exv10w1



 






Exhibit 10.1




CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AND THE NON-PUBLIC INFORMATION HAS BEEN
FILED WITH THE SECURITIES EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.




	 	 	 
	[Northrop Grumman Security Systems, LLC Logo]

	 	Northrop Grumman Security Systems, LLC
	 

	 	7040B Troy Hill Drive
	 

	 	Elkridge, Maryland 21075






July 20, 2005



In Response Refer To: DLH-BDS-200705




Cepheid, Inc.

904 Caribbean Drive

Sunnyvale, California 94089

Attention: Mr. Brant Adornato





			
	Subject:	 	Advanced Authorization for Two Million Three Hundred Thousand and Forty
(2,300,040) Part Number 900-0124 Cartridges







Dear Mr. Adornato:




     Northrop Grumman Security Systems, LLC (NGSS) hereby provides this Advanced Authorization to
Cepheid, Inc. to proceed with the fabrication of Two Million Three Hundred Thousand and Forty
(2,300,040 or 19,167 cases of 120 cartridges each) of the Part Number 900-0124 Cartridges for the
BDS Program. This advanced authorization is in accordance with the following terms:




	 	•	 	The price for each of the Part Number 900-0124 Cartridges is $[***], for a total price
of $[***] for the two million three hundred thousand and forty cartridges.
	 
	 	•	 	The price of $[***] per cartridge does not include the royalty of $[***] per cartridge
that shall be paid by NGSS to Cepheid for the difference between the price that NGSS pays
to Cepheid and the price that NGSS charges to USPS. The royalty payments will be added once
a Purchase Order for the cartridges is in-place.
	 
	 	•	 	The price of $[***] for the 900-0124 cartridge is the same as that paid on the previous
PO 8130000499.
	 
	 	•	 	The cartridges to be provided under this authorization shall comply with the shelf-life
and Storage Temperature Requirements as specified in the Technical Requirements Document
(TRD) for Bio-Identifier Module (BIM).




 


The symbol [***] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.







 









 









	 	•	 	The cartridges to be provided under this authorization shall be delivered to the
following schedule:





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Qty of	 	 	Cumulative Qty	 	 	Qty of	 	 	Cumulative	 
	Delivery by:	 	Cartridges	 	 	of Cartridges	 	 	Cases	 	 	Qty of Cases	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	[***]
	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 	 	 	[***]	 
	09/29/06
	 	 	[***]	 	 	 	2,300,040	 	 	 	1,461	 	 	 	19,167	 








 




			
	*	 	Deliveries in advance of this schedule will not be accepted.






	 	•	 	In the event that NGSS decides to not proceed with the Purchase Order for these
additional cartridges, NGSS hereby agrees to reimburse Cepheid for any actual and
verifiable expenses incurred up to that point in fabricating the cartridges. Per previous
discussions, Cepheid has committed that those expenses shall not exceed the following
amounts:





	 	 	 
	o As of June30, 2005:

	 	$[***]
	o As of July 28th, 2005:

	 	$[***]






     NGSS anticipates definitizing the Purchase Order that will result from this Advanced
Authorization per the following schedule. Since this new Purchase Order will have the same Terms
and Conditions and pricing as PO 8130000499 and Government Contract Number 3BMHRD-03-Z-5541 applies
to this order, then all of the steps listed below may not be required.



	 	 	 	 	 
	• Finalize Pricing Submission
	 	 	08/01/05	 
	• Finalize Terms and Conditions
	 	 	08/03/05	 
	• Fact Finding
	 	 	08/05/05	 
	• Negotiations
	 	 	08/10/05	 
	• Release of Purchase Order
	 	 	08/15/05	 





 




The symbol [***] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.




 









 





Please acknowledge Cepheid’s acceptance of this Advanced Authorization by signing and dating a copy
of this letter and returning it to the undersigned within 3 calendar days at FAX 410-694-2560.
Should you have any questions regarding the above Advanced Authorization, please do not hesitate to
contact the undersigned.




	 	 	 	 	 
	Sincerely,	 	Accepted and Agreed to
this 20th day of July 2005
	 
	 	 	 	 
	NORTHROP GRUMMAN SECURITY SYSTEMS, LLC	 	CEPHEID, INC.
	 
	 	 	 	 
	Mr. Donald L. Hannah

	 	By:
	 	/s/ Brant Adornato
	 

	 	 	 	 
	Subcontract Administrator

	 	 	 	Mr. Brant Adornato
	Telephone: (410) 471-4072
	 	 	 	 
	Fax: (410) 694-2560

	 	Title:
	 	Manager, Business Integration
	Mail Stop 8875

Email: donald.hannah@ngc.com
	 	 	 	 





 




The symbol [***] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.