Document:

EXHIBIT 10.1-10Q900

EXHIBIT 10.1

AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment dated as of August 1, 2000, is by and between Temptronic Corporation, a Delaware corporation, with its principal place of business in Newton, Massachusetts (the "Company"), and William M. Stone of 12 Samuel Drive, North Grafton,
Massachusetts 01536 (the "Employee").

RECITALS

The Company and the Employee entered into an Employment Agreement dated March 9, 2000 (the "Employment Agreement").

The Company and the Employee desire to amend the Employment Agreement as set forth in this Amendment to Employment Agreement.

NOW, THEREFORE, the Company and the Employee, intending to be legally bound, hereby agree to amend the Employment Agreement as follows:

1. Definitions.
All capitalized terms used and not defined herein shall have the meanings given to them in the Employment Agreement unless otherwise indicated by the context.

2. Amendments. 
(I) Section 4(b) of the Employment Agreement is hereby amended and restated to read in its entirety as follows: 
"(b) Percent of Profit Bonus. For each full calendar year during the term of this Agreement, the Employee shall receive a bonus equal to 1% of the pre-tax profit of the Company during such fiscal year. Pre-tax profit shall be determined by the
Company's independent auditors in accordance with generally accepted accounting principles, except that such computation shall not take into account the bonus payable pursuant to this Section 4(b) but pre-tax profit will be computed after deduction for the bonus amount paid during such fiscal year pursuant to Section 4(e). The bonus payable pursuant to this Section 4(b) shall be prorated for any portion of a calendar year included within the term of this Agreement."

(II) A new Section 4(e) of the Employment Agreement is hereby added reading in its entirety as follows:
"(e) Fixed Bonus.
(i) In addition to the bonus payable pursuant to Section 4(b), the Employee shall receive additional fixed bonus amounts as follows:

	
Payable Date
	
 
	
Amount

	
8/1/00

8/1/01

8/1/02

8/1/03

8/1/04
	
 
	
$80,000

$80,000

$80,000

$80,000

$80,000

 
The fixed bonus amounts payable pursuant to this Section 4(e), are conditioned upon the Employee's continued employment with the Company on the respective Payable Date; provided, however, that upon the occurrence of any of the following events, the
remaining bonus amounts will be accelerated and become payable within thirty days thereafter: (A) a Change in Control (as defined below) of the Company's parent, inTEST Corporation ("inTEST"); (B) the Employee's death or disability; or (C) the termination
of the Employee's employment by Temptronic without cause as provided in this Agreement.

 

 

(ii) "Change of Control" shall be deemed to have occurred upon the earliest to occur of the following events:
(A) The date the stockholders of inTEST (or the Board of Directors, if stockholder action is not required) approve a plan or other arrangement pursuant to which inTEST will be dissolved or liquidated;

(B) The date the stockholders of inTEST (or the Board of Directors, if stockholder action is not required) approve a definitive agreement to sell or otherwise dispose of all or substantially all of the assets of inTEST;

(C) The date the stockholders of inTEST (or the Board of Directors, if stockholder action is not required) and the stockholders of the other constituent corporation (or its board of directors if stockholder action is not required) have approved a
definitive agreement to merge or consolidate inTEST with or into such other corporation, other than, in either case, a merger or consolidation of inTEST in which holders of shares of the Common Stock of inTEST immediately prior to the merger or
consolidation will hold at least a majority of the ownership of common stock of the surviving corporation (and, if one class of common stock is not the only class of voting securities entitled to vote on the election of directors of the surviving
corporation, a majority of the voting power of the surviving corporation's voting securities) immediately after the merger or consolidation, which common stock (and, if applicable, voting securities) is to be held in substantially the same proportion as
such holders' ownership of the Common Stock of inTEST immediately before the merger or consolidation; or

(D) the date any entity, person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities and Exchange Act of 1934, as amended (the "Exchange Act")), other than (x) inTEST or any of its Affiliates (as defined below) or any
employee benefit plan (or related trust) sponsored or maintained by inTEST or any of its Affiliates or (y) any entity, person or group (other than a group in which an entity described in (x) is a member) who, on the date of this Amendment shall have been
the beneficial owner of at least twenty percent (20%) of the outstanding Common Stock of inTEST shall have become the beneficial owner of, or shall have obtained voting control over, more than fifty percent (50%) of the outstanding shares of the Common
Stock of inTEST. The term "Affiliates" shall mean any corporation or other business organization in which inTEST owns, directly or indirectly, 50% or more of the voting stock or capital at the date of this Amendment."

(III) The last sentence of Section 5(b) of the Employment Agreement is hereby amended and restated to read in its entirety as follows: 
"In addition, the Employee or others so entitled shall be paid (i) any bonus to which the Employee may be entitled pursuant to Section 4(b) that may have accrued through the effective date of termination, as soon as practicable after the determination
of such amount, and (ii) the remaining fixed bonus amounts, if any, as provided in Section 4(e)(i)."

3. Reaffirmation.
Except as modified hereby, all of the terms, covenants and conditions of the Employment Agreement are hereby in all respects ratified, reaffirmed and confirmed and shall continue in full force and effect.

4. Counterparts.
This Amendment of Employment Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same
instrument.

IN WITNESS WHEREOF, this Amendment of Employment Agreement has been executed by the Company, by its duly authorized officer, and by the Employee, as of the date first above written.

 

 

	
 
	
 
	
TEMPTRONIC CORPORATION

	
 

/s/ William M. Stone

William M. Stone
	
 

By:
	
 

/s/ Hugh T. Regan, Jr.

Hugh T. Regan, Jr.

Secretary and Treasurer1190 Borregas Avenue

 [**] CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED WITH THE SEC.

Cepheid

1190 Borregas Avenue

Sunnyvale, CA 94089-1302

Telephone: 408-541-4191

Fax: 408-541-4192

July 11, 2000

TAKARA SHUZO CO., LTD.

Biomedical Group

Seta 3-4-1, Otsu Shiga

520-2193 JAPAN

Attn: Ikunoshin Kato, Ph.D., President

 Dear Dr. Kato,

This letter is to confirm the terms of the agreement between CEPHEID
("CEPHEID") and TAKARA Shuzo Co., Ltd. ("TAKARA") (the "Parties"), under which
TAKARA will serve as distributor, in the defined Territory , of the Smart
CyclerTM System, accessories, and reaction tubes developed by and made by
or for CEPHEID.

1. Product Line. The "Products" shall include the Smart Cycler ®
System described in Exhibit A, the accessories listed in Exhibit A, and the
reaction tubes described in Exhibit A. Excluded is the computer, which TAKARA
must purchase for integration into the system. The "Products" shall further
include additional, upgraded and improved Smart CyclerTM Systems,
accessories and reaction tubes introduced by CEPHEID as a replacement for
existing Products and intended for sale in the life science research market (the
"Field"). Additional thermal cyclers, accessories, and reaction tubes offered by
CEPHEID shall become "Products" only upon agreement of the parties. All Products
shall conform to CEPHEID's specifications as have been disclosed to TAKARA. All
outer shipping cartons shall conform to applicable Department of Transportation
specifications.

2. Distribution Rights. CEPHEID grants to TAKARA the right to
distribute the Products in Japan, South Korea, Taiwan. (the "Territory") into
the life science research market (the "Field"). Such right shall be exclusive,
except for CEPHEID's reserved right to sell directly to the end user customers
listed in Exhibit B.

2a. Definition of Field. Rights are granted by CEPHEID to TAKARA for
distribution of the Products into the Field of life science research.
Specifically excluded from the Field are human and veterinary diagnostics
(including applications subject to regulatory labeling including "For
Investigational Use Only" or "For Research Use Only"), environmental testing,
quality assurance and control testing, identity and forensic testing, and
testing for biothreat agents.

2b. Definition of Territory. Rights are granted by CEPHEID to
TAKARA for distribution of the Products into Japan, South Korea, and Taiwan.

2b. Exclusive Supplier. While the exclusive
distribution rights under

Paragraph 2 remain in force, CEPHEID will be the exclusive
supplier to TAKARA of systems capable of performing thermal cycling with
real-time optical detection.

2c. Sales Targets; Loss of Exclusivity. The parties
have set minimum sales targets for T AKARA, in terms of units of Smart
CyclerTM Systems (units defined as the total number of 16-site Smart
CyclerTM processing blocks, either as part of a Starter System or as Add-On
Blocks) in each of the countries comprising the Territory. Such sales targets
shall not represent commitments to purchase; but if TAKARA fails to achieve a
sales target, CEPHEID may, by written notice to TAKARA terminate the exclusivity
of TAKARA's distribution rights under Paragraph 2. Such written notice shall be
given within 90 days after the end of the sales target period and shall become
effective 30 days after TAKARA's receipt of the notice. Such termination of
exclusivity shall be CEPHEID's sole remedy for TAKARA's failure to achieve sales
targets. The sales targets are as follows:

                           Year 1               Year 2           Year 3
                          --------             --------         --------
Japan                      [**] units            [**] units       [**] units

South Korea                [**] units            [**] units       [**] units

Taiwan                     [**] units            [**] units       [**] units

TAKARA shall provide CEPHEID within 30 days after the first of each March,
June, September, and December a true and accurate accounting report of Products
(including units sold and selling price) sold on a country-by-country basis
during the preceding 3 months. In addition, T AKARA shall provide to CEPHEID on
a quarterly basis an updated customer and contact list.

 

TAKARA shall also provide CEPHEID with one year (comprised of four quarters)
territory forecasts that will be updated on a quarterly basis and will include
projections for each of the upcoming three months. While the forecast will not
be binding in total, the projections provided for the upcoming quarter will
represent a purchase commitment.

3. Product Price. The transfer prices to T AKARA for the Products
shall be as listed in Exhibit A. These prices shall be fixed for the period
ending on the first anniversary of this Agreement. Thereafter, prices may be
reviewed and increased annually due to increases in production cost, provided
that such annual increase will not exceed 10%. Such production cost increases
will be subject to verification at TAKARA's option and expense, utilizing the
accounting firm serving CEPHEID at the time. In addition the prices may be
reviewed and renegotiated at the request of either party, but shall not be
changed more than once in any given year. If in the course of such review and
renegotiation the Parties are unable to agree upon new prices, the existing
prices will remain in effect for one year after which time they will again be
subject to review and renegotiation if either Party requests. Each shipment
shall be billed at the price in effect at the time of order placement. Notice of
price changes shall be sent to:
TAKARA SHUZO CO., LTD.

Biomedical Group

Seta 3-4-1, Otsu-Shiga

520-2193 JAPAN

3a. Payment Terms. Payment terms shall be net forty-five days from
receipt

of valid invoice. Payments will be made in US dollars.

4. Warranty. CEPHEID shall warrant all Smart CyclerTM System
Products for 12 months from delivery to TAKARA's customer and all accessories
(except the computer) for 12 months from delivery to TAKARA's customer. CEPHEID
shall provide or reimburse T AKARA for parts used in making repairs during the
warranty period and shall make parts available after the warranty period to
TAKARA at a discount of [**]% from CEPHEID's list price for such parts.

CEPHEID also warrants that the Smart CyclerTM System to be distributed
by TAKARA in the Field and Territory shall be an "authorized thermal cycler"
under the terms of the Thermal Cycling Authorization Program administered by PE
Biosystems, a division of PE Corporation.

5. Computer System. .TAKARA shall be responsible for the direct
purchase of compatible computer systems to be sold to end users for use with the
Products. CEPHEID will provide to TAKARA specifications and recommendations for
an applicable computer. If TAKARA selects a preferred computer vendor and model
that is different than that being supplied by CEPHEID with its own Smart Cycler
System, TAKARA will provide Cepheid at no cost one appropriately configured
computer for software qualification and will pay CEPHEID's direct costs of
qualifying the software.

6. Shipping. CEPHEID will ship all Smart CyclerTM System Products
(systems, accessories and reaction tubes) FOB Sunnyvale, CA to TAKARA's
designated distribution centers in Japan. TAKARA will be responsible for paying
all freight charges and import duties.

7. Marketing and Training Support. CEPHEID will provide to TAKARA
English language copies of the User's Manual, Service Manual, and other
promotional support materials used to support the sale of the Products in the US
market. T AKARA will be responsible for the translation and production of such
materials in a form suitable for use in their Territory .

Prior to commercial launch of the Products in the Territory, CEPHEID will
provide initial technical and sales training to TAKARA personnel at the CEPHEID
facilities in Sunnyvale, California. In the case that such training is conducted
in Japan at TAKARA's request, TAKARA shall pay the travel and lodging expenses
of CEPHEID personnel conducting the training.

8. Customer Support and Service. T AKARA will be responsible for
providing direct support to its local distributors and end user customers. In
order to support TAKARA's efforts to support TAKARA's customers, CEPHEID will
provide to T AKARA, as reasonable and appropriate, technical and product updates
and will respond to questions from TAKARA personnel received via phone, fax, or
e-mail. CEPEHID will not be responsible for providing support directly to TAKARA
local distributors or end-user customers.

9. Customer Complaint Records. TAKARA shall establish and maintain
and, as necessary, make available to CEPHEID, customer complaint records to
enable CEPHEID to operate under the appropriate ISO and QSR regulations and
standards governing the manufacture and distribution of Products. 

10. Term. The term of this Agreement shall be from the date of mutual
execution of this Letter Agreement and extending for three years from the date
of initial product launch. Thereafter, the Agreement shall remain in force for
successive twelve month periods, unless either party gives written notice of
non- renewal to the other at least sixty (60) days prior to the current
expiration date.

11. Amendments This Agreement may not be amended or modified except in
writing signed by both parties, and no course of dealing by or between the
parties shall be deemed to affect any such amendment or modification.

12. Public Announcements. Neither Party shall issue or cause to be
issued any press release or public announcement or otherwise disclose the
existence of this Agreement or the transactions contemplated hereby except as
and to the extent that the Parties agree, in writing.

13. Material Breach. Either party shall be entitled to terminate this
Agreement by not less than 60 days' written notice if the other party is in
material breach of any provision of this Agreement; provided that if such breach
is capable of being remedied and is remedied before expiration of the said 60
day period, the notice of termination shall not take effect.

14. Bankruptcy. Either party may terminate this Agreement upon the
bankruptcy or insolvency of the other party.

15. Assignment. Neither party may assign, subcontract, or delegate its
rights and obligations under this Agreement without the prior written consent of
the other party.

16. Governing Law. This Agreement shall be governed by the laws of the
State of California applicable to contracts between California residents wholly
to be performed in the State of California.

17. Force Majeure. Neither party shall be liable for failure to
perform or delay in performing any provision of this Agreement where such
failure results from an act of God, acts of civil or military authority, fires,
strikes, floods, epidemics, quarantine, restrictions, riots, delays in
transportation, shortage of raw materials, fuel or power or from any other cause
whether or not of the same nature as the foregoing beyond the control of the
party in question.

18. Notices. Any notice required or permitted to be given pursuant to
this Agreement shall be delivered by hand at or sent by pre-paid registered or
certified mail or by facsimile to the party in question at the address set out
below or such other address as shall have been notified to the other party, and
any notice sent by registered or certified mail shall be deemed to have been
given on the third day after the date of mailing

If to CEPHEID:

Cepheid

1190 Borregas Avenue

Sunnyvale, CA 94089

Attn: Cris McReynolds

Telephone No. 408-541-4191

Fax No.408-734-1260

If to TAKARA:

Takara Shuzo Co., Ltd.

Biomedical Group

Seta 3-4-1, Otsu, Shiga 520-2193, Japan

Attn: Director, Marketing & Sales, Biomedical Group

Telephone No. 077-543-7247

Fax No. 077-543-9254

19. Severability. Should any part of this Agreement determined by a
court of competent jurisdiction to be invalid or unenforceable, such
determination shall not affect the validity or enforceability of the remainder
unless the part so determined invalid or unenforceable impairs the value of the
whole Agreement to either party.

20. Entire Agreement. This agreement sets forth the entire agreement
between the

parties relating to the subject matter hereof and supercedes any and all
prior and contemporaneous agreements, discussions, understandings and
correspondence.

Please signify your acceptance of this Agreement by signing below and
returning one original to CEPHEID.
Yours truly,

/s/ THOMAS L. GUTSHALL

Thomas L. Gutshall

Chairman and CEO

Cepheid

Agreed and Accepted:

TAKARA SHUZO CO., LTD.

By: /s/ Ikunoshin Kato, Ph.D.

Name: Ikunoshin Kato, Ph.D.

Title: President, Biomedical Group

7/19/2000

Date

Exhibits:

A. - Products and Prices

B. - Customer Groups Excluded From Exclusivity Provision

 

 
EXHIBIT A

 

SMART CYCLER@ SYSTEM
(see attached flyer for description and specifications)

 

Part#                 Description                              TAKARA Price
-------         -----------------------------------        -----------------
TBD               Smart Cycler@ Processing Block             $[**] (U.S.)
                  (16-site block, Japan compatible,
                   w/ USB cable)

TBD               Smart Cycler@ Accessory Pack*              $[**] (U.S.)

* Accessory pack includes 1 mini-centrifuge, four reaction tube racks, one
cooling block, software, users manual.

ACCESSORIES:

Part#                 Description                              TAKARA Price
-------         -----------------------------------        -----------------
TBD               Mini-Centrifuge                            $[**] (U.S.)

TBD               Tube Racks (pack of 4)                     $[**] (U.S.)

TBD               Cooling Block                              $[**] (U.S.)

REACTION TUBES:

Part#                 Description                              TAKARA Price
-------         -----------------------------------        -----------------
TBD               1 Carton of 25 ~L Smart Cycler@           $[**] (U.S.)
                  Reaction Tubes (20 bags of 50 tubes ea)

TBD               1 Carton of 100 ~L Smart Cycler@          $[**] (U.S.)
                  Reaction Tubes (20 bags of 50 tubes ea)

 

 

 

 

 

 

 

 
EXHIBIT B

End User Customers Groups Excluded From The Exclusivity Provisions Of
Paragraph 2
[**]

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