December 18, 2000

Dear Valued LifeScan Customer:
Recently a legal settlement was reached between LifeScan and the U.S. Department of Justice in a case involving two problems with the SureStep® Blood Glucose System, problems that were corrected more than two years ago. Because of the potential for confusion, we want to share the information surrounding this case with you directly.

It's important for you to know that the issues raised in this case do not involve the current SureStep product, product supply, or the people who use and depend on the SureStep System every day. No other LifeScan products were affected.

The first issue involved a software problem that caused the meter to sometimes give an error message, instead of a "HI" warning, if a patient's blood glucose level was very high. The second issue involved test strips, which could give a false low result if they were not firmly inserted. The false low issue affected the SureStep Consumer Meter as well as the SureStep®Pro Hospital Meter, while the error message issue affected only the consumer meter.

LifeScan addressed the error message and false low problems with its SureStep Meters and Test Strips and offered to replace all affected meters free of charge in 1998.

In the settlement with the government, LifeScan acknowledged that the SureStep product labeling was clearly deficient, that LifeScan did not properly notify the government of those deficiencies, and that it was slow to remedy them completely. We fully acknowledge that mistakes and misjudgments were made and we sincerely apologize for them.

To all our customers who sell, recommend or use LifeScan products, please be assured that this issue has no impact on SureStep Meters manufactured after August of 1997 or any SureStep Test Strips manufactured after March 1998.

We recognize that our customers depend on LifeScan products to help manage diabetes.
Maintaining your trust by offering only the highest quality products and services is a responsibility we take very seriously. We are committed to doing everything possible to earn your continued support. This is a matter that has affected us all very deeply. If you have any questions I hope you will feel free to contact us directly at 877 903-0270.

Sincerely,

Robert C. Coradini
President

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