ACTV, INC.

                             EMPLOYMENT AGREEMENT

            EMPLOYMENT AGREEMENT made as of this 1st day of August, 1995, and
amended December 24, 1997, by and between ACTV, INC., a Delaware corporation,
having an office at 1270 Avenue of the Americas, New York, New York 10020
(hereinafter referred to as "Employer") and DAVID REESE, an individual residing
at 30 Maclay Road, Montville, New Jersey 07045 (hereinafter referred to as
"Employee");

                             W I T N E S S E T H:

            WHEREAS, Employer employs, and desires to continue to employ,
Employee as its Executive Vice President and President of ACTV Entertainment,
Inc.; and

            WHEREAS, Employee is willing to continue to be employed as the
Executive Vice President of Employer and President of ACTV Entertainment, Inc.
in the manner provided for herein, and to perform the duties of the Executive
Vice President of Employer and President of ACTV Entertainment, Inc. upon the
terms and conditions herein set forth;

            NOW, THEREFORE, in consideration of the promises and mutual
covenants herein set forth it is agreed as follows:

            1. Employment of Executive Vice President of Employer and President
of ACTV Entertainment, Inc. Employer hereby employs Employee as its Executive
Vice President and as President of ACTV Entertainment, Inc.

            2. Term. Subject to Section 9 below, the term of this Agreement
shall commence on August 1, 1995 and end on December 31, 2000. Each 12 month
period from January 1 through December 31 during the term hereof shall be
referred to as an "Annual Period." During the term hereof, Employee shall devote
substantially all of his business time and efforts to Employer and its
subsidiaries and affiliates.

            3. Duties. The Employee shall perform any and all duties and shall
have any and all powers as may be prescribed by the President and Chief
Executive Officer and shall be available to confer and consult with and advise
the officers and directors of Employer at such times that may be required by
Employer. Employee shall report directly and solely to the President and Chief
Executive Officer or his designee.

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            4. Compensation.

                  a. (i) Employee shall be paid a minimum of $245,000 for each
Annual Period, commencing January 1, 1998; provided, however, that Employee's
salary shall be increased annually at the beginning of each Annual Period
commencing January 1, 1999 by an amount equal to no less than the amount of his
annual salary for the immediately preceding Annual Period times the percentage
increase in the CPIW (New York) then in effect as compared to the previous
period for which the CPIW (New York) is available. Employee shall be paid
periodically in accordance with the policies of the Employer during the term of
this Agreement, but not less than monthly.

                        (ii) Employee is eligible for quarterly bonuses, if any,
which will be determined and paid in accordance with policies set from time to
time by the Board.

                  b.    (i)  In the event of a "Change of Control" whereby

                        (A) A person (other than a person who is an officer or a
Director of Employer on the effective date hereof), including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes, or
obtains the right to become, the beneficial owner of Employer securities having
30% or more of the combined voting power of then outstanding securities of the
Employer that may be cast for the election of directors of the Employer;

                        (B) At any time, a majority of the Board-nominated slate
of candidates for the Board is not elected;

                        (C) Employer consummates a merger in which it is not the
surviving entity;

                        (D) Substantially all Employer's assets are sold; or

                        (E) Employer's stockholders approve the dissolution or
liquidation of Employer; then

                        (ii) (A) All stock options, warrants and stock
appreciation rights ("Rights") granted by Employer to Employee under any plan or
otherwise prior to the effective date of the Change of Control, shall become
vested, accelerate and become immediately exercisable; at an exercise price of
10(cent) per stock appreciation right if applicable; and in addition the
employee, at his option, shall receive a special compensation payment for the
exercise cost of all vested options upon exercising those options any time
within twelve months after the effective date of the change of control, adjusted
for any stock splits and capital reorganizations having a similar effect,

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subsequent to the effective date hereof. In the event Employee owns or is
entitled to receive any unregistered

securities of Employer, then Employer shall use its best efforts to effect the
registration of all such securities as soon as practicable, but no later than
120 days after the effective date of the registration statement; provided,
however, that such period may be extended or delayed by Employer for one period
of up to 60 days if, upon the advice of counsel at the time such registration is
required to be filed, or at the time Employer is required to exercise its best
efforts to cause such registration statement to become effective, such delay is
advisable and in the best interests of Employer because of the existence of
non-public material information, or to allow Employer to complete any pending
audit of its financial statements;

                        (B) Any outstanding principle and interest on loans to
Employee pursuant to Section 4.g.(ii), below, shall be recalculated and
reconstituted as if the rights were exercised under 4 (b) (ii).

                        (C) If upon said Change of Control, (i) a new Chief
Executive Officer of Employer is appointed and (ii) Employee is not retained in
his immediately prior position or a substantially similar position with Employer
or the surviving entity, as applicable, then in addition, Employee shall be
eligible to receive a one-time bonus, equal on an after-tax basis to two times
his then current annual base salary. To effectuate this provision, the bonus
shall be "grossed-up" to include the amount necessary to reimburse Employee for
his federal, state and local income tax liability on the bonus and on the
"gross-up" at the respective effective marginal tax rates. In no event shall
this bonus exceed 2.7 times Employee's then current base salary. Said bonus
shall be paid within thirty (30) days of the Change of Control.

                  c. Employer shall include Employee in its health insurance
program available to Employer's executive officers.

                  d. Employer shall maintain a life, accidental death and
dismemberment insurance policy on Employee for the benefit of a beneficiary
named by Employee in an amount not less than $2,000,000. Ownership of the policy
shall be assigned to Employee upon termination of Employee's employment under
this Agreement.

                  e. Employee shall also be entitled to participate pari passu
in any other program established by Employer pursuant to which any executive
officers receive a share of the profits of Employer.


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                  f. Employee shall have the right to participate in any other
employee benefit plans established by Employer.

                  g. Unless a pre-existing plan of Employer expressly forbids
it, all Rights which may become exercisable during the term hereof shall be paid
for in cash only if Employee so elects, otherwise they may be paid for.

                  (i) by the transfer by Employee to Employer of so much of
Employee's Rights which, when valued at the highest trading price of the
underlying securities of Employer during the previous six months, will offset
the price of the Rights then being exercised;

                  (ii) by means of a non-recourse Note with interest at the
lowest rate, it any, required to be charged by any governmental authority, to
accrue and become due and payable with the principle, in an amount no greater
than the exercise price, given by Employee to Employer and secured solely by the
shares of stock being paid for thereby, which Note shall become due and payable
at the earlier of the expiration hereof or, on a pro rata basis, the sale by
Employee of all or part of the Rights or underlying stock which constitute
security for the Note; or

                  (iii) by any combination of cash and (ii) or (iii), above.

            5. Expenses. Employee shall be reimbursed for all of his actual
out-of-pocket expenses incurred in the performance of his duties hereunder,
provided such expenses are acceptable to Employer, which approval shall not be
unreasonably withheld, for business related travel and entertainment expenses,
and that Employee shall submit to Employer reasonably detailed receipts with
respect thereto.

            6. Vacation. Employee shall be entitled to receive four (4) weeks
paid vacation time after each year of employment upon dates agreed upon by
Employer. Upon separation of employment, for any reason, vacation time accrued
and not used shall be paid at the salary rate of Employee in effect at the time
of employment separation.

            7. Secrecy. At no time shall Employee disclose to anyone any
confidential or secret information (not already constituting information
available to the public) concerning (a) internal affairs or proprietary business
operations of Employer or (b) any trade secrets, new product developments,
patents, programs or programming, especially unique processes or methods.


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            8. Covenant Not to Compete. Subject to, and limited by, Section
10(b), Employee will not, at any time, anywhere in the world, during the term of
this Agreement, and for one (1) year thereafter, either directly or indirectly,
engage in, with or for any enterprise, institution, whether or not for profit,
business, or company, competitive with the business (as identified herein) of
Employer as such business may be conducted on the date thereof, as a creditor,
guarantor, or financial backer, stockholder, director, officer, consultant,
advisor, employee, member, inventor, producer, director, or otherwise of or
through any corporation, partnership, association, sole proprietorship or other
entity; provided, that an investment by Employee, his spouse or his children is
permitted if such investment is not more than four percent (4%) of the total
debt or equity capital of any such competitive enterprise or business and
further provided that said competitive enterprise or business is a publicly held
entity whose stock is listed and traded on a national stock exchange or through
the NASDAQ Stock Market. As used in this Agreement, the business of Employer
shall be deemed to include the development and implementation of individualized
television technology or programs.

            9.  Termination.

                  a.  Termination by Employer

                        (i) Employer may terminate this Agreement upon written
notice for Cause. For purposes hereof, "Cause" shall mean (A) engaging by the
Employee in conduct that constitutes activity in competition with Employer; (B)
the conviction of Employee for the commission of a felony; and/or (C) the
habitual abuse of alcohol or controlled substances. Notwithstanding anything to
the contrary in this Section 9(a)(i), Employer may not terminate Employee's
employment under this Agreement for Cause unless Employee shall have first
received notice from the Board advising Employee of the specific acts or
omissions alleged to constitute Cause, and such acts or omissions continue after
Employee shall have had a reasonable opportunity (at least 10 days from the date
Employee receives the notice from the Board) to correct the acts or omissions so
complained of.

                        (ii) Employer may terminate Employee's employment under
this Agreement if, as a result of any physical or mental disability, Employee
shall fail or be unable to perform his duties under this Agreement for any
consecutive period of 90 days during any twelve-month period. If Employee's
employment is terminated under this Section 9(a)(ii): (A) for the first six
months after termination, Employee shall be paid 100% of his full compensation
under Section 4(a) of this Agreement at the rate in effect on the date of
termination, and in each successive 12 month period thereafter Employee shall be
paid an amount equal to 67% of his compensation under Section 4(a) of this
agreement at the rate in effect on the date of termination; (B) Employer's

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obligation to pay life insurance premiums on the policy referred to in Section
4(d) shall continue in effect until five years after the date of termination;
and (C) Employee shall continue to be entitled, insofar as is permitted under
applicable insurance policies or plans, to such general medical and employee
benefit plans (including profit sharing or pension plans) as Employee had been
entitled to on the date of termination. Any amounts payable by Employer to
Employee under this paragraph shall be reduced by the amount of any disability
payments payable by or pursuant to plans provided by Employer and actually paid
to Employee.

                        (iii) This agreement automatically shall terminate upon
the death of Employee, except that Employee's estate shall be entitled to
receive any amount accrued under Section 4(a) and the pro-rata amount payable
under Section 4(e) for the period prior to Employee's death and any other amount
to which Employee was entitled of the time of his death.

                  b. Termination by Employee

                        (i) Employee shall have the right to terminate his
employment under this Agreement upon 30 days' notice to Employer given within 90
days following the occurrence of any of the following events (A) through (D) or
within three years following the occurrence of event (E):

                              (A) Employer acts to change the geographic
location of the performance of Employee's duties from the New York Metropolitan
area. For purposes of this Agreement, the New York Metropolitan area shall be
deemed to be the area within 30 miles of midtown Manhattan.

                              (B) A Material Reduction (as hereinafter defined)
in Employee's rate of base compensation, or Employee's other benefits. "Material
Reduction" shall mean a ten percent (10%) differential;

                              (C) A failure by Employer to obtain the assumption
of this Agreement by any successor;

                              (D) A material breach of this Agreement by
Employer, which is not cured within thirty (30) days of written notice of such
breach by Employer;

                              (E) A Change of Control.

                        (ii) Anything herein to the contrary notwithstanding,
Employee may terminate this Agreement upon thirty (30) days written notice.

                  c. If Employer shall terminate Employee's employment other
than due to his death or disability or for Cause (as defined in Section 9(a)(i)
of this Agreement), or if Employee shall terminate this Agreement under Section
9(b)(i), Employer's


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obligations under Section 4 shall be absolute and unconditional and not subject
to any offset or counterclaim and Employee shall continue to be entitled to
receive all amounts provided for by Section 4 and all additional employee
benefits under Section 4 regardless of the amount of compensation he may earn
with respect to any other employment he may obtain.

            10.   Consequences of Breach by Employer;
                  Employment Termination

                  a. If this Agreement is terminated pursuant to Section 9(b)(i)
hereof, or if Employer shall terminate Employee's employment under this
Agreement in any way that is a breach of this Agreement by Employer, the
following shall apply:

                        (i) Employee shall receive as a bonus, and in addition
to his salary continuation pursuant to Section 9.c., above, a cash payment equal
to the Employee's total base salary as of the date of termination hereunder for
the remainder of the term plus an additional amount to pay all federal, state
and local income taxes thereon on a grossed-up basis as heretofore provided,
payable within 30 days of the date of such termination; except that if this
Agreement is terminated pursuant to Section 9.(b)(i)(E), then Employee shall not
be entitled to receive a bonus under this Section 10.a.(i) but shall instead
receive a lump-sum payout of Employee's total base salary for the remainder of
the term plus an additional amount to pay all federal, state and local income
taxes thereon on a grossed-up basis as heretofore provided, payable within 30
days of the date of such termination.

                        (ii) Employee shall be entitled to payment of any
previously declared bonus and additional compensation as provided in Section
4(a), (b) and (e) above.

                  b. In the event of termination of Employee's employment
pursuant to Section 9(b)(i) of this Agreement, the provisions of Section 8 shall
not apply to Employee.

            11.   Remedies

                  Employer recognizes that because of Employee's special
talents, stature and opportunities in the interactive television industry, and
because of the special creative nature of and compensation practices of said
industry and the material impact that individual projects can have on an
interactive television company's results of operations, in the event of
termination by Employer hereunder (except under Section 9(a)(i) or (iii), or in
the event of termination by Employee under Section 9(b)(i) before the end of the
agreed term, Company acknowledges and agrees that the provisions of this
Agreement regarding further payments of base salary, bonuses and the
exercisability of Rights constitute fair and reasonable provisions for the
consequences of such termination, do not


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constitute a penalty, and such payments and benefits shall not be limited or
reduced by amounts' Employee might earn or be able to earn from any other
employment or ventures during the remainder of the agreed term of this
Agreement.

            12. Excise Tax. In the event that any payment or benefit received or
to be received by Employee in connection with a termination of his employment
with Employer would constitute a "parachute payment" within the meaning of Code
Section 280G or any similar or successor provision to 280G and/or would be
subject to any excise tax imposed by Code Section 4999 or any similar or
successor provision then Employer shall assume all liability for the payment of
any such tax and Employer shall immediately reimburse Employee on a "grossed-up"
basis for any income taxes attributable to Employee by reason of such Employer
payment and reimbursements.

            13. Arbitration. Any controversies between Employer and Employee
involving the construction or application of any of the terms, provisions or
conditions of this Agreement, save and except for any breaches arising out of
Sections 7 and 8 hereof, shall on the written request of either party served on
the other be submitted to arbitration. Such arbitration shall comply with and be
governed by the rules of the American Arbitration Association. An arbitration
demand must be made within one (1) year of the date on which the party demanding
arbitration first had notice of the existence of the claim to be arbitrated, or
the right to arbitration along with such claim shall be considered to have been
waived. An arbitrator shall be selected according to the procedures of the
American Arbitration Association. The cost of arbitration shall be born by the
losing party or in such proportions as the arbitrator shall decide. The
arbitrator shall have no authority to add to, subtract from or otherwise modify
the provisions of this Agreement, or to award punitive damages to either party.

            14. Attorneys' Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which he may be entitled.

            15. Entire Agreement; Survival. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
herein and supersedes, effective as of the date hereof any prior agreement or
understanding between Employer and Employee with respect to Employee's
employment by Employer. The unenforceability of any provision of this Agreement
shall not effect the enforceability of any other provision. This Agreement may
not be amended except by an agreement in writing signed by the Employee and the
Employer, or any waiver, change, discharge or modification as sought. Waiver of
or failure to exercise any rights provided by this Agreement and in any respect
shall not be deemed a waiver of any further or future rights.


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                  b.    The provisions of Sections 4, 7, 8, 9(a)(ii), 9(a)(iii),
9(c), 10, 11, 12, 13, 14, 17, 18 and 19 shall survive the termination of this
Agreement.

            16. Assignment. This Agreement shall not be assigned to other
parties.

            17. Governing Law. This Agreement and all the amendments hereof, and
waivers and consents with respect thereto shall be governed by the internal laws
of the state of New York, without regard to the conflicts of laws principles
thereof.

            18. Notices. All notices, responses, demands or other communications
under this Agreement shall be in writing and shall be deemed to have been given
when

                  a. delivered by hand;

                  b. sent be telex or telefax, (with receipt confirmed),
provided that a copy is mailed by registered or certified mail, return receipt
requested; or

                  c. received by the addressee as sent be express delivery
service (receipt requested) in each case to the appropriate addresses, telex
numbers and telefax numbers as the party may designate to itself by notice to
the other parties:

                        (i) if to the Employer:

                              ACTV, Inc.
                              1270 Avenue of the Americas
                              New York, New York, 10020

                              Attention: William C. Samuels

                              Telefax:  (212) 459-9548
                              Telephone:  (212) 262-2570

                              Gersten, Savage, Kaplowitz & Curtin
                              575 Lexington Avenue
                              27th Floor
                              New York, New York 10022

                              Attention:  Jay M. Kaplowitz, Esq.

                              Telefax: (212) 980-5192
                              Telephone: (212) 752-9700

                        (ii) if to the Employee:

                              David Reese
                              30 Maclay Road
                              Montville, New Jersey 07045

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            19. Severability of Agreement. Should any part of this Agreement for
any reason be declared invalid by a court of competent jurisdiction, such
decision shall not affect the validity of any remaining portion, which remaining
provisions shall remain in full force and effect as if this Agreement had been
executed with the invalid portion thereof eliminated, and it is hereby declared
the intention of the parties that they would have executed the remaining
portions of this Agreement without including any such part, parts or portions
which may, for any reason, be hereafter declared invalid.

            IN WITNESS WHEREOF, the undersigned have executed this agreement as
of the day and year first above written.

                                          ACTV, INC.

                                          By:
                                                  ------------------------------
                                                  WILLIAM C. SAMUELS
                                                  President

                                                  DAVID REESE

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