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 [**].

 

		
      
	 

 

 

ClearMode
Content Provider 

STANDARD
SERVICE AGREEMENT

Between

Wmode
Inc.

and

Dwango
North America Corp.

 

CONFIDENTIAL

1

 

CLEARMODE
CONTENT PROVIDER STANDARD SERVICE AGREEMENT

 

BETWEEN:

 

Wmode
Inc, a
company incorporated under the laws of the province of Alberta, Canada, having
its principal place of business located at 3553 - 31 Street N.W. Calgary,
Alberta, Canada T2L 2K7;

 

(hereinafter
referred to as "Wmode").

 

AND:

 

Dwango
North America Corp. d/b/a/ Dwango Wireless, a
corporation organized under the laws of Nevada, USA, with offices at 200 West
Mercer Street, Suite 501, Seattle, WA 98119;

 

(hereinafter
referred to as "Content
Provider").

 

WHEREAS:

 

	 	
      A.
	
      Wmode
      has developed and operates ClearMode, a mobile portal and content
      management service, and 

 

	 	
      B.
	
      Carrier(s)
      have developed and operate mobile telecommunications networks that can be
      accessed from mobile telecommunications devices;
and

 

	 	
      C.
	
      Content
      Provider has developed or represents applications that can be used on
      mobile telecommunications devices; and 

 

	 	
      D.
	
      Wmode
      has entered into agreements with Carriers to allow billing records
      generated by the usage of the information provided by ClearMode services
      to be accessed by Content Provider End-Users to be posted on the Carriers’
      billing systems; and

 

	 	
      E.
	
      Content
      Provider and Wmode have agreed to enter into this Agreement providing
      Content Provider with ClearMode services;
and

 

NOW
THEREFORE in
consideration of the mutual covenants contained herein, the parties agree as
follows:

 

	
      1.
	
      DEFINITIONS

 

"Agreement" means
this ClearMode Content Provider Standard Service Agreement;

 

"Application(s)" or
(“Content”) means
computer software and wireless applications developed or sold by the Content
Provider delivered to End-Users;

 

"Carrier
Addendum(s)" means
the agreement between Content Provider and Wmode whereby Content Provider
acknowledges Wmode will grant access to a specific Carrier’s billing system
through ClearMode upon Content Provider acceptance of the terms set out in the
Carrier Addendum.

 

“Carrier
/ Operator Agreement” means
Wmode’s agreements with mobile operators (Carriers) to allow billing records
generated by ClearMode from the usage of mobile applications provided by content
providers to be posted on to End-Users accounts in carriers’ billing
systems.

 

“ClearMode” means
Wmode’s mobile portal and content management system.

 

"Documentation" means
rules and instructions associated with ClearMode and that relate to the use of
the ClearMode by Content Provider or End-Users for its intended purposes; which
may include, but are not limited to, Wmode's Proposal, these Standard Terms and
Conditions, Wmode’s standard Service Level Agreement and Wmode’s Service Price
List, online
documentation, online resources and access to the ClearMode developer support
network.

 

"Effective
Date" means
the date on which the last party to execute this Agreement or Carrier Addendum
thereto executes it;

 

"End-Users" mean
mobile
data users using content provided by Content Provider under the terms of this
agreement. 

 

 

CONFIDENTIAL

2

 

“Gross
Revenue” shall
mean the revenue that results from retail transactional charges by the Carrier
through ClearMode to End Users in exchange for the Content Providers' authorized
sale, distribution or sub-licensing of the Applications or Content by the
Carrier less any local use or sales taxes.

 

"Person" means
an individual, corporation, company, cooperative, partnership, trust,
unincorporated association, entity with juridical personality or governmental
authority or body, and pronouns which refer to a Person shall have a similarly
extended meaning;

 

"Property" shall
have the meaning set forth in Section 5 of this Agreement;
Property

 

"Service" means
the features, functions and services provided to the Content Provider by Wmode
through its ClearMode Clearinghouse.

 

"Term" shall
have the meaning set forth in Section 8 of this
Agreement;

 

"Territory" shall
mean the service area provided by Carrier and its roaming partners;

 

"Trade-Marks" means
the Clearinghouse Members trade-marks as identified in the Clearinghouse content
catalogue or as noted in Schedule A if applicable;

 

"Warranty" shall
have the meaning set forth in Section 6.1 of this
Agreement;

 

	1.1 	Headings of Clauses are inserted for convenience
      only and shall not affect the interpretation or construction of this
      Agreement. 

	 	 

	
      2.
	
      WMODE
      SERVICE COMMITMENTS

	 	 

	2.1 	Grant of rights to use
    ClearMode 

	 	 

Wmode
hereby grants to the Content Provider for the duration of the Term, and the
Content Provider accepts, a non-exclusive, non-transferable and non-assignable
right to use the current version of ClearMode for: 

 

	 	
      (a)
	
      the
      use or right to use the approved Services provided through ClearMode via
      the Carrier wireless telecommunications network, in the Territory, for the
      sole purpose of allowing Content Providers to make its Applications
      available to End-Users; and 

 

	 	
      (b)
	
      use
      the Service or any Trade-Marks in the Territory in association with
      Content Provider’s offering of the Application(s) to End-Users;
      and

 

	 	
      (c)
	
      the
      generation of billing records for Applications purchased by End-Users for
      inclusion on End-Users’ monthly mobile telephone bills or the generation
      of deductions from an End-User’s Prepaid Account from Wmode’s Service; and
      

 

	 	
      (d)
	
      the
      settlement of a pre-arranged fees for this billing
  service

 

	2.2 	ClearMode
Operations 

	 	 

	
       
	
      Wmode
      is responsible to provide to Content Provider the Services that meet the
      functional requirements of ClearMode. However, Wmode reserves the right to
      select the material, equipment, software, design, method of performance,
      hosting and means of implementation necessary to provide the Service.

	 	 

	2.3	Changes to the ClearMode
    service 

	 	 

	 	All changes affecting ClearMode’s features or otherwise
      affecting the scope of the Services are to be documented in writing for
      approval and authorization by Content Provider and Wmode's
      representatives. All authorized changes may result in changes in price,
      availability, delivery and/or terms and
conditions. 

	 	 

	2.4 	Start of
service 

	 	 

	 	Wmode shall establish a start of service after (a)
      receipt of written acceptance by Content Provider to provide the Service,
      (b) receipt by Wmode at its facility of all necessary information from
      Content Provider, including but not limited to final agreement on detailed
      specifications and, (c) the integration, configuration and verification of
      the Content Provider Application(s) within
ClearMode. 

	 	 

 

 

 

CONFIDENTIAL

3

 

 

.

 

 

	 	In the event that the start of service is delayed because
      of Content Provider re-quests, acts or omissions, Wmode shall have the
      right to extend the start of Service date. Wmode shall not be liable for
      any damages caused by delay in start of Service

	 	 

	2.5 	Support 

	 	 

	 	Provided Content Provider is accessing the current
      version of ClearMode, Wmode will provide reasonable technical support
      concerning the operation of ClearMode by telephone and by e-mail to the
      during the normal business hours on days that the ClearMode Partner
      Assistance Center is open for business. 

	 	 

	
      3.
	
      CONTENT
      PROVIDER COMMITMENTS

	 	 

	3.1	Carrier Operator Agreements

	 	 

	 	Wmode will from time to time enter into agreements with
      mobile operators (Carriers) to provide discovery, management, delivery and
      the generation of prepaid and post-paid billing records to be generated by
      ClearMode from the usage of mobile applications provided by content
      providers. 

	 	 

	 	Content Provider acknowledges Wmode will grant access to
      a Carrier’s internal systems through ClearMode upon Content Provider
      acceptance of the terms set out in the Carrier Addendum(s) to this
      Agreement, which may incorporate by reference Wmode’s contract with the
      Carrier. Such Carrier
      Addendum and documents incorporated therewith may include, and not limited
      to, terms regarding; integration, settlement, payments, repudiation,
      customer care, style guides, operations, service levels, technical
      specifications, testing, and prohibitions regarding certain types of
      Applications. 

	 	 

	3.2 	Termination and changes by a
      carrier 

	 	 

	 	Carriers may from time to time make changes in the
      operating requirements and terms and conditions or terminate its Carrier /
      Operator agreements with Wmode. Content provider acknowledges that it will
      be bound by such changes or termination. Wmode will not be responsible for
      any costs incurred by Content Provider for such changes or
      termination. 

	 	 

	3.3	Representations, Warranties and
      Covenants 

	 	 

Content Provider represents, warrants and covenants
to Wmode as follows:

	 	 	 

	 	
      (a)
	
      it
      has the power and authority to enter into this Agreement and perform its
      obligations hereunder;

	 	 	 

	 	(b) 	it has duly authorized, executed and delivered this
      Agreement and this Agreement, once executed, constitutes a legally valid
      and binding obligation of Content Provider enforceable against Content
      Provider in accordance with its terms except as such enforcement may be
      limited by applicable bankruptcy, insolvency and other laws of general
      application affecting the enforcement of creditors’ rights and subject to
      general equitable principles;

	 	 	 

	 	(c) 	the Content has been or will be designed, developed and
      implemented in accordance with the Specifications, the applicable
      Documentation, and industry standards for games, codes and software of
      similar functionality; 

	 	 	 

	 	(d)	the Content will function upon delivery substantially in
      accordance with the Specifications, the applicable Documentation and
      industry standards for similar games; 

	 	 	 

	 	(e) 	the Content will not infringe any Intellectual Property
      Right or any other proprietary right of a third
party; 

	 	 	 

	 	(f) 	the Content Provider is and will be, during the Term, the
      legal and beneficial owner or authorized licensee of all Intellectual
      Property Rights in the Content free and clear of all liens, charges and
      encumbrances to the extent that the same may restrict or limit the ability
      of Content Provider to perform its obligations or the ability of Wmode to
      exercise its rights under this Agreement and Content Provider has the full
      power and authority to grant the licenses and rights and to perform its
      obligations herein contemplated without the consent of any other
      Person; 

	 	 	 

	 	(g) 	it shall pay all applicable royalties and any and all
      other amounts to the Persons from whom Wmode licenses the Content or to
      any governmental or regulatory body (the “Licensors”)
      in a timely manner and shall maintain all related licenses and similar
      agreements in good standing throughout the Term. Content Provider shall be
      solely responsible to its Licensors for any and all royalties and other
      amounts payable pursuant to the distribution of the Content in accordance
      with this Agreement and shall hold any royalties received from Wmode in a
      separate trust account in trust for its
  Licensors; 

	 	 	 

	 	(h) 	it has not granted and will not grant any rights or
      licenses to the whole or any part of the Total Content or any other
      Intellectual Property Rights or technology that would conflict with
      Content Provider’s obligations or Wmode’s rights under this
      Agreement; 

	 	 	 

	 	(i) 	the Content will not contain any back door, time bomb,
      drop-dead device or other software routine designed to disable the Content
      automatically either with the passage of time or under positive control of
      any Person; 

	 	 	 

	 	(j) 	the Content will not contain any viruses, Trojan horses,
      worms or other software routines designed to disable, erase, or otherwise
      harm the Content or any Interactive Device used to access any of the
      foregoing; 

	 	 	 

	 	(k) 	the Content will be created solely by, or licensed by,
      Content Provider and Content Provider has obtained all assignments of
      Intellectual Property Rights from its employees and contractors and its
      contractors’ employees necessary to grant the rights to Wmode herein
      granted; 

	 	 	 

	 	(l) 	the provision of the Content, and the other services
      provided hereunder, shall be performed with reasonable skill and
      care; 

	 	 	 

	 	(m) 	the Content is not and will not be unlawful, abusive,
      defamatory; 

	 	 	 

	 	(n) 	Wmode’s use of Content Provider’s Marks pursuant to this
      Agreement do not: 

  

CONFIDENTIAL

4

 

	 	 	(i) 	infringe the Intellectual Property Rights of
      any Person 
	 	 	 	 
	 	 	(ii) 	unlawfully promote or incite hatred
      (including any transmissions constituting or encouraging conduct that
      would constitute a criminal offence, give rise to civil liability, or
      otherwise violate any applicable law); 
	 	 	 	 
	 	 	(iii) 	access or scan any equipment, device,
      software, data, or any confidential, copyright protected or patent
      protected material of any other person, without the knowledge and consent
      of such person, nor use any tools designed to facilitate such access or
      scan; 
	 	 	 	 
	 	 	(iv) 	upload, post, transmit, reproduce, or
      distribute in any way, information, software or other material that is
      protected by copyright, or other proprietary right, or related derivative
      works, without obtaining permission of the copyright owner or
      rightholder; 
	 	 	 	 
	 	 	(v) 	intentionally alter, modify, disrupt or
      tamper with the Carrier Network or any aspect thereof; restrict, inhibit
      or otherwise interfere with the ability of any other person to use or
      enjoy the Carrier Network or create an unusually large burden on the
      Carrier Network, including, without limitation: posting or transmitting
      any information or software that contains a virus or other harmful or
      debilitating feature; distributing mass or unsolicited messages (“spamming”);
      or otherwise independently generating levels of traffic sufficient to
      impede others’ ability to send or retrieve information;
    or 
	 	 	 	 
	 	 	(vi) 	intentionally interfere with computer
      networking or telecommunications service to or from any user, host or
      network, including but not limited to denial of service attacks, seizure
      or abuse of operator privileges (“hacking”)
      or attempting to “crash” a
      host. 
	 	 	 	 

 

	3.4 	Conflicts 

	 	 

	 	If there is a conflict between this Agreement and Carrier
      Addendum with respect to the matters covered by the Carrier Addendum, the
      terms of the Carrier Addendum will control.

	 	 

	
      3.5
	
      Service
      Level Agreement

	 	 

		Content Provider will perform, at its expense, all
      hosting and related operational activities in support of the operation of
      the Content Provider Application(s). Content Provider will use
      commercially reasonable efforts to ensure accessibility of the Content
      Provider Mobile Channel by End Users during the term of this Agreement
      according to the terms of the Service Level Agreement provided in Schedule
      B. If Content Provider delays in signing the Service Level Agreement, the
      start of Service shall be delayed until the Service Level Agreement is
      signed.

	 	 

	3.6 	Integration with
    ClearMode 

	 	 

	 	Content Provider is solely responsible to perform the
      necessary integration efforts as defined in the Documentation. Prior to
      providing Applications to End Users, the integration of ClearMode must
      pass all acceptance tests the reasonable satisfaction of
  Wmode.

	 	 

	3.7 	Information is
    correct  

	 	 

	 	Content Provider will ensue that all information
      regarding the Content Provider and any of its Applications shall at all
      times be true, accurate, current and
complete. 

	 	 

	3.8	Responsibility for the operation of
      Applications 

	 	 

	 	Content Provider is responsible for, including but not
      limited to, the operation, marketing, development, creation, maintenance,
      upgrade, end user access, and all technical support for its Applications.
      Content provider is responsible for obtaining all licenses, permits or
      releases required to enable the purchase of its Applications by End
      Users. 

	 	 

	3.9 	Obligation to
  distribute 

	 	 

	 	Content Provider agrees and acknowledges that neither
      Wmode and Carrier has any obligation to market or distribute Applications
      and that there is no guarantee or assurance that Content Provider will
      receive any revenues. 

	 	 

	3.10 	Right to represent Applications to
      Carriers 

	 	 

	 	Content Provider grants Wmode the non-exclusive limited
      right to represent its content offering to Carriers for the purpose of
      evaluation, testing and distribution to the Carrier’s subscriber base
      including listing on Wmode’s website. Prices for the Applications will be
      determined by the Content Provider as negotiated with the Carriers, or in
      accordance with restrictions defined in the Carrier Addendum(s) to the
      Agreement. 

 

 

CONFIDENTIAL

5

 

 

	3.11 	Payment and Charges for Wmode
      Services 

	 	 

	 	Content Provider shall pay such service fees payable to
      Wmode by Content Provider as identified in Schedule A, or in the Carrier
      Addendum(s). In the event that a Wmode invoice remains unpaid sixty days
      after date of said invoice, Wmode reserves the right to stop Service until
      Wmode receives payment.

	 	 

	
      3.12
	
      Monthly
      Revenue Reports, Payments and
Settlement

	 	 

		After the Commercial Launch Date with respect to Premium
      Content and Applications, within ten (10) days of the end of each calendar
      month, Wmode shall provide Content Provider with a report detailing the
      Monthly Revenue earned for the Premium Content and Applications in such
      calendar month as well as the number of successful Premium Content
      deliveries to User Devices in such calendar
month.

	 	 

	 	Each party will pay to the other party all amounts due
      hereunder when due. Payments by Wmode to the Content Provider will be in
      accordance with the Carrier Addendum and in all cases payment will be
      within 5 (five) business days of the receipt of funds by Wmode from the
      Carrier. Each party may accept any check or payment without prejudice to
      its rights to recover the balance due or to pursue any other right or
      remedy. No endorsement or statement on any check or payment or letter
      accompanying any check or payment or elsewhere will be construed as an
      accord or satisfaction. 

	 	 

	
      4. 
	
      CONSIDERATION,
      TAXES AND AUDIT RIGHTS

	 	 

	4.1 	Membership and Service
      Fees

	 	 

	 	The Membership fees for Wmode services are as stipulated
      in Schedule A - “ClearMode Clearinghouse Content Provider Membership
      Fees”.

	 	 

		End-User purchase prices and service fees for
      Applications provided by Content Provider to Content Provider’s End-Users
      will be documented in specific Carrier Addendums, which will be signed by
      Wmode and Content Provider from time to time. Carrier specific revenue
      sharing amounts, if applicable, will appear in specific Carrier Addendum,
      which must be signed by Content Provider prior to Start of Service with a
      specific Carrier. 

	 	 

	 	In the event that Content Provider, at any time, requests
      a change in the Service or causes the scheduled start of service dates to
      be delayed, the Service price may, at Wmode's discretion, upon written
      notice, be adjusted accordingly to reflect the price of the new Service or
      the prevailing price at the time of the new start of Service
    date. 

	 	 

	4.2 	Taxes 

	 	 

	 	All payments to be made by Content Provider under this
      Agreement shall be made free and clear and without deduction for any sales
      tax, such as State Sales Tax or any and all other present or future local
      or documentary taxes or any other excise or property taxes, charges or
      similar levies arising from any payment made hereunder or from the
      execution, delivery or enforcement of, or otherwise with respect to, this
      Agreement, or any other present or future taxes, levies, imports, duties,
      deductions, charges or withholding imposed by any governmental authority
      (hereinafter the "Taxes").
      Where Taxes apply, Wmode shall provide to Content Provider an invoice
      reflecting such sales Taxes charged to Content
    Provider. 

	 	 

	4.3 	Audit
Rights 

	 	 

	 	The
      settlement of revenues and the payment of any service fees by Wmode to
      Content Provider are based on monthly reporting and invoices and
      statements provided by Wmode or Wmode’s financial settlement partners.
      Wmode shall keep copies of relevant revenue records for a period of three
      (3) years during the term of the Agreement and for a period of one (1)
      year following the termination of this Agreement. On reasonable written
      notice, but no more than once per calendar year, Content Provider or its
      agents shall have the right to audit Wmode’s records. If any audit
      discloses that Content Provider was underpaid or overpaid for its portion
      of revenues, Wmode shall immediately reimburse or invoice Content Provider
      accordingly for all revenues so determined to have been in
      error. 

	 	 

	5.	OWNERSHIP
      OF INFORMATION, INTELLECTUAL PROPERTY RIGHTS AND
      NON-DISCLOSURE 

	 	 

	5.1	Wmode 

	 	 

	 	Wmode
      shall remain, the owner or licensee of ClearMode, the Trade-Marks, the
      Documentation and all related intellectual property, including without
      limitation, all copyright, trade secret, patent, trade-marks and other
      intellectual or industrial property rights therein (the "Property"). No
      Property or ownership right or interest in the Property or any part
      thereof is granted to Content Provider by virtue of this Agreement, the
      rights granted hereunder to Content Provider being solely contractual in
      nature. 

 

 

CONFIDENTIAL

6

 

 

	 	Content Provider covenants to execute and provide all
      documents reasonably necessary to Wmode from time to time in order to
      protect Wmode and the Clearinghouse Member’s rights, title or interest in
      the Property in the Territory or in any other jurisdiction. This
      obligation of Content Provider will continue for a period of five (5)
      years after the termination of this
Agreement. 

	 	 

	5.2 	Content
Provider 

	 	 

	 	As between Wmode and Content Provider, Content Provider
      reserves and retains all right, title and interest, including but not
      limited to all Intellectual Property Rights in the technology used by
      Content Provider in connection with this Agreement and no title to or
      ownership of any of the technology is transferred to Wmode or any other
      Person under this Agreement. As between the parties, Content Provider
      retains all Intellectual Property Rights and all right, title and interest
      in and to the Content Provider Applications (including, without
      limitation, any and all content, data, URLs, domain names, technology,
      software, code, user interfaces, the Look and Feel, Trade-Marks and other
      items posted thereon or used in connection or associated therewith; but
      excluding any items supplied by Wmode) and the Content Provider
      Trade-Marks. Except as specifically set forth in this Agreement, Wmode
      obtains no right to use Content Provider Intellectual Property Rights
      beyond the term of this Agreement.

	 	 

	
      5.3
	
      Prohibited
      Uses

	 	 

		Save and except as expressly set out in Section 2.1,
      no rights are granted to Content Provider with respect to the use of the
      Property. Without limiting the generality of the foregoing, the parties
      agree that Content Provider shall not, directly or indirectly, cause or
      permit decompilation, transformation, disassembly or reverse engineering
      of ClearMode nor shall it, directly or indirectly, modify, merge, copy or
      otherwise reproduce or tamper with the ClearMode or Documentation or
      produce or create any derivative works
thereof.

	 	 

	 	As the wireless Application(s) industry evolves it may
      become necessary over time for changes to be made to the presentation or
      format of one or certain of the Application(s). If such circumstances
      arise, Wmode agrees to consider in good faith Content Provider’s requests
      in that sense to make reasonable efforts to accommodate Content Provider,
      provided that Wmode’s and the Clearinghouse Member’s rights and interests
      are adequately protected.  

	 	 

	
      5.4 
	
      Proprietary
      Notices

	 	 

	 	Content Provider shall not alter or remove
      any copyright, trade secret, patent, trade-mark, proprietary and/or other
      legal notices contained on or in ClearMode or the
  Documentation.

	 	 

	5.5 	Confidential
      Information

	 	 

		Content Provider acknowledges that all
      material and information that has or will come into its possession or
      knowledge in connection with Wmode's Service and the performance thereof,
      consists of confidential and proprietary data, which disclosure to or use
      by third parties will be damaging. Content Provider therefore agrees to
      execute Wmode's Non-Disclosure Agreement and abide by the terms of that
      agreement and hold such material and information in strictest confidence,
      not to make use thereof other than for the performance of this contract,
      to release it only to employees requiring such information, and not to
      release or disclose it to any other party. 

	 	 

	 	Content Provider agrees to take the appropriate action
      with respect to its employees to ensure that the obligations of non-use
      and non-disclosure of confidential information can be fully
      satisfied. 

	 	 

	 	Content Provider is granted the limited license to
      publicize status as a clearinghouse member provided that Wmode’s logo and
      trademarks are used in accordance with Wmode usage guidelines. Content
      Provider hereby grants to Wmode the right to publicize their status as a
      clearinghouse member. Either party may provide a link to the other party's
      website. 

	 	 

	5.6 	Suggestions and
  changes 

	 	 

	 	Any suggestions from Wmode regarding changes to Content
      Provider’s service, applications or process are made in good faith, based
      on then available information. Any changes or modifications made as a
      result of such suggestions shall be made at the exclusive risk of Content
      Provider. Any suggestions from Content Provider regarding changes to
      Wmode’s equipment, processes or Services will not result in any claim,
      ownership or right to the resulting intellectual
  property. 

 

 

 

CONFIDENTIAL

7

 

 

	6.	WARRANTY, REMEDIES, DISCLAIMERS AND LIMITATION ON
      LIABILITY  

	 	 

	6.1 	
      Sole Warranty 

	 	 

	 	Content Provider acknowledges that ClearMode, represented
      by Wmode cannot be entirely free of defects or errors, despite all
      verifications that have been made regarding the performance and function.
      Subject to Sections 6.2
      and 6.3,
      Wmode warrants that during the Term and any renewal thereof, ClearMode
      will perform and function substantially in accordance with its then in
      effect specifications, as set forth in the applicable Documentation
      provided by Wmode (the "Warranty").

	 	 

	
       
	
      Except
      as specifically provided above, Wmode expressly disclaim all other
      warranties, whether express or implied, written or oral, with respect to
      the ClearMode, the documentation or under this Agreement, including any
      warranties of merchantability, fitness for a particular purpose, or
      non-infringement or those arising by law, statute, usage of trade or
      course of dealing. Other than the Warranty, no employee, agent or other
      representative of Wmode is authorized to give any other
      warranty.

	 	 

	6.2	Conditions
      for the Applicability of the Warranty 

	 	 

	 	The Warranty will only apply to the performance and
      functioning of ClearMode where
      the Applications are accessed and used by Content Provider or End-Users
      using Carrier’s wireless Telecommunications Network.
      Further, the Warranty will not apply to or cover any performance problem
      or malfunction of ClearMode:
      (a) caused, in whole or in part, by Content Provider’s products, services,
      technologies, systems or equipment; or (b) caused by or resulting from, in
      whole or in part, the negligence or other actions of Content Provider or
      End-Users; or (c) resulting from accident, misuse, abuse, neglect or
      improper repairs, alterations or attachments made by Content Provider not
      approved by Wmode.  

	 	 

	
      6.3 
	
      Sole
      Remedy Under the Warranty

	 	 

	 	If ClearMode does not substantially perform
      or function in accordance with the Warranty, then Wmode shall, at its
      expense and option, (a) use reasonable efforts to make ClearMode perform
      or function in accordance with the Warranty, (b) replace the
      non-performing or malfunctioning ClearMode with an equivalent service or
      ClearMode that performs or functions in accordance with the Warranty, or
      (c) credit the End-User for the session(s) during which ClearMode failed
      to substantially perform or function in accordance with the
      Warranty.

	 	 

	 	In the event that at the request of Content
      Provider, remediation support requires Wmode on-site assistance and the
      Content Provider approves for this assistance, Content Provider will be
      responsible for all travel time at the prevailing rate and for all travel
      and living expenses at cost plus fifteen percent. Wmode shall provide
      on-site assistance beyond the scope of this guarantee in accordance with
      its prevailing terms and rates.

	 	 

		The above shall be Wmode’s sole obligation,
      and Content Provider’s sole remedy, under the
Warranty. 

	 	 

	6.4 	Wmode Limitations on Liability and
      Damages 

	 	 

	 	Wmode shall have no liability whatsoever in relation to
      Content Provider’s or any End-User's use of ClearMode or the
      Documentation, or, subject to Section 7,
      with respect to any infringement or alleged infringement of any
      intellectual property rights of any Person by the Property, or as a result
      of the use of the Property. 

	 	 

	 	Sections 6.1,
      6.2
      and 6.3
      set out Wmode's entire liability with respect to the performance or
      functioning of ClearMode or in relation to any alleged breach of the
      Warranty related thereto, and Section 6.4
      sets out Wmode's entire liability in relation to Content Provider’s or any
      End-User's use of ClearMode or of the Documentation, or, subject to
      Section 7,
      with respect to any infringement or alleged infringement of any
      intellectual property rights of any Person by the Property or as a result
      of the use of the Property. The total maximum aggregate liability of the
      Wmode arising from or due to the Property or under this Agreement, of any
      kind whatsoever including, without limitation, any costs, expenses,
      losses, claims, demands, damages, obligations, liabilities or injuries
      arising from or due to the Property or other performance or
      non-performance by Wmode under or related to this Agreement, whether based
      or arising in contract, in tort, under a statute, at law, in equity or
      otherwise, is limited to the remedies specified by this Agreement and may
      not exceed in any and all circumstances whatsoever, in the aggregate, the
      payments actually received by Wmode for the Service for the previous three
      (3) month period. 

	 	 

	 	WMODE WILL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE FOR
      INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR INCIDENTAL DAMAGES,
      INCLUDING BUT NOT LIMITED TO LOSS OF USE, REVENUE OR PROFIT, REGARDLESS OF
      THE FORM OF THE CAUSE OF ACTION AND REGARDLESS OF WHETHER WMODE KNEW OR
      OUGHT TO HAVE KNOWN OF THE POSSIBILITY OF
DAMAGES. 

 

 

 

CONFIDENTIAL

8

 

 

	6.5	Content Provider Limitations on
      Liability and Damages  

	 	 

	 	
      Content Provider shall have no liability whatsoever in relation to
      use of Wmode’s ClearMode service or any End-User's use of ClearMode or the
      Documentation, or, subject to Section 7,
      with respect to any infringement or alleged infringement of any
      intellectual property rights of any Person by the Property, or as a result
      of the use of the Property 

	 	 

	
      7.
	
      INDEMNITY

	 	 

	
      7.1
	
      Indemnification

	 	 

		Each
      party (the “Indemnifying Party”) will defend, indemnify and hold harmless
      the other party (the “Indemnified Party”), and the respective directors,
      officers, employees, suppliers, and agents of the Indemnified Party, from
      and against any and all claims, costs, losses, damages, judgments and
      expenses (including reasonable attorneys’ fees) (collectively, “Claims”)
      arising out of or in connection with any third-party claim alleging (i)
      any breach of such party’s representations or warranties or covenants set
      forth in this Agreement, (ii) that any advertisements or other content or
      materials served or submitted by such party to or through the Content
      Provider Application(s), as the case may be, contains any material that is
      obscene, libelous or defamatory, or infringes any Intellectual Property
      Rights or other rights of any third party, (iii) in the case of Content
      Provider, that technology or information used by Content Provider in the
      creation, operation or maintenance of the Content Provider Application(s)
      infringes on the Intellectual Property Rights of any person, or (iv) in
      the case of Wmode, that technology or information used by Wmode in the
      creation, operation or maintenance of ClearMode infringes on the
      Intellectual Property Rights of any person. In addition, Content Provider,
      as Indemnifying Party, will indemnify Wmode, as Indemnified Party, from
      and against any and all Claims related to the goods and services, if any,
      sold by Content Provider through ClearMode. The obligations of the
      Indemnifying Party are subject to the requirements that (a) the
      Indemnified Party notify the Indemnifying Party in writing within a
      reasonable time after the Indemnified Party is notified of a claim
      (provided, failure to provide timely notice will not alter the
      Indemnifying Party’s duties hereunder except to the extent such party is
      materially prejudiced thereby), (b) the Indemnifying Party have sole
      control of the defense of the claim (except that, if an Indemnified Party
      elects to do so, it may participate in the defense at its own expense) and
      all related monetary settlement negotiations (it being agreed that any
      non-monetary terms, including any licensing terms, of any settlement of a
      claim that directly affects the Indemnified Party shall require the prior
      written approval of the Indemnified Party), and (c) the Indemnified Party
      provides the Indemnifying Party with assistance, information and authority
      necessary for the Indemnifying Party to perform its obligations under this
      section; provided always that the Indemnified Party will not be required
      to admit liability under any circumstances. Reasonable out-of-pocket
      expenses incurred by an Indemnified Party in providing such assistance
      must be reimbursed by the Indemnifying Party promptly upon receipt of an
      account of such expenses. The obligations of the parties as set forth in
      this Section survive expiration or termination of this Agreement. 
      

	 	 

	7.2 	Limitations on
    Liability  

	 	 

	
       
	
      Wmode
      shall not have any liability to Content Provider under this
      Section 7 to
      the extent that any infringement or claim thereof is based upon (a) use of
      ClearMode or Trade-Marks in combination with other hardware, software or
      devices where ClearMode or Trade-Marks are not in and of themselves
      infringing, (b) compliance with designs, plans or specifications provided
      by Content Provider, (c) modifications of ClearMode or Trade-Marks by
      anyone other than Wmode, or its employees or agents, (d) or any claims of
      infringement of any patent, copyright, trade secret, trade-mark or other
      proprietary right in which Content Provider or any affiliate of Content
      Provider has an interest or license other than in the licensed software as
      contemplated hereunder, (e) failure of Content Provider to use updated
      components provided by Wmode for avoiding infringement; and (f) use of the
      ClearMode in a manner for which it was never designed or
      contemplated

	 	 

	 	Furthermore, the total maximum aggregate
      liability of Wmode under this Section 7,
      of any kind whatsoever including, without limitation, any costs, expenses,
      losses, claims, demands, damages, obligations, liabilities or injuries
      arising from or due to the Property or other performance or
      non-performance by Wmode under or related to this Agreement, whether based
      or arising in contract, in tort, under a statute, at law, in equity or
      otherwise, is limited and may not exceed in any and all circumstances, in
      the aggregate, the payments actually received by Wmode for the Service for
      the previous three (3) month period. 

	 	 

	
      8. 
	
      TERM 

	 	 

		This Agreement shall be effective from the
      date of signing by both Parties for a one year term (“Term”).and shall
      automatically renew on the end of the Term on each successive anniversary
      date for a further one year. 

	 	 

	 	Notwithstanding any other provisions herein to the
      contrary either Content Provider or Wmode may terminate the agreement for
      any reason by notification in writing to the other party by a written
      notice of termination at least thirty (30)
days. 

	 	 

	 	Notwithstanding
      any other provisions herein to the contrary, it is understood and agreed
      that the agreement shall terminate upon the bankruptcy, insolvency or a
      wind-up of either of the parties or in the event of general assignment in
      favour of its creditors, or upon the mutual consent in writing of Content
      Provider and Wmode, or at the option of Wmode, upon breach by Content
      Provider of any of the terms and conditions of this
      contract  

 

 

 

CONFIDENTIAL

9

 

	 	Upon termination of this Agreement, Wmode shall be
      entitled to deny access or use of ClearMode and Trade-Marks belonging to
      Carrier, and the rights granted under the Agreement shall terminate
      forthwith. Similarly, upon the termination of this Agreement, Wmode shall
      cease the distribution, sale, or facilitation of sale of all Applications
      or Content. Wmode shall permanently remove all intellectual property
      belonging to Content Provider from it’s systems, inclusive of backups.
      Such intellectual property shall include, but will not be limited to:
      .Jar/.Jad files, URLs, Application & Content descriptions, logos,
      screenshots, and other marketing material promoting the
    same. 

	 	 

	
      9. 
	
      ARBITRATION

	 	 

	 	Any and all disputes arising under or by virtue of the
      provisions of the Contract documents shall be determined in accordance
      with the provisions of the arbitra-tion law of the jurisdiction defined in
      Section 10.4
      hereof. The decision of the Arbitrator(s) shall be final and binding on
      both parties. The parties hereto shall each pay half of the fees and
      costs, if any, associated directly with the arbitra-tion, except each
      party shall pay it’s own transportation, accommodation and meal
      expenses. 

	 	 

	
      10. 
	
      ENFORCEABILITY
      AND AUTHORITY 

	 	 

	10.1 	Incorporation and
    Qualification 

	 	 

	 	Each of Wmode and Content Provider represents that they
      are duly formed, organized, in good standing and has the power to own and
      operate its property, carry on its business and enter into and perform its
      obligations under this Agreement. 

	 	 

	10.2 	Validity of
Agreement 

	 	 

	 	Each of Wmode and Content Provider represents that the
      execution, delivery and performance by it of this Agreement: have been
      duly authorized by all necessary corporate action on its part; and do not
      (or would not with the giving of notice, the lapse of time or the
      happening of any other event or condition) result in a breach or a
      violation of, or conflict with, or allow any other person to exercise any
      rights under, any of the terms or provisions of its constating documents
      or by-laws or any contracts or instruments to which it is a party or
      pursuant to which any of its assets or property may be
    affected. 

	 	 

	10.3 	Execution and Binding
    Obligation 

	 	 

	 	Each of Wmode and Content Provider represents, but with
      respect to itself only, that this Agreement has been duly executed and
      delivered by it, and constitutes a legal, valid and binding obligation,
      enforceable against it in accordance with its terms subject only to any
      limitation under applicable laws relating to bankruptcy, winding-up,
      insolvency, reorganization, arrangement and other similar laws of general
      application affecting the enforcement of creditors' rights, and the
      discretion that a court may exercise in the granting of equitable remedies
      such as specific performance and injunction 

	 	 

	10.4 	Jurisdiction 

	 	 

	 	The laws of the Province of Alberta and the applicable
      laws of Canada shall govern this agreement. The Content Provider expressly
      attorns to the non-exclusive jurisdiction of the courts of the Province of
      Alberta. 

	 	 

	
      11. 
	
      SEVERANCE 

	 	 

	 	Each of the restrictions and provisions contained in this
      Agreement or in any variation thereof shall be construed as independent of
      every other such restriction or provision to the effect that if any
      provision is determined to be invalid or unenforceable to any extent, such
      provision shall be severed from the body or other provisions and such
      determination shall not affect any other provision in the Agreement, which
      shall continue to be valid and enforceable to the fullest extent permitted
      by law. 

	 	 

	
      12. 
	
      GENERAL
      PROVISIONS 

 

	 	
      1)
	
      Independent
      Contractors.
      Wmode and Content Provider are independent contractors under this
      Agreement, and nothing herein may be construed to create a partnership,
      joint venture, franchise or agency relationship between Wmode and Content
      Provider. Neither party has any authority to enter into agreements of any
      kind on behalf of the other party.

 

 

CONFIDENTIAL

10

 

 

	 	
      2)
	
      Attorneys’
      Fees.
      If any arbitration or court action is commenced by either party, the
      substantially prevailing party in that action is entitled to recover its
      out-of-pocket and court costs and reasonable attorneys’ fee incurred
      therein.

 

	 	
      3)
	
      Assignment.
      Neither party may assign this Agreement or any of its rights or delegate
      any of its duties under this Agreement without the prior written consent
      of the other party, not to be unreasonably withheld; except that either
      party may, without the other party’s consent, assign this Agreement or any
      of its rights or delegate any of its duties under this Agreement to any
      affiliate of such party; provided that the affiliate controls, is
      controlled by or is under common control with such party. Wmode may assign
      this Agreement, without consent, to any purchaser of all or substantially
      all of Wmode’s assets or to any successor by way of merger, consolidation
      or similar transaction. Subject to the foregoing, this Agreement will be
      binding upon, enforceable by, and inure to the benefit of the parties and
      their respective successors and assigns.

 

	 	
      4)
	
      Nonwaiver.
      No waiver of any breach of any provision of this Agreement will constitute
      a waiver of any prior, concurrent or subsequent breach of the same or any
      other provisions hereof, and no waiver will be effective unless made in
      writing and signed by an authorized representative of the waiving
      party.

 

	 	
      5)
	
      Force
      Majeure.
      Neither party will be deemed to be in default of or to have breached any
      provision of this Agreement as a result of any delay, failure in
      performance or interruption of service, resulting directly or indirectly
      from acts of God, acts of civil or military authorities, civil
      disturbances, wars, strikes or other labor disputes, fires, transportation
      contingencies, interruptions in telecommunications or Internet services or
      network provider services, failure of equipment and/or software, other
      catastrophes or any other occurrences which are beyond such party’s
      reasonable control.

 

	 	
      6)
	
      Language.
      All Wmode supplied manuals, documents and printed matter of any sort
      comprising or relating to the contract shall be in the English language,
      unless otherwise requested by Content Provider, in which case Content
      Provider shall pay all translation costs incurred by
  Wmode.

 

	 	
      7)
	
      Announcements.
      Neither party shall make any announcement concerning this Agreement, or
      its subject matter, without the prior written approval of the other party,
      which will not unreasonably be withheld, except as required by law or any
      regulatory authority.

 

	 	
      8)
	
      Counterparts,
      Electronic Signatures.
      This Agreement may be executed in counterparts by means of facsimile
      which, when each is respectively executed by each of the parties shall be
      deemed to be an original and such counterparts together shall be deemed to
      constitute one instrument. 

 

	 	
      9)
	
      Assignment.
      Content Provider may assign no agreement constituted by Wmode’s acceptance
      without the written consent of Wmode.

 

	 	
      10)
	
      Employment.
      During the term of this Agreement and for a period of three years
      following its termination for any reason whatsoever, the Content Provider
      shall not, directly or indirectly, on the Content Provider’s behalf or on
      behalf of others, solicit, divert or hire, or attempt to solicit, divert
      or hire, any person employed by Wmode.

 

	 	
      11)
	
      Actions.
      No action, regardless of form, arising out of the services provided
      pursuant to these terms and conditions, may be brought by Content Provider
      more than one (1) year after the cause of action has
    accrued.

 

 

 

CONFIDENTIAL

11

 

 

	
      13.
	
      NOTICES

	 	 

	 	Any notice given by Wmode or Content Provider hereunder
      may be given by e-mail, facsimile, courier, personal delivery or mail. The
      date of service of notice shall be that date on which the said notice is
      received.

	
       
	 

	
       
	
      The
      address and fax number for services of notice shall
be:

	 	 

	 	In respect of Wmode: 

 

	 	
      To Wmode: 
	3553 - 31 Street
  N.W.,  
	 	 	Calgary, AB, Canada, T2L
  2K7 

 

	 	 	ATTENTION: 	Mr. Robert S. Woodward 
	 	 	Phone: 	403.260.8692 
	 	 	Fax: 	403.210.3663 
	 	 	email: 	contracts@wmode.com 

 

	 	In respect of  Content
Provider: 

 

	 	
      To Content
      Provider:   
	Dwango North America Corp. 
	 	 	2211 Elliott Avenue, Suite 601
	 	 	Seattle, WA USA
98119 

 

	 	 	ATTENTION: 	Paul Quinn
	 	 	Phone: 	206.832 .0659 
	 	 	Fax: 	206.832.0601 
	 	 	email:  	paul.quinn@dwango.com 

 

	 	Each of the parties hereto shall notify the others of any
      change of address or fax number within 48 hours of such
    change. 

	 	 

	
      
      14.

	
      
      ENTIRE
      AGREEMENT

	 	 

	 	This Agreement (including the Carrier Addendums)
      constitutes the entire agreement between the parties and supersedes all
      prior agreements in connection with the subject matter hereof, except for
      the non-disclosure agreement referred to in Section 5.5,
      which is incorporated herein in its entirety. This Agreement may only be
      varied by written instrument, signed by a duly authorized representative
      of each party.

	
       
	 

	
       
	
      
      IN
      WITNESS WHEREOF,
      Content Provider and Wmode have caused these presents to be executed by
      their duly authorized representatives as
    follows:

	 	 

 

	
      Wmode
      Inc.

       
	
      Dwango
      North America Corp.

	
      
      Signature:

	 
      /s/ Robert Woodward 	
      Signature:
	 /s/
      J.Paul Quinn
	 	 	 	 
	
      Name:
	
       
      Robert Woodward
	
      Name:

       
	
       
      Paul Quinn

       

	
      Title: 
	
       
      CFO
	
      Title:
	
       
      CFO

       

	
      Date:
		
      Date:
      
	 
      3/9/05

 

 

CONFIDENTIAL

12

 

Schedule
A

 

“ClearMode
Clearinghouse Content Provider Membership Fees”

 

		

	 	Unless otherwise agreed to in writing, payment for the
      ClearMode Service herein is based upon the terms identified in each
      specific Carrier Addendum. 

	
      
       

	
      
       

	 	The settlement of funds will be monthly
    and: 

	 	

	
       
	a) For amount directly settled by Wmode, shall be
      reported and transferred by the settlement process provided by Wmode or
      its settlement partners, or 

	
       
	
      
       

	 	b) For amounts not settled by Wmode, shall be invoiced
      monthly by Wmode based on the transactional details calculated and
      reported by Wmode’s Service. 

	 	 

	 	Content Provider shall pay a one-time
      clearinghouse-provisioning fee that entitles the Content Provider to
      license the necessary Software and access to limited Engineering Services
      to assist with integrating Content Provider’s environment to the
      clearinghouse Service. NOTE:
      This fee has been
waived. 

	 	 

	 	Content Provider shall maintain a membership with Wmode
      in order to have access to the clearinghouse Service. Membership must be
      renewed on an annual basis. Wmode must receive payment of an annual
      membership fee in order for Content Provider to remain a member of the
      clearinghouse Service. 

 

	 	
      1.
	
      Content
      Provider will pay Wmode an integration fee. This fee is due and payable
      within 10 days of integration of the Content Provider Applications with
      ClearMode. NOTE:
      This fee has been waived.

 

	 	
      2.
	
      Content
      Provider will pay Wmode an annual clearinghouse membership fee. This fee
      is due and payable within 30 days of each anniversary of this Agreement.
      Should the Content Provider not achieve sales of $2000 per month at the
      end of the first year, Wmode may charge an annual fee of $1000 per year
      for the Content Provider to remain a clearinghouse member NOTE:
      This fee is waived for the first year of
      Membership.

 

 

CONFIDENTIAL

A-1

 

Schedule
B

 

Service
Level Agreement

 

	
      Service
      Item

       
	 	
      Wmode
      Responsibility

       
	 	
      Content
      Provider Responsibility

	
      Customer
      Interaction

       
	 	
      Wmode
      will respond to, resolve, and track only the billing-related customer
      issues for the Content Provider’s service. Wmode will refer all other
      service-related customer issues to the Content Provider.
	 	
      Content
      Provider will respond to and resolve all non-billing service-related
      queries referred directly from Wmode Customer Care to the Content Provider
      for resolution.

	 	 	 	 	
      If Content Provider receives any calls directly from
      Carrier Subscribers regarding Wireless Data Service in general, refer them
      to the appropriate carrier at 611
      on
      their wireless phone.  

	Single Point of Contact
      for Incident Resolution  	 	
      1 403-608-6089

      operations.support@wmode.com 
	 	
      1.206.283.0600 menu option  

      Hot phone support - 24x7x365

	
       
	 	
      24x7x365
      days/yr
	 	
      support@dwango.com

	
      Service
      Level Targets

       
	 	
      Availability:

       

      99.5%,
      excluding planned maintenance (planned maintenance shall not exceed one
      

      hour
      per week).

       
	 	
      Availability:

       

      99.5%,
      excluding planned maintenance (planned maintenance shall not exceed one
      

      hour
      per week).

       

      Maximum
      Site Response:
      not to exceed:

      • Ten
      seconds per page view

      • That
      of comparable services on the Internet

      Each
      party recognizes the potential for latency as a result of the Internet or
      Carrier network performance issues.

	
      Outage/Incident
      Reporting

       
	 	
      If
      Wmode or the Carrier detects a service-affecting incident:

      • Wmode
      may open a Software Problem Report and troubleshoot the
      problem.

      • If
      determined to be a Content Provider problem, Wmode will e-mail Content
      Provider single point of contact number to report
incident.
	 	
      If
      Content Provider detects a service-affecting incident:

      • E-mail
      Wmode to
      report incident, providing description of incident, impact to customers,
      and estimated resolution time: operations.support@wmode.com

      • Provide
      Wmode with
      periodic updates of progress towards resolution.

	Incident
      Escalation 	 	Business
      Contacts: 	 	
       

	Note: A
      “bridge” is a conference call initiated by Wmode for incident
      troubleshooting purposes. 	 	
      • Richard
      Bessette - ClearMode Operations
   Office (403)
      608-6089  
      • Peter
      Dean - ClearMode Operations
   Office (403) 260-5590
      

	 	
      
      • A
      Bridge
      Contact
              
      David Parker
       Office:
      206.832.0626
       Mobile:
      206.601.6311
       E-mail:
      david.parker@dwango.com

      •
       B Bridge Contact
   Neil Olson

        
      Office: 206.832.0657
   Mobile:
      206.409.8677
   E-mail:neil.olson@dwango.com

      • Business
      Contacts
   Brad David
   Office:
      206.832.0615
   Mobile: 425.283.7600
   E-mail:
      brad.david@dwango.com 

	
      Outage/Incident
      Reviews

       
	 	
      Incident
      history will be maintained in SPR records logged by Wmode.

      Wmode
      will escalate based on requirements from the various
Carriers.

      If
      a problem persists for four hours or more, Wmode has the right to pull
      Content Provider’s Applications from the ClearMode system until such time
      that Content Provider demonstrates that it can meet service level
      expectations. In this case, contact:

      operations.support@wmode.com
	 	
      For
      each incident that prevents customer access to Content Provider site for
      more than two hours, Content Provider will send root cause assessment
      analysis via e-mail within 10 days of incident resolution to:

      operations.support@wmode.com

	
      Maintenance/Change
      Control Management

       
	 	
      Wmode
      will provide Content Provider with at least 10 days advance notice via
      e-mail of any change to ClearMode that would impact the interface and
      inter-operation of services provided by the Content Provider

       
	 	
      Content
      Provider will provide Wmode with at least ten days advance notice via
      e-mail to operations.support@wmode.com of all planned maintenance
      activities. Planned maintenance will be conducted within the standard
      maintenance window.

       

      Standard
      Maintenance Window:

      Between
      the hours of 10:00 p.m. and 3 a.m. Eastern Standard Time. Content Provider
      will make every effort to coordinate with Wmode when planning maintenance
      to minimize impact to Carrier customers.

	
      Third
      Party Services

       
	 	
      N/A

       
	 	
      Content
      Provider is responsible for third party content, Internet service, or
      application providers included as part of the Content Provider
      service.

	
      Monthly
      Reporting

       
	 	
      Refer
      to Section 3.12 Monthly Revenue Reports, Payments and
      Settlement.

       
	 	
      Content
      Provider will submit performance reports to Wmode via e-mail on a monthly
      basis, or provide availability to online statistics.

      Reports
      are due by the seventh business day after the end of each month, beginning
      one month after the signing of this Agreement, and should be sent
      to:

      operations.support@wmode.com

      Each
      report shall include:

      • Total
      number of outages in a given month

      • Total
      availability expressed as a percentage

      • Number
      of reported purchase errors

      • Mean
      time to repair (minutes)

      Content
      Provider will use a standard reporting template, an electronic copy of
      which can be requested by e-mailing Peter Dean at:

      operations.support@wmode.com

	
      Service
      Reviews

       
	 	
      Initially
      at six months, annually thereafter (unless actual service performance
      during any month warrants an earlier review).
	 	
      When
      requested, Content Provider will participate in service
      reviews.

       

 

 

CONFIDENTIAL

B-1

 

ADDENDUM
TO CLEARMODE CONTENT PROVIDER

STANDARD
SERVICE AGREEMENT

For

MICROCELL
SOLUTIONS INC.

 

This
Addendum (the “Addendum”) dated February 23, 2005, (“Addendum Date”), by and
between Wmode, Inc. (“Wmode”) and Dwango North America Corp, d/b/a Dwango
Wireless (“Content Provider”) amends the ClearModeTM Content Provider Standard
Service Agreement dated December 21, 2004 (the “Agreement”).

 

Under
this Addendum, Content Provider wishes to sell certain Digital Content to
Microcell Solutions (Microcell) Users. This Addendum sets forth certain terms
and conditions for the Content Provider’s integration into the ClearMode
platform and subsequent sale of Digital Content to Microcell Users.

 

	 	 
	
      WMODE
	
      CONTENT
      PROVIDER

	
      Legal
      Name:

       

      Wmode
      Inc., an Alberta Corporation 
	
      Legal
      Name: Dwango North America Corp.

       

      Business
      Name (if different):

       

	(“Wmode”) 	(“Content
      Provider”) 
	 	 
	
      WMODE
      ADDRESS

       

      (For
      Official Notices and Billing)
	
      CONTENT
      PROVIDER ADDRESS

       

      (For
      Official Notices and Billing)

	 	 
	
      Wmode
      Inc.

       

      3553
      31 St NW

       

      Calgary,
      AB T2L 2K7

       

      Attn:
      Mr. Robert S. Woodward

       

      Email
      Address: contracts@wmode.com

       

      Fax
      No. (403) 210-3663
	
      Dwango
      North America Corp.

       

      2211
      Elliott Ave. Suite 601

       

      Seattle,
      WA 98121

       

      Attn:
      Paul Quinn

       

      E-mail:
      paul.quinn@dwango.com

       

      Fax
      No: 206.832.0601

	 	 

EXHIBITS

 

Exhibit A
- Financial Schedule

 

Exhibit B
- Policies Concerning Content and Services

 

	 
	
       

      EACH
      PARTY’S SIGNATURE BELOW ACKNOWLEDGES THAT SUCH PARTY HAS READ AND
      UNDERSTANDS EACH OF THE TERMS AND CONDITIONS OF THIS AGREEMENT AND AGREES
      TO BE BOUND BY THEM.

       

 

 

CONFIDENTIAL

 

	WMODE INC. 	CONTENT PROVIDER 
	 	 
	By: /s/ Dennis Woronuk	By: /s/ J. Paul Quinn
	 	 
	Title: President and CEO	Title: CFO
	 	 
	Date: March 10, 2005	Date: 3/9/05

 

	
      
      1.

	
      
      DEFINITIONS

	 	 

	 	Agreement shall
      mean the ClearMode Content Provider Standard Service
      Agreement

	
       
	 

	
       
	
      Content
      Delivery & Management System (CDMS) shall
      mean the product offered by Microcell for giving to the Content Provider
      the opportunity to receive payment from Users for WAP, SMS, MMS, Web and
      Java based content services of the Content
  Provider.

	 	 

	 	Users shall
      mean Microcell (Fido) mobile phone
subscribers. 

	 	 

	 	“Service” or “Content Service” shall
      mean a collection of content made available by the Content Provider to the
      Users over the mobile network of
Microcell. 

	 	 

	 	User-Billing
      shall mean the billing functionality that allows qualified Users (as
      determined by Microcell) to purchase content services through the CDMS,
      either in single transactions, on a subscription basis or through bundles,
      and to have those purchases appear on the User’s bill or charged to the
      User’s prepay account. 

	 	 

	 	Ring Tones shall
      mean downloadable: 

	 	
      ·
	
      Monophonic -
      Audio segments that are either Nokia Smart Message Specification v.3.0,
      iMelody Specification v. 1.0, Motorola proprietary or otherwise current
      version. 

 

	 	
      ·
	
      Polyphonic -
      Audio segments that are either four (4), eight (8), sixteen (16),
      twenty-four (24), thirty-two (32), forty (40) or
      seventy (70) voice general MIDIs.

 

	 	
      ·
	
      TruTones:

	 	
      ·
	
      Cover
      Tones -
      Audio segments that are either actual standalone audio recordings or audio
      recordings combining certain file elements as cover representations of hit
      songs; 

 

	 	
      ·
	
      FX
      Tones -
      Audio segments that are either actual standalone audio recordings or audio
      recordings combining certain file elements as representations of sound
      effects, movie & TV lines, sports moments, famous speeches,
      etc.;

 

	 	
      ·
	
      Standard
      Voice Ringers -
      Audio segments that are either actual standalone audio recordings or audio
      recordings combining certain file elements where the most prominent
      element is a comedic message, but does not include Celebrity Voice
      Ringers; and

 

	 	
      ·
	
      Celebrity
      Voice Ringers -
      Audio segments that are either actual standalone audio recordings or audio
      recordings combining certain file elements where the most prominent
      element is the spoken voice of a celebrity

 

	 	
      ·
	
      Master
      Tones - Audio
      segments that are either actual standalone audio recordings or audio
      recordings combining certain file elements embodying a master sound
      recording commercially released by a record
label.

 

	
      
      
      2.

	
      
      
      ROLES
      AND RESPONSIBILITIES OF
      MICROCELL

	 	 

	 	Microcell
      is responsible for the payment solution for its Users. In order for
      Microcell to be able to organize the payment solution through invoicing of
      User as stated in this Addendum, the following criteria must be
      fulfilled:

	
       
	 

 

	 	
      ·
	
      the
      User must be a subscriber of Microcell

 

	 	
      ·
	
      the
      User must be linked to Microcell’s network with a data connection, where
      the MSISDN of the User is transferred.

 

 

CONFIDENTIAL

2

 

	
      
      
       

	
      
      
      The
      Content Provider will not be passed User’s MSISDN. ClearMode will provide
      unique identifiers for each User. Where Users cannot be identified
      automatically they will be allowed by the Content Provider to browse
      unidentified.

	 	 

	 	Microcell
      is responsible for operation and the performance of its mobile network.
      Microcell assumes no liability for any direct or indirect damage caused by
      the unavailability or non-operation Microcell Network, CDMS or any of the
      ClearMode components.

	
       
	 

	 	Microcell shall charge its Users for the purchase of
      Content Provider’s content services and collect amounts from
      User’s. 

	 	 

	 	Microcell shall provide first-tier customer care for
      Users with respect to the billing of content services purchased via the
      CDMS. Microcell will have sole responsibility for settling any billing
      disputes with Users regarding the purchase of content services through the
      CDMS. If Microcell, in its sole discretion, determines that a full or
      partial refund shall be granted to a User, Microcell may grant such a
      refund. 

	 	 

	 	If Microcell is unable to recover from its Users the
      debts resulting in Services usage, in particular in case of complaints by
      the Users, Microcell can refuse to share the related revenue or to require
      a refund if the payment has already been
made. 

	 	 

	 	Microcell has the right to develop and to maintain its
      own content services. 

	 	 

	 	Microcell will protect the Trademarks, the Documentation
      and all related intellectual property
      including without limitation, all copyright, trade secret, patent,
      trademarks and other intellectual or industrial property rights therein
      (the "Property"). No Property or ownership right or interest in the
      Property or any part thereof is granted to Microcell by virtue of this
      Agreement, 

	 	 

	3. 	ROLES AND RESPONSIBILITIES OF CONTENT
      PROVIDER 

	 	 

	 	The Content Provider shall develop and offer the content
      services in accordance to the “Fido Mobile Network Development Guide for
      Content Providers” for the Microcell CDMS. The Content Provider is
      responsible for the operation of its own applications and content
      services. 

	 	 

	 	The Content Provider is responsible for the interface
      between its applications and ClearMode. The Content Provider shall have
      sufficient technological means for the maintenance and distribution of the
      content and to meet the service levels specified in Section
      5. 

	 	 

	 	The Content Provider shall provide Wmode with URL links
      to the WAP Content Services for incorporation into Microcell’s CDMS. The
      Content Provider shall make the Content Services available to Wmode for
      test and approval. 

	 	 

	 	The Content Provider shall enter and configure the
      content services into ClearMode for billing purposes, The Content Provider
      shall fill out the form “Fido Mobile Network Portal Information” that
      includes the description of the services and Microcell may publish this
      information on the Microcell web portal. 

	 	 

	 	The Content Provider appoints Wmode to generate the
      billing record for content service purchased by the
  User. 

	 	 

	 	The Content Provider is only allowed to use ClearMode to
      deliver Services (e.g. SMS, MMS, WAP Push, Java downloads) to Users, who
      have solicited the Service (i.e. signed up). In case of complaints raised
      by any Microcell User, the Content Provider has to provide Wmode with all
      the relevant documents proving that the request for the specific Service
      by the complaining User was made in proper and legal
  way. 

	 	 

	 	The Content Provider takes all the risks and liabilities
      for the purchase of content services, including but not limited to the
      risks of non-payment and fraud. 

	 	 

	 	The Content Provider has the full responsibility to
      provide User Support and User Services to Users through a customer
      self-care by one or more of the following means: web, email, WAP service
      or a toll free number (800). In no case shall it be a charge back number
      (900). The Content Provider’s contact information (web link, email) may be
      published on the Microcell web
portal. 

 

 

 

CONFIDENTIAL

3

 

	 	The Content Provider shall only display Content Items in
      response to a Content Request originating from the User’s MSISDN that
      generates a notice by Wmode to the Content
Provider. 

	 	 

	 	The Content Provider determines the nature of the Content
      Services delivered and is solely responsible for its content and operation
      following the policies set forth in Exhibit B, “Policies Concerning
      Content and Services” and in the “Fido Mobile Network Development Guide
      for Content Providers”. 

	 	 

	
      4.
	
      THE
      CONTENT SERVICE

	 	 

	 	If Microcell reasonably suspects breach of this Agreement
      it must provide written notice and allow Content Provider 14 days to
      respond before it may temporarily remove all links to the Content Service
      from the Microcell CDMS Portal.

	 	 

	 	Content Provider shall not knowingly provide Content
      Item’s that shall contain any virus, worm, Trojan or other rogue program
      or contaminant.

	 	 

	 	The Content Provider shall retain evidence that Content
      Items displayed to Users were properly requested by a User and Microcell
      shall have the right to inspect the evidence referred to above for a
      period of one (1) year.

	 	 

	 	The Content Provider shall not apply any fee or charge to
      any Content Item, which relates to pricing, instructions, and subscription
      management or is otherwise not a genuine part of the Content
      Service.

	 	 

	 	The Content Provider will ensure that the Content
      Services are delivered in accordance with the specifications set out in
      Exhibit B, “Policies concerning Content and
Services”.

	 	 

	 	No file downloaded as part of the Content Services shall
      be larger than 0.5 megabytes and no page displayed shall be larger than 30
      kilobytes.

	 	 

	 	The Content Provider must give Wmode at least 14 days'
      notice of its intention to make any alterations to this Content Services
      Specification. In the event of the Content Provider serving such
      notification Wmode shall use its reasonable endeavors to ensure that
      billing and other systems can be put in place to accommodate such
      alterations within 14 days and Microcell or Wmode shall only withhold
      approval on reasonable grounds of technical or User
    protection. 

	 	 

	 	Wmode shall manage subscriptions and access control. The
      Content Provider shall be entitled to add its own subscription management
      and access control with the prior written consent of Wmode, consent to
      which shall not be unreasonably
withheld.   

	 	 

	
      5. 
	
      CUSTOMER
      SERVICE AND SUPPORT 

	 	 

	 	In addition to the requirements specified in the
      “ClearMode Content Provider Standard Service Agreement”, the Content
      Provider shall provide Wmode with their services that meet the following
      requirements: 

 

	 	
      ·
	
      Second
      level Customer Service support through email with a 12-hour
      turnaround;

 

	 	
      ·
	
      A
      99.5% percent availability for all Content, servers and
    links

 

	 	
      ·
	
      A
      disaster recovery plan; and

 

	 	
      ·
	
      An
      escalation procedure

 

 

CONFIDENTIAL

4

 

 

	 	 

	
      
      6. 

	
      
      MARKETING 

	 	 

	 	Microcell will ensure that a link to the Content Services
      is incorporated into the Microcell Portal. 

	 	 

	 	Microcell will have the final decision on where
      services/content initially appears in directory structure and any future
      repositioning of the Content Service in the directory
    structure. 

	 	 

	 	The Content Provider shall be responsible for marketing
      and promoting the Content Services. 

	 	 

	 	Microcell shall be entitled to use any trademark of the
      Content Provider for the purposes of promoting the Service on the
      Microcell Portal. 

	 	 

	 	Before the Content Service is promoted on the Microcell
      Portal, and from time to time afterwards, the Content Provider shall
      provide Wmode with sample, free view or promotional material for use in
      the event that it wishes to promote the Content
Service. 

	 	 

	
      7.
	
      DURATION
      & TERMINATION

	 	 

	 	The Addendum shall remain in force for an indefinite
      period of time. Each party may terminate this Addendum by giving 90 days
      notice to the other at any time, but not earlier than 6 months after the
      present Addendum has been signed. 

	 	 

	
      8.
	
      EXCLUSIVITY

	 	 

	 	Content Provider agrees that the Premium Content provided
      as part of this schedule to Microcell, shall be exclusively provided
      through this agreement with Wmode. 

	 	 

	
      9. 
	
      CONFIDENTIALITY

	 	 

	 	All Content Provider proposals submitted for review by
      Microcell and Wmode shall be treated as
Confidential. 

 

 

CONFIDENTIAL

5

EXHIBIT
A

 

FINANCIAL
SCHEDULE

 

REVENUE
SHARE FOR CONTRACTED CONTENT

 

Table
A.1 - Revenue Share for Contracted Content

 

	 	 	 
	
      
Content
      Type

       
	 	
      
Content
      Provider Revenue Share

       

	
      Ringtones

       

      (Monophonic,
      Polyphonic, True Tones)

       
	 	
      [**]

       

	
      Rolling
      Stone Ringtones

       

      (Monophonic,
      Polyphonic, True Tones)

       
	 	
      [**]

       

	
      Graphics

       
	 	
      [**]

       

	
      Game
      Downloads

       
	 	
      [**]

       

	
      Premium
      WAP Services

       
	 	
      [**]

       

	
      Master
      Tones 

       
	 	
      [**]

       

	
      Premium
      SMS Services

       
	 	
      [**]

       

	
      Premium
      MMS Content

       
	 	
      [**]

       

	
       

       
	 	
      [**]

       

	
      Applications
      / Other

       
	 	
      [**]

       

	
       

       
	 	
       

       

 

 

	
      1 
	
      PRICES
      & PAYMENT CONDITIONS

	 	 

	 	Wmode reserves the right to remove link to the Content
      Services and cease making Revenue Share Payments relating to Content
      Requests made from the date of such removal, during a period of continued
      non-availability. Wmode shall provide such notice by
  email. 

	 	 

	 	Wmode shall remove all access to the Content Services
      (including all Content Items) from the Microcell Portal, within 3 working
      days of the termination of the Addendum. 

	 	 

	 	On termination of the Addendum, the Content Provider
      shall either: 

 

	 	
      1.
	
      Refund
      pro-rata to User all sums paid in respect of the un-expired term of any
      Subscription Item;

 

	 	
      2.
	
      Provide
      Content Services in another form for the un-expired period of any
      Subscription Request.

 

	
      2 
	
      PRICING

 

[**]   Confidential treatment
requested

 

CONFIDENTIAL

6

 

 

	 	 

	 	The Content Provider shall suggest the retail price for
      the Content and Microcell will either approve or suggest an alternate
      price for the launch. If an alternate price is suggested, the Content
      Provider must approve this price prior to launch. All prices exclude
      applicable taxes. 

	 	 

	 	During the Term, Wmode agrees to pay to Content Provider,
      in full consideration of the rights and licenses granted to Wmode by
      Content Provider for the Content & Applications in this Agreement, a
      fee for the Content and Applications downloaded by End-User’s payable as
      follows (the “Revenue Share”): 

 

	 	
      ·
	
      Wmode
      shall pay: 

      the
      percentage of the Gross Revenue as defined in Table A.1 above for each
      successfully downloaded element of Content or Application by End
      User,

 

	 	
      ·
	
      Microcell
      may change the Revenue Share percentages from time to time that may result
      in Wmode changing the revenue share payable to the Content Provider. Wmode
      shall provide notice by email of such pending change;

 

	 	
      ·
	
      Microcell
      may change the retail price of the price of each Service from time to
      time; and

	 	 	 

	 	 	When used in this Agreement, “Gross Revenue”, as defined
      in the ClearMode Content Provider Standard Service Agreement, is processed
      by Microcell each month after the Commercial Launch
  Date. 

	 	 	 

	 	 	User’s access to the GSM and GPRS network, including SMS
      and MMS services, is not part of this agreement and all revenue derived
      from the associated transport services shall be the sole revenue of
      Microcell. 

	 	 	 

	 	 	Wmode shall have the right to terminate this Addendum by
      giving a days notice without liability if the Content Provider does not
      reach minimum revenue of $2000.00 per month, but not earlier as of 12
      months after the Addendum has been signed. 

	 	 	 

	 	 	All transactions by Wmode or Microcell test devices will
      not be included in the Gross Revenue. 

	 	 	 

 

 

CONFIDENTIAL

7

 

 

EXHIBIT
B

 

POLICIES
CONCERNING CONTENT AND SERVICES

 

	
      1. 
	
      ANTI-SPAMMING

	 	 

	 	Spamming is the sending of a large number
      of unsolicited messages (SMS/MMS) which are wholly or mainly identical in
      terms of content (e.g. advertising, chain letters) sent to a wireless
      mobile device whereby at least some of the targeted recipients (Users)
      have not requested or consented to receive this kind of messages and have
      reported a complaint. 

	 	 

	 	Microcell and the Content Provider agree
      that they wish to combat Spamming using the measures outlined
      below.  

	 	 

	 	Therefore, the following conditions shall
      apply:  

 

	 	
      ·
	
      Spamming
      is forbidden;

 

	 	
      ·
	
      the
      Content Provider shall only send advertisement and/or information to a
      User where the Content Provider is in receipt of its consent or of an
      explicit request;

 

	 	
      ·
	
      the
      Content Provider shall offer a simple SMS "opt out"-possibility to each of
      its services individually or to all of its services. The Content Provider
      has to handle such opt-out requests immediately. The opt-out function must
      be easy to use by the Users;

 

	 	
      ·
	
      the
      Content Provider agrees to include the following information in every
      advertising and/or information SMS sent:
Content Provider name
      

 

	 	
      ·
	
      Content
      Provider’s telephone number1 

 

	 	
      ·
	
      the
      Content Provider agrees to include the following information in every MMS
      sent, irrespective of the message content:

 

	 	
      §
	
      Content
      Provider
      name 

 

	 	
      §
	
      Content
      Provider
      address 

 

	 	
      §
	
      Content
      Provider’s
      telephone number1
      or
      alternatively Content
      Provider’s
      hotline

      e-mail address;

 

	 	
      ·
	
      the
      text or images displayed in the messages must not be misleading, and must
      straightforwardly describe or illustrate the services
    offered.

 

	
      2 
	
      
      SERVICE
      SUBSCRIPTON

	 	 

	 	The Content Provider can offer service
      subscriptions through the Internet. In that case the Content Provider
      shall take all appropriate security measures in order to avoid any
      abuse. 

	 	 

	 	The Content Provider shall send a free of
      charge SMS confirmation for each service subscription done by a
      User. 

	 	 

________________________

1 The
number shall either be a toll number (800) or a geographical number and in no
case shall it be a charge back number (900).

 

 

CONFIDENTIAL

8

 

 

	 	The Content Provider commits to avoid the
      offering of valueless or inappropriate content that a User can consider as
      abusive or excessive. In case of suspicion of abuse, Microcell reserves
      the right to start a specific investigation according to its own rules and
      conditions in collaboration with the Content Provider. During the
      investigation, Microcell can suspend the concerned service in order to
      prevent possible damages. 

	 	 

	
      3 
	
      
      
      GENERAL
      STATEMENT

	 	 

	 	Microcell reserves the right to either
      suspend the service or terminate the contract with the Content Provider
      with immediate effect without any obligation or contractual liability if
      the conditions contained in the present document are not followed. The
      Service will be immediately reactivated as soon as they are
      met. 

	 	 

		
      Microcell
      reserves the right to update the present document on an ongoing basis to
      comply with the latest developments in these matters, and will inform the
      Content Provider 4 weeks before the new version enters into
      force. 

 

 

CONFIDENTIAL

9

 

ADDENDUM
TO CLEARMODE CONTENT PROVIDER STANDARD SERVICE AGREEMENT

RINGTONES
& GRAPHICS

ROGERS
WIRELESS

 

This
Addendum (the “Addendum”) dated February 28, 2005, (“Addendum Date”), by and
between Wmode, Inc. (“Wmode”) and Dwango North America Corp. d/b/a Dwango
Wireless (“Content Provider”) amends the ClearModeTM Content Provider Standard
Service Agreement dated December 21, 2004 (the “Agreement”).

 

Under
this Addendum, Content Provider wishes to sell certain Digital Content to Rogers
Wireless Users. This Addendum sets forth certain terms and conditions for the
Content Provider’s integration into the ClearMode platform and subsequent sale
of Digital Content to Rogers Wireless Users.

 

 

	 	 
	
      
WMODE

       
	
      
CONTENT
      PROVIDER

       

	
      Legal
      Name: Wmode Inc., an Alberta Corporation 

       

      (“Wmode”)

       
	
      Legal
      Name: Dwango North America Corp.

       

      Business
      Name (if different):

       

      (“Content
      Provider”)

       

	
      WMODE
      ADDRESS

      (For
      Official Notices and Billing)

       
	
      CONTENT
      PROVIDER ADDRESS

      (For
      Official Notices and Billing)

       

	
      Wmode
      Inc.

      3553
      31 St NW

      Calgary,
      AB T2L 2K7

      Attn:
      Mr. Robert S. Woodward

      Email
      Address: contracts@wmode.com

      Fax
      No. (403) 210-3663

       
	
      Dwango
      North America Corp.

      2211
      Elliott Avenue Suite 601

      Seattle,
      WA 98121

      Attn:
      Paul Quinn 

       

      Email
      address: paul.quinn@dwango.com

       

      Fax
      No. 206.832.0601

 

EXHIBITS

 

Exhibit A
- Rogers Wireless Interactive Devices

 

	 
	 

      EACH
      PARTY’S SIGNATURE BELOW ACKNOWLEDGES THAT SUCH PARTY HAS READ AND
      UNDERSTANDS EACH OF THE TERMS AND CONDITIONS OF THIS AGREEMENT AND AGREES
      TO BE BOUND BY THEM.

       

 

	WMODE INC. 	CONTENT PROVIDER 
	 	 
	By: /s/ Dennis Woronuk	By: /s/ J. Paul Quinn
	 	 
	Title: President and CEO	Title: CFO
	 	 
	Date: March 10, 2005	Date: 3/9/05

 

CONFIDENTIAL

1          
Definition:

“Ring
Tones” means
downloadable:

 

	 	
      ·
	
      Monophonic -
      Audio segments that are either Nokia Smart Message Specification v.3.0,
      iMelody Specification v. 1.0, Motorola proprietary or otherwise current
      version. 

 

	 	
      ·
	
      Polyphonic -
      Audio segments that are either four (4), eight (8), sixteen (16),
      twenty-four (24), thirty-two (32), forty (40) or
      seventy (70) voice general MIDIs.

 

	 	
      ·
	
      TruTones:

 

	 	
      ·
	
      Cover
      Tones -
      Audio segments that are either actual standalone audio recordings or audio
      recordings combining certain file elements as cover representations of hit
      songs; 

 

	 	
      ·
	
      FX
      Tones -
      Audio segments that are either actual standalone audio recordings or audio
      recordings combining certain file elements as representations of sound
      effects, movie & TV lines, sports moments, famous speeches,
      etc.;

 

	 	
      ·
	
      Standard
      Voice Ringers -
      Audio segments that are either actual standalone audio recordings or audio
      recordings combining certain file elements where the most prominent
      element is a comedic message, but does not include Celebrity Voice
      Ringers; and

 

	 	
      ·
	
      Celebrity
      Voice Ringers -
      Audio segments that are either actual standalone audio recordings or audio
      recordings combining certain file elements where the most prominent
      element is the spoken voice of a celebrity

 

	 	
      ·
	
      Master
      Tones - Audio
      segments that are either actual standalone audio recordings or audio
      recordings combining certain file elements embodying a master sound
      recording commercially released by a record
label.

 

2     
    Ring Tones: End User Navigation Of Content Provider Main
Deck provided to Wmode:

Ring
Tones: End User Navigation Of Content Provider Main Deck provided to
Wmode

Content
Provider will provide Wmode with a Main
Deck as
follows:

Ringtone
1

Ringtone
2

Ringtone
X

 

Content
Provider will provide Wmode with Sub
Decks as
follows:

Ringtone
1

Ringtone
1

Accept
Page

Download
Page

Store
Options

Thank You
Page

Help

Terms of
Use

Rogers
Home

 

Wmode
will provide during the term, Content Provider additional End User navigation
look and feel to the main and sub deck as the Rogers Total Content library
expands

 

3    GRAPHICS:
END USER NAVIGATION OF CONTENT PROVIDER MAIN DECK PROVIDED TO
WMODE:

 

Content
Provider will create, in both English and French, WAP Decks considering the
following requirements:.

 

Content
Provider will provide Wmode with a Main
Deck as
follows:

Title
1

Title
2

Title
X

Rogers
Home

 

Content
Provider will provide Wmode with Sub
Decks as
follows:

Title
1

Title
1

Accept
Page

Download
Page

Store
Options

Thank You
Page

Help

Terms of
Use

Main
Deck

Rogers
Home

 

Wmode
will provide during the term, Content Provider additional End User navigation
look and feel to the main and sub deck as the Rogers Total Content library
expands..

 

4        
CONNECTIVITY REQUIREMENTS:

Content
Provider will provide:

WAP URL
to the main deck as identified in section 1 and 2.

 

 

CONFIDENTIAL

5    
Ring Tones and Rogers Content - Download Experience:

 

Content
Provider is required to support the following download experience as determined
by Rogers:

 

Customer
launches browser and surfs Premium Content on main deck as identified in section
1 and 2.

 

Customer
selects a Ringtone for download using their browser, which results in a HTTP
request to the content. The User Agent or preferably the User Agent Profile is
used to display only the available Ringtone and/or Rogers Content for the device
identified. 

 

Content
Provider displays the Accept page containing the text “You are about to download
“Ringtone Title”. Your Ring Tune will be billed $2.10 plus any applicable data
transmission fees.” with a link to Accept. 

 

On
“Accept” Content Provider redirects the User to ClearMode Purchase Engine (PE
Deferred). ClearMode Purchase engine will display the Download Page to the User.
On acceptance ClearMode Purchase Engine will redirect the User back to the
Content Provider server. 

 

The
Content Provider server passes the Ringtone to the client and the client browser
prompts to Download/Cancel.

 

After the
download has completed, the client displays the messages on the phone "Download
Complete". Upon successful delivery of the Ringtone, Content Provider will send
an “Event Complete” message to ClearMode. 

 

Content
Provider to add other handling scenario by phone type.

 

Content
Provider and Wmode will provide Rogers and its Customers with a download window.
The download window will be open for a 96-hour period where customers and Rogers
will have the opportunity to download the same piece of content for a Customer
at no additional charge.

 

6    
GRAPHICS - DOWNLOAD EXPERIENCE:

 

Content
Provider is required to support the following download experience as determined
by Rogers:

 

Customer
launches browser and surfs Premium Content on main deck as identified in section
2.

 

Customer
selects an Image for download using their browser, which results in a HTTP
request to the content. The User Agent or preferably the User Agent Profile is
used to display only the available Ring Tone and/or Rogers Content for the
device identified. 

 

Content
Provider displays the Accept page containing the text “You are about to download
“Image Title”. Your Image will be billed $1.50 plus any applicable data
transmission fees.” with a link to Accept. 

 

On
“Accept” Content Provider redirects the User to ClearMode Purchase Engine (PE
Deferred). ClearMode Purchase engine will display the Download Page to the User.
On acceptance ClearMode Purchase Engine will redirect the User back to the
Content Provider server. 

 

The
Content Provider server passes the Image to the client and the client browser
prompts to Download/Cancel.

 

After the
download has completed, the client displays the messages on the phone "Download
Complete". Upon successful delivery of the Image, Content Provider will send an
“Event Complete” message to ClearMode. 

 

Content
Provider to add other handling scenario by phone type.

 

Content
Provider and Wmode will provide Rogers and its Customers with a download window.
The download window will be open for a 96-hour period where customers and Rogers
will have the opportunity to download the same piece of content for a Customer
at no additional charge

 

7   
HANDSET REQUIREMENTS:

 

Content
Provider will provide Content for all Devices specified in Exhibit A at content
providers best efforts.

 

Content
Provider will provide Wmode with a handset roadmap and the supported
Content.

 

8   
BILLING REQUIREMENTS:

 

Content
Provider is required to support the following interface requirements between
their content server and ClearMode:

 

Content
Provider will configure their services into ClearMode using Purchase Engine (PE
Deferred) and price each service as stated by Rogers.

 

	
      9
	
      Revenue
      Share:

 

26.1 During
the Term, Wmode agrees to pay to Content Provider, in full consideration of the
rights and licenses granted to Wmode by Content Provider for the Content &
Applications in this Agreement, a fee for the Content and Applications
downloaded by End-User’s payable as follows (the “Revenue
Share”):

 

(a) for
RingTones (Monophone, Ployphonic TruTones) and Graphics, Wmode shall pay:

[**] of
the Gross Revenue for each successfully downloaded element of Content or
Application by End User;

 

(b) for
RingTones (Master Tones) Wmode shall pay ; [**] of the Gross Revenue for each
successfully downloaded element of Content or Application by End
User.

 

(c) Rogers
Wireless may change the Revenue Share percentages from time to time that may
result in Wmode changing the revenue share payable to the Content Provider.
Wmode will provide advance notice to the Content Provider; 

 

(d) Rogers
Wireless may change the retail price of the price of each service from time to
time;and

 

[**]   Confidential treatment
requested

 

CONFIDENTIAL

 

26.3 When
used in this Agreement, “Gross
Revenue”,
as defined in the ClearMode Content Provider Standard Service Agreement, is
processed by Rogers each month after the Commercial Launch Date less a deduction
of [**] percent for customer credits and uncollectable debt attributable to such
Content and Applications (the “Deduction”).

 

Any
transactions by Wmode or Rogers test devices shall not be included in the Gross
Revenue

 

10  
OTHER REQUIREMENTS:

For all
Content, Content Provider to provide following information:

Images/Screenshots/Previews

Description
of each Content

Application
Size

Supported
Devices

Content
titles

Marks,
Trade Names, Logos, Marketing Style Guidelines

 

11   Customer
Service and Support:

Content
Provider shall provide Wmode with their services that meet the following
requirements:

Second
level Customer Service support through email with a 12-hour
turnaround;

99.5%
percent availability for all Content, servers and links.

A
disaster recovery plan

Escalation
procedure.

 

	
      12
	
      Exclusivity

	 	Content Provider agrees that the Premium Content provided
      as part of this schedule to Rogers Wireless, shall be exclusively provided
      through this agreement with Wmode. 

 

 

[**]   Confidential treatment
requested

CONFIDENTIAL

 

EXHIBIT
A

 

ROGERS
WIRELESS INTERACTIVE DEVICES

 

For
launch, Content Provider will support Content for the following devices and
capabilities:

 

	 	 	 	 	 	 	 	 	 	 	 
	
      HANDSET
	
      HANDSET
	
      Ring
      Tones
	
      Ring
      Tones
	
      Java
	
      Graphics
	
      Graphics
	
      MMS
	
      MMS
	
      Video
	
      Video

	
      MFG
	
      Model
	
      Poly
	
      TruTone
	
      Games
	
      Colour
	
      Animated
	
      Pictures
	
      Video
	
      Capture
	
      Downloads

	
      Ericsson
	
      T39
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      LG
	
      1150
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      LG
	
      4010
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      LG
	
      4015
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO

	
      LG
	
      1400
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      C256
	
      YES
	
      NO
	
      NO
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      C333/C332
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      C350
	
      YES
	
      NO
	
      NO
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      C370
	
      YES
	
      NO
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      C650
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      P280
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      P7382i
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      T193
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      T720
	
      YES
	
      NO
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      V180
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      V3
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES

	
      Motorola
	
      V220
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      V300
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      V600
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      YES
      (Play)
	
      NO

	
      Motorola
	
      V551
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      YES
	
      NO

	
      Motorola
	
      V60g
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      V60i
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      V66
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Motorola
	
      V70
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      3100
	
      YES
	
      NO
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      3100b
	
      YES
	
      NO
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      3220
	
      YES
	
      NO
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES

	
      Nokia
	
      3300
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      3590
	
      YES
	
      NO
	
      YES
	
      NO
	
      NO
	
      YES
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      3595
	
      YES
	
      NO
	
      YES
	
      YES
	
      NO
	
      YES
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      3600
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      YES
	
      NO

	
      Nokia
	
      6010
	
      YES
	
      NO
	
      YES
	
      YES
	
      NO
	
      YES
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      6100
	
      YES
	
      NO
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      6590
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      YES
      R/S
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      6620
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES

	
      Nokia
	
      5140
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES

	
      Nokia
	
      6800
	
      YES
	
      NO
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      6820
	
      YES
	
      NO
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES

	
      Nokia
	
      8390
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      6310i
	
      NO
	
      NO
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      NGAGE
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Nokia
	
      NGAGE
      QD
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Panasonic
	
      GD88
	
      YES
	
      NO
	
      NO
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Samsung
	
      S307
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO

	
      Samsung
	
      X426
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO

	
      Samsung
	
      E316
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Siemens
	
      C56
	
      YES
	
      NO
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Siemens
	
      C61
	
      YES
	
      NO
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Siemens
	
      M46
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO
	
      NO

	
      Siemens
	
      SL56
	
      YES
	
      NO
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO
	
      NO

	
      Sony
      Ericsson
	
      T226
	
      YES
	
      NO
	
      NO
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Sony
      Ericsson
	
      T237
	
      YES
	
      NO
	
      NO
	
      YES
	
      NO
	
      YES
	
      NO
	
      NO
	
      NO

	
      Sony
      Ericsson
	
      T306
	
      YES
	
      NO
	
      NO
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Sony
      Ericsson
	
      T616
	
      YES
	
      NO
	
      YES
	
      YES
	
      YES
	
      YES
	
      NO
	
      NO
	
      NO

	
      Sony
      Ericsson
	
      T637
	
      YES
	
      NO
	
      YES
	
      YES
	
      NO
	
      YES
	
      NO
	
      NO
	
      NO

	
      Sony
      Ericsson
	
      T68i
	
      NO
	
      NO
	
      NO
	
      YES
	
      NO
	
      YES
	
      NO
	
      NO
	
      NO

	
      Sony
      Ericsson
	
      S710a
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES

	
      Sony
      Ericsson
	
      Z500
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES
	
      YES

CONFIDENTIALEMPLOYMENT
AGREEMENT

 

This
Agreement (this “Agreement”), dated
as of February 1, 2005 (the “Effective Date”), by and between VIOQUEST
PHARMACEUTICALS, INC., a Minnesota corporation with principal executive offices
at Princeton Corporate Plaza, 7 Deer Park Drive, Suite E, Monmouth Junction, New
Jersey, 08852 (the “Company”), and
DANIEL GREENLEAF,
residing at 383
Gristmill Drive, Basking Ridge, NJ 07920 (the “Executive”).

 

W
I T N E S S E T H:

 

WHEREAS,
the Company desires to employ the Executive as President and Chief Executive
Officer of the Company, and the Executive desires to serve the Company in those
capacities, upon the terms and subject to the conditions contained in this
Agreement;

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto hereby agree as follows:

 

1.  Employment.

 

(a)  Services.
The
Executive will be employed by the Company as its President and Chief Executive
Officer. The Executive will report to the Board of Directors of the Company (the
"Board") and shall perform such duties as are consistent with his position as
President and Chief Executive Officer (the
“Services”). The
Executive agrees to perform such duties faithfully, to devote all of his working
time, attention and energies to the business of the Company, and while he
remains employed, not to engage in any other business activity that is in
conflict with your duties and obligations to the Company. 

 

(b)  Acceptance.
Executive hereby accepts such employment and agrees to render the
Services.

 

2.  Term.

 

The
Executive's employment under this Agreement (the "Term") shall commence as of
the Effective Date and shall continue for a term of three (3) years, unless
sooner terminated pursuant to Section 9 of this Agreement. Notwithstanding
anything to the contrary contained herein, the provisions of this Agreement
governing protection of Confidential Information shall continue in effect as
specified in Section 6 hereof and survive the expiration or termination hereof.
This Agreement may be renewed for additional successive one year terms on the
same terms and conditions as set forth herein if the Company and the Executive
agree in writing prior to the expiration or other termination of the Term. In
the event the Company does not intend to agree to any such renewal, the Company
will indicate to Executive, at least 90 days prior to the expiration of the
Term, whether it intends to attempt to negotiate a new employment agreement with
Executive for a period to commence following the expiration of the Term. At such
time, if the Company informs the Executive that it does not intend to attempt to
negotiate a new employment agreement with Executive for a period to commence
following the expiration of the Term, this Agreement shall terminate and the
Executive shall be entitled to only that compensation described in Section
10(c).

 

 

3.  Best
Efforts; Place of Performance.

 

(a)  The
Executive shall devote substantially all of his business time, attention and
energies to the business and affairs of the Company and shall
use his best efforts to advance the best interests of the Company and shall not
during the Term be actively engaged in any other business activity, whether or
not such business activity is pursued for gain, profit or other pecuniary
advantage, that will interfere with the performance by the Executive of his
duties hereunder or the Executive’s availability to perform such duties or that
will adversely affect, or negatively reflect upon, the Company.

 

(b)  The
duties to be performed by the Executive hereunder shall be performed primarily
at the office of the Company in Monmouth Junction, New Jersey, subject to
reasonable travel requirements on behalf of the Company, or such
other place as the Board may reasonably designate. Notwithstanding the
foregoing, the Company may be relocated to another city within the United States
with consent of the Board.

 

4.  Directorship. The
Company shall use its best efforts to cause the Executive to be elected as a
member of its Board of Directors throughout the Term and shall include him in
the management slate for election as a director at every annual or other meeting
of shareholders during the Term at which the shareholders will consider the
election of directors. The Executive agrees to accept election, and to serve
during the Term, as director of the Company, without any compensation therefor
other than as specified in this Agreement.

 

5.  Compensation.
As full compensation for the performance by the Executive of his duties under
this Agreement, the Company shall pay the Executive as follows:

 

(a)  Base
Salary. The
Company shall pay Executive a salary (the “Base Salary”) equal to Three Hundred
Sixty Thousand Dollars ($360,000) per
year. Payment shall be made in accordance with the Company’s normal payroll
practices. In
addition, the Board
of Directors of the Company shall annually review the Base Salary in
consultation with the Executive.

 

(b)  Guaranteed
Bonus. The
Company shall pay the Executive a bonus (the “Guaranteed Bonus”) of One Hundred
Thousand ($100,000) Dollars within thirty (30) days following each anniversary
of the
Effective Date during the Term, provided that the Executive is employed
hereunder on such anniversary date. Additionally, the Company will remit to the
Executive the sum of Twenty-Five Thousand Dollars ($25,000) within 3 buiness
days of the execution of this Agreement, and an additional Twenty-Five Thousand
Dollars ($25,000) upon the six month anniversary of this Agreement, provided the
Executive is an employee of the Company on such six month anniversary.
In
addition, the Board
of Directors of the Company shall annually review the Guaranteed Bonus in
consultation with Executive.

 

(c) Discretionary
Bonus.
At the
sole discretion of the Board of Directors of the Company, the Executive shall
receive an additional bonus on each anniversary of the Effective Date during the
Term (the “Discretionary Bonus”) in an amount up to Two Hundred Fifty Thousand
Dollars ($250,000)
based on
the attainment by the Executive of certain financial, clinical development and
business milestones (the
“Milestones”) as
established annually by the Board of Directors (or a committee thereof), after
consultation with the Executive, prior to
the start of each anniversary of this Agreement. The
Milestones for the first year of this Agreement are set forth in Schedule A attached
hereto. The Company agrees that if the Milestones are achieved prior to the
first anniversary of the Effective Date, the applicable portion of the
Discretionary Bonus shall be paid to the
Executive. The Board of Directors, after consultation with the Executive, shall
establish the Milestones for each upcoming year at least sixty (60) days prior
to each anniversary of this Agreement. The Discretionary Bonus shall be payable
either as a lump-sum payment or in installments as determined by the Board of
Directors of the Company in its sole discretion, provided, however, if the Board
determines to pay the Executive in installments, such installments shall be no
less frequently than monthly, and shall be over a time period not to exceed four
months, unless otherwise agreed by the Executive in writing. 

 

 

(d) Withholding. The
Company shall withhold all applicable federal, state and local taxes and social
security and such other amounts as may be required by law from all amounts
payable to the Executive under this Section 5. 

 

(e) Stock
Options. As
additional compensation for the services to be rendered by the Executive
pursuant to this Agreement, the Company shall grant the Executive stock options
(“Stock Options”) to purchase a number of shares of the Company’s common stock,
par value $.01 per share (the “Common Stock”), equal to five percent (5%) of the
total number of shares of Common Stock issued and outstanding as of the
Effective Date. The Stock Options shall be governed by the Company’s 2003 Stock
Option Plan and shall vest, if at all, in three equal installments on the first,
second and third anniversaries of the Effective Date, subject in each case to
the provisions of Section 10 below. In connection with such grant, the Executive
shall enter into the Company’s standard stock option agreement which will
incorporate the foregoing vesting schedule and the Stock Option related
provisions contained in Section 10 below. The Board of Directors of the Company
shall annually review the number of Stock Options granted to the Executive to
determine whether an increase in the number thereof is warranted. Additionally,
until such time as the (i) Company has raised gross proceeds equal to
$20,000,000 through the sale of its equity securities and (ii) obtained the
right to one clinical stage human therapeutic, the Company shall issue to the
Executive a number of additional Stock Options (the “Additional Stock Options”)
sufficient to maintain Executive’s ownership percentage at 5% (assuming exercise
of his Stock Options and Additional Stock Options). Once the Company has (i)
raised $20,000,000 through the sale of its equity securities and (ii) obtained
the right to one clinical stage human therapeutic, Executive shall be diluted
pro rata along with all other holders of securities of the Company. Such
Additional Stock Options shall be valued at the then existing fair market value
of the Common Stock and shall vest in equal parts over the remaining Term on
each anniversary of this Agreement at the same time as the Stock Options (for
instance, if Additional Stock Options are granted within 6 months of the date
hereof, the first third of the Additional Stock Options shall vest six months
later on the anniversary of this Agreement, and the remainder of the Additional
Stock Options shall vest in 2 equal parts on each of the next two anniversaries
thereof ); provided, however, the Executive remains an employee of the Company
on each such applicable vesting date. For purposes hereof, “fair market value”
shall mean the average closing sale price of the Common Stock during the
preceding five (5) trading days, as reported on the OTC Bulletin Board (or such
other market or exchange if the Common Stock is then quoted or listed on a
market or exchange other than the OTC Bulletin Board); provided, however, that
if the Common Stock is not then listed or quoted on any stock exchange, stock
market or other over-the-couter market, then fair market value of the Common
Stock shall be established in good faith by the Company’s Board of
Directors.

 

 

   (f)
 Expenses. The
Company shall reimburse the Executive for all normal, usual and necessary
expenses incurred by the Executive in furtherance of the business and affairs of
the Company, including reasonable travel and entertainment, upon timely receipt
by the Company of appropriate vouchers or other proof of the Executive’s
expenditures and otherwise in accordance with any expense reimbursement policy
as may from time to time be adopted by the Company.

 

(g) Other
Benefits. The
Executive shall be entitled to all rights and benefits for which he shall be
eligible under any benefit or other plans (including, without limitation,
dental, medical, medical reimbursement and hospital plans, pension plans,
employee stock purchase plans, profit sharing plans, bonus plans and other
so-called "fringe" benefits) as the Company shall make available to its senior
executives from time to time. 

 

(h)  Vacation. The
Executive shall, during the Term, be entitled to a vacation of four (4)
weeks per
annum (no more
than two (2) consecutive weeks) in addition to holidays observed by the
Company. The
Executive shall not be entitled to carry any vacation forward to the next year
of employment and shall not receive any compensation for unused vacation
days.

 

6.  Confidential
Information and Inventions.

 

(a)  The
Executive recognizes and acknowledges that in the course of his duties he is
likely to receive confidential or proprietary information owned by the Company,
its affiliates or third parties with whom the Company or any such affiliates has
an obligation of confidentiality. Accordingly, during and after the Term, the
Executive agrees to keep confidential and not disclose or make accessible to any
other person or use for any other purpose other than in connection with the
fulfillment of his duties under this Agreement, any Confidential and Proprietary
Information (as defined below) owned by, or received by or on behalf of, the
Company or any of its affiliates. “Confidential and Proprietary Information”
shall include, but shall not be limited to, confidential or proprietary
scientific or technical information, data, formulas and related concepts,
business plans (both current and under development), client lists, promotion and
marketing programs, trade secrets, or any other confidential or proprietary
business information relating to development programs, costs, revenues,
marketing, investments, sales activities, promotions, credit and financial data,
manufacturing processes, financing methods, plans or the business and affairs of
the Company or of any affiliate or client of the Company. The Executive
expressly acknowledges the trade secret status of the Confidential and
Proprietary Information and that the Confidential and Proprietary Information
constitutes a protectable business interest of the Company. The Executive
agrees: (i) not to use any such Confidential and Proprietary Information for
himself or others; and (ii) not to take any Company material or reproductions
(including but not limited to writings, correspondence, notes, drafts, records,
invoices, technical and business policies, computer programs or disks) thereof
from the Company’s offices at any time during his employment by the Company,
except as required in the execution of the Executive’s duties to the Company.
The Executive agrees to return immediately all Company material and
reproductions (including but not limited, to writings, correspondence, notes,
drafts, records, invoices, technical and business policies, computer programs or
disks) thereof in his possession to the Company upon request and in any event
immediately upon termination of employment.

 

 

(b)  Except
with prior written authorization by the Company, the Executive agrees not to
disclose or publish any of the Confidential and Proprietary Information, or any
confidential, scientific, technical or business information of any other party
to whom the Company or any of its affiliates owes an obligation of confidence,
at any time during or after his employment with the Company.

 

(c)  The
Executive agrees that all inventions, discoveries, improvements and patentable
or copyrightable works (“Inventions”)
initiated, conceived or made by him, either alone or in conjunction with others,
during the Term shall be the sole property of the Company to the maximum extent
permitted by applicable law and, to the extent permitted by law, shall be “works
made for hire” as that term is defined in the United States Copyright Act (17
U.S.C.A., Section 101). The Company shall be the sole owner of all patents,
copyrights, trade secret rights, and other intellectual property or other rights
in connection therewith. The Executive hereby assigns to the Company all right,
title and interest he may have or acquire in all such Inventions; provided,
however, that the Board of Directors of the Company may in its sole discretion
agree to waive the Company’s rights pursuant to this Section 6(c) with respect
to any Invention that is not directly or indirectly related to the Company’s
business. The Executive further agrees to assist the Company in every proper way
(but at the Company’s expense) to obtain and from time to time enforce patents,
copyrights or other rights on such Inventions in any and all countries, and to
that end the Executive will execute all documents necessary:

 

(i)  to apply
for, obtain and vest in the name of the Company alone (unless the Company
otherwise directs) letters patent, copyrights or other analogous protection in
any country throughout the world and when so obtained or vested to renew and
restore the same; and

(ii)  to defend
any opposition proceedings in respect of such applications and any opposition
proceedings or petitions or applications for revocation of such letters patent,
copyright or other analogous protection.

 

(d)  The
Executive acknowledges that while performing the services under this Agreement
the Executive may locate, identify and/or evaluate patented or patentable
inventions having commercial potential in the fields of pharmacy,
pharmaceutical, biotechnology, healthcare, technology and other fields which may
be of potential interest to the Company or one of its affiliates (the “Third
Party Inventions”). The Executive understands, acknowledges and agrees that all
rights to, interests in or opportunities regarding, all Third-Party Inventions
identified by the Company, any of its affiliates or either of the foregoing
persons’ officers, directors, employees (including the Executive), agents or
consultants during the Employment Term shall be and remain the sole and
exclusive property of the Company or such affiliate and the Executive shall have
no rights whatsoever to such Third-Party Inventions and will not pursue for
himself or for others any transaction relating to the Third-Party Inventions
which is not on behalf of the Company.

 

(e)  Executive
agrees that he will promptly disclose to the Company, or any persons designated
by the Company, all improvements, Inventions made or conceived or reduced to
practice or learned by him, either alone or jointly with others, during the
Term.

 

 

(f)  The
provisions of this Section 6 shall survive any termination of this
Agreement.

 

7.  Non-Competition,
Non-Solicitation and Non-Disparagement.

 

(a)  The
Executive acknowledges that, due to the unique nature of the Company’s business,
the loss of any of its clients or business flow or the improper use of its
Confidential and Proprietary Information could create significant instability
and cause substantial damage to the Company and its affiliates and therefore the
Company has a strong legitimate business interest in protecting the continuity
of its business interests and the restriction herein agreed to by the Executive
narrowly and fairly serves such an important and critical business interest of
the Company. For purposes of this Agreement, the Company shall be deemed to be
actively engaged on the date hereof in the development and commercialization of
drugs, including therapeutics and vaccines for the treatment of humans in the
medial fields of the Company’s products at the time or such termination or
expiration of this Agreement. Accordingly, during the
Term and for a period of 12 months thereafter, the Executive shall not, directly
or indirectly, without the prior written consent of the Company:

 

(i)  solicit
or induce any employee of the Company or any of its affiliates to leave the
employ of the Company or any such affiliate; or hire for any purpose any
employee of the Company or any affiliate or any employee who has left the
employment of the Company or any affiliate within one year of the termination of
such employee’s employment with the Company or any such affiliate or at any time
in violation of such employee’s non-competition agreement with the Company or
any such affiliate; or

 

(ii)  solicit
or accept employment or be retained by any Person who, at any time during the
term of this Agreement, was an agent, client or customer of the Company or any
of its affiliates where his position will be related to the business of the
Company or any such affiliate; or

(iii)  solicit
or accept the business of any agent, client or customer of the Company or any of
its affiliates with respect to products, services or investments similar to
those provided or supplied by the Company or any of its affiliates.

 

(iv)   Accept
employment or an engagement with, as an employee, consultant, agent, partner,
joint venturer or otherwise, at any of the companies listed on Schedule
7(a)(iv), such Schedule to be completed in good faith by the Board in
consultation with the Executive following the acquisition of a human clinical
compound. It is intended that such companies on Schedule 7(a)(iv) will represent
direct competitors of the Company. Schedule 7(a)(iv) shall be reviewed from time
to time and at least annually in good faith by the Board and Executive, and may
be amended by the Board after consultation with the Executive without additional
compensation to Executive.

 

(b)  The
Company and the Executive each agree that both during the Term and at all times
thereafter, neither party shall directly or indirectly disparage, whether or not
true, the name or reputation of the other party or any of its affiliates,
including but not limited to, any officer, director, employee or shareholder of
the Company or any of its affiliates.

 

(c) In the
event that the Executive breaches any provisions of Section 6 or this Section 7
or there is a threatened breach, then, in addition to any other rights which the
Company may have, the Company shall (i) be entitled, without the posting of a
bond or other security, to seek injunctive relief to enforce the restrictions
contained in such Sections and (ii) have the right to seek to require the
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments and other benefits (collectively “Benefits”)
derived or received by the Executive as a result of any transaction constituting
a breach of any of the provisions of Sections 6 or 7 and the Executive hereby
agrees to account for and pay over such Benefits to the Company. The
Executive agrees that in an action pursuant to this Section 7, that if the
Company makes a prima facie showing that the Executive has violated or
apparently intends to violate any of the provisions of this Section 7, the
Company need not prove either damage or irreparable injury in order to obtain
injunctive relief. The Company and the Executive agree that any such action for
injunctive or equitable relief shall be heard in a state or federal court
situated in the County and State of New York and each of the parties hereto
agrees to accept service of process by registered or certified mail and to
otherwise consent to the jurisdiction of such courts.

 

 

(d) Each of
the rights and remedies enumerated in Section 7(d) shall be independent of the
others and shall be in addition to and not in lieu of any other rights and
remedies available to the Company at law or in equity. If any of the covenants
contained in this Section 7, or any part of any of them, is hereafter construed
or adjudicated to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants or rights or remedies which shall be
given full effect without regard to the invalid portions. If any of the
covenants contained in this Section 7 is held to be invalid or unenforceable
because of the duration of such provision or the area covered thereby, the
parties agree that the court making such determination shall have the power to
reduce the duration and/or area of such provision and in its reduced form such
provision shall then be enforceable. No such holding of invalidity or
unenforceability in one jurisdiction shall bar or in any way affect the
Company’s right to the relief provided in this Section 7 or otherwise in the
courts of any other state or jurisdiction within the geographical scope of such
covenants as to breaches of such covenants in such other respective states or
jurisdictions, such covenants being, for this purpose, severable into diverse
and independent covenants.

 

(e) In the
event that an actual proceeding is brought in equity to enforce the provisions
of Section 6 or this Section 7, the Executive shall not urge as a defense that
there is an adequate remedy at law nor shall the Company be prevented from
seeking any other remedies which may be available. The Executive agrees that he
shall not raise in any proceeding brought to enforce the provisions of Section 6
or this Section 7 that the covenants contained in such Sections limit his
ability to earn a living.

 

(f) The
provisions of this Section 7 shall survive any termination of this
Agreement.

 

8.  Representations
and Warranties by the Executive.

 

The
Executive hereby represents and warrants to the Company as follows:

 

(i)  Neither
the execution or delivery of this Agreement nor the performance by the Executive
of his duties and other obligations hereunder violate or will violate any
statute, law, determination or award, or conflict with or constitute a default
or breach of any covenant or obligation under (whether immediately, upon the
giving of notice or lapse of time or both) any prior employment agreement,
contract, or other instrument to which the Executive is a party or by which he
is bound.

 

 

(ii)  The
Executive has the full right, power and legal capacity to enter and deliver this
Agreement and to perform his duties and other obligations hereunder. This
Agreement constitutes the legal, valid and binding obligation of the Executive
enforceable against him in accordance with its terms. No approvals or consents
of any persons or entities are required for the Executive to execute and deliver
this Agreement or perform his duties and other obligations
hereunder.

 

9.  Termination. The
Executive’s employment hereunder shall be terminated upon the Executive’s death
and may be terminated as follows:

 

(a)  The
Executive’s employment hereunder may be terminated by the Board of Directors of
the Company for Cause. Any of the following actions by the Executive shall
constitute “Cause”:

 

(i)  The
willful failure, disregard or refusal by the Executive to perform his duties
hereunder;

(ii)  Any
willful, intentional or grossly negligent act by the Executive having the effect
of injuring, in a material way (whether financial or otherwise and as determined
in good-faith by a majority of the Board of Directors of the Company), the
business or reputation of the Company or any of its affiliates, including but
not limited to, any officer, director, executive or shareholder of the Company
or any of its affiliates; 

 

(iii)  Willful
misconduct or neglect by the Executive in respect of the duties or obligations
of the Executive under this Agreement,
including, without limitation, insubordination with respect to lawful directions
received by the Executive from the Board of Directors of the Company;

 

(iv)  The
Executive’s indictment of any felony or a misdemeanor involving moral turpitude
(including entry of a nolo contendere plea);

 

(v)  The
determination by the Company, after a reasonable and good-faith investigation by
the Company following a written allegation by another employee of the Company,
that the Executive engaged in some form of harassment prohibited by law
(including, without limitation, age, sex or race discrimination);

 

(vi)  Any
misappropriation or embezzlement of the property of the Company or its
affiliates (whether or not a misdemeanor or felony);

 

(vii)  Breach by
the Executive of any of the provisions of Sections
6, 7 or
8 of this
Agreement; and

(viii)  Breach by
the Executive of any provision of this Agreement other than those contained in
Sections
6, 7 or
8 which is
not cured by the Executive within sixty (60) days after written notice thereof
is given to the Executive by the Company.

 

 

(b)  The
Executive’s employment hereunder may be terminated by the Board of Directors of
the Company due to the Executive’s Disability. For purposes of this Agreement, a
termination for “Disability” shall
occur (i) when the Board of Directors of the Company has provided a written
termination notice to the Executive supported by a written statement from a
reputable independent physician to the effect that the Executive shall have
become so physically or mentally incapacitated as to be unable to resume, within
the ensuing six months, his employment hereunder by reason of physical or mental
illness or injury, or (ii) upon rendering of a written termination notice by the
Board of Directors of the Company after the Executive has been unable to
substantially perform his duties hereunder for 60 or more consecutive days, or
more than 120 days in any consecutive twelve month period, by reason of any
physical or mental illness or injury. For purposes of this Section 9(b), the
Executive agrees to make himself available and to cooperate in any reasonable
examination by a reputable independent physician retained by the
Company.

 

(c)  The
Executive’s employment hereunder may be terminated by the Board of Directors of
the Company (or its successor) upon the occurrence of a Change of Control. For
purposes of this Agreement, “Change
of Control” means
(i) the acquisition, directly or indirectly, following the date hereof by any
person (as such term is defined in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended), in one transaction or a series of related
transactions, of securities of the Company representing in excess of fifty
percent (50%) or more of the combined voting power of the Company’s then
outstanding securities if such person or his or its affiliate(s) do not own in
excess of 50% of such voting power on the date of this Agreement, or (ii) the
future disposition by the Company (whether direct or indirect, by sale of assets
or stock, merger, consolidation or otherwise) of all or substantially all of its
business and/or assets in one transaction or series of related transactions
(other than a merger effected exclusively for the purpose of changing the
domicile of the Company). Notwithstanding any provision to the contrary
contained herein, a Change of Control shall not be deemed to have occurred in
the event the Company sells or otherwise disposes of all or substantially all of
the stock or assets of Chiral Quest, Inc., its wholly-owned
subsidiary.

 

(d)  The
Executive’s employment hereunder may be terminated by the Executive for Good
Reason. For purposes of this Agreement, “Good
Reason” shall
mean 

 

(i)  any
material breach of Section 5 of this Agreement that is not cured by the Company
within 60 days after receipt of written notice by Executive to the Company of
such material breach. 

 

(ii)  if
Executive is assigned duties materially inconsistent with his position as chief
executive, or there is a material reduction in the nature of his authority or
responsibilities;

 

(iii)   if
Executive is required to relocate his office to a location which requires a
commute from his present residence, the address of which is set forth in the
preamble of this Agreement, to a new office which (A) is in excess of fifty (50)
miles from such residence and (B) is
in excess of three miles from the Company’s headquarters as of the date of this
Agreement in Monmouth Junction, New Jersey;

 

(e)  Notwithstanding
any provision to the contrary contained herein, the
Executive’s employment may be terminated by the Company for any reason or no
reason.

 

 

10. Compensation
upon Termination.

 

(a) If the
Executive’s employment is terminated as a result of his death or Disability, the
Company shall pay to the Executive or to the Executive’s estate, as
applicable, his (i)
Base Salary, the pro-rata portion of the Guaranteed Bonus payable for the year
in which the death or Disability occurred (for example, if Executive was
employed four months of a year prior to his death or Disability, he would be
entitled to receive one-third of the Guaranteed Bonus); (iii) earned
Discretionary Bonus (for example, if Executive is terminated under this Section
(d), and at that time the Company has acquired a clinical stage compound
approved by the Board, Executive shall be entitled to receive $80,000); and (iv)
and any expense reimbursement amounts through the date of his Death or
Disability. All Stock Options and Additional Stock Options that are
scheduled to vest by the end of the calendar year in which such termination
occurs shall be accelerated and deemed to have vested as of the termination
date, and shall remain exercisable for a period of 12 months following such
termination. All Stock Options and
Additional Stock Options that
have not
vested (or been
deemed pursuant to the immediately preceding sentence to have
vested) as of
the date of termination shall be deemed to have expired as of such date. The
Company shall maintain health benefit coverage of Executive (or his family, if
applicable) and other general benefits that are offered to all full time
employees of the Company at the time of termination (life insurance, disability,
401K, if applicable etc) for a period of 12 months following any termination
pursuant to this Section 10(a).

 

(b) If the
Executive’s employment is terminated by the Board of Directors of the Company
for Cause, then the Company shall pay to the Executive his Base Salary through
the date of his termination and the Executive shall have no further entitlement
to any other compensation or benefits from the Company. All Stock
Options and
Additional Stock Options that
have not
vested as of the
date of termination shall be deemed to have expired as of such date. Any
Stock Options and
Additional Stock Options that have
vested as of the date of the Executive’s termination for Cause shall remain
exercisable for a period of 90 days following the date of such
termination. 

 

(c)
 If the
Executive’s employment is terminated by the Company (or its successor) (1) upon
the occurrence of a Change of Control and on the date of termination pursuant to
this Section 10(c) the fair market value of the Company’s Common Stock, in the
aggregate, as determined in good faith by the Board on the date of such Change
of Control, is less than $38,000,000 or (2) pursuant to the terms of Section 2,
then the Company (or its successor, as applicable) shall continue to pay to the
Executive his Base Salary for a period of six months following such termination
as well as any expense reimbursement amounts owed through the date of
termination. All Stock Options and Additional Stock Options that are
scheduled to vest by the end of the calendar year in which such termination
occurs shall be accelerated and deemed to have vested as of the termination
date. Any Stock Options and
Additional Stock Options that have
vested (or been deemed pursuant to the immediately preceding sentence to have
vested) as of the
date of the Executive’s termination and shall remain exercisable for 12 months
following such termination. The
Company shall maintain health benefit coverage of Executive and other general
benefits that are offered to all full time employees of the Company at the time
of termination (life insurance, disability, 401K, if applicable etc) for a
period of 12 months following any termination pursuant to this Section
10(c).

 

 

(d) If the
Executive’s employment is terminated by the Company other than as a result of
the Executive’s death or Disability and other than for reasons specified in
Sections 9(a), 9(b), 9(c), 10(b) or 10(c), then the Company shall (i) continue
to pay to the Executive his Base Salary for a period of twelve months following
such termination; (ii) pay the Executive the Guaranteed Bonus payable for the
year in which such termination occurs; (iii) pay to Executive any earned
Discretionary Bonus (for example, if Executive’s employment is terminated under
this Section (d), and at that time the Company has acquired a clinical stage
compound approved by the Board, Executive shall be entitled to receive $80,000
in accordance with the Milestones described on Schedule A hereto); and (iv) pay
the Executive any expense reimbursement amounts owed through the date of
termination. All Stock Options and Additional Stock Options that are
scheduled to vest shall be accelerated and deemed to have vested as of the
termination date and shall remain exercisable for 12 months following such
termination. The
Company shall maintain health benefit coverage of Executive and other general
benefits that are offered to all full time employees of the Company at the time
of termination (life insurance, disability, 401K, if applicable etc) for a
period of 12 months following any termination pursuant to this Section
10(d).

 

(e) This
Section 10 sets forth the only obligations of the Company with respect to the
termination of the Executive’s employment with the Company, and the Executive
acknowledges that, upon the termination of his employment, he shall not be
entitled to any payments or benefits which are not explicitly provided in
Section 10.

 

(f) Upon
termination of the Executive’s employment hereunder for any reason, the
Executive shall be deemed to have resigned as director of the Company, effective
as of the date of such termination.

 

(g) The
obligations of the Company that arise under this Section 10 shall survive the
expiration or earlier termination of the Term.

 

11. Miscellaneous.

 

(f)  This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New Jersey, without giving effect to its
principles of conflicts of laws.

 

(g)  Any
dispute arising out of, or relating to, this Agreement or the breach thereof
(other than Sections 6 or 7 hereof), or regarding the interpretation thereof,
shall be finally settled by arbitration conducted in Newark, New Jersey in
accordance with the rules of the American Arbitration Association then in effect
before a single arbitrator appointed in accordance with such rules. Judgment
upon any award rendered therein may be entered and enforcement obtained thereon
in any court having jurisdiction. The arbitrator shall have authority to grant
any form of appropriate relief, whether legal or equitable in nature, including
specific performance. For the purpose of any judicial proceeding to enforce such
award or incidental to such arbitration or to compel arbitration and for
purposes of Sections 6 and 7 hereof, the parties hereby submit to the
non-exclusive jurisdiction of the Supreme Court of the State of Jersey, Newark,
or the appropriate federal court in the State of New Jersey, and agree that
service of process in such arbitration or court proceedings shall be
satisfactorily made upon it if sent by registered mail addressed to it at the
address referred to in paragraph (g) below. The costs
of such arbitration shall be borne proportionate to the finding of fault as
determined by the arbitrator. Judgment on the arbitration award may be entered
by any court of competent jurisdiction.

 

 

(h)  This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective heirs, legal representatives, successors and
assigns.

 

(i)  This
Agreement, and the Executive’s rights and obligations hereunder, may not be
assigned by the Executive. The Company may assign its rights, together with its
obligations, hereunder in connection with any sale, transfer or other
disposition of all or substantially all of its business or assets.

 

(j)  This
Agreement cannot be amended orally, or by any course of conduct or dealing, but
only by a written agreement signed by the parties hereto.

 

(k)  The
failure of either party to insist upon the strict performance of any of the
terms, conditions and provisions of this Agreement shall not be construed as a
waiver or relinquishment of future compliance therewith, and such terms,
conditions and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.

 

(l)  All
notices, requests, consents and other communications, required or permitted to
be given hereunder, shall be in writing and shall be delivered personally or by
an overnight courier service or sent by registered or certified mail, postage
prepaid, return receipt requested, to the parties at the addresses set forth on
the first page of this Agreement, and shall be deemed given when so delivered
personally or by overnight courier, or, if mailed, five days after the date of
deposit in the United States mails. Either party may designate another address,
for receipt of notices hereunder by giving notice to the other party in
accordance with this paragraph (g).

 

(m)  This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, relating to the subject matter
hereof. No representation, promise or inducement has been made by either party
that is not embodied in this Agreement, and neither party shall be bound by or
liable for any alleged representation, promise or inducement not so set
forth.

 

(n)  As used
in this Agreement, “affiliate” of a specified Person shall mean and include any
Person controlling, controlled by or under common control with the specified
Person.

 

(o)  The
section headings contained herein are for reference purposes only and shall not
in any way affect the meaning or interpretation of this Agreement.

 

(p)  This
Agreement may be executed in any number of counterparts, each of which shall
constitute an original, but all of which together shall constitute one and the
same instrument.

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

 

	 	 	 
	 	VIOQUEST
      PHARMACEUTICALS, INC. 
	 
 	 
 	 
 
		By:  	/s/ Stephen C.
      Rocamboli 
	 	
      

      Name: Stephen C. Rocamboli
	 	Title: Chairman of the
    Board

	 	 	 
	 	EXECUTIVE
	 
 	 
 	 
 
		By:  	/s/ Daniel Greenleaf
	 	
      

      Name: Daniel
      Greenleaf
	 	

 

SCHEDULE
A

Milestones
for 2005 for Daniel Greenleaf

The
Milestones and Milestone Payments described below are to be approved by the
compensation committee and ultimately subject to approval by the Board of
Directors and are intended to provide cash incentives pursuant to the terms of
this Agreement.

 

	
      Milestone
	
      Milestone
      Payments

	 	 
	
      The
      acquisition of a clinical stage compound as approved by the Board of
      Directors.
	
      Eighty-Five
      Thousand Dollars ($85,000).

	
      The
      acquisition of a second clinical stage compound as approved by the Board
      of Directors.
	
      Thirty
      Thousand Dollars ($30,000).

	
      Successful
      completion of a financing in excess of Five Million Dollars
      ($5,000,000).
	
      Forty
      Thousand Dollars ($40,000).

	
      Successful
      Completion of a second financing in excess of Five Million Dollars
      ($5,000,000).
	
      Forty
      Thousand Dollars ($40,000).

	
      List
      of the Company’s Common Stock on the American Stock Exchange, NASDAQ
      Smallcap or NASDAQ National Market
	
      Twenty-Five
      Thousand Dollars ($25,000).

	
      The
      initiation of a human clinical trial with a compound acquired by the
      Company in the United States under a Company sponsored IND
	
      Thirty
      Thousand Dollars ($30,000).

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