Exhibit 10.25
TRADEMARKS LICENSE AGREEMENT
This Trademarks License Agreement ("Agreement") is entered into in
Houston, Texas, U.S.A., effective as of the 14th day of August, 2002 ("the
Effective Date"), by and between DWANGO Company, Ltd., ("DWANGO"), a Japanese
Corporation with a principal place of business at Xxxxxxxx Xxxxxxxx Xxxx.,
0-00-0, Xxxxxxxxxx-Xxxxxxxx-xxx, Xxxx-xx, Xxxxx, Xxxxx 103-0014 and Dwango North
America, Inc("DNA"), a Texas corporation with a principal place of business at
000 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxxx.
RECITALS
WHEREAS, DWANGO owns and uses certain trademarks as defined below (the
"Trademarks");
WHEREAS, DWANGO has developed and owns certain intellectual property,
as defined below ("Licensed Property");
WHEREAS, DWANGO and DNA (collectively the "Parties" and each a
"Party") have previously entered into a license agreement dated January 31, 2002
("Original License Agreement"), wherein DWANGO licensed certain trademarks and
technology to DNA, under the terms and conditions set out at length in the
Original License Agreement;
WHEREAS, DWANGO and DNA wish to amend and replace the Original
License Agreement in its entirety with this Agreement and a technology agreement
being entered into simultaneously herewith;
WHEREAS DNA desires a license of the Licensed Property to use the
Licensed Property for applications developed or to be developed by or for Dwango
and/or in order to develop new applications of the Licensed Property for
Wireless Technology, for use within the United States of America, Canada and
Mexico (collectively, the "Territory");
WHEREAS, DNA desires to use the Trademarks in connection with the
promotion, marketing and delivery of the Licensed Property, the DWANGO
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Related Technology and DNA Developed Technology within the Territory; and
WHEREAS, DWANGO is willing to permit such use of the Trademarks under
the terms and conditions set forth in this Agreement;
NOW THEREFORE, the parties agree as follows:
1. Grant of License.
1.1. Licensed Property. "Licensed Property" shall mean all intellectual property
rights to all Wireless Technology owned or held, now or in the future, by DWANGO
(for purposes of this definition only, the term DWANGO to include DWANGO
Company, Ltd., and any subsidiary, division or other entity owned and/or
controlled by DWANGO Company, Ltd.), including any DWANGO modifications,
additions, enhancements and upgrades thereto. Title to and all ownership rights
of, in and to the Licensed Property, and the copyrights, trademarks, patents and
other intellectual property rights related thereto, are and will remain the
property of DWANGO, which shall have the exclusive right to protect the same by
copyright, trademark, patent or otherwise.
1.2.1 Trademarks. "Trademarks" shall mean DWANGO(R), and all other product names
and related trademarks owned and registered by DWANGO (for purposes of this
definition only, the term DWANGO to include DWANGO Company, Ltd., and any
subsidiary, division or other entity owned and/or controlled by DWANGO Company,
Ltd.). In the event that DWANGO chooses not to register any trade name or
product name used by DWANGO, DNA may register such unregistered trade name or
product name used by DWANGO. In such case, DNA shall transfer, for no additional
consideration, all of these registered trademarks to DWANGO upon termination of
this Agreement. Title to and all ownership rights of, in and to the Trademarks,
are and will remain the property of DWANGO, which shall have the exclusive right
to protect the same.
1.2.2 DNA Developed Technology. "DNA Developed Technology" shall mean all
software written and/or technology developed by or for DNA, which does not
contain any portion of the Licensed Property.
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1.2.3 DWANGO Related Technology. "DWANGO Related Technology" shall mean all
software and/or technology, which contains some portion of the Licensed
Property, or has been co-developed by DWANGO and DNA.
1.2.4 Wireless Technology. "Wireless Technology" shall mean all technology owned
by DWANGO now or in the future that is designed for use or may be used over any
wireless network and/or that supports or may be used to support any wireless
application, including, without limitation, all client applications, all server
applications, all transmission applications, all ringtone applications, all
browser applications, all software development applications and all source and
object code related thereto, and also including any technology which DWANGO uses
under license to the extent contained in any of the foregoing, but only to the
extent that this technology which has been licensed to DWANGO may be sublicensed
to DNA.
1.3. Grant of License. DWANGO hereby grants to DNA an exclusive, nontransferable
license to use the Trademarks in connection with the name of DNA and
DNA's products and services, including the marketing, sale, manufacture,
distribution, promotion and packaging of such products and services in the
Territory. DNA may only use the Trademarks as a collective whole and shall not
separately use any element or elements of the Trademarks.
1.4. Reservation of Rights. DWANGO hereby reserves any and all rights not
expressly and explicitly granted in this Agreement.
1.5.1 Relationship of the Parties. DWANGO and DNA are independent contractors
with respect to each other, and nothing contained in this Agreement shall be
deemed to create, and the Parties shall not intend to create, any relationship
of partners or joint ventures with respect to this Agreement. None of the
Parties to this Agreement shall be, or shall hold themselves out to be, the
agent of the other party under this Agreement. Neither Party may assume or
create any obligation of any kind, either express or implied, or make any claims
or representations, on behalf of the other Party. All financial liabilities
associated with each Party's business are the sole responsibility of that Party.
All
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sales and other agreements between the Party and its customers are under
exclusive responsibility of that Party and will have no effect on the Party's
obligations under this Agreement.
1.5.2 Use of the Trademarks. DNA shall clearly indicate on DNA's homepage that
Dwango and DNA are separate entities. In addition, in instances where DNA may
deem such notice appropriate, advertising and promotional materials for DNA
shall also indicate that Dwango and DNA are separate entities.
2.1 Gross Revenue. "Gross Revenue" shall mean all revenue, fees, proceeds
and/or income of whatever type or character, and from whatever source, that DNA
may collect or receive from or as a result of Wireless Technology and/or any
technology that is designed for use or may be used over any wireless network
and/or that supports or may be used to support any wireless application,
including, without limitation, all client applications, all server applications,
all transmission applications, all ringtone applications, all browser
applications, all software development applications and all source and object
code related thereto.
2.2 License Fee. For the rights granted to DNA herein, DNA shall pay DWANGO an
annual running royalty of (*) of DNA's Gross Revenue ("DWANGO Royalty"), which
in any case shall not be less than (*) ("a Minimum Annual Royalty"). If DWANGO
in good faith contests any tax that is so payable or reimbursable by DWANGO, DNA
shall cooperate in good faith in the contest at DWANGO's expense. In the event
that the United States government withholds any sums from the royalties
otherwise payable to DWANGO, DNA shall pass on to DWANGO any tax refund and
interest related thereto, received by DNA with respect to DNA's previous payment
or reimbursement of applicable taxes and interest related thereto hereunder, if
any.
2.3 Payment. DNA shall determine the DWANGO Royalty on a quarterly basis, and
the DWANGO Royalty shall be due and payable to DWANGO within ninety (90) days
after the end of each quarterly period ending March 31, June 30, September 30
and December 31. The Annual Minimum Royalty set forth above shall apply to each
applicable contract year, which shall run from October 1 to September 30.
Parties hereto acknowledges that the first contract year shall run from August
1, 2002 to September 30, 2002. The
* 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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Annual Minimum Royalty shall be paid on or before December 31 during the term of
this Agreement for each contract year. The first Minimum Annual Royalty payment
shall be for the contract year ended September 30, 2003, and shall be due on
December 31, 2003. DWANGO shall release DNA from payment of the Annual Minimum
Royalty for the first contract year (August 1, 2002 to September 30, 2002). DNA
acknowledges that DNA shall pay DWANGO an annual running royalty for the first
contract year equal to one-half of one percent (1/2 of 1%) of the Gross Revenue.
2.4 Records and Reports. DNA shall keep, or cause to be kept, complete and
accurate records and books in English language sufficiently separate and
detailed to show the amount of DWANGO Royalty due and payable to DWANGO.
During the term of this Agreement within thirty (30) calendar days after the end
of each quarterly period, DNA shall submit to DWANGO the report, in English
showing the Gross Revenue, the amount of royalties to be payable, and other data
for calculation thereof.
2.5 Financial Examination. DNA shall, at the request and at the expense of the
DWANGO and upon reasonable notice, permit its personnel and/or an independent
accountant designated by DWANGO and reasonably acceptable to DNA to have access
to, examine and copy during ordinary business hours such records as may be
necessary to verify or determine any royalties, paid or payable, under this
Agreement. Financial examinations provided for in this section shall take place
no more than one time in any calendar quarter. In the event any examination of
DNA's records proves the lesser of twenty thousand United States Dollars
US$20,000.00 or ten (10)% underpayment of DWANGO Royalty, DNA shall promptly
reimburse DWANGO for all reasonable expenses associated with such financial
examination along with the deficient amounts, together with interest thereon at
the rate of 10% per year from the original due date. In the event that any
examination of DNA's records proves an overpayment of DWANGO Royalty, DWANGO
shall promptly reimburse DNA for the over payment.
3.1 Ownership of Trademarks. DNA hereby acknowledges that DWANGO is the owner
of the Trademarks, and any trademarks applications and/or registrations thereto,
agrees that it will do nothing inconsistent with DWANGO's intellectual property
rights in the Trademarks and agrees that
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all good will from the use of the Trademarks by DNA shall inure to the benefit
of DWANGO. DNA agrees that nothing in this Agreement shall give DNA any right,
title or interest in the Trademarks other than the right to use the Trademarks
in accordance with this Agreement. Except as permitted by this Agreement, DNA
agrees not to register or attempt to register the Trademarks as a trademark,
service xxxx, trade name, with any domestic or foreign governmental or
quasi-governmental authority and agrees it will not violate any of DWANGO's
intellectual property rights in the Trademarks. The provisions of this paragraph
shall survive the expiration or termination of this Agreement.
3.2 Ownership of Domain Name. DNA hereby agrees to transfer all right, title
and interest in the domain name "xxx.xxxxxx.xxx" to DWANGO upon termination of
this Agreement.
4. Use of the Trademarks; Protection of the Trademarks.
4.1. Proper Use. DNA agrees that all use of the Trademarks under this Agreement
shall only occur in connection with the DNA corporate name, the Licensed
Property, the Dwango Related Technology, and/or the DNA Developed Technology,
and shall be in compliance with the terms of this Agreement. Except as
provided in this Agreement, DNA shall have no right to sublicense, transfer or
assign the use of the Trademarks or to use the Trademarks for any other purpose.
DNA further agrees not to use the Trademarks on or in connection with any
products or services that are or would generally be regarded as obscene or
pornographic by the standards applicable in the United States; or disparaging of
Dwango or its products or services; or that are unlawful or whose purpose is to
encourage unlawful activities by others.
4.2. Quality Standards. If DNA uses the Trademarks in connection with the DNA
Developed Technology and/or DWANGO Related Technology, DNA agrees to maintain a
consistent level of quality of the DNA Developed Technology made available
thereunder, substantially equal to that found in DNA's products and Web site
services. DNA further agrees to maintain a level of quality of the DNA Developed
Technology in connection with its use of the Trademarks that is consistent with
general industry standards.
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4.3. Monitoring by DWANGO. DNA acknowledges that DWANGO does have the right to
periodically monitor, no more than quarterly, DNA's use of the Trademarks in
conjunction with the DNA Developed Technology and/or DWANGO Related Technology.
Upon reasonable request by DWANGO, no more often than quarterly, DNA shall
provide DWANGO with representative samples of each such use prior to the time
the Trademarks are published on the Internet or in press materials or marketing
or advertising materials. Each use of the Trademarks shall require the prior
consent of DWANGO. In the event that DWANGO does not provide such consent (or
rejection) within fourteen (14) business days after receipt of the proposed use,
then DWANGO shall be deemed to have consented to such use. If DWANGO has
consented to a particular use, DNA shall be entitled to continue that use and
all similar uses unless and until DWANGO revokes such consent. Any revocation of
consent must be on no less than thirty (30) days written notice and shall not
apply to services and products and marketing and advertising therefore that has
been introduced into the market, printed or scheduled for printing or published
or scheduled for publication at the time of such notice.
4.4. Legend; Disclaimer. DNA shall include with any online publication or
publication in print of the Trademarks a trademark legend indicating that the
Trademarks are that of DWANGO. DNA shall clearly indicate on DNA's homepage that
Dwango and DNA are separate entities. In addition, in instances where DNA may
deem such notice appropriate, advertising and promotional materials for DNA
shall also indicate that the DNA Developed Technology has been produced by DNA
and not by Dwango.
5. Confidential Information and Disclosure. Unless required by law, and except
to assert its rights hereunder or for disclosures to its own employees,
consultants, accountants, agents, representatives and attorneys on a "need to
know" basis, each party agrees not to disclose the terms of this Agreement or
matters relating thereto without the prior written consent of the other.
6. Indemnification
DNA hereby agrees to indemnify and hold harmless DWANGO and its
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predecessors, successors and assigns, and their officers, directors,
shareholders, employees, agents, accountants, attorneys and independent
contractors, from any and all causes of action, liabilities, demands, fines,
claims, costs and expenses (including the fees and expenses of legal counsel and
any expert witnesses) arising out of, relating to, or in connection with
Licensee's performance of its obligations hereunder, including all warranties
provided herein, or DNA's breach thereof. DWANGO shall have the right, subject
to prior written approval from DNA, to defend or settle any such action or
proceeding with counsel of its choice. DNA agrees to cooperate to the fullest
possible extent with DWANGO in any such defense effort.
DWANGO hereby agrees to indemnify and hold harmless DNA and its
predecessors, successors and assigns, and their officers, directors,
shareholders, employees, agents, accountants, attorneys and independent
contractors, from any and all causes of action, liabilities, demands, fines,
claims, costs and expenses (including the fees and expenses of legal counsel and
any expert witnesses) arising out of, relating to, or in connection with
DWANGO's performance of its obligations hereunder, including all warranties
provided herein, or DWANGO's breach thereof. DNA shall have the right, subject
to prior written approval from DWANGO, to defend or settle any such action or
proceeding with counsel of its choice. DWANGO agrees to cooperate to the fullest
possible extent with DNA in any such defense effort.
7.1. Term and Termination. This Agreement shall take effect the Effective Date,
and shall remain in full force for a Period of twenty-five (25) years from the
date, unless sooner terminated in accordance with the terms of this Agreement.
The parties hereto are entitled to offer in writing, ninety (90) days
immediately prior to expiration, to negotiate in good faith to extend the term
of this Agreement. Upon mutual agreement of the parties hereto, this Agreement
may be renewed or extended for successive terms, pursuant to mutual agreed terms
and conditions.
Either party may, without prejudice to any other rights or remedies, terminate
this Agreement by giving a written notice to the other such written notice shall
take immediate effect, if any of the following events should occur:
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(a) if either party fails to make any payment to the other when due under
this Agreement and such failure continues for more than thirty (30)
calendar days after receipt of a written notice specifying the default;
(b) If DNA makes what would generally be regarded by standards applicable
in the United States any obscene or pornographic use of the Trademarks; or
any use of the Trademarks disparaging of DWANGO or its products or
services; or any use that is unlawful in the Territory or encourage
activities which are unlawful in the Territory; and DNA fails to cure or
cease such use within thirty (30) days after notice from DWANGO;
(c) if either party: (i) makes an assignment for the benefit of creditors
of any interest subject to this Agreement; (ii) files a petition or
application under any foreign, state, or United States Bankruptcy act,
receivership statute or similar act or statute, as they now exist or are
hereafter amended; or (iii) is the subject of such an above referenced
petition or application filed by a third party, and such petition or
application is not resolved favorably for such party within one hundred
eighty (180) days thereafter;
(d) Failure by DNA to launch its service within 2 years after the effective
date and/or if DNA discontinues operation of the service thereafter for a
continuous period of more than 6 consecutive months and the service is not
restarted within 60 days after written notice of such from Dwango.
7.2. Effect of Termination. Upon termination of the Agreement, DNA agrees it
shall immediately cease any and all use of the Trademarks and ensure the removal
of the word "DWANGO" from its trade name immediately. DNA shall immediately
cease production of all materials containing the Trademarks, and within 6 months
thereafter, DNA shall destroy all previously produced products and all
advertising and promotional materials bearing Trademarks including samples and
catalogues, if any.
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8. General
8.1. Choice of Law and Venue. This Agreement shall be governed, construed and
enforced in accordance with the laws of Japan. Any claim or lawsuit arising out
of this Agreement must be brought in the District Court of Tokyo.
8.2. Entire Agreement. This Agreement constitutes the entire Agreement and
understanding between the parties and integrates all prior discussions between
them related to its subject matter. No amendment or modification of any of the
terms of this Agreement shall be valid unless in writing and signed by an
authorized representative of each party.
8.3. Assignment. Except as set forth below, neither party may assign, sublicense
or otherwise encumber any of its rights or (except in the normal course of its
business) delegate any of its duties under this Agreement, or otherwise assign
or transfer this Agreement without the prior written consent of the other party.
DWANGO shall have the right to terminate this Agreement upon thirty (30) days
prior written notice if DNA assigns or transfers this Agreement as permitted to
a direct competitor of DWANGO in the web client or web portal business without
DWANGO's consent. Any attempted assignment, delegation or transfer in derogation
of the foregoing shall be null and void. This Agreement shall apply to and bind
any permitted successors or assigns of the parties hereto and any reference to
the applicable parties herein shall refer to the applicable successors or
assigns.
8.4. Force Majeure. Neither party will be responsible for any failure to perform
its obligations under this Agreement due to causes beyond its reasonable
control, including but not limited to acts of God, war, riot, embargoes, acts of
civil or military authorities, fire, floods or accidents.
8.5. Waiver. Any waiver, either expressed or implied, by either party of any
default by the other in the observance and performance of any of the conditions,
covenants of duties set forth herein shall not constitute or be construed as a
waiver of any subsequent or other default.
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8.6. Headings. The headings to the Sections and Subsections of this Agreement
are included merely for convenience of reference and shall not affect the
meaning of the language included therein.
8.7. Independent Contractors. The parties acknowledge and agree that they are
dealing with each other hereunder as independent contractors. Nothing contained
in the Agreement shall be interpreted as constituting either party the joint
venture or partner of the other party or as conferring upon either party the
power of authority to bind the other party in any transaction with third
parties.
8.8. Survival. The provisions of Section 1.4 (Reservation of Rights), 3.1
(Ownership of Trademarks), 3.2 (Ownership of Domain Name), 4.4 (Legend;
Disclaimer), 5 (Confidential Information and Disclosure), 6 (Indemnification),
7.2 (Effect of Termination) and 8 (General) will survive any termination of this
Agreement.
8.9. Severability. Except as otherwise set forth in this Agreement, the
provisions of this Agreement are severable, and if any one or more such
provisions shall be determined to be invalid, illegal or unenforceable, in whole
or in part, the validity, legality and enforceability of any of the remaining
provisions or portions thereof shall not in any way be affected thereby and
shall nevertheless be binding between the parties hereto.
The undersigned hereby agree to the terms and conditions of this Agreement
effective on the Execution Date first set forth above.
DWANGO NORTH AMERICA, INC. DWANGO COMPANY, LTD.
BY: /s/ Xxxxxx X. Xxxxxxx BY: /s/ Xxxxxxx Xxxxxxxxx
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Xxxxxx X. Xxxxxxx, President and Xxxxxxx Xxxxxxxxx, President
Chief Executive Officer
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