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SOFTWARE DISTRIBUTION AGREEMENT
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Source: http://www.sec.gov/Archives/edgar/data/1158134/000119312504135906/dex1013.txt
EX-10.13
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dex1013.txt
SOFTWARE DISTRIBUTION AGREEMENT EXECUTED SEPT. 24,2003
Exhibit 10.13
SOFTWARE DISTRIBUTION AGREEMENT
This Software Distribution Agreement (the "Agreement") is entered into by
and between Motorola, Inc., a Delaware corporation by and through its iDEN
Subscriber Group with offices at 8000 West Sunrise Boulevard, Plantation,
Florida 33322, U.S.A. ("Motorola/Licensee"), and Dwango North America, Ind., a
Texas corporation having a principal place of business at 2825 San Felipe St.
Suite 2825 Houston, TX, 77057 ("Licensor"). Motorola and Licensor are each
sometimes referred to herein as a "Party" and collectively as the "Parties". The
Effective Date of this Agreement shall be the date of the last signature affixed
to this Agreement.
RECITALS
WHEREAS, Motorola is a provider of certain wireless communication products
that include architectures upon which other companies or developers can develop
client and/or client-server software applications that may be executed, at least
in part, by the Motorola wireless communication products;
WHEREAS, Licensor owns and/or controls all rights, title, and interests
within the United States, Canada and Mexico in and to one or more software
applications that have application in the mobile wireless environment;
WHEREAS, Motorola desires to license certain software applications from
Licensor on a non-exclusive basis for distribution by Motorola or through
Motorola's distribution channels to Customers as herein defined; and
WHEREAS, Licensor desires to grant such a license to Motorola and authorize
Motorola as a non-exclusive distributor of Licensor's software applications;
NOW THEREFORE, in consideration of the foregoing premises, and mutual
covenants, promises and agreements herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, with the intention to be legally bound hereby, the Parties agree
as follows:
TERMS AND CONDITIONS
1. Definitions.
1.1 "Application" shall mean a software application together with its
associated User Documentation that is owned by Licensor or for which Licensor
otherwise holds sufficient rights to grant Motorola the licenses set forth in
Sections 4, 5 and 6 below. An initial list of Applications is set forth in
Exhibit A attached hereto, which Exhibit may be amended from time to time upon
the mutual agreement of the Parties.
1.2 "Bundle" shall mean a combination of one or more Licensor or third
party Certified Applications made available for distribution to a Customer.
1.3 "Certified Application" shall mean (i) an Application that has
successfully completed and passed compatibility or other verification testing
performed by Motorola or a Motorola-approved third party or (ii) an Application
otherwise approved for distribution by Motorola in its sole discretion. A
Certified Application may be a Local Application or a Client Application. The
Certified Applications in audio, visual, or audio-visual content may
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be embodied in a tangible medium, including without limitation, a CD-ROM or
Floppy disk, Mobile Software retail cards, or may be embodied in an electronic
medium, including without limitation, as a collection of software accessible via
a web site. A Certified Application may be a Local Application or a Client
Application. Certified Application(s) are identified in Exhibit A. Exhibit A may
be amended from time to time upon the mutual agreement of the Parties.
1.4 "Client Application" shall mean the portion of a Network-based
Application that is executable by a Supported Product.
1.5 "Customers" shall mean wireless service providers, distributors,
retailers and end users of Supported Products.
1.6 "Demonstration Application" shall mean an Application containing a
subset of the Full Up Application features or a Full-Up Application with some
internal means to determine a finite number of uses before being disabled, or a
combination of both. Royalty fees may or may not be applicable.
1.7 "Distribution Server" shall mean a server computer from which
Certified Applications may be distributed to Customers. The Parties
acknowledge that a Distribution Server may be owned by Motorola or by a
Motorola-approved third party. The Parties also acknowledge that the Certified
Applications may be hosted on one or more Distribution Servers by Motorola or a
Motorola-approved third party(ies).
1.8 "Download," means any successful transmission(s) or distribution(s)
of a single Certified Application or Bundle to a Customer.
1.9 "Embeddable Applications" shall mean a certain subset of the
Applications that, once certified or otherwise approved for distribution by
Motorola, may be embedded or pre-installed in Supported Products. An initial
list of Embeddable Applications is set forth in Exhibit A, which list may be
amended from time to time upon the mutual agreement of the Parties.
1.10 "Full-Up Application" shall mean a full featured Application for
which royalty fees are applicable.
1.11 "iDEN Subscriber Group" means the Motorola business entity engaged in
the design, development, manufacture and distribution of product with the
Integrated Digital Enhanced Network (iDEN) technology.
1.12 "Intellectual Property Rights" shall mean all worldwide intellectual
property rights of any kind whether arising under statute, common law, treaty,
convention or otherwise, and whether or not vested or inchoate, including,
without limitation, (i) all patents, patent applications, conceptions,
inventions, discoveries and improvements, including any patent applications
filed or patents acquired after the Effective Date; (ii) all rights associated
with works of authorship, including copyrights and moral rights; (iii) all
rights relating to the protection of trade secrets and Confidential Information;
and (iv) any other proprietary rights relating to intellectual property and/or
industrial property. Notwithstanding the foregoing, Intellectual Property Rights
shall not include any trademark, service mark, and/or trade dress rights of any
kind.
1.13 "Licensor Trademarks" shall mean any trademarks, service marks,
design marks, symbols, logos and/or other indicia of source owned or used under
license by Licensor, and all goodwill associated therewith.
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1.14 "Local Application" shall mean an Application that is executable by a
Supported Product and performs all of its functions on the Supported Product
only.
1.15 "Network" means the Website (as defined below) and Approved Third
Party Websites (as defined below) from which Certified Applications will be made
available to consumers, as served from and through the Server (as defined
below), via a range of service channels limited to Internet, cable, satellite,
web, WAP, SMS, or cellular transmission, provided said channel shall include a
file encryption format, such as a secure socket layer (SSL) transmission format,
that will substantially reduce the likelihood that Certified Applications(s)
encrypted in such format will be copied, played, distributed, transmitted or
exploited in any way beyond the Wireless Device of the consumer that has
initially received said Certified Application(s).
1.16 "Network-based Application" shall mean a collection of software
applications that utilizes wireless resources to perform at least some of its
functions. Each Network-based Application includes a Client Application and at
least one Server Application.
1.17 "Royalty" means the amount payable hereunder by Licensee to Licensor
with respect to each and every Certified Applications or bundle in each Download
sold, distributed, transmitted, delivered or otherwise exploited by Licensee.
1.18 "Subscription Services" shall mean those services that are available
through the Client Applications distributed by Motorola to Customers and for
which Licensor receives revenue or proceeds directly or indirectly from such
Customers.
1.19 "Subscription Service Server" shall mean a server computer operated
by or on behalf of Licensor or Licensor's licensee to facilitate the provision
of Subscription Services.
1.20 "Supported Products" shall mean the Motorola wireless communication
products that include architectures that support execution of one or more of the
Certified Applications and that are listed in Exhibit B, which Exhibit may be
amended from time to time upon the mutual agreement of the Parties. The
Supported Products are categorized in Exhibit B with respect to the
architectures that they include to support execution of the Certified
Applications.
1.21 "Third Party Website" means a third party's proprietary website from
which Licensee proposes to allow Certified Applications(s) to be transmitted to
consumers or from which Licensee proposes to allow consumers to "hyperlink" to
the Server. The parties acknowledge that, upon the execution of this Agreement,
www.nextel.com, www.southernline.com, www.boostmobile.com,
www.telusmobility.com, www.iden.motorola.com/nextel, www.iden.motorola.com/
southernline, www.iden.motorola.com/boost, and www.iden.motorola.com/telus
shall be deemed Approved Third Party Websites. Motorola, at its sole discretion,
may add or delete Third Party Websites during the term of the Agreement.
1.22 "User Documentation" shall mean the user manual and any other
information provided by Licensor in support of a particular Application that is
identified by Licensor as being intended either for distribution with the
particular Application or to be made available by Motorola, via Motorola's
website or otherwise, to Customers of the Supported Products.
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1.23 "Website" means Licensee's proprietary Website on the Internet having
a URL of www.motorola.com.
2. Licensor's Obligations for Developing Applications and Sharing Proceeds
Received for Subscription and/or System Integration Services.
2.1 Promptly upon execution of this Agreement, Licensor shall provide
Motorola at least one copy of each Certified Application intended for
distribution by Motorola pursuant to this Agreement. Any text displayed or
published in such Certified Application(s) shall be in the English language.
Licensor may provide from time to time, at its sole expense, additional copies
of each Certified Application in other languages as may be mutually agreed upon
by the Parties.
2.2 Licensor shall use its reasonable best efforts to develop
Applications for use with one or more of the Supported Products. All such
Applications shall be in English and such other languages as may be mutually
agreed upon by the Parties from time to time. Licensor shall provide Motorola
with an Application development - roadmap monthly, or at such other mutually
agreed upon times, identifying titles, content summaries and estimated release
dates for additional Applications.
2.3 Licensor agrees to ensure that each Certified Application works with
all the Supported Products in a particular architecture category as identified
in Exhibit B. Motorola reserves the right to test and review any Certified
Application (including all supporting User Documentation) before Motorola allows
such Certified Application to be made available to Customers of the Supported
Products. Motorola further reserves the right, in its reasonable discretion, to
remove any Application from any Distribution Server at any time or otherwise
refuse to distribute any Application. Upon mutual agreement, Licensor shall
modify Certified Applications as requested by Motorola to insure operability of
the Certified Application on or with the Supported Products, and/or make minor
changes to the user interface or User Documentation of each Certified
Application as may be requested by Motorola from time to time. Alternatively or
additionally, Motorola may make minor changes or corrections to the User
Documentation of each Certified Application as Motorola deems necessary in its
reasonable discretion.
2.4 Certification of Applications.
2.4.1 J2ME (Java) Applications. Licensor shall submit each J2ME (Java)
Application to Quality Partners for testing to determine whether the Application
is compatible with the Supported Products in a particular architecture category.
Application certification information is located at www.qpqa.com/motorola/iden.
Motorola may decide at its sole discretion to allow Licensor to self-certify
applications, if submission of the initial Applications under this Agreement
pass certification testing, and there are a sufficient number of Certified
Applications listed in Exhibit A. Additional self-certifying information and
specific requirements may be accessed at www.motorola.com/idendev.
2.4.2 Ringtones. Each Ring Tone shall be subjectively optimized by Licensor
to maximize the volume output, while eliminating any audible distortion. The
optimization testing shall occur for each Ring Tone pushed to Motorola's server,
and the testing shall be conducted on an actual iDEN handset. Licensor shall
also verify that the
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Ring Tone is in the correct format and compatible with each iDEN handset prior
to submitting to Motorola for Customer use.
2.4.3 Wallpapers/Graphics. Each Wallpaper shall be subjectively optimized
by Licensor to fully leverage the color palette for each iDEN handset display
type. The optimization testing shall occur for each Wallpaper pushed to
Motorola's server, and the testing shall be conducted on actual iDEN handset.
Licensor shall also verify that the Wallpaper is in the correct format and
compatible with each iDEN handset prior to submitting to Motorola for Customer
use.
2.5 Licensor shall be solely responsible for all aspects of the operation
of the Certified Applications distributed by Motorola, including but not limited
to, providing technical support to Motorola and the Customers and providing
end-user licenses, click-wrap or otherwise, for using the Certified
Applications. In addition, Licensor shall be solely responsible for establishing
Customer pricing for the Certified Applications and shall communicate such
pricing to Motorola from time to time; provided however that the license fee for
each Certified Application shall be an amount sufficient to cover Motorola's
Costs (as defined in Exhibit C) per transaction. Based on current Motorola Costs
per transaction, the projected sales price for each Certified Application shall
be an amount greater than or equal to [*].
2.6 Licensor shall provide twenty-four (24) hour technical support, seven
(7) days a week, via telephone in English to Motorola, and shall appoint a
dedicated person and email address to which Motorola can send questions and
problems, and shall ensure that Motorola receives a response to any such
questions and problems within twelve (12) hours.
2.7 Licensor will provide, at no charge, to Motorola or, where
applicable, the Customer, (a) bug fixes or software patches as are reasonably
required to ensure proper operation of each Certified Application in accordance
with its accompanying User Documentation and (b) upgrades and enhancements for a
Certified Application, provided that the Licensor may, in its sole discretion,
charge Customers for such upgrades or enhancements.
2.8 Licensor shall be solely responsible for warranting the Applications
and providing warranty and Customer support services for the Applications, and
further agrees to indemnify Motorola as provided in Section 17 below for any
warranty or Customer support services provided by Motorola with respect to the
Applications.
2.9 Licensor will acquire all necessary rights from all Trademark and
copyright holders (or their agents) in the musical compositions and graphical
representations or other application content underlying the Certified
Applications to allow Customers to use the Certified Applications in accordance
with the terms and conditions of any end-user license agreement and to allow
Motorola to perform its obligations under this Agreement. Licensor will be
solely responsible for all payments due and owed to all Trademark and copyright
holders (or their agents) and any other parties responsible for collecting fees
related to underlying rights in the Certified Applications and their
distribution.
3. Motorola's Obligations for Hosting and Distributing Applications.
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* 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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3.1 Upon receiving a Certified Application from Licensor or on Licensor's
behalf and performing any testing or review of the Certified Application as
Motorola, in its sole discretion, deems necessary, Motorola will load the
particular Certified Application on one or more Distribution Servers for
distribution to Customers of the Supported Products. Motorola may remove any
Certified Application from any Distribution Server or otherwise refuse to
distribute any Application at any time in its reasonable discretion.
3.2 Motorola or a Motorola-approved third party will host the Certified
Applications on the Distribution Server(s) and maintain operability of the
Distribution Server(s). Should a decision be made at Motorola's sole discretion
to allow Licensor to host the Certified Application(s), a separate hosting and
distribution agreement will be executed between the Parties.
3.3 Motorola will advertise and market the website from which the
Certified Applications will be distributed and will create appropriate links to
enable Customers of the Supported Products to download the Certified
Applications upon Motorola's receipt of a purchase order or other request and
payment of the advertised price for the particular Certified Application.
3.4 Motorola will collect all monies associated with license fees for the
Certified Applications distributed by or on behalf of Motorola, and will provide
Licensor its share of the collected proceeds in accordance with Section 7 below.
3.5 Motorola will track the quantity of licenses for each Certified
Application, and will report such quantities to Licensor in accordance with
Section 8 below.
3.6 Licensor acknowledges that Motorola may, in its reasonable
discretion, allow Customers to electronically submit or post their comments or
opinions related to one or more of the Certified Applications on Motorola's web
site for public informational purposes and/or use by potential Customers of the
Certified Applications.
4. Grant of License for Distributing Certified Applications.
4.1 Licensor hereby grants to Motorola, during the term of this
Agreement, a nonexclusive license within the United States, Canada and Mexico
to: (i) license (or have licensed), and/or distribute (or have distributed) the
Certified Applications; (ii) pre-install or embed (or have pre-installed or
embedded) in Supported Products Embeddable Applications, and offer for sale (or
have offered for sale), sell (or have sold), distribute (or have distributed),
and otherwise dispose of Supported Products containing the Embeddable
Applications; (iii) reproduce and display (or with the right to sublicense to
have reproduced and display) the Certified Applications (individually or
Bundled) as necessary to carry out the foregoing rights; (iv) provide a limited
sublicensed right to use to Customers who have purchased or downloaded a
Certified Application (individually or Bundled), and, for wireless service
provider, distributor and retailer Customers, to sell, license or distribute,
the Certified Applications (individually or Bundled) and/or Supported Products
containing Embeddable Applications to Customers; and (v) reproduce, install and
use the Certified Applications internally for test and/or evaluation purposes.
Except as may be otherwise agreed upon pursuant to Exhibit C. Licensor agrees
that Motorola's rights under subsection (ii) and other rights related to
Embeddable Applications shall be royalty-free.
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4.2 Licensor hereby grants to Motorola a royalty-free, nonexclusive
license within the Uniied States, Canada and Mexico, with right to grant
sublicenses, under Licensor's Intellectual Property Rights and Licensor's
Trademarks to copy the Certified Applications from a Customer's Supported
Product into a non-server computer and store the Certified Applications
temporarily in the non-server computer in order to accommodate updating or
upgrading software of the Customer's Supported Product or upgrading the
Customer's Supported Product to another Supported Product ("Upgraded Supported
Product") capable of executing the Certified Applications, and to store or
restore the Certified Applications in the Customer's Supported Product or
Upgraded Supported Product, provided that any and all copies of the Certified
Applications are permanently deleted from the non-server computer immediately
after or during such storing or restoring of the Certified Applications in the
Customer's Supported Product or Upgraded Supported Product.
4.3 Licensor hereby grants to Motorola a royalty-free, nonexclusive
license within the United States, Canada and Mexico, with right to grant
sublicenses, under Licensor's Intellectual Property Rights and Licensor's
Trademarks to re-distribute Certified Applications to Supported Products of
Customers so long as Licensor has received or will receive a royalty for the
initial license and/or distribution of such Certified Applications to such
Customers.
4.4 Grant of License for Non-Royalty Distribution. Licensor hereby grants
to Licensee, during the term of this Agreement the right to re-send or otherwise
re-distribute Certified Application(s) to Wireless Devices free of charge in the
event such Certified Application(s) were deleted, through no fault of Licensee
except in the case of repairing or upgrading the software in a Wireless Device,
but only if such Certified Application(s) had been previously purchased by such
consumers (collectively, "Replaced Certified Application(s)"). For purposes of
clarification, a consumer who misplaces, or becomes dispossessed of his/her
Wireless Device, or a consumer who purchases a new Wireless Device shall not be
qualified to receive the "free-of-charge" Replaced Certified Application(s)
contemplated in this subparagraph.
5. Grant of License for Demonstration Purposes.
Licensor hereby grants to Motorola, during the term of this Agreement, a
nonexclusive, royalty-free license within the United States, Canada and Mexico
under Licensor's Intellectual Property Rights and Licensor's Trademarks to use,
publicly display, publicly perform, and reproduce the Certified Applications for
the purpose of marketing and demonstrating the Certified Applications to current
or prospective Motorola Customers and/or at trade shows, seminars, conferences,
or wireless or electronic industry events. Such marketing or demonstration
efforts may include demonstrating the Certified Applications online via an
Internet accessible emulator device, webcasting, end user trials or by other
means.
6. Trademark License.
6.1 Licensor grants to Motorola, during the term of this Agreement, a
nonexclusive, royalty-free license within the United States, Canada and Mexico
under Licensor's Trademarks to use Licensor's Trademarks in online, print or
other advertising for the purposes of promoting, selling, licensing, and
distributing the Certified
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Applications and the Supported Products to Customers. Licensor further grants
Motorola the right to place hyperlinks on Motorola's website pointing to
Licensor's website and/or web page related to the Certified Applications.
6.2 Motorola acknowledges that all right, title and interest in and to
Licensor's Trademarks, including all goodwill related thereto, are and shall
remain owned solely and exclusively by Licensor and that all usage of Licensor's
Trademarks by or on behalf of Motorola shall inure to the benefit of Licensor.
6.3 Motorola agrees to comply with any and all usage guidelines
promulgated by Licensor with respect to Licensor's Trademarks, and shall supply,
upon Licensor's written request, specimens of all advertising, marketing and/or
promotional materials in which a Licensor Trademark appears to Licensor for
inspection and approval, which approval shall not be unreasonably withheld. If
Licensor has not indicated its approval or rejection of such specimens within
five (5) business days after receiving such specimens, such specimens shall be
deemed approved by Licensor. Licensor agrees to provide Motorola a copy of its
current trademark usage guidelines promptly upon execution of this Agreement.
7. Royalty/Revenue-Sharing Payments. Royalty payments between the Parties
shall be made in accordance with attached Exhibit C.
8. Promotion, Publicity and Press Releases.
8.1 Licensor authorizes Motorola to refer, in Motorola's online, print or
other advertising and promotional materials, to the fact that Licensor's
Certified Applications are accessible through Motorola and/or that Motorola is a
distributor of Licensor's Certified Applications, provided that any such
materials: (a) either do not use Licensor's Trademarks or use Licensor
Trademarks only as permitted in Section 6 above; (b) do not state, suggest or
imply by the wording or prominence of such statement, or otherwise, that
Licensor sponsors, authorizes, and/or is the source or origin of the Supported
Products; and (c) do not disparage Licensor, its products, services, or
affiliates.
8.2 Except as may be required under applicable state for federal law,
neither Party shall publicize the terms or the existence of this Agreement to
any third party without prior written consent from the other Party after that
Party's review and approval of the form and content of any publicity release or
other press announcement. Licensor shall not imply or state to any person or
entity that it is sponsored by, funded by, or in any way associated with
Motorola other than as authorized by Motorola pursuant to this Agreement.
Similarly, Motorola shall not imply or state to any person or entity that it is
sponsored by, funded by, or in any way associated with Licensor other than as
authorized by Licensor pursuant to this Agreement.
8.3 Both Parties agree to use commercially reasonable efforts to jointly
market and promote the Certified Applications and the Supported Products,
including without limitation offering each other, in each Party's sole
discretion, opportunities to demonstrate, market and promote the Certified
Applications at trade or other shows, seminars and/or wireless or electronic
industry events.
9. Limitations on Applications to be Distributed by Motorola.
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9.1 Only Certified Applications will be made available by Motorola for
license and/or distribution to Customers.
9.2 Motorola reserves the right to remove applications from the
Distribution Server(s) in its reasonable discretion.
10. Representations and Warranties.
10.1 By Licensor.
Licensor hereby represents and warrants to Motorola and the Customers that:
(i) Licensor has the power and authority to enter into and perform its
obligations according to the terms of this Agreement; (ii) Licensor has no
restrictions that would impair its ability to perform its obligations and grant
all rights contemplated by this Agreement; (iii) Licensor has not and will not
enter into any agreement that is inconsistent with its obligations hereunder;
(iv) Licensor is the owner or has obtained and currently holds valid and
sufficient rights, including rights in third party Intellectual Property Rights
and trademarks, to license the rights granted to Motorola herein; (v) the
content of the Applications and the distribution thereof shall comply with all
applicable federal, state, and local laws and regulations; and (vi) the content
of the Applications does not contain any viruses, worms, Trojan horses, time
bombs, or other software routines that may negatively impact the operation of
any Supported Products or damage interfere with, intercept, or expropriate any
system data or personal information. Licensor has acquired or owns all the
necessary underlying rights mentioned in Section 2.9 above so that Licensor is
able to license the Certified Applications with no additional royalties or fees
whatsoever paid by Motorola, except for the royalties or fees to be paid
according to this Agreement. Licensor is required to notify Motorola of any
known encumbrances to the foregoing during the term of this Agreement.
10.2 By Motorola.
Motorola hereby represents and warrants to Licensor that Motorola: (i) has
the power and authority to enter into and perform its obligations according to
the terms of this Agreement; (ii) has no restrictions that would impair its
ability to perform its obligations contemplated by this Agreement; and (iii) has
not and will not enter into any agreement that is inconsistent with its
obligations hereunder.
10.3 Disclaimer.
EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, THE FOREGOING
WARRANTIES ARE THE ONLY WARRANTIES GIVEN BY EITHER PARTY AND ALL OTHER
WARRANTIES OR CONDITIONS, WHETHER EXPRESS OR IMPLIED BY STATUTE OR OTHERWISE,
ARE SPECIFICALLY EXCLUDED BY THE PARTIES, INCLUDING WITHOUT LIMITATION, IMPLIED
WARRANTIES OF MERCHANTIBLLITY OR FITNESS FOR A PARTICULAR PURPOSE.
11. Confidentiality.
11.1 The Parties agree that during the term of this Agreement there may be
a need to exchange certain confidential or proprietary information
("Confidential Information"). Confidential Information shall be defined as the
terms of this Agreement and any confidential, trade secret, or other proprietary
information disclosed by one Party (the
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"Disclosing Party") to the other Party (the "Receiving Party") under this
Agreement, provided that such information is marked or otherwise identified at
the time of disclosure as being confidential or proprietary information of the
Disclosing Party. The Parties agree to mark any Confidential Information
disclosed in tangible form with a suitable legend. Confidential Information
shall not include information that (i) is public knowledge at the time of
disclosure, (ii) was known by the Receiving Party before disclosure by the
Disclosing Party, or becomes public knowledge or otherwise known to the
Receiving Party after such disclosure, other than by breach of the
confidentiality obligations of this Agreement, or (iii) is independently
developed by the Receiving Party by persons without access to Confidential
Information of the Disclosing Party.
11.2 For a period of three (3) years after the Receiving Party receives
any particular component of the Disclosing Party's Confidential Information,
the Receiving Party shall use its reasonable best efforts, but in no instance
less than reasonable care, to limit dissemination of the component of
Confidential Information to such of its employees and agents who have a strict
need to know in the performance of the Receiving Party's duties hereunder, and
not disclose the Confidential Information to any third party, except as may be
reasonably necessary to load, host or remove the Certified Applications on or
from a Distribution Server.
11.3 The Receiving Party shall take appropriate action, by instruction,
agreement, or otherwise, with any persons permitted access to the Disclosing
Party's Confidential Information so as to assure that they will hold such items
in confidence. All Receiving Party personnel who receive or use the Confidential
Information of the Disclosing Party shall, before receipt or use of such
information, be informed of the Receiving Party's obligations under this
Agreement.
11.4 The Receiving Party agrees to return to the Disclosing Party, upon
termination of this Agreement, the Disclosing Party's Confidential Information
and any and all copies and derivatives thereof, or certify the destruction of
same upon the request of the Disclosing Party.
11.5 The Parties agree that any breach of the confidentiality obligations
of this Section 11 may result in irreparable harm to the Disclosing Party for
which damages would be an inadequate remedy and, therefore, in addition to its
rights and remedies otherwise available at law, the Disclosing Party shall be
entitled to seek equitable relief, including injunction, in the event of such
breach.
12. Term and Termination.
12.1 Term. The term of this Agreement shall begin on the Effective Date
and shall continue for a period of three (3) years ("Initial Term"), unless
earlier terminated as provided herein. The term of this Agreement shall
automatically renew for one or more additional one (1) year periods (each such
one-year period being referred to herein as a "Renewal Term") upon expiration of
the Initial Term or any Renewal Term, unless a notice of non-renewal is
communicated by one Party to the other at least ninety (90) calendar days prior
to the expiration of the Initial Term or a particular Renewal Term, as the case
may be. Neither Party shall be liable to the other for any termination of this
Agreement in accordance with its terms or for any refusal, to renew or to extend
its term.
12.2 Termination for Cause. If either Party ("Defaulting Party") fails to
perform a material obligation of this Agreement, the other Party may notify the
Defaulting Party of its intent to terminate this Agreement for cause
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by giving the Defaulting Party thirty (30) calendar days prior written notice.
If the Defaulting Party cures its non-performance within the thirty (30)
calendar day period, this Agreement shall remain in full force and effect;
otherwise this Agreement shall automatically terminate upon expiration of the
thirty (30) calendar day period, subject to Motorola's limited right to sell-off
as set forth in Section 13 below.
12.3 Insolvency. All rights and licenses granted under or pursuant to this
Agreement by Licensor to Motorola are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the United States Bankruptcy Code (or any other
section(s) of the United States Bankruptcy Code in effect on the Effective Date
of this Agreement that addresses rights in executory contracts), 11 U.S.C.
Section 101 et seq. (the "Bankruptcy Code"), licenses of rights to "intellectual
property" as such term is defined under the Bankruptcy Code. The Parties agree
that Motorola, as a licensee of such rights and licenses, shall retain and may
fully exercise all of its rights and elections under the Bankruptcy code, and
that Motorola shall have the right to retain and enforce its rights under this
Agreement provided it abides by the terms of this Agreement.
12.4 Rights and Duties Upon Termination. In the event of expiration or
termination of this Agreement: (i) Motorola shall promptly remove the Certified
Applications from all Distribution Servers and, subject to Motorola's limited
right to sell-off as set forth in Section 13 below, shall not license or
otherwise dispose of the Certified Applications to any third party after such
expiration or termination; and (ii) Licensor shall be responsible for continued
support of past licenses of the Certified Applications and sales of Certified
Applications during the Sell-Off Period specified in Section 13.
12.5 Survival. Except as provided in this Section 12, there shall be no
further remedies or obligations from either Party upon termination of this
Agreement, except those obligations, rights and remedies set forth in Sections
1, 2.5-2.9, 4 (through completion of the below-defined Sell-Off Period only), 6,
7 (including the provisions of Exhibit C), 10, 11 (only to the extent expressly
provided therein), 12, 13 (through completion of the Sell-Off Period), 14, 16-18
(inclusive), 24, and 27, which shall survive the termination of this Agreement
for any reason.
13. Limited Right to Sell-Off.
In the event that this Agreement is terminated for any reason. Motorola
shall have, for a mutually agreed upon period ("Sell-Off Period") of not less
than ninety (90) calendar days following the effective date of termination, the
limited, one-time right to license and/or distribute copies of downloadable or
embedded Certified Applications, provided that such Certified Applications had
been sold to or requested by Customers on or before the effective date of
termination.
14. Notice of Discontinuance
In the event that Licensor desires to discontinue distribution, execution
or technical support of any Certified Application(s), a minimum one-hundred and
eighty (180) day prior notification shall be provided to Motorola to allow
phase-out of the Certified Application. This notification and phase-out period
may be shortened upon mutual consent of the parties.
11
15. Intellectual Property Rights.
Nothing in this Agreement grants either Party an ownership or other
interest in the other Party's Intellectual Property Rights. In no event are any
rights, except the licenses expressly granted herein, in any real or
intellectual property transferred from one Party to the other pursuant to this
Agreement. Motorola shall own all proprietary rights, including copyrights
and/or trademarks, in and to any marketing materials created, modified or
otherwise prepared by or for Motorola which may contain Licensor's Intellectual
Property Rights and/or Licensor's Trademarks.
16. Relationship of the Parties.
Each of the Parties shall act as, and shall be, independent contractors in
all aspects of this Agreement. Neither Party will act or have authority to act
as an agent for the other Party for any purpose whatsoever. Nothing in this
Agreement will be deemed to constitute or create a joint venture, partnership,
pooling arrangement, or other formal business entity or fiduciary relationship
between Motorola and Licensor.
17. Indemnification.
Licensor shall indemnify and hold harmless Motorola, its affiliates,
subsidiaries and Customers, and its and their respective officers, directors,
employees, agents, successors and assigns (each an "Indemnified Party") from and
against any judgments, losses, damages, liabilities, costs or expenses
(including, but not limited to, reasonable attorneys' fees and legal expenses)
of any kind attributable to any use, distribution, or license of any
Application, including but not limited to costs, expenses, and attorney's fees
incurred by an Indemnified Party associated with or arising from: (i) any breach
or claimed breach of the above Licensor representations and warranties; (ii)
damage to the Supported Products or any portion thereof resulting from use of
any of the Applications; (iii) warranty or Customer support services performed
by Motorola with respect to any of the Applications or any Supported Products
damaged as a result of use of any of the Applications; (iv) recalling any
defective Applications; and (v) any third party claim or action brought against
an Indemnified Party alleging that any Application or any portion thereof (a)
infringes, misappropriates or violates in any manner, any intellectual property
right, right of publicity, right of privacy, moral right, or any other
proprietary right of a third party; or (b) contains material or information that
is fraudulent, deceptive, misleading, obscene, defamatory, trade libelous,
libelous, slanderous, or unlawfully harassing or injurious, or is in violation
of personal or property rights, regulation or law, or other common law or
statutory rights. The foregoing indemnity will be in addition to, and not in
lieu of, all other legal rights and remedies that Motorola may have. Licensor
agrees that it will, upon Motorola's request and at Licensor's expense, defend
or assist Motorola in the defense of any action brought against Motorola for
which Licensor has an indemnity obligation hereunder.
18. Limitations of Liability.
WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, NEITHER LICENSOR NOR
MOTOROLA SHALL BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL, PUNITIVE
OR
12
SPECIAL DAMAGES OF ANY KIND OR CHARACTER. INCLUDING WITHOUT LIMITATION LOSS OF
REVENUE OR PROFITS. FAILURE TO REALIZE SAVINGS OR OTHER BENEFITS, OR LOSS OF
DATA OR USE, EVEN IF EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. Except for Licensor's indemnity obligations under Section 17, neither
Party's liability under this Agreement shall exceed the amount of payments due
and payable to the Licensor under Section 7 and Exhibit C.
19. Dispute Resolution.
19.1 The Parties will attempt to settle any claim, dispute, controversy or
difference arising out of, or in relation to, or in connection with this
Agreement, or for breach thereof, through consultation and negotiation in good
faith and spirit of mutual cooperation. If those attempts fail to achieve a
settlement, then the dispute will be mediated by a mutually acceptable mediator
to be chosen by the Parties within forty-five (45) calendar days after written
notice by either Party demanding mediation. Neither Party may unreasonably
withhold consent to the selection of a mediator, and the Parties will share the
costs of mediation equally. The mediation hearing shall be conducted within
thirty (30) calendar days after the selection of the mediator. The Parties may
also agree to replace mediation with some other form of alternate dispute
resolution ("ADR"), such as neutral fact-finding or a mini-trial. Any mediation
or other ADR shall be conducted in the English language. Any dispute which
cannot be resolved between the Parties through negotiation, mediation or other
form of ADR within six (6) months of the date of the initial demand for ADR or
mediation by one of the Parties may then be submitted to the courts for
resolution.
19.2 The use of any ADR procedures will not be construed under the
doctrines of laches, waiver or estoppel to affect adversely the rights of either
Party. Nothing in this Section 19 will prevent either Party from resorting to
judicial proceedings if interim relief from a court is necessary to prevent
serious and irreparable injury to that Party or to others. In addition, nothing
in this Section 19 shall be construed as applying to disputes regarding the
Intellectual Property Rights or trademarks of either Party (including but not
limited to Confidential Information), the enforcement of the Parties' respective
Intellectual Property Rights or trademarks, or the enforcement of the Parties'
respective obligations under this Agreement with respect to the other Party's
Intellectual Property Rights or trademarks.
20. No Exclusivity.
Each Party shall carry out its commitments under this Agreement in a manner
that reflects favorably upon the good name and goodwill of the other Party. The
Parties agree that the commitments under this Agreement are not exclusive and
that either Party may enter into similar agreements with third parties,
including either Party's competitors.
21. Entire Agreement and Amendments.
21.1 This Agreement, including any and all Exhibits, constitute the
complete and exclusive agreement between the Parties with respect to the subject
matter hereof, superseding and replacing any and all prior or contemporaneous
agreements, communications, and understandings, both written and oral, regarding
such subject
13
matter. Notwithstanding the foregoing, this Agreement shall not be interpreted
to supersede or replace any other written agreement between the Parties that
does not relate to the subject matter hereof. In the event of a conflict between
the Terms and Conditions of this Agreement and the terms and conditions of any
other written Agreement between the Parties, the Parties agree to negotiate in
good faith to resolve the conflict, except that in the event of a conflict
between the Terms and Conditions of this Agreement and the terms and conditions
of a click-accept agreement on the Motorola web site that is accepted by
Licensor subsequent to this Agreement and relates to the subject matter hereof,
the Terms and Conditions of this Agreement shall control.
21.2 Motorola may, from time to time, modify the terms of this Agreement
by: (i) posting the revised agreement on Motorola's web site and notifying
Licensor of the change by e-mail; (ii) forwarding a copy of the revised
Agreement to Licensor, whether electronically or through a postal service; or
(iii) any other means reasonably calculated to inform Licensor of the terms of
the revised agreement. Unless Licensor objects to the revised agreement in
writing to Motorola within thirty (30) days of receiving notice of the change,
in which case no revision will take effect. Licensor will be deemed to have
accepted the terms of the revised Agreement and the as revised Agreement will
take effect and be biding on both parties at the end of Licensor's thirty (30)
day objection period. Subject to the foregoing, all other amendments to this
Agreement must be in a written document signed by authorized representatives of
both Parties.
22. Assignment.
Licensor may not assign this Agreement or any of its rights or obligations
hereunder without the express written consent of Motorola, which consent shall
not be unreasonably withheld. Motorola may assign this Agreement or any of its
rights or obligations hereunder; provided that the third party to whom the
rights or obligations will be assigned first agrees in writing to assume
Motorola's obligations under this Agreement. Notwithstanding any clause herein
to the contrary, Motorola is authorized to grant a limited sub-licensed right to
its Customers to use the Certified Applications, and/or resell or re-distribute
Supported Products that include any Certified Applications.
23. Force Majeure.
Neither Party shall be held responsible or liable for any losses arising
out of any delay or failure in performance of any part of this Agreement due to
any act of God, act of governmental authority, act of the public enemy or due to
war, riot, flood, civil commotion, insurrection, labor difficulty, severe or
adverse weather conditions, lack or shortage of electrical power, failure of
performance by any third party hosting service or equipment provided or
maintained by others, including general performance of the Internet itself, or
any other cause beyond the reasonable control of the Party delayed.
24. Severability.
If any one or more of the provisions of this Agreement is held to be
unenforceable under applicable law, (a) such unenforceability shall not affect
any other provision of this Agreement; (b) this Agreement shall be construed as
if said unenforceable provision had not been contained therein; and (c) the
Parties shall negotiate in good faith to
14
replace the unenforceable provision by a provision which has the effect nearest
to that of the provision being replaced.
25. Governing Law.
It is understood and agreed by both Parties hereto that the laws of the
United States and any other jurisdiction in which actions are taken in
performance of this Agreement shall be respected and observed. This Agreement
shall be construed and governed in accordance with the laws of the State of
Illinois, U.S.A., without regard to its conflict of law rules. Both Parties
consent to the jurisdiction of the State of Illinois, acknowledge that venue is
proper in the state and federal courts located in Cook County, Illinois, U.S.A.,
and waive any objection they have or may have in the future with respect to any
of the above.
26. Notices.
Except as otherwise provided for herein, all notices required or permitted
to be given hereunder shall be in writing (including telegraphic communication)
and shall be sent by registered mail (return receipt requested and postage
prepaid), facsimile, overnight or two-day courier or delivered-in-person and
shall be addressed as follows:
IF to Motorola:
Motorola, Inc.
8000 West Sunrise Boulevard
Fort Lauderdale, Florida 33322
Attn.: Vice President & General Manager of U.S. Market Operations,
iDEN Subscriber Group
Fax Number: (954) 723-6177
With copy to:
Motorola, Inc.
8000 West Sunrise Boulevard
Fort Lauderdale, Florida 33322
Attn.: Law Department
Fax Number: (954) 723-3871
If to Licensor:
Dwango North America, Inc.
200 West Mercer St., Suite 501
Seattle, WA 98119
Attn.: Rick J. Hennessey
Fax Number: (206) 286-1442
With copy to:
Gunn, Mullins & Farrell, L.L.P,
1415 North Loop West, Suite 1100
Houston, TX 77008
Attn: Robert M.Mullins
Fax Number: (713) 869-3085
15
Either Party may change its address by a notice given to the other Party
in the manner set forth above. Mailed notices given as herein provided shall be
considered to have been given seven (7) days after the mailing thereof,
telegraphic or facsimile notices shall be considered to have been given on the
day sent, overnight or two-day courier sent notices shall be considered to have
been given three (3) days after sending, and delivered in person notices shall
be considered to have been given on the day of delivery.
27. Expenses.
Each Party shall be responsible for all expenses, including attorney's fees
and costs, incurred by it in relation to the making, review and negotiation of
this Agreement, and to the fulfillment of its obligations as set forth in this
Agreement.
28. Construction.
This Agreement has been negotiated by the Parties and by their respective
counsel. This Agreement will be fairly interpreted in accordance with its terms
and without any strict construction in favor or against any Party either as
scrivener or otherwise. Unless a contrary intention is clearly expressed, any
reference to a Section shall be construed to refer to all provisions of the
referenced Section. In the event that this Agreement is translated into any
other language, the English language version hereof shall govern.
29. Titles, Headings and Subheadings.
The titles, headings and subheadings used throughout this Agreement are
intended solely for convenience of reference and form no part of the Terms and
Conditions of this Agreement.
30. Counterparts.
This Agreement may be executed in two or more counterparts, each of which,
when so executed, shall be deemed an original, but all of which counterparts
together shall constitute one and the same document.
31. Incorporation of Exhibits and Recitals.
Exhibits A through C attached hereto and the Recitals set forth above are
expressly incorporated herein by reference in their entirely to form part of the
Terms and Conditions of this Agreement. In the event of any conflict between the
provisions of the Recitals, Exhibit A, or Exhibit B and any of the Terms and
Conditions set forth in Sections 1-33, the provisions of the Terms and
Conditions shall take precedence and shall control. In the event of a conflict
between the provisions of Exhibit C and any of the Terms and Conditions set
forth in Sections 1-33, the provisions of Exhibit C shall take precedence and
shall control.
32. Authority and Binding Effect. By executing this Agreement, each Party
represents and warrants that it has the full power and authority to enter into
this Agreement, and that, when executed, this Agreement shall constitute a valid
and legally binding obligation of such Party, enforceable in accordance with its
terms.
16
33. No Waiver. Failure by either Party, in any one or more instances, to
enforce any of its rights in connection with this Agreement, or to insist upon
the strict performance of the terms of this Agreement, its Appendices or
Exhibits, shall not be construed as a waiver or a relinquishment of any such
rights for future breach or enforcement thereof.
IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by
its duly authorized representative.
MOTOROLA, INC. DWANGO NORTH AMERICA, INC.
--------------------------
/s/ Eric Brooks 9/24/03 /s/ Rick J. Hennessey 9-11-03
-------------------------------------- --------------------------------------
Signature Date Signature Date
ERIC BROOKS Rick J. Hennessey
-------------------------------------- --------------------------------------
Printed Name Printed Name
VP Eng President
-------------------------------------- --------------------------------------
Title Title
ATTACHMENTS:
Exhibit A - List of Applications/List of Embeddable Applications
Exhibit B - List of Supported Products
Exhibit C - Royalty/Revenue-Sharing Payments
17
EXHIBIT A
---------
LIST OF APPLICATIONS
1. The Parties may maintain a separate List of Applications and List of
Embeddable Applications to avoid the administrative burden of amendments
to incorporate subsequent changes to the respective lists.
--------------------------------------------------------------------------------
Supported
Product
Category (e.g., Recommended
Application J2ME, WAP, Sales Price
No. Application Title Version No. etc.) (US$)
--------------------------------------------------------------------------------
1 Star Exceed J2ME $[**]
--------------------------------------------------------------------------------
2 Dwango Racing J2ME $[**]
--------------------------------------------------------------------------------
3 JumPuyon J2ME $[**]
--------------------------------------------------------------------------------
4 BlackJack J2ME $[**]
--------------------------------------------------------------------------------
5 Slots J2ME $[**]
--------------------------------------------------------------------------------
6 Rouleue J2ME $[**]
--------------------------------------------------------------------------------
7 Casino Sub* J2ME $[**]
--------------------------------------------------------------------------------
8 AquaX J2ME $[**]
--------------------------------------------------------------------------------
* Monthly subscription fee.
LIST OF EMBEDDABLE APPLICATIONS
--------------------------------------------------------------
Supported
Product
Category
Application Application (e.g., J2ME,
No. Title Version No. WAP, etc.)
--------------------------------------------------------------
1 Dwango Blackjack Full-Up J2ME
--------------------------------------------------------------
2 Dwango Racing Full-Up J2ME
--------------------------------------------------------------
----------------
** 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.
A-1
EXHIBIT B
---------
LIST OF SUPPORTED PRODUCTS
Architecture Category 1: J2ME
1. i85s(TM)
2. i50sx(TM)
3. i55sr(TM)
4. i90c(TM)
5. i80s(TM)
6. i95cl(TM)
7. i730(TM)
8. all future iDEN handsets
B-1
EXHIBIT C
---------
ROYALTY/REVENUE-SHARING PAYMENTS
1. Royalty-Related Definitions.
1.1 "Motorola's Costs" shall mean any internal and/or out-of-pocket costs
incurred by Motorola in connection with (1) the sale, license and/or
distribution of Certified Applications, and/or (2) the transfer of payments to
Licensor under Section 2 below. Such Motorola Costs shall include, but are not
limited to, sales, use, excise, custom duty or similar taxes or assessments
imposed by a governmental authority: wireless resource or airtime charges,
credit card transaction fees and other third party, electronic commerce-related
fees (including without limitation hosting fees); wire transfer or other fees
associated with the transfer of payments to Licensor; and costs incurred in
connection with storing and maintaining the Certified Application(s) on a
Distribution Server.
1.2 "Motorola's Net Proceeds" shall mean the proceeds in U.S. currency
received by Motorola from the independent license and/or distribution of
Certified Applications, less Motorola's Costs.
1.3 "Reporting Period" shall mean a calendar quarter, except that the
first Reporting Period shall commence on the date of the first receipt of
Motorola's Net Proceeds resulting from the license and/or distribution of any
Certified Application and shall conclude upon the end of the first calendar
quarter that ends at least forty-five (45) calendar days thereafter.
2. Royalty Determination.
2.1 As provided in Section 3 below, Motorola shall make the following
royalty payments to Licensor:
A. Certified Applications Downloaded From Motorola's Distribution Server
---------------------------------------------------------------------
With respect to Certified Applications not embedded in Supported
Product (downloaded from Motorola's distribution server),
Motorola shall retain [*] of Motorola's Net Proceeds
received from the license and/or distribution of each Client
Application during each Reporting Period and pay Licensor a
royalty ("Certified Applications Royalty") equal to the [*] of
such Net Proceeds.
B. Certified Applications Embedded (Preloaded) in Supportable Product
------------------------------------------------------------------
1. With respect to Full-up Certified Applications embedded
(preloaded) in Supported Product, Motorola shall pay Licensor a
flat fee of [*] for each instance the Full-up Certified
Application is embedded in a Supported Product as follows:
a. App name: Dwango Blackjack
Version: Full-Up
Product: Phat Farm II i730
----------------
* 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.
C-1
b. App name: Dwango Racing
Version: Full-Up
Product: Limited Edition Bloomingdale's i730 phone
Notwithstanding the foregoing, the Parties agree that neither Motorola nor
any Customer shall be obligated to pay Licensor any additional royalty to
exercise Motorola's rights under Section 4.2 or Section 4.3 of the Agreement.
2.2 Restrictions for Sublicense to Wireless Service Provider Customers.
Motorola shall require any wireless service provider Customer to which Motorola
grants a license to distribute Certified Applications to charge not more than
either (i) Licensor's recommended sales price or (ii) Licensor's recommended
sales price adjusted to a reasonable selling price based on a publicly
published, three month forward exchange rate for the country in which the
wireless service provider Customer operates, whichever is greater.
3. Payments and Royalty Reports.
3.1 The payment made to Licensor for royalties earned during any Reporting
Period ("Licensor's Royalty") shall be the sum of the Certified Applications
Royalty and the Embedded Applications Royalty, if any, less any current or past
amounts due Motorola under Section 7 of the Agreement and/or Section 17 of the
Agreement. No payments shall be due to Licensor for Motorola's installation
and/or internal use of the Applications during testing, trials, pilot launches,
or other non-revenue generating tests or evaluation, or for Motorola's public
demonstrations of the Certified Applications to current or prospective Motorola
Customers and/or at trade shows, seminars, conferences, or wireless or
electronic industry events. Licensor's Royalty shall be paid to Licensor within
forty-five (45) calendar days of the end of any particular Reporting Period for
royalties earned during the particular Reporting Period. If there is a
disagreement relating to Licensor's Royalty, such disagreement will be resolved
mutually in accordance with Section 19 of the Agreement.
3.2 Each payment made to Licensor shall be accompanied by a report
("Royalty Report") providing support for the payment. The Royalty Report
provided to Licensor shall include the quantity of each Certified Application,
identified by title or other appropriate identifier, licensed or distributed
during the Reporting Period and the price paid for each purchased Certified
Application. Motorola may alternatively or additionally make Licensor's Royalty
Report available to Licensor via a secure or password-protected connection over
Motorola's website, in which case Motorola shall not be obligated to accompany
Licensor's Royalty Report with each royalty payment.
C-2