ACTV - EARTH WEB
JOINT VENTURE AGREEMENT
AGREEMENT, made as of December 1, 1995, by and between Earth Web, LLC
("Earth Web"), a limited liability corporation having a place of business at 0
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and ACTV, Inc., a Delaware corporation,
having a place of business at 1270 Avenue of the Americas, Xxxxx 0000, Xxx Xxxx,
Xxx Xxxx 00000 ("ACTV").
WHEREAS, ACTV is the owner of certain individualized television
programming technology (the "ACTV Programming Technology"), which includes
patents, pending patent applications, and inventions owned by ACTV, proprietary
technologies, programming methods, a programming language used to achieve
functionality in ACTV programming, software programs used to detect and convert
ACTV Programming for display and other trade secrets, know-how and proprietary
technology relating to the ACTV Programming Technology.
WHEREAS, ACTV has particular marketing expertise and relationships with
both television networks and distance learning.
WHEREAS, Earth Web specializes in helping content providers create
compelling Internet services with proprietary Internet technologies and design
capability, including Java software development. Earth Web has had particular
success in the area of developing strong on-line strategic relationships.
WHEREAS, Earth Web is also engaged in research and development of a
number of Internet Technologies.
WHEREAS, ACTV and Earth Web desire to begin development of certain
software which will enable the content in a television program to be dynamically
linked to WWW content. ("TeleWeb") and grow a business which is significant to
both companies.
WHEREAS, it is contemplated that the general responsibilities of each
party will be as follows: ACTV will take primary responsibility for sales,
marketing and administration while Earth Web will take primary responsibility
for the development of the specific technology, software and client support
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained, the parties agree as follows:
1. ACTV and Earth Web agree to cooperate on the development of certain
software code to provide dynamic links directly between the television content
and additional material available through the WWW. This code will allow a user
to move transparently between Web pages indexed to the television broadcast via
URL's and other address information provided as part of the TV broadcast signal
for more information or greater convenience ("Concept"). These codes would be
inserted in various lines of the vertical blanking interval to push the viewer
to a particular Web site. It is contemplated that upon successful development of
this first project, that others will follow.
Excluded from the joint venture would be ongoing work Earth
Web is engaged in to develop systems for content providers to update their WWW
sites in real time or near real times -- such systems do not use the VBI or TV
broadcast signal.
2. Joint Venture. The parties agree to form a 50/50 joint venture to
develop new product applications. It is estimated that up to $250,000 will be
required for the first phase of product development to perform legal work, the
purchase of certain specialized equipment, and to develop enough software code
that the demonstration is credible.
a. It is contemplated that the new product development performed by the
joint venture in this first project will encompass the purchase of outside
services as well as services provided by the two parties, ACTV and Earth Web.
The parties agree, that for services provided by the parties to the venture, the
venture will be billed at the company's direct cost rate without overhead
allocation. For direct labor provided by each of the companies, software design,
etc., the rate at which the venture is billed will constitute direct cost plus
FICA.
b. As additional capital is required to support on-going new product
development in the joint venture, if warranted, the companies may provide
capital on a 50/50 basis. The parties may agree to accept outside capital to
finance further work.
c. It will be the joint venture's responsibility and expense to protect
and maximize the value of the intellectual property created by the venture.
d. It is not initially contemplated that a new company will be formed,
but rather that the marketing and operational support required to exploit the
new products and applications developed by the venture be performed by ACTV and
Earth Web.
3. Once product is released by the joint venture for commercial
application, ACTV will have the primary responsibility for sales, marketing and
administration while Earth Web will have primary operational responsibility for
the product delivery and client support.
a. Both companies will collaborate on sales, marketing, technology,
product development, client support and operational issues.
b. Once a product or application is sold, fifty percent (50%) of the
revenue collected from sales will remain with the selling company, while
fifty-percent of the sales revenue will be provided to the other company.
c. It is currently contemplated that the support by each company in the
areas of marketing, operations and client support to net against the cash
distribution will be comparable. The intent is to structure a distribution which
ensures that each party is equally rewarded.
4. Termination. It is contemplated that the initial joint venture
will terminate no later than December 31, 1996 and be replaced by a more
definitive agreement as based on the first year's experience.
In the event that one of the parties elects to terminate this
initial joint venture, each party shall license to the other the right to use
any technology developed as part of the joint venture. This license shall
constitute a royalty-free license for a period of one year from the date of
termination of the joint venture. After this first year, the parties shall
license to each other use of the technology at a resonable rate.
5. Stock Options. It is contemplated that Earth Web may be
granted x number of stock options in ACTV Inc. and conversely, ACTV, Inc. may be
granted the equivalent in the form of x number of stock options in Earth Web,
LLC. The companies will use their reasonable best efforts to grant said stock
options to one another by March 1, 1996.
6. Confidentiality Agreement. The parties will sign a mutual
confidentiality agreement.
7. New York Law. This Agreement and all matters or issues
collateral thereto shall be governed by and construed and enforced in accordance
with the laws of the State of New York applicable to contacts made and performed
entire therein.
8. Entire Understanding. This Agreement contains the entire
understanding of the parties hereto relating to the subject matter herein
contained, and supersedes any and all prior agreements or understandings
relating to the subject matter. This Agreement may not be changed except by a
writing signed by the party sought to be charged therewith.
ACTV, INC. EARTH WEB, LLC
/s/ Xxxxx X. Xxxxxxx /s/ Xxxx Xxxxxx
Xxxxx X. Xxxxxxx Xxxx Xxxxxx
Executive Vice President President
