Document:

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 include any
      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 mean DWANGO®,
      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 includes any
      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 as Exhibit
      C to
      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 on Schedule
      A to
      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 on Exhibit
      A to
      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 of Exhibit
      B to
      this Agreement.

 

	4.1.5.  	
      Provide
      infrastructure and (as further described in Exhibit
      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 a
      payment
      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. Conrad
	 	Alexander Conrad, President/COO
200
      West Mercer St., Suite 501
Seattle,
      WA 98117
	 	 
	 	 
	NAPSTER, INC.
	 	 
	By:	/s/
      Laura Goldberg
	 	Laura Goldberg, Chief Operating
      Officer
9044
      Melrose Avenue
Los
      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
      handsets
	Nextel	All
      available handsets
	Boost Mobile 	
      All
      available handsets

	T-Mobile	
      All
      high volume handsets, midp2, featured handsets

	Verizon	All
      high volume handsets, midp2, featured handsets
	USCellular	All high volume handsets, midp2, featured
      handsets
	Alltel	All
      high volume handsets, midp2, featured handsets
	Virgin 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
      handsets
	FIDO   	
      All
      high volume handsets, midp2, featured handsets

	Telus	All high volume handsets, midp2, featured
      handsets
	Bell 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: Email domantay@
      napster.com

	
      DWANGO
	 	
      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
28th 

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
      4015

	
      LG
      1150

	
      Motorola
      t720

	
      Motorola
      t721

	
      Motorola
      V600

	
      NEC
      515

	
      NEC
      525

	
      Siemens
      S56

	
      Siemens
      SL56

	
      Siemens
      M56

	
      Siemens
      C61

	
      Samsung
      x426

	
      Samsung
      e316

	
      Sony
      Ericsson T226

	
      Sony
      Ericsson T616

	
      Sony
      Ericsson T306

	
      Sony
      Ericsson T637

	
      Nokia
      3100

 

 

 

	
      Nokia
      3200

	
      Nokia
      3300

	
      Nokia
      3595

	
      Nokia
      3650

	
      Nokia
      6200

	
      Nokia
      6200IM

	
      Nokia
      6800

	
      Nokia
      7210

	
      Nokia
      3595IM

	
      Nokia
      6820

	
      Nokia
      3590

	
      Nokia
      3620

	
      Motorola
      V180

	
      Motorola
      V505

	
      Siemens
      C56

	
      Siemens
      C61

	
      Sony
      Ericsson Z500a

	
      Nokia
      6620

	
      Motorola
      V220

	
      LG
      4020

	
      Nokia
      3120

	
      Nokia
      6010

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

AWS,
Cingular, Nextel, Boost, T-Mobile   

Estimated
Launch Date Jan 28th

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
      4015

	
      LG
      1150

	
      Motorola
      t720

	
      Motorola
      t721

	
      Motorola
      V600

	
      NEC
      515

	
      NEC
      525

	
      Siemens
      S56

	
      Siemens
      SL56

	
      Siemens
      M56

	
      Siemens
      C61

	
      Samsung
      x426

	
      Samsung
      e316

	
      Sony
      Ericsson T226

	
      Sony
      Ericsson T616

	
      Sony
      Ericsson T306

	
      Sony
      Ericsson T637

	
      Nokia
      3100

	
      Nokia
      3200

	
      Nokia
      3300

	
      Nokia
      3595

	
      Nokia
      3650

	
      Nokia
      6200

	
      Nokia
      6200IM

	
      Nokia
      6800

	
      Nokia
      7210

	
      Nokia
      3595IM

	
      Nokia
      6820

	
      Nokia
      3590

	
      Nokia
      3620

	
      Motorola
      V180

	
      Motorola
      V505

	
      Siemens
      C56

	
      Siemens
      C61

	
      Sony
      Ericsson Z500a

	
      Nokia
      6620

	
      Motorola
      V220

	
      LG
      4020

	
      Nokia
      3120

	
      Nokia
      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
	 	
      $
	
      1.99
	 
	
      Average
      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 TREATMENTEXHIBIT
10.39

SUBLEASE
AGREEMENT

 

This
SUBLEASE is made as of this 11th day of November, 2004 between MICROSOFT
CORPORATION, a Washington corporation ("Sublandlord"), and
Dwango North America Corp., a Nevada corporation ("Subtenant").

Sublandlord
is the successor tenant under that certain lease agreement dated January 9,
1998, as amended by First Amendment to Lease Agreement dated November 1, 1999;
Second Amendment to Lease Agreement dated August 9, 2000; Third Amendment to
Lease dated September 1, 2000, and Fourth Amendment to Lease dated September 30,
2001, with EOP-WTC, L.L.C. as the current landlord ("Landlord")
(collectively, the "Master
Lease"), for
space (the "Master
Space")
located in the building (the "Building")
described below:

	Name of Building:	World Trade Center
	Address: 	
      2211
      Elliott Avenue,

	City, State and Zip Code: 	
      Seattle
      WA 98101

 

A copy of
the Master Lease is attached as Exhibit
A.

The
Building, and the land on which the Building is located, and the common areas in
the Building and on the land are referred to collectively as the Property (the
“Property”).

In
consideration of the covenants and promises contained in this Sublease, the
parties agree as follows:

1.    Subleased
Premises.

1.1    Premises.
Sublandlord agrees to sublease to Subtenant, and Subtenant agrees to sublease
from Sublandlord, that portion of the Master Space shown in Exhibit
B,
consisting of approximately 15,000 rentable square feet on the sixth floor of
the Building (the "Premises"). In
addition to use of the Premises, Subtenant shall have the same rights of ingress
and egress to the Premises, and any common areas and the benefit of any
appurtenant easements and rights of way, all on such conditions and at such
times as permitted by Landlord and granted under the Master Lease.

1.2    Furniture.
Subtenant will use the furniture and telephone equipment (collectively,
“Furniture”) currently located in the Premises during the Term. An inventory of
the Furniture is attached hereto as Exhibit
C.
Subtenant acknowledges the Furniture is used, has been inspected by Subtenant,
and is accepted as-is, where-is in its current condition without warranty,
express of implied, of any kind. Subtenant shall be responsible for all damage
or risk of loss regarding the Furniture.

2.    Term/
Sublandlord’s Early Termination Right. This
Sublease shall commence on the later of substantial completion of tenant
improvement or December 1, 2004 (the “Commencement
Date”) and
shall terminate at the end of the twenty-fourth (24th) month
following the Commencement Date (the “Term”), which
Term is less than the remaining term under the Master Lease. If Sublandlord has
not, for any reason whatsoever (other than delays caused by Subtenant)
substantially completed the tenant improvements (i.e. "Sublandlord’s Work”, as
defined in Section 5 below) within sixty (60) days of receipt of Landlord’s
consent, the Subtenant may terminate this Sublease on written notice to
Sublandlord within thirty (30) days thereafter. 

 

 

1

 

If
Landlord has failed to deliver its written consent to this Sublease within
twenty (20) days of Landlord’s receipt of the fully executed Sublease, Subtenant
or Sublandlord shall, at the option of either, have the right to terminate this
Sublease by written notice delivered to the other party within ten (10) days of
such date and prior to delivery of Landlord’s consent, in which event this
Sublease shall be of no further force and effect.

Sublandlord
shall have the option to terminate this Sublease on four (4) months prior
written notice to Subtenant ("Termination Notice"), provided that the
Termination Notice may not be given prior to the fifteenth (15th) month
after the Commencement Date, and provided, further, that Sublandlord shall pay
to Subtenant, concurrently with the delivery of the Termination Notice, a
termination fee in the amount of Twenty Four Thousand and 00/100 Dollars
($24,000.00).

3.    Rent.

3.1    Minimum
Rent. Minimum
Rent due one month following the Commencement Date through February 28, 2005
shall be Fifteen Thousand Eight Hundred Thirty-Three and 33/100 ($15,833.33) per
month. Beginning March 1, 2005 Subtenant agrees to pay Sublandlord Minimum Rent
in the amount of Twenty Thousand and 00/100 (20,000.00) per month. February 28,
2006; Beginning March 1, 2006 Subtenant agrees to pay Sublandlord Twenty-seven
Thousand One Hundred Seven and 50/100 ($27,107.50) per month through the end of
the Term. , all to be paid in advance on the first day of each month without any
prior demand and without any deduction or offset whatsoever.

3.2    Additional
Rent. During
the Term, in addition to paying the Minimum Rent specified in Section 3.1 above,
Subtenant shall, commencing as of January 1, 2006, pay its prorata share of
the annual increases in Operating Costs (as defined in the Master Lease) above
the actual costs for the 2005 calendar year ("Operating Cost Pass Through”)
"Subtenant's
Share" is
determined to be 8.42 %, based upon the ratio of the number of rentable square
feet of the Premises (15,490 RSF) to the total number of rentable square feet
leased by Sublandlord in the Building (183,927 RSF). Such payments by Subtenant,
together with any and all other amounts payable by Subtenant to Sublandlord
pursuant to the terms of this Sublease, are hereinafter referred to as the
"Additional
Rent." The
calculation, payment and reconciliation of the Additional Rent payments by
Subtenant and Sublandlord shall be made in the same manner as between Landlord
and Sublandlord under the Master Lease. Sublandlord shall, at Sublandlord’s
option, credit or refund to Subtenant Subtenant’s Share of any Additional Rent
overpayments received by Sublandlord under the Master Lease, and Subtenant shall
pay to Sublandlord any Additional Rent underpayments prior to the date due from
Sublandlord under the Master Lease. 

Any and
all sums Subtenant is obligated to pay under the terms of this Sublease shall be
construed as rent obligations in addition to the monthly rent set forth in this
Sublease. In addition, such additional rent shall include a service charge of
One Hundred Dollars ($100.00) for each of Subtenant's dishonored checks returned
by the institution on which said checks are drawn. If, at any time during the
term of this Sublease, Subtenant has tendered payment by check and Subtenant's
bank has returned more than one such payment for any reason, including
insufficient funds, Sublandlord may, at its option, require that all future
payments be made by cashier's check.

4.    Prepaid
Rent/Security Deposit.
Subtenant has prepaid Minimum Rent for months two, three and six of the Term in
the sum of $47,499.99. Additionally, Subtenant has deposited with Sublandlord
the sum of $27,107.50 as a security deposit (the "Security
Deposit”). The
Security Deposit shall be held by Sublandlord as security for Subtenant's
performance of all of the terms, covenants and conditions of this Sublease. If
Subtenant defaults under any provision of this Sublease, Sublandlord may (but
shall not be required to) use, apply or retain all or any part of this Security
Deposit for the payment of any amount Sublandlord may spend by reason of
Subtenant's default or to compensate Sublandlord for any loss or damage
Sublandlord may suffer because of Subtenant's default. If any portion of the
Security Deposit is so used or applied, Subtenant shall, within ten (10) days
after written demand, deposit cash with Sublandlord in an amount sufficient to
restore the Security Deposit to its original amount. Sublandlord is not required
to keep the Security Deposit separate from its general funds, and Subtenant is
not entitled to interest on the Security Deposit. If Subtenant performs each of
its obligations under this Sublease, the Security Deposit, or any balance
thereof, shall be returned to Subtenant within forty five (45) days after the
later of the expiration of the Term or the date Subtenant vacates the Premises.
If Master Landlord consent to this Sublease is not obtained pursuant to the
terms hereof, the Security Deposit shall be returned to Subtenant.

 

 

2

 

5.    Sublandlord’s
Work and Alterations.
Sublandlord, at its expense, will (a) construct a suitable entry for the
Premises off the sixth floor elevator lobby, with materials and finishes
consistent with those in the Premises and Building; (b) demise or secure the
internal staircase between the sixth and fifth floors; (c) clean and if
necessary repair all carpet in the Premises, and (d) patch walls if necessary
and touch-up paint to match paint in the Premises ("Sublandlord’s Work”).
Sublandlord's Work is more fully described on the plans and specifications for
such work, prepared by Marvin Yamaguchi Architects and dated October 18, 2004
("Plans and Specifications" which is attached hereto as Exhibit
D).
Notwithstanding the above, Subtenant shall have access to the Premises during
Sublandlord’s Work in order to install and test its server equipment and perform
minimal, Sublandlord and Landlord approved, modifications in the Premises,
provided that such modifications do not interfere with Sublandlord’s
Work.

Subtenant
shall not make any improvements in or alterations or additions (collectively,
"Alterations”) to the
Premises without first obtaining Sublandlord's written consent, but as used
herein "Alterations" shall not include decorations and minor, nonstructural
alterations that do not affect Building systems. All Alterations shall be at the
sole cost and expense of Subtenant and, except for Subtenant's trade fixtures,
furniture and equipment shall become the property of Sublandlord and shall
remain in and be surrendered with the Premises at the termination of this
Sublease. However, Sublandlord, in its sole and absolute discretion, may elect
to require Subtenant to remove from the Premises any or all Alterations upon the
termination of the Sublease, and upon any such election (which must be made, if
at all, at the time Sublandlord consents to the Alterations) Subtenant shall
promptly do so and shall repair all damages occasioned by such removal and
return the Premises to their original condition to Sublandlord's reasonable
satisfaction, all at Subtenant's sole cost and expense.

All
Alterations undertaken by Subtenant shall be performed by a contractor approved
in advance by Sublandlord, according to plans approved in advance by
Sublandlord. Subtenant shall cause all work to be done in a good and workmanlike
manner using materials equal to or better than those used in the construction of
the Premises and shall comply with or cause compliance with all laws and with
any direction given by any public officer pursuant to law, including, without
limitation, Title III of the Americans with Disabilities Act of 1990 as amended
("ADA"), as
the same are in effect on the date hereof and may be hereafter modified, amended
or supplemented. During construction, Subtenant or its general contractor shall
procure and maintain in effect all insurance coverages required under the Master
Lease and any additional insurance coverage required by Sublandlord at its
reasonable discretion.

6.    Condition
of Premises.
Subtenant has thoroughly inspected the Premises and accepts them in their
present condition, AS IS WITH ALL FAULTS (subject to completion of Sublandlord’s
Work). Subtenant acknowledges that neither Sublandlord nor any agent of
Sublandlord has made any representation as to the suitability of the Premises
for the conduct of Subtenant's business. Subtenant and Sublandlord expressly
agree that there are and shall be no implied warranties of merchantability,
habitability, fitness for a particular purpose or any other kind arising out of
this Sublease, and there are no warranties that extend beyond those expressly
set forth in this Sublease.

3

 

7.    Landlord's
Services. Under
the Master Lease Landlord is obligated to provide Sublandlord with certain
operating services, maintenance and repairs (collectively, "Landlord's
Services"). To
the extent Landlord's Services apply to the Premises, Subtenant shall have the
benefit of such services. Sublandlord has no obligation to furnish any of
Landlord's Services and will not be liable for any disruption or failure of such
services. Upon receipt of written complaint from Subtenant, Sublandlord shall
make demand upon Landlord to take all appropriate action for the correction of
any defect, inadequacy or insufficiency in Landlord's provision of Landlord's
Services. If necessary, upon written request of Subtenant, Sublandlord shall
enforce its rights under the Master Lease to Landlord's Services for Subtenant's
benefit (including any abatement of Minimum Rent and Additional Rent provided to
Sublandlord under the Master Lease and applicable to the Premise in the event of
interruption of services that continue for five (5) business days), or by
litigation (if necessary), in which event Subtenant shall reimburse Sublandlord
for the costs and expenses of such enforcement to the extent such costs and
expenses are not recovered from Landlord.

8.    Subtenant's
and Sublandlord's Maintenance and Repairs.

8.1    Maintenance
of Premises.
Subtenant shall, at its expense, maintain the Premises, including, without
limitation, all improvements to the Premises, in substantially the same order,
condition and repair as delivered to Subtenant, to the same extent required of
Sublandlord under the Master Lease, excepting only reasonable wear and tear and
damage by the elements.

 

8.2.    Repair
of Building and Common Areas. Except
for repairs required to be made by Landlord under the Master Lease, all repairs
to the Property other than the Premises shall be coordinated by and through
Sublandlord. To the extent the repairs are not paid for from Landlord's
insurance, the costs of repair will be paid in the following
manner:

(a)    The
Premises.
Subtenant shall pay for any repairs conducted in the Premises, unless such
repairs are due to the negligence or willful misconduct of
Sublandlord.

(b)    The
Property other than the Premises.
Subtenant shall pay for any repairs conducted in the Property to the extent the
damage was caused by Subtenant or an employee, guest, or agent of
Subtenant.

Subtenant
shall promptly notify Sublandlord of any condition in the Property that is in
need of repair.

9.    Use.
Subtenant shall use the Premises as a business office only and for no other
purposes whatsoever. Subtenant shall not do or permit anything to be done in or
about the Property that will in any way interfere with the rights of Sublandlord
or other occupants of the Building, or injure or annoy them, or use or allow the
Property to be used for any unlawful purpose; nor shall Subtenant cause,
maintain or permit any nuisance in, on or about the Property. Subtenant shall
not commit or suffer to be committed any waste in or about the
Property.

4

 

10.    Signs
and Sign Restrictions.
Sublandlord will provide Subtenant with Building standard signage, in the lobby
directory and on the 6th floor,
at Sublandlord’s expense. No other sign, picture, advertisement or notice shall
be displayed, inscribed, painted or affixed to any door, wall or woodwork
without Sublandlord's prior consent, which shall not be unreasonably
withheld.

11.    Locks. Except
for Subtenant’s server room, no additional locks shall be placed upon any doors
of the Premises or Master Space without Sublandlord's consent, which shall not
be unreasonably withheld. Keys will be furnished to each lock for access to the
Premises at times as permitted by Sublandlord. At the termination of the
Sublease, Subtenant shall surrender to Sublandlord all keys and security cards
to the Premises and Master Space.

12.    Defaults. Any of
the following occurrences shall constitute a default by Subtenant: 

12.1    Failure
to Pay Money When Due. If
Subtenant fails to make any payment of rent, additional security deposit or any
other payment required to be made by Subtenant hereunder, as and when due, for a
three (3) business day period after written notice from
Sublandlord.

 

12.2    Other
Breaches. If
Subtenant fails to observe or perform any other provision of this Sublease,
including compliance with Landlord's Rules and Regulations, for a twenty (20)
day period after written notice from Sublandlord (or as soon thereafter as is
practicable, provided that Subtenant commences to cure the breach within such
20-day period and diligently prosecutes such cure to completion). The 20-day
grace period shall not apply to Sublandlord’s right to exercise remedies under
Section 13(a) with respect to Subtenant’s breach of its obligations to maintain
unexpired insurance coverages in full compliance with Sections 5 and 14 of
this Sublease.

 

13.    Remedies. If
Subtenant commits a default under this Sublease which continues beyond any
notice and cure period, Sublandlord may do any one or more of the following, in
addition to pursuing its remedies under law:

 

(a)    Cure the
default and charge the costs to Subtenant, in which case Subtenant shall pay
such costs as additional rent promptly on demand, together with interest thereon
at the rate of eighteen percent (18%) per year or the highest rate permitted by
law, whichever is less.

(b)    Terminate
this Sublease.

(c)    Enter and
take possession of the Premises and remove Subtenant and all other persons and
any property from the Premises, with process of law.

(d)    Hold
Subtenant liable for and collect rent and other indebtedness owed by Subtenant
to Sublandlord or rent that would have accrued during the remainder of the term
had there been no default, less any sums Sublandlord receives by reletting the
Premises.

(e)    Hold
Subtenant liable for that part of the following sums paid by Sublandlord that
are attributable to the remainder of the term:

(i)    Customary
broker's fees incurred by Sublandlord in reletting part or all of the
Premises;

5

 

(ii)    The cost
of removing and storing Subtenant's property;

(iii)    The cost
of repairs and alterations reasonably necessary to put the Premises in a
condition reasonably acceptable to a new subtenant; and

(iv)    Other
necessary and reasonable expenses incurred by Sublandlord in enforcing its
remedies.

Sublandlord
shall mitigate its damage by making reasonable efforts to relet the Premises on
reasonable terms. Sublandlord may relet for a shorter or longer period of time
than the Sublease term and make reasonably necessary repairs and alterations.
All sums collected from reletting shall be applied first to Sublandlord's
expenses of reletting described in Section 13(e), and then to the payment
of amounts due from Subtenant to Sublandlord under this Sublease.

14.    Insurance.
Subtenant shall, during any period of occupancy, at its sole cost and expense,
keep in full force and effect the following insurance:

14.1    Liability
Insurance. A
policy of general commercial liability insurance satisfying the requirements of
the Master Lease regarding insurance to be carried by Sublandlord and naming
both Sublandlord and Landlord as additional insureds. Such liability policy
shall (a) insure against any and all claims or liability arising out of the use
or maintenance of the Property under this Sublease, in an amount not less than
Two Million Dollars ($2,000,000) per occurrence covering bodily injury to
persons, including death, and damage to property; (b) insure the hazards of the
Property and Subtenant's operations thereon, independent contractors,
contractual liability (covering all indemnity provisions of this Sublease); and
(c) contain a cross-liability provision and a provision that the insurance
provided Sublandlord and Landlord hereunder shall be primary and
non-contributing with any other insurance.

14.2    Property
Damage Insurance. A fire
and extended coverage insurance policy on the improvements to the Premises
satisfying the requirements of the Master Lease regarding insurance to be
carried by Sublandlord and naming both Sublandlord and Landlord as additional
insureds as their interests may appear. Such policy shall (a) be a standard form
of property insurance insuring against the perils of fire, extended coverage,
vandalism, malicious mischief, special extended coverage ("All-Risk") and
sprinkler leakage, and (b) be upon all property owned by Subtenant, or for which
Subtenant is legally liable, or that was installed at Subtenant's expense, and
that is located at the Premises, including, but not limited to, furniture,
fittings, installations, fixtures, and any other personal property of Subtenant,
in an amount not less one hundred percent (100%) of the full replacement cost
thereof.

14.3    General
Requirements. All
policies shall be written in a form (including amount of deductibles, if any)
reasonably satisfactory to Sublandlord and shall be taken out with insurance
companies holding a General Policyholders Rating of "A" and a Financial Rating
of "X" or better, as set forth in the most current issue of Best's Insurance
Reports, but in any event not less than the rating required under the Master
Lease.

Within
ten (10) days after the execution of this Sublease, Subtenant shall deliver to
Sublandlord copies of policies or certificates complying with this Sublease, in
form reasonably satisfactory to Sublandlord. No such policy shall be cancelable
or reducible in coverage except after thirty (30) days prior written notice to
Sublandlord. If Subtenant fails to obtain, maintain and/or provide evidence of
insurance required hereunder, Sublandlord may obtain the same and Subtenant
shall, upon demand, reimburse Sublandlord for the cost thereof. No such action
by Sublandlord or reimbursement from Subtenant shall be a waiver of default or
other remedies. In no event shall the limits of such policies be considered as
limiting liability of Subtenant under this Sublease.

6

 

15.    Waiver
of Recovery.
Sublandlord and Subtenant each release and relieve the other, and waive their
entire rights of recovery for loss or damage to property located within or
constituting a part or all of the Property to the extent that the loss or damage
is covered by (a) the injured party's insurance, or (b) the insurance
the injured party is required to carry under Section 14, whichever is greater.
This waiver applies whether or not the loss is due to the negligent acts or
omissions of Sublandlord or Subtenant, or their respective officers, directors,
employees, agents, contractors, or invitees. Each of Sublandlord and Subtenant
shall have their respective property insurers endorse the applicable insurance
policies to reflect the foregoing waiver of claims, provided, however, that the
endorsement shall not be required if the applicable policy of insurance permits
the named insured to waive rights of subrogation on a blanket basis, in which
case the blanket waiver shall be acceptable.

16.    Risk. Except
as otherwise expressly provided in this Section 16, all of Subtenant's personal
property of any kind or description whatsoever in the Property shall be at
Subtenant's sole risk. Sublandlord and Landlord shall not be liable for any
damage done to or loss of such personal property, injury to person or damage or
loss suffered by the business or occupation of Subtenant arising from any acts
or neglect of co-tenants or other occupants of the Building, or of any other
persons, or from bursting, overflowing or leaking of water, sewer or steam
pipes, or from the heating or plumbing or sprinkler fixtures, or from electric
wires, or from gas, or odors, or caused in any other manner whatsoever unless
and to the extent the damage is caused by the willful misconduct or negligence
of Sublandlord or breach of Sublandlord's obligations under this
Sublease.

17.    Liability
of Sublandlord.
Sublandlord's officers, directors and employees shall have no personal liability
under this Sublease. Subtenant shall look first to rents, issues and profits
from the Premises for the satisfaction of any judgment or decree against
Sublandlord based upon any default under this Sublease, and then to other
property or assets of Sublandlord, which shall only be subject to levy,
execution or other enforcement procedures for satisfaction of any such judgment
or decree.

18.    Indemnification. Subject
to Section 15 above, Subtenant will defend, indemnify and hold harmless
Sublandlord and Landlord from any claim, liability or suit, including attorney
fees, on behalf of any party for any injury or damage occurring in or about the
Master Space where such damage or injury was caused by any act, omission,
negligence or intentional act of Subtenant or by Subtenant's agents, employees,
servants, customers, clients, contractors, or invitees. Subject to Section 15
above, Sublandlord will defend, indemnify and hold harmless Subtenant from any
claim, liability or suit, including attorney fees, on behalf of any party for
any bodily injury or property damage occurring in or about the Master Space to
the extent the damage or injury was caused by the act, omission or negligence of
Sublandlord, its agents, employees, servants, customers, clients, contractors or
invitees. The indemnification obligations contained in this Section shall not be
limited by any worker's compensation, benefit or disability laws, and each
indemnifying party hereby waives any immunity that the indemnifying party may
have under the Industrial Insurance Act, Title 51 RCW and similar worker's
compensation, benefit or disability laws. SUBLANDLORD
AND SUBTENANT ACKNOWLEDGE BY THEIR EXECUTION OF THIS SUBLEASE THAT EACH OF THE
INDEMNIFICATION PROVISIONS OF THIS LEASE (SPECIFICALLY INCLUDING BUT NOT LIMITED
THOSE RELATING TO WORKER'S COMPENSATION BENEFITS AND LAWS) WERE SPECIFICALLY
NEGOTIATED AND AGREED TO BY SUBLANDLORD AND SUBTENANT.

19.    Casualty
& Condemnation. Under
certain circumstances described in the Master Lease, either Landlord or
Sublandlord may terminate the Master Lease if there is a fire or other casualty
damaging the Building or the Premises, or if there is a condemnation affecting
the Building. Any such termination will automatically terminate this Sublease.
If there is a fire or other casualty in the Premises that materially damages the
Premises, either party may elect to terminate this Sublease within thirty (30)
days following occurrence of the damage. Sublandlord's obligation to repair any
damage to the Premises is limited to its obligation to do so under the Master
Lease.

7

 

Rent will
abate in proportion to the loss of use of the Premises caused by fire or other
casualty.

20.    Master
Lease.

20.1    Good
Standing.
Sublandlord represents and warrants that (a) the Master Lease is in good
standing, (b) there are no agreements other than the Master Lease between
Landlord and Sublandlord concerning the use of the Premises, and (c) to
Sublandlord’s actual knowledge, Sublandlord has not received notice of any
breach or default of the Master Lease by Sublandlord that has not been cured as
of the date of this Sublease.

20.2    Subordination. This
Sublease is subject and subordinate to the Master Lease, to all ground and
underlying leases, and to all mortgages and deeds of trust which may now or
hereafter affect the Property, and to any and all renewals, modifications,
consolidations, replacements and extensions thereof. Sublandlord agrees not to
effect any modification or amendment of the Master Lease that adversely affects
the rights of Subtenant hereunder without the written consent of Subtenant
(which consent shall be deemed granted if not refused within ten (10) business
days of written request). Subtenant agrees, upon request of Sublandlord, at any
time or times, to execute and deliver to Sublandlord any and all instruments as
shall be required by Landlord to effect a subordination of this Sublease to the
lien of a lender or ground lessor of the Master Landlord in accordance with and
subject to the terms of the Master Lease.

20.3    Adherence
to Terms of Master Lease; Indemnity.
Subtenant agrees to be bound by all obligations and responsibilities of
Sublandlord as tenant under the Master Lease as they pertain to the Premises,
except to the extent contradicted by the express terms of this Sublease.
Subtenant shall neither do nor permit anything to be done that would cause the
Master Lease to be terminated or forfeited by reason of any right of termination
or forfeiture reserved or vested in Landlord under the Master Lease. Subtenant
shall defend, indemnify and hold Sublandlord harmless from and against all
claims, damages and liability (including but not limited to actual attorneys’
fees) made or threatened against Sublandlord as a result of Subtenant’s breach
of, or failure to abide by the terms of, this Sublease or of the Master Lease.
Sublandlord shall neither do nor permit anything to be done that would cause the
Master Lease to be terminated or forfeited by reason of any right of termination
or forfeiture reserved or vested in Landlord under the Master Lease. Sublandlord
shall defend, indemnify and hold Subtenant harmless from and against all claims,
damages and liability (including but not limited to actual attorneys’ fees) made
or threatened against Subtenant as a result of Sublandlord’s breach of, or
failure to abide by the terms of, this Sublease or of the Master
Lease.

21.    Right
of Entry. Upon
reasonable prior notice to Subtenant (except in the case of emergency),
Sublandlord shall have the right to enter the Premises, subject to such
reasonable security and confidentiality requirements as Subtenant may
require.

22.    Parking.
Subtenant, its employees and invitees, shall have the right to use up to 1.2
unreserved parking stalls in the Building garage per 1000 rentable square feet
of Premises at rates charged for such parking from time to time, subject to the
terms of the Master Lease.

23.    Rules
and Regulations.
Subtenant shall observe at all times the reasonable rules and regulations
promulgated by Landlord that are applicable to the Premises or any occupant
thereof.

 

8

 

24.    Subletting/Assignment.

24.1    Sublandlord
Consent.
Subtenant shall not sublet the Premises or assign this Sublease or any part
thereof for any period of time without the prior consent of the Landlord and
without Sublandlord’s prior consent pursuant to and subject to the terms of the
Master Lease. Such consent by Sublandlord shall not be unreasonably withheld or
delayed except: (a) Sublandlord may withhold in its absolute and sole discretion
consent to any mortgage, hypothecation, pledge or other encumbrance of any
interest in this Sublease or the Premises by Subtenant, whereby this Sublease or
any interest therein becomes collateral for any obligation of Subtenant; (b)
Sublandlord may withhold in its absolute and sole discretion consent if Landlord
does not consent to the proposed transfer; and (c) Sublandlord may withhold in
its absolute and sole discretion consent if Sublandlord determines the proposed
transferee is a business competitor of Sublandlord. It is agreed that any of the
following factors, or any other reasonable factor, will be reasonable grounds
for Sublandlord deciding whether to consent to Subtenant’s request: (i)
occupancy by any proposed assignee, subtenant or other transferee is not
consistent with the maintenance and operation of a Class A office building due
to the nature of the proposed occupant's business or the manner of conducting
its business or its experience or reputation in the community, (ii) occupancy by
any proposed assignee, subtenant or other transferee is likely to cause
disturbance to the normal use and occupancy of the Building by Sublandlord or
other occupants; and (iii) notwithstanding that Subtenant or others remain
liable under this Sublease, whether the proposed assignee, subtenant or other
transferee has a net worth, financial strength and equal or greater than that of
the Subtenant as of the Commencement Date or the effective date of the
assignment or sublease, whichever is higher.

24.2    Permitted
Transfers.

Notwithstanding
anything to the contrary in this Sublease, Subtenant may, without Sublandlord’s
prior written consent, but with prior notice to Sublandlord, assign this
Sublease or sublet all or portions of the Premises to (i) a subsidiary,
affiliate, parent or other entity which controls, is controlled by, or is under
common control with, Subtenant; or to (ii) a successor corporation related to
subtenant by merger, consolidation, or reorganization, or an entity that
acquires all or substantially all of the assets of Subtenant, provided that the
successor corporation or entity has a net worth at least equal to the greater of
the net worth of Subtenant upon mutual execution of this Sublease or the net
worth of Subtenant immediately prior to such merger, consolidation, or
reorganization (any of the foregoing are referred to herein as "Permitted
Transfers"). In the event of any assignment or subletting permitted by the
foregoing sentence, a copy of the documentation effecting such permitted
assignment or subletting shall be delivered to Sublandlord prior to the
effective date thereof. In the case of a permitted assignment, the assignee
shall expressly assume all of the obligations of Subtenant hereunder in an
assumption agreement reasonably acceptable to Sublandlord. In the case of a
permitted subletting, the subtenant shall expressly agree to comply with all of
Subtenant's obligations under this Sublease applicable to the Premises and, at
Sublandlord's option, will agree (except for the economic obligations which such
subtenant will undertake directly to Subtenant) to attorn to Sublandlord under
the terms of the sublease in the event this Sublease terminates before the
sublease expires.

24.3    Recapture. In lieu
of granting a consent to a proposed sublease, assignment or other transfer, and
except for Permitted Transfers, Sublandlord reserves the right, within ten (10)
days of receipt of a mutually executed sublease, assignment or other transfer,
to terminate this Sublease or, in the case of a subletting of less than all the
Premises, to terminate this Sublease with respect to such portion of the
Premises, as of the proposed effective date of such subletting or assignment, in
which event Sublandlord may enter into the relationship of landlord and tenant
with any other person or entity (including the sublessee or assignee proposed by
Subtenant) on such terms and conditions as Sublandlord may deem acceptable. If
Sublandlord so elects to terminate this Sublease, Subtenant shall have the
option, within the following ten (10) day period, to rescind its request for
consent and keep this Sublease in full force and effect, in which case
Sublandlord's termination shall be null and void.

9

 

24.4    Effect
of Transfer. No
subletting, assignment or other transfer under this Article 24 shall relieve
Subtenant of any liability under this Sublease, and no consent to any such
transfer shall operate as a waiver of the necessity for consent to a subsequent
transfer. Subtenant promptly shall provide Sublandlord with copies of any
instruments of transfer.

25.    Notice. Any
notice in connection with this Sublease or termination thereof shall be in
writing and be sent by certified mail or personally delivered to, in the case of
Sublandlord:

Microsoft
Corporation

One
Microsoft Way

Redmond,
Washington 98052-6399

Attention:     
Jose
Oncina,

General
Manager, Real Estate & Facilities

With a
copy to:

Microsoft
Corporation

One
Microsoft Way

Redmond,
Washington 98052-6399

Attention:    
Timothy
R. Osborn,

Law and
Corporate Affairs

Or, in
the case of Subtenant:

Prior to
the Commencement Date:

Dwango
North America Corp.

200 West
Mercer St., Suite 501

Seattle,
WA 98119

Attn:             
Chief Financial Officer

After the
Commencement Date:

Dwango
North America Corp.

2211
Elliott Ave, Suite 601

Seattle,
WA   

98101    

Attention:    
Chief
Financial Officer,

Paul
Quinn    

Notice
shall be deemed given when so delivered to Sublandlord or Subtenant (or on the
date delivery is refused), or three (3) business days after it is placed,
properly addressed with postage prepaid, in a depository for United States
certified mail. Either party may provide for a different address by notifying
the other party of said change as provided for herein. Subtenant agrees to
deliver to Sublandlord, simultaneously with delivery to Landlord, a copy of any
notice, demand, request, consent or approval Subtenant sends to Landlord. Each
party agrees to promptly deliver to the other party a copy of any notice,
demand, request, consent or approval received from Landlord and not transmitted
directly to such other party which is relevant on its face to the rights and
obligations hereunder of the other party.

10

 

26.    Estoppel
Certificate. Upon
Sublandlord's request, at any time and from time to time, Subtenant shall
execute and deliver to Sublandlord:

(a)    An
estoppel in favor of Landlord and Sublandlord in accordance with and subject to
the terms of the Master Lease, and

(b)    Within
ten (10) business days after receipt of the request, a written instrument, duly
executed in favor of Sublandlord:

(i)    Certifying
that this Sublease has not been amended or modified and is in full force and
effect or, if there has been a modification or amendment, that this Sublease is
in full force and effect as modified or amended, and stating the modifications
or amendments;

(ii)    Specifying
the date to which the rent has been paid;

(iii)    Stating
whether, to Subtenant's best knowledge, Sublandlord is in default and, if so,
stating the nature of the default; and

(iv)    Stating
the commencement date of the term and whether any option to extend the term has
been exercised.

27.    Surrender
of Premises.
Subtenant shall, on the last day of the term of this Sublease, or upon any
earlier termination, remove all of its furniture, furnishings, personal property
and equipment and surrender to Sublandlord the Premises and all improvements to
the Premises broom clean in good order, condition and state of repair,
reasonable wear and tear excepted, provided that Subtenant shall leave the
Furniture in the Premises shown on Exhibit
C in
accordance with Section 1.2 above.

28.    Holding
Over. If
Subtenant holds over after expiration or termination of this Sublease without
written consent of Sublandlord (which consent may be withheld in Sublandlord’s
sole judgment), Subtenant shall pay two times the fixed minimum monthly rental
in effect during the last month hereof and all other charges due hereunder for
each month or any part thereof of any such holdover period. No holding over by
Subtenant after the term of this Sublease shall operate to extend the Sublease
term. In the event of any unauthorized holding over, Subtenant shall indemnify
Sublandlord against all costs and claims for damages, including, without
limitation, any claims for damages by any other tenant to whom Sublandlord or
Landlord may have leased all or any part of the Premises.

If
Subtenant holds over after expiration of the term of this Sublease, or after the
Sublease is terminated, with Sublandlord's consent, Subtenant shall be deemed to
be occupying the Premises under a month-to-month tenancy, and subject to all the
terms, covenants and conditions of this Sublease (other than the term), except
that minimum monthly rent shall be one hundred twenty-five percent (125%) of the
minimum monthly rent for the last month of the term and the tenancy shall be
terminable by either party on twenty (20) days written notice to the other
party, effective as of the last day of a calendar month.

29.    Consent
by Sublandlord.
Whenever Sublandlord's consent or approval is required under this Sublease, such
consent or approval may be withheld at Sublandlord's sole discretion, except as
otherwise expressly provided in this Sublease.

11

 

30.    Successors
and Assigns. Subject
to the restriction contained in Section 24, the covenants and conditions
contained in this Sublease shall bind the heirs, successors, executors,
administrators and assigns of the parties.

31.    Brokers.
Sublandlord and Subtenant each represents and warrants to the other that, other
than David Milloy of Trammell Crow Company, which represents Sublandlord, and
Chris Moe of GVA Kidder Mathews, which represents Subtenant (collectively, the
"Brokers"), they did not deal with any broker in connection with this
transaction. Sublandlord shall be solely responsible for the fees and
commissions due to the Brokers pursuant to separate agreement. Each party agrees
to indemnify and defend the other against any loss, cost or liability,
including, without limitation, attorneys’ fees, in connection with the claims of
any other broker arising from such party’s acts.

32.    Attorney
Fees. In the
event legal proceedings are initiated to enforce any provision of this Sublease,
to recover any rent due under this Sublease, for the breach of any covenant or
condition of this Sublease, or for the restitution of the Premises to the
Sublandlord and/or eviction of the Subtenant, the prevailing party shall be
entitled to recover, as an element of its cost of suit and not as damages,
reasonable attorneys’ fees and costs to be fixed by the court.

33.    Entire
Agreement, Merger and Waiver. This
Sublease supersedes and cancels all previous negotiations, arrangements, offers,
agreements or understandings, if any, between the parties. This Sublease
expresses and contains the entire agreement of the parties and there are no
express or implied representations, warranties or agreements between them,
except as contained in this Sublease. This Sublease may not be modified, amended
or supplemented except by a writing signed by both Sublandlord and Subtenant. No
consent given or waiver made by Sublandlord of any breach of Subtenant of any
provision of this Sublease shall operate or be construed in any manner as a
waiver of any subsequent breach of the same or of any other
provision.

34.    Captions. The
captions of this Sublease are provided for convenience only and shall not be
used in construing its meaning.

35.    Severability. If any
provision of this Sublease is found to be unenforceable, the remainder of this
Sublease shall not be affected thereby.

36.    Authority. If
Subtenant is a corporation or partnership, each individual executing this
Sublease on behalf of Subtenant represents and warrants that he or she is duly
authorized to execute and deliver this Sublease on behalf of Subtenant and that
this Sublease is binding upon Subtenant according to its terms. If Subtenant is
a corporation, each individual executing this Sublease on behalf of Subtenant
represents and warrants that his or her authorization to execute and deliver
this Sublease was in accordance with a duly adopted resolution of Subtenant's
Board of Directors and Subtenant's Bylaws. Concurrently with execution of this
Sublease, Subtenant shall deliver to Sublandlord such evidence of authorization
as Sublandlord may require.

37.    Sublandlord
and Subtenant Relationship Only. Nothing
contained in this Sublease shall be construed to create the relationship of
principal and agent, partnership, joint venturer or any association between
Sublandlord and Subtenant.

38.    Memorandum
of Lease. This
Sublease shall not be recorded, and no memorandum of this Sublease shall be
recorded.

39.    Consent
to Sublease by Landlord.
Sublandlord’s obligations under this Sublease are subject
to the consent of Landlord. Accordingly, it shall be a condition precedent of
Sublandlord’s obligations hereunder that Sublandlord has obtained the consent of
Landlord. Sublandlord and Subtenant hereby agree, for the benefit of Landlord,
that this Sublease and Landlord’s consent hereto shall not (a) be deemed to have
amended the Master Lease in any regard (unless Landlord shall have expressly
agreed in writing to such amendment); or (b) be construed as a waiver of
Landlord’s right to consent to an assignment of the Master Lease by Sublandlord
or any further subletting of the Master Space, as and to the extent provided in
the Master Lease. Landlord’s consent shall, however, be deemed to evidence
Landlord’s agreement that Subtenant shall be entitled to any waiver of claims
and of the right of subrogation for damage to Landlord’s property if and to the
extent that the Master Lease provides such waivers for the benefit of
Sublandlord.

12

 

40.    Environmental.

(a)    Neither
Subtenant nor its officers, directors, agents, contractors, employees or
invitees will use, generate, manufacture, produce, store, release, discharge or
dispose of on, under or about the Premises, or off-site the Premises affecting
the Property, or transport to or from the Premises, any Hazardous Substance
except small amounts typically found in a class A office environment provided
such use and disposal is in compliance with Environmental Laws. The term
"Hazardous
Substance" means
any hazardous or toxic substance, material or waste, pollutants or contaminants,
as defined, listed or regulated now or in the future by any federal, state or
local law, ordinance, code, regulation, rule, order or decree regulating,
relating to or imposing liability or standards of conduct concerning, any
environmental conditions, health or industrial hygiene, including without
limitation, (i) chlorinated solvents, (ii) petroleum products or
by-products, (iii) asbestos and (iv) polychlorinated biphenyls. The
term "Environmental
Law" means
any federal, state or local law, statute, ordinance, regulation or order
pertaining to health, industrial hygiene, environmental conditions or hazardous
substances or materials including those defined in this Article as "Hazardous
Substances."

(b)    Subtenant
shall give prompt written notice to Sublandlord and Landlord of: any proceeding
or inquiry by any governmental authority with respect to the presence of any
Hazardous Substance on the Premises; all claims made or threatened by any third
party against Subtenant or the Premises relating to any loss or injury resulting
from any Hazardous Substance; and Subtenant's discovery of any occurrence or
condition on the Premises that could cause the Premises or any part thereof to
be subject to any restrictions on occupancy, or use of the Premises under any
Environmental Law.

(c)    Subtenant
shall protect, indemnify, defend and hold harmless Sublandlord and Landlord and
their directors, partners, officers, employees, agents, parents, subsidiaries,
successors and assigns from any loss, damage, cost, expense or liability
(including reasonable attorneys' fees and costs) directly or indirectly arising
out of or attributable to the use, generation, manufacture, production, storage,
release, discharge, disposal or presence of a Hazardous Substance on the
Premises or off-site of the Premises affecting the Property caused by Subtenant
or its directors, partners, officers, employees, agents, contractors and
invitees, including without limitation, the costs of any required or necessary
repairs, cleanup or detoxification of the Premises and the preparation and
implementation of any closure, remedial or other required plans.

41.    Waiver
of Trial by Jury.
Sublandlord and Subtenant each agree to and they hereby do waive trial by jury
in any action, proceeding or counterclaim brought by either of the parties
hereto against the other on any matters whatsoever arising out of or in any way
connected with this Sublease, the relationship of Sublandlord and Subtenant,
Subtenant's use or occupancy of the Premises and/or any claim of injury or
damage, and any statutory remedy.

13

	 	SUBLANDLORD:
	 	 	 
	 	MICROSOFT CORPORATION,
a
      Washington corporation
	 	 	 
	 	By:	/s/
      Jose Oncina
	 	 	Name: Jose
      Oncina
Title: General
      Manager, Real Estate & Facilities
	 	 	 
	 	 	 
	 	SUBTENANT:
	 	 	 
	 	DWANGO NORTH AMERICA CORP.
A
      Nevada corporation
	 	 	 
	 	By:	/s/
      J. Paul Quinn
	 	 	Name: J. Paul Quinn
Title:
      CFO
	 	 	 

 

14

Sublandlord

	STATE OF WASHINGTON 	
      )

	 	
      )
      ss.

	COUNTY OF KING 	
      )

I certify
that I know or have satisfactory evidence that ____________ is the person who
appeared before me, and said person acknowledged that s/he signed this
instrument, on oath stated that s/he was authorized to execute the instrument
and acknowledged it as the ____________ of
Microsoft Corporation to be the free and voluntary act of such party for the
uses and purposes mentioned in the instrument.

Dated:
________________________

	 	 
	 	
      _______________________________________________________________

      Notary
      Public

      Print
      Name_______________________________________________________

      My
      commission
      expires______________________________________________

       

       

(Use this
space for notarial stamp/seal)

Subtenant

 

	STATE OF WASHINGTON	
      )

	 	
      )
      ss.

	COUNTY OF ________________	
      )

I certify
that I know or have satisfactory evidence that ________________________is the
person who appeared before me, and said person acknowledged that s/he signed
this instrument, on oath stated that s/he was authorized to execute the
instrument and acknowledged it as the _________________
of
________________________to be the
free and voluntary act of such party for the uses and purposes mentioned in the
instrument.

Dated:
________________________

	 	 
	 	
      _______________________________________________________________

      Notary
      Public

      Print
      Name_______________________________________________________

      My
      commission
      expires______________________________________________

       

       

(Use this
space for notarial stamp/seal)

 

 

15

Exhibit A

 

MASTER
LEASE

 

 

 

 

 

 

 

 

 

 

A-1

Exhibit B

THE
PREMISES

B-1

Exhibit C

Furniture
Inventory

 

 

 

 

 

C-1

Exhibit D

Plans and
Specifications 

 

 

 

 

 

 

 

 

 

 

	 	 	 	 
	 	 	 	 
	
      D-1

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