WIRELESS DISTRIBUTION AGREEMENT

Exhibit 10.4

WIRELESS DISTRIBUTION AGREEMENT

THIS LICENSE FOR WIRELESS DISTRIBUTION (“ Agreement ”) is entered into as of March 6, 2006 (the “ Effective Date ”) by and between:

and

WHEREAS, Licensor is the owner or licensee of all right, title and interest in and to certain content and Licensor seeks to license such content to BVIG on the terms set out hereunder to allow BVIG to create and distribute wireless products and services using the content;

WHEREAS, BVIG desires to license Licensor’s content to create and distribute wireless products and services that incorporate the content;

NOW, THEREFORE, in consideration of the reciprocal promises, conditions, covenants, and undertakings set out in the Agreement, Licensor and BVIG agree as follows:

Terms not defined above have the meanings indicated in the attached Wireless Distribution Terms and Conditions, which are incorporated into this Agreement. By signing below, both Licensor and BVIG accept and agree to this Agreement, including the attached Terms and Conditions.

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Exclusive Wireless License Terms and Conditions (Short Form)

Wireless Distribution Terms and Conditions

1.1      “ Approved Handsets ” means the Handsets listed on Exhibit A hereto, as such list may be updated from time to time by mutual written agreement of Licensor and BVIG in accordance with Section 6.6.

1.2      “ Carrier ” means a provider of wireless telecommunications services.

1.3      “ Disney Affiliate ” means The Walt Disney Company (“ Disney ”) and any entity directly or indirectly controlling or controlled by or in common control with Disney, where “control” is defined as the ownership of at least 50% of the equity or beneficial interests of such entity or the right to vote for or appoint a majority of the board of directors or other governing body of such entity, and any other entity with respect to which Disney or any of such Disney Affiliates has management or operational control (even though Disney or such Disney Affiliate may own less than 50% of the equity of such entity).

1.4      “ Handsets ” means handheld wireless mobile devices that enable end users to view and browse Licensed Content.

1.5       “Intellectual Property Rights” means all intellectual property rights throughout the universe, whether existing under intellectual property, unfair competition or trade secret laws, or under statute or at common law or equity, including but not limited to: (i) copyrights, trade secrets, trademarks, trade names, patents, rights in inventions, rights in designs, rights in logos and trade dress, “moral rights,” rights in mask works, rights of personality, publicity or privacy, and any other intellectual property and proprietary rights; (ii) any application or right to apply for, preserve, protect or secure any of the rights referred to in this clause; and (iii) any and all renewals, extensions and restorations thereof, now or hereafter in force and effect.

1.6       “Licensed Content ” means the Licensor product identified in the cover page of this Agreement, including any and all Materials licensed by Licensor to BVIG in connection with that product, including for the avoidance of doubt, all versions of Volume 1 of the Licensed Content created for Wireless Distribution in the Territory (for example, v1.0, v2.0, v3.0, and any other future versions of Volume 1 of the Licensed Content created for Wireless Distribution in the Territory).

1.7      “ Licensor Affiliate ” means any entity directly or indirectly controlling or controlled by or in common control with Licensor, where “control” is defined as the ownership of at least 50% of the equity or beneficial interests of such entity or the right to vote for or appoint a majority of the board of directors or other governing body of such entity, and any other entity with respect to which Licensor or any of such Licensor Affiliates has management or operational control (even though Licensor or such Licensor Affiliate may own less than 50% of the equity of such entity).

1.8       “Materials” means audio and audiovisual material, text, designs, graphics, musical compositions, photos, symbols, films, photographs, artwork, sound recordings, games, web pages, stories, interactive chats and conferences, and any combinations of the foregoing, and compilations of data and other materials. Without limiting the foregoing, such Materials shall include all necessary data and content described as Licensed Content on the cover page of this Agreement.

1.9       “Net Cumulative End User Fees ” means the monies actually collected by BVIG from revenue directly attributable to the Wireless Distribution of the Applications or Licensed Content in the Territory (“ Gross ”) less (a) third party out of pocket distribution fees and commissions, for example a portion or share due and payable to a Carrier and/or other distributors; (b) sales, value added, use and similar taxes, tariffs, duties or assessments (excluding corporate income tax); (c) credit card or similar fees charged for the transactions with end users who obtain Applications; (d) solely as approved in writing by Licensor prior to their occurence, any fees, royalties and other charges payable by BVIG to third parties for services directly related to the Applications (including development, programming changes, repairs, porting, and testing), provided that BVIG shall not be required to obtain Licensor’s approval for any such services for which the fee amount is not material; (e) credits, bill reconciliations, discounts, promotions, rebates or similar transactions; and (f) relevant music collection society royalty payments payable in the Territory, whether by BVIG or a third-party distributor, with respect to the Wireless Distribution of the Applications (provided that BVIG informs Licensor that such music colleciton society royalty payments have been made). The same amounts may not be deducted from Gross more than once, whether pursuant to the above or elsewhere in the Agreement, and amounts deducted pursuant to the above may not exceed 35% of Gross.

1.10       “Product Placement Fees” means all cash revenues generated in any territory throughout the world derived by BVIG in accordance with Section 5.5 during the Term.

1.11      “ Product Launch Date ” means the date on which the first Application is made available by BVIG to consumers via Wireless Distribution on at least one major U.S. Carrier in the Territory.

1.12      “ Territory ” shall have the meaning set forth on the cover page of this Agreement, provided that the parties recognize and agree that wireless distribution

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Exclusive Wireless License Terms and Conditions (Short Form)

networks and users of wireless devices are not always strictly territorially constrained. Restrictions based on Territory shall generally mean restrictions to Carriers that serve markets in such Territory or to users that reside or make purchases in such Territory, based on available information and implemented technology.

1.13      “ Wireless Distribution ” means distribution to wireless service providers and wireless end user customers of the Approved Handsets, including without limitation via the following: over the air provisioning via wireless networks; Carrier online or wireless mobile stores, including retail locations where wireless devices are generally sold; storefronts, portals (whether operated by BVIG, or a Carrier); on Approved Handsets; and all Carriers serving customers in the Territory.

2.            EXCLUSIVE LICENSE.    Subject to the terms of this Agreement, Licensor grants to BVIG an exclusive (including as to Licensor), non-transferable (except to a Disney Affiliate), license in the Territory and for the Term: (i) to use (or have used), with prior written consent of the Licensor, the Licensed Content in conjunction with the distribution and promotion of the entertainment products targeted for Wireless Distribution that are further described in Exhibit B hereto (“ Applications ”); (ii) to distribute, display and perform (or have distributed, displayed or performed) the Applications via Wireless Distribution (including a license to end-users in accordance with the next to last sentence of Section 3); and (iii) to use, distribute, display and perform (or have used, distributed, displayed or performed) the Licensed Content in connection with the advertising and promotion of the Applications and their availability via specific Wireless Distribution platforms. The license granted by the Licensor to BVIG in each Territory is made on an exclusive basis during the Term. Licensor acknowledges and agrees that BVIG may subcontract with and permit third party suppliers or developers to host and distribute the Applications, provided that BVIG remains in all respects responsible for all work performed by such subcontractors and for all duties and obligations under this Agreement to be undertaken by BVIG. Licensor shall promptly take action to enforce all of its rights against any third party that distributes or plans or attempts to distribute any content, application or product similar to Applications or Licensed Content in the Territory or otherwise makes any claim or takes or attempts to take any action that would affect the rights accorded BVIG under this Agreement, and Licensor shall promptly provide BVIG with detailed notice of any such third-party distribution, plan, claim or attempt and the enforcement steps that Licensor intends to take.

3.            TERM AND TERMINATION. This Agreement shall continue for the Term set forth above. Notwithstanding the foregoing, on the earlier of (a) the eighteen (18) month anniversary of the Product Launch Date or (b) January 1, 2008, in the event that the Revenue Share paid to Licensor pursuant to Section 4 is less than the amount equal to (i) $87,250 for either Application, Licensor may elect to deliver to BVIG a written notice stating that the license granted in Section 2 for the Application that did not reach such revenue level will be non-exclusive for the remaining months of the Term whereupon such license will become nonexclusive (“ Non Exclusivity Notice ”), or Licensor may elect to deliver to BVIG a written termination notice whereupon BVIG’s license granted in 2 will termin ate for the Application that did not reach such revenue level. Upon the expiration of the Term, this Agreement shall automatically renew for successive renewal terms of one (1) year each (each a “ Renewal Term ” and collectively with the prior Term, the “ Term ”) unless either party shall have given the other party prior written notice of its intent not to renew no later than ninety (90) days prior to the expiration of the Term or any Renewal Term. Either party may terminate this Agreement upon not less than ninety (90) days’ prior written notice to the other party of any specific and material breach by such other party, provided that such termination shall not be effective if the other party shall within such ninety (90)-day period have cured the material breach identified in such notice. Either party may terminate this Agreement immediately upon prior written notice to the other party in the event the other party (i) violates Section 7, or (ii) becomes insolvent (i.e. unable to pay its debts in the ordinary course as they come due). Upon termination or expiration of this Agreement, the Applications and/or Licensed Content will no longer be able to be used by BVIG for any purpose, provided that Licensor’s ownership or ability to use the underlying Licensed Content it supplied to BVIG for such Applications shall not be affected and BVIG’s ability to use any Materials created or otherwise used for the Wireless Distribution contemplated hereunder (including, but not limited to the Materials in the Applications) shall not be affected to the extent the same is not precluded by Licensor’s copyright or trademark rights. Notwithstanding the above, all technology, source code, software, templates and functionality used and/or created by BVIG or its nominated contractors (collectively, “ BVIG Technology ”) shall be owned (or licensed) by BVIG and BVIG will have all rights to freely use such BVIG Technology after termination of this Agreement. In the event of early termination of this Agreement, BVIG will discontinue the distribution of the Applications or Licensed Content, provided that the parties

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Exclusive Wireless License Terms and Conditions (Short Form)

acknowledge that, in the event BVIG has contractually committed to a Carrier to allow Wireless Distribution of an Application, BVIG will use reasonable efforts to request that such Carrier discontinue distribution of the Application, but, failing to do so, such Wireless Distribution may continue, subject to all other terms and conditions of this Agreement (including Licensor’s payment rights), until what would have been the natural expiration date of the Agreement. Licensor acknowledges and agrees that end users’ rights to use Licensed Content on a Handset will not terminate upon termination or expiration of this Agreement. Any subscription or hosted services relating to the Applications may no longer be provided by BVIG after termination or expiration of the Agreement.

4.1       Revenue Share. BVIG shall pay Licensor the non-refundable Exclusivity Fee within sixty (60) days of the execution of this Agreement by both parties. BVIG may recoup the Exclusivity Fee, Hosting Fee and Insurance Payment from the Revenue Share payable to Licensor. Licensor shall receive its Revenue Share of the Net Cumulative End User Fees from all Wireless Distribution by BVIG of the Applications and its Revenue Share of all revenues generated as Product Placement Fees in the Territory (together, the “ Revenue Share ”) after recoupment of the Exclusivity Fee, Hosting Fee and the Insurance Payment by BVIG against Licensor’s Revenue Share. Revenue Share payments shall be due and payable within thirty (30) days after the end of each calendar quarter in which BVIG actually receives any Net Cumulative End User or Product Placement Fees. BVIG shall provide to Licensor a written statement setting forth in respect of each Territory for the applicable calendar quarter (i) the number of active subscribers for the Applications at the start and end of that quarter, (ii) Net Cumulative End User Fees received, (iii) the total amount of fees paid to BVIG as Product Placement Fees, and (iv) a calculation of the Revenue Share due to Licensor. Payments and statements issued by BVIG hereunder shall be binding unless Licensor submits to BVIG a written notice of any disputed items within ninety (90) days from the date of receipt of the applicable payment or statement, except however, this sentence shall not apply to any results from an audit conducted by Licensor pursuant to this Section 4.1. If Licensor reasonably believes that such reports or payments are materially inaccurate, it may, no more than once per calendar year during the Term of this Agreement and at its own cost, request that a nationally recognized independent CPA or accounting firm nominated by the Licensor and approved by BVIG (whose approval may not be unreasonably withheld) audit the Revenue Share calculations. Any such audit shall take place after prior written notice has been delivered to BVIG and at a mutually agreeable time and place. In the event that such audit reveals that the dollar value of a BVIG underpayment of the Revenue Share for a specific payment period exceeds 10% of the amounts actually paid by BVIG for such period, then BVIG shall reimburse the reasonable fees paid by Licensor to the auditor. Any results and information obtained during such audit shall be treated as confidential pursuant to Section 7 of this Agreement. To the extent a Carrier or other distributor is not responsible, each party shall be responsible for foreign, federal, state and local taxes, tariffs, duties or similar governmental assessments, properly assessed against it in connection with this Agreement.

4.2       Hosting and Maintenance. After the Product Launch Date, and so long as BVIG is distributing and end users are using the Applications, BVIG will pay to Licensor the following fee in addition to the Revenue Share: a maintenance and hosting fee of $2,000 per month (“ Hosting Fee ”) for Licensor to provide maintenance and hosting service in accordance with the terms set forth in Exhibit D. Licensor shall invoice BVIG in accordance with BVIG’s standard invoicing policies, with each invoice covering the Hosting Fee to be made for the previous quarter. In accordance with this Section 4, Licensor shall receive its Revenue Share after recoupment of the Insurance Payment, Hosting Fee and the Exclusivity Fee by BVIG.

4.3       Non Exclusivity Notice . Notwithstanding anything to the contrary herein, in the event that (a) Licensor delivers a Non Exclusivity Notice to BVIG in accordance with Section 3 and (b) BVIG terminates its distribution of the Applications as a result thereof, then BVIG shall have no further obligation to make any future Insurance Fee or Hosting Fee payments to Licensor.

5.1       General Marketing and Approvals . During the Term, BVIG shall use its commercially reasonable efforts to advertise and promote the merits, availability and content of the Applications. Licensor will not include BVIG’s trademarks or name in any marketing without BVIG’s specific, prior written approval, which may be withheld in BVIG’s sole discretion. BVIG agrees to use commercially reasonable efforts to (a) include in all marketing and publicity materials for the Applications distributed in each Territory, a reference that the Applications has been “produced by Artificial Life, Inc.” (or similar) and (b) not include Licensor’s trademarks or name in any marketing without Licensor’s specific, prior written approval, such approval not to be unreasonably withheld or delayed. Any co-branding of the

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Exclusive Wireless License Terms and Conditions (Short Form)

Applications shall be subject to the mutual agreement of the parties. All costs of marketing (except for any costs independently incurred by Licensor in accordance with the first sentence of this Section 5.1) will be paid for exclusively by BVIG.

5.2       Carrier Promotions . During the Term, BVIG will use commercially reasonable efforts to work with Carriers to promote the Applications and negotiate all appropriate legal documentation, provided that BVIG will have sole discretion over how and where the Applications are promoted. Any failure of BVIG to obtain any such marketing from any Carrier will not be a breach of this Agreement or give rise to any rights or causes of action for Licensor or any other person or entity hereunder. All costs associated with promotional work with the Carriers will be solely at the expense of BVIG.              

5.3       Website, Packaging and Email Marketing . Subject to BVIG’s specific, prior written approval, Licensor shall use commercially reasonable efforts to prominently advertise and promote the Applications, including without limitation, prominently and above the fold on the home page of Licensor and Application-related websites and online and wireless channels, and in Application-related publications, packaging and dispays.

5.4       Publicity; No Right to Use Disney Brands . Licensor and BVIG shall issue a mutually-agreed joint press release. Licensor shall not directly or indirectly issue or permit the issuance of any further press release or any other publicity regarding, or make any public statements concerning BVIG, or any other matters regarding this Agreement without prior coordination with and approval by BVIG which may be granted or withheld in BVIG’s sole discretion. Except and only to the extent specifically permitted under this Agreement, Licensor shall not acquire any right under this Agreement to use, and shall not use, the names “BVIG,” “Buena Vista Internet Group”, “Walt Disney Internet Group”, “Starwave”, “ABC”, “ESPN”, “Disney”, “The Walt Disney Company” or the name of any other BVIG Affiliate (either alone or in conjunction with or as a part of any other word or name) or any fanciful characters or designs of BVIG or any BVIG Affiliate in any advertising, publicity or promotion or other disclosures, or to express or imply any endorsement of Licensor’s products or services, or for any purpose whatsoever. The provisions of this section shall survive termination or expiration of this Agreement or any determination that this Agreement or any portion is void or voidable.

5.5       Product Placement. BVIG shall be responsible for acquiring (1) any third party product placements for advertising with the Application, and (2) any product placements of BVIG Materials within the Applications only as mutually agreed upon by the parties and as jointly determined by BVIG and Licensor. During the Term, BVIG shall use commercially reasonable efforts to work with third parties on product placement advertising within the Applications, provided that any failure of BVIG to consummate any such arrangements will not be a breach of this Agreement or give rise to any rights or causes of action for Licensor or any other person or entity hereunder, and any such arrangements shall be subject to Licensor’s prior written approval. Licensor will, within seven (7) calendar days of written request for approval, provide approvals or disapprovals for any such product placement arrangements. If Licensor expressly disapproves of any such product placement arrangement, it will, contemporaneously with such disapproval, supply a written statement setting forth the exact reasons for the disapproval and the corrections necessary to obtain Licensor’s approval, if any. Licensor's failure to provide any approval or disapproval hereunder within seven (7) calendar days after BVIG's request therefore will be deemed Licensor’s approval. The aesthetic design of any product placement advertising for third party content within the Applications shall be mutually agreed upon by the parties and the implementation thereof shall be the responsibility of Licensor, subject to BVIG’s approval. Any development costs incurred by Licensor for product placements will be mutually agreed upon by Licensor and BVIG prior to any agreement between BVIG and a third party for implementing any product placement. The fees charged by BVIG for any such product pla