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DOUBLETWIST DISTRIBUTION AND VALUE-ADDED RESELLER AGREEMENT
Agreement made this 24th day of March, 2000 ("Effective Date") by and between
DoubleTwist, Inc. ("DoubleTwist") having its principal offices at 1999 Harrison
Street, Suite 1100, Oakland, CA 94612, and Hitachi, Ltd., including its
subsidiaries and affiliates in which 50% or more of the stock is directly or
indirectly controlled by Hitachi, Ltd. ("Hitachi") having it principal offices
at 6, Kanda-Surugadai 4-Chome, Chiyoda-ku, Tokyo, 101-8010 Japan.
1. PURPOSE. The purpose of this Agreement is to set forth the terms and
conditions pursuant to which Hitachi will integrate and distribute to its
customers the DoubleTwist software and/or database products described on
the Product Description (Exhibit A) attached hereto and made a part hereof
("Licensed Product" or "Hitachi/DT Products").
2. DEFINITIONS.
(a) All terms defined in the Product Description shall have the meanings
therein ascribed to them for purposes of this Agreement.
(b) "Hitachi Systems" shall be defined as the computer and/or software
systems created, marketed, distributed, and/or sold by Hitachi to the
market, with which a Licensed Product will be integrated.
(c) "End Users" shall be defined as current and future Hitachi customers
who purchase from Hitachi a Hitachi/DT Product.
(d) "Updates" shall be defined as generally available revisions to
Hitachi/DT Products released from time to time by DoubleTwist.
(e) "Initial Distribution" shall be defined as the initial sale of a
Hitachi/DT Product to an End User. There will be only one (1) Initial
Distribution to each End User.
(f) "Upgrade" shall be defined as the license of a) a more expensive
Licensed Product, or b) a Licensed Product with additional features, by
End User following the Initial Distribution.
(g) "Integration" shall be defined as the programming undertakings to be
performed by Hitachi which are required to allow End Users functional
access to Licensed Product features and capabilities from within
Hitachi Systems and the logically appropriate data sharing between
Hitachi/DT Products and Hitachi Systems.
(h) "Hitachi/DT Product" shall be defined as 1) a Licensed Product, or 2) a
Hitachi System integrated with a Licensed Product.
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"Documentation" shall be defined as the user manuals and similar materials
customarily supplied by DoubleTwist to end users of the Licensed Product.
3. GRANT OF RIGHTS.
(a) Subject to payment of the Distribution Fees by Hitachi to DoubleTwist
as hereinafter provided, DoubleTwist grants to Hitachi a personal,
exclusive, non-transferable, royalty-free right to market, distribute,
direct to End Users, and install at End User locations in the Asia
Pacific region ("Region") software packages comprising the Hitachi/DT
Products, subject to the terms and conditions of this Agreement.
Hitachi shall not transfer any Licensed Product other than in the form
of a Hitachi/DT Product.
(b) DoubleTwist grants Hitachi a non-exclusive, non-transferable,
royalty-free right (i) to use and make copies of the Documentation for
back-up and archival purposes, marketing, distribution, service and
support of Hitachi/DTProducts and (ii) to furnish such documentation to
End Users in connection with Hitachi's distribution of Hitachi/DT
Products, and maintenance and support thereof.
(c) DoubleTwist reserves all other rights to the Hitachi/DT Products which
are not expressly specified in this Agreement.
4. DUTIES OF DOUBLETWIST
(a) Upon execution of this Agreement, DoubleTwist shall transmit to Hitachi
six (6) copies of the Hitachi/DT Products and associated Documentation.
Hitachi shall have the right to inspect the Hitachi/DT Products
delivered by DoubleTwist to determine if they comply with the
specifications and the warranties contained in Documentation. Hitachi
shall have thirty (30) days from the date Hitachi/DT Products are
shipped by DoubleTwist to Hitachi in which to notify DoubleTwist of any
failure of the Hitachi/DT Products to conform to such specifications or
warranties. DoubleTwist shall promptly repair or replace any such
defect in the Hitachi/DT Products to conform to Documentation. If
DoubleTwist fails to do so, Hitachi shall have the right to reject the
Hitachi/DT Products. If Hitachi has not informed DoubleTwist of any
failure of the Hitachi/DT Products during the said thirty (30) day
period, the Hitachi/DT Products shall be deemed accepted ("Acceptance
Date").
(b) DoubleTwist shall provide five (5) days training for marketing,
distribution and installation of the Licensed Product, said training to
be completed by June 30, 2000. Hitachi employees shall be trained at
DoubleTwist's principal offices without charges or, at Hitachi's
election, at another site subject to Hitachi's reimbursement to
DoubleTwist of all reasonable travel and accommodation expenses related
to such training. DoubleTwist shall, without charge and during
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DoubleTwist's regular business hours, reply to questions asked by
Hitachi regarding the operation and maintenance of the Licensed
Program, by telephone, mail and E-mail, necessary for Hitachi's
distribution, installation, maintenance, and support of the Hitachi/DT
Products.
(c) DoubleTwist will be responsible for Providing to Hitachi and
maintaining Updates to the Hitachi/DT Products without charge. Updates
will be Licensed Product specific and their frequency will be
determined solely by DoubleTwist.
(d) DoubleTwist will provide, without charge, back-up support of Licensed
Product to Hitachi related to the appropriate use, error correction,
and contents of the Hitachi/DT Products to the same extent that
DoubleTwist provides such support for its other products generally.
5. DUTIES OF HITACHI
(a) Hitachi will be responsible for Integration of Hitachi/DT Products
within Hitachi Systems and for all costs related to such Integration.
(b) Integration of the Hitachi/DT Products will include development by
Hitachi of programs that allow for proper operation of the Hitachi/DT
Products within Hitachi Systems.
(c) Hitachi will be responsible for installation and on-going support of
Hitachi/DT Products for End Users. Hitachi shall be solely responsible
for maintenance of Hitachi/DT Products.
(d) Hitachi will be responsible for notifying DoubleTwist in writing of
orders it receives for Hitachi/DT Products, per Section 7(a).
(e) Hitachi will provide necessary and appropriate marketing services for
the Hitachi/DT Products.
(f) Hitachi will provide to DoubleTwist, and update in a timely manner, a
listing of Hitachi/DT Product customers including the contact name,
organization name, address, phone number, and type of Hitachi System.
DoubleTwist's use of Hitachi customer information will be strictly
limited to DoubleTwist's marketing and support activities. Such
information shall constitute "Confidential Information" for purposes of
Section 8, hereinbelow.
(g) During the term of this Agreement and, in the event of any breach of
this Agreement by Hitachi for twelve (12) months thereafter, Hitachi
agrees not to market integrated or to integrate within Hitachi Systems,
directly or indirectly 1) any product capable of clustering or aligning
greater than 50,000 DNA, mRNA,
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cDNA, or non-protein consensus sequence, or 2) any database of sequence
clusters that contains greater than 50,000 input DNA, mRNA, cDNA, or
non-protein consensus sequences.
6. LICENSE TERMS
(a) Hitachi agrees that the use of the Hitachi/DT Products by End Users
will be subject to the terms and conditions of the applicable
DoubleTwist Software License Agreement.
(b) Hitachi agrees to pay DoubleTwist the Distribution Fees set forth in
the Distribution Fee Schedule of Exhibit B, attached hereto and made a
part hereof.
(c) In addition to the above, DoubleTwist will charge standard fees for
shipping and handling the Hitachi/DT Products as set forth in the
Pricing Schedule.
(d) DoubleTwist shall, after the first anniversary of the Effective Date,
have the right, at its sole discretion, to increase the Distribution
Fees for the Hitachi/DT Products. DoubleTwist shall notify Hitachi
within thirty (30) days of any such change, and Hitachi shall have and
additional sixty (60) days from such notification to institute such
price change within Region.
(e) Hitachi shall, in addition to the other amounts payable under this
Agreement, pay all sales and other taxes, federal, state, or otherwise,
however designated, which are levied or imposed by reason of the
transactions contemplated by this Agreement, except taxes related to
the income of or the employees of DoubleTwist.
(f) Hitachi agrees to notify End Users of the requirement to license third
party coding systems or other components ("Third Party Software") for
use in the Hitachi/DT Products. Notwithstanding any other provision of
this Agreement, DoubleTwist shall have no liability and makes no
warranty with regard to any such Third Party Software, and shall have
no responsibility to procure or otherwise make available to End User
such Third Party Software.
7. PAYMENT TERMS AND RECORD KEEPING
(a) Within thirty (30) days of the end of each calendar quarter, Hitachi
will provide DoubleTwist with a report, which contains the following
items:
i. A listing of the number and type of Initial Distributions of
Hitachi/DT Products made by Hitachi during the previous calendar
quarter;
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ii. A listing of the number of Upgrade and Renewal sales made by
Hitachi during the previous calendar quarter; and
iii. The number of returns or rejections, if any, of the Hitachi/DT
Products that occurred during the previous calendar quarter.
Included with the report will be payment to DoubleTwist by Hitachi for
amounts currently due, adjusted for returns and rejections. For
purposes of illustration, Hitachi shall submit a report to DoubleTwist
along with payment no later than July 31, 2000 for Initial
Distributions, Upgrades sales and Renewal sales made by Hitachi in the
second quarter, 2000.
(b) The report described in Section 7 (a) shall be certified as correct by
an officer of Hitachi. Hitachi shall keep accurate and correct records
of Initial Distributions, Upgrade sales and Renewal sales in a form as
is appropriate to determining the amount due DoubleTwist under this
Agreement. Copies of these records shall be retained by Hitachi
("Hitachi Records") for at least three (3) years following a given
quarter and shall be made available at Hitachi's principal office
during normal business hours for inspection once each calendar year by
DoubleTwist or its authorized representative, for the sole purpose of
verifying reports and payments made under this Agreement. DoubleTwist
shall notify Hitachi in writing more than sixty (60) days prior to the
date of such inspection.
(c) In the event that it is determined that Hitachi has inadvertently
underreported in excess of five percent (5%) of the amounts due
DoubleTwist over a twelve (12) month period, then in addition to the
amount due DoubleTwist by Hitachi from such under-reporting, Hitachi
shall also reimburse DoubleTwist the reasonable cost of such inspection
of Hitachi's records. Following such underreporting, DoubleTwist shall
have the right to inspect Hitachi Records once every six (6) months
during the term of the Agreement, and in the event a subsequent
underreporting in excess of five percent (5%) is discovered, Hitachi
shall reimburse DoubleTwist the reasonable cost of each such
inspection.
8. CONFIDENTIALITY
(a) For the purposes of this Agreement, "Confidential Information" means
that information disclosed by each party to the other party, that is
related to, but is not limited to, the terms and conditions of this
Agreement, the existence of the discussions between the parties, trade
secrets of each party, any nonpublic information relating to each
party's product plans, designs, ideas, concepts, costs, prices,
finances, marketing plans, business opportunities, personnel, research,
development or know-how and any other nonpublic technical or business
information of each party. Confidential Information does not, however,
include information that: (a) is now or subsequently becomes generally
available to the
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public through no fault or breach on the part of the receiving party;
(b) the receiving party can demonstrate to have had rightfully in its
possession without an obligation of confidentiality prior to disclosure
hereunder; (c) is independently developed by the receiving party
without the use of any Confidential Information of the disclosing party
as evidenced by written documentation; or (d) the receiving party
rightfully obtains from a third party who has the right to transfer or
disclose it and who provides it without a confidentiality obligation.
(b) The Confidential Information is provided for the purposes of
facilitating the distribution of DoubleTwist's bioinformatics products
or projects (the "Business Purpose"). The receiving party will not
disclose, publish or disseminate Confidential Information to anyone
other than those of its employees who need to know for the Business
Purpose, and the receiving party will take reasonable precautions to
prevent any unauthorized use, disclosure, publication or dissemination
of Confidential Information. The receiving party accepts Confidential
Information for the Business Purpose and in connection with the
business discussions regarding the Business Purpose hereunder. The
receiving party will not use Confidential Information other than for
the Business Purpose for its own or any third party's benefit without
the prior written approval of an authorized representative of the
disclosing party in each instance. If the receiving party receives
notice that it may be required or ordered by any judicial or
governmental entity to disclose Confidential Information of the
disclosing party, it will take all necessary steps to give the
disclosing party sufficient prior notice in order to contest such
requirement or order.
9. INDEMNIFICATION
(a) DoubleTwist represents and warrants to Hitachi that the Licensed
Product were developed or licensed by DoubleTwist and, to the best of
DoubleTwist's knowledge, do not infringe any patent, trademark,
copyright, trade secret, or any other proprietary rights of any third
party or parties.
(b) DoubleTwist shall indemnify, defend and hold harmless Hitachi from all
costs, damages or expenses (including attorney's fees) which may be
finally assessed in any action resulting from a claim that the Licensed
Product infringes any third party's patent, copyright, trade secret or
any other proprietary rights and shall procure for Hitachi the right to
continue to distribute the Licensed Product or shall make commercially
reasonable efforts to replace or modify the same to make them
non-infringing, which such replacement or modification shall meet the
specifications identified in Documentation; provided that (1) Hitachi
shall give DoubleTwist prompt written notice of any such action, claim
or threat of suit (2) DoubleTwist shall take over, settle or defend
such action, claim or suit through counsel of DoubleTwist's choice and
under DoubleTwist's sole direction, and
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3) Hitachi shall cooperate fully with DoubleTwist in connection with
such action, claim or suit.
(c) Hitachi shall indemnify, defend and hold harmless DoubleTwist from all
costs, damages or expenses (including attorney's fees) which may be
finally assessed in any action resulting from a claim that any
statement made by Hitachi in advertising, licensing or promoting the
Hitachi/DT Products is false or misleading or for any material breach
by Hitachi of its obligations hereunder, provided that (1) DoubleTwist
shall give Hitachi prompt written notice of any such action, claim or
threat of suit; (2) Hitachi shall take over, settle or defend such
action, claim or suit through counsel of Hitachi's choice and under
Hitachi's sole direction and at Hitachi's expense; and (3) DoubleTwist
shall cooperate fully with Hitachi in connection with such action.
(d) The foregoing provisions shall not apply to any infringement
attributable to any unauthorized modification of the Hitachi/DT
Products by Hitachi, or any portion thereof, or any use of the
Hitachi/DT Products with additional software or devices not expressly
authorized in writing by DoubleTwist herein.
(e) Except for intellectual property infringement claims covered by part
Section 9(a) and (b), Hitachi shall indemnify and hold DoubleTwist
harmless against any liability, or any litigation cost or expense
(including attorney's fees), arising out of third party claims against
DoubleTwist as a result of Hitachi's use or distribution of the
Hitachi/DT Product or Licensed Product or Documentation.
10. WARRANTY
(a) DoubleTwist represents and warrants that the computer programs,
databases and/or other reports included in the Licensed Products will,
for one (1) year from the Acceptance Date, conform to their
then-current Documentation.
(b) If defects in the Licensed Product are discovered by Hitachi,
DoubleTwist agrees to make efforts to correct such defects commensurate
with the severity of the defect at DoubleTwist's expense within ten
(10) days following receipt of notice from Hitachi of such defects.
After correction of the such defects, Hitachi will inspect such
Hitachi/DT Products as provided in Paragraph 4(a) of this Agreement.
(c) EXCEPT AS SPECIFICALLY PROVIDED HEREIN, THERE ARE NO WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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11. LIMITATION OF LIABILITY.
(a) DoubleTwist's sole liability to Hitachi for any claims, notwithstanding
the form of such claims (e.g., contract, negligence or otherwise),
arising out of errors or omissions in the Licensed Products shall be to
furnish the correct information as soon as reasonably practicable.
(b) DoubleTwist's sole liability for claims, notwithstanding the form of
such claims (e.g., contract, negligence or otherwise), arising out of
unavailability of support or the unusability of the Licensed Products
shall be to use reasonable efforts to correct the Licensed Products as
soon as reasonably practicable.
(c) DoubleTwist shall not be liable or deemed to be in default for any
delay or failure to perform under this Agreement resulting directly or
indirectly from any cause beyond DoubleTwist's reasonable control such
as acts of Gods, act of any governmental authority, riot, revolution,
fires or war.
(d) EXCEPT ANY CAUSE COVERED BY PARAGRAPH 9, IN NO EVENT WILL DoubleTwist
BE RESPONSIBLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF
BUSINESS PROFITS, BUSINESS INTERRUPTION LOSS OF BUSINESS INFORMATION,
OR ANY OTHER PECUNIARY LOSS) ARISING OUT OF THE SALE, USE OR INABILITY
TO USE THE Hitachi/DT PRODUCTS, EVEN IF DoubleTwist HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.
12. TERM. Except as otherwise provided herein, this Agreement shall commence on
the date hereof and shall continue for a period from April 3, 2000 through
December 31, 2000 (the "Initial Term"). After the Initial Term, this
Agreement shall be automatically extended for consecutive one (1) year
terms, subject to termination by either party to take effect at the end of
the Initial Term or any renewal term upon at least Thirty (30) days prior
to written notice.
13. TERMINATION.
(a) Notwithstanding anything to the contrary contained herein, either party
may terminate this Agreement (1) upon any material breach by the other
of its obligations under this Agreement, or (2) if the other party
shall commit an act of bankruptcy or become insolvent, by sending such
party written notice of termination which shall state the nature of the
breach. Such notice shall be effective thirty (30) days following the
date thereof, unless such breach shall have been remedied during such
thirty-day period.
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(b) In addition, DoubleTwist may terminate this Agreement, and any license
granted to an End User for whom the Distribution Fee has not been paid
if Hitachi fails to pay DoubleTwist any Distribution Fees or taxes due
hereunder.
(c) The foregoing rights and remedies shall be cumulative and in addition
to all other rights and remedies available to each party in law and in
equity.
(d) All licenses with End Users which are entered into due to Hitachi's
distribution of the Hitachi/DT Products will continue in accordance
with the terms and applicable period as provided in the applicable
DoubleTwist Software License Agreement.
(e) Notwithstanding anything to the contrary contained herein, the rights
and obligations set forth in Paragraphs 5(g), 8,9 and 11 shall survive
termination of this Agreement.
14. MISCELLANEOUS TERMS.
(a) Each party represents to the other that this Agreement has been
exhausted and delivered by an authorized representative of such signing
party.
(b) The headings and captions to this Agreement are for reference only and
are not to be construed in any way as terms hereof.
(c) Unless otherwise stated, all notices required under this Agreement
shall be in writing and served by Certified mail or Registered mail,
return receipt requested, with a copy by first class mail or by
personal services and shall be deemed to have been duly given when sent
if mailed to the addressee or when received if hand delivered at the
address designated below or such subsequent address as may be
designated in writing by the respective party:
if to DoubleTwist:
DoubleTwist, Inc.
1999 Harrison Street, Suite 1100
Oakland, CA 94612
Attn: Legal Counsel
if to Hitachi:
[Contract]
International Procurement Center, Procurement Dept.
Hitachi Ltd.,
6, Kanda-Surugadai 4-Chome, Chiyoda-ku, Tokyo, 101-8010 Japan
Attn: Manager, International Procurement Center
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[Delivery]
Purchasing Sect. Administration Dept.
Central Research Laboratory, Hitachi, Ltd.
1-280, Higashi-Koigakubo, Kokubunji-shi, Tokyo, 185-8601, Japan
Attn: Manager, Purchasing Sect.
[Technical]
Bio Informatic Dept. Life Science Gr.
Hitachi, ltd.
1-280, Higashi-Koigakubo, Kokubunji-shi, Tokyo, 185-8601, Japan
Attn: Manager, Bioinformatics Gr.
(d) If any of the provisions of this Agreement are invalid, illegal or
unenforceable under any applicable statute or rule of law, the
validity, legality or enforceability of the remaining provisions shall
not be affected or impaired thereby.
(e) This Agreement shall be interpreted in accordance with the laws of the
State of California, USA, as if entered into by California residents,
without regard to its conflict of laws rules.
(f) Except for assignment in conjunction with a change of control, this
Agreement shall not be assigned by either party without the written
consent of the other party. In event of assignment in conjunction with
change of control, this Agreement will bind and insure to benefit of
each party's permitted successors and assigns.
(g) DoubleTwist shall obtain any and all export licenses and/or
governmental approvals that may be required to export the Licensed
Product to Japan. Hitachi agrees that the Licensed Product may be
subject to restrictions under the export control laws and regulations
of the United States of America, including but not limited to the U.S.
Export Administration Act and the U.S. Export Administration
Regulations. Hitachi agrees not to export or re-export, directly or
indirectly, the Licensed Product in whole or in part without first
obtaining any required license or other approval from the U.S.
Department of Commerce or any other agency or department of the United
States Government.
(h) This Agreement is the entire agreement between the parties relating to
the subject matter hereof and supersedes all prior understanding,
writings, proposals, representations or communications, oral or
written, of either party. This Agreement may be amended only by an
instrument executed by the authorized representatives of both parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
DoubleTwist, Inc. Hitachi, Ltd.
By: /s/ By: /s/
-------------------------------- ----------------------------------
Title: Title:
----------------------------- -------------------------------
Date: Date:
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EXHIBIT A
DESCRIPTION OF LICENSED PRODUCT
Clustering and Alignment Tools (CAT), version 3.5, including Serial d2, Serial
d2_cluster, CRAW and MAP, in object code form only, and current Documentation.
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EXHIBIT B
DISTRIBUTION FEE SCHEDULE
Hitachi shall purchase for distribution to End Users six (6) software packages
comprising Licensed Product and Documentation during the Initial Term ("Initial
Distributed Product"). Hitachi shall pay to DoubleTwist One Million Five Hundred
Ninety Thousand Dollars (US$1,590,000) within thirty (30) day after Hitachi's
acceptance as set forth in Paragraph 4(a), which acceptance or rejection shall
in no event be later than May 15, 2000, in full payment of Distribution Fees for
Initial Distributed Product.
For each additional Licensed Product distributed by Hitachi ("Subsequent
Distributed Product"), Hitachi shall pay to DoubleTwist a Distribution Fee of
Two Hundred Sixty Five Thousand Dollars (US$265,000), which amount shall be due
and payable to DoubleTwist within thirty (30) days of distribution of Licensed
Product to End User.
Additionally, for each Licensed Product distributed to an End User by Hitachi,
in the event such End User desires to receive, and Hitachi agrees to perform,
maintenance for such Licensed Product for any term beyond one (1) year from the
Effective Date of the license between DoubleTwist and End User ("Extended
Maintenance"), such Extended Maintenance shall be performed by Hitachi on an
annual basis ("Extended Maintenance Period"), and for each such Extended
Maintenance Period Hitachi shall pay to DoubleTwist, within thirty (30) days of
the first day of any such Extended Maintenance Period. Twenty Five Thousand
Dollars (US$25,000).
Hitachi America, Ltd. ("HAL") will act as a disbursement agent of Hitachi.
Notices and invoices to HAL shall be delivered or addressed to:
Hitachi America, Ltd.
Procurement and Technical Service Division
2000 Sierra Point Parkway
Brisbane, CA 94005-1835
Attn: Purchasing Manager
