**NOTE:
Confidential treatment has been requested for certain portions of this document.
Material that has been omitted from this document as filed on EDGAR is marked as
follows [**].**
****


EXHIBIT
10.38





**DWANGO
NORTH AMERICA CORP. / NAPSTER, INC.**





**LICENSING
AGREEMENT**




This
Licensing Agreement **(** “ **Agreement** ” **)** , is
effective as of the 23rd day of November, 2004 ( **“Effective
Date”** ) and is
entered into by and between **Dwango
North America Corp., d/b/a/ Dwango Wireless** (“ **DWANGO** ”) , a
Nevada corporation with a principal place of business at 200 West Mercer Street,
Suite 501, Seattle, WA 98119 and
Napster, LLC (“ **NAPSTER** ”), a
limited liability corporation with a principal place of business at 9044 Melrose
Avenue, Los Angeles, CA 90069. DWANGO and NAPSTER may be referred to in this
Agreement individually as a “Party” and together as the “Parties”.





**WITNESSETH:**





**WHEREAS,** DWANGO
has developed and/or licensed the rights to the Mobile Entertainment Service (as
defined in Section 1 of this Agreement);





**WHEREAS,** NAPSTER
owns or has licensed the right to use the NAPSTER Properties (as defined in
Section 1 of this Agreement);





**WHEREAS** , DWANGO
wants to license certain NAPSTER Properties from NAPSTER, develop certain
documentation and other materials with NAPSTER, and incorporate those NAPSTER
Properties and Jointly Developed NAPSTER Properties into the Mobile
Entertainment Service to create the NAPSTER Mobile Entertainment Service (in
each case as defined herein); provide the delivery, support, community and
infrastructure services for the commercial exploitation of the NAPSTER Mobile
Entertainment Service; and share the revenue generated from such commercial
exploitation with NAPSTER;





**WHEREAS,** NAPSTER
wants DWANGO to develop the NAPSTER Mobile Entertainment Service, the Parties
want to promote it broadly to potential wireless device users in the retail
channel, on the world wide web and via Wireless Carrier Partners (as defined
below), and NAPSTER further wants to receive a royalty from the commercial
exploitation of the NAPSTER Mobile Entertainment Service, and NAPSTER shall have
the right to exploit the Jointly Developed NAPSTER Properties in territories not
contemplated under this Agreement; and





**WHEREAS** , the
Parties wish to enter into an agreement whereby NAPSTER will license the NAPSTER
Properties to DWANGO, DWANGO will develop the NAPSTER Mobile Entertainment
Service, and the Parties will share the revenue generated by the NAPSTER Mobile
Entertainment Service;





**NOW,
THEREFORE** , in
consideration of the premises and of the mutual covenants contained herein, the
Parties 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:




1.1.
    **“Brand
      Licensing Fee**”
      shall mean a non-refundable sum of Three Hundred Sixty Thousand Dollars
      ($360,000) in the aggregate payable in cash, check or other immediately
      available funds according to the schedule set forth in Section 5.3.











1.2.
    “**Jointly
      Developed NAPSTER Properties**”
      shall mean (i) the documentation (to be created jointly by DWANGO and
      NAPSTER) related to the user-interface design and information workflow of
      the NAPSTER Mobile Entertainment Service, (ii) the style guides and design
      assets of the NAPSTER Mobile Entertainment Service, and (iii) the process,
      documentation, design assets and workflow relating to the integration of
      any NAPSTER-specific elements into the NAPSTER Mobile Entertainment
      Service (e.g., as described in Section 4.1.6 below) to be created jointly
      by DWANGO and NAPSTER. The Jointly Developed NAPSTER Properties do not
      include any part of the Mobile Entertainment Service. To the extent
      created by DWANGO, the Jointly Developed NAPSTER Properties shall be
      considered “work made for hire” for NAPSTER by DWANGO within the meaning
      of the United States Copyright Act. If any such properties are not deemed
      “work made for hire,” they will be deemed transferred to NAPSTER. All such
      Jointly Developed NAPSTER Properties shall, from the inception of
      creation, be entirely the property of NAPSTER, in perpetuity, throughout
      the universe, free of any claim whatsoever by DWANGO or any third
      party.




1.3.
    **“NAPSTER
      Properties**”
      shall mean the Jointly Developed NAPSTER Properties, the NAPSTER name, the
      NAPSTER logo(s), and any other Intellectual Property Rights owned or used
      by NAPSTER and/or associated with the NAPSTER brand. The NAPSTER
      Properties shall includeany
      modifications, additions, enhancements and upgrades to the NAPSTER
      Properties, but shall not include the Mobile Entertainment Service. As
      between NAPSTER and DWANGO, title to and all ownership rights of, in and
      to the NAPSTER Properties, and the copyrights, trademarks, patents and
      other intellectual property rights related thereto, are and will remain
      the property of NAPSTER, which, as between NAPSTER and DWANGO, shall have
      the exclusive right to protect the same by copyright, trademark, patent or
      otherwise.




1.4.
    “**NAPSTER
      Service Launch Date**”
      shall mean the date that the NAPSTER Mobile Entertainment Service is first
      available to customers of a Wireless Carrier Partner. The Parties intend
      such date to be no later than January 31,
2005.




1.5.
    “**Confidential
      Material**”
      shall mean any oral, written, graphic or machine readable information that
      is clearly marked as confidential, or should reasonably be known to be
      confidential, including, but not limited to, that which relates to
      patents, patent applications, research, product requirements, product
      plans, products, developments, inventions, processes, designs, drawings,
      engineering, formulae, markets, software (including source and object
      code), hardware configuration, computer programs, algorithms,****business
      plans, agreements with third parties, services, customers, marketing or
      finances, as known and disclosed by one Party to another Party.
      Confidential Material specifically includes all orally disclosed
      confidential information, if such information is not public and should
      reasonably be deemed in the circumstances to be the private information of
      the other party, or is identified as proprietary, confidential, or private
      upon disclosure. Confidential Material also includes the financial and
      other material terms of this
Agreement.




1.6.
    “**DWANGO
      Trademarks**”
      shall meanDWANGO®,
      and all other product names, logos, trade names and trademarks owned or
      used by DWANGO, including all Intellectual Property Rights contained
      therein (for purposes of this definition only, the term DWANGO 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 DWANGO Trademarks are and will remain
      the property of DWANGO, which shall have the exclusive right to protect
      the same.






2




1.7.
    “**Intellectual
      Property Rights**”
      shall mean all copyrights (including, without limitation, the exclusive
      right to reproduce, distribute copies of, display and thereupon perform
      the 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.




1.8.
    **“Mobile
      Entertainment Service”**shall mean DWANGO’s service that includes, and permits users of wireless
      services to browse, sample, download, play, use and purchase, the
      following: ring tones;ringback
      tones;alert
      tones;master
      recording tones; short tones; promo tones; wireless games; images;video
      clips; streaming video;
      subscription services; bundled services; text-to-voice; and other like
      content or services, in each case for mobile phones and other wireless
      mobile devices with mobile phone functionality, through a mobile device
      interface or a web interface.The
      Mobile Entertainment Service includes features related to the Mobile
      Entertainment Service, including the functionality to redeem a promotion
      via a short code or other promotional code, through integration with a
      Wireless Carrier Partner’s billing mechanism or use of an alternative
      payment method. The Mobile Entertainment Service includesany
      modifications, additions, enhancements and upgrades to the Mobile
      Entertainment Service, but shall in no event include any NAPSTER
      Properties. As between NAPSTER and DWANGO, title to and all ownership
      rights of, in and to the Mobile Entertainment Service, and any
      Intellectual Property Rights therein, are and will remain the property of
      DWANGO, which shall have the exclusive right to protect the same by
      copyright, trademark, patent or
otherwise.




1.9.
    “**Mobile
      Entertainment****Service
      Revenue**”
      shall mean all fees that a Wireless Carrier Partner pays to DWANGO in
      connection with the NAPSTER Mobile Entertainment Service less royalties
      paid by DWANGO to Wireless Carrier Partners and third party copyright
      owners of the products sold through the Mobile Entertainment Service. A
      sample calculation of Mobile Entertainment Service Revenue for the sale of
      a polyphonic ring tone through a Wireless Carrier Partner is attached
      hereto as Exhibit D.




1.10.
    **“NAPSTER
      Mobile Entertainment Service”**shall mean the Mobile Entertainment Service after incorporating any
      NAPSTER Properties or any Jointly Developed NAPSTER Properties, provided
      that the NAPSTER Mobile Entertainment Service shall comprise only those
      parts or aspects of the Mobile Entertainment Service into which NAPSTER
      Properties or the Jointly Developed NAPSTER Properties are incorporated
      under this Agreement. The Parties understand that only the elements of the
      Mobile Entertainment Service relating to ring tones, master recording
      tones, promo tones and images will comprise the NAPSTER Mobile
      Entertainment Service, unless Napster and DWANGO specifically agree
      otherwise in writing.




1.11.
    “**NAPSTER
      Premium Service**”
      shall mean the basic version of the NAPSTER subscription service which
      currently allows unlimited streaming and tethered downloading (i.e.
      downloaded files remain active throughout the subscription term but are
      limited to use on the PC of the applicable subscriber of full-length
      songs) (“Tethered Downloads”), and other features such as access to
      NAPSTER “radio” stations, editorial and music programming, and community
      elements. Additionally, subscribers may purchase songs or albums on an a
      la carte basis.






3




1.12.
    **“NAPSTER
      Third Party Partner”**shall have the meaning given in Section
4.1.10.




1.13.
    **“NAPSTER
      To Go Service”**shall
      mean the version of the NAPSTER subscription service which currently
      allows the activities in the NAPSTER Premium Service as well as allowing
      transfer of Tethered Downloads to certain NAPSTER To Go Service compatible
      portable audio devices.




1.14.
    “**NAPSTER
      Websites**”
      shall mean Napster.com and other websites made available by NAPSTER for
      the use of NAPSTER subscribers.




1.15.
    **“Royalty
      Report”**shall mean the report described in Section
5.5.




1.16.
    **“Territory”**shall mean the US and Canada.




1.17.
    **“Term”**shall
      have the meaning set forth in Section 6.1.




1.18.
    **“Mobile
      Entertainment Service Royalty”**means royalties of **[**]** of all Mobile Entertainment
      Service Revenue.




1.19.
    **“Statement
      of Work**”
      shall mean the statement of work attached asExhibit
      Cto
      this Agreement, as amended from time to time by mutual written agreement
      of the Parties.




1.20.
    “**Wireless
      Carrier Partner**”
      means a wireless service provider or other third party that has agreed to
      offer the NAPSTER Mobile Entertainment Service to its customers at prices
      agreed to by the Wireless Carrier Partner or other third party and DWANGO,
      and approved by Napster. DWANGO shall make reasonable commercial efforts
      to solicit each wireless service provider identified onSchedule
      Ato
      become a Wireless Carrier Partner. NAPSTER must approve all other Wireless
      Carrier Partners not identified on Schedule A in writing in
      advance.




1.21.
    **“Top
      8 Wireless Carriers”**means
      ATT/Cingular, Verizon, T-Mobile, US Cellular, Alltel, Nextel, Boost, and
      Virgin Mobile.





**2.**
    **License
      Grant.**




2.1.
    **License
      to DWANGO Trademarks.**Subject to the other provisions of this Agreement, DWANGO hereby grants to
      NAPSTER, solely during the Term, a non-assignable, non-sublicensable,
      non-exclusive (except as described in Section 2.3 below), royalty-free
      right and license in the Territory, to use, reproduce, publish, perform
      and display the DWANGO Trademarks in promotional and marketing materials,
      content directories and indices, and electronic and printed advertising,
      publicity, press releases, newsletters and mailings about DWANGO, DWANGO’s
      relationship with NAPSTER as established by this Agreement, and the
      NAPSTER Mobile Entertainment Service. Prior to each new use of any of the
      DWANGO Trademarks in the manner permitted herein, NAPSTER shall submit a
      sample of such proposed use to DWANGO for its prior written approval,
      which may not be unreasonably withheld, conditioned or delayed; provided
      that NAPSTER may make use of the DWANGO Trademarks on a going forward
      basis during the Term in a substantially similar manner to those
      previously approved by DWANGO. Once DWANGO has approved a particular use
      of a DWANGO Trademark, the approval will remain in effect for such use
      until the earlier of (i) the time such approval is withdrawn with
      reasonable prior written notice or (ii) the expiration of this
      Agreement.






**[**]
REQUESTED FOR CONFIDENTIAL TREATMENT**
 4




2.2.
    **License
      to NAPSTER Properties**.
      Subject to the other provisions of this Agreement, NAPSTER hereby grants
      to DWANGO, solely during the Term, a non-exclusive (except as described in
      Section 2.3 below) and non-sublicenseable (except as necessary for the
      licensing and distribution of the NAPSTER Mobile Entertainment Service
      pursuant to the terms of this Agreement) right and license within the
      Territory to reproduce, publish, perform and display the NAPSTER
      Properties in the NAPSTER Mobile Entertainment Service, and promotional,
      instructional and marketing materials for the NAPSTER Mobile Entertainment
      Service, including content directories and indices, and electronic and
      printed advertising, publicity, press releases, newsletters and mailings
      about the NAPSTER Mobile Entertainment Service.Prior
      to each new use of any of the NAPSTER Properties in the manner permitted
      herein, DWANGO shall submit a sample of such proposed use to NAPSTER for
      its prior written approval, which may not be unreasonably withheld,
      conditioned or delayed; provided that DWANGO may make use of the NAPSTER
      Trademarks on a going forward basis during the Term in a substantially
      similar manner to those previously approved by NAPSTER. Once NAPSTER has
      approved a particular use of a NAPSTER Property, the approval will remain
      in effect for such use until the earlier of (i) the time such approval is
      withdrawn with reasonable prior written notice, and (ii) the expiration of
      this Agreement.




2.3.
    **Exclusivity**.
      During the Term (the “Exclusivity Period”, except as otherwise provided
      below): (a)NAPSTER
      will not license, sell, or otherwise grant rights in the NAPSTER
      Properties or the Jointly Developed NAPSTER Properties for use in the
      Territory in connection with any service or product that includes any
      component part (e.g., ring tone provision)of the NAPSTER Mobile
      Entertainment Service, nor shall NAPSTER make any use in the Territory of
      the NAPSTER Properties or the Jointly Developed NAPSTER Properties that
      includes any component part of the NAPSTER Mobile Entertainment
      Service;and (b) DWANGO will not enter into an agreement to provide any part or
      aspect of the Mobile Entertainment Service on behalf of any other
      individual, entity or business unit whose primary business is providing
      digital music services (other than RollingStone.com and
      RealNetworks/Rhapsody). Notwithstanding the foregoing, if at any point
      beginning April 1, 2005 through the rest of the Exclusivity Period DWANGO
      cannot secure and maintain for the NAPSTER Mobile Entertainment Service
      approval for “deck” placement on at least five (5) of the Top Eight
      Wireless Carriers, the Exclusivity Period shall terminate. Notwithstanding
      the foregoing, the Exclusivity Period shall terminate if the NAPSTER
      Service Launch Date has not occurred by April 1,
2005.





**3.**
    **Ownership
      and Restrictions.**




3.1.
    **Ownership
      of the Mobile Entertainment Service and the DWANGO
      Trademarks.**NAPSTER hereby acknowledges that as between NAPSTER and DWANGO, DWANGO
      owns all right, title and interest in and to all content, products,
      services, specifications, documentation, software and other materials
      supplied by DWANGO, including, without limitation the Mobile Entertainment
      Service, the DWANGO Trademarks and any improvements and modifications
      thereto, including all Intellectual Property Rights therein, but
      specifically excluding all NAPSTER
Properties.






5




Except as
specifically and clearly set forth in this Agreement, nothing herein, nor the
exercise of any rights granted NAPSTER hereunder, conveys to NAPSTER, and
NAPSTER shall not acquire by virtue of this Agreement, any Intellectual Property
Rights or any other right or title to, or interest in, the Mobile Entertainment
Service or the DWANGO Trademarks or any part or aspect thereof (or any
derivative work). NAPSTER 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 Rights in the Mobile Entertainment
Service and/or the DWANGO Trademarks owned by or licensed to DWANGO, other than
the NAPSTER Properties included therein.





NAPSTER
shall use each DWANGO Trademark in a manner consistent with how it is generally
used by DWANGO, and not in any manner that will disparage, embarrass or injure
the brand. Upon written notice by DWANGO, NAPSTER shall promptly remedy any
failure to comply with the previous sentence or, if such remedy is not promptly
made, cease its use of such trademark.





3.2.
    **Ownership
      of NAPSTER Properties.**DWANGO hereby acknowledges that as between NAPSTER and DWANGO, NAPSTER
      owns all right, title and interest in and to all content, products,
      services, specifications, documentation, software and other materials
      supplied or owned by NAPSTER in accordance with the terms hereof,
      including, without limitation, the NAPSTER Properties and any improvements
      and modifications thereto, including all Intellectual Property Rights
      therein. DWANGO shall provide NAPSTER with copies of all such materials
      produced by DWANGO in connection with the Jointly Developed NAPSTER
      Properties.




Except as
specifically and clearly set forth in this Agreement, nothing herein, nor the
exercise of any rights granted DWANGO hereunder, conveys to DWANGO, and DWANGO
shall not acquire by virtue of this Agreement, any Intellectual Property Rights,
or any other right or title to, or interest in, the NAPSTER Properties or any
part or aspect thereof (or any derivative work). DWANGO 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 Rights in
the NAPSTER Properties owned by or licensed to DWANGO.





DWANGO
shall use each NAPSTER trademark in a manner consistent with how it is generally
used by NAPSTER, and not in any manner that will disparage, embarrass or injure
the brand. Upon written notice by NAPSTER, DWANGO shall promptly remedy any
failure to comply with the previous sentence or, if such remedy is not promptly
made, cease its use of such trademark





**4.**
    **Services
      to be Performed by and Obligations of Each Party.**




4.1.
    **Services
      to be performed by and Obligations of DWANGO.**Subject
      to the timing, specifications and limitations set forth in the Statement
      of Work, DWANGO shall:




4.1.1.
    Develop,
      distribute and maintain the NAPSTER Mobile Entertainment Service on WAP,
      BREWTM and Java-enabled handset models and on no less than eighty percent
      (80%) of the MIDP1 & MIDP2 handset models identified onExhibit
      Ato
      this Agreement.




4.1.2.
    Maintain
      the NAPSTER Mobile Entertainment Service at a quality level (i.e., with
      respect to breadth of content, tone quality and current nature of content)
      at least as high as the top three ring tone services then commercially
      available as reasonably determined by Napster (currently Moviso, Faithwest
      and Zingy).






6




4.1.3.
    Develop
      with NAPSTER the Jointly Developed NAPSTER
Properties.




4.1.4.
    Take
      all reasonable measures to ensure availability of the NAPSTER Mobile
      Entertainment Service to subscribers of the NAPSTER Mobile Entertainment
      Service at least ninety-nine percent (99.0%) of the time, within the
      meaning ofExhibit
      Bto
      this Agreement.




4.1.5.
    Provide
      infrastructure and (as further described inExhibit
      B)
      customer support for the proper functioning of the NAPSTER Mobile
      Entertainment Service that is at least as good as the commercially
      reasonable industry standard in all respects.




4.1.6.
    Create
      and implement a method for delivering advertisements or promotions into
      the NAPSTER Mobile Entertainment Service which would permit the
      distribution to unique handsets of unique promotional codes (both from
      NAPSTER as well as NAPSTER’s third party prepaid card provider) redeemable
      for trials of the NAPSTER Premium Service.




4.1.7.
    At
      DWANGO’s sole expense, provide at least one free ring tone per unique user
      of the NAPSTER Mobile Entertainment Service at the time each such user
      registers for or initiates use of the NAPSTER Mobile Entertainment
      Service.




4.1.8.
    Establish
      rights to distribute at least 90% of the ring tones listed on the
      soon-to-be-released Billboard ring tones charts and maintain catalog
      licensing relationships with all five of the major music
      publishers.




4.1.9.
    Work
      with each of NAPSTER’s pre-paid card partners identified on the Statement
      of Work to develop the ability to permit users of the NAPSTER Mobile
      Entertainment Service to pre-pay for products and services included in the
      NAPSTER Mobile Entertainment Service.




4.1.10
    Upon
      written request by NAPSTER, assist third party providers of services
      similar to any services included in the NAPSTER Mobile Entertainment
      Service operating outside of the Territory to integrate the Jointly
      Developed NAPSTER Properties with any such third party’s services for
      NAPSTER. To the extent that NAPSTER utilizes DWANGO’s services, NAPSTER
      agrees to pay DWANGO at a rate of $200/hour per person. DWANGO shall not
      be obligated to provide more than a total of twenty (20) hours of service
      per month during the Term to satisfy its obligations under this
      subparagraph; provided that DWANGO will use reasonable efforts to provide
      as much assistance as NAPSTER reasonably
requests.





4.1.11
    Use
      best efforts to secure and maintain for the NAPSTER Mobile Entertainment
      Service approval for “deck” placement on at least four (4) of the Top
      Eight Wireless Carriers.





4.2.
    **Services
      to be performed by and Obligations of
NAPSTER.**






7




4.2.1.
    Promote
      the NAPSTER Mobile Entertainment Service by providing constant and
      prominent placements reasonably determined by NAPSTER of the NAPSTER
      Mobile Entertainment Service on each of (i) the NAPSTER Websites in
      territories where the NAPSTER Mobile Entertainment Service is available,
      (ii) the NAPSTER Premium Service, (iii) the NAPSTER To Go Service and (iv)
      any other similar service offered by NAPSTER. Prominent placement may
      include, but not be limited to, the home page of Napster.com, in the
      NAPSTER “store” and via a prominent link in the NAPSTER client. For the
      sake of clarity, there will be a navigable path to an area featuring the
      NAPSTER Mobile Entertainment Service in each of (i) the NAPSTER Websites
      in territories where the NAPSTER Mobile Entertainment Service is
      available, (ii) the NAPSTER Premium Service, (iii) the NAPSTER To Go
      Service and (iv) any other similar service offered by NAPSTER**.**Notwithstanding
      the foregoing, to the extent that any NAPSTER cobranded affiliate refuses
      to allow the NAPSTER Mobile Entertainment Service to be offered through
      its version of the NAPSTER Service, promotions for the NAPSTER Mobile
      Entertainment Service will not be included in such version.




The
Parties shall work together in good faith to determine the exact descriptive
elements of the placements, and to optimize the exposure of the NAPSTER Mobile
Entertainment Service over the course of the Term. NAPSTER will be wholly
responsible for providing all creative elements, and shall present each newly
designed promotion to DWANGO for comment and review prior to its public use
(provided that substantially similar promotions will be deemed to be approved).
Notwithstanding the foregoing, NAPSTER shall maintain final editorial control
over the look and feel of the promotional placements.




4.2.2.
    During
      the Term, NAPSTER shall from time to time send emails promoting DWANGO
      and****the
      NAPSTER Mobile Entertainment Service to all users of NAPSTER’s services
      who have opted in for such emails. NAPSTER will be responsible for the
      creation of such emails, the design of which shall be subject to review
      and approval of DWANGO (not to be unreasonably withheld); provided that
      substantially similar emails will be deemed to be approved. Emails
      promoting the NAPSTER Mobile Entertainment Service shall be delivered to
      eligible users of NAPSTER’s services no fewer than four (4) times during
      each calendar quarter during the Term.




4.2.3.
    NAPSTER
      shall use reasonable efforts to assist DWANGO in its efforts to maintain
      and develop relationships with current or potential Wireless Carrier
      Partners, including through, upon reasonable request by DWANGO, occasional
      direct communications by senior executives of NAPSTER to current and
      potential Wireless Carrier Partners promoting DWANGO and the NAPSTER
      Mobile Entertainment Service to such Wireless Carrier
      Partners.




**5.**
    **Royalties;
      Advertising Fees; Reports; Audits.**




5.1.
    **Royalty.**In
      consideration for the license of the NAPSTER Properties and the
      performance by NAPSTER of all of its obligations under this Agreement,
      DWANGO shall pay NAPSTER the Mobile Entertainment Service Royalty and the
      Brand License Fee.




5.2.
    **NAPSTER
      Royalty Payments.**DWANGO shall pay the Mobile Entertainment Service Royalties no later than
      thirty (30) days subsequent to the end of each calendar month during the
      Term in which such Mobile Entertainment Service Royalties
      accrue.






8




5.3.
    **Brand
      License Fee**.
      DWANGO shall pay NAPSTER the aggregate Brand License Fee in twelve (12)
      equal installments. The initial payment of Thirty Thousand Dollars
      ($30,000) shall be made on the one-month anniversary of the NAPSTER
      Service Launch Date, and all subsequent payments of Thirty Thousand
      Dollars ($30,000) shall be made on the one-month anniversary of the prior
      payment date, until a total of twelve (12) such payments are made. If apayment
      date is a weekend or a holiday, payment shall be made on the next business
      day.




5.4.
    **Sponsorship
      Commitment**:DWANGO
      will pay NAPSTER an aggregate amount equal to two hundred thousand dollars
      ($200,000) to be applied toward sponsorship of certain events jointly
      approved by DWANGO and NAPSTER during the Term. The amounts paid by DWANGO
      pursuant to this Section 5.4 will be used to promote the NAPSTER Mobile
      Entertainment Service. DWANGO shall only be obligated to make payments
      pursuant to this Section 5.4 after DWANGO and NAPSTER have jointly agreed
      upon (i) an event or events to jointly promote and (ii) a plan of
      promotion.




5.5.
    **Royalty
      Reports.**During the entire Term and for not less than two (2) years following the
      termination or expiration of this Agreement, DWANGO shall maintain copies
      of all documents, including those delivered to it by the Wireless Carrier
      Partners that are necessary to calculate the Mobile Entertainment Service
      Revenue and the Mobile Entertainment Service Royalty. DWANGO shall be
      responsible for preparation and delivery of “Royalty Reports” detailing
      the amount of Mobile Entertainment Service Royalty due for the applicable
      period, which shall be due within thirty (30) days subsequent to the end
      of each calendar month during the Term, together with the Mobile
      Entertainment Service Royalty payment due for such period. Without
      limiting the foregoing obligation, such reports shall also include all
      information reasonably necessary for computation and confirmation of the
      Mobile Entertainment Service Royalties, if any, for such monthly period.




5.6.
    **Audits.**In
      connection with the obligations undertaken by DWANGO hereunder to prepare
      and deliver the Royalty Reports and related payments and to preserve the
      records related thereto, an accountant experienced in audits designated by
      NAPSTER may inspect the records on which such reports are based no more
      than twice per calendar year (and once within 180 days after the last
      royalty statement provided hereunder is received by NAPSTER). Upon ten
      (10) days prior written notice by NAPSTER, DWANGO will provide such
      accountant with access to the books and records relating to such Royalty
      Reports, at DWANGO’s facilities during normal business hours. NAPSTER
      shall be obligated to pay the fees and expenses of the accountant;
      provided that DWANGO shall be obligated to pay such fees and expenses if
      the accountant determines that DWANGO prepared such report incorrectly
      resulting in underpayment of the NAPSTER Royalties by more than five
      percent (5%) for the period being audited. DWANGO shall immediately pay
      any such underpayments to NAPSTER.




**6.**
    **Term
      and Termination.**




6.1.
    **Term.**The
      term of this Agreement and the licenses granted herein shall begin on the
      Effective Date of this Agreement and shall expire on the date one (1)
      calendar year from the NAPSTER Service Launch Date (the “Term”).
      Thereafter, this Agreement will be automatically renewed for additional
      periods of one (l) year each unless either party shall have given the
      other party written notice of termination of this Agreement at least sixty
      (60) calendar days prior to the expiration date.






9




6.2.
    **Termination
      for Cause.**Either
      party may immediately terminate this Agreement prior to the expiration of
      the Term in the event that the other party (i) files in any court or
      agency a petition in bankruptcy or insolvency, (ii) is served with an
      involuntary petition against it that is filed in any insolvency
      proceeding, and such petition is not dismissed within sixty (60) days
      after the filing thereof, (iii) makes an assignment for the benefit of
      creditors, and (iv) breaches any material representation, obligation or
      covenant contained herein, unless such breach is cured no later than
      thirty (30) days from the date of receipt of notice of such breach, or if
      by the nature of the breach it is not able to be so cured, it is resolved
      to the non-breaching party’s satisfaction.




**7.**
    **Confidentiality
      Agreement.**




7.1.
    **Confidentiality
      Obligations.**Each
      of the Parties hereby acknowledges that all Confidential Material of the
      other Party constitutes trade secrets of the other Party and must be kept
      confidential. Each Party acknowledges the unique and proprietary nature of
      the Confidential Material of the other Party. Each Party hereby agrees and
      acknowledges that it makes no present claim, nor will it make any future
      claim whatsoever, to the other Party’s 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 Party; and each Party shall treat the Confidential
      Material as confidential and proprietary information of the other Party
      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.
      For purposes of Section 7 of this Agreement, “Party” shall include the
      directors, officers, employees, consultants, agents, successors and
      predecessors of such Party. Each Party agrees to only disclose
      Confidential Materials to those officers, directors, and employees who
      need access to the Confidential Materials in order so that the Party may
      perform its obligations under this Agreement and to require such persons
      to comply with terms of this Agreement.




7.2.
    **Exceptions
      to Confidentiality Obligations**.
      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 Party; (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 rightfully received by a Party from a third party
      whom such Party has reasonable grounds to believe is authorized to make
      such disclosure without restriction; (e) is required by law or regulation
      to be disclosed, but only to the extent and for the purposes of such
      required disclosure; or (f) 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.**






10




8.1.
    **Representations
      and Warranties**.




8.1.1.
    NAPSTER
      hereby represents and warrants that:




(a)
    NAPSTER
      either owns or has licensed, and will own or have a license to throughout
      the Term, all Intellectual Property Rights required to grant the licenses
      that NAPSTER has granted under this
Agreement.




(b)
    NAPSTER
      either owns or has licensed, and will continue to own or have licensed
      throughout the Term, all Intellectual Property Rights and other rights
      required to reproduce, distribute, and market the NAPSTER Properties (but
      specifically excluding the Mobile Entertainment Service), and including
      all modifications, versions and additions thereto made or provided by
      NAPSTER throughout the Term; and




(c)
    Distribution,
      reproduction, promotion, and marketing of the NAPSTER Properties in
      accordance with the terms of this Agreement will not infringe on any third
      party’s rights, including, without limitation, any rights of copyright,
      trademark, patent, unfair competition, defamation, publicity or
      privacy.




8.1.2.
    DWANGO
      hereby represents and warrants that:




(a)
DWANGO either owns or has licensed, and will own or have a license to throughout
the Term, all Intellectual Property Rights required to grant the licenses that
DWANGO has granted under this Agreement;




(b)
DWANGO either owns or has licensed, and will continue to own or have licensed
throughout the Term, all Intellectual Property Rights and other rights required
to develop, reproduce, distribute, and market the Mobile Entertainment Service,
including all music, images, photos, text, logos, and other content (but
specifically excluding the NAPSTER Properties) and all technology incorporated
therein and used in connection therewith; and




(c) Distribution,
reproduction, development, promotion, marketing of and support for the Mobile
Entertainment Service in accordance with the terms of this Agreement will not
infringe on any third party’s rights, including, without limitation, any rights
of copyright, trademark, patent, unfair competition, defamation, publicity or
privacy.




(d) The
Jointly Developed NAPSTER Properties will belong to NAPSTER without any third
party interest and will not infringe the rights (including without limitation
contractual rights and Intellectual Property Rights) of any third
party.





8.2.
    **Indemnification**.
      Each Party hereby agrees to, and shall, indemnify, defend and hold
      harmless the other Party and its directors, officers, agents and employee
      for damages, liabilities, costs and expenses resulting from any and all
      legal actions and threats of legal actions brought against the other Party
      by a third party (i) charging or alleging that the Intellectual Property
      Rights of such indemnifying Party infringe the patent, copyright,
      trademark or other Intellectual Property Rights of such third party, and
      (ii) arising from a breach or alleged breach of any representation or
      warranty made by the indemnifying party of Sections 8 or 9 of this
      Agreement. The parties agree to (i) prompt written notification from
      the Party seeking indemnification to the indemnifying Party of the claim
      for which indemnity is sought; (ii) sole control by the indemnifying
      Party of the defense of any action and all negotiations for settlement and
      compromise; and (iii) cooperation and assistance from the Party
      seeking indemnification, including reasonable disclosure of information
      and authority necessary to perform the above. The indemnified Party shall
      be responsible for the costs and fees of its own counsel if it desires to
      have separate legal representation in any such action. Neither Party has
      any obligations to indemnify the other Party for any claims not covered by
      this Section 8.2.






11




**9.**
    **General
      Warranties.**Each
      Party hereby warrants and represents that it has full legal rights and
      authority to enter into this Agreement and to perform all of its
      obligations hereunder, and that by entering into this Agreement or
      performing its obligations hereunder, it is not in default or breach of
      any contract or agreement with any third party and it is not violating or
      infringing upon the rights of any third party. Each Party represents and
      warrants that it is 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 OR
      ARISING BY CUSTOM OR TRADE USAGE. EACH PARTY EXPRESSLY DISCLAIMS ALL OTHER
      WARRANTIES AND REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, INCLUDING
      WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTIBILITY AND FITNESS
      FOR A PARTICULAR PURPOSE.




**11.**
    **LIMITATION
      ON LIABILITY.**EXCEPT
      AS OTHERWISE PROVIDED IN THIS AGREEMENT, NO PARTY SHALL BE LIABLE TO
      ANOTHER PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL
      DAMAGES, INCLUDING WITHOUT LIMITATION, LOSS OF REVENUES, LOSS OF PROFITS,
      OR COST OF PROCUREMENT OF SUBSTITUTE TECHNOLOGY, EVEN IF THAT PARTY HAS
      BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.




**12.**
    **Choice
      of Law and Venue.**This
      Agreement shall be governed, construed and enforced in accordance with the
      laws of the State of California, and applicable federal law. The parties
      consent to the exclusive jurisdiction of the local, state and federal
      courts located in Los Angeles County
California.




**13.**
    **Severability.**Whenever
      possible, each provision of this Agreement shall be interpreted in such a
      manner as to be effective and valid under applicable law, but if any
      provision of this Agreement shall be prohibited by or invalid under
      applicable law, such provisions shall be ineffective only to the extent of
      such prohibition or invalidity, without invalidating the remainder of such
      provision or the remaining provisions of this
Agreement.




**14.**
    **Press
      Releases and Public Statements.**Neither party will issue any public statement about this Agreement without
      the prior written approval of the other Party (which approval shall not be
      unreasonably withheld or delayed).Notwithstanding
      the foregoing, each party shall be entitled to use the name of the other
      Party as well as previously disclosed terms of this Agreement in
      connection with public statements issued
thereafter.






12




**15.**
    **Delivery
      of Notices and Payments.**Unless
      otherwise directed in writing by the parties, all notices given hereunder
      shall be sent via Federal Express or another equivalent express delivery
      service, or by facsimile with confirmation of transmission, to the name
      and addresses set forth on the signature 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
      Federal Express or other equivalent express delivery service via overnight
      delivery.




**16.**
    **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.




**17.**
    **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
      Party; provided that either 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.




**18.**
    **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.




**19.**
    **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 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.




**20.**
    **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.




**21.**
    **Survival
      of Agreement.**Upon
      termination or expiration of this Agreement for any reason, the following
      provisions of this Agreement shall survive: Sections 1, 3, 7, 8.2 and 10
      through 21.




[signature
page follows]










13


****


**IN
WITNESS WHEREOF** , the
parties have executed this Agreement on the date first set forth above.








DWANGO NORTH AMERICA
    CORP.By:
    /s/
      Alexander U. ConradAlexander Conrad, President/COO200
      West Mercer St., Suite 501Seattle,
      WA 98117NAPSTER, INC.By:
    /s/
      Laura GoldbergLaura Goldberg, Chief Operating
      Officer9044
      Melrose AvenueLos
      Angeles, CA 90069

















**SIGNATURE
PAGE TO DWANGO/NAPSTER LICENSING AGREEMENT]**





**Exhibit
A**




**Carriers with US Headquarters**AT&T /Cingular
    (WEB) (WAP) (Initial Launch WEB/WAP deck
      placement target)Nextel
    (WEB) (WAP) (Initial Launch WEB/WAP deck
      placement target)Boost Mobile
    (WEB) (WAP) (Initial Launch WEB/WAP deck
      placement target)T-Mobile
    WEB) (Initial Launch)Verizon
    (BREW) (WAP 2.0) **(Future
      - Pending new marketing program release)**USCellular
    (BREW) (BREW deck placement target pending
      release of DWANGO BREW 2.0 Service)Alltel
    (BREW)
      (BREW deck placement target pending release of DWANGO BREW 2.0
      Service)Virgin Mobile
    (WEB)
      (WAP**)
      (Future - tentatively slated for late Q1 2005)****Handset
      Target List**AT&T /Cingular
    All high volume handsets, midp2, featured
      handsetsNextel
    All
      available handsetsBoost Mobile
    All
      available handsetsT-Mobile
    All
      high volume handsets, midp2, featured handsetsVerizon
    All
      high volume handsets, midp2, featured handsetsUSCellular
    All high volume handsets, midp2, featured
      handsetsAlltel
    All
      high volume handsets, midp2, featured handsetsVirgin Mobile
    All
      high volume handsets, midp2, featured handsets**Carriers
      with Canadian Headquarters**Rogers
    (WEB) (WAP) (Subsequent Launch date TBD -
      WEB/WAP deck)FIDO
    (WEB)
      (WAP) (Subsequent Launch date TBD - WEB/WAP deck)Telus
    (WEB
      only) (Subsequent Launch date TBD - WEB/WAP deck)Bell Canada
    (WEB
      only) (Subsequent Launch date TBD - WEB/WAP deck)**Handset
      Target List**Rogers
    All high volume handsets, midp2, featured
      handsetsFIDO
    All
      high volume handsets, midp2, featured handsetsTelus
    All high volume handsets, midp2, featured
      handsetsBell Canada
    All high volume handsets, midp2, featured
      handsets


****
















**Exhibit
B**





**AVAILABILITY
/ HOSTING SERVICE LEVEL/CUSTOMER SUPPORT**








**1.**
    **Operational
      Issues****.**




In case
operational issues arise which require the assistance of the other Party to be
resolved, each Party may contact the other Party and each Party commits to a
joint resolution of the issue. Both Parties shall provide and maintain a phone
number, which phone number is set forth in the table below, and which shall be
answered by technical skilled personnel during the business hours which are set
forth in the table below. In the event that DWANGO’s operations center does not
operate 24 hours each day, 7 days a week, DWANGO shall link the phone number
provided below to a pager and shall return NAPSTER’s call(s) no later than 15
minutes after the time the pager message was left by NAPSTER during all hours
outside of the business hours as set forth below for DWANGO. The contact
information below for operational issues is intended solely for communication
between NAPSTER and DWANGO and shall not be provided to third parties. Each
Party shall notify the other Party of any changes to the operations contact
information provided in the operations contact table below ten (10) business
days before such change becomes effective.







**2.**
    **Network
      Availability****.**




The
NAPSTER Mobile Entertainment Service shall be available to NAPSTER users a
minimum of 99 % of the time during any 24 hour period, 7 day period, and 30 day
period. Calculation of this availability shall exclude Maintenance Outages but
shall include Unplanned Outages and Emergency Maintenance Outages. Upon
NAPSTER’s request, DWANGO shall provide NAPSTER with a report showing service
availability.








3.
    **Maintenance/Planned
      Outages**.





DWANGO
shall perform any work which requires the unavailability of the NAPSTER Mobile
Entertainment Service (“Maintenance Outage”) between 11:00 PM and 5:00 AM
Pacific Standard Time (the “Maintenance Window”). DWANGO will notify NAPSTER at
least seven days in advance of any planned Maintenance Outage. No more than
eight hours of Maintenance Outages per month may occur.





In the
event the time required to perform such work will unexpectedly exceed the
Maintenance Window DWANGO shall notify NAPSTER at the telephone number set forth
below forty-five (45) minutes before the end of the Maintenance Window, and such
unavailability shall be considered an Unplanned Outage or Emergency Maintenance
Outage.





DWANGO
shall notify NAPSTER at the telephone number set forth below of any material
impairment of the NAPSTER Mobile Entertainment Service (an “Unplanned Outage”)
within thirty (30) minutes after such Unplanned Outage commences. DWANGO shall
provide a short description of the impairment causing the Unplanned Outage (e.g.
service affected, extent of impairment) and a status for resolution.















DWANGO
shall notify NAPSTER at the telephone number set forth below of any required
maintenance beyond Maintenance Outages (“Emergency Maintenance”) forty-five (45)
minutes prior to the start of the Emergency Maintenance. DWANGO shall provide an
estimated timeframe for resolution and a status of such Emergency Maintenance
every two (2) hours until resolved.





b.
    NAPSTER
      and DWANGO Operations Center Contact Information.





**Party**
    
    **Phone
      Numbers for**
      **NAPSTER
      and DWANGO to Use**
    
    **Hours
      of Operation**NAPSTER
      George
      Domantay
    
    Phone
      number: 1-310-281-5002
    
    M -
      F 8am to 6pm PST; S -S 8am to 5pm PST
      Alternative/After
      hours: Emaildomantay@napster.comDWANGO
    
    Phone
      number: (206) 286-1440 - menu for service
    
    Business
      Hours: M-S 8am-6pm PST. After hours: The phone number is linked to a
      mobile “Hot” Phone. DWANGO commits to immediate
  response.





**4.**
    **Customer
      Support**.





The
DWANGO Support Group resides on-site in Seattle, Washington and supports all
customer inquiries related to applications and content.  The typical*
customer support process begins with a call from the customer to the Wireless
Carrier Partner, which acts as the **Tier 1** support
agent. If the Wireless Carrier Partner is unable to resolve the issue, it is
forwarded to the DWANGO Support Group ( **Tier 2** and **Tier
3)** .





**Tier
1 (Wireless Carrier Partner):** Customer's
initial contact with the Wireless Carrier Partner and information
gathering.  If the support issue is not a quick resolution and is unrelated
to the Wireless Carrier Partner’s network, it is forwarded to **Tier
2** .





**Tier
2 (DWANGO):** The
support issue is logged into DWANGO's support tracking system and the customer
is contacted for further review.  If the issue is not known and resolvable,
it is forwarded to **Tier
3** for
further evaluation and triage.  The customer automatically receives a
full refund or replacement, provided they are not identified as abusing DWANGO’S
goodwill. Tier 2 customer support will be offered by Dwango via telephone from 7
AM to 6 PM PST on normal business days (i.e. excluding weekends and holidays).
Tier 2 customer support during all hours other than the hours identified in the
prior sentence will be available through a dedicated email address and pager
number





**Tier
3 (DWANGO):** The
product issue is logged in DWANGO’S issue tracking software and
assigned to the appropriate Development team for resolution.  When
a cause is discovered, it is either fixed or declared a known issue and
communicated to the **Tier
2** team for
future identification.





*
Sometimes the customer will contact **Tier
2** directly, at which point the Dwango Support Group will evaluate whether it is a
Wireless Carrier Partner or Dwango related problem and address it
accordingly.














**Exhibit
C**





**STATEMENT
OF WORK**







The
items listed below define the objectives for the Services:




1.
    Napster
      branded WAP sales channel for Polyphonic Ringtones, Audio Tones &
      Images:





**AWS,
Cingular, Nextel, Boost, T-Mobile**


**Estimated
Launch Date:**  **Jan
28** **th** ****





**Features:**


1.1.
    Polyphonic
      Ringtone Sales


1.2.
    Audio
      Tone Sales


1.3.
    Image
      Sales


1.4.
    Featured
      Tone


1.5.
    Featured
      Image


1.6.
    Catalog
      Browsing


1.7.
    Catalog
      Search


1.8.
    Promo
      Code Redemption (See section 4)


1.9.
    Promo
      Code Distribution (See section 4)


1.10.
    Minimum
      Supported Handsets - Subject to Change Based on Carrier Handset
      Roadmaps





LG
      4015LG
      1150Motorola
      t720Motorola
      t721Motorola
      V600NEC
      515NEC
      525Siemens
      S56Siemens
      SL56Siemens
      M56Siemens
      C61Samsung
      x426Samsung
      e316Sony
      Ericsson T226Sony
      Ericsson T616Sony
      Ericsson T306Sony
      Ericsson T637Nokia
      3100
   
  Nokia
      3200Nokia
      3300Nokia
      3595Nokia
      3650Nokia
      6200Nokia
      6200IMNokia
      6800Nokia
      7210Nokia
      3595IMNokia
      6820Nokia
      3590Nokia
      3620Motorola
      V180Motorola
      V505Siemens
      C56Siemens
      C61Sony
      Ericsson Z500aNokia
      6620Motorola
      V220LG
      4020Nokia
      3120Nokia
      6010








2.
    Napster
      branded Web sales channel for Polyphonic Ringtones, Audio Tones &
      Images:





**AWS,
Cingular, Nextel, Boost, T-Mobile**


**Estimated
Launch Date Jan 28** **th**





**Features:**


2.1
    Polyphonic
      Ringtone Sales


2.2
    Audio
      Tone Sales


2.3
    Image
      Sales


2.4
    Catalog
      Browsing


2.5
    Catalog
      Search


2.6
    Promo
      Code Redemption (See section 4)


2.7
    Promo
      Code Distribution (See section 4)


2.8
    Content
      Updated Weekly


2.9
    Minimum
      Supported Handsets - Subject to Change Based on Carrier Handset
      Roadmaps










LG
      4015LG
      1150Motorola
      t720Motorola
      t721Motorola
      V600NEC
      515NEC
      525Siemens
      S56Siemens
      SL56Siemens
      M56Siemens
      C61Samsung
      x426Samsung
      e316Sony
      Ericsson T226Sony
      Ericsson T616Sony
      Ericsson T306Sony
      Ericsson T637Nokia
      3100Nokia
      3200Nokia
      3300Nokia
      3595Nokia
      3650Nokia
      6200Nokia
      6200IMNokia
      6800Nokia
      7210Nokia
      3595IMNokia
      6820Nokia
      3590Nokia
      3620Motorola
      V180Motorola
      V505Siemens
      C56Siemens
      C61Sony
      Ericsson Z500aNokia
      6620Motorola
      V220LG
      4020Nokia
      3120Nokia
      6010














3.
    Napster
      branded Next-Generation BREW Client:**NSTL
      -****March
      2005**




**US Cellular**
    **NSTL
      Submission March ‘05****Alltel**
    **NSTL
      Submission March ‘05**





**Features:**


**3.1**
    Polyphonic
      Ringtone Sales


**3.2**
    Audio
      Tone Sales


**3.3**
    Image
      Sales


**3.4**
    Featured
      Tone


**3.5**
    Featured
      Image


**3.6**
    Ringtone
      Preview


**3.7**
    Catalog
      Browsing


**3.8**
    Catalog
      Search


**3.9**
    Content
      Updated Weekly


**3.10**
    Promo
      Code Distribution (See Section 4)


**3.11**
    Promo
      Code Redemption (See Section 4)


**3.12**
    Supported
      Handsets - TBD







4.
    Support
      for Promotional
      Codes**January
      28, 2005**





**Features:**


4.1
    Dwango
      will distribute promotional codes for Napster-provided content via SMS,
      using a list of generated codes from Napster.


4.2
    Napster
      will distribute promotional codes for Dwango-provided content using a list
      of generated codes from Dwango, which Dwango provide redemption
    to.




5.
    System
      Sustainment





5.1
    Content
      Updated Weekly per Napster’s specification and/or
approval.


5.1.1
    New
      Content Published into System


5.1.2
    Major
      List Content Rotation


5.1.3
    Featured
      Tones Rotation


5.2
    New
      handsets added monthly (WAP/WEB)


5.2.1
    Handsets
      On-boarded for Polyphonics


5.2.2
    Handsets
      On-boarded for Audiotones


5.2.3
    Handsets
      On-boarded for Images


5.3
    New
      handsets added for BREW regularly.














The
following items will be delivered during the course of the project by the party
identified below. In the event that NAPSTER does not deliver the UI Design by
the below date, each of the subsequent item dates will be adjusted outward by
the corresponding number of business days.: ****




**·**
    **UI
      Design and Documentation (NAPSTER)****November
      29, 2004**




**·**
    ****Product
      Requirements Document
      (DWANGO)****December
      3, 2004****




**·**
    **Recognized
      Change Request Protocol (DWANGO)****December
      8, 2004**




**·**
    **Project
      Plan
      (DWANGO)****December
      8, 2004**




The
Project Plan (which will set forth timelines for completion of all projects
contemplated herein), Product Requirements Document and Recognized Change
Request Protocol will be delivered by DWANGO to NAPSTER and shall each be
subject to NAPSTER’s approval, which approval shall not be unreasonably
withheld, conditioned or delayed. Dwango
will use best efforts to complete the deliverables in accordance with the above
schedule. Other
than as specifically provided in the Agreement, no payment will be required by
either party for the work contemplated herein or in any of the documents
referenced herein.





**Additional
Statement of Work For Creation of Additional Functionality**





Dwango
will provide Statements of Work for the development of the following
functionality no later than **January
17, 2005** ,
provided that design discussion occurs between Napster and Dwango engineers a
minimum of five business days in advance (January 10, 2005). Napster will have
the right to approve such additional SOWs, such approvals not to be unreasonably
withheld, conditioned or delayed.





·
    Integration
      with Napster Prepaid Card Solution
(FastCard)


·
    Creation
      of Napster Branded PremiumSMS and SMSSales/Marketing
    Channel


·
    Creation
      of a J2ME Content Browser


·
    Support
      of First Time Purchase Reward Programs





A joint
DWANGO/NAPSTER status call will occur weekly during the Term and as needed to
discuss other initiatives. DWANGO will continue to hold internal release board
meetings to control and manage change related to all DWANGO/NAPSTER
projects.











*Each
party understands and acknowledges that, while best efforts will be made to
comply with the schedules set forth in this Statement of Work, maintenance of
these schedules will require the cooperation and assistance of both parties,
including each party having sufficient and timely access to the other party’s
technical resources wherever joint or parallel development must
occur.*



















**EXHIBIT
D**




**Ringtone
Sample Sale**




Ringtone
      Retail Price
    
    $
    1.99Average
      Payment to Carrier Partner
    
    
    **[**]**Payment
      Received by Dwango from Wireless Carrier Partner
    
    
    **[**]**Payment
      From Dwango to third party copyright owners (e.g. publishers &
      ASCAP)
    
    
    **[**]**Mobile
      Entertainment Service Revenue (as defined in Section 1.9)
    
    
    **[**]**Royalty
      to Napster
    
    
    **[**]**Dwango
      Proceeds
    
    
    **[**]**








**[**]
REQUESTED FOR CONFIDENTIAL TREATMENT**