DWANGO NORTH AMERICA CORP. / NAPSTER, INC. LICENSING AGREEMENT
NOTE:
Confidential treatment has been requested for certain portions of this document.
Material that has been omitted from this document as filed on ▇▇▇▇▇ is marked as
follows [**].
EXHIBIT
10.38
DWANGO
NORTH AMERICA CORP. / NAPSTER, INC.
This
Licensing Agreement
(“Agreement”), is
effective as of the 23rd day of November, 2004 (“Effective
Date”) and is
entered into by and between Dwango
North America Corp., d/b/a/ Dwango Wireless (“DWANGO”), a
Nevada corporation with a principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and
Napster, LLC (“NAPSTER”), a
limited liability corporation with a principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. DWANGO and NAPSTER may be referred to in this
Agreement individually as a “Party” and together as the “Parties”.
WITNESSETH:
WHEREAS, DWANGO
has developed and/or licensed the rights to the Mobile Entertainment Service (as
defined in Section 1 of this Agreement);
WHEREAS,
NAPSTER
owns or has licensed the right to use the NAPSTER Properties (as defined in
Section 1 of this Agreement);
WHEREAS, DWANGO
wants to license certain NAPSTER Properties from NAPSTER, develop certain
documentation and other materials with NAPSTER, and incorporate those NAPSTER
Properties and Jointly Developed NAPSTER Properties into the Mobile
Entertainment Service to create the NAPSTER Mobile Entertainment Service (in
each case as defined herein); provide the delivery, support, community and
infrastructure services for the commercial exploitation of the NAPSTER Mobile
Entertainment Service; and share the revenue generated from such commercial
exploitation with NAPSTER;
WHEREAS,
NAPSTER
wants DWANGO to develop the NAPSTER Mobile Entertainment Service, the Parties
want to promote it broadly to potential wireless device users in the retail
channel, on the world wide web and via Wireless Carrier Partners (as defined
below), and NAPSTER further wants to receive a royalty from the commercial
exploitation of the NAPSTER Mobile Entertainment Service, and NAPSTER shall have
the right to exploit the Jointly Developed NAPSTER Properties in territories not
contemplated under this Agreement; and
WHEREAS, the
Parties wish to enter into an agreement whereby NAPSTER will license the NAPSTER
Properties to DWANGO, DWANGO will develop the NAPSTER Mobile Entertainment
Service, and the Parties will share the revenue generated by the NAPSTER Mobile
Entertainment Service;
NOW,
THEREFORE, in
consideration of the premises and of the mutual covenants contained herein, the
Parties hereby agree as follows:
| 1. | Definitions. As used in this Agreement, the Parties hereto agree the words set forth below shall have the meanings thereby specified: |
| 1.1. | “Brand Licensing Fee” shall mean a non-refundable sum of Three Hundred Sixty Thousand Dollars ($360,000) in the aggregate payable in cash, check or other immediately available funds according to the schedule set forth in Section 5.3. |
| 1.2. |
“Jointly
Developed NAPSTER Properties”
shall mean (i) the documentation (to be created jointly by DWANGO and
NAPSTER) related to the user-interface design and information workflow of
the NAPSTER Mobile Entertainment Service, (ii) the style guides and design
assets of the NAPSTER Mobile Entertainment Service, and (iii) the process,
documentation, design assets and workflow relating to the integration of
any NAPSTER-specific elements into the NAPSTER Mobile Entertainment
Service (e.g., as described in Section 4.1.6 below) to be created jointly
by DWANGO and NAPSTER. The Jointly Developed NAPSTER Properties do not
include any part of the Mobile Entertainment Service. To the extent
created by DWANGO, the Jointly Developed NAPSTER Properties shall be
considered “work made for hire” for NAPSTER by DWANGO within the meaning
of the United States Copyright Act. If any such properties are not deemed
“work made for hire,” they will be deemed transferred to NAPSTER. All such
Jointly Developed NAPSTER Properties shall, from the inception of
creation, be entirely the property of NAPSTER, in perpetuity, throughout
the universe, free of any claim whatsoever by DWANGO or any third
party. |
| 1.3. |
“NAPSTER
Properties”
shall mean the Jointly Developed NAPSTER Properties, the NAPSTER name, the
NAPSTER logo(s), and any other Intellectual Property Rights owned or used
by NAPSTER and/or associated with the NAPSTER brand. The NAPSTER
Properties shall include any
modifications, additions, enhancements and upgrades to the NAPSTER
Properties, but shall not include the Mobile Entertainment Service. As
between NAPSTER and DWANGO, title to and all ownership rights of, in and
to the NAPSTER Properties, and the copyrights, trademarks, patents and
other intellectual property rights related thereto, are and will remain
the property of NAPSTER, which, as between NAPSTER and DWANGO, shall have
the exclusive right to protect the same by copyright, trademark, patent or
otherwise. |
| 1.4. |
“NAPSTER
Service Launch Date”
shall mean the date that the NAPSTER Mobile Entertainment Service is first
available to customers of a Wireless Carrier Partner. The Parties intend
such date to be no later than January 31,
2005. |
| 1.5. |
“Confidential
Material”
shall mean any oral, written, graphic or machine readable information that
is clearly marked as confidential, or should reasonably be known to be
confidential, including, but not limited to, that which relates to
patents, patent applications, research, product requirements, product
plans, products, developments, inventions, processes, designs, drawings,
engineering, formulae, markets, software (including source and object
code), hardware configuration, computer programs, algorithms, business
plans, agreements with third parties, services, customers, marketing or
finances, as known and disclosed by one Party to another Party.
Confidential Material specifically includes all orally disclosed
confidential information, if such information is not public and should
reasonably be deemed in the circumstances to be the private information of
the other party, or is identified as proprietary, confidential, or private
upon disclosure. Confidential Material also includes the financial and
other material terms of this
Agreement. |
| 1.6. |
“DWANGO
Trademarks”
shall mean DWANGO®,
and all other product names, logos, trade names and trademarks owned or
used by DWANGO, including all Intellectual Property Rights contained
therein (for purposes of this definition only, the term DWANGO shall
include Dwango North America, Inc., Dwango North America, Corp., and any
subsidiary, division or other entity owned and/or controlled by ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇., ▇▇▇/▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Corp.). Title to and all
ownership rights of, in and to the DWANGO Trademarks are and will remain
the property of DWANGO, which shall have the exclusive right to protect
the same. |
2
| 1.7. |
“Intellectual
Property Rights”
shall mean all copyrights (including, without limitation, the exclusive
right to reproduce, distribute copies of, display and thereupon perform
the copyrighted work and to prepare derivative works), copyright
registrations and applications, trademark rights (including, without
limitation, registrations and applications), patent rights, including
registration and application, trade names, mask work rights, trade
secrets, moral rights, author’s rights, algorithms, rights in packaging,
goodwill and other intellectual property rights, and all divisions,
continuations, reissues, renewals and extensions thereof, regardless of
whether any such rights arise under the laws of the United States or any
other state, country or jurisdiction, and all derivative works of any
copyrighted work. |
| 1.8. |
“Mobile
Entertainment Service”
shall mean DWANGO’s service that includes, and permits users of wireless
services to browse, sample, download, play, use and purchase, the
following: ring tones; ringback
tones; alert
tones; master
recording tones; short tones; promo tones; wireless games; images;
video
clips; streaming video;
subscription services; bundled services; text-to-voice; and other like
content or services, in each case for mobile phones and other wireless
mobile devices with mobile phone functionality, through a mobile device
interface or a web interface. The
Mobile Entertainment Service includes features related to the Mobile
Entertainment Service, including the functionality to redeem a promotion
via a short code or other promotional code, through integration with a
Wireless Carrier Partner’s billing mechanism or use of an alternative
payment method. The Mobile Entertainment Service includes any
modifications, additions, enhancements and upgrades to the Mobile
Entertainment Service, but shall in no event include any NAPSTER
Properties. As between NAPSTER and DWANGO, title to and all ownership
rights of, in and to the Mobile Entertainment Service, and any
Intellectual Property Rights therein, are and will remain the property of
DWANGO, which shall have the exclusive right to protect the same by
copyright, trademark, patent or
otherwise. |
| 1.9. |
“Mobile
Entertainment Service
Revenue”
shall mean all fees that a Wireless Carrier Partner pays to DWANGO in
connection with the NAPSTER Mobile Entertainment Service less royalties
paid by DWANGO to Wireless Carrier Partners and third party copyright
owners of the products sold through the Mobile Entertainment Service. A
sample calculation of Mobile Entertainment Service Revenue for the sale of
a polyphonic ring tone through a Wireless Carrier Partner is attached
hereto as Exhibit D. |
| 1.10. |
“NAPSTER
Mobile Entertainment Service”
shall mean the Mobile Entertainment Service after incorporating any
NAPSTER Properties or any Jointly Developed NAPSTER Properties, provided
that the NAPSTER Mobile Entertainment Service shall comprise only those
parts or aspects of the Mobile Entertainment Service into which NAPSTER
Properties or the Jointly Developed NAPSTER Properties are incorporated
under this Agreement. The Parties understand that only the elements of the
Mobile Entertainment Service relating to ring tones, master recording
tones, promo tones and images will comprise the NAPSTER Mobile
Entertainment Service, unless Napster and DWANGO specifically agree
otherwise in writing. |
| 1.11. |
“NAPSTER
Premium Service”
shall mean the basic version of the NAPSTER subscription service which
currently allows unlimited streaming and tethered downloading (i.e.
downloaded files remain active throughout the subscription term but are
limited to use on the PC of the applicable subscriber of full-length
songs) (“Tethered Downloads”), and other features such as access to
NAPSTER “radio” stations, editorial and music programming, and community
elements. Additionally, subscribers may purchase songs or albums on an a
la carte basis. |
3
| 1.12. | “NAPSTER Third Party Partner” shall have the meaning given in Section 4.1.10. |
| 1.13. |
“NAPSTER
To Go Service” shall
mean the version of the NAPSTER subscription service which currently
allows the activities in the NAPSTER Premium Service as well as allowing
transfer of Tethered Downloads to certain NAPSTER To Go Service compatible
portable audio devices. |
| 1.14. |
“NAPSTER
Websites”
shall mean ▇▇▇▇▇▇▇.▇▇▇ and other websites made available by NAPSTER for
the use of NAPSTER subscribers. |
| 1.15. | “Royalty Report” shall mean the report described in Section 5.5. |
| 1.16. | “Territory” shall mean the US and Canada. |
| 1.17. | “Term” shall have the meaning set forth in Section 6.1. |
| 1.18. | “Mobile Entertainment Service Royalty” means royalties of [**] of all Mobile Entertainment Service Revenue. |
| 1.19. |
“Statement
of Work”
shall mean the statement of work attached as Exhibit
C to
this Agreement, as amended from time to time by mutual written agreement
of the Parties. |
| 1.20. |
“Wireless
Carrier Partner”
means a wireless service provider or other third party that has agreed to
offer the NAPSTER Mobile Entertainment Service to its customers at prices
agreed to by the Wireless Carrier Partner or other third party and DWANGO,
and approved by Napster. DWANGO shall make reasonable commercial efforts
to solicit each wireless service provider identified on Schedule
A to
become a Wireless Carrier Partner. NAPSTER must approve all other Wireless
Carrier Partners not identified on Schedule A in writing in
advance. |
|
1.21. |
“Top 8 Wireless Carriers” means ATT/Cingular, Verizon, T-Mobile, US Cellular, Alltel, Nextel, Boost, and Virgin Mobile. |
| 2. | License Grant. |
| 2.1. |
License
to DWANGO Trademarks.
Subject to the other provisions of this Agreement, DWANGO hereby grants to
NAPSTER, solely during the Term, a non-assignable, non-sublicensable,
non-exclusive (except as described in Section 2.3 below), royalty-free
right and license in the Territory, to use, reproduce, publish, perform
and display the DWANGO Trademarks in promotional and marketing materials,
content directories and indices, and electronic and printed advertising,
publicity, press releases, newsletters and mailings about DWANGO, DWANGO’s
relationship with NAPSTER as established by this Agreement, and the
NAPSTER Mobile Entertainment Service. Prior to each new use of any of the
DWANGO Trademarks in the manner permitted herein, NAPSTER shall submit a
sample of such proposed use to DWANGO for its prior written approval,
which may not be unreasonably withheld, conditioned or delayed; provided
that NAPSTER may make use of the DWANGO Trademarks on a going forward
basis during the Term in a substantially similar manner to those
previously approved by DWANGO. Once DWANGO has approved a particular use
of a DWANGO Trademark, the approval will remain in effect for such use
until the earlier of (i) the time such approval is withdrawn with
reasonable prior written notice or (ii) the expiration of this
Agreement. |
[**]
REQUESTED FOR CONFIDENTIAL TREATMENT
4
| 2.2. |
License
to NAPSTER Properties.
Subject to the other provisions of this Agreement, NAPSTER hereby grants
to DWANGO, solely during the Term, a non-exclusive (except as described in
Section 2.3 below) and non-sublicenseable (except as necessary for the
licensing and distribution of the NAPSTER Mobile Entertainment Service
pursuant to the terms of this Agreement) right and license within the
Territory to reproduce, publish, perform and display the NAPSTER
Properties in the NAPSTER Mobile Entertainment Service, and promotional,
instructional and marketing materials for the NAPSTER Mobile Entertainment
Service, including content directories and indices, and electronic and
printed advertising, publicity, press releases, newsletters and mailings
about the NAPSTER Mobile Entertainment Service. Prior
to each new use of any of the NAPSTER Properties in the manner permitted
herein, DWANGO shall submit a sample of such proposed use to NAPSTER for
its prior written approval, which may not be unreasonably withheld,
conditioned or delayed; provided that DWANGO may make use of the NAPSTER
Trademarks on a going forward basis during the Term in a substantially
similar manner to those previously approved by NAPSTER. Once NAPSTER has
approved a particular use of a NAPSTER Property, the approval will remain
in effect for such use until the earlier of (i) the time such approval is
withdrawn with reasonable prior written notice, and (ii) the expiration of
this Agreement. |
| 2.3. |
Exclusivity.
During the Term (the “Exclusivity Period”, except as otherwise provided
below): (a) NAPSTER
will not license, sell, or otherwise grant rights in the NAPSTER
Properties or the Jointly Developed NAPSTER Properties for use in the
Territory in connection with any service or product that includes any
component part (e.g., ring tone provision)of the NAPSTER Mobile
Entertainment Service, nor shall NAPSTER make any use in the Territory of
the NAPSTER Properties or the Jointly Developed NAPSTER Properties that
includes any component part of the NAPSTER Mobile Entertainment
Service;
and (b) DWANGO will not enter into an agreement to provide any part or
aspect of the Mobile Entertainment Service on behalf of any other
individual, entity or business unit whose primary business is providing
digital music services (other than ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and
RealNetworks/Rhapsody). Notwithstanding the foregoing, if at any point
beginning April 1, 2005 through the rest of the Exclusivity Period DWANGO
cannot secure and maintain for the NAPSTER Mobile Entertainment Service
approval for “deck” placement on at least five (5) of the Top Eight
Wireless Carriers, the Exclusivity Period shall terminate. Notwithstanding
the foregoing, the Exclusivity Period shall terminate if the NAPSTER
Service Launch Date has not occurred by April 1,
2005. |
| 3. | Ownership and Restrictions. |
| 3.1. |
Ownership
of the Mobile Entertainment Service and the DWANGO
Trademarks.
NAPSTER hereby acknowledges that as between NAPSTER and DWANGO, DWANGO
owns all right, title and interest in and to all content, products,
services, specifications, documentation, software and other materials
supplied by DWANGO, including, without limitation the Mobile Entertainment
Service, the DWANGO Trademarks and any improvements and modifications
thereto, including all Intellectual Property Rights therein, but
specifically excluding all NAPSTER
Properties. |
5
Except as
specifically and clearly set forth in this Agreement, nothing herein, nor the
exercise of any rights granted NAPSTER hereunder, conveys to NAPSTER, and
NAPSTER shall not acquire by virtue of this Agreement, any Intellectual Property
Rights or any other right or title to, or interest in, the Mobile Entertainment
Service or the DWANGO Trademarks or any part or aspect thereof (or any
derivative work). NAPSTER agrees that it shall not at any time assert or claim
any interest in, or do anything that may adversely affect the validity or
enforceability of, any Intellectual Property Rights in the Mobile Entertainment
Service and/or the DWANGO Trademarks owned by or licensed to DWANGO, other than
the NAPSTER Properties included therein.
NAPSTER
shall use each DWANGO Trademark in a manner consistent with how it is generally
used by DWANGO, and not in any manner that will disparage, embarrass or injure
the brand. Upon written notice by DWANGO, NAPSTER shall promptly remedy any
failure to comply with the previous sentence or, if such remedy is not promptly
made, cease its use of such trademark.
| 3.2. |
Ownership
of NAPSTER Properties.
DWANGO hereby acknowledges that as between NAPSTER and DWANGO, NAPSTER
owns all right, title and interest in and to all content, products,
services, specifications, documentation, software and other materials
supplied or owned by NAPSTER in accordance with the terms hereof,
including, without limitation, the NAPSTER Properties and any improvements
and modifications thereto, including all Intellectual Property Rights
therein. DWANGO shall provide NAPSTER with copies of all such materials
produced by DWANGO in connection with the Jointly Developed NAPSTER
Properties. |
Except as
specifically and clearly set forth in this Agreement, nothing herein, nor the
exercise of any rights granted DWANGO hereunder, conveys to DWANGO, and DWANGO
shall not acquire by virtue of this Agreement, any Intellectual Property Rights,
or any other right or title to, or interest in, the NAPSTER Properties or any
part or aspect thereof (or any derivative work). DWANGO agrees that it shall not
at any time assert or claim any interest in, or do anything that may adversely
affect the validity or enforceability of, any Intellectual Property Rights in
the NAPSTER Properties owned by or licensed to DWANGO.
DWANGO
shall use each NAPSTER trademark in a manner consistent with how it is generally
used by NAPSTER, and not in any manner that will disparage, embarrass or injure
the brand. Upon written notice by NAPSTER, DWANGO shall promptly remedy any
failure to comply with the previous sentence or, if such remedy is not promptly
made, cease its use of such trademark
| 4. | Services to be Performed by and Obligations of Each Party. |
| 4.1. |
Services
to be performed by and Obligations of DWANGO. Subject
to the timing, specifications and limitations set forth in the Statement
of Work, DWANGO shall: |
| 4.1.1. |
Develop,
distribute and maintain the NAPSTER Mobile Entertainment Service on WAP,
BREW™ and Java-enabled handset models and on no less than eighty percent
(80%) of the MIDP1 & MIDP2 handset models identified on Exhibit
A to
this Agreement. |
| 4.1.2. |
Maintain
the NAPSTER Mobile Entertainment Service at a quality level (i.e., with
respect to breadth of content, tone quality and current nature of content)
at least as high as the top three ring tone services then commercially
available as reasonably determined by Napster (currently Moviso, Faithwest
and Zingy). |
6
| 4.1.3. |
Develop
with NAPSTER the Jointly Developed NAPSTER
Properties. |
| 4.1.4. |
Take
all reasonable measures to ensure availability of the NAPSTER Mobile
Entertainment Service to subscribers of the NAPSTER Mobile Entertainment
Service at least ninety-nine percent (99.0%) of the time, within the
meaning of Exhibit
B to
this Agreement. |
| 4.1.5. |
Provide
infrastructure and (as further described in Exhibit
B)
customer support for the proper functioning of the NAPSTER Mobile
Entertainment Service that is at least as good as the commercially
reasonable industry standard in all respects.
|
| 4.1.6. |
Create
and implement a method for delivering advertisements or promotions into
the NAPSTER Mobile Entertainment Service which would permit the
distribution to unique handsets of unique promotional codes (both from
NAPSTER as well as NAPSTER’s third party prepaid card provider) redeemable
for trials of the NAPSTER Premium Service. |
| 4.1.7. |
At
DWANGO’s sole expense, provide at least one free ring tone per unique user
of the NAPSTER Mobile Entertainment Service at the time each such user
registers for or initiates use of the NAPSTER Mobile Entertainment
Service. |
| 4.1.8. |
Establish
rights to distribute at least 90% of the ring tones listed on the
soon-to-be-released Billboard ring tones charts and maintain catalog
licensing relationships with all five of the major music
publishers. |
| 4.1.9. |
Work
with each of NAPSTER’s pre-paid card partners identified on the Statement
of Work to develop the ability to permit users of the NAPSTER Mobile
Entertainment Service to pre-pay for products and services included in the
NAPSTER Mobile Entertainment Service. |
| 4.1.10 |
Upon
written request by NAPSTER, assist third party providers of services
similar to any services included in the NAPSTER Mobile Entertainment
Service operating outside of the Territory to integrate the Jointly
Developed NAPSTER Properties with any such third party’s services for
NAPSTER. To the extent that NAPSTER utilizes DWANGO’s services, NAPSTER
agrees to pay DWANGO at a rate of $200/hour per person. DWANGO shall not
be obligated to provide more than a total of twenty (20) hours of service
per month during the Term to satisfy its obligations under this
subparagraph; provided that DWANGO will use reasonable efforts to provide
as much assistance as NAPSTER reasonably
requests. |
| 4.1.11 |
Use
best efforts to secure and maintain for the NAPSTER Mobile Entertainment
Service approval for “deck” placement on at least four (4) of the Top
Eight Wireless Carriers. |
| 4.2. | Services to be performed by and Obligations of NAPSTER. |
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| 4.2.1. |
Promote
the NAPSTER Mobile Entertainment Service by providing constant and
prominent placements reasonably determined by NAPSTER of the NAPSTER
Mobile Entertainment Service on each of (i) the NAPSTER Websites in
territories where the NAPSTER Mobile Entertainment Service is available,
(ii) the NAPSTER Premium Service, (iii) the NAPSTER To Go Service and (iv)
any other similar service offered by NAPSTER. Prominent placement may
include, but not be limited to, the home page of ▇▇▇▇▇▇▇.▇▇▇, in the
NAPSTER “store” and via a prominent link in the NAPSTER client. For the
sake of clarity, there will be a navigable path to an area featuring the
NAPSTER Mobile Entertainment Service in each of (i) the NAPSTER Websites
in territories where the NAPSTER Mobile Entertainment Service is
available, (ii) the NAPSTER Premium Service, (iii) the NAPSTER To Go
Service and (iv) any other similar service offered by NAPSTER.
Notwithstanding
the foregoing, to the extent that any NAPSTER cobranded affiliate refuses
to allow the NAPSTER Mobile Entertainment Service to be offered through
its version of the NAPSTER Service, promotions for the NAPSTER Mobile
Entertainment Service will not be included in such version.
|
The
Parties shall work together in good faith to determine the exact descriptive
elements of the placements, and to optimize the exposure of the NAPSTER Mobile
Entertainment Service over the course of the Term. NAPSTER will be wholly
responsible for providing all creative elements, and shall present each newly
designed promotion to DWANGO for comment and review prior to its public use
(provided that substantially similar promotions will be deemed to be approved).
Notwithstanding the foregoing, NAPSTER shall maintain final editorial control
over the look and feel of the promotional placements.
| 4.2.2. |
During
the Term, NAPSTER shall from time to time send emails promoting DWANGO
and the
NAPSTER Mobile Entertainment Service to all users of NAPSTER’s services
who have opted in for such emails. NAPSTER will be responsible for the
creation of such emails, the design of which shall be subject to review
and approval of DWANGO (not to be unreasonably withheld); provided that
substantially similar emails will be deemed to be approved. Emails
promoting the NAPSTER Mobile Entertainment Service shall be delivered to
eligible users of NAPSTER’s services no fewer than four (4) times during
each calendar quarter during the Term. |
| 4.2.3. |
NAPSTER
shall use reasonable efforts to assist DWANGO in its efforts to maintain
and develop relationships with current or potential Wireless Carrier
Partners, including through, upon reasonable request by DWANGO, occasional
direct communications by senior executives of NAPSTER to current and
potential Wireless Carrier Partners promoting DWANGO and the NAPSTER
Mobile Entertainment Service to such Wireless Carrier
Partners. |
| 5. | Royalties; Advertising Fees; Reports; Audits. |
| 5.1. |
Royalty.
In
consideration for the license of the NAPSTER Properties and the
performance by NAPSTER of all of its obligations under this Agreement,
DWANGO shall pay NAPSTER the Mobile Entertainment Service Royalty and the
Brand License Fee. |
| 5.2. |
NAPSTER
Royalty Payments.
DWANGO shall pay the Mobile Entertainment Service Royalties no later than
thirty (30) days subsequent to the end of each calendar month during the
Term in which such Mobile Entertainment Service Royalties
accrue. |
8
| 5.3. |
Brand
License Fee.
DWANGO shall pay NAPSTER the aggregate Brand License Fee in twelve (12)
equal installments. The initial payment of Thirty Thousand Dollars
($30,000) shall be made on the one-month anniversary of the NAPSTER
Service Launch Date, and all subsequent payments of Thirty Thousand
Dollars ($30,000) shall be made on the one-month anniversary of the prior
payment date, until a total of twelve (12) such payments are made. If a
payment
date is a weekend or a holiday, payment shall be made on the next business
day. |
| 5.4. |
Sponsorship
Commitment:
DWANGO
will pay NAPSTER an aggregate amount equal to two hundred thousand dollars
($200,000) to be applied toward sponsorship of certain events jointly
approved by DWANGO and NAPSTER during the Term. The amounts paid by DWANGO
pursuant to this Section 5.4 will be used to promote the NAPSTER Mobile
Entertainment Service. DWANGO shall only be obligated to make payments
pursuant to this Section 5.4 after DWANGO and NAPSTER have jointly agreed
upon (i) an event or events to jointly promote and (ii) a plan of
promotion. |
| 5.5. |
Royalty
Reports.
During the entire Term and for not less than two (2) years following the
termination or expiration of this Agreement, DWANGO shall maintain copies
of all documents, including those delivered to it by the Wireless Carrier
Partners that are necessary to calculate the Mobile Entertainment Service
Revenue and the Mobile Entertainment Service Royalty. DWANGO shall be
responsible for preparation and delivery of “Royalty Reports” detailing
the amount of Mobile Entertainment Service Royalty due for the applicable
period, which shall be due within thirty (30) days subsequent to the end
of each calendar month during the Term, together with the Mobile
Entertainment Service Royalty payment due for such period. Without
limiting the foregoing obligation, such reports shall also include all
information reasonably necessary for computation and confirmation of the
Mobile Entertainment Service Royalties, if any, for such monthly period.
|
| 5.6. |
Audits. In
connection with the obligations undertaken by DWANGO hereunder to prepare
and deliver the Royalty Reports and related payments and to preserve the
records related thereto, an accountant experienced in audits designated by
NAPSTER may inspect the records on which such reports are based no more
than twice per calendar year (and once within 180 days after the last
royalty statement provided hereunder is received by NAPSTER). Upon ten
(10) days prior written notice by NAPSTER, DWANGO will provide such
accountant with access to the books and records relating to such Royalty
Reports, at DWANGO’s facilities during normal business hours. NAPSTER
shall be obligated to pay the fees and expenses of the accountant;
provided that DWANGO shall be obligated to pay such fees and expenses if
the accountant determines that DWANGO prepared such report incorrectly
resulting in underpayment of the NAPSTER Royalties by more than five
percent (5%) for the period being audited. DWANGO shall immediately pay
any such underpayments to NAPSTER. |
| 6. | Term and Termination. |
| 6.1. |
Term.
The
term of this Agreement and the licenses granted herein shall begin on the
Effective Date of this Agreement and shall expire on the date one (1)
calendar year from the NAPSTER Service Launch Date (the “Term”).
Thereafter, this Agreement will be automatically renewed for additional
periods of one (l) year each unless either party shall have given the
other party written notice of termination of this Agreement at least sixty
(60) calendar days prior to the expiration date.
|
9
| 6.2. |
Termination
for Cause. Either
party may immediately terminate this Agreement prior to the expiration of
the Term in the event that the other party (i) files in any court or
agency a petition in bankruptcy or insolvency, (ii) is served with an
involuntary petition against it that is filed in any insolvency
proceeding, and such petition is not dismissed within sixty (60) days
after the filing thereof, (iii) makes an assignment for the benefit of
creditors, and (iv) breaches any material representation, obligation or
covenant contained herein, unless such breach is cured no later than
thirty (30) days from the date of receipt of notice of such breach, or if
by the nature of the breach it is not able to be so cured, it is resolved
to the non-breaching party’s satisfaction. |
| 7. | Confidentiality Agreement. |
| 7.1. |
Confidentiality
Obligations. Each
of the Parties hereby acknowledges that all Confidential Material of the
other Party constitutes trade secrets of the other Party and must be kept
confidential. Each Party acknowledges the unique and proprietary nature of
the Confidential Material of the other Party. Each Party hereby agrees and
acknowledges that it makes no present claim, nor will it make any future
claim whatsoever, to the other Party’s Confidential Material. In addition,
the Parties agree that no Party shall disclose the Confidential Material,
or any part thereof, to any person or entity without the prior written
consent of the other Party; and each Party shall treat the Confidential
Material as confidential and proprietary information of the other Party
and the Confidential Material of the other as valuable business and
property rights. Notwithstanding anything to the contrary herein, the
representations and obligations of the Parties contained within this
paragraph 7 shall survive any termination or expiration of this Agreement.
For purposes of Section 7 of this Agreement, “Party” shall include the
directors, officers, employees, consultants, agents, successors and
predecessors of such Party. Each Party agrees to only disclose
Confidential Materials to those officers, directors, and employees who
need access to the Confidential Materials in order so that the Party may
perform its obligations under this Agreement and to require such persons
to comply with terms of this Agreement. |
| 7.2. |
Exceptions
to Confidentiality Obligations.
The obligations of this paragraph 7 shall not apply to any Confidential
Material which (a) is or becomes available to the public through no breach
of this Agreement; (b) is independently developed by a Party without the
use of Confidential Material of the other Party; (c) is approved for
release by written authorization of the disclosing Party, but only to the
extent of and subject to such conditions as may be imposed in such written
authorization; (d) is rightfully received by a Party from a third party
whom such Party has reasonable grounds to believe is authorized to make
such disclosure without restriction; (e) is required by law or regulation
to be disclosed, but only to the extent and for the purposes of such
required disclosure; or (f) is disclosed in response to a valid order of a
court or other governmental body of the United States or any political
subdivisions thereof, but only to the extent of and for the purposes of
such order; provided, however, that the Party receiving the Confidential
Material shall first notify the disclosing Party hereto of the order and
permit the disclosing Party to seek an appropriate protective
order. |
| 8. | Proprietary Rights Warranty and Indemnification. |
10
| 8.1. |
Representations
and Warranties.
|
| 8.1.1. |
NAPSTER
hereby represents and warrants that: |
| (a) |
NAPSTER
either owns or has licensed, and will own or have a license to throughout
the Term, all Intellectual Property Rights required to grant the licenses
that NAPSTER has granted under this
Agreement. |
| (b) |
NAPSTER
either owns or has licensed, and will continue to own or have licensed
throughout the Term, all Intellectual Property Rights and other rights
required to reproduce, distribute, and market the NAPSTER Properties (but
specifically excluding the Mobile Entertainment Service), and including
all modifications, versions and additions thereto made or provided by
NAPSTER throughout the Term; and |
| (c) |
Distribution,
reproduction, promotion, and marketing of the NAPSTER Properties in
accordance with the terms of this Agreement will not infringe on any third
party’s rights, including, without limitation, any rights of copyright,
trademark, patent, unfair competition, defamation, publicity or
privacy. |
| 8.1.2. |
DWANGO
hereby represents and warrants that: |
(a)
DWANGO either owns or has licensed, and will own or have a license to throughout
the Term, all Intellectual Property Rights required to grant the licenses that
DWANGO has granted under this Agreement;
(b)
DWANGO either owns or has licensed, and will continue to own or have licensed
throughout the Term, all Intellectual Property Rights and other rights required
to develop, reproduce, distribute, and market the Mobile Entertainment Service,
including all music, images, photos, text, logos, and other content (but
specifically excluding the NAPSTER Properties) and all technology incorporated
therein and used in connection therewith; and
(c) Distribution,
reproduction, development, promotion, marketing of and support for the Mobile
Entertainment Service in accordance with the terms of this Agreement will not
infringe on any third party’s rights, including, without limitation, any rights
of copyright, trademark, patent, unfair competition, defamation, publicity or
privacy.
(d) The
Jointly Developed NAPSTER Properties will belong to NAPSTER without any third
party interest and will not infringe the rights (including without limitation
contractual rights and Intellectual Property Rights) of any third
party.
| 8.2. |
Indemnification.
Each Party hereby agrees to, and shall, indemnify, defend and hold
harmless the other Party and its directors, officers, agents and employee
for damages, liabilities, costs and expenses resulting from any and all
legal actions and threats of legal actions brought against the other Party
by a third party (i) charging or alleging that the Intellectual Property
Rights of such indemnifying Party infringe the patent, copyright,
trademark or other Intellectual Property Rights of such third party, and
(ii) arising from a breach or alleged breach of any representation or
warranty made by the indemnifying party of Sections 8 or 9 of this
Agreement. The parties agree to (i) prompt written notification from
the Party seeking indemnification to the indemnifying Party of the claim
for which indemnity is sought; (ii) sole control by the indemnifying
Party of the defense of any action and all negotiations for settlement and
compromise; and (iii) cooperation and assistance from the Party
seeking indemnification, including reasonable disclosure of information
and authority necessary to perform the above. The indemnified Party shall
be responsible for the costs and fees of its own counsel if it desires to
have separate legal representation in any such action. Neither Party has
any obligations to indemnify the other Party for any claims not covered by
this Section 8.2. |
11
| 9. |
General
Warranties. Each
Party hereby warrants and represents that it has full legal rights and
authority to enter into this Agreement and to perform all of its
obligations hereunder, and that by entering into this Agreement or
performing its obligations hereunder, it is not in default or breach of
any contract or agreement with any third party and it is not violating or
infringing upon the rights of any third party. Each Party represents and
warrants that it is not prohibited nor in any manner otherwise restricted,
by any law, regulation or administrative or judicial order of the United
States from entering into this Agreement or carrying out its provisions or
the transactions contemplated
thereby. |
| 10. |
DISCLAIMER.
EXCEPT FOR THE EXPRESS WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES, EXPRESS OR IMPLIED OR
ARISING BY CUSTOM OR TRADE USAGE. EACH PARTY EXPRESSLY DISCLAIMS ALL OTHER
WARRANTIES AND REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTIBILITY AND FITNESS
FOR A PARTICULAR PURPOSE. |
| 11. |
LIMITATION
ON LIABILITY. EXCEPT
AS OTHERWISE PROVIDED IN THIS AGREEMENT, NO PARTY SHALL BE LIABLE TO
ANOTHER PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES, INCLUDING WITHOUT LIMITATION, LOSS OF REVENUES, LOSS OF PROFITS,
OR COST OF PROCUREMENT OF SUBSTITUTE TECHNOLOGY, EVEN IF THAT PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. |
| 12. |
Choice
of Law and Venue. This
Agreement shall be governed, construed and enforced in accordance with the
laws of the State of California, and applicable federal law. The parties
consent to the exclusive jurisdiction of the local, state and federal
courts located in Los Angeles County
California. |
| 13. |
Severability.
Whenever
possible, each provision of this Agreement shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under
applicable law, such provisions shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this
Agreement. |
| 14. |
Press
Releases and Public Statements.
Neither party will issue any public statement about this Agreement without
the prior written approval of the other Party (which approval shall not be
unreasonably withheld or delayed). Notwithstanding
the foregoing, each party shall be entitled to use the name of the other
Party as well as previously disclosed terms of this Agreement in
connection with public statements issued
thereafter. |
12
| 15. |
Delivery
of Notices and Payments. Unless
otherwise directed in writing by the parties, all notices given hereunder
shall be sent via Federal Express or another equivalent express delivery
service, or by facsimile with confirmation of transmission, to the name
and addresses set forth on the signature page of this Agreement. All
notices, requests, consents and other communications under this Agreement
shall be in writing and shall be deemed to have been delivered on the day
after the date sent via facsimile or two days after the date sent via
Federal Express or other equivalent express delivery service via overnight
delivery. |
| 16. |
Entire
Agreement. This
Agreement constitutes the entire understanding between the Parties
regarding the subject matter hereof. No modification or change in this
Agreement shall be valid or binding upon the Parties unless in writing,
executed by the parties to be bound
thereby. |
| 17. |
Assignability.
No
rights or interest arising under this Agreement may be transferred or
assigned by any Party without the prior written consent of the other
Party; provided that either Party may assign this Agreement in whole or
part without consent to any entity controlling, controlled by or under
common control with such Party, or to any entity that acquires such Party
by purchase of stock or by merger or otherwise, or by obtaining
substantially all of the assets of such Party’s applicable business
unit. |
| 18. |
Not
a Partnership. This
Agreement does not constitute and shall not be construed as constituting a
partnership or joint venture among the Parties hereto, or an
employee-employer relationship. No Party shall have any right to obligate
or bind any other Party in any manner whatsoever, and nothing herein
contained shall give, or is intended to give, any rights of any kind to
any third persons. |
| 19. |
Counterparts.
This
Agreement may be executed in several counterparts, each of which will be
deemed to be an original, and each of which alone and all of which
together, shall constitute one and the same instrument, but in making
proof of this Agreement it shall not be necessary to produce or account
for each copy of any counterpart other than the counterpart signed by the
Party against whom this Agreement is to be enforced. This Agreement may be
transmitted by facsimile, and it is the intent of the parties for the
facsimile of any autograph printed by a receiving facsimile machine to be
an original signature and for the facsimile and any complete photocopy of
the Agreement to be deemed an original
counterpart. |
| 20. |
Captions.
All
captions in this Agreement are intended solely for the convenience of the
Parties, and none shall affect the meaning or construction of any
provision. |
| 21. |
Survival
of Agreement. Upon
termination or expiration of this Agreement for any reason, the following
provisions of this Agreement shall survive: Sections 1, 3, 7, 8.2 and 10
through 21. |
[signature
page follows]
13
IN
WITNESS WHEREOF, the
parties have executed this Agreement on the date first set forth above.
| DWANGO NORTH AMERICA CORP. | |
| By: | /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
| ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President/COO ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |
| NAPSTER, INC. | |
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Operating
Officer ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |
Exhibit
A
| Carriers with US Headquarters | |
| AT&T /Cingular | (WEB) (WAP) (Initial Launch WEB/WAP deck placement target) |
| Nextel | (WEB) (WAP) (Initial Launch WEB/WAP deck placement target) |
| Boost Mobile | (WEB) (WAP) (Initial Launch WEB/WAP deck placement target) |
| T-Mobile | WEB) (Initial Launch) |
| Verizon | (BREW) (WAP 2.0) (Future - Pending new marketing program release) |
| USCellular | (BREW) (BREW deck placement target pending release of DWANGO BREW 2.0 Service) |
| Alltel |
(BREW)
(BREW deck placement target pending release of DWANGO BREW 2.0
Service) |
| Virgin Mobile |
(WEB)
(WAP)
(Future - tentatively slated for late Q1 2005) |
|
Handset
Target List |
|
| AT&T /Cingular | All high volume handsets, midp2, featured handsets |
| Nextel | All available handsets |
| Boost Mobile |
All
available handsets |
| T-Mobile |
All
high volume handsets, midp2, featured handsets |
| Verizon | All high volume handsets, midp2, featured handsets |
| USCellular | All high volume handsets, midp2, featured handsets |
| Alltel | All high volume handsets, midp2, featured handsets |
| Virgin Mobile |
All
high volume handsets, midp2, featured handsets |
|
Carriers
with Canadian Headquarters |
|
| Rogers | (WEB) (WAP) (Subsequent Launch date TBD - WEB/WAP deck) |
| FIDO |
(WEB)
(WAP) (Subsequent Launch date TBD - WEB/WAP deck) |
| Telus |
(WEB
only) (Subsequent Launch date TBD - WEB/WAP deck) |
| ▇▇▇▇ Canada |
(WEB
only) (Subsequent Launch date TBD - WEB/WAP deck) |
|
Handset
Target List |
|
| Rogers | All high volume handsets, midp2, featured handsets |
| FIDO |
All
high volume handsets, midp2, featured handsets |
| Telus | All high volume handsets, midp2, featured handsets |
| ▇▇▇▇ Canada | All high volume handsets, midp2, featured handsets |
Exhibit
B
AVAILABILITY
/ HOSTING SERVICE LEVEL/CUSTOMER SUPPORT
| 1. | Operational Issues. |
In case
operational issues arise which require the assistance of the other Party to be
resolved, each Party may contact the other Party and each Party commits to a
joint resolution of the issue. Both Parties shall provide and maintain a phone
number, which phone number is set forth in the table below, and which shall be
answered by technical skilled personnel during the business hours which are set
forth in the table below. In the event that DWANGO’s operations center does not
operate 24 hours each day, 7 days a week, DWANGO shall link the phone number
provided below to a pager and shall return NAPSTER’s call(s) no later than 15
minutes after the time the pager message was left by NAPSTER during all hours
outside of the business hours as set forth below for DWANGO. The contact
information below for operational issues is intended solely for communication
between NAPSTER and DWANGO and shall not be provided to third parties. Each
Party shall notify the other Party of any changes to the operations contact
information provided in the operations contact table below ten (10) business
days before such change becomes effective.
| 2. | Network Availability. |
The
NAPSTER Mobile Entertainment Service shall be available to NAPSTER users a
minimum of 99 % of the time during any 24 hour period, 7 day period, and 30 day
period. Calculation of this availability shall exclude Maintenance Outages but
shall include Unplanned Outages and Emergency Maintenance Outages. Upon
NAPSTER’s request, DWANGO shall provide NAPSTER with a report showing service
availability.
| 3. | Maintenance/Planned Outages. |
DWANGO
shall perform any work which requires the unavailability of the NAPSTER Mobile
Entertainment Service (“Maintenance Outage”) between 11:00 PM and 5:00 AM
Pacific Standard Time (the “Maintenance Window”). DWANGO will notify NAPSTER at
least seven days in advance of any planned Maintenance Outage. No more than
eight hours of Maintenance Outages per month may occur.
In the
event the time required to perform such work will unexpectedly exceed the
Maintenance Window DWANGO shall notify NAPSTER at the telephone number set forth
below forty-five (45) minutes before the end of the Maintenance Window, and such
unavailability shall be considered an Unplanned Outage or Emergency Maintenance
Outage.
DWANGO
shall notify NAPSTER at the telephone number set forth below of any material
impairment of the NAPSTER Mobile Entertainment Service (an “Unplanned Outage”)
within thirty (30) minutes after such Unplanned Outage commences. DWANGO shall
provide a short description of the impairment causing the Unplanned Outage (e.g.
service affected, extent of impairment) and a status for resolution.
DWANGO
shall notify NAPSTER at the telephone number set forth below of any required
maintenance beyond Maintenance Outages (“Emergency Maintenance”) forty-five (45)
minutes prior to the start of the Emergency Maintenance. DWANGO shall provide an
estimated timeframe for resolution and a status of such Emergency Maintenance
every two (2) hours until resolved.
| b. | NAPSTER and DWANGO Operations Center Contact Information. |
|
Party |
|
Phone
Numbers for
NAPSTER
and DWANGO to Use |
|
Hours
of Operation |
|
NAPSTER
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ |
Phone
number: ▇-▇▇▇-▇▇▇-▇▇▇▇ |
M -
F 8am to 6pm PST; S -S 8am to 5pm PST
Alternative/After
hours: Email ▇▇▇▇▇▇▇▇@
▇▇▇▇▇▇▇.▇▇▇ | ||
|
DWANGO |
Phone
number: (▇▇▇) ▇▇▇-▇▇▇▇ - menu for service |
Business
Hours: M-S 8am-6pm PST. After hours: The phone number is linked to a
mobile “Hot” Phone. DWANGO commits to immediate
response. |
| 4. | Customer Support. |
The
DWANGO Support Group resides on-site in Seattle, Washington and supports all
customer inquiries related to applications and content. The typical*
customer support process begins with a call from the customer to the Wireless
Carrier Partner, which acts as the Tier 1 support
agent. If the Wireless Carrier Partner is unable to resolve the issue, it is
forwarded to the DWANGO Support Group (Tier 2
and
Tier
3).
Tier
1 (Wireless Carrier Partner): Customer's
initial contact with the Wireless Carrier Partner and information
gathering. If the support issue is not a quick resolution and is unrelated
to the Wireless Carrier Partner’s network, it is forwarded to Tier
2.
Tier
2 (DWANGO): The
support issue is logged into DWANGO's support tracking system and the customer
is contacted for further review. If the issue is not known and resolvable,
it is forwarded to Tier
3 for
further evaluation and triage. The customer automatically receives a
full refund or replacement, provided they are not identified as abusing DWANGO’S
goodwill. Tier 2 customer support will be offered by Dwango via telephone from 7
AM to 6 PM PST on normal business days (i.e. excluding weekends and holidays).
Tier 2 customer support during all hours other than the hours identified in the
prior sentence will be available through a dedicated email address and pager
number
Tier
3 (DWANGO): The
product issue is logged in DWANGO’S issue tracking software and
assigned to the appropriate Development team for resolution. When
a cause is discovered, it is either fixed or declared a known issue and
communicated to the Tier
2 team for
future identification.
*
Sometimes the customer will contact Tier
2
directly, at which point the Dwango Support Group will evaluate whether it is a
Wireless Carrier Partner or Dwango related problem and address it
accordingly.
Exhibit
C
STATEMENT
OF WORK
The
items listed below define the objectives for the Services:
| 1. |
Napster
branded WAP sales channel for Polyphonic Ringtones, Audio Tones &
Images: |
AWS,
Cingular, Nextel, Boost, T-Mobile
Estimated
Launch Date: Jan
28th
Features:
| 1.1. |
Polyphonic
Ringtone Sales |
| 1.2. |
Audio
Tone Sales |
| 1.3. |
Image
Sales |
| 1.4. |
Featured
Tone |
| 1.5. |
Featured
Image |
| 1.6. |
Catalog
Browsing |
| 1.7. |
Catalog
Search |
| 1.8. |
Promo
Code Redemption (See section 4) |
| 1.9. |
Promo
Code Distribution (See section 4) |
| 1.10. |
Minimum
Supported Handsets - Subject to Change Based on Carrier Handset
Roadmaps |
|
LG
4015 |
|
LG
1150 |
|
Motorola
t720 |
|
Motorola
t721 |
|
Motorola
V600 |
|
NEC
515 |
|
NEC
525 |
|
Siemens
S56 |
|
Siemens
SL56 |
|
Siemens
M56 |
|
Siemens
C61 |
|
Samsung
x426 |
|
Samsung
e316 |
|
Sony
Ericsson T226 |
|
Sony
Ericsson T616 |
|
Sony
Ericsson T306 |
|
Sony
Ericsson T637 |
|
Nokia
3100 |
|
Nokia
3200 |
|
Nokia
3300 |
|
Nokia
3595 |
|
Nokia
3650 |
|
Nokia
6200 |
|
Nokia
6200IM |
|
Nokia
6800 |
|
Nokia
7210 |
|
Nokia
3595IM |
|
Nokia
6820 |
|
Nokia
3590 |
|
Nokia
3620 |
|
Motorola
V180 |
|
Motorola
V505 |
|
Siemens
C56 |
|
Siemens
C61 |
|
Sony
Ericsson Z500a |
|
Nokia
6620 |
|
Motorola
V220 |
|
LG
4020 |
|
Nokia
3120 |
|
Nokia
6010 |
| 2. |
Napster
branded Web sales channel for Polyphonic Ringtones, Audio Tones &
Images: |
AWS,
Cingular, Nextel, Boost, T-Mobile
Estimated
Launch Date Jan 28th
Features:
| 2.1 |
Polyphonic
Ringtone Sales |
| 2.2 |
Audio
Tone Sales |
| 2.3 |
Image
Sales |
| 2.4 |
Catalog
Browsing |
| 2.5 |
Catalog
Search |
| 2.6 |
Promo
Code Redemption (See section 4) |
| 2.7 |
Promo
Code Distribution (See section 4) |
| 2.8 |
Content
Updated Weekly |
| 2.9 |
Minimum
Supported Handsets - Subject to Change Based on Carrier Handset
Roadmaps |
|
LG
4015 |
|
LG
1150 |
|
Motorola
t720 |
|
Motorola
t721 |
|
Motorola
V600 |
|
NEC
515 |
|
NEC
525 |
|
Siemens
S56 |
|
Siemens
SL56 |
|
Siemens
M56 |
|
Siemens
C61 |
|
Samsung
x426 |
|
Samsung
e316 |
|
Sony
Ericsson T226 |
|
Sony
Ericsson T616 |
|
Sony
Ericsson T306 |
|
Sony
Ericsson T637 |
|
Nokia
3100 |
|
Nokia
3200 |
|
Nokia
3300 |
|
Nokia
3595 |
|
Nokia
3650 |
|
Nokia
6200 |
|
Nokia
6200IM |
|
Nokia
6800 |
|
Nokia
7210 |
|
Nokia
3595IM |
|
Nokia
6820 |
|
Nokia
3590 |
|
Nokia
3620 |
|
Motorola
V180 |
|
Motorola
V505 |
|
Siemens
C56 |
|
Siemens
C61 |
|
Sony
Ericsson Z500a |
|
Nokia
6620 |
|
Motorola
V220 |
|
LG
4020 |
|
Nokia
3120 |
|
Nokia
6010 |
| 3. | Napster branded Next-Generation BREW Client: NSTL - March 2005 |
|
US Cellular |
NSTL
Submission March ‘05 |
|
Alltel |
NSTL Submission March ‘05 |
Features:
| 3.1 |
Polyphonic
Ringtone Sales |
| 3.2 |
Audio
Tone Sales |
| 3.3 |
Image
Sales |
| 3.4 |
Featured
Tone |
| 3.5 |
Featured
Image |
| 3.6 |
Ringtone
Preview |
| 3.7 |
Catalog
Browsing |
| 3.8 |
Catalog
Search |
| 3.9 |
Content
Updated Weekly |
| 3.10 |
Promo
Code Distribution (See Section 4) |
| 3.11 |
Promo
Code Redemption (See Section 4) |
| 3.12 |
Supported
Handsets - TBD |
| 4. |
Support
for Promotional
Codes
January
28, 2005 |
Features:
| 4.1 | Dwango will distribute promotional codes for Napster-provided content via SMS, using a list of generated codes from Napster. |
| 4.2 | Napster will distribute promotional codes for Dwango-provided content using a list of generated codes from Dwango, which Dwango provide redemption to. |
| 5. |
System
Sustainment |
| 5.1 | Content Updated Weekly per Napster’s specification and/or approval. |
| 5.1.1 | New Content Published into System |
| 5.1.2 | Major List Content Rotation |
| 5.1.3 | Featured Tones Rotation |
| 5.2 | New handsets added monthly (WAP/WEB) |
| 5.2.1 | Handsets On-boarded for Polyphonics |
| 5.2.2 | Handsets On-boarded for Audiotones |
| 5.2.3 | Handsets On-boarded for Images |
| 5.3 | New handsets added for BREW regularly. |
The
following items will be delivered during the course of the project by the party
identified below. In the event that NAPSTER does not deliver the UI Design by
the below date, each of the subsequent item dates will be adjusted outward by
the corresponding number of business days.:
| · |
UI
Design and Documentation (NAPSTER) November
29, 2004 |
| · |
Product
Requirements Document
(DWANGO) December
3, 2004 |
| · |
Recognized
Change Request Protocol (DWANGO) December
8, 2004 |
| · |
Project
Plan
(DWANGO) December
8, 2004 |
The
Project Plan (which will set forth timelines for completion of all projects
contemplated herein), Product Requirements Document and Recognized Change
Request Protocol will be delivered by DWANGO to NAPSTER and shall each be
subject to NAPSTER’s approval, which approval shall not be unreasonably
withheld, conditioned or delayed. Dwango
will use best efforts to complete the deliverables in accordance with the above
schedule. Other
than as specifically provided in the Agreement, no payment will be required by
either party for the work contemplated herein or in any of the documents
referenced herein.
Additional
Statement of Work For Creation of Additional Functionality
Dwango
will provide Statements of Work for the development of the following
functionality no later than January
17, 2005,
provided that design discussion occurs between Napster and Dwango engineers a
minimum of five business days in advance (January 10, 2005). Napster will have
the right to approve such additional SOWs, such approvals not to be unreasonably
withheld, conditioned or delayed.
| · |
Integration
with Napster Prepaid Card Solution
(FastCard) |
| · |
Creation
of Napster Branded PremiumSMS and SMSSales/Marketing
Channel |
| · |
Creation
of a J2ME Content Browser |
| · |
Support
of First Time Purchase Reward Programs |
A joint
DWANGO/NAPSTER status call will occur weekly during the Term and as needed to
discuss other initiatives. DWANGO will continue to hold internal release board
meetings to control and manage change related to all DWANGO/NAPSTER
projects.
Each
party understands and acknowledges that, while best efforts will be made to
comply with the schedules set forth in this Statement of Work, maintenance of
these schedules will require the cooperation and assistance of both parties,
including each party having sufficient and timely access to the other party’s
technical resources wherever joint or parallel development must
occur.
EXHIBIT
D
Ringtone
Sample Sale
|
Ringtone
Retail Price |
$ |
1.99 |
||
|
Average
Payment to Carrier Partner |
|
[**] |
||
|
Payment
Received by Dwango from Wireless Carrier Partner |
|
[**] |
||
|
Payment
From Dwango to third party copyright owners (e.g. publishers &
ASCAP) |
|
[**] |
||
|
Mobile
Entertainment Service Revenue (as defined in Section 1.9) |
|
[**] |
||
|
Royalty
to Napster |
|
[**] |
||
|
Dwango
Proceeds |
|
[**] |
[**]
REQUESTED FOR CONFIDENTIAL TREATMENT