WIRELESS DISTRIBUTION AGREEMENT

This Wireless Distribution Agreement (the “Agreement”) is made as of November 1, 2004 (the “Effective Date”), by and between Playboy.com, Inc., a Delaware corporation with offices at 730 Fifth Avenue, New York, New York 10019, U.S.A. (“Playboy.com”), and Dwango North America Corp., a Nevada corporation with principal offices at 200 West Mercer Street, Suite 501, Seattle, Washington 98119 (“Dwango”).

WHEREAS , Playboy.com desires to grant to Dwango, and Dwango desires to accept, certain rights to distribute the Distributed Content to Mobile Devices in the Territory on permitted Networks (each as defined below) in accordance with the following terms and conditions;

NOW, THEREFORE , in consideration of the mutual promises herein contained, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1    DEFINITIONS.

1.1      “Content Enablers ” shall mean entities that translate, encode, localize, aggregate and/or otherwise enable the Distributed Content to be distributed on the Mobile Entertainment Service (as defined below) by the Telecoms under a sublicense agreement with Dwango pursuant to Section 2.3 below.

1.2     “Distributed Content” shall mean (a) Dwango Created Content (if text content, in the English language or other languages at Playboy.com’s discretion), (b) Dwango Acquired Material (as defined below), and (c) Playboy Content, in each case as branded with the Playboy.com Properties and distributed by Dwango in accordance with the terms and conditions of this Agreement. All Distributed Content shall be subject to Playboy.com’s advance written approval. “Distributed Content” does not and will not include: (i) so-called “mobile commerce,” the sale of products or services associated with the Playboy.com Properties, or otherwise; (ii) minimally interactive streams of video content, whether via television broadcast signal or otherwise, or other video programming ninety (90) minutes or longer in a format similar to a television channel’s programming; or (iii) wager-based gaming activities (e.g. gambling or betting).

1.3      “Dwango Acquired Material” shall mean Games, ring tones, audio clips, and other content that has been specifically licensed, commissioned, or otherwise obtained by Dwango for use as Distributed Content under the Agreement through an acquisition of rights from a third party, all of which shall be subject to Playboy.com’s approval prior to its inclusion within the Distributed Content. For purposes of clarification, Dwango Acquired Content shall not include any Playboy Content or the Playboy.com Properties.

1.4     “Dwango Created Content” shall mean Games, ring tones, audio clips, and other content that has been created by Dwango for use as Distributed Content under the Agreement, all of which shall be subject to Playboy.com’s approval prior to its inclusion within the Distributed Content.

1.5     “Games” shall mean for-fun (i.e., not involving gambling or betting of any type) interactive games enabled for use on Mobile Devices that have either been created by or for Dwango or licensed by Dwango from a third party, including any modifications, additions, enhancements and upgrades thereto.

1.6     “Mobile Device” means a mobile, wireless device existing as of the Effective Date or developed thereafter during the Term that (i) is intended to be mobile and not used at a fixed location and (ii) is primarily intended to receive voice, and/or data.. The definition of “Mobile Device” includes devices commonly referred to as “cell phones,” “mobile phones” or “PDAs” used as mobile phones on Networks and, for the avoidance of doubt, excludes all computers (e.g., laptops and desktops), non-mobile television devices and other devices that function as receivers or set-top box for a fixed display device or fixed monitor. Final determination of acceptable Mobile Devices will be at Playboy.com’s reasonable discretion.

1.7     “Mobile Entertainment Service” means Dwango’s technology platform that permits Subscribers to browse, sample, download, play, use and purchase Games, ring tones and other content and services that have been distributed via Networks to Mobile Devices pursuant to this Agreement. The Mobile Entertainment Service shall include any modifications, additions, enhancements and upgrades to the Mobile Entertainment Service, but shall in no event include any Playboy Content or Playboy.com Properties. As between Playboy.com 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 during and after the Term, which shall have the exclusive right to protect the same by copyright, trademark, patent or otherwise.

1.8     “Networks” shall mean SMS, EMS, MMS, WAP, GSM, TDMA, CDMA, PDC, GPRS, UMTS or other applicable wireless messaging (including without limitation smart messaging) or wireless network standards primarily intended to transmit voice and data to Mobile Devices by Telecoms. “Networks” shall specifically exclude wireless technologies that transmit over networks primarily used for other purposes or formats, including, but not limited to, wireless fidelity (wi-fi) Internet via local area networks (e.g., IEEE specification 802.11a/b/g), digital television programming, direct satellite transmission, infra-red technologies, server message block (SMB) and Bluetooth technologies. Final determination of acceptable Networks will be at Playboy.com’s reasonable discretion.

1.9     “Playboy Content” shall mean content, in any medium and whether or not Playboy-branded, that is (a) licensed and delivered to Dwango by Playboy.com pursuant to this Agreement, and (b) that Playboy.com’s rights and permissions department has granted Dwango express prior written authorization to distribute hereunder as Distributed Content. Playboy Content may include, without limitation, (i) video, audio-visual, and audio works, (ii) photographs and still images, and (iii) textual works, in each case similar in style and content to that displayed from time to time at http:// www.playboy.com . For purposes of this Agreement, Playboy Content shall include any content created by or for Dwango from Playboy Content, such that the resulting work constitutes a derivative work of any Playboy Content, other than solely as a result of its branding with Playboy.com Properties. This shall include, without limitation, any encoded, translated, dubbed or subtitled versions of Playboy Content.

1.10     “Playboy.com Properties” shall mean the copyrights, trademarks, trade names, service marks and/or logos owned or used by Playboy.com and identified on Exhibit A hereto.

1.11     “Subscribers” shall mean individual customers of Dwango or a Dwango sublicensee who (a) are at least (18) years old or the minimum age necessary under law to view applicable Playboy Content, (b) reside in the Territory, (c) pay an applicable access, subscription or download fee specifically to receive the Distributed Content on their Mobile Devices, and (d) complete a registration process that includes, without limitation, acceptance of the applicable terms of use and Privacy Policy pursuant to Section 3.5 below.

1.12     “Telecoms” shall mean, for purposes of this Agreement, any entity that, in its ordinary and primary course of business, utilizes the Networks to carry the Distributed Content via Mobile Devices to Subscribers, it being understood that any and all Telecoms through which Dwango proposes to distribute and/or promote the Distributed Content will be subject to Playboy.com's advance written approval.

1.13     “Territory” shall mean Canada and the United States of America.

2          LICENSE GRANTS .

2.1    Playboy Content . Subject to the terms and conditions set forth herein, Playboy.com hereby grants Dwango, and Dwango hereby accepts, a non-exclusive (subject to Section 2.4 below), non-sublicensable (except as provided in Section 2.3 below), non-transferable, non-assignable, revocable, limited right and license to distribute the Playboy Content via the Networks to Telecoms and Subscribers solely in the Territory and during the Term. For the avoidance of doubt, Dwango shall have no right or license to distribute any Playboy Content without Playboy.com’s express prior written authorization.

2.2      Playboy.com Properties . Subject to the terms and conditions set forth herein, Playboy.com hereby grants Dwango, and Dwango hereby accepts, a non-exclusive (subject to Section 2.4 below), non-sublicensable (except as provided in Section 2.3 below), non-transferable, non-assignable right and license to use and reproduce the Playboy.com Properties during the Term solely for the purpose of promoting and distributing Distributed Content via the Networks to Telecoms and Subscribers in the Territory; including, but not limited to, attaching and incorporating the Playboy.com Properties to and into the Distributed Content.

2.3     Sublicenses . Subject to the terms and conditions set forth herein, Dwango may grant a non-exclusive, non-transferable, non-assignable limited right and license to Telecoms to promote, offer and distribute the Distributed Content to Subscribers via Networks to Mobile Devices in the Territory; provided however, that Dwango may only sublicense Distributed Content to such Telecoms as are approved in advance and in writing by Playboy.com. Dwango shall ensure that each such sublicense (i) be in a valid and binding writing; and (ii) be in accordance with this Agreement’s terms and conditions. Furthermore, Dwango shall use commercially reasonable efforts to ensure that each such sublicense provide that Playboy.com is named as a third party beneficiary of such agreement. Upon request from Playboy.com, Dwango shall verify to Playboy.com’s satisfaction that any agreement entered into between Dwango and any sublicensee meets the requirements set forth herein, shall provide copies of any such agreements and shall either make any revisions Playboy.com reasonably requests or no longer sublicense Playboy Content or Playboy.com Properties pursuant to such Agreement. Dwango shall be primarily responsible to Playboy.com for all actions and omissions of its sublicensees as if such actions and omissions were those of Dwango.

3    DISTRIBUTED CONTENT .

3.1    Distributed Content . The parties agree that Playboy.com will deliver Playboy Content to Dwango in a mutually agreed upon digital format and in accordance with a schedule to be mutually agreed upon by the parties. Subject to Playboy.com’s approval rights in Section 14 below and the restrictions in Section 3.2 below, during the Term Dwango shall develop and distribute the Distributed Content to Telecoms and/or Subscribers in the Territory via permitted Networks as contemplated in this Agreement. Dwango shall be solely responsible for making Distributed Content available and for designing, uploading, maintaining, and updating the same, and will ensure that the same is refreshed at least every thirty (30) days. Dwango shall ensure that Distributed Content is accessible only in the Territory and for authorized purposes by using commercially reasonable measures acceptable to Playboy.com, including the use of digital rights management systems approved by Playboy and, where applicable, blocking all unauthorized Internet protocol addresses. Dwango shall also be solely responsible for operating and hosting the service described herein, as well as for customer service, transactions and billing; provided that such services may be subcontracted to either by (i) Telecoms in their sole discretion or (ii) Dwango to third parties approved by Playboy.com in advance and in writing, which approval shall not be unreasonably withheld, conditioned or delayed. For the avoidance of doubt, Dwango shall be solely responsible for all costs and expenses and for compliance with applicable laws, rules and regulations and with all rights of third parties (including, without limitation, obtaining any necessary rights clearances for specific Distributed Content) in connection with any use of the Distributed Content. In the event that any incremental royalties or other costs must be paid (i) to any third party (including, without limitation, to Playboy.com or its affiliates) to obtain rights to use or distribute any Distributed Content or because of such use or (ii) to make such content technically available to Dwango. Dwango shall be solely responsible for payment of such incremental royalties or costs.

3.2    Compliance with Guidelines . Playboy.com shall have final editorial approval over all Distributed Content. Dwango shall at all times comply (and shall cause its sublicensees at all times to comply) with the provisions and limitations set forth in the Guidelines attached hereto as Exhibit B , as the same may be amended by Playboy.com from time to time upon no less than five (5) business days prior notice to Dwango (the “Guidelines”). Regardless, Dwango shall not (i) supply to Playboy.com, (ii) include as Distributed Content, or (iii) use in connection with the Playboy.com Properties or Playboy Content, any content which contains models or performers who were less than eighteen (18) years old (or, if older, such other age of majority under applicable law) at the time such content was first fixed in tangible form. Any and all advertising appearing in connection with any service featuring Distributed Content shall be subject to Playboy.com’s prior written approval. To the extent there is any conflict between this Agreement and the Guidelines, the terms of this Agreement shall control.

3.3    Consultation Regarding Censorship . Dwango shall forward promptly to Playboy.com any information received by it regarding censorship by governmental agencies, Telecoms, Content Enablers, or otherwise in connection with the Distributed Content. Dwango shall at all times consult fully with Playboy.com and act in accordance with the reasonable determinations of Playboy.com in response to instances of censorship.

3.4    Minimum Service Levels . Dwango shall, and shall require that its sublicensees shall, take all reasonable measures to ensure availability to Subscribers of the Distributed Content at least ninety-nine and one half percent (99.5%) of the time per month as averaged over any one (1) month period.

3.5    Terms of Use and Privacy Policy . Dwango shall (and will require that Telecoms shall) use its best commercial efforts to ensure that each Subscriber is at least eighteen (18) years of age (or, if older, such other age as is applicable in the Territory according to its laws regarding the viewing of Distributed Content) and shall post or otherwise obtain from each Subscriber a binding terms of use agreement acceptable to Playboy.com which at a minimum (i) forbids the unauthorized use of the Distributed Content, (ii) identifies the required legal age of such Subscriber, and confirms that the Subscriber is resident within the Territory. In addition, Dwango shall (and will use its best commercial efforts to ensure that Telecoms shall) implement a privacy policy (“Privacy Policy”) applicable to Subscribers that is no less protective of user privacy than is required under the laws, rules, requirements and directives of each applicable country within the Territory. Dwango shall not, and shall require that Telecoms do not, take any action in contravention of such Privacy Policy or of any applicable law, rule, requirement or directive. If Dwango and/or a Telecom violate the Privacy Policy or any applicable law, rule, requirement or directive, in addition to any remedies provided herein, Playboy or Dwango may require such entity to immediately cease providing Distributed Content. Both the terms of use and Privacy Policy shall be prominently displayed and will require an affirmative indication of consent to their terms by each Subscriber or other user (e.g., by requiring a click of an “I Agree” button). Playboy.com shall have the right to review the terms of use and Privacy Policy, to require reasonable changes thereto (subject to applicable laws), and to request certification from Dwango that it is complying with this paragraph. All such requests shall be promptly met.

3.6    User Data . To the extent possible directly and/or through its agreements with Telecoms, Dwango will collect, store and manage information regarding Subscribers and use of the Distributed Content, including without limitation, names and e-mail addresses (“User Data”). As between the parties, Dwango shall own and have rights to the User Data; provided, however, that to the extent permitted under applicable laws, regulations, any applicable Privacy Policy and any written agreements existing as of the Effective Date, and to the extent the Subscriber given his or her consent, Dwango shall provide User Data to Playboy.com on request, and Playboy.com shall have the right to market to such Subscribers. During and following the Term: (i) Dwango shall use User Data only in the distribution and promotion of the Distributed Content and (ii) Playboy.com may use such data free of charge. 

4    PLAYBOY.COM PROPERTIES .

4.1    Rights in Playboy.com Properties; Usage . Dwango recognizes and acknowledges that the Playboy.com Properties are internationally well-known by the general public and are associated in the public mind with Playboy.com’s affiliate, Playboy Enterprises International, Inc. (“PEII”), and are marks in which PEII has acquired considerable and valuable goodwill. Dwango acknowledges that Playboy.com and PEII have an interest in maintaining the worldwide goodwill, recognition and standards of the Playboy.com Properties and the Playboy Content. Consequently, Playboy.com shall have the right to require Dwango and its sublicensees to make any changes and/or corrections with regard to the Playboy.com Properties and/or the Distributed Content as Playboy.com may reasonably deem necessary to maintain the quality standards and the goodwill associated with the Playboy.com Properties. Dwango agrees, and shall use its best commercial efforts to require its sublicensees to agree, to make and incorporate such changes or corrections promptly upon notice from Playboy.com and at Dwango’s sole cost and expense. Such changes and corrections shall be made promptly after a written request identifying the requested change and/or correction is delivered to Dwango form Playboy.com. Playboy.com acknowledges that the Distributed Content and the use of the Playboy.com Properties on the Networks may differ to some extent from paper-printed Playboy Content and Playboy.com Properties. Therefore, when assessing the quality and the reasonableness of changes and/or corrections required by Playboy.com of the Distributed Content and the Playboy.com Properties hereunder, the creation and use of the Distributed Content and Playboy.com Properties shall be compared with other digital content created or used by Dwango or other content providers operating in the same industry with Dwango.

4.2    Goodwill . Dwango and its sublicensees will not obtain any right, title or interest in the Playboy.com Properties or the Playboy Content by virtue of their use of the Playboy.com Properties or Playboy Content under this Agreement and any additional goodwill associated with the Playboy.com Properties that is created through use of the Playboy.com Properties shall inure solely to the benefit of PEII.

4.3    Variations . During and after the Term, Dwango and its sublicensees will not apply for or use any Playboy.com Properties or service marks that include or are confusingly similar to any of the Playboy.com Properties or any other similar marks or variations thereto.

4.4    Notices . Dwango must (and must cause its sublicensees to) display on the Distributed Content such trademark and copyright notices as requested by Playboy.com and/or as required by applicable law. Except as expressly approved in writing by Playboy.com and as contemplated by the last two sentences of Section 4.1 of this Agreement, the Playboy.com Properties and any notices may not be changed, manipulated or modified in appearance.

5    INTELLECTUAL PROPERTY RIGHTS .

5.1    Ownership . Each party hereby reserves for itself all rights not specifically granted to the other party in this Agreement.

5.1.1    Ownership by Playboy.com . As between the parties, Playboy.com shall own all right, title and interest in and to the Playboy Content, the Playboy.com Properties and the Dwango Created Content. Nothing contained in this Agreement shall be deemed to transfer or convey to Dwango or its sublicensees any ownership rights whatsoever in and to the Playboy Content, the Playboy.com Properties or the Dwango Created Content. To the extent that Dwango is deemed to obtain any interest or ownership rights in the Playboy.com Properties or the Playboy Content, Dwango hereby assigns, transfers and conveys to Playboy.com, to the maximum extent permitted by applicable law, all of Dwango’s right, title and interest therein used or created by Dwango under or in connection with this Agreement so that Playboy.com will be the sole owner of all rights therein. Dwango shall require the same assignments from its sublicensees and further agrees to cooperate with Playboy.com during and after the Term to effect and perfect all assignments.

5.1.2    Ownership by Dwango . As between the parties, Dwango shall own all right, title and interest in and to all content, products, services, specifications, documentation, software and other materials in the Mobile Entertainment Service and any improvements and modifications thereto, including all intellectual property rights therein, but specifically excluding the Playboy Content, the Playboy.com Properties and Dwango Created Content. Nothing contained in this Agreement shall be deemed to transfer or convey to Playboy.com any ownership rights whatsoever in and to the Dwango Acquired Material and the Mobile Entertainment Service. To the extent that Playboy.com is deemed to obtain any interest or ownership rights in the Mobile Entertainment Service, Playboy hereby assigns, transfers and conveys to Dwango, to the maximum extent permitted by applicable law, all of Playboy.com’s right, title and interest therein used by Playboy.com under or in connection with this Agreement so that Dwango will be the sole owner of all rights therein.

5.2    Acquired and Created Material; Enforcement .

5.2.1    With respect to all Dwango Acquired Material, Dwango will acquire, at its sole cost and expense, all necessary licenses and/or assignments necessary to carry out the distribution of the Distributed Content in accordance with the terms and conditions of this Agreement. Each such license and/or assignment shall be subject to Playboy.com’s prior approval. All right, title, and interest in and to all Dwango Created Content shall automatically and immediately transfer to Playboy.com upon its creation by Dwango.

5.2.2    By Playboy.com . If Dwango becomes aware of any alleged or actual infringement of Playboy Content, Playboy.com Properties or Dwango Created Content or any violation of the terms of a sublicense granted pursuant to this Agreement, it shall promptly notify Playboy.com. In the event of such actual or alleged infringement, Playboy.com and/or its affiliates shall have the right (but not the obligation) to bring one or more actions, at its sole expense, against the infringer in its own name or in the name of Dwango or, in its discretion, may join Dwango as a party thereto. Dwango shall not, under any circumstance, take any action on account of any such infringements without first obtaining the written consent of Playboy.com. Dwango shall cooperate in any action brought by another pursuant to this paragraph; and to the extent possible, have its employees testify when requested and make available relevant records, papers, information, samples, and the like.

5.2.3    By Dwango . If Playboy.com becomes aware of any alleged or actual infringement of the Dwango Acquired Material or the Mobile Entertainment Service, it shall promptly notify Dwango. In the event of such infringement, Dwango and/or its affiliates shall have the right (but not the obligation) to bring one or more actions, at its sole expense, against the infringer. If neither Dwango nor such an affiliate pursues such an action, then, upon obtaining Dwango’s written consent, Playboy.com may bring such an action or actions at its sole expense for any infringement of its rights to use the Mobile Entertainment Service or the Dwango Acquired Material as set forth above. Each of the parties shall keep the other informed of any action it brings pursuant to this paragraph, cooperate in any action brought by another pursuant to this paragraph; and to the extent possible, have its employees testify when requested and make available relevant records, papers, information, samples, and the like.

6    MARKETING .

6.1    Generally . Dwango shall use its best commercial efforts to actively advertise, promote and encourage the distribution of the Distributed Content to Telecoms and Subscribers in the Territory via all channels reasonably available ( e.g. , carrier-independent websites, WAP portals, retail and offline channels). Dwango and its sublicensees may produce marketing material that is based on the Distributed Content and use such material solely for marketing purposes. All promotional and marketing material shall comply with the Guidelines and must be approved by Playboy.com prior to its use and/or distribution. Once Playboy.com has approved a particular use of certain promotion and marketing material, 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. Additionally, Dwango shall (and shall ensure that its sublicensees shall) cooperate with the publisher(s) of the local edition of Playboy Magazine in the Territory and other licensees of Playboy.com, PEII or their affiliates in applying their best efforts to leverage cross-media synergies in exploiting their rights and maximizing revenue.

6.2    Marketing Plan . Prior to Dwango’s initial distribution of any Distributed Content and then again within thirty (30) days following the end of each three (3) month quarterly period thereafter, Dwango shall provide Playboy.com with a quarterly report detailing Dwango’s plans for marketing the Distributed Content and promoting ancillary Playboy businesses (e.g., the local Internet website, television service and edition of Playboy Magazine, if applicable) through Telecoms over Networks during the upcoming quarter and offering a forecast for its related expenditures, new subscriptions and other information the parties may determine to be relevant (the “Marketing Plan”). The Marketing Plan shall be subject to Playboy.com’s prior approval. If Playboy.com determines in its reasonable discretion that any Marketing Plan is unduly delayed or is otherwise unsatisfactory, then it shall give notice thereof to Dwango and, if the Marketing Plan is unsatisfactory, explain in reasonable detail its objections to the Marketing Plan. Dwango shal