Exhibit 10.23
LICENSE AGREEMENT
This License Agreement ("Agreement"), is effective as of the 29th day of
October, 2003 ("Effective Date"), and is entered into by and between Dwango
North America, Inc. ("DNA"), a Texas corporation with its principal place of
business at 0000 Xxx Xxxxxx Xx., Xxxxx 0000, Xxxxxxx, Xxxxx 00000-0000 and
Enorbus Technologies ("Enorbus") a Chinese company with a principal place of
business at B1606 Xxxxxx Xxxxx, Xx. 0, Xxxxxxxx Xxxx, Xxxxxxxx Xxxxxxxx,
Xxxxxxx, 000000, Xxxxx.
WITNESSETH:
WHEREAS, DNA owns the rights to certain wireless games ("DNA Wireless
Games") and DNA does not currently commercially exploit the DNA Wireless Games
within the Peoples Republic of China ("China");
WHEREAS, Enorbus owns the rights to certain wireless games ("Enorbus
Wireless Games") and Enorbus does not currently commercially exploit the Enorbus
Wireless Games within the United States, Canada and Mexico (collectively "North
America");
WHEREAS, DNA desires the opportunity to commercially exploit certain
Enorbus Wireless Games within North America and share the revenue generated from
such commercial exploitation with Enorbus;
WHEREAS, Enorbus desires the opportunity to commercially exploit certain
DNA Wireless Games within China and share the revenue generated from such
commercial exploitation with DNA; and
WHEREAS, DNA and Enorbus (collectively the "Parties" and each a "Party")
wish to enter into an agreement whereby DNA will be permitted to commercially
exploit certain Enorbus Games within North America and Enorbus will be permitted
to commercially exploit the DNA Games within China;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, DNA and Enorbus hereby agree as follows:
1. Definitions. As used in this Agreement, the Parties hereto agree the words
set forth below shall have the meanings thereby specified:
a. "Confidential Material" shall mean corporate information, including
contractual licensing arrangements, plans, strategies, tactics,
policies, resolutions, patents, trademark and trade name applications,
and any litigation or negotiations; marketing information, including
sales or product plans, strategies, tactics, methods, customers,
prospects, or market research data; financial information, including
cost and performance data, debt arrangement, equity structure,
investors, and holdings; operational and scientific information, and
documentation for all such software, drawings and designs; and
personnel information, including personnel lists, resumes, personnel
data, and performance evaluation, as known and disclosed by one Party
to another Party. Confidential Material specifically includes all
orally disclosed confidential information, if such information is
identified as proprietary, confidential, or private upon disclosure or
is confirmed in writing to have been confidential within thirty (30)
days of the oral disclosure.
b. "Intellectual Property Rights" shall mean all copyrights (including,
without limitation, the exclusive right to reproduce, distribute
copies of, display and thereupon perform the
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copyrighted work and to prepare derivative works), copyright
registrations and applications, trademark rights (including, without
limitation, registrations and applications), patent rights, including
registration and application, trade names, mask work rights, trade
secrets, moral rights, author's rights, algorithms, rights in
packaging, goodwill and other intellectual property rights, and all
divisions, continuations, reissues, renewals and extensions thereof,
regardless of whether any such rights arise under the laws of the
United States or any other state, country or jurisdiction, and all
derivative works of any copyrighted work.
c. "DNA Wireless Game(s)" shall mean the wireless games owned by or
licensed to DNA and either listed in Exhibit A of the Agreement or
identified in a written amendment to the Agreement executed by the
Parties, which amendment shall specifically provides that such
additional DNA Wireless Game is being added to the scope of the
Agreement ("Amendment"). DNA Wireless Games shall include any
modifications, additions, enhancements and upgrades to the DNA
Wireless Games. Title to and all ownership rights of, in and to the
DNA Wireless Games, and the copyrights, trademarks, patents and other
intellectual property rights related thereto, are and will remain the
property of DNA, which shall have the exclusive right to protect the
same by copyright, trademark, patent or otherwise.
d. "DNA Trademarks" shall mean shall mean DWANGO(R), and all other
product names, logos, tradenames and trademarks owned or used by DNA
(for purposes of this definition only, the term DNA shall include
Dwango North America, Inc., Dwango North America, Corp., and any
subsidiary, division or other entity owned and/or controlled by Dwango
North America, Inc., and/or Dwango North America, Corp.). Title to and
all ownership rights of, in and to the DNA Trademarks are and will
remain the property of DNA, which shall have the exclusive right to
protect the same.
e. "Enorbus Wireless Game(s)" shall mean the wireless games owned by or
licensed to Enorbus and either listed in Exhibit B of the Agreement or
identified in an Amendment. Enorbus Wireless Games shall include any
modifications, additions, enhancements and upgrades to the Enorbus
Wireless Games. Title to and all ownership rights of, in and to the
Enorbus Wireless Games, and the copyrights, trademarks, patents and
other intellectual property rights related thereto, are and will
remain the property of Enorbus, which shall have the exclusive right
to protect the same by copyright, trademark, patent or otherwise.
f. "Net Revenue" shall mean all revenue, fees, proceeds and/or income of
whatever type or character that either: (1) DNA may collect or receive
from or as a direct result of the Enorbus Wireless Games within North
America, less all payments made by DNA to third parties (including
wireless carriers and licensors, but excluding any income tax or other
similar payments to any governmental authority) which are due to or
result directly from the collection of such revenue; or (2) Enorbus
may collect or receive from or as a direct result of the DNA Wireless
Games within China, less all payments made by Enorbus to third parties
(including wireless carriers and licensors, but excluding any income
tax or other similar payments to any governmental authority) which are
due to or result directly from the collection of such revenue.
2. License Grant.
a. License to DNA Wireless Games.
x. Xxxxx of License to DNA Wireless Games. DNA hereby grants to
Enorbus and Enorbus hereby accepts a non-assignable (except as
specifically provided herein),
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non-exclusive, right and license solely within China for the term
of the Agreement to: (i) to port the DNA Wireless Games for use
by end user subscribers ("End Users") within China and offer the
DNA Wireless Games to wireless carriers within China; and (ii) to
distribute to End Users within China an unlimited number of
copies of such DNA Wireless Games in object code form only.
Enorbus shall bear the costs of porting and publishing the DNA
Wireless Games. Enorbus shall have no right to use or reproduce
any DNA Trademarks.
With respect to each DNA Wireless Game licensed herein, the
foregoing license shall commence on the date the DNA Wireless
Game is added to Exhibit A or any Amendment and will terminate on
the earlier of (a) the date the DNA Wireless Game is no longer
offered to End Users, or (b) the date of termination of this
Agreement. Any such termination shall not terminate an End User's
right to continue to use the DNA Wireless Games downloaded by the
End User prior to such termination.
ii. License Restrictions on DNA Wireless Games. Except to the extent
permitted by this Agreement or after receiving subsequent written
consent by DNA, Enorbus agrees (i) it will not otherwise
distribute DNA Wireless Games; (ii) it will not reverse assemble,
decompile or reverse engineer any DNA Wireless Games, and (iii)
it will not remove, efface or obscure any copyright notices or
other proprietary notices or legends included in any DNA Wireless
Games.
b. License to Enorbus Wireless Games.
x. Xxxxx of License to Enorbus Wireless Games. Enorbus hereby grants
to DNA and DNA hereby accepts a non-assignable (except as
specifically provided herein), non-exclusive, right and license
solely within North America for the term of the Agreement to: (i)
to port the Enorbus Wireless Games for use by End Users within
North America and offer the Enorbus Wireless Games to wireless
carriers within North America; and (ii) to distribute to End
Users within North America an unlimited number of copies of such
Enorbus Wireless Games in object code form only. DNA shall bear
the costs arising from the porting and publishing of the Enorbus
Wireless Games.
With respect to each Enorbus Wireless Game licensed herein, the
foregoing license shall commence on the date the Enorbus Wireless
Game is added to Exhibit B or any Amendment and will terminate on
the earlier of (a) the date the Enorbus Wireless Game is no
longer offered to End Users, or (b) the date of termination of
this Agreement. Any such termination shall not terminate an End
User's right to continue to use the Enorbus Wireless Games
downloaded by the End User prior to such termination.
ii. License Restrictions on Enorbus Wireless Games. Except to the
extent permitted by this Agreement or after receiving written
consent by Enorbus, DNA agrees (i) it will not otherwise
distribute Enorbus Wireless Games; (ii) it will not reverse
assemble, decompile or reverse engineer any Enorbus Wireless
Games, and (iii) it will not remove, efface or obscure any
copyright notices or other proprietary notices or legends
included in any Enorbus Wireless Games.
3. Ownership.
a. Ownership of DNA Wireless Games. Enorbus hereby acknowledges that DNA
owns all right, title and interest in and to all content, products,
services, specifications, documentation,
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software and other materials supplied by DNA, including, without
limitation, all DNA Wireless Games and any improvements and
modifications thereto, including all Intellectual Property Rights
therein.
For each DNA Wireless Game that Enorbus ports for use by a wireless
device in China, Enorbus shall provide DNA the source code for each
DNA Wireless Game and each such wireless device ("Enorbus Ported
SKU"). In the event that DNA desires to commercially exploit an
Enorbus Ported SKU outside North America, the Parties shall determine
the appropriate compensation Enorbus shall receive for DNA's use of
such Enorbus Ported SKU. However, nothing herein shall limit DNA's
right to port (either internally or by means of a third party) any DNA
Wireless Game for use by any wireless device, regardless of whether
Enorbus has previously created an Enorbus Ported SKU for such wireless
device ("Independently Ported SKU"). The Party producing an
Independently Ported SKU shall not owe the other Party any royalty or
other payment for the development or use of any Independently Ported
SKU.
Except as specifically and clearly set forth in this Agreement,
nothing herein, nor the exercise of any rights granted Enorbus
hereunder, conveys to Enorbus, and Enorbus shall not have or acquire,
and shall not purport to have or acquire, any Intellectual Property
Right or any other right or title to, or interest in any DNA Wireless
Games or any part or aspect thereof (or any derivative work). Enorbus
agrees that it shall not at any time assert or claim any interest in,
or do anything that may adversely affect the validity or
enforceability of, any Intellectual Property Right in the DNA Wireless
Games owned by or licensed to DNA. Enorbus shall immediately return
all copies of the DNA Wireless Games to DNA upon DNA's request at any
time, but in any event promptly upon termination of this Agreement.
b. Ownership of Enorbus Wireless Games. DNA hereby acknowledges that
Enorbus owns all right, title and interest in and to all content,
products, services, specifications, documentation, software and other
materials supplied by Enorbus, including, without limitation, all
Enorbus Wireless Games and any improvements and modifications thereto,
including all Intellectual Property Rights therein.
For each Enorbus Wireless Game that DNA ports for use by a wireless
device in North America, DNA shall provide Enorbus the source code for
each Enorbus Wireless Game and each such wireless device ("DNA Ported
SKU"). In the event that Enorbus desires to commercially exploit a DNA
Ported SKU outside China, the Parties shall determine the appropriate
compensation DNA shall receive for Enorbus' use of such DNA Ported
SKU. However, nothing herein shall limit Enorbus' right to port
(either internally or by means of a third party) any Enorbus Wireless
Game for use by any wireless device, regardless of whether DNA has
previously created a DNA Ported SKU for such wireless device
("Independently Ported SKU"). The Party producing an Independently
Ported SKU shall not owe the other Party any royalty or other payment
for the development or use of any Independently Ported SKU.
Except as specifically and clearly set forth in this Agreement,
nothing herein, nor the exercise of any rights granted DNA hereunder,
conveys to DNA, and DNA shall not have or acquire, and shall not
purport to have or acquire, any Intellectual Property Right or any
other right or title to, or interest in any Enorbus Wireless Games or
any part or aspect thereof (or any derivative work). DNA agrees that
it shall not at any time assert or claim any interest in, or do
anything that may adversely affect the validity or enforceability of,
any Intellectual Property Right in the Enorbus Wireless Games owned by
or licensed to Enorbus. DNA shall
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immediately return all copies of the Enorbus Wireless Games to Enorbus
upon Enorbus' request at any time, but in any event promptly upon
termination of this Agreement.
4. Division of Revenue.
a. Royalty.
i. Royalty for DNA Wireless Games.
In consideration for the license of the DNA Wireless Games,
Enorbus shall pay DNA a royalty equal to (*) of Net Revenue
received by Enorbus from the DNA Wireless Games ("DNA Royalty").
Determination and distribution of the DNA Royalty shall be made
within Thirty (30) days subsequent to the end of each calendar
quarter, based on the aggregate amount of Net Revenue collected
during such calendar quarter.
ii. Royalty for Enorbus Wireless Games.
In consideration for the license of the Enorbus Wireless Games,
DNA shall pay Enorbus a royalty equal to (*) of Net Revenue
received by DNA from the Enorbus Wireless Games ("Enorbus
Royalty").
Determination and distribution of the Enorbus Royalty shall be
made within Thirty (30) days subsequent to the end of each
calendar quarter, based on the aggregate amount of Net Revenue
collected during such calendar quarter.
b. Royalty Reports. Each Party shall maintain complete and accurate
records regarding the Net Revenue during the entire term of this
Agreement and for not less than two (2) years following the
termination or expiration of this Agreement. Each Party shall be
responsible for preparation and delivery of a Net Revenue report,
which shall be due within thirty (30) days subsequent to the end of
each calendar quarter. Such report shall provide all information
reasonably necessary for computation and confirmation of the Net
Revenue, if any, for such quarterly period. The Parties agree that any
audits performed with regard to the books and records relating to Net
Revenue reports shall be performed by a mutually acceptable
independent accounting firm or certified public accountant.
c. Audits. In connection with the obligations undertaken by the Parties
hereunder to prepare and deliver the Net Revenue reports and to
preserve the records related thereto, an accountant mutually agreed
upon by the Parties may inspect the records on which such reports are
based no more than once per calendar year. Upon written request the
Parties shall send the records upon which the Net Revenue reports are
based to the agreed upon accountant within 10 days after receiving
such request. If, upon performing such audit, it is determined that a
Party prepared such report incorrectly resulting in underpayment of
the royalty payments, such Party shall pay the other Party the amount
of the underpayment within five (5) business days from the completion
of the audit. If such underpayment exceeds five percent (10%) of the
royalty payments due in the period being audited, the audited Party
will bear all reasonable expenses and costs of such audit. If, upon
performing such audit, it is determined that the Party prepared such
report incorrectly resulting in overpayment of the royalty payments,
the other Party shall reimburse the audited Party the amount of the
overpayment within five (5) business days from the completion of the
audit.
* Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
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5. Other Enorbus and DNA Content. The Parties hereby recognize that each Party
provides and/or intends to provide various types of content for use on
wireless devices. The licenses granted and royalty payments provided herein
are intended to apply to DNA Wireless Games and Enorbus Wireless Games, and
are not intended to apply to the various other types of content the Parties
provide and/or intend to provide for use on wireless devices. In the event
that the Parties subsequently agree to license such other content for
wireless devices, the Parties shall enter into a separate written agreement
concerning the terms and conditions of any such license.
6. Term and Termination. The term of this Agreement and the Licenses granted
herein shall begin on the Effective Date and shall expire on a date two (2)
calendar years from the Effective Date unless terminated earlier pursuant
to this section of the Agreement.
Either Party hereto may terminate this Agreement by giving thirty (30) days
written notice to the other Party of any material default by such party
under this Agreement. This Agreement shall terminate on the thirtieth
(30th) day following receipt by the defaulting Party of the described
notice, unless the defaulting Party cures any such default within the above
proscribed thirty (30) day period.
7. Confidentiality Agreement. Each of the Parties hereby acknowledges that all
Confidential Material of the other Parties constitutes trade secrets of the
other Parties and must be kept confidential. Each Party acknowledges the
unique and proprietary nature of the Confidential Material of the other
Parties. Each Party hereby agrees and acknowledges that it makes no present
claim, nor will it make any future claim whatsoever, to the other Parties'
Confidential Material. In addition, the Parties agree that no Party shall
disclose the Confidential Material, or any part thereof, to any person or
entity without the prior written consent of the other Parties; and each
Party shall treat the Confidential Material as confidential and proprietary
information of the other Parties and the Confidential Material of the other
as valuable business and property rights. Notwithstanding anything to the
contrary herein, the representations and obligations of the Parties
contained within this paragraph 7 shall survive any termination or
expiration of this Agreement.
The obligations of this paragraph 7 shall not apply to any Confidential
Material which (a) is or becomes available to the public through no breach
of this Agreement; (b) is independently developed by a Party without the
use of Confidential Material of the other Parties; (c) is approved for
release by written authorization of the disclosing Party, but only to the
extent of and subject to such conditions as may be imposed in such written
authorization; (d) is required by law or regulation to be disclosed, but
only to the extent and for the purposes of such required disclosure; or (e)
is disclosed in response to a valid order of a court or other governmental
body of the United States or any political subdivisions thereof, but only
to the extent of and for the purposes of such order; provided, however,
that the Party receiving the Confidential Material shall first notify the
disclosing Party hereto of the order and permit the disclosing Party to
seek an appropriate protective order.
8. Proprietary Rights Warranty and Indemnification.
a. Warranty - Each Party represents and warrants that it is the owner of
the Intellectual Property Rights licensed herein and/or that it has
the authority to make the transfers and grant the licenses granted
hereunder, and that there is no claim, litigation or proceeding
pending or threatened with respect to those rights or any component
thereof.
b. Indemnification - Each Party hereby agrees to, and shall, indemnify,
defend and hold harmless the other Party and its directors, officers,
agents and employees from and against any and all suits, actions,
damages, costs, losses, expenses (including attorneys' fees) and other
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liabilities arising from or in connection with a breach of the
warranty set forth in Section 8 (a). Each Party shall promptly notify
the other Party of any such claim.
9. General Warranties. The Parties hereby warrant and represent that they have
full legal rights and authority to enter into this Agreement and to perform
their obligations hereunder, and that by entering into this Agreement or
performing their obligations hereunder, they are not in default or breach
of any contract or agreement with any third party and they are not
violating or infringing upon the rights of any third party. The Parties
represent and warrant that they are not prohibited nor in any manner
otherwise restricted, by any law, regulation or administrative or judicial
order of the United States from entering into this Agreement or carrying
out its provisions or the transactions contemplated thereby.
10. DISCLAIMER. EXCEPT FOR THE EXPRESS WARRANTIES AND REPRESENTATIONS SET FORTH
IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES, EXPRESS OR
IMPLIED. EACH PARTY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES AND
REPRESENTATIONS, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANTIBILITY, FITNESS FOR A
PARTICULAR.
11. Choice of Law and Venue. This Agreement shall be governed, construed and
enforced in accordance with the laws of the state of Texas (without regard
to its principles of choice of law), and applicable federal law. Venue for
any action concerning this Agreement shall be in Xxxxxx County, Texas.
12. Severability. Each and every clause of this Agreement is severable from the
whole and shall survive unless the entire Agreement is declared
unenforceable.
13. Delivery of Notices and Payments. Unless otherwise directed in writing by
the parties, all notices given hereunder shall be sent via DHL or another
equivalent express delivery service to the addresses set forth on the first
page of this Agreement. All notices, requests, consents and other
communications under this Agreement shall be in writing and shall be deemed
to have been delivered on the day after the date sent via facsimile or two
days after the date sent via DHL or other equivalent express delivery
service.
14. Entire Agreement. This Agreement constitutes the entire understanding
between the Parties regarding the subject matter hereof. No modification or
change in this Agreement shall be valid or binding upon the Parties unless
in writing, executed by the parties to be bound thereby.
15. Assignability. No rights or interest arising under this Agreement may be
transferred or assigned by any Party without the prior written consent of
the other Parties, provided that any Party may assign this Agreement in
whole or part without consent to any entity controlling, controlled by or
under common control with such Party, or to any entity that acquires such
Party by purchase of stock or by merger or otherwise, or by obtaining
substantially all of the assets of such Party's applicable business unit.
16. Not a Partnership. This Agreement does not constitute and shall not be
construed as constituting a partnership or joint venture among the Parties
hereto, or an employee-employer relationship. No Party shall have any right
to obligate or bind any other Party in any manner whatsoever, and nothing
herein contained shall give, or is intended to give, any rights of any kind
to any third persons.
17. Counterparts. This Agreement may be executed in several counterparts, each
of which will be deemed to be an original, and each of which alone and all
of which together, shall constitute one
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and the same instrument, but in making proof of this Agreement it shall not
be necessary to produce or account for each copy of any counterpart other
than the counterpart signed by the Party against whom this Agreement is to
be enforced. This Agreement may be transmitted by facsimile, and it is the
intent of the parties for the facsimile of any autograph printed by a
receiving facsimile machine to be an original signature and for the
facsimile and any complete photocopy of the Agreement to be deemed an
original counterpart.
18. Attorney's Fees. The prevailing Party in any legal proceedings to enforce
this Agreement or to recover damages because of an alleged breach thereof
shall be entitled to recover its reasonable attorneys' fees and costs.
19. Captions. All captions in this Agreement are intended solely for the
convenience of the Parties, and none shall affect the meaning or
construction of any provision.
20. Survival of Agreement. Upon termination or expiration of this Agreement for
any reason, the following provisions of this Agreement shall survive:
Sections 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 and
20.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first set forth above.
DWANGO NORTH AMERICA, INC. ENORBUS TECHNOLOGIES
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxx
--------------------------------- ---------------------------------
Xxxxxx X. Xxxxxxx, CEO Name: XXXXXXX XXXXX
0000 Xxx Xxxxxx Xx., Xxxxx 0000 --------------------------------
Xxxxxxx, XX 00000-0000 Title: CEO
--------------------------------
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