Joint Venture & License Agreement

POINTCAST JAPAN, L.L.C.





LIMITED LIABILITY COMPANY AGREEMENT

-----------------------------------



This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of PointCast Japan, L.L.C. ("LLC") is made and en tered into as of May 30, 1997, by and among PointCast Incorporated, a California corporation ("PCI"), TransCosmos, Incorporated, a Japanese corporation ("TCI") and such other persons or entities as may be admitted to LLC after the date hereof, whose names shall be set forth in Schedule 1 hereto (collectively with PCI and TCI, the "Members").

---------- Capitalized terms not otherwise defined herein are defined in Section 1.9.



WHEREAS, the Members desire to form a Delaware limited liability company on the terms and conditions set forth in this Agreement.



NOW, THEREFORE, the Members hereby agree as follows:



ARTICLE I



FORMATION OF LLC



1.1 Formation. The Members hereby form LLC pursuant to the Delaware

--------- Limited Liability Company Act (6 Del. Code (S)(S)18-101 et seq.) (the "Act"),

-- --- which Act shall govern the rights and liabilities of the Members except as otherwise herein expressly stated.



1.2 Name of LLC. The name of LLC is PointCast Japan, L.L.C., a Delaware

----------- limited liability company.



1.3 Filings, Other Actions. PCI has caused to be filed a Certificate of

---------------------- Formation (the "Certificate") with the office of the Secretary of State of Delaware. The Board (as defined below) shall take all other actions which may be necessary or appropriate from time to time to comply with all requirements of law for the formatio n and operation of a limited liability company and to ensure the limited liability of the Members in the State of Delaware and any jurisdictions where LLC may conduct activities.



1.4 Place of Business. The principal place of business for LLC initially

----------------- shall be at Sumitomoseimei Akasaka Bldg., 3-3-3, Akasaka, Minato-ku, Tokyo, Japan 107; provided, however, that the Board may change the address of the principal office by not ice in writing to all the Members. In addition, LLC may maintain such other offices and places of business as the Board may deem advisable. Notwithstanding the foregoing, unless the Members unanimously agree otherwise, LLC shall in no event maintain a p lace of business, own any assets or have any employees in the United States.



1.5 Term. LLC shall continue in effect until May 30, 2096, subject in any

---- event to earlier termination in accordance with the provisions of this Agreement.





1.6 Purposes and Powers.

-------------------



(a) Subject to the provisions of this Agreement, the purposes of LLC shall be to commercially exploit, through a wh olly owned subsidiary to be formed as a Japanese corporation ("NewCo"), the localized PointCast network technology within the country of Japan, as well as any and all activities necessary or incidental thereto.



(b) LLC shall have all powers necessary, suitable or convenient for the accomplishment of its purposes.



(c) Nothing set forth herein shall be construed as authorizing LLC to possess any purpose or power, or to do any act or thing, forbidden by law to a limited liability company organized under the laws of the State of Delaware.



1.7 Delaware Office; Agent for Service of Process. LLC's agent for

--------------------------------------------- service of process in the State of Delaware shall be c/ o Corporation Service Company, Inc., 1013 Centre Road, Wilmington, County of New Castle, Delaware 19805. The name of the registered agent for service of process on LLC is Corporation Service Company, Inc. The Board may designate a different agent for se rvice of process at any time, provided, however, that the Board shall give all of the Members written notice promptly following such change.



1.8 Title to LLC Property. All property owned by LLC, whether real or

--------------------- personal, tangible or intangible, shall be owned by LLC as an entity, and no Member individually nor any other person, partnership, corporation or other entity shall have any ownership interest in such property.



1.9 Definitions. For purposes of this Agreement, the following terms

----------- shall have the meanings set forth respectively after each:



(a) "Act" shall mean the Delaware Limited Liability Company Act, 6

--- Del. Code Sections 18-101 et seq.

-- ---



(b) "Administrative Services and Management Agreement" shall mean the

------------------------------------------------ agreement by and between NewCo and TCI in the form attached to this Agreement as Exhibit A. - ---------



(c) "Affiliate" of any party shall mean any person or entity that

--------- controls, is controlled by or is under common control with such party.



(d) "Agreement" shall mean this Limited Liability Company Agreement,

--------- as the same may be amended from time to time (including by the addition of Counterparts).



(e) "Approval" shall mean consent by the Members to an action of LLC

-------- by the affirmative vote of Members holding a majority of the Percentage Interests in LLC entitled to vote with respect to such matter, or such other Percentage Interests as may be expressly stated herein, which vote may be obtained either at a meeting of Members duly noticed (to the address



of each Member shown on LLC's records at least ten (10) days prior to the date set forth in such notice) or by a written consent executed and delivered by such Members.



(f) "Bankruptcy" shall mean with respect to any person, being the

---------- subject of an order for relief under Title 11 of the United States Code, or any successor statute i n any foreign jurisdiction having like import or effect, or that such person shall have made an assignment for the benefit of its creditors generally or a receiver shall have been appointed for substantially all of the property and assets of such person.



(g) "Board" shall mean the Board of Managers of LLC, designated in

----- accordance with Section 3.1.



(h) "Book Value" shall mean, as of any particular date, the value at

---------- which LLC's assets are properly reflected on the books of LLC as of such date in accordance with the provisions of Treasury Regulations Section 1.704-1(b). The Book Va lues of all LLC assets shall, if the Board in its sole discretion deems it appropriate, be adjusted to equal their respective gross fair market values, as determined by the Board, at the times specified in those regulations.



(i) "Capital Account" shall mean the individual capital account of a

--------------- Member maintained in accordance with Section 2.5 hereof.



(j) "Capital Contribution" shall have the meaning set forth in

-------------------- Section 2.2 hereof.



(k) "Commercial Exploitation Rights Agreement" shall mean the

---------------------------------------- agreement of this date between TCI and PCI in the form attached to this Agreement as Exhibit B.

---------



(l) "Commercial Exploitation Rights Assignment" shall mean the

----------------------------------------- assignment of the Commercial Exploitation Rights Agreement by TCI to LLC in the form attached to this Agreement as Exhibit C.

---------



(m) "Distributable Cash" shall mean, with respect to each fiscal year

------------------ of LLC, LLC's cash flow from operations for such fiscal year, as reflected in financial statements audited by LLC's independent public accountants, after providing for reserves that are determined by the Board to be required to fund ongoing development, marketing, operations and capital expenditures of LLC, and after deducting any amounts determined by the Board to be subject to any contingency.



(n) "Certificate" shall have the meaning set forth in Section 1.3.

-----------



(o) "Code" shall mean the Internal Revenue Code of 1986, as amended.

----



(p) "LLC" shall have the meaning set forth in the preamble to this

--- Agreement.



(q) "Counterpart" shall mean an additional document executed and

----------- delivered by (i) any new Member admitted to membership in LLC after the original date of this Agreement, and (ii) such Members having the right under this Agreement to approve the



admission of such Member, which document shall set forth the new Member's Percentage Interest, the resulting Percentage Interests of all other Members, and any other terms and conditions as shall apply to such Members membership in LLC. Each Counterpart shall be attached t o, and shall become part of, this Agreement.



(r) "Member" shall have the meaning set forth in the preamble to this

------ Agreement, each of whose name, Capital Contributions and Percentage Interests are or will be set forth on Schedule 1 hereto and all Counterparts.

----------



(s) "Percentage Interest" shall have the meaning set forth in Section

------------------- 2.1 hereof.



(t) "Phase I" shall mean the period from the inception of NewCo until

------- completion by NewCo of three consecutive quarters in which it has earned profits, as determined in accordance with United States generally accepted accounting principles.



(u) "Profit" or "Loss" shall mean for each taxable year, LLC's

----- ----------- taxable income or taxable loss for such taxable year, as determined under Section 703(a) of the Code and Section 1.703-1 of the Treasury Regulations (for this purpose, all items of income, gain, loss or deduction required to be stated separate l y pursuant to Section 703(a)(1) of the Code shall be included in taxable income or taxable loss), but with the following adjustments: (i) any tax-exempt income or LLC expenditures described in Section 705(a)(2)(B) of the Code shall be taken into account i n computing such taxable income or taxable loss; (ii) any item of income or gain required to be allocated specially to a Member under Section 6.2 shall not be taken into account in computing such taxable income or taxable loss; and (iii) in lieu of the dep r eciation, amortization, gain or loss taken into account in computing such taxable income or loss, LLC shall compute such items based on the Book Value of LLC property rather than its tax basis, in accordance with Treasury Regulations Section 1.704-1(b)(2) (iv)(g)(3).



(v) "Tax Matters Partner" has the meaning set forth in Section 5.6.

-------------------



(w) "Technology and Trademark License Agreement" shall mean the

------------------------------------------ Technology and Trademark License Agreement of this date between PCI and LLC in the form attached to this Agreement as Exhibit D.

---------



(x) "Treasury Regulations" shall mean the Income Tax Regulations

-------------------- issued by the United States Department of the Treasury.



ARTICLE II



CAPITAL CONTRIBUTIONS



2.1 Percentage Interests. Each Member shall have an initial undivided

-------------------- percentage economic interest in LLC, including, except as may oth erwise be provided in Article VI hereof, each item of income, gain, loss, deduction, credit and distributions or dividends of LLC (a "Percentage Interest"), as follows:





(a) PCI -- 60%



(b) TCI -- 40%



The Percentage Interests of the Members as of any date shall be as set forth next to such Member's name on Schedule 1 of this Agreement (or the most recently

---------- adopted Counterpart) and shall adjust appropriately upon admission of any new Members and other events.



2.2 Capital Contributions.

---------------------



(a) Upon execution of this Agreement, PCI has contributed to the capital of LLC (i) cash in the amount of $1 million, and (ii) certain rights to PCI technology as specified in the Technology and Trademark License Agreement, which rights have a fair market value as of the date hereof, as agreed by the Members, of $2 million. PCI's initial Capital Account balance shall equal $3 million, subject to adjustment hereafter as provided in Section 2.5 of this Agreement. The contributions made by PCI and TCI under this Section 2.2, and any subsequent contributions of capital by Members to LLC under Sections 2.3 or 2.4, are hereafter referred to as "Capital Contributions."



(b) Upon execution of this Agreement, TCI has contributed to the capital of LLC (i) cash in the amount of $2 million, and (ii) the commercial exploitation rights in respect of the localized PointCast netwo rk in Japan acquired by TCI pursuant to the Commercial Exploitation Rights Agreement. TCI's initial Capital Account balance shall equal $2 million, subject to adjustment hereafter as provided in Section 2.5 of this Agreement.



(c) In the event that the Board from time to time hereafter determines that LLC requires additional funding in excess of the amounts contributed to LLC pursuant to this Section 2.2 (and Section 2.4, if applicable) and any amounts advanced pursuant to Section 2.3, then the Members may (but shall have no obligation to) make, and LLC shall accept, such additional Capital Contributions on such terms as may be agreeable to the contributing Member and LLC.



2.3 Member Advances. In addition to the Capital Contributions provided

--------------- for under Section 2.2, the Members may, if the Board in its discretion deems it appropriate, make cash advances in such amounts and upon such repayment, interest and other te rms as the Board and the Member providing such advance shall agree. Any such cash advances shall be treated as loans to LLC rather than Capital Contributions and shall therefore not affect a Member's Capital Account.



2.4 Additional Members. Subject to Section 3.3 hereof, the Board may

------------------ admit additional Members and accept additional Capital Contributions from such additional Members from time to time and on such terms as the B oard deems appropriate in its sole discretion, and (other than such approval of the Board and, if applicable under Section 3.3, TCI) no approval from the Members shall be required for such actions. Notwithstanding the preceding sentence, no additional Me mber shall be admitted (a) which is a direct competitor of PCI or TCI unless such Member consents to such admission, or (b) upon terms which would disproportionately



reduce either PCI's or TCI's Percentage Interest relative to the interests of other Memb er(s). Any additional Members who may hereafter be admitted to LLC shall make such Capital Contributions for such interests in LLC as the Board and such additional Member shall mutually agree. No Member shall be obligated or permitted to make any other Ca pital Contributions except as otherwise provided in this Article II.



2.5 Capital Accounts.

----------------



(a) A separate capital account (a "Capital Account") shall be maintained for each Member strictly in accordance with th e rules set forth in Treasury Regulations Section 1.704-1(b)(2)(iv). Subject to the preceding sentence, each Member's Capital Account shall be (i) increased by the amount of Capital Contributions made by such Member to LLC and allocations to such Member o f Company Profits and other items of book income and gain; and (ii) decreased by the amount of money and fair market value of property (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to und e r Section 752 of the Code) distributed to it by LLC and allocations to such Member of LLC Loss and other items of book loss and deductions; and (iii) otherwise adjusted in accordance with the additional rules set forth in Treasury Regulations Section 1.70 4-1(b)(2)(iv).



(b) In the event the Book Values of LLC assets are adjusted pursuant to Treasury Regulations Section 1.704-1(b) and Section 1.9(u), the Capital Accounts of all Members shall be adjusted simultaneously to reflect the allocations of income, gain, loss or deduction that would be made to the Members if there were a taxable disposition of LLC's property for its fair market value. If any assets of LLC are to be distributed in kind, such assets shall be distributed on the basis of their f air market values after the Members' Capital Accounts have been adjusted to reflect the manner in which any unrealized income gain, loss or deduction with respect to such assets (that have not been reflected in the Capital Accounts previously) would be al located between the Members if there were a taxable disposition of the property for its fair market value.



(c) If any interest in LLC is transferred in accordance with the provisions of this Agreement, the transferee Member shall succeed to that portion of the Capital Account of the transferring Member as relates to such transferred interest.



(d) It is the intent of LLC that the Capital Accounts of all Members be determined and maintained in accordance with the principles of Treasury Regulations Section 1.704-1 at all times throughout the full term of LLC and the foregoing provisions of this Section 2.5 shall be interpreted in accordance with such intention.



2.6 Return of Capital; Partition. Except as otherwise provided herein, no

---------------------------- Member shall have any right to (a) withdraw from LLC, (b) demand the return of all or any part of such Member's capital during the term of LLC or (c) receive a return of su ch Member's capital from any specific assets of LLC. Each Member irrevoc ...