Strategic Alliance Agreement

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.











EXCLUSIVE STRATEGIC ALLIANCE AGREEMENT





Engage Technologies, Inc. and ADSmart Corporation





Cross Beam Networks Corporation





January 7, 1998

TABLE OF CONTENTS



TABLE OF CONTENTS.......................................................... 2



1. DEFINITIONS........................................................... 3



2. LOCALIZATION OF SYSTEM................................................ 5



3. LICENSE OF LOCALIZED SYSTEM........................................... 6



4. MARKETING AND DISTRIBUTION OBLIGATIONS OF XBEAM....................... 8



5. MARKETING AND DISTRIBUTION OBLIGATIONS OF ADSMART..................... 9



6. COMPENSATION.......................................................... 12



7. REPRESENTATIONS AND WARRANTIES........................................ 14



8. LIMITATION OF LIABILITY............................................... 15



9. PROPRIETARY RIGHTS.................................................... 15



10. INDEMNIFICATION....................................................... 17



11. CONFIDENTIAL INFORMATION.............................................. 18



12. TERM AND TERMINATION.................................................. 19



13. MISCELLANEOUS......................................................... 21





SCHEDULES



Schedule A --Description of ADSmart System Schedule B --ADSmart Marks Schedule C --This Page Left Intentionally Blank Schedule D --Error Correction Schedule E --Implementation Timeline

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.





EXCLUSIVE STRATEGIC ALLIANCE AGREEMENT





THIS EXCLUSIVE STRATEGIC ALLIANCE AGREEMENT (the "Agreement"), dated as of January 7, 1998 (the "Effective Date"), is by and between Engage Technologies, Inc., with offices at 100 Brickstone Square, Andover , MA, USA 01810 ("Engage") and ADSmart Corporation, with offices at 100 Brickstone Square, Andover, MA, USA 01810 ("ADSmart"), sister companies under common management, and Cross Beam Networks Corporation, with offices at 1-32-2 Harmony Tower 14F Honcho, Nakano- ku, Tokyo, 100 Japan ("Xbeam").



WHEREAS, ADSmart has developed and operates a system for the sale and distribution of advertisements on the World Wide Web (the "Web"); and



WHEREAS, Xbeam desires to operate on an exclusive basis within a limited territory a version of such system localized for the Japanese market, and ADSmart agrees to grant Xbeam such rights and develop such localized version on the terms and conditions set forth below.



NOW, THEREFORE, for and in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:



1. DEFINITIONS.



As used herein, the following capitalized terms shall have the meanings set forth below.



1.1 "Ad Services" means the provision by Xbeam, solely in conjunction with ADSmart's provision of Interim System Services as set forth in Section 5.1 or Xbeam's us e of the Localized System pursuant to Section 3, to Customers who are advertisers and ad agencies, of the following advertisement sales and management services, which are similar to the services provided by ADSmart to its network of Web sites: Web media p l acement services, campaign-based ad serving and management services, sales representation (including site promotion to advertisers and agencies, audience promotion to advertisers and agencies, proposal generation, client support, campaign and revenue repo r ting, overall marketing and branding of the network of Xbeam affiliated Web sites) and management services (including order entry and provision of sales automation for a site's sales force, creative management and approval, ad serving and targeting, clien t support, campaign reporting and billing and collections).





1.2 "Affiliate" means any person or entity directly or indirectly Controlling, Controlled by or under common Control with either party, as the context may require. "Control" shall mean an ownership interest of more than fifty percent (50%).



1.3 "Confidential Information" means, subject to the limitations set forth in Section 11 of this Agreement, any written or visual, technical, trade secret or business information of either party he reto or an Affiliate (the "Disclosing Party") which is confidential or proprietary in nature and specifically designated as confidential or proprietary or, where orally or visually disclosed, reduced to writing by the Disclosing Party within three (3) day s after the disclosure, including, without limitation, the following: business plans and/or strategy, the System and the Localized System, in whole or in part, business activities (past, present and future), pricing, financial information, product developm ent, customer information and the terms and conditions of this Agreement.



1.4 "Customer" means a person with a primary residence, or an entity with a principal place of business or corporate headquarters, in the Territory that purchases Ad Services from Xbeam as contemplated hereunder.



1.5 "Derivative Works" means works that are based upon the System and Localized System, in whole or in part, such as a revision, modification, translation, abridgment, condensation, expansion, or any other form i n which the System or Localized System may be recast, transformed, or adapted, and which, if prepared without authorization of the owner of the copyright in the System or Localized System would constitute a copyright infringement.



1.6 "Documentation " means the administrator and user documentation of software and processes, provided in hard copy or electronic on-line format, required for the intended and proper use of the System or the Localized System, as the context may require.



1.7 "Enhancements" means new features added to the System or Localized System.



1.8 "Error" means a Class 1, Class 2 or Class 3 error, as defined in Schedule D - ----------



1.9 "Internationalized System" means the core code base which is double byte enabled or further enhanced and which supports the System to be localized.



1.10 "Localized System" means the version of the System localized pursuant to Section 2 for use solely in the Territory.



1.11 "Proprietary Materials" has the meaning set forth in Section 10.1.





Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.





1.12 "Revenues" means the [**], if applicable, and (ii) the [**], to the Web site(s), if any, on which ads were placed.



1.13 "System" means the ADSmart proprietary materials, techniques, processes and know-how, including computer software, Documentation and related materials, as further described in Schedule A.

----------



1.14 "Term" has the meaning set forth in Section 12.



1.15 "Territory" means the country of Japan.



2. LOCALIZATION OF SYSTEM.



2.1 ADSmart Obligations. With the assistance and cooperation of Xbeam as

------------------- set forth in Sections 2.2, 2.3 and 2.4, ADSmart shall according to schedule as set forth in Schedule E use best efforts to localize the System and deliver the System and Loca lized System to Xbeam, and provide updates and revisions thereof on an ongoing basis, including double byte-enablement, user interface, translation of user interface and end user documentation and modification of operational policies and procedures. ADSma rt shall be solely responsible for the Localized System and System, excluding all contributions solely by Xbeam.



2.2 Xbeam Obligations. Xbeam shall use vigorous and diligent efforts to

----------------- provide ADSmart assistance require d for ADSmart to comply with its obligations under Section 2.1, including advising ADSmart on the legal, cultural and other requirements for the Localized System and providing ADSmart the financial and/or personnel resources available for Xbeam and agreed by parties for reduction of the amount of the costs pursuant to Section 2.5.



2.3 Testing of Localized System. Upon initial completion of the Localized

--------------------------- System, ADSmart shall provide one (1) copy of the Localize d System and (1) copy of the Documentation thereof to Xbeam to be used solely for testing purposes and not for any productive or other use. Xbeam shall test the Localized System, and, in accordance with Schedule D, shall promptly report to ADSmart any sub stantial

---------- Errors related to the Localized System. ADSmart shall address such Errors as set forth in Schedule D.

----------



2.4 Receipt of Localized System for service by Xbeam. After successful

------------------------------------------------ testing of the Localized System according to operational criteria to be mutually





Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.





established and accepted by the parties, Xbeam shall submit to ADSmart written certification of acceptance of the Localized System.



2.5 Costs and Expenses of Localization Efforts. The parties shall share

---- -------------------------------------- equally the cost and expense incurred by ADSmart in internationalizing and localizing the System, both initially and applicable to later new releases (the "Expenses") provided that Xbeam's share of the Expenses shall not exceed [**] payable on a monthly basis as expenses are accrued ("Xbeam's Share") the ADSmart sends invoices to Xbeam with proper voucher. Notwithstanding the foregoing provision, the amount of the costs borne by Xbeam shall, after prior agreement by b o th parties, be reduced if Xbeam provides engineering resources for localization. The amount of the reduction shall be decided based on the amount of the engineering resources provided by Xbeam as agreed by parties before Xbeam provides engineering resourc es. Xbeam shall not be required or obliged to bear any costs other than those of internationalization and localization of the System for Japan pursuant to this provision.



Xbeam's payment, or reimbursement, of monies to ADSmart pursuant to this Section 2 shall be in accordance with Section 6.4.



2.6 Localization of On-Going Features and Enhancements. Xbeam agrees to

-------------------------------------------------- share equally the costs and expense incurred by ADSmart for any on-goin g features and enhancements, which have not been developed and planned to be developed for US market, to the System and Localized System required specifically for the Japanese market.



3. LICENSE OF LOCALIZED SYSTEM.



3.1 Grant of Rights. Provided that Xbeam timely pays all fees due ADSmart

--------------- hereunder and otherwise complies with the terms of this Agreement during the term of this Agreement, ADSmart grants to Xbeam a non-transferable, exclusive right, with the right of subli cence to the joint venture when established by Xbeam and ADSmart and/or third parties which Xbeam shall be free to select subject to AD Smart's prior approval, such approval not being unreasonably withheld, (provided that in the joint venture Sumitomo Cor p oration has a controlling interest in the joint venture and Xbeam shall create a joint venture with no more than one (1) ad network at any one time), for the operation of the System or Licensed System in Japan to use only internally the object code versio n of the System, subject to Section 5.1, and the Localized System solely for the purpose of performing Ad Services in the Territory for Customers, and not for internal advertising purposes or for Affiliates, unless Xbeam shall compensate ADSmart for such u ses as provided in Section 6.1. Xbeam





Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.



may make two (2) back-up copies of the Localized System. Prior to the completion, testing and delivery of the Localized System as set forth in Section 2, ADSmart shall provide Xbeam with the System services set forth in Section 5.1 so that Xbeam can marke t and sell Ad Services in the Territory on an interim basis.



3.2 Restrictions. Xbeam may not use the System or Localized System for

------------ any purpose other than that specified in Section 3.1. Xbeam shall not, and shall not permit an y employee, contractor or other third party to, use, modify, copy, disclose, publish, distribute, assign, sublicense, sell, rent, lease, transfer, reverse engineer, disassemble, decompile, dispose of, or use for "outsourcing" or "service bureau" purposes t he System or Localized System, in whole or in part, except as specifically permitted herein. Xbeam has the right to request modifications to the Oracle database tables and ADSmart shall respond to such enhancement requests as specified in Schedule D or gi ve approval to modify to Xbeam. All of Xbeam's rights to use the System and Localized System are expressly stated herein; there are no implied rights and ADSmart reserves all rights not expressly granted to Xbeam.[**]



3.3 Misuse of System or Localized System. Xbeam shall provide ADSmart

------------------------------------ with written notice of any material breach of this Agreement, including any misuse of the System or Localized System by Xbeam, where misuse is defined as any usage beyond that specified in Section 3.2 or expressly authorized under the terms and conditions of this Agreement (hereafter 'Misuse'), excluding with ADSmart's prior approval, such approval shall not be unreasonably withheld, including but not limited to (i) copyi n g, sale, rental, distribution or repackaging of the System, Localized System and clickstream data in any form; (ii) use of the System, Localized System or clickstream data for sites outside the ADSmart network in the Territory; (iii) use of the System, Lo c alized System or clickstream data with software tools other than those provided by ADSmart and Engage; and (iv) operating the System, Localized System and clickstream data on hardware and software platforms not certified by ADSmart or Engage; and (v) modi f ying Oracle database tables for the System or Localized System. If Xbeam materially breaches the terms of this Agreement or if Xbeam Misuses the System or Localized System and such breach or Misuse is not cured within thirty (30) days after written notice thereof from Xbeam, ADSmart shall have no further obligation with respect to any warranty, support or maintenance of the part of the System or Localized System, and, notwithstanding any provision to the contrary herein, Xbeam shall not be entitled to a re fund of any amounts paid to ADSmart and shall discontinue all Ad Service operations in Japan.



3.4 Equitable Relief. Xbeam acknowledges that the Misuse of ADSmart's

---------------- System or Localized System will substantially diminish the value to ADSmart of the System and/or Localized System and cause irreparable injury in a short period of





time, and that ADSmart's remedy at law for such Misuse is inadequate. Accordingly, if Xbeam materially breaches any of its obligations with respect to the use of the System or Localized System, ADSmart shall be entitled to equitable relief to protect its interests therein, induding, but not limited to, preliminary and permanent injunctive relief, in addition to any other remedies it may have.



3.5 Marketing and Sale of Xbeam Ad Services. The parties respective

--------------------------------------- obligations regarding the marketing and sale of the Ad Services are set forth in Sections 4 and 5.



4. MARKETING AND DISTRIBUTION OBLIGATIONS OF XBEAM.



With respect to marketing and sale of Ad Services, Xbeam shall have the following obligations:



4.1 Market Development. Xbeam shall, at all times during the Term, use

------------------ its best efforts to develop the market for the Ad Services and to sell the Ad Services in the Territory in a vigorous and diligent manner which shall favorably reflect upon ADSmart's name, trademarks and the quality of its System and Localized System.



4.2 Advertising and Promotion. Xbeam shall use its efforts through its

------------------------- sales and merchandizing programs to advertise and promote the Ad Services throughout the Territory in an adequate manner. Xbeam shall be responsible for: (i) the distribution o f all advertising and promotional materials provided to Xbeam by ADSmart; (ii) the translation of such materials as well as all instructional materials provided to Xbeam by ADSmart, as necessary to meet legal and marketing requirements; and (iii) the dist r ibution of advertising and promotional materials, at Xbeam's expense, as appropriate in fulfilling its obligations hereunder to develop the market for the Ad Services. For the foregoing, ADSmart shall furnish to Xbeam, at no cost, with a reasonable quanti t y of advertising, promotional and instructional materials, including catalogues, quotation sheets, specifications and technical data in an electronic on-line format. All advertising, promotional and instructional materials not supplied by ADSmart, includi n g any translations of any English-language materials provided by ADSmart, must be approved in writing by AD Smart prior to use. Xbeam further agrees that ADSmart shall own all rights to and interests in any such translation of materials and shall undertak e any necessary action to perfect such rights and interests. All such materials shall remain the sole and exclusive property of ADSmart and, except insofar as they are distributed by Xbeam in the course of its performance of its duties under this Agreement , must be promptly destroyed in accordance with Section 12.7 hereof upon the expiration or termination of this Agreement.



4.3 Xbeam Prices. Xbeam shall be free to establish its own pricing for Ad

------------ Services that it sells. Xbeam shall notify ADSmart of its pricing, as in effect from time to time.





4.4 Facilities and Staff. Throughout the term of this Agreement Xbeam

--------------------- shall maintain the fac ilities and a staff of competent sales, marketing, technical and support personnel reasonably necessary to properly market, service and support the Ad Services in the Territory. ADSmart shall not be responsible for any performance failures significantly d ue to Xbeam's facilities or staff. Xbeam shall be solely responsible for upgrades required by any third party hardware, software and communications systems listed in Schedule A as well as

---------- staying current on all third party hardware, software and communications systems listed in Schedule A. If the equipment, staff, facilities and personnel are not

---------- sufficient for ADSmart to fulfill its obligations then the penalty in Section 6.2 will not be applied.



4.5 Training. Xbeam shall be responsible for the instruction and training

-------- of its personnel as may be necessary to effectively support, market and distribute the Ad Services in the Territory. Without lim iting the foregoing, Xbeam shall ensure that an adequate number of its (i) sales and technical personnel attend the ADSmart sales and technical training courses described in Section 5.4; and (ii) technical and support personnel receive formal training fro m third-party certified trainers in Oracle database applications, Oracle web server software, the Solaris operating system and third party router vendor classes to the extent necessary or appropriate for the performance by Xbeam of this Agreement.



4.6 Books and Records. Xbeam shall keep accurate and complete books and

----------------- records of all sales of all Ad Services, whether such services are provided by Xbeam or by ADSmart (as set forth in Section 5.7). Upon the reasonable prior r equest of ADSmart, Xbeam shall permit ADSmart and its agents and representatives, at ADSmart's cost and expense, to review such books and records for the sole purpose of ensuring the accuracy of the amounts payable hereunder pursuant to Section 6. Such au d its shall be carried out at reasonable times and in a manner that does not disrupt or otherwise adversely affect the conduct of Xbeam's business. If an audit reveals that Xbeam has failed to account accurately for any amounts due ADSmart, Xbeam shall prom ptly pay ADSmart such amounts, and reimburse ADSmart for the cost and expense of such audit.



4.7 Support. Xbeam shall be responsible for (i) communicating with all

------- Customers regarding maintenance and support, (ii) replicating and d ocumenting errors and problems identified by Customers, and (iii) reporting such errors and problems to ADSmart. ADSmart shall have no direct responsibility for Xbeam's Customers, but shall be responsible for performing error correction, as provided in Sc hedule D.

----------



4.8 Non-Competition. Xbeam shall not, during the Term, research, design,

--------------- develop, sell, market or distribute in the Territory, either directly or indirectly, any service or product that may reasonabl y be regarded as competitive with the Ad Services or Localized System, and shall keep ADSmart fully informed regarding any





services or products that might be considered so competitive whether then being researched, designed, developed, distributed or bei ng considered for distribution by Xbeam, Xbeam also shall provide current market information to ADSmart on a regular basis, including without limitation, general economic trends and conditions affecting the industry, competitor activities, customer attitu des and reactions, and other relevant information.



5. MARKETING AND DISTRIBUTION OBLIGATIONS OF ADSMART.



With respect to Xbeam's marketing and sale of the Ad Services, ADSmart shall have the following obligations:



5.1 Interim System Services. -----------------------



a. Commencing as per Schedule E and continuing in effect through the

---------- date that the Localized System is first used by Xbeam for pro ductive purposes as set forth in subsection 5.1(b), hereinafter the Interim Period, ADSmart, at its facilities, where Xbeam shall bear the costs of setting up the Xbeam advertising center including hardware and software platform costs (hereafter the 'Inte rim Equipment') and communications costs of establishing the interim system in Japan, shall provide Xbeam the services set forth in Schedule A according to the

---------- schedule in Schedule E for Xbeam to market and sell Ad Services to Customers in

---------- the Territory on an interim basis. At the conclusion of the Interim Period, Xbeam shall be responsible for all transportation costs, tariffs and taxes associated with shipping the Interi m Equipment to the designated Xbeam facilities in Japan.



b. ADSmart shall endeavor, as soon after the Effective Date as commercially practicable, to provide Xbeam a copy of the System solely for Xbeam to market and sell Ad Services to Customer s in the Territory on an interim basis. Xbeam's limited right to use the System under this subsection shall terminate upon the date of its first productive use of the Localized System, whereupon Xbeam shall immediately cease all use of the System and retu rn to ADSmart all tangible elements of the System, including without limitation all software and documentation.



c. Xbeam is responsible for managing ad campaigns for their customers, including proposal generation, order entry, order reservation , booking and scheduling, creative submission and approval, inventory management, reporting and billing, and ADSmart will provide web-based interfaces and access rights to the advertising database applications during the Interim Period to enable Xbeam to do so.



5.2 Advertising Material. ADSmart shall make available to Xbeam at no

-------------------- charge a reasonable supply of printed English language advertising, instructional and promotional material for use by Xbeam in carrying out i ts obligations in the Territory under this Agreement together with the electronic on-line format thereof Such





materials shall remain the sole and exclusive property of ADSmart and, except insofar as they are distributed by Xbeam in the course of its perf ormance of its duties under this Agreement, must be promptly returned to ADSmart or destroyed in accordance with Section 12.7 hereof upon the expiration or termination of this Agreement.



5.3 Quality and Delivery. ADSmart shall use best efforts to ensure that

-------------------- the Localized System is of a quality consistent with its intended use.



5.4 Training. At no charge to Xbeam, ADSmart shall make available initial

-------- technical training to Xbeam technical oper ations staff, customer service manager and database administrator at a location designated by ADSmart to train representatives of Xbeam to properly perform the Ad Services; provided that Xbeam shall be responsible for payment of all associated travel, lod ging, meal and other expenses of Xbeam personnel. ADSmart will also endeavor to make reasonably available further training services, support services, and in the event of an emergency, including telephone support and localized system repair services.



5.5 Improvements. ADSmart shall provide written notice to Xbeam of new

------------ models of, and improvements and enhancements to, the System that become available for use by Xbeam in the Territory, and the localized models, improvements and enhancements shall be considered to be part of the Localized System defined in Section 1.10. Xbeam shall provide written notice to ADSmart regarding enhancements specifically required for the Japanese market in the Territory and for any joint venture crea ted as per Section 3.1. ADSmart will respond to these requests as per Schedule D and Xbeam will share equally the

---------- costs incurred by ADSmart for these enhancements according to Section 2.6.



5.6 Exclusivity. During the Term, ADSmar ...