Document:

exv10w1

 

Exhibit 10.1

December 20, 2002

CONFIDENTIAL

Roche Molecular Systems, Inc.

4300 Hacienda Drive

Pleasanton, CA 94588-2722

Attention: Peter Saladin, Vice President, Finance

Re: Amendment No. 3 to the Letter Agreement

Dear Peter:

On April 29, 2001, Roche Molecular Systems, Inc., a Delaware corporation and an
affiliate of F. Hoffmann-La Roche, Ltd., a corporation organized under the laws
of Switzerland (“Roche”), and Digene Corporation, a Delaware corporation
(“Digene”), entered into a letter agreement to set forth the understanding
between Roche and Digene regarding the sale, marketing and distribution of
Digene’s Hybrid Capture® HPV products and the negotiation of a strategic
collaboration and relationship, which letter agreement was amended by the
Amendment to the Letter Agreement dated September 7, 2001 (which is hereinafter
referred to as Amendment No. 1) and the Amendment to the Letter Agreement dated
October 24, 2001 (which is hereinafter referred to as Amendment No. 2). The
Letter Agreement dated April 29, 2001, Amendment No. 1 and Amendment No. 2 are
collectively hereinafter referred to as the “Letter Agreement”. The purpose of
this letter agreement (“Amendment No. 3”) is to amend certain terms of the
Letter Agreement to reflect our current agreements and understandings. Upon
execution of this Amendment No. 3 below, each of Digene and Roche agrees to be
bound by the terms and conditions of this Amendment No. 3. All capitalized
terms used in this Amendment No. 3 without definition have the meanings given
to such terms in the Letter Agreement.

	1.	 	Equipment Buy-Back. Paragraph 3(c) of the Letter Agreement is
hereby deleted in its entirety and replaced with the following:

	 	 	“3.	Distribution.
	 

	 	 	 	(c)	Equipment Buy-Back. In the event that
no agreement is reached under paragraph 6(a), then Digene
shall have the option, exercisable at any time on or
after the date of this Amendment No. 3, to buy back from
Roche equipment purchased by Roche from Digene that is
then owned by Roche and was in use for HPV testing in
customers’ laboratories on June 30, 2002 at such
equipments’ December 31, 2002 depreciated value, based on
a straight-line, four-year depreciation schedule. If
such equipment is not purchased by Digene as described
above and if Roche has met all of its obligations under
this Agreement (which obligations do not include a
requirement that any agreement be reached under paragraph
6(a)), then Digene shall extend the wind-down period
under paragraph 3(b) by an additional twenty-four months
beginning January 1, 2003 and ending December 31, 2004.”

	2.	 	Equipment Repurchase. Digene hereby executes the option, set forth
in Section 1, paragraph 3(c) of this Amendment No. 3, to buy back from
Roche equipment purchased by

 

 

	 	 	Roche from Digene pursuant to the Letter Agreement that is owned by Roche
as of the date of this Amendment No. 3 and was in use for HPV testing in
customer laboratories on June 30, 2002 in the Territory (the “Placed
Equipment”). Digene shall repurchase the Placed Equipment at such
equipments’ December 31, 2002 depreciated value, based on a
straight-line, four-year depreciation schedule as described in Section 1,
paragraph 3(c) of this Amendment No. 3.
	 
	3.	 	Status of Equipment.

	 	a.		Placed Equipment. Roche will provide Digene with the
following information to document the status of the Placed
Equipment, by December 31, 2002 to the extent reasonably
available and otherwise by February 28, 2003:
	 

	 	 	 	i.	List of all equipment placed including
customer location, equipment description, luminometer
serial numbers, date of placement, customer site, contact
name with telephone number, fax number and address, and
equipment placement agreement or comparable written
documentation of equipment ownership, and customer
contracts; and
	 
	 	 	 	ii.	Depreciated value of the Placed Equipment
as of December 31, 2002 on the books of Roche and
documentation to support such depreciated value.
	 

	 	b.	 	Option to Repurchase Additional Placed Equipment.
Roche is currently the owner of certain luminometers and related
equipment purchased by Roche from Digene pursuant to the Letter
Agreement but placed at up to three customer locations after June
30, 2002. For up to all three of such customers, Digene agrees
to repurchase such luminometers and related equipment (the
“Option Equipment”) on the same terms as the Placed Equipment.
Roche will provide the following information for the Option
Equipment to Digene by December 31, 2002 to the extent reasonably
available and otherwise by February 28, 2003:
	 

	 	 	 	i.	Instrument description, including
luminometer serial numbers, date of placement, customer
site, contact name with telephone number, fax number and
address and instrument placement agreement or comparable
written documentation of instrument ownership; and
	 
	 	 	 	ii.	Depreciated value of the Option Equipment
as of December 31, 2002 on the books of Roche and
documentation to support such depreciated value.
	 

	 	c.	 	Repurchase of Inventoried Equipment. Digene shall
repurchase from Roche the equipment listed on Schedule I attached
hereto and located in the Roche locations set forth on
Schedule I
(the “Inventoried Equipment”). The repurchase price for the
Inventoried Equipment shall be equal to a mutually agreed-upon
discount to the Transfer Price paid by Roche to Digene for the
Inventoried Equipment pursuant to the Letter Agreement. After
the Closing Date (as defined below) Roche will transfer all
Inventoried Equipment from Roche locations to its facility in
Mannheim, Germany. During the week of February 10, 2003,
representatives of Digene shall have access to the Mannheim
facility, and to any other Roche locations containing the
Inventoried Equipment, and shall have the right to inspect such
Inventoried Equipment. Digene and Roche shall agree upon the
condition of such Inventoried Equipment and its suitability for
repurchase prior to its shipment to the Digene affiliate or
representative identified by Digene at or prior to that time. By
February 14, 2003, Roche will ship all of the mutually
agreed-upon Inventoried Equipment to such Digene affiliate or
representative.
	 
	 	d.	 	Location of Equipment. Neither Roche nor any of its
Affiliates, without Digene’s prior written approval, shall remove
or authorize the removal of any of the Placed Equipment or Option
Equipment from customer locations or, except as set forth in
Section 3(c) of this

2

 

	 	 	 	Amendment No. 3, move or authorize the move of the Inventoried
Equipment from its location prior to, on or after the Closing Date,
unless otherwise determined by Digene pursuant to written
instructions to Roche.

	4.	 	Calculation of Depreciated Value of Placed Equipment, Option
Equipment and Inventoried Equipment. By December 31, 2002, Roche shall
provide Digene with an initial summary of the Placed Equipment, the
Option Equipment and the Inventoried Equipment (collectively, the
“Repurchased Equipment”) and the repurchase price for such Repurchased
Equipment, calculated, for the Placed Equipment and the Option
Equipment, as set forth in Section 1, paragraph 3(c) of this Amendment
No. 3 and for the Inventoried Equipment as described in Section 3(d) of
this Amendment No. 3 (the “Repurchase Price”). The final determination
of the Repurchase Price is subject to the reconciliation activities
described in Section 6 of this Amendment No. 3.
	 
	5.	 	Closing of Repurchase. On January 6, 2003, or such earlier date as
the parties may agree (the “Closing Date”):

	 	a.	 	Digene Deutschland GmbH (“Digene Germany”) will pay to
Roche, by wire transfer pursuant to instructions received by
Digene Germany from Roche prior to the Closing Date, the portion
of the Repurchase Price attributable to all Placed Equipment and
Option Equipment located in Germany, Digene Germany shall issue a
promissory note to Roche, substantially in the form of Attachment
A hereto, with a preliminary aggregate principal amount equal to
the portion of the Repurchase Price established pursuant to
Sections 3(c) and 4 of this Amendment No. 3 attributable to the
Inventoried Equipment, and subject to Section 6 of this Amendment
No. 3 (the “Note”), Digene shall deliver to Roche a preliminary
Guarantee, substantially in the form of Attachment B hereto (the
“Guarantee”), and Roche shall deliver to Digene Germany a bill of
sale transferring title to all of such Repurchased Equipment to
Digene Germany, which bill of sale shall be substantially in the
form of Attachment C to this Amendment No. 3.
	 
	 	b.	 	Digene (UK) Limited (“Digene UK”) will pay to Roche, by
wire transfer pursuant to instructions received by Digene UK from
Roche prior to the Closing Date, the portion of the Repurchase
Price attributable to all Placed Equipment and Option Equipment
located in the Territory other than in Germany, and Roche shall
deliver to Digene UK a bill of sale transferring title to all of
such Repurchased Equipment to Digene UK, which bill of sale shall
be substantially in the form of Attachment C to this Amendment
No. 3.

	6.	 	Reconciliation Period. By no later than March 31, 2003, Digene
shall provide Roche with the final summary of the confirmed Repurchased
Equipment. If such reconciliation activities reveal that some
equipment repurchased did not meet the definition of Placed Equipment,
Option Equipment, or Inventoried Equipment, or result in a final
Repurchase Price different than the Repurchase Price determined in
accordance with Section 4 of this Amendment No. 3, on such date Digene
shall provide Roche with a report of its findings, together with
documentation for the basis of any proposed readjustment. Within not
later than ten (10) business days after the issuance of such report,
subject to the consent of Roche, which consent shall not be
unreasonably withheld or delayed:

	 	a.	 	If such reconciliation report relates to Placed
Equipment, Option Equipment or Inventoried Equipment repurchased
by Digene Germany pursuant to Section 5(a) of this Amendment No.
3, thereby reducing such portion of the Repurchase Price, Digene
Germany shall issue to Roche a final Note with the aggregate
principal amount equal to such final attributable portion of the
Repurchase Price and Digene shall execute and deliver to Roche a
final Guarantee.
	 
	 	b.	 	If such reconciliation report relates to Placed
Equipment or Option Equipment repurchased by Digene UK pursuant
to Section 5(b) of this Amendment No. 3, thereby

3

 

	 	 	 	reducing such portion of the Repurchase Price, Roche shall rebate
the difference to Digene UK by wire transfer pursuant to
instructions received by Roche from Digene UK at the time the
report is issued.

	7.	 	Status of Letter Agreement. On and after the date of this
Amendment No. 3, the terms and provisions of the Letter Agreement,
except as amended hereby, shall continue in full force and effect. If
a conflict arises between the terms of this Amendment No. 3 and the
terms of the Letter Agreement, the terms of this Amendment No. 3 shall
control.
	 
	8.	 	The parties agree that time is of the essence with respect to the
provisions of this Amendment No. 3.

Please indicate your agreement with the terms and conditions of this Amendment
No. 3 by executing this Amendment No. 3 in the space provided below and
returning an executed counterpart of this Amendment No. 3 to me.

Best Regards,

DIGENE CORPORATION

	 
	By: /s/ Evan Jones
	

	Evan Jones

Chairman and Chief Executive Officer

Agreed to by:

Roche Molecular Systems, Inc.

	 
	By: /s/ Peter Saladin
	

	Peter Saladin

Vice President, Finance

cc: Morris Cheston, Jr., Esquire

4<PAGE>
                                                                    EXHIBIT 10.9

                      FISCAL YEAR 2003 MANAGEMENT BONUS PLAN OF
                       HUTCHINSON TECHNOLOGY INCORPORATED

Hutchinson  Technology  Incorporated  ("HTI") has a  management  bonus plan that
covers  executive  officers and certain other  management-level  employees.  The
decision to pay out bonuses is made  annually by the  Compensation  Committee of
HTI's Board of Directors.  The Committee's  decision is based primarily on HTI's
attainment of quarterly  earnings per share goals throughout the fiscal year, as
well as other  factors that may be  considered  at the  Committee's  discretion.
Bonuses are paid in cash in the first quarter of the following fiscal year.

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