Document:

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                                                                   EXHIBIT 10.18

[CEPHEID LETTERHEAD]

                                                               December 13, 2000

EUROGENTEC
Parc Scientifique du Sart Tilman
4102 Seraing, BELGIUM
Attn:  Jean-Pierre Delwart, CEO

Dear Mr. Delwart,

This letter is to confirm the terms of the agreement between CEPHEID, a
California corporation with its principle office at 1190 Borregas Avenue,
Sunnyvale, California 94089 ("Cepheid"), and EUROGENTEC, a Belgian company with
its principle office at Parc Scientifique du Sart Tilman, 4102 Seraing, Belgium
("Eurogentec"), together the "Parties", under which Eurogentec will serve as
distributor, in the defined Territory, of the Smart Cycler(TM) System,
accessories, and reaction tubes developed by and made by or for Cepheid.

1)   Products: Cepheid's Smart Cycler System, including processing block,
reaction tubes, accessories, software (but not including computer, which
Eurogentec must provide, according to Cepheid specifications). Product
improvements and upgrades of the Smart Cycler System that are applicable to the
Field will be deemed to be part of "Products".

2)   Distribution Rights: Cepheid grants to Eurogentec the right to distribute
the Products in Belgium, France, Germany, The Netherlands, Switzerland, United
Kingdom, (the "Territory") into the life science research market (the "Field").
Such right will be exclusive, subject to the terms and limitations of this
Agreement.

[***]

2a)  Field: Life science research. The Field does not include 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)  Territory: Belgium, France, Germany, The Netherlands, Switzerland, United
Kingdom.

[***] CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SEC. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

<PAGE>   2

2c)  Exclusivity: Eurogentec will have exclusive rights to sell the Products in
the Territory and Field; however, Cepheid retains the right to make OEM sales of
thermal cyclers, accessories and/or reaction tubes similar to Products which
Cepheid may sell and ship to a firm for resale under that firm's label. In
addition, Cepheid will have rights to sell or have sold Products in the
Territory, but outside the Field, notably to customers carrying out biothreat
testing.

2d)  Exclusive Supplier: While the exclusive distribution rights under Paragraph
2 remain in force, Cepheid will be the exclusive supplier to Eurogentec of
systems capable of performing thermal cycling with real-time optical detection.

2e)  Sales Targets: The following represent minimum sales targets that must be
achieved by Eurogentec in order to maintain exclusivity.

                  Year 1            Year 2           Year 3
                  ------            ------           ------

                  [***]             [***]            [***]

Prior to scheduled commercial launch of the Products by Eurogentec, Eurogentec
will provide Cepheid with a 12 month forecast that will be updated monthly. The
first three months of any updated forecast will represent a binding commitment
to purchase

2f)  Legal Status of Distributor: As the appointed distributor, Eurogentec buys
and sells the products in its own name and for its own account and acts as an
independent trader as regards to both the supplier and the customer.

2g)  Terms of Resale: Eurogentec shall be free to set in-market prices with its
Territory and to set the terms of the resale, except in the case as such terms
would be in conflict with others terms set forth in this Agreement; in which
case the terms of this Agreement shall govern.

3)   Transfer Pricing: Eurogentec will purchase Products from Cepheid according
to the transfer pricing schedule attached as Exhibit A. The Parties will review
the transfer prices six months following date of first commercial launch by
Eurogentec. The prices may be adjusted at that time if market conditions
warrant, by mutual agreement of the Parties. The prices may also be reviewed and
renegotiated at the request of either party following the first anniversary of
this agreement, but shall not be changed more than once in any given year. If in
the course of any 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.

In addition, prices may be reviewed and increased annually, following the first
anniversary of this agreement, due to increases in production cost, provided
that such annual increase will not exceed [***]%. Such production cost increases
will be subject to verification at Eurogentec's option and expense, utilizing
the accounting firm serving Cepheid at the time.

                                       2

<PAGE>   3

Each shipment shall be billed at the price in effect at the time of order
placement. Notice of price changes shall be sent to:

                           EUROGENTEC
                           Parc Scientifique du Sart Tilman
                           4102 Seraing, BELGIUM

3a)  Payment Terms: Payment terms shall be net forty-five days from receipt of
valid invoice. Payments will be made in US dollars.

4)   Shipping: Products will be shipped FOB Sunnyvale, CA to designated
Eurogentec warehouse and distribution facilities. Eurogentec will be responsible
for freight charges, import duties, and taxes.

5)   Warranty: Cepheid shall warrant all Smart Cycler(TM) System Products for 12
months from delivery to Eurogentec's customer and all accessories (except the
computer) for 12 months from delivery to Eurogentec's customer. Cepheid shall
provide or reimburse Eurogentec for parts used in making repairs during the
warranty period and shall make parts available after the warranty period to
Eurogentec at a discount of [***]% from Cepheid's list price for such parts.

6)   Reporting: Eurogentec 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, serial numbers, and selling price)
sold on a country-by-country basis during the preceding 3 months. In addition,
Eurogentec shall provide to Cepheid on a monthly basis an updated customer and
contact list.

Eurogentec 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.

7)   Service: Eurogentec will be responsible for providing direct support to its
end user customers. In order to support Eurogentec's efforts to support its
customers, Cepheid will provide to Eurogentec, as reasonable and appropriate,
technical and product updates and will respond to questions from Eurogentec
personnel received via phone, fax, or e-mail. Cepheid will not be responsible
for providing support directly to Eurogentec end-user customers.

Cepheid will provide to Eurogentec 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. Eurogentec will be responsible for the
translation and production of such materials in a form suitable for use in their
Territory.

                                       3

<PAGE>   4

8)   Training: Prior to commercial launch of the Products in the Territory,
Cepheid will provide an initial technical and sales training session to
Eurogentec personnel at a Eurogentec facility in Europe. Eurogentec shall pay
the travel and lodging expenses of Cepheid personnel conducting the training.

9)   Computer: Eurogentec 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 Eurogentec specifications and recommendations for an
applicable computer. If Eurogentec selects a preferred computer vendor and model
that is different than that being supplied by Cepheid with its own Smart Cycler
System, Eurogentec will provide Cepheid at no cost one appropriately configured
computer for software qualification and will pay Cepheid's direct costs of
qualifying the software. However, Cepheid is not required to modify the software
in order to conform to specific requirements of a computer that is different
from the one recommended by Cepheid.

10)  Term: The term of this Agreement shall be three years from the date of
mutual execution of the Agreement. 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 three months 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.

                                       4

<PAGE>   5

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:    Cristopher McReynolds  (Phone: 408-541-4191 / Fax: 408-734-1260)

If to EUROGENTEC:

Eurogentec

Parc Scientifique du Sart Tilman

4102 Seraing, Belgium

Attn.    Didier Allaer  (Phone:  32-4-366-6110 / Fax: 32-4-365-1604)

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.

                                       5

<PAGE>   6

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

                                       Yours truly,

                                       /s/Thomas L. Gustshall
                                       -----------------------------------
                                       Thomas L. Gutshall
                                       Chairman and CEO
                                       Cepheid

Agreed And Accepted:

EUROGENTEC

By: /s/Didier Allaer
    ----------------------------

Name: Didier Allaer
Title: Business Unit Manager
December 13, 2000
Date

Exhibits          A - Products and Prices

                                       6

<PAGE>   7

                                    EXHIBIT A

SMART CYCLER(R) SYSTEM
    (see attached flyer for description and specifications)
<TABLE>
<CAPTION>
Part #            Description                                          EUROGENTEC Price
------            -----------                                          ----------------
<S>               <C>                                                      <C>
TBD               Smart Cycler(R)Processing Block                          $[***] (U.S.)
                  (16-site block, Europe compatible,
                  w/ USB cable)

TBD               Smart Cycler(R)Accessory Pack*                           $[***] (U.S.)
</TABLE>

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

ACCESSORIES:
-----------
<TABLE>
<CAPTION>
Part #            Description                                          EUROGENTEC Price
------            -----------                                          ----------------
<S>               <C>                                                       <C>
TBD               Mini-Centrifuge                                           $[***] (U.S.)

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

TBD               Cooling Block                                             $[***]  (U.S.)
</TABLE>

REACTION TUBES:
--------------
<TABLE>
<CAPTION>
Part #            Description/Packaging                                EUROGENTEC Price
------            ---------------------                                ----------------
<S>               <C>                                                        <C>
TBD               1 Carton of 25 uL Smart Cycler(R)                          $[***] (U.S.)
                  Reaction Tubes (20 bags of 50 tubes ea)

TBD               1 Carton of 100 uL Smart Cycler(R)                         $[***] (U.S.)
                  Reaction Tubes (20 bags of 50 tubes ea)
</TABLE>

                                       7<PAGE>   1
                                                                   EXHIBIT 10.19

ADDENDUM 1

FISHER CANADA ("DISTRIBUTOR") ADDENDUM TO AGREEMENT BETWEEN CEPHEID
("SUPPLIER") AND FISHER SCIENTIFIC COMPANY L.L.C.

Note: It is the purpose of this Addendum to define contractual terms and
conditions that differ from terms and conditions outlined in the Agreement
between Cepheid and Fisher Scientific Company L.L.C., dated January 10, 2000,
and that apply specifically to the contractual relationship between Fisher
Canada ("Distributor") and Cepheid ("Supplier"). Any terms and conditions in the
Agreement that are not specifically referenced or redefined in this Addendum are
deemed to apply in the contractual relationship between the Distributor and the
Supplier.

2.   Distribution Rights. Supplier grants to Distributor the exclusive right to
distribute the Products in Canada into the Life Science Research Market. Such
rights shall be exclusive except for: (a) Supplier's reserved right to sell
exclusively and directly to the end user customers listed in Exhibit B and (b)
Supplier's right to make OEM sales of thermal cyclers, accessories and/or
reaction tubes similar to Products which Supplier may sell and ship to a firm
for resale under the firm's label.

2b.  Exclusive Supplier. In the event that Supplier chooses to make OEM sales of
thermal cyclers, accessories and/or reaction tubes, Distributor retains the
right to distribute other systems capable of performing thermal cycling with
real-time optical detection.

2c.  Sales Targets; Loss of Exclusivity. Minimum sales target are for the
Canadian market only. Failure of any other Fisher affiliate to meet sales
minimums shall in no way affect this agreement between Distributor and Supplier.
The Sales targets are as follows:

<TABLE>
<CAPTION>
                           Year 1           Year 2
                           ------           ------
                           <S>              <C>
                           [***] units      [***] units
</TABLE>

In lieu of the monthly reporting requirements defined in the Agreement between
Cepheid and Fisher Scientific Company L.L.C., Distributor will provide to
Supplier copies of each customer invoice, at the same time it is sent to the
customer. Included will be customer address and phone number, contact name, unit
serial number, net sales price, and ship date.

The quarterly forecast to be provided to the Supplier by the Distributor, as per
the Agreement between Cepheid and Fisher Scientific Company L.L.C., shall be
updated by the Distributor on a monthly, rolling quarter basis.

3.   Product Price. The Product list prices and transfer prices to Distributor
shall be as listed in Exhibit A. These prices shall be firm through December 31,
2001. Notice of price changes shall be sent to:

                  Marketing Department
                  Fisher Scientific Canada
                  112 Colonnade Road
                  Nepean, Ontario
                  K2E 7L6

4.   Warranty. Intrinsically flawed and defective Products shall be returned by
Distributor to the Supplier for full invoice credit plus shipping charges. Field
retrofits and software upgrades necessary to provide for claimed system
performance will be implemented in Distributor's stock and in Distributor's
customers units at Supplier's expense.

[***] CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SEC. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

<PAGE>   2

The Supplier warrants that the Products will comply and be manufactured,
packaged, labeled and shipped in compliance with all applicable federal,
provincial and local laws, orders, regulations and standards (such as those of
the Canadian Standards Association or equivalent)

5.   Shipping. Products shall be shipped "F.O.B. Freight Collect" to
Distributor's facilities as designated by Distributor. The Supplier shall use
its best efforts to ship orders within 20 working days after order receipt;
Distributor may cancel orders not shipped within 45 working days of order
receipt. The Supplier shall provide blanket Free-Trade certificates in the form
requested by Distributor prior to Distributor commencing the distribution of the
products or on an annual basis and will be responsible for all assessments
levied by Revenue Canada for improper certificates.

8.   Term. After the three year contract term, this Agreement shall be in effect
until terminated by either party with 90 days written notice to the other.

13.  This Agreement shall be governed by and construed in accordance by the laws
of the Province of Ontario if legal action is instituted by the Supplier or by
the laws of California if legal action is instituted by Distributor.

14.  Both parties agree that during the term of this agreement and for 1 year
after termination (for whatever reason), neither party will hire nor attempt to
hire one another's' employees with prior written consent of both parties.

The parties have executed this Agreement by their duly authorized
representatives.

CEPHEID                                FISHER SCIENTIFIC LIMITED

/s/Thomas Gutshall                     /s/Signature Illegible, President
---------------------------            -----------------------------------

Cepheid Signature                      Fisher Scientific Limited Signature

11/27/00                               12/20/00
---------------------------            ---------------------------

Date                                                          Date

                                       2

<PAGE>   3

EXHIBIT A

SMART CYCLER SYSTEM

<TABLE>
<CAPTION>
Part#             Description                                 List Price                Fisher Price
-----             -----------                                 ----------                ------------
<S>               <C>                                         <C>                       <C>
SC1000N1-1        Smart Cycler Starter System                 US$32,000                 [***]% of list
                  (includes one 16-site processing
                  block, accessory pack*, and
                  desk-top computer)

SC1000N3-1        Smart Cycler Processing Block               US$29,000                 [***]% of list
                  (one16-site processing block and
                  USB interface cable)
</TABLE>

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

ACCESSORIES
<TABLE>
<CAPTION>
Part#             Description                                 List Price                Fisher Price
-----             -----------                                 ----------                ------------
<S>               <C>                                         <C>                       <C>
900-0020          Mini-centrifuge                             US$325.00                 [***]% of list

900-0027          Tube Racks                                  US$30.00                  [***]% of list

900-0028          Cooling Block                               US$85.00                  [***]% of list
</TABLE>

REACTION TUBES

<TABLE>
<CAPTION>
Part#             Description                                 List Price                Fisher Price
-----             -----------                                 ----------                ------------
<S>               <C>                                         <C>                       <C>
900-003           1 Bag of 25 (mu)L Smart Cycler              US$30.00                  [***]% of list
                  Reaction Tubes (50 tubes/bag)

900-0004          1Bag of 100(mu)L Smart Cycler               US$30.00                  [***]% of list
                  Reaction Tubes (50 tubes/bag)

900-0022          1 Carton of 25(mu)L Smart Cycler            US$550.00                 [***]% of list
                  Reaction Tubes (20 bags of 50 tubes ea)

900-0023          1 Carton of 100(mu)L Smart Cycler           US$550.00                 [***]% of list
                  Reaction Tubes (20 bags of 50 tubes ea)
</TABLE>

                                       3

<PAGE>   4

EXHIBIT B

Canadian Biothreat Customers Excluded From The Fisher Canada Field (to be served
exclusively by Cepheid)

[***]

                                       4

<PAGE>   5

EXHIBIT C

Sales & Marketing Support - Respective Roles and Responsibilities of Distributor
and Supplier (Canadian Distribution)

During the term of this agreement, Distributor shall use its reasonable best
efforts to actively promote the Products of this agreement in Canada through its
sales force (including Account Representatives, Sales Representatives and
Instrument Specialists). Distributor shall support such sales at its own expense
via the following activities:

     o    Launch package/training material distributed to entire sales and
          customer service organization;

     o    Train and support Customer Service Organization through dedicated
          Fisher Canada Product Trainer;

     o    Provide the opportunity for Supplier to train sales force and
          Instrument Specialists in Canada on (i) Smart Cycler System, (ii)
          basics of Real-Time PCR, (iii) Lead qualification and (iv) directing
          of detailed technical questions;

     o    Provide the opportunity for Supplier to train Instrument Specialists
          in Canada on (i) demonstrating the Smart Cycler system (ii)
          applications and software;

     o    Provide opportunities for Supplier to provide formal follow-up
          training as agreed upon by the Distributor and Supplier;

     o    Utilize its own Sales and Marketing Management resources as necessary
          to ensure that its sales force and Instrument Specialists, including
          new hires, have the necessary knowledge to effectively sell the
          Products. Informal follow-up training (including field based training)
          will be provided, as necessary, by the Distributor's Sales and
          Marketing Management

     o    Half page advertisements in upcoming issues of Lab Solutions
          publication, according to the following schedule: 2001: 2 issues;
          2002: 2 issues; 2003: 1 issue.

     o    Product information in "What's New" section of Distributor web-site

     o    Supplier added to supplier list for Distributor web-site

     o    Display Products at trade shows where appropriate

     o    Include products in Distributor Sponsored catalogues and literature

     o    Provide sales commissions and other sales incentives as necessary to
          support Product sales.

During the term of this agreement, the following activities will also be
undertaken by Supplier, as described below:

     o    Supplier will have primary responsibility for providing technical
          support to customers for its products;

     o    Supplier will provide Distributor with reasonable quantities of
          product and application literature at its own costs;

     o    Supplier will provide Distributor with an electronic file of a Product
          Data Sheet to enable the Distributor to produce, at its own costs, a
          specific data sheet for the Canadian market;

     o    Supplier will provide thirteen (13) copies of all operating manuals,
           brochures and accessories price lists concerning the servicing of
          each of the Products, free -of-charge, in a paper or electronic format
          as designated by Distributor

     o    Supplier shall provide Distributor with demo unit(s), travel cases and
          accessories at an agreed transfer price which includes a $[***] charge
          for an extended 2 year warranty;

                                       5

<PAGE>   6

     o    Supplier will provide 10 copies of demo software, when available, for
          sales force;

     o    Supplier shall provide personnel to train Distributor sales force in
          Canada. Training will be provided at 2 to 3 levels to cover instrument
          specialists and general sales force. The maximum number of training
          sessions will be two per year.

     o    Supplier shall provide a combined training and co-travel support in
          Canada to Distributor of at least 10 person days in year 1 and 15
          person days in year 2 of this agreement.

In addition, Supplier may choose, at its own discretion and cost, to participate
in the following activities:

     o    Attend and have a booth at Distributor's National Sales Meeting

     o    Participate in account specific vendor shows

     o    Co-travel with Distributor sales representatives

     o    Advertise and exhibit in other publications and meetings, making
          reference to Distributor as the exclusive distributor in Canada.

                                       6

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