Document:

Exhibit 10.5

 

***PORTIONS
OF THIS EXHIBIT MARKED BY BRACKETS (“[     ]”) OR
OTHERWISE INDICATED HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.  THE OMITTED PORTIONS HAVE
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***

 

LABORATORY CORPORATION OF AMERICA HOLDINGS

(LabCorp)

MASTER AGREEMENT

 

This Agreement (the “Agreement”) between Cytyc Corporation and its
wholly owned subsidiaries, including but not limited to Cytyc Limited
Partnership, (“Cytyc”) and Laboratory Corporation of America Holdings,
(“LabCorp”) and its Affiliated Laboratories (1) (collectively, the “Parties’)
sets forth the terms and conditions upon which Cytyc will sell and LabCorp will
purchase various products and services identified in Addenda annexed hereto and
incorporated herein.  

 

The Parties agree as
follows:

 

A.           In
consideration of LabCorp purchasing from Cytyc the products and services
specified in the attached Addenda B, C, D and E (“Products”), during the term
of this Agreement, Cytyc agrees to sell such Products to LabCorp at the
purchase prices specified.  This
Agreement supersedes all prior contracts between the Parties.

 

B.             LabCorp
may add an Affiliated Laboratory to Addendum A, at any time by providing Cytyc
written notice.  Upon such notice, the
Affiliated Laboratory will be eligible for the pricing in this Agreement.

 

C.             The
term of the Agreement shall commence on October 18, 2004 and remain in
effect until December 31, 2007 (“Term”).

 

D.            Cytyc
shall sell Products to LabCorp and any Affiliated Laboratories in accordance
with the terms and conditions of this Agreement.  Invoices should be mailed to the following
address:

 

SEND INVOICES TO:

Laboratory Corporation of America Holdings

Accounts Payable Department

Caller 2280

Burlington, North Carolina  27216-2280

 

Payment is net
thirty (30) days.  LabCorp is taxable
based on shipment destination and all applicable local/state taxes are the
responsibility of LabCorp.  In those
states where Cytyc collects local/state sales taxes, Cytyc will add these taxes
to the invoices and remit to the appropriate taxing authority.

 

E.              Shipment
shall be made FOB Origin Freight and Insurance Prepaid, no additional handling
charges or associated fees.  LabCorp
bears all risk of loss during delivery.

 

F.              Neither
Party shall assign or transfer this Agreement without the written consent of
the other Party, which consent shall not be unreasonably withheld or delayed.

 

G.             Notices
and other communications permitted or required under this Agreement will be
deemed to be properly given if in writing and either delivered by hand,
courier, facsimile or mailed by First Class U.S. Mail, postage prepaid,
addressed to the Parties as follows:

(1)Affiliated
Laboratories are defined as: (i) laboratories listed in Addendum A attached
hereto and incorporated herein by reference; (ii) laboratories in which LabCorp
acquires a greater than fifty (50) percent equity interest; and (iii) other
laboratories affiliated with LabCorp as mutually agreed by the parties.

 

1

 

	
  SELLER:

  	
   

  	
  through November 30, 2004:

  
	
   

  	
   

  	
  Cytyc
  Corporation

  
	
   

  	
   

  	
  85 Swanson Road

  
	
   

  	
   

  	
  Boxborough, MA 01719

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  After November 30, 2004:

  
	
   

  	
   

  	
  Cytyc
  Corporation

  
	
   

  	
   

  	
  205 Campus Drive

  
	
   

  	
   

  	
  Marlborough, MA  01752

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Christopher Bleck

  
	
   

  	
   

  	
  Vice President Worldwide Marketing

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to: General Counsel

  
	
   

  	
   

  	
   

  
	
  LabCorp:

  	
   

  	
  Laboratory Corporation
  of America Holdings

  
	
   

  	
   

  	
  Department
  of Science and Technology

  
	
   

  	
   

  	
  112 Orange Drive

  
	
   

  	
   

  	
  Elon, North
  Carolina 27244

  
	
   

  	
   

  	
  Attention: Susan
  R. Barber

  
	
   

  	
   

  	
  Vice President
  and Director Department of Science and Technology

  

 

H.            This
Agreement and the Addenda annexed hereto (collectively the “Agreement”) may not
be amended or   modified except by
written agreement signed by the Parties. 

 

I.                 Cytyc
will not be liable for any failure to perform under this Agreement due to
strikes, fire, explosion, flood, riot, lock-out, injunction, interruption of
transportation, unavoidable accidents, inability to obtain supplies at
reasonable prices or diagnostic products set forth in this Agreement or any
other reason beyond Cytyc’s reasonable control. 

 

J.                Cytyc
guarantees LabCorp that the Products supplied to LabCorp shall not be
adulterated or misbranded within the meaning of the U.S. Food, Drug, and
Cosmetic Act.

 

K.            Cytyc
and LabCorp will conduct quarterly business reviews to discuss technical
performance of all Products included in this Agreement.  In the event that technical problems are
identified or Product is unavailable, LabCorp will notify Cytyc of the problem
in writing, Cytyc will, within the course of ten (10) business days, identify
an action plan to correct the problem and deliver this, in writing, to
LabCorp.  If after ten (10) business
days, progress is not demonstrated in resolving the problem or Product performance
does not meet package insert claims, then LabCorp may discontinue use of that
Product without affecting the terms and conditions of the Agreement.

 

L.              This
Agreement may be terminated by either Party with or without cause at any time
with ninety (90) days written notice unless there are quality or shipment
problems.  If quality or shipment
problems occur, then Paragraph K applies. 
Quality or shipment problems are defined as inconsistent shipments,
inadequate Product availability; products that do not meet package insert
claims or performance specifications as published in the manufacturers’
publications.  Either Party may terminate
this Agreement if the other Party seeks protection under the bankruptcy laws
(other than as a creditor), any assignment is made for the benefit of
creditors, or a trustee is appointed for all or any portion of such Party’s
assets.  In the event either Party is in
breach of any material term, covenant or condition of this Agreement, the
non-breaching Party may terminate the Agreement upon thirty (30) days’ advance
written notice of the breach, unless during the thirty (30) day notice period
the Party in breach cures the breach, in which event, the Agreement shall
remain in full force and effect.  The
rights and remedies provided hereunder shall be cumulative and be in addition
to all rights and remedies available to the Parties in law and equity.

 

2

 

M.         Cytyc
warrants that during its applicable shelf life, the ThinPrepÒ
Pap Test disposable Product will conform with the Specifications set forth in
the package insert and the warranty attached hereto as Addendum F and the
instrumentation and accompanying software will operate in accordance with the
specifications and warranties set forth on Addendum F attached hereto and
incorporated herein by reference. Furthermore, Cytyc hereby represents and
warrants that to the best of its knowledge the use of any technology or U.S.
patents licensed hereunder is and will be free of any infringement of U.S.
patents. Cytyc hereby represents and warrants that to the best of its knowledge
the use and sale of any Product covered by this Agreement is and will be free
of any infringement of patents of other persons.

 

N.            Cytyc
shall give LabCorp a one hundred twenty (120 day) written notification of any
Product changes.

 

O.            Cytyc
agrees to defend, indemnify, and hold LabCorp and subsidiaries, directors,
officers, employees, and agents wholly harmless from and against third-party
claims, losses, lawsuits, settlements, demands, causes, judgments, expenses,
and cost (including reasonable attorney fees) arising under or in connection
with this Agreement in the event that such cost and liabilities are caused by
(a) Cytyc breach of any of its warranties in this Agreement; (b) any negligence
or willful misconduct of Cytyc; or (c) the failure of Products to function
properly when used by LabCorp in accordance with the Product
specifications.  However, the foregoing
rights to indemnity shall not apply to the extent that such claim, loss,
lawsuit, or settlement results from LabCorp’s sole negligence or willful
misconduct including, without limitation, the negligence of LabCorp’s
employees, or from the modification of any Product by LabCorp or any third
party not within Cytyc’s control or without Cytyc’s permission.  Cytyc’s defense, indemnity and hold harmless
obligation shall also include, but is not limited to, any such third-party
claims, losses, damages, lawsuits, settlements, demands, causes, judgments,
expenses and costs (including reasonable attorney fees) against LabCorp which
relate in any manner to LabCorp’s alleged infringement of any intellectual
property rights of a third party in or to the Product shipped by Cytyc under
this Agreement.  LabCorp agrees to
defend, indemnify, and hold Cytyc and subsidiaries, directors, officers,
employees, and agents wholly harmless from and against third-party claims,
losses, lawsuits, settlements, demands, causes, judgments, expenses, and cost
(including reasonable attorney fees) arising under or in connection with this
Agreement in the event that such cost and liabilities are caused by (a) LabCorp’s
breach of any of its warranties in this Agreement or (b) any negligence or
willful misconduct of LabCorp.  However,
the foregoing rights to indemnity shall not apply to the extent that such
claim, loss, lawsuit, or settlement results from Cytyc’s sole negligence or
willful misconduct including, without limitation, the negligence of Cytyc’s
employees.   In the event of a lawsuit or
other action in connection with which LabCorp or Cytyc is seeking
indemnification from the other Party hereunder, the Party seeking
indemnification agrees to give timely notice of the lawsuit or action to and to
cooperate with other Party in the defense of the lawsuit or action.  

 

P.              Each
Party shall, at its sole cost and expense, obtain and keep in force a policy of
comprehensive general liability (“CGL”) insurance with bodily injury, death,
and property damage limits of One Million U.S. Dollars ($1,000,000) per
occurrence and Ten Million U.S. Dollars ($10,000,000) in the aggregate,
including product and contractual liability coverage.  LabCorp shall provide evidence of such
insurance in the form of a certificate of insurance delivered to Cytyc within ten
(10) business days after the execution of this Agreement.

 

Q.            Cytyc
and LabCorp each acknowledge that the other Party has a proprietary interest in
its legal and business name and reputation. 
Therefore,  except as otherwise
required by law, neither party shall use the other’s name nor shall mention or
describe this Agreement or its relationship with the other party in any press
release, advertising, marketing, and promotional materials or other
publications or materials without first obtaining the prior written approval of
(a) in the case of LabCorp, LabCorp’s Director of The Department of Science and
Technology (b) in the case of Cytyc, the VP of Worldwide Marketing or EVP of
Commercial Operations.  Notwithstanding
the above, LabCorp may advertise and promote Cytyc’s Product and use Cytyc’s
trademarks (in accordance with Cytyc’s TradeMark Book of Standards attached
hereto as Addendum G), for the sole purpose of identifying that LabCorp
performs the ThinPrep Pap Test using the Imager.   A violation of this paragraph shall be
considered a material breach of this Agreement, and the non-breaching party
shall be entitled to pursue any and all legal or equitable remedies, including
an injunction, as a result of such breach.  
Except as otherwise required by law, each of the Parties hereto agrees
to keep the terms and conditions of this Agreement (including any Product
Addenda) confidential and will not disclose the same without the prior written
consent of the other party. 
Notwithstanding the foregoing sentence, either party may disclose the
terms and conditions of this Agreement (including the Addenda) to any
employees, agents, or advisors of such party with a material need to know such
information, provided that all such employees, agents and advisors agree to be
bound by the

 

3

 

terns
and conditions of the foregoing sentence as if they were Parties hereto, and
neither party may disclose any such terms and conditions to any competitor of
the other party.  Notwithstanding any of
the above, the Parties agree that they will issue a joint Press Release
announcing the new agreement and the addition of the Imager as defined in
Addendum C to the Agreement.   Said
release must be approved by both Parties prior to issuance, said approval not
to be unreasonably withheld.  

 

R.             This
Agreement including the Addenda attached hereto and incorporated by reference
herein, shall constitute the   entire
agreement between the Parties with respect to the sale of Products and
supercedes all prior written or oral agreements or understandings between Cytyc
and LabCorp with respect to the subject matter hereof.  Any additional or different terms contained
in any purchase order, acknowledgment, confirmation, invoice or other document
shall be null and void.

 

S.              It
is the intention of the Parties that the provisions of this Agreement will be
enforceable to the fullest extent permissible under applicable laws, and that
the unenforceability of any provisions under such laws will not render unenforceable,
or impair, the remainder of this Agreement. 
If any provisions hereof are deemed invalid or unenforceable, this
Agreement will be deemed amended to delete or to modify, as necessary, the
offending provisions and to alter the bounds thereof in order to render it
valid and enforceable.

 

 

	
  LABORATORY CORPORATION OF AMERICA

  HOLDINGS

  	
   

  	
  CYTYC CORPORATION

  
	
  By:

  	
  /s/ Susan R. Barber

  	
   

  	
  By:

  	
  /s/ Patrick J.
  Sullivan

  
	
   

  	
  Susan R. Barber

  	
   

  	
   

  	
   

  	
  Patrick J. Sullivan

  
	
  Title:

  	
  Vice President and Director

  	
   

  	
   

  	
  Title: 

  	
        Chairman and

  	
   

  
	
   

  	
  Department of Science and Technology

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  Date:  October 15, 2004

  	
   

  	
  Date:  October 15, 2004

  
								

 

4

 

ADDENDUM A

 

LabCorp Affiliated Laboratories

 

[       ]

 

5

 

ADDENDUM
C

 

Imager
and Stain

 

Imager(1),(2)

 

The “Imager”
includes the following:

 

1  - Image Processor

1
-  Image Processor Computer Server

3
-  Review Scopes

1
-  Imager Accessory Kit

1 –
ThinPrep Stain Implementation Kit

•                  ThinPrep Stain Reagent Sets (for
every 3,500 Imager Tests processed)

•                  On-site Imager Service and Technical
Support

•                  Installation

•                  Onsite Training by Cytyc authorized
personnel

 

(1) Cytyc
will retain title to the Imager(s) during the Term and shall file a standard
Uniform Commercial Code Form 1 to reflect its title in the Imager(s).  At the end of the Term (with no renewal),
LabCorp is obligated to return the Imager(s) to Cytyc at Cytyc’s expense.

 

(2) Cytyc will provide up to one Sakura DRS – 2000 Automated
or other Imager compatible Stainer (“Stainer”) for every two Imagers ordered by
LabCorp.  Cytyc will retain title to the
Stainers during the Term and shall file a standard Uniform Commercial Code Form
1 to reflect its title in the Stainers. 
At the end of the Term, LabCorp is obligated to return the Stainers to
Cytyc at Cytyc’s expense.

 

II.  Imager Stain

 

[   ]

 

III.         Imager Rollout Schedule

 

Cytyc
will provide LabCorp with a sufficient number of Imagers to meet a processing
capacity of 300 slides per day.  If Cytyc’s
current Imager capacity increases, Cytyc will use its best efforts to provide
Imagers to meet the need for LabCorp’s TPPT volume during the Term.  The number of ThinPrep Imaging Systems per
location will be included in the system-wide adoption schedule by March 5,
2005.  Current Imager Rollout Schedule is
attached hereto and may be modified by the Parties through March 5, 2005.

 

Cytyc
will cooperate with LabCorp in its effort to achieve data connectivity between
the Imager and LabCorp’s internal LIS system. 
In the interim, Cytyc will provide LabCorp, at Cytyc’s expense, an
adequate labeling and bar coding solution for specimen tracking at Imager
locations.

 

IV. Reporting

 

LabCorp
shall provide Cytyc with monthly Imager utilization reports for each LabCorp
facility using the Imager by the 20th day of the following month.

 

6

 

CYTYC PROPOSED IMAGER ROLLOUT

 

[   ]

 

7

 

ADDENDUM D

 

Pricing for the ThinPrep®
2000 and 3000 Processors

 

I.  Instrument Pricing
Table:

 

	
  INSTRUMENT

  	
   

  	
  PRICE

  	
   

  
	
  ThinPrep® 2000 Processor

  	
   

  	
  $

  	
  [   

  	
  ]

  
	
  ThinPrepÒ
  3000 Processor

  	
   

  	
  $

  	
  [   

  	
  ]

  

 

II. ThinPrep 2000
Processor Placement 

 

Effective upon the
commencement date of this Agreement, Cytyc shall provide to LabCorp ThinPrep
2000 Processors (“T-2000”) under the following terms and conditions:

 

(a)                 [
    ]  Cytyc retains title
to all additional T-2000s placed at LabCorp facilities in accordance with this
provision and may file a standard Uniform Commercial Code Form 1 to reflect its
title in the T-2000s.

 

(b)                [
    ].

 

(c)          The Baseline Period
shall be determined as follows:

 

i.      [
    ].

ii.   [
    ].

 

(d)                Reporting:  LabCorp shall provide Cytyc with monthly TPPT
Test utilization reports for each LabCorp facility by the 20th day
of the following month in order for the Parties to determine if an
additional   T-2000 will be placed at any
LabCorp facilities pursuant to (a) above. 
Cytyc, upon reasonable prior notice, may visit LabCorp facilities to
evaluate productivity of T-2000s at such facilities and provide feedback to
LabCorp on such evaluation.

 

(e)                 During
the Term of the Agreement, Cytyc shall maintain title to any T-2000s provided
to LabCorp in accordance with this Addendum D. 
LabCorp has the right to purchase any T-2000 placed by Cytyc [    
].

 

(f)                   LabCorp
shall be responsible for service costs as set forth in Addendum E to the
Agreement.

 

(g)                The
Parties acknowledge and agree to the following with respect to placement of
T-2000s through August 30, 2004:

 

(i) [    
];

(ii) [
    ].

(iii)                   [    
].

(iv)                  [    
].

 

(h)                Cytyc
will maintain a Schedule of all T-2000s placed and earned through the
execution of this Agreement and throughout the Term (“Schedule One”).
During the remainder of the Term, Schedule One will be updated quarterly
by mutual agreement of the Parties to reflect T-2000s previously placed,
T-2000s earned and the Baseline for each LabCorp facility.   LabCorp will

 

8

 

timely
provide all information necessary to update Schedule One on a quarterly
basis.  Cytyc will provide the updated Schedule One
to LabCorp no more than ten (10) business days after the receipt of the
necessary information from LabCorp.

 

(i)                    T-2000
PURCHASE RIGHT UPON AGREEMENT TERMINATION: 
Upon Termination of this Agreement, LabCorp shall have the right to
purchase any T-2000 placed pursuant to paragraphs (a) (b) (c) and (g) above at
a cost of $[     ] per T-2000. 
In the event LabCorp elects to purchase such T-2000 it shall provide
Cytyc 15 days notice prior to the end of the Term of its intent to
purchase.  Upon payment of the purchase
price, Cytyc shall convey to LabCorp all right, title, and interest to the
purchased T-2000(s) free and clear of all liens and encumbrances.  Otherwise, LabCorp shall return the T-2000s
to Cytyc within thirty (30) days of termination of this Agreement.

 

(j)                    During
the Term LabCorp may purchase additional T-2000s in accordance with the
Instrument Pricing Table in section I of this Addendum D.

 

(k)                 LabCorp
may purchase a ThinPrep 3000 Processor (“T-3000”) in accordance with the
Instrument Pricing Table in section I of this Addendum D.

 

9

 

LabCorp T2 Shipments

YTD as of August 31, 2004

 

[     ]

 

10

 

ADDENDUM
E

 

INSTRUMENT
SERVICE & TRAINING

 

I.                 INSTRUMENT SERVICE

 

LabCorp
is responsible for maintaining the Imager and all Cytyc Products in good
working condition and for protecting the Imager, T2000 and T3000 from
damage.    Service does not include the
following:  (1) service or parts which
are needed as a result of LabCorp’s negligence, misuse, theft, environmental
factors, unauthorized modifications or accessory items not meeting Cytyc’s
specifications, or any other cause beyond Cytyc’s control, including floods,
fires, or acts of God; (2) reconditioning or refurbishment by LabCorp or a
third party of the Imager, T2000 and T3000.

 

A.           ThinPrep 2000

 

Cytyc will provide a
ThinPrep® 2000 Processor Service Agreement to LabCorp based upon the following
discounted pricing schedule.  Service
contract pricing below is quoted on a “per facility” basis, recognizing service
economics due to multiple instruments at a single facility.

 

Service
Pricing Table:

 

	
  Length of

  Service

  Agreement

  	
   

  	
  Annual Price

  	
   

  	
  Total Service

  Price per Facility

  	
   

  
	
  1 year

  	
   

  	
  $

  	
  [   

  	
  ]

  	
  $

  	
  [   

  	
  ]

  
	
  3 years

  	
   

  	
  $

  	
  [   

  	
  ] 

  	
  $

  	
  [   

  	
  ]

  
	
  5 years

  	
   

  	
  $

  	
  [   

  	
  ] 

  	
  $

  	
  [   

  	
  ]

  

 

Cytyc will perform
corrective maintenance (Service) on the ThinPrep® 2000 Processors at no additional
charge to LabCorp during the Term of this Agreement for any ThinPrep 2000
Processors previously placed or any new ThinPrep Processors placed under this
Agreement.

 

Notwithstanding the
above, Cytyc shall provide service for any ThinPrep 2000 Processors purchased
by LabCorp prior to or after the commencement of this Agreement , in accordance
with the Service Pricing Table above. 
Service will be provided by one of the following methods at the sole
discretion of Cytyc:

1.               Repairing the
instrument in the laboratory.

2.               Replacing out the
system while repairs are being performed.

 

Additional services shall
include but are not limited to the following:

Toll free phone service
and technical support during normal service hours

On-site field service
response within 24-48 hours

Annual Preventive
Maintenance visit

On-site technical
lectures for staff, if requested by LabCorp

Technical Service
Representative visits as requested

 

B.             ThinPrep Imaging
System

 

During the Term, Cytyc
shall provide to LabCorp On-site Imager service and technical support service
during Cytyc’s standard service business hours. 
LabCorp agrees to make the Imager available to Cytyc at mutually
acceptable prearranged times in order for Cytyc to perform the service.

 

Cytyc Cytology
Applications Specialists will be at each LabCorp site during the “go live”
period for the Imager.

 

11

 

II.             TRAINING

 

[    
].  For laboratories that have been
trained by Cytyc at Cytyc’s headquarters in Boxborough, MA, additional training
of laboratory personnel will be conducted by Cytyc Cytology Application
Specialists.  This additional training
will be conducted at LabCorp laboratories. 
Requests by LabCorp for additional on-site training can be scheduled and
coordinated through Cytyc’s Technical Service Department.  [     ].

 

12

 

ADDENDUM F

 

Cytyc Limited Warranty on Products

 

The Products (Imager,
ThinPrep 2000 Processor (“T2000”), ThinPrep 3000 Processor (“T3000”) and ThinPrep
Pap Test) are warranted against defects in workmanship and materials for the
Term of the Agreement.  Cytyc may
periodically notify LabCorp of software updates in the Product; Cytyc assumes
no liability for Product if LabCorp declines to permit Cytyc to update the
software. Cytyc’s sole obligation under this warranty is to repair or replace
any defective Product (including the software). 
Replacement parts, which may be reconditioned, are warranted from the
date of installation for the remainder of the original Warranty Period. This
warranty shall not apply to defects resulting from misuse, negligence or
accident, including, without limitation: operation outside of the environmental
specifications for the Product; multiple use of filters, use of unauthorized
supplies; performance of improper or inadequate maintenance (other than
maintenance required in accordance with the Operator’s manual) by LabCorp or
its agents or employees or any third party; installation of software not
supplied by Cytyc; any attempt to erase or corrupt any patient or slide records
maintained by the Product: any attempt by LabCorp or its agents or employees to
gain access to those areas of the Product accessible only to authorized service
personnel; any attempt by LabCorp or its agents or employees to service those
aspects of the Product that may only be serviced by authorized Cytyc personnel;
improper use or connection to incompatible equipment; modifications to the
Product not authorized by Cytyc; and external causes beyond the control of
Cytyc such as, but not limited to, power failure. THE FOREGOING PROVISIONS SET
FORTH CYTYC’S SOLE AND EXCLUSIVE REPRESENTATIONS, WARRANTIES AND OBLIGATIONS
WITH RESPECT TO THE PRODUCT, AND CYTYC MAKES NO OTHER WARRANTY OF ANY KIND
WHATSOEVER, EXPRESS OR IMPLIED.  CYTYC
SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE, WHETHER ARISING FROM A STATUTE OR OTHERWISE IN LAW,
EQUITY OR FROM A COURSE OF DEALING OR USAGE OF TRADE.  CYTYC’S LIABILITY ARISING OUT OF THE
MANUFACTURE, SALE OR SUPPLY OF THE PRODUCT(S) OR SERVICES OR ITS USE OR
DISPOSITION, WHETHER BASED UPON WARRANTY, CONTRACT, TORT OR OTHERWISE, SHALL
NOT EXCEED THE ACTUAL PURCHASE PRICE PAID BY LABCORP FOR THE PRODUCT OR
SERVICES EXCEPT AS PROVIDED IN PARAGRAPH O OF THE AGREEMENT.  SUCH LIMITED WARRANTY IS GIVEN SOLELY TO
LABCORP AND IS NOT GIVEN TO, NOR MAY IT BE RELIED UPON BY, ANY THIRD PARTY
INCLUDING, WITHOUT LIMITATION, CUSTOMERS OF LABCORP.  THIS WARRANTY IS VOID UPON TRANSFER OF PRODUCT
BY LABCORP TO ANY ENTITY WHICH IS NOT AN AFFILIATED LABORATORY.  SOME STATES DO NOT ALLOW THE EXCLUSION OF
IMPLIED WARRANTIES SO THE ABOVE EXCLUSIONS MAY NOT APPLY TO YOU.  YOU MAY ALSO HAVE OTHER RIGHTS, WHICH VARY,
FROM STATE TO STATE.

 

13Exhibit 10.1

 

	
  Notice
  of Grant of Stock Option

  	
  MANUGISTICS
  GROUP, INC.

  
	
  and
  Option Agreement (Performance Based)

  	
  ID:
  52-1469385

  
	
  (the
  “Option Agreement”)

  	
  9715
  KEY WEST AVENUE

  
	
   

  	
  ROCKVILLE
  MD 20850

  

 

	
  [Name]

  	
  Grant
  Number:

  	
  [   ]

  
	
  [Address]

  	
  Plan:

  	
  1998

  
	
   

  	
  ID:

  	
  [   ]

  

 

Dear
[name]:

 

Effective  [date] 
you have been granted a Non-Qualified Stock Option (the “Stock Option”)
to buy [# ] shares of Manugistics Group, Inc. (the “Company”) common stock at
an exercise price of  $[  ] per share, with an expiration date of [date]
..    The total exercise price to acquire
all of the shares granted is $[  ].

 

The
shares will vest [VESTING SCHEDULE] beginning on [VEST START  DATE].

 

Vesting Schedule:   Vests on the earlier of: (y) the Company
achieving adjusted earnings per share over any four consecutive fiscal quarters
of $.08, at which time 50% of the outstanding option shall vest, or adjusted
earnings per share over any four consecutive fiscal quarters of $0.12, at which
time 100% of the outstanding options shall vest or (z)  the seventh anniversary of the date of
grant.  Adjusted earnings per share shall
be calculated for this purpose in the same manner as for the Company’s public
disclosures.

 

	
  Shares

  	
  Expiration

  
	
   

  	
   

  
	
  [details]

  	
   

  

 

To
the extent shares are vested, you may exercise the Stock Option in minimum
increments of 50 shares or, if fewer, the total number of shares then
exercisable.  At the time of exercise,
you are required to pay the exercise price and the applicable taxes by cash or
check in U.S. dollars.

 

If
your employment with Manugistics is terminated (other than for death or
disability), the Stock Option will continue to vest and be exercisable through
the later of your termination date or any period during which you are receiving
severance payments, after which vesting shall cease.  Thereafter, you may continue to exercise the
Stock Option to the extent your shares are vested for the thirty – day period
following the last date of vesting.  If your
employment terminates due to your 
permanently disability, vesting shall cease on the date you are
determined to be permanently disabled and you shall have one (1) year from that
date to exercise your Stock Option to the extent your shares are vested.  If you die while employed by Manugistics,
vesting shall cease on your date of death and your beneficiaries or your estate
have one (1) year from the date of death to exercise the Stock Option to the
extent your shares are vested.

 

By
your acceptance, you agree that this Stock Option is granted under the Plan and
is governed by this Option Agreement and the terms and conditions of the
Plan.  A copy of the Plan is incorporated
by this reference and can be found in the Company’s Employee Encyclopedia.  As stated in Section 5(c) of the Plan, any
interpretations, decisions, or actions made by the Committee administering the
Plan will be final, conclusive and binding. 
The grant of this Stock Option shall not prevent the Company from
terminating your employment or modifying the conditions of your employment at
any time.

 

Please
electronically accept this Option Agreement and print a copy for your records.

 

	
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