entitled to be voted at any given time,
unless they are held by it in a fiduciary capacity, in which case they may be
voted and shall be counted in determining the total number of outstanding
shares at any given time.

          The Board of Directors may adopt by resolution a procedure by which
a stockholder may certify in writing to the Corporation that any shares of
stock registered in the name of the stockholder are held for the account of a
specified person other than the stockholder. The resolution shall set forth
the class of stockholders who may make the certification, the purpose for
which the certification may be made, the form of certification and the
information to be contained in it; if the certification is with respect to a
record date or closing of the stock transfer books, the time after the record
date or closing of the stock transfer books within which the certification
must be received by the Corporation; and any other provisions with respect to
the procedure which the Board of Directors considers necessary or desirable.
On receipt of such certification, the person specified in the certification
shall be regarded as, for the purposes set forth in the certification, the
stockholder of record of the specified stock in place of the stockholder who
makes the certification.

          Notwithstanding any other provision of the charter of the
Corporation or these Bylaws, Title 3, Subtitle 7 of the Corporations and
Associations Article of the Annotated Code of Maryland (or any successor
statute) shall not apply to any acquisition by any person of shares of stock
of the Corporation. This section may be repealed, in whole or in part, at any
time, whether before or after an acquisition of control shares and, upon such
repeal, may, to the extent provided by any successor bylaw, apply to any prior
or subsequent control share acquisition.

     Section 11. INSPECTORS. At any meeting of stockholders, the chairman of
the meeting may, or upon the request of any stockholder shall, appoint one or
more persons as inspectors for such meeting. Such inspectors shall ascertain
and report the number of shares represented at the meeting based upon their
determination of the validity and effect of proxies, count all votes, report
the results and perform such other acts as are proper to conduct the election
and voting with impartiality and fairness to all the stockholders.

          Each report of an inspector shall be in writing and signed by him or
by a majority of them if there is more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority shall
be the report of the inspectors. The report of the inspector or inspectors on
the number of shares represented at the meeting and the results of the voting
shall be prima facie evidence thereof.

     Section 12. NOMINATIONS AND STOCKHOLDER BUSINESS

     (a) Annual Meetings of Stockholders. (1) Nominations of persons for
election to the Board of Directors and the proposal of business to be
considered by the stockholders (except for stockholder proposals included in
the proxy materials pursuant to Rule 14a-8 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) may be made at an annual meeting of
stockholders (i) pursuant to the Corporation's notice of meeting, (ii) by or
at the direction of the Board of Directors or (iii) by any stockholder of the
Corporation who was a stockholder of record at the time of giving of notice
provided for in this Section 12(a), who is entitled to vote at the meeting and
who complied with the notice procedures set forth in this Section 12(a).

          (ii) (2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (iii) of
paragraph (a)(1) of this Section 12, the stockholder must have given timely
notice thereof in writing to the secretary of the Corporation. To be timely, a
stockholder's notice shall be delivered to the secretary at the principal
executive offices of the Corporation not less than 75 days nor more than 180
days prior to the first anniversary of the preceding year's annual meeting or
special meeting in lieu thereof; provided, however, that in the event that the
date of the annual meeting is advanced by more than seven calendar days or
delayed by more than 60 days from such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the 180th day
prior to such annual meeting and not later than the close of business on the
later of the 75th day prior to such annual meeting or the twentieth day
following the earlier of the day on which public announcement of the date of
such meeting is first made or notice of the meeting is mailed to stockholders.
Such stockholder's notice shall set forth (i) as to each person whom the
stockholder proposes to nominate for election or reelection as a director all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required,
in each case pursuant to Regulation 14A under the Exchange Act (including such
person's written consent to being named in the proxy statement as a nominee
and to serving as a director if elected); (ii) as to any other business that
the stockholder proposes to bring before the meeting, a brief description of
the business desired to be brought before the meeting, the reasons for
conducting such business at the meeting and any material interest in such
business of such stockholder and of the beneficial owner, if any, on whose
behalf the proposal is made; and (iii) as to the stockholder giving the notice
and the beneficial owner, if any, on whose behalf the nomination or proposal
is made, (x) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (y) the number of shares
of each class of stock of the Corporation which are owned beneficially and of
record by such stockholder and such beneficial owner.

          (3) Notwithstanding anything in the second sentence of paragraph
(a)(2) of this Section 12 to the contrary, in the event that the number of
directors to be elected to the Board of Directors is increased and there is no
public announcement naming all of the nominees for director or specifying the
size of the increased Board of Directors made by the Corporation at least 85
days prior to the first anniversary of the preceding year's annual meeting, a
stockholder's notice required by this Section 12(a) shall also be considered
timely, but only with respect to nominees for any new positions created by
such increase, if it shall be delivered to the secretary at the principal
executive offices of the Corporation not later than the close of business on
the tenth day following the day on which such public announcement is first
made by the Corporation.

     (b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting.
Nominations of persons for election to the Board of Directors may be made at a
special meeting of stockholders at which directors are to be elected (i)
pursuant to the Corporation's notice of meeting, (ii) by or at the direction
of the Board of Directors or (iii) provided that the Board of Directors has
determined that directors shall be elected at such special meeting, by any
stockholder of the Corporation who is a stockholder of record at the time of
giving of notice provided for in this Section 12(b), who is entitled to vote
at the meeting and who complied with the notice procedures set forth in this
Section 12(b). In the event the Corporation calls a special meeting of
stockholders for the purpose of electing one or more directors to the Board of
Directors, any such stockholder may nominate a person or persons (as the case
may be) for election to such position as specified in the Corporation's notice
of meeting, if the stockholder's notice containing the information required by
paragraph (a)(2) of this Section 12 shall be delivered to the secretary at the
principal executive offices of the Corporation not earlier than the 180th day
prior to such special meeting and not later than the close of business on the
later of the 75th day prior to such special meeting or the tenth day following
the day on which public announcement is first made of the date of the special
meeting and of the nominees proposed by the Board of Directors to be elected
at such meeting.

     (c) General. (1) Only such persons who are nominated in accordance
with the procedures set forth in this Section 12 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Section 12. The presiding officer of the
meeting shall have the power and duty to determine whether a nomination or any
business proposed to be brought before the meeting was made in accordance with
the procedures set forth in this Section 12 and, if any proposed nomination or
business is not in compliance with this Section 12, to declare that such
defective nomination or proposal be disregarded.

          (2) For purposes of this Section 12, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable news service or in a document publicly filed by
the Corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.

          (3) Notwithstanding the foregoing provisions of this Section 12, a
stockholder shall also comply with all applicable requirements of state law
and of the Exchange Act and the rules and regulations thereunder with respect
to the matters set forth in this Section 12. Nothing in this Section 12 shall
be deemed to affect any rights of stockholders to request inclusion of
proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under
the Exchange Act.

     Section 13. VOTING BY BALLOT. Voting on any question or in any election
may be viva voce unless the presiding officer shall order or any stockholder
shall demand that voting be by ballot.

                                 ARTICLE III

                                  DIRECTORS

     Section 1. GENERAL POWERS; QUALIFICATIONS. The business and affairs of
the Corporation shall be managed under the direction of its Board of
Directors.

     Section 2. NUMBER, TENURE AND QUALIFICATIONS. At any regular meeting or
at any special meeting called for that purpose, a majority of the entire Board
of Directors may establish, increase or decrease the number of directors,
provided that the number thereof shall never be less than the minimum number
required by the Maryland General Corporation Law, nor more than 15, and
further provided that the tenure of office of a director shall not be affected
by any decrease in the number of directors.

     Section 3. ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board of
Directors shall be held immediately after and at the same place as the annual
meeting of stockholders, no notice other than this Bylaw being necessary. The
Board of Directors may provide, by resolution, the time and place, either
within or without the State of Maryland, for the holding of regular meetings
of the Board of Directors without other notice than such resolution.

     Section 4. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the chairman of the board (or any
co-chairman of the board if more than one), president or by a majority of the
directors then in office. The person or persons authorized to call special
meetings of the Board of Directors may fix any place, either within or without
the State of Maryland, as the place for holding any special meeting of the
Board of Directors called by them.

     Section 5. NOTICE. Notice of any special meeting of the Board of
Directors shall be delivered personally or by telephone, facsimile
transmission, United States mail or courier to each director at his business
or residence address. Notice by personal delivery, by telephone or a facsimile
transmission shall be given at least two days prior to the meeting. Notice by
mail shall be given at least five days prior to the meeting and shall be
deemed to be given when deposited in the United States mail properly
addressed, with postage thereon prepaid. Telephone notice shall be deemed to
be given when the director is personally given such notice in a telephone call
to which he is a party. Facsimile transmission notice shall be deemed to be
given upon completion of the transmission of the message to the number given
to the Corporation by the director and receipt of a completed answer-back
indicating receipt. Neither the business to be transacted at, nor the purpose
of, any annual, regular or special meeting of the Board of Directors need be
stated in the notice, unless specifically required by statute or these Bylaws.

     Section 6. QUORUM. A majority of the directors shall constitute a quorum
for transaction of business at any meeting of the Board of Directors, provided
that, if less than a majority of such directors are present at said meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice, and provided further that if, pursuant to the charter
of the Corporation or these Bylaws, the vote of a majority of a particular
group of directors is required for action, a quorum must also include a
majority of such group.

          The Board of Directors present at a meeting which has been duly
called and convened may continue to transact business until adjournment,
notwithstanding the withdrawal of enough directors to leave less than a
quorum.

     Section 7. VOTING. The action of the majority of the directors present at
a meeting at which a quorum is present shall be the action of the Board of
Directors, unless the concurrence of a greater proportion is required for such
action by applicable statute.

     Section 8. TELEPHONE MEETINGS. Directors may participate in a meeting by
means of a conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same time.
Participation in a meeting by these means shall constitute presence in person
at the meeting.

     Section 9. INFORMAL ACTION BY DIRECTORS. Any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting, if a consent in writing to such action is signed by each director and
such written consent is filed with the minutes of proceedings of the Board of
Directors.

     Section 10. VACANCIES. If for any reason any or all the directors cease
to be directors, such event shall not terminate the Corporation or affect
these Bylaws or the powers of the remaining directors hereunder (even if fewer
than three directors remain). Any vacancy on the Board of Directors for any
cause other than an increase in the number of directors shall be filled by a
majority of the remaining directors, although such majority is less than a
quorum. Any vacancy in the number of directors created by an increase in the
number of directors may be filled by a majority vote of the entire Board of
Directors. Any individual so elected as director shall hold office for the
unexpired term of the director he is replacing.

     Section 11. COMPENSATION. Directors shall not receive any stated salary
for their services as directors but, by resolution of the Board of Directors,
may receive fixed sums per year and/or per meeting and/or per visit to real
property owned or to be acquired by the Corporation and for any service or
activity they performed or engaged in as directors. Directors may be
reimbursed for expenses of attendance, if any, at each annual, regular or
special meeting of the Board of Directors or of any committee thereof and for
their expenses, if any, in connection with each property visit and any other
service or activity they performed or engaged in as directors; but nothing
herein contained shall be construed to preclude any directors from serving the
Corporation in any other capacity and receiving compensation therefor.

     Section 12. LOSS OF DEPOSITS. No director shall be liable for any loss
which may occur by reason of the failure of the bank, trust company, savings
and loan association, or other institution with whom moneys or stock have been
deposited.

     Section 13. SURETY BONDS. Unless required by law, no director shall be
obligated to give any bond or surety or other security for the performance of
any of his duties.

     Section 14. RELIANCE. Each director, officer, employee and agent of the
Corporation shall, in the performance of his duties with respect to the
Corporation, be fully justified and protected with regard to any act or
failure to act in reliance in good faith upon the books of account or other
records of the Corporation, upon an opinion of counsel or upon reports made to
the Corporation by any of its officers or employees or by the adviser,
accountants, appraisers or other experts or consultants selected by the Board
of Directors or officers of the Corporation, regardless of whether such
counsel or expert may also be a director.

     Section 15. CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.
The directors shall have no responsibility to devote their full time to the
affairs of the Corporation. Any director or officer, employee or agent of the
Corporation, in his personal capacity or in a capacity as an affiliate,
employee, or agent of any other person, or otherwise, may have business
interests and engage in business activities similar to or in addition to or in
competition with those of or relating to the Corporation.

     Section 16.  MATTERS TO BE TAKEN INTO CONSIDERATION BY DIRECTORS.  In
considering any potential acquisition of control of the Corporation, the
directors may consider the effect of the potential acquisition of control on
(i) stockholders of the Corporation and unitholders of Reckson Operating
Partnership, L.P. and employees, suppliers, customers and creditors of the
Corporation or any of its subsidiaries; and (ii) communities in which offices
or other establishments of the Corporation are located.

                                  ARTICLE IV

                                  COMMITTEES

     Section 1. NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors may
appoint from among its members an Executive Committee, an Audit Committee, a
Compensation Committee and other committees, composed of two or more
directors, to serve at the pleasure of the Board of Directors.

     Section 2. POWERS. The Board of Directors may delegate to committees
appointed under Section 1 of this Article any of the powers of the Board of
Directors, except as prohibited by law.

     Section 3. MEETINGS. Notice of committee meetings shall be given in the
same manner as notice for special meetings of the Board of Directors. A
majority of the members of the committee shall constitute a quorum for the
transaction of business at any meeting of the committee. The act of a majority
of the committee members present at a meeting shall be the act of such
committee. The Board of Directors may designate a chairman of any committee,
and such chairman or any two members of any committee may fix the time and
place of its meeting unless the Board shall otherwise provide. In the absence
of any member of any such committee, the members thereof present at any
meeting, whether or not they constitute a quorum, may appoint another director
to act in the place of such absent member. Each committee shall keep minutes
of its proceedings.

     Section 4. TELEPHONE MEETINGS. Members of a committee of the Board of
Directors may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting
can hear each other at the same time. Participation in a meeting by these
means shall constitute presence in person at the meeting.

     Section 5. INFORMAL ACTION BY COMMITTEES. Any action required or
permitted to be taken at any meeting of a committee of the Board of Directors
may be taken without a meeting, if a consent in writing to such action is
signed by each member of the committee and such written consent is filed with
the minutes of proceedings of such committee.

     Section 6. VACANCIES. Subject to the provisions hereof, the Board of
Directors shall have the power at any time to change the membership of any
committee, to fill all vacancies, to designate alternate members to replace
any absent or disqualified member or to dissolve any such committee.

                                  ARTICLE V

                                  OFFICERS

     Section 1. GENERAL PROVISIONS. The officers of the Corporation shall
include a chief executive officer, a president, a secretary and a treasurer
and may include a chairman of the board (or one or more co-chairmen of the
board), a vice chairman of the board, one or more executive vice presidents,
one or more senior vice presidents, one or more vice presidents, a chief
operating officer, a chief financial officer, a treasurer, one or more
assistant secretaries and one or more assistant treasurers. In addition, the
Board of Directors may from time to time appoint such other officers with such
powers and duties as they shall deem necessary or desirable. The officers of
the Corporation shall be elected annually by the Board of Directors at the
first meeting of the Board of Directors held after each annual meeting of
stockholders, except that the chief executive officer may appoint one or more
vice presidents, assistant secretaries and assistant treasurers. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as may be convenient. Each officer shall hold office
until his successor is elected and qualifies or until his death, resignation
or removal in the manner hereinafter provided. Any two or more offices except
president and vice president may be held by the same person. In its
discretion, the Board of Directors may leave unfilled any office except that
of president, treasurer and secretary. Election of an officer or agent shall
not of itself create contract rights between the Corporation and such officer
or agent.

     Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the
Corporation may be removed by the Board of Directors if in its judgment the
best interests of the Corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed. Any officer of the Corporation may resign at any time by giving
written notice of his resignation to the Board of Directors, the chairman of
the board (or any co-chairman of the board if more than one), the president or
the secretary. Any resignation shall take effect at any time subsequent to the
time specified therein or, if the time when it shall become effective is not
specified therein, immediately upon its receipt. The acceptance of a
resignation shall not be necessary to make it effective unless otherwise
stated in the resignation. Such resignation shall be without prejudice to the
contract rights, if any, of the Corporation.

     Section 3. VACANCIES. A vacancy in any office may be filled by the Board
of Directors for the balance of the term.

     Section 4. CHIEF EXECUTIVE OFFICER. The Board of Directors may designate
a chief executive officer. In the absence of such designation, the chairman of
the board (or, if more than one, the co-chairmen of the board in the order
designated at the time of their election or, in the absence of any
designation, then in the order of their election) shall be the chief executive
officer of the Corporation. The chief executive officer shall have general
responsibility for implementation of the policies of the Corporation, as
determined by the Board of Directors, and for the management of the business
and affairs of the Corporation.

     Section 5. CHIEF OPERATING OFFICER. The Board of Directors may designate
a chief operating officer. The chief operating officer shall have the
responsibilities and duties as set forth by the Board of Directors or the
chief executive officer.

     Section 6. CHIEF FINANCIAL OFFICER. The Board of Directors may designate
a chief financial officer. The chief financial officer shall have the
responsibilities and duties as set forth by the Board of Directors or the
chief executive officer.

     Section 7. CHAIRMAN OF THE BOARD. The Board of Directors shall designate
a chairman of the board (or one or more co-chairmen of the board). The
chairman of the board shall preside over the meetings of the Board of
Directors and of the stockholders at which he shall be present. If there be
more than one, the co-chairmen designated by the Board of Directors will
perform such duties. The chairman of the board shall perform such other duties
as may be assigned to him or them by the Board of Directors.

     Section 8. CHAIRMAN OF THE BOARD EMERITUS. The directors may elect by a
majority vote, from time to time, a chairman of the board emeritus (or one or
more co-chairmen of the board emeritus). The chairman of the board emeritus
shall be an honorary position and shall have no vote on any matter considered
by the directors. The chairman of the board emeritus shall serve for such term
as determined by the Board of Directors and may be removed by a majority vote
of directors with or without cause.

     Section 9. PRESIDENT. The president or chief executive officer, as the
case may be, shall in general supervise and control all of the business and
affairs of the Corporation. In the absence of a designation of a chief
operating officer by the Board of Directors, the president shall be the chief
operating officer. He may execute any deed, mortgage, bond, contract or other
instrument, except in cases where the execution thereof shall be expressly
delegated by the Board of Directors or by these Bylaws to some other officer
or agent of the Corporation or shall be required by law to be otherwise
executed; and in general shall perform all duties incident to the office of
president and such other duties as may be prescribed by the Board of Directors
from time to time.

     Section 10. VICE PRESIDENTS. In the absence of the president or in the
event of a vacancy in such office, the vice president (or in the event there
be more than one vice president, the vice presidents in the order designated
at the time of their election or, in the absence of any designation, then in
the order of their election) shall perform the duties of the president and
when so acting shall have all the powers of and be subject to all the
restrictions upon the president; and shall perform such other duties as from
time to time may be assigned to him by the president or by the Board of
Directors. The Board of Directors may designate one or more vice presidents as
executive vice president or as vice president for particular areas of
responsibility.

     Section 11. SECRETARY. The secretary shall (a) keep the minutes of the
proceedings of the stockholders, the Board of Directors and committees of the
Board of Directors in one or more books provided for that purpose; (b) see
that all notices are duly given in accordance with the provisions of these
Bylaws or as required by law; (c) be custodian of the corporate records and of
the seal of the Corporation; (d) keep a register of the post office address of
each stockholder which shall be furnished to the secretary by such
stockholder; (e) have general charge of the share transfer books of the
Corporation; and (f) in general perform such other duties as from time to time
may be assigned to him by the chief executive officer, the president or by the
Board of Directors.

     Section 12. TREASURER. The treasurer shall have the custody of the funds
and securities of the Corporation and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. In the absence of a designation of a chief financial officer by the
Board of Directors, the treasurer shall be the chief financial officer of the
Corporation.

          The treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the president and Board of Directors, at
the regular meetings of the Board of Directors or whenever it may so require,
an account of all his transactions as treasurer and of the financial condition
of the Corporation.

          If required by the Board of Directors, the treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Corporation, in case of
his death, resignation, retirement or removal from office, of all books,
papers, vouchers, moneys and other property of whatever kind in his possession
or under his control belonging to the Corporation.

     Section 13. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The assistant
secretaries and assistant treasurers, in general, shall perform such duties as
shall be assigned to them by the secretary or treasurer, respectively, or by
the president or the Board of Directors. The assistant treasurers shall, if
required by the Board of Directors, give bonds for the faithful performance of
their duties in such sums and with such surety or sureties as shall be
satisfactory to the Board of Directors.

     Section 14. SALARIES. The salaries and other compensation of the officers
shall be fixed from time to time by the Board of Directors and no officer
shall be prevented from receiving such salary or other compensation by reason
of the fact that he is also a director.

                                  ARTICLE VI

                     CONTRACTS, LOANS, CHECKS AND DEPOSITS

     Section 1. CONTRACTS. The Board of Directors may authorize any officer or
agent to enter into any contract or to execute and deliver any instrument in
the name of and on behalf of the Corporation and such authority may be general
or confined to specific instances. Any agreement, deed, mortgage, lease or
other document executed by one or more of the directors or by an authorized
person shall be valid and binding upon the Board of Directors and upon the
Corporation when authorized or ratified by action of the Board of Directors.

     Section 2. CHECKS AND DRAFTS. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name
of the Corporation shall be signed by such officer or agent of the Corporation
in such manner as shall from time to time be determined by the Board of
Directors.

     Section 3. DEPOSITS. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board of Directors may
designate.

                                 ARTICLE VII

                                    STOCK

     Section 1. CERTIFICATES. Each stockholder shall be entitled to a
certificate or certificates which shall represent and certify the number of
shares of each class of stock held by him in the Corporation. Each certificate
shall be signed by the chief executive officer, the president or a vice
president and countersigned by the secretary or an assistant secretary or the
treasurer or an assistant treasurer and may be sealed with the seal, if any,
of the Corporation. The signatures may be either manual or facsimile.
Certificates shall be consecutively numbered; and if the Corporation shall,
from time to time, issue several classes of stock, each class may have its own
number series. A certificate is valid and may be issued whether or not an
officer who signed it is still an officer when it is issued. Each certificate
representing shares which are restricted as to their transferability or voting
powers, which are preferred or limited as to their dividends or as to their
allocable portion of the assets upon liquidation or which are redeemable at
the option of the Corporation, shall have a statement of such restriction,
limitation, preference or redemption provision, or a summary thereof, plainly
stated on the certificate. If the Corporation has authority to issue stock of
more than one class, the certificate shall contain on the face or back a full
statement or summary of the designations and any preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends and
other distributions, qualifications and terms and conditions of redemption of
each class of stock and, if the Corporation is authorized to issue any
preferred or special class in series, the differences in the relative rights
and preferences between the shares of each series to the extent they have been
set and the authority of the Board of Directors to set the relative rights and
preferences of subsequent series. In lieu of such statement or summary, the
certificate may state that the Corporation will furnish a full statement of
such information to any stockholder upon request and without charge. If any
class of stock is restricted by the Corporation as to transferability, the
certificate shall contain a full statement of the restriction or state that
the Corporation will furnish information about the restrictions to the
stockholder on request and without charge.

     Section 2. TRANSFERS. Upon surrender to the Corporation or the transfer
agent of the Corporation of a stock certificate duly endorsed or accompanied
by proper evidence of succession, assignment or authority to transfer, the
Corporation shall issue a new certificate to the person entitled thereto,
cancel the old certificate and record the transaction upon its books.

          The Corporation shall be entitled to treat the holder of record of
any share of stock as the holder in fact thereof and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
share or on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of the State
of Maryland.

          Notwithstanding the foregoing, transfers of shares of any class of
stock will be subject in all respects to the charter of the Corporation and
all of the terms and conditions contained therein.

     Section 3. REPLACEMENT CERTIFICATE. Any officer designated by the Board
of Directors may direct a new certificate to be issued in place of any
certificate previously issued by the Corporation alleged to have been lost,
stolen or destroyed upon the making of an affidavit of that fact by the person
claiming the certificate to be lost, stolen or destroyed. When authorizing the
issuance of a new certificate, an officer designated by the Board of Directors
may, in his discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificate or the owner's
legal representative to advertise the same in such manner as he shall require
and/or to give bond, with sufficient surety, to the Corporation to indemnify
it against any loss or claim which may arise as a result of the issuance of a
new certificate.

     Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The Board
of Directors may set, in advance, a record date for the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders
or determining stockholders entitled to receive payment of any dividend or the
allotment of any other rights, or in order to make a determination of
stockholders for any other proper purpose. Such date, in any case, shall not
be prior to the close of business on the day the record date is fixed and
shall be not more than 90 days and, in the case of a meeting of stockholders,
not less than ten days, before the date on which the meeting or particular
action requiring such determination of stockholders of record is to be held or
taken.

          In lieu of fixing a record date, the Board of Directors may provide
that the stock transfer books shall be closed for a stated period but not
longer than 20 days. If the stock transfer books are closed for the purpose of
determining stockholders entitled to notice of or to vote at a meeting of
stockholders, such books shall be closed for at least ten days before the date
of such meeting.

          If no record date is fixed and the stock transfer books are not
closed for the determination of stockholders, (a) the record date for the
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day on which the notice
of meeting is mailed or the 30th day before the meeting, whichever is the
closer date to the meeting; and (b) the record date for the determination of
stockholders entitled to receive payment of a dividend or an allotment of any
other rights shall be the close of business on the day on which the resolution
of the directors, declaring the dividend or allotment of rights, is adopted.

          When a determination of stockholders entitled to vote at any meeting
of stockholders has been made as provided in this section, such determination
shall apply to any adjournment thereof, except when (i) the determination has
been made through the closing of the transfer books and the stated period of
closing has expired or (ii) the meeting is adjourned to a date more than 120
days after the record date fixed for the original meeting, in either of which
case a new record date shall be determined as set forth herein.

     Section 5. STOCK LEDGER. The Corporation shall maintain at its principal
office or at the office of its counsel, accountants or transfer agent, an
original or duplicate share ledger containing the name and address of each
stockholder and the number of shares of each class held by such stockholder.

     Section 6. FRACTIONAL STOCK; ISSUANCE OF UNITS. The Board of Directors
may issue fractional stock or provide for the issuance of scrip, all on such
terms and under such conditions as they may determine. Notwithstanding any
other provision of the charter or these Bylaws, the Board of Directors may
issue units consisting of different securities of the Corporation. Any
security issued in a unit shall have the same characteristics as any identical
securities issued by the Corporation, except that the Board of Directors may
provide that for a specified period securities of the Corporation issued in
such unit may be transferred on the books of the Corporation only in such
unit.

                                 ARTICLE VIII

                                ACCOUNTING YEAR

          The Board of Directors shall have the power, from time to time, to
fix the fiscal year of the Corporation by a duly adopted resolution.

                                  ARTICLE IX

                                 DISTRIBUTIONS

     Section 1. AUTHORIZATION. Dividends and other distributions upon the
stock of the Corporation may be authorized and declared by the Board of
Directors, subject to the provisions of law and the charter of the
Corporation. Dividends and other distributions may be paid in cash, property
or stock of the Corporation, subject to the provisions of law and the charter.

     Section 2. CONTINGENCIES. Before payment of any dividends or other
distributions, there may be set aside out of any assets of the Corporation
available for dividends or other distributions such sum or sums as the Board
of Directors may from time to time, in its absolute discretion, think proper
as a reserve fund for contingencies, for equalizing dividends or other
distributions, for repairing or maintaining any property of the Corporation or
for such other purpose as the Board of Directors shall determine to be in the
best interest of the Corporation, and the Board of Directors may modify or
abolish any such reserve in the manner in which it was created.

                                  ARTICLE X

                               INVESTMENT POLICY

          Subject to the provisions of the charter of the Corporation, the
Board of Directors may from time to time adopt, amend, revise or terminate any
policy or policies with respect to investments by the Corporation as it shall
deem appropriate in its sole discretion.

                                  ARTICLE XI

                                     SEAL

     Section 1. SEAL. The Board of Directors may authorize the adoption of a
seal by the Corporation. The seal shall contain the name of the Corporation
and the year of its incorporation and the words "Corporate Seal Maryland." The
Board of Directors may authorize one or more duplicate seals and provide for
the custody thereof.

     Section 2. AFFIXING SEAL. Whenever the Corporation is permitted or
required to affix its seal to a document, it shall be sufficient to meet the
requirements of any law, rule or regulation relating to a seal to place the
word "(SEAL)" adjacent to the signature of the person authorized to execute
the document on behalf of the Corporation.

                                 ARTICLE XII

                   INDEMNIFICATION AND ADVANCES FOR EXPENSES

          To the maximum extent permitted by Maryland law in effect from time
to time, the Corporation, without requiring a preliminary determination of the
ultimate entitlement to indemnification, shall indemnify and shall pay or
reimburse reasonable expenses in advance of final disposition of a proceeding
to (a) any individual who is a present or former director or officer of the
Corporation and who is made a party to the proceeding by reason of his service
in that capacity or (b) any individual who, while a director of the
Corporation and at the request of the Corporation, serves or has served
another corporation, partnership, joint venture, trust, employee benefit plan
or any other enterprise as a director, officer, partner or trustee of such
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise and who is made a party to the proceeding by reason of his service
in that capacity. The Corporation may, with the approval of its Board of
Directors, provide such indemnification and advance for expenses to a person
who served a predecessor of the Corporation in any of the capacities described
in (a) or (b) above and to any employee or agent of the Corporation or a
predecessor of the Corporation.

          Neither the amendment nor repeal of this Article, nor the adoption
or amendment of any other provision of the Bylaws or charter of the
Corporation inconsistent with this Article, shall apply to or affect in any
respect the applicability of the preceding paragraph with respect to any act
or failure to act which occurred prior to such amendment, repeal or adoption.

                                 ARTICLE XIII

                               WAIVER OF NOTICE

          Whenever any notice is required to be given pursuant to the charter
of the Corporation or these Bylaws or pursuant to applicable law, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. Neither the business to be transacted at nor the
purpose of any meeting need be set forth in the waiver of notice, unless
specifically required by statute. The attendance of any person at any meeting
shall constitute a waiver of notice of such meeting, except where such person
attends a meeting for the express purpose of objecting to the transaction of
any business on the ground that the meeting is not lawfully called or
convened.

                                 ARTICLE XIV

                              AMENDMENT OF BYLAWS

          The Board of Directors shall have the exclusive power to adopt,
alter or repeal any provision of these Bylaws and to make new Bylaws.<PAGE>

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                                                  EXHIBIT 10.209

                "CONFIDENTIAL TREATMENT REQUESTED BY CYGNUS, INC."

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

This contract (the "Contract") is made effective the 25th day of August, 2000,
between Livingston Healthcare Services Inc., a Delaware corporation, having its
principal place of business at 220 Lake Drive, Newark, Delaware, 19702,
hereinafter referred to as "LHSI," and Cygnus, Inc., a Delaware corporation,
having its principal place of business at 400 Penobscot Drive, Redwood City,
California 94063, hereinafter referred to as "Client."

                                   WITNESSETH

WHEREAS, LHSI is in the business of providing outsource logistics services to
healthcare clients requiring similar services,

WHEREAS, Client has substantial knowledge and expertise in and owns certain
technology relating to the development, manufacture and sale of glucose
monitoring systems,

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

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

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

                             ARTICLE I. DEFINITIONS

1.1      "Affiliate(s)" means of a person, firm or entity means any entity
         controlled by, under common control with, or controlling such person,
         firm or entity. "Control" in this context shall mean direct or indirect
         beneficial ownership of greater than fifty percent (50%) of the voting
         stock or equity, or greater than fifty percent (50%) interest in the
         income of such corporation or other business entity; provided that, if
         local law requires a minimum percentage of local ownership, control
         will be established by direct or indirect beneficial ownership of one
         hundred percent (100%) of the maximum ownership percentage that may,
         under such local law, be owned by foreign interests. All references to
         LHSI or Client shall apply equally to their Affiliate(s), as if stated
         separately each time herein.

1.2      "Agency" means any advertising, promotional, public relations, or
         similar agency contracted by Client to develop, support, and execute
         the marketing of the Product.

1.3      "Authorized Customer" means any party so designated and approved
         through the initialization Work Instruction.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>

1.4      "DEA" means the United States Drug Enforcement Agency.

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

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

1.7      "LHSI Premises" means the distribution facilities located in
         [CONFIDENTIAL TREATMENT REQUESTED] and [CONFIDENTIAL TREATMENT
         REQUESTED], and the Call Center located in [CONFIDENTIAL TREATMENT
         REQUESTED] operated by LHSI and may only include other LHSI facilities
         if pre-approved by Client.

1.8      "Legend Device" means a device that bears the statement "Caution: U.S.
         Federal law restricts the _________________ to sale by or on the order
         of a physician."

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

1.10     "Products" means, individually and collectively, those items or
         transactions which Client has requested LHSI to physically handle for
         Client, and any items which Client acquires and/or manufactures during
         the term of this Contract.

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

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

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

1.14     "Territory" shall include the 50 States of the United States, the
         District of Columbia, Puerto Rico and any other locations on which the
         parties may agree in a Record.

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

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

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>

                   ARTICLE II. OBLIGATIONS OF LHSI AND CLIENT

2.1      LHSI shall use commercially reasonable efforts to train its personnel
         and perform all services up to the limit of its regulatory authority
         required under this Contract substantially in accordance with the Work
         Instructions; provided, however, that if provisions of this Contract
         and the Work Instructions conflict, then the provisions of this
         Contract shall control. For any services outside the bounds of LHSI's
         regulatory authority, LHSI will be responsible to transfer those
         services to a subcontractor mutually agreed upon by both LHSI and
         Client.

2.2      Client shall use commercially reasonable efforts to perform all
         obligations required under this Contract substantially in accordance
         with the Work Instructions; provided, however, that if provisions of
         this Contract and the Work Instructions conflict, then the provisions
         of this Contract shall control.

2.3      Client's Products

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

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

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

         (d)      Client shall be solely responsible for the procurement,
                  marketing and sale of the Products.

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

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

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

         (h)      Client shall pay the Logistics Fees enumerated in Exhibit "A",
                  including any minimum fee set forth therein, and perform all
                  of its other obligations under this Contract and the Work
                  Instructions. All capital equipment purchased by LHSI for
                  Client shall become the property of Client and LHSI will
                  execute requested documents to this effect. Such equipment
                  will be set forth in Exhibit "C". If Client does not pay the
                  Logistics Fees enumerated in Exhibit "A" within

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>

                  [CONFIDENTIAL TREATMENT REQUESTED] days and Client has not
                  notified LHSI of a good faith dispute regarding such fees,
                  then LHSI reserves the right to hold a portion of Client's
                  inventory with a value not to exceed the undisputed overdue
                  fees until receipt of fee payment from Client to LHSI.

         (i)      Client agrees that the Logistics Fee Schedule attached as
                  Exhibit "A" is conditioned on the accuracy of the Scope of
                  Service/Logistics Assumptions attached as Exhibit "B". Thus,
                  Client agrees that if the Scope of Service/Logistics
                  Assumptions attached as Exhibit "B" prove to be inaccurate in
                  any material respect, the parties will revise Exhibits "A" and
                  "B".

2.4      Receiving and Storage

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

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

         (c)      Within the scope of its regulatory authority, LHSI shall
                  comply with all laws and regulations of all local, state and
                  federal governments and agencies having jurisdiction over the
                  Products, their storage in the LHSI Premises, and their
                  distribution, including, but not limited to, the FDA, the DEA,
                  the Environmental Protection Agency, the Occupational Safety
                  and Health Administration, the Department of Transportation,
                  and any other applicable agencies that may have or come to
                  have jurisdictional authority.

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

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

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

2.5      Customer Service and Technical Support

         LHSI shall:

         (a)      Provide customer service and technical support.

         (b)      Set up new customers utilizing a customer initialization Work
                  Instruction.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>

         (c)      Provide Cygnus education and testing process for each patient
                  for any order for a Legend Device.

         (d)      Follow appropriate Work Instruction to determine and document
                  the eligibility of the authorizing physician or other
                  healthcare professional.

         (e)      Enter patient orders whether received via phone call,
                  facsimile, mail, website, etc., as specified in the Work
                  Instruction.

         (f)      Match patient orders with corresponding physician
                  authorization.

         (g)      Verify patient testing.

         (h)      Maintain records of Authorized Customers who have opened
                  accounts with Client.

         (i)      Accept orders on Client's behalf only from Authorized
                  Customers.

         (j)      Maintain physician authorization records.

         (k)      Maintain customer education and test records.

         (l)      Provide basic Product technical support to customers,
                  physicians and other healthcare professionals per approved
                  Work Instruction developed by Client.

         (m)      Collect data pertaining to potential adverse events and
                  transmit same to Client per Work Instruction.

         (n)      Provide reports of all Call Center operations to Client.

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

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

         (b)      Within the scope of its regulatory authority, LHSI shall
                  package and ship Products in compliance with the Work
                  Instructions and all applicable laws and all regulations of
                  the United States Department of Transportation, the FDA, and
                  any other applicable agencies that have or may come to have
                  jurisdictional authority.

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

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>

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

         (e)      LHSI shall prepare and forward to Client reports summarizing
                  orders received, shipments completed, backorders, and current
                  inventory status, either via fax or electronically, as
                  specified by Client in a Record, which shall include shipping
                  dates and quantities of Products delivered to Authorized
                  Customers.

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

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

         (h)      Perform all other duties performed by a warehousemen.

2.7      Samples and Promotional Literature Fulfillment

         (a)      LHSI shall provide sample and promotional literature
                  fulfillment in accordance with commercially reasonable
                  standards and as outlined in the Work Instructions.

         (b)      LHSI shall package and ship samples and/or promotional
                  literature in compliance with the Standard Procedures and all
                  applicable laws and all regulations of the United States
                  Department of Transportation, the FDA, and any other
                  applicable agencies that have or may come to have
                  jurisdictional authority

2.8      Records and Reports

         (a)      LHSI shall provide inventory, customer, physician, technical
                  support, and adverse event records and reports management in
                  accordance with commercially reasonable standards and as
                  outlined in the Work Instructions, including, but not limited
                  to, daily and monthly activity reports.

2.9      Access and Modifications to the LHSI Premises

         (a)      LHSI represents that it will make all commercially reasonable
                  efforts to configure and equip the LHSI Premises to adequately
                  meet Client's current and projected requirements as set forth
                  in the Work Instructions for Product receiving, storage,
                  shipment, call center, work stations, personnel, database and
                  file transmission system.

         (b)      LHSI shall promptly notify Client, upon notice to LHSI, of any
                  inspection by a federal, state, or local regulatory
                  representative concerning the Products and will allow a
                  representative of Client, if so desired, to be present at LHSI
                  facilities during such inspections as it relates to Client's
                  Products. LHSI shall provide

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                  Client a summary of the results of such inspections and of the
                  actions, if any, taken to remedy conditions cited in such
                  inspections.

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

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

2.12     During the term of this Contract, warehouse services, customer and
         technical services and distribution to be performed in the Territory
         with respect to the Products shall be performed solely by LHSI or
         subcontractors of LHSI whose services have been pre-approved by Client.

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

2.14     Other Duties

         (a)      Upon a [CONFIDENTIAL TREATMENT REQUESTED] business days
                  advance notice, LHSI shall allow Client's personnel or its
                  representatives to perform physical inventory audits of
                  Products in LHSI's custody, possession or control at any time
                  during normal business hours, provided such audit is performed
                  without interruption to LHSI's normal business activities.

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

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

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

         (e)      LHSI shall allow Client's personnel or its representatives to
                  perform audits of LHSI's quality system and performance
                  thereof. Such audits may include facilities visits upon
                  [CONFIDENTIAL TREATMENT REQUESTED] business days notice, and
                  inspection of records and reports.

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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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                             ARTICLE III. INSURANCE

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

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

         (ii)     Warehouseman's legal liability insurance in the amount of
                  [CONFIDENTIAL TREATMENT REQUESTED]. Client acknowledges that
                  Client has its own insurance sufficient to cover the value of
                  all Products stored at the LHSI Premises under this Contract.

         (iii)    Commercial general liability insurance in the amount of
                  [CONFIDENTIAL TREATMENT REQUESTED] for bodily injury or
                  property damage for any one occurrence or series of
                  occurrences arising out of one cause, designating Client as an
                  additional insured. The policy shall also cover liabilities
                  specifically assumed under this Contract.

3.2      The responsibility of LHSI for loss or damage of any Product covered by
         this Contract, including any packaging of such Product, while being
         stored on the LHSI Premises or transported to or from the LHSI
         Premises, is limited on a per occurrence basis to the insurance
         proceeds received by LHSI, or paid on behalf of LHSI to a maximum of
         those amounts set forth in 3.1 above to cover any such loss or damage
         of Client's Product, including any self insured retention or
         deductible.

3.3      At all times during the term of this Contract, Client shall maintain,
         at its own expense, the following insurance coverage:

         (i)      primary commercial first-party insurance sufficient to cover
                  the replacement value of Products in the possession of LHSI;

         (ii)     product liability insurance in an amount appropriate to
                  Client's business type and level, said amount to be reviewed
                  on an annual basis;

         (iii)    Commercial General Liability, Automobile Liability Insurance
                  and Worker's Compensation Insurance with limits equal to the
                  limits of LHSI's coverage set forth in Section 3.1 if
                  employees of Client shall be present at facilities owned or
                  operated by LHSI.

3.4      Upon request, each party will furnish certificates of insurance to the
         other party evidencing the insurance required by this Contract. Each
         party will provide at least 30 days prior written notice in the event
         of cancellation or material reduction in coverage, and upon request
         promptly submit to the other party satisfactory evidence of such
         insurance.

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                           ARTICLE IV. INDEMNIFICATION

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

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

4.3      Client shall further indemnify and hold harmless LHSI from and against
         any and all claims, demands, actions, causes of action, losses,
         judgments and damages, brought or alleged by a third party, and any and
         all costs or expenses relating thereto (including but not limited to
         reasonable attorneys' fees, court costs and costs of settlement)
         arising as a result of (a) any actual or asserted violation of the
         Federal Food, Drug and Cosmetic Act or any other federal, state or
         local law or regulation by virtue of which Products sold, supplied or
         delivered by Client shall be alleged or determined to be adulterated,
         misbranded, mislabeled or otherwise not in full compliance with any
         such law or regulation, (b) the possession, distribution, sale and/or
         use of, or by reason of the seizure of, any of Client's Products,
         including any prosecution or action whatsoever by any governmental body
         or agency or by any private party, including claims of bodily injury,

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         death or property damage, or (c) a claim that the Products infringe any
         patent, trademark, copyright, license or other property right or
         proprietary right of any third party, or (d) any claims regarding any
         aspect of the use of credit cards by Authorized Customers to pay for
         orders hereunder (including but not limited to regulatory violations,
         credit card fraud or processing errors), unless such credit
         card-related claim is due to the sole negligence, fraud or willful
         misconduct of LHSI. LHSI shall provide Client prompt written notice of
         any claims, demands, actions, causes of action, losses, judgments or
         damages and LHSI shall have the right, at its discretion and at its
         cost, to have attorneys of its choosing participate with Client on the
         investigation, litigation, settlement and all other aspects of such
         claims, demands, actions, causes of action, losses, judgments or
         damages in such event Client shall share, on a timely basis, all such
         information obtained with LHSI. It is a condition to the foregoing
         indemnity that LHSI shall not admit liability nor make any payment,
         settlement or compromise in respect thereof without the prior written
         consent of Client, which consent shall not be unreasonably withheld or
         delayed.

                       ARTICLE V. AMENDMENT AND ASSIGNMENT

5.1      This Contract together with Exhibit "A" and Exhibit "B" and Exhibit "C"
         hereto, constitute the entire understanding of the parties, and
         supersedes the Letter of Intent between the parties dated August 3,
         2000 and any and all previous understandings, whether written or oral,
         with respect to the subject matter hereof. All such other
         understandings are hereby declared null and void and of no further
         force or effect, with the exception of the Mutual Confidentiality
         Agreement between the parties dated June 19, 2000, which shall remain
         in full force and effect. The terms, conditions and provisions of this
         Contract shall prevail over any inconsistent statements, terms,
         conditions or provisions contained in any documents passing between the
         parties hereto including, but not limited to, any acknowledgment,
         confirmation or notice. This Contract may not be amended, supplemented,
         or otherwise modified except by an instrument in a Record executed by
         the parties hereto.

5.2      This Contract shall not be assignable by either Party hereto, in whole
         or in part, in fact or by operation of law, without the prior written
         consent of the other, except that either Party may assign this Contract
         to any of its present Affiliates, as well as to a person or entity who
         acquires all or substantially all of the assets or business of the
         business unit to which this Contract relates, whether by sale, merger
         or otherwise. This Contract shall inure to the benefit of the parties
         and to their successors and assigns.

                            ARTICLE VI. FORCE MAJEURE

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

6.2      Notwithstanding the immediately foregoing provision, if the LHSI
         Premises at any time are subject to a condition constituting Force
         Majeure such that LHSI is unable to fulfill its obligations under this
         Contract, LHSI shall give immediate written notice thereof to Client,
         whereupon Client may, at its sole option, immediately terminate this
         Contract by giving written notice of termination to LHSI and make other
         arrangements for

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         distribution of its Products, or permit LHSI to provide other
         warehousing facilities reasonably acceptable to Client for the
         duration of the Force Majeure. Notwithstanding the foregoing, in the
         event that Client elects to permit LHSI to provide a substitute
         facility and the Force Majeure condition continues for more than
         [CONFIDENTIAL TREATMENT REQUESTED] days, Client may then, at its
         sole option, terminate this Contract by giving written notice of
         such termination to LHSI. In the event of termination during a Force
         Majeure condition, LHSI shall use its best efforts to remove, or
         enable Client to remove Products, shipping and packaging materials,
         data and information related to Products, and other property of
         Client from the LHSI Premises as promptly as possible.

                          ARTICLE VII. CONFIDENTIALITY

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

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

7.3      The parties agree that in the event of a violation of Sections 7.1 or
         7.2, the nonviolating party shall have the right to seek an injunctive
         relief, in addition to any other existing rights provided in this
         Contract or by operation of law, without the requirement of posting
         bond.

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

              (a)      any information that, at the time of disclosure, is
                       in, or after disclosure lawfully becomes a part of the
                       public domain (but only after it becomes a part of the
                       public domain);

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

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                       business, or as evidenced by proof of actual prior use
                       by the recipient party;

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

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

7.5      Nonsolicitation of Employees. Client and LHSI covenant that they shall
         not, for a period of [CONFIDENTIAL TREATMENT REQUESTED] after the
         termination of this Contract, or with respect to a former employee or
         contractor of the other party, for a period of [CONFIDENTIAL TREATMENT
         REQUESTED] after the termination of employment of such employee or
         contractor, whichever is earlier: (i) solicit or attempt to solicit any
         employee or contractor of the other party to quit employment with
         Client or LHSI; (ii) interfere with or disrupt Client's or LHSI's
         relationship with other employees or contractors of the other party; or
         (iii) solicit, entice or take away any person engaged by Client or
         LHSI.

                       ARTICLE VIII. TERM AND TERMINATION

8.1      This Contract shall commence as of the 25th day of August, 2000, and
         shall extend for a period of five (5) years, to and including the 25th
         day of August, 2005. This Contract shall automatically renew for
         successive [CONFIDENTIAL TREATMENT REQUESTED] terms unless notice to
         cancel is provided in writing by one party to the other party at least
         [CONFIDENTIAL TREATMENT REQUESTED] prior to the end of the applicable
         term.

8.2      Client only may terminate this Contract by submitting [CONFIDENTIAL
         TREATMENT REQUESTED] prior written notice of termination to the other
         party. If Client terminates this Contract within the first
         [CONFIDENTIAL TREATMENT REQUESTED] (i.e., prior to [CONFIDENTIAL
         TREATMENT REQUESTED]) then LHSI shall be entitled to the lesser of (a)
         [CONFIDENTIAL TREATMENT REQUESTED] or (b) [CONFIDENTIAL TREATMENT
         REQUESTED]. During the [CONFIDENTIAL TREATMENT REQUESTED] notice period
         Client shall pay the greater of (aa) [CONFIDENTIAL TREATMENT REQUESTED]
         or (bb) [CONFIDENTIAL TREATMENT REQUESTED]. Client shall pay LHSI any
         outstanding amounts owed within [CONFIDENTIAL TREATMENT REQUESTED] days
         after termination of this Contract.

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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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8.3      If either LHSI or Client should fail to discharge fully and promptly
         any of its obligations under this Contract or the Exhibits hereto,
         including, but not limited to, the obligation to make payments and
         LHSI's obligation to make timely delivery of Products, and its
         obligations under Section 2.9(a), and further fail to cure such default
         within a reasonable time not to exceed [CONFIDENTIAL TREATMENT
         REQUESTED] days (provided that such a failure can be cured) after
         written notice thereof by the non-defaulting party, the non-defaulting
         party shall have the right to immediately terminate this Contract upon
         giving the defaulting party written notice to such effect.

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

8.5      Upon termination or expiration of this Contract, LHSI shall promptly
         return to Client all Products then in its possession or control, all
         packaging, shipping and labeling materials related thereto, all invoice
         forms, any equipment or other property purchased by Client, and all
         customer and sales representative lists and other confidential or
         proprietary information provided hereunder by Client or developed by
         LHSI in relation to this Contract, and any information provided in
         order that LHSI may obtain any government licenses and permits. In the
         event of termination by Client under Section 8.2 or termination by LHSI
         under Sections 8.3 and/or 8.4 or cancellation under Section 8.1, LHSI
         shall be compensated at the accessorial labor rate detailed in Exhibit
         "A" of this Contract in returning property of Client from the last
         effective day of this Contract.

8.6      In the event of early termination under Section 8.2 by Client, Client
         shall pay the remaining [CONFIDENTIAL TREATMENT REQUESTED] book value
         and take title to capital assets purchased by LHSI on behalf of Client.
         These capital assets, with their original cost and depreciation term,
         are specified in Exhibit "C", which shall be updated throughout the
         term of this Contract as mutually agreed by the parties.

8.7      The obligation of Client to pay fees and expenses earned or incurred by
         LHSI, as the case may be, prior to the effective date of termination,
         the obligations of both parties under Article IV, and the rights and
         obligations of both parties under Articles VII, VIII and IX shall
         survive the termination or expiration of this Contract.

                               ARTICLE IX. GENERAL

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

9.2      The parties agree and acknowledge that they have the obligations to
         indemnify each other set forth in Article IV and that LHSI's
         responsibility for loss or damage of any Product

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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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         covered by this Contract is set forth in Article III. With respect
         to all other claims for damages that the parties may assess against
         each other:

         (i)      Neither party shall be liable to the other under any
                  circumstances for consequential, incidental, indirect or
                  special damages, for lost profits, savings or revenues of any
                  kind, regardless of whether such party has been advised of the
                  possibility of such damages; and

         (ii)     LHSI's total liability for damages to Client under this
                  Contract shall be limited to money damages and shall not
                  exceed an amount equal to the amount actually paid to LHSI by
                  Client.

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

9.4      Routine notices of conditions or situations affecting the Services
         performed under this Contract will be given in writing between Ken
         Pitzer of Cygnus and Karen Sassi of LHSI, or as otherwise designated by
         the parties. All other notices will be given in writing and delivered
         by mail or facsimile to the parties as follows:

                           In the case of LHSI:
                                    Livingston Healthcare Services Inc.
                                    220 Lake Drive
                                    Newark, DE  19702
                                    Attention:  Karen Sassi
                                    Facsimile:  (302) 266-7650

                           In the case of Cygnus:
                                    Cygnus, Inc.
                                    400 Penobscot Drive
                                    Redwood City, CA  94063
                                    Attention:  General Counsel
                                    Facsimile:  (650) 599-3913

         If notice is mailed by prepaid first-class mail at any time other than
         during a general discontinuance of postal service due to strike,
         lockout or otherwise, shall be deemed to have been received
         [CONFIDENTIAL TREATMENT REQUESTED] business days after the post-marked
         date thereof, or if sent by facsimile or electronic mail, shall be
         deemed to have been received on the next business day following
         dispatch and acknowledgment of receipt by the recipient's facsimile
         machine or computer, or if telecopied, shall be deemed to have been
         received on the next business day following dispatch or if delivered by
         hand shall be deemed to have been received at the time it is delivered.
         Notice of change of address shall also be governed by this Section 9.4.

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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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9.5      Upon pre-approval by Client, LHSI may to display any logo, trademark,
         service mark, service name or trade name of Client (collectively, the
         "Mark(s)") at any site at which the Products are stored or in
         advertising or other literature promoting LHSI's logistics services.

9.6      Except to the extent necessary under applicable laws or for ordinary
         marketing purposes, the Parties agree that no press releases or other
         publicity relating to the substance of the matters contained herein
         will be made without approval by both Parties. Any press release
         announcing this Contract will be jointly developed and released by both
         Parties.

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

         CYGNUS, INC.

         By:      /s/ John C Hodgman
            ---------------------------------------------

         Name:              John C Hodgman
              -------------------------------------------

         Title:             Chairman, President & CEO
               ------------------------------------------

         Date:             8/30/00
              -------------------------------------------

         LIVINGSTON HEALTHCARE SERVICES INC.

         By:      /s/ Peter Westermann
            ---------------------------------------------

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

         Title:             President
               ------------------------------------------

         Date:             8/31/00
              -------------------------------------------

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                                                                       EXHIBIT A

                       [CONFIDENTIAL TREATMENT REQUESTED]

         CYGNUS, INC.

         By:      /s/ John C Hodgman
            ----------------------------------------------

         Name:              John C Hodgman
              --------------------------------------------

         Title:             Chairman, President & CEO
               -------------------------------------------

         Date:             8/30/00
              --------------------------------------------

         LIVINGSTON HEALTHCARE SERVICES INC.

         By:      /s/ Peter Westermann
            -----------------------------------------------

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

         Title:             President
               --------------------------------------------

         Date:             8/31/00
              ---------------------------------------------

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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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                                                                       EXHIBIT B

                       [CONFIDENTIAL TREATMENT REQUESTED]

         CYGNUS, INC.

         By:      /s/ John C Hodgman
            --------------------------------------------

         Name:              John C Hodgman
              ------------------------------------------

         Title:             Chairman, President & CEO
               -----------------------------------------

         Date:             8/30/00
              ------------------------------------------

         LIVINGSTON HEALTHCARE SERVICES INC.

         By:      /s/ Peter Westermann
            --------------------------------------------

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

         Title:             President
               -----------------------------------------

         Date:             8/31/00
              ------------------------------------------

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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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                                                                       EXHIBIT C

                       [CONFIDENTIAL TREATMENT REQUESTED]

         CYGNUS, INC.

         By:      /s/ John C Hodgman
            -----------------------------------------------

         Name:              John C Hodgman
              ---------------------------------------------

         Title:             Chairman, President & CEO
               --------------------------------------------

         Date:             8/30/00
              ---------------------------------------------

         LIVINGSTON HEALTHCARE SERVICES INC.

         By:      /s/ Peter Westermann
            -----------------------------------------------

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

         Title:             President
               --------------------------------------------

         Date:             8/31/00
              ---------------------------------------------

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}]]