Strategic Alliance Agreement

STRATEGIC ALLIANCE AGREEMENT





This Strategic Alliance Agreement (this "Agreement"), dated as of October 10, 1997 (the "Effective Date"), is by and between INTERVU INC., a Delaware corporation, ("InterVU"), and NBC MULTIMEDIA, INC., a Delaware corporation ("NBC").





A. Concurrently with the execution and delivery of this Agreement, and pursuant to the terms and conditions of that certain Stock Purchase Agreement of even date herewith (the "Stock Purchase Agreement") by and between InterVU and the National Broadcas ting Company, Inc. ("NBCI"), which is NBC's parent company, InterVU shall issue and NBCI shall subscribe for and purchase 1,280,000 shares (the "Purchased Shares") of preferred stock of InterVU, Series G.



B. As a condition to such issuance of the P urchased Shares by InterVU, and the purchase thereof by NBCI, the parties wish to enter into this Agreement pursuant to which, and subject to the terms and conditions set forth below, InterVU shall be the exclusive provider of technology and services for t he distribution of, and audio/visual presentation to users of, entertainment (i.e., excluding sports, news and other non-entertainment programming) audio/video content (including audio only portions) by means of the Internet (as defined below), the distri bution of which audio/video content (including audio only portions) are Controlled (as defined below) by NBC.



NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein set forth, the parties hereto agree as follows:





SECTION 1 - DEFINITIONS



Certain Definitions. The following terms, as used herein, have the following meanings:



"Adult Video Content" shall mean any audio and/or video material which is pornographic or which contains nudity, explicit sexual material or depictions of sexual acts any of which is beyond that normally broadcast over the NBC Television Network.



"Common Stock" shall mean the common stock of InterVU, par value $.001 per share.



"Control" shall mean, with respect to any distribution channel or source of any content, the ability to control, and the actual control, including the final approval right, of the presentation of content on such distribution channel or source.



"Initial Public Offering" shall mean the first public offering of Common Stock to the general public which is effected pursuant to a registration statement filed with, and declared effective by, the Securities and Exchange Commission under the Secur ities Act of 1933, as amended, and the rules









and regulations promulgated thereunder, the aggregate proceeds of which exceed Ten Million Dollars ($10,000,000).



"Internet" shall mean (i) the distributed interactive computer network commonly referred to as the internet, and (ii) any other interactive on-line or distributed computer network distribution methods in their current form as of the date hereof, i n cluding, without limitation, America Online, @Home, Road Runner, CompuServe and Prodigy, that is supported by the InterVU Delivery System. The term Internet shall not include any traditional analog or digital broadcast or distribution medium (e.g., tradit ional analog or digital broadcast and digital or analog cable or satellite transmission) by which television, film, other audio/visual or textual programming is disseminated to viewers.



"InterVU Logo" shall mean that registered design trademark of InterVU that is indicated on Exhibit A hereto or such other trademarks, service marks, designs or logos as InterVU may designate.



"InterVU Site" shall mean, collectively, the World Wide Web site that has as its universal resource locator (URL) "www.intervu.net" and such other Internet sources, sites or "areas" as may be Controlled by InterVU hereafter.



"InterVU Delivery Centers" shall mean the Internet file servers Controlled by InterVU that are used together with the InterVU Delivery System for the distribution of audio/video content (including audio only portions) to users over the Internet.



"InterVU Delivery System" shall mean the on-demand audio/video content (including audio only portions) transmission and distribution network system developed by InterVU and more fully described on Exhibit B hereto.



"MSNBC" shall mean MSNBC Interactive News L.L.C., MSNBC Cable L.L.C. or any entity which is a successor of the business of such entities.



"NBC Internet Sites" shall mean the world wide site operated by NBC with the URL address of www.nbc.com ("NBC.com") and those aspects of the NBC Interactive Neighborhood syndication platform which are Controlled by NBC ("NBC-IN").



"Revenue Sharing Area" shall mean a new " area" to be created and placed by NBC upon NBC.com in connection with this Agreement, including all pages, HTML documents or other screens or interfaces within such "area", which will be designed solely to allow (a) the distribution, transmission or makin g available for downloading NBC Audio/Video Clips, (b) the promotion, marketing or advertising of the availability of NBC Audio/Video Clips for distribution, transmission or downloading, and/or (c) the promotion, marketing or advertising of the NBC/InterVU business relationship and which will be mutually agreed upon by the parties. In addition, if the parties are able to mutually agree upon any additional Internet sites or "areas" which have the characteristics described in the previous sentence, then each such new site or "area" shall also be considered a Revenue Sharing Area for purposes hereof.









1.1 Other definitions. The following terms shall have the meanings defined for such terms in the Sections set forth below:





Term Section

---- -------

Costs 3.1.1

InterVU Advertising 5.1

Net Revenues 4.2

NBC Audio/Video Clip 2.1

Prepayment 4.4

Production Costs 4.4

Referral Fees 5.2.2

Revised Standards 2.4.2



SECTION 2 - DELIVERY OF SERVICES



2.1 Preparation, Delivery of Content. NBC shall create digital versions of all entertainment (i.e., excluding sports, news and other non-entertainment programming) audio/video content (including audio only p ortions) that it desires to make available for downloading, to distribute or to transmit via NBC Internet Sites ("NBC Audio/Video Clip"), provided that for a period of six (6) months following the Effective Date InterVU shall provide such digitization ser v ices required to create digital versions of the NBC Audio/Video Clips, up to a maximum of fifty (50) one-minute video clips per month of encoding (per format), the expense of which shall be included as a Cost within the cost sharing provisions of Section 3 .1. NBC shall determine the data format (e.g., MPEG or ASF ) in which the NBC Audio/Video Clip shall be transmitted and, if applicable, the video viewing software products with which the NBC Audio/Video Clip shall be compatible (e.g., "Real Video" or "Net S how"); provided, however, that such NBC Audio/Video Clip shall be compatible with, and shall be capable of being distributed from and viewed by means of, the InterVU Delivery System from InterVU Delivery Centers as long as InterVU supports any data format and/or video viewing software products reasonably required by NBC within a reasonable time after new versions of such products are released, including the streaming products of the following entities: Apple, Real Networks, Macromedia, Microsoft, VDO, Vivo Software and VXtreme. InterVU shall provide technical assistance to NBC in connection with the digitization of the NBC Audio/Video Clip by NBC including without limitation providing a description of any needed technical standards or other specifications a n d providing a reasonable amount of training for the NBC personnel who will be responsible for such digitization. InterVU agrees that it shall provide NBC with a designated InterVU employee who will be made reasonably available to NBC's technical and other personnel in connection with the activities described herein.



2.2 Placement of NBC Audio/Video Clips. Subject to Section 2.5, NBC may from time to time make NBC Audio/Video Clips available to users over the Internet from such Internet sources as NBC elects as set forth in this Section 2.2.



2.2.1 NBC shall from time to time provide copies of all NBC

Audio/Video Clips to InterVU for distribution to, and storage at, each

of the InterVU Delivery Centers. InterVU may distribute additional

copies of NBC Audio/Video Clips to, and store at, additional











InterVU Delivery Centers as they are made available for access via the

Internet. In the event that any existing NBC Audio/Video Clip is

changed, NBC shall provided updated or replacement copies for such NBC

Audio/Video Clip, whereafter InterVU shall within a reasonably prompt

period, not to exceed thirty (30) minutes from the time of InterVU's

receipt thereof (or such later time as NBC may specify), make any and

all such updated or replacement NBC Audio/Video Clips available from all

of the then-available InterVU Delivery Centers. In addition, during the

time period when InterVU is providing digitization services pursuant to

Section 2.1, InterVU shall both digitize any updated and replacement NBC

Audio/Video Clips specifically indicated by NBC and make such updated or

replacement NBC Audio/Video Clips available from all of the

then-available InterVU Delivery Centers within a time period not to

exceed one (1) business day (or such later time as NBC may specify). NBC

shall determine, and shall provide sufficiently detailed information to

InterVU describing, the schedule of when each of such NBC Audio/Video

Clips shall be made accessible to users.



2.2.2 NBC shall, in its sole discretion but subject only to

Section 6.1, determine what materials and content shall be incorporated

into the NBC Audio/Video Clips. NBC may at any time and from time to

time, direct InterVU to remove, restrict or prevent access to any NBC

Audio/Video Clip by means of the InterVU Delivery System.



2.3 Delivery Services. InterVU shall store the NBC Audio/Video Clips at each of the InterVU Delivery Centers as set forth above and shall transmit the NBC Audio/Video Clips on demand to users via the Internet in response to requests fro m such users. The InterVU Delivery System shall provide a successful user connection rate of at least, or greater than, ninety-eight percent (98%), and from time to time, InterVU shall provide verification to NBC of such rate within a reasonable time peri o d following a request therefor from NBC. As of the date hereof, the InterVU Delivery System shall, in addition to any specifications set forth within the body of this Agreement, conform to the specifications set forth on Exhibit B hereto, provided, howeve r , that NBC acknowledges that such specifications shall be subject to change as long as the overall level of quality of the services provided by InterVU hereunder, including, but not limited to, the capacity levels and user connection success rates, is not reduced.



2.4 Maintenance, Support.



2.4.1 InterVU Delivery Centers. Subject only to Section 3,

InterVU shall be solely responsible for the design, maintenance,

support, upkeep and administration of the InterVU Delivery Centers.



2.4.2 InterVU Delivery System. Subject only to Section 3,

InterVU shall be solely responsible for the design, maintenance,

support, upkeep and administration of the InterVU Delivery System.

InterVU may update, upgrade and/or revise the InterVU Delivery System at

any time in its sole discretion. In the event of any such update,

upgrade or revision, InterVU shall provide NBC with a description of any

needed technical standards or other specifications (the "Revised

Standards") that will thereafter be required by NBC in order to ensure

that subsequent NBC Audio/Video Clips are compatible with the InterVU

Delivery System; provided, however, that such Revised Standards must

give NBC the ability to provide NBC Audio/Video Clips using any of the

formats and/or software described in









Section 2.1 and must retain the overall level of quality of the services

provided by InterVU hereunder, including, but not limited to, the

capacity levels and user connection success rates, and if the imposition

of such Revised Standards would require NBC to assume any additional

costs in connection with its activities described herein, the parties

shall mutually agree upon how such additional NBC costs will be shared

between the parties.



2.5 Restrictions. Without limiting any of the other terms or conditions set forth in this Agreement, NBC shall not make, and InterVU shall not be required to make, any NBC Audio/Video Clip stored at an InterVU Delivery Center or utilizing the InterVU Delivery System accessible from any source or other distribution channel other than on the Internet.



2.6 Exclusivity. Except as otherwise provided in this Agreement or unless otherwise agreed by InterVU in writing in advance, during the Exclusive Term (as hereinafter defined) NBC will not make available for transmission over the Internet any entertai n ment (i.e., excluding sports, news and non-entertainment programming) audio/video content (including audio only portions), other than audio/video content, including clips and digital files, of less than 5 seconds if measured by duration or of some other r e asonably small number of bytes if measured by file size, in any audio/visual format to users via NBC Internet Sites unless such entertainment audio/video content is being made available for transmission over the Internet pursuant to this Agreement; provid e d, however, that the parties acknowledge that this Section 2.6 shall in no way prevent NBC from providing NBC Audio/Video Clips or any other kind of entertainment audio/video clips or other materials for unrestricted use on, or distribution via, any Inter n et site or "area" which is not an NBC Internet Site. If InterVU is unable to provide the services described herein to NBC for a period of more than twenty-four (24) hours or is unable to provide the amount and level of service required by NBC at any time, including, but not limited to, the number of concurrent audio/video streams required by NBC, then notwithstanding the terms hereof, NBC may obtain such services from any third party until such time as InterVU is able to adequately provide such services (f o llowing a reasonable transition period from the third party back to InterVU) or NBC terminates this Agreement as provided in Section 2.8.5 below. In addition, while NBC agrees that it will use commercially reasonable efforts to utilize InterVU's services a s described herein in connection with all of its activities involving the transmission over the Internet of entertainment audio/video content via NBC Internet Sites as required above, if any of the type of distributors described in the definition of "Inte r net" above cannot or refuse to permit NBC to utilize InterVU's services in connection with their particular distribution method or InterVU is not able to provide such services in connection with such particular distribution method at a level of quality re asonably comparable to that of other relevant third party providers, then NBC shall not be bound by the terms of this Section 2.6 in connection with such distribution method.



2.7 Exclusive Term. The term of this Agreement (the "Exclusive Term") sha ll be the period beginning on the Effective Date and ending on the second anniversary of the Effective Date, provided, however that if certain mutually agreed cost and revenue goals are established and met, then the Exclusive Term shall be automatically e x tended until the fourth anniversary of the Effective Date. The parties shall meet and consult with one another in good faith and shall make good faith efforts to determine such cost and revenue goals on or before the first anniversary of the Effective Dat e.









2.8 Early Termination.



2.8.1 Prior to an Initial Public Offering. During the Exclusive

Term and prior to the consummation of an Initial Public Offering, NBC

may terminate this Agreement without cause by giving ninety (90) days

prior written notice to InterVU. Any such notice must be accompanied by,

and actual termination of this Agreement at the end of the ninety (90)

days shall be expressly conditioned upon, NBCI's or NBC's return, for no

compensation, of the following number of Purchased Shares in the

following periods: (i) all 1,280,000 of the Purchased Shares, if notice

is given in months one (1) through six (6) of the Exclusive Term; (ii)

900,000 of the Purchased Shares, if notice is given in months seven (7)

through twelve (12) of the Exclusive Term, (iii) 380,000 of the

Purchased Shares, if notice is given in months thirteen (13) through

twenty-four (24) of the Exclusive Term and (iv) no Purchased Shares, if

notice is given after month twenty-four (24) of the Exclusive Term if

such term is extended as provided herein; provided, however, that

neither NBCI nor NBC shall be required to return any such Purchased

Shares until such date as NBC receives all of the Prepayments owed

pursuant to Sections 4.4 and 4.5.1.



2.8.2 Following an Initial Public Offering. Any time after the

date on which InterVU consummates an Initial Public Offering which is

during the Exclusive Term, NBC may terminate this Agreement without

cause by giving ninety (90) days prior written notice to InterVU. Any

such notice must be accompanied by, and actual termination of this

Agreement at the end of the ninety (90) days shall be expressly

conditioned upon, NBCI's or NBC's return, for no compensation, of either

(i) all of the shares of InterVU Common Stock held by each party, or

both parties, if such termination becomes effecti ...