Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 10.5
------------
[NaviSite Logo]
September 16, 1998
This letter agreement ("Agreement") will serve as a binding agreement between
Engage Technologies, Inc. ("Engage") on the one hand, and NaviSite Internet
Services Corporation ("NaviSite") and Servercast Communications, L.L.C.
("Servercast" collectively with NaviSite, "NaviSite/Servercast"), on the other
hand, concerning their respective responsibilities and the revenue sharing
arrangement between the parties for jointly providing the ad management service
solution to be called "AdBureau." This Agreement will remain in force until the
parties complete a definitive agreement ("Definitive Agreement") that more fully
describes terms of the arrangement between Engage and NaviSite/Servercast.
Engage will be responsible for providing the Accipiter AdManager software as
well as the sales, marketing, billing and end user support of Customers using
the AdBureau service.
NaviSite/Servercast will provide Internet connectivity, hardware, Oracle
databases and other relevant software. NaviSite/Servercast will additionally
market and sell AdBureau and bill directly the clients to whom it has sold
AdBureau.
The fees and revenue sharing for the AdBureau service will be as follows:
Fees:
----
. Set-up Fee: [**] NaviSite/Servercast, [**] Engage). (NaviSite and Engage
will discuss guidelines to reduce set-up fees to close sale.)
. Engage will sell the AdBureau service at the mutually agreed CPM pricing
levels. A schedule is attached. Changes in pricing will require
NaviSite/Servercast's approval. AdBureau prices assume an average ad size
of 10Kb. If a customer's monthly ads, on average, exceed 10Kb, the customer
will incur an additional monthly fee.
Revenue sharing:
---------------
. If AdBureau is sold through Engage the revenue split will be
NaviSite/ServerCast -[**] Engage -[**]
. If AdBureau is sold through NaviSite/ServerCast the revenue split will be
NaviSite/ServerCast -[**] Engage - [**]
Both parties agree to make sure that the right financial model is in place to
ensure both parties are mutually incented.
The information contained in this document is proprietary and confidential. 1
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Terms and Mutual Exclusivity
----------------------------
The initial of the Definitive Agreement shall be three (3) years commencing as
of the Effective Date, unless terminated sooner for a material breach and other
customary early termination events. Engage agrees to partner exclusively with
NaviSite worldwide for the delivery of AdBureau for a three-year period,
beginning on the effective date of the Definitive Agreement. While this is a
worldwide exclusive, if NaviSite is unable to provide, or chooses not to
provide, services in certain foreign markets, Engage will be free to establish
relationships with other vendors to provide AdBureau services in those markets.
NaviSite, in turn, will not partner with competitive ad serving software
companies to resell their ad serving software as a service. However, NaviSite
will not be restricted from selling hosting services to customers for
competitive ad serving software. Additionally, NaviSite may sell competitive ad
serving software as a service if it is Engage-enable or it receives Engage's
prior approval.
The Definitive Agreement will include revenue and profitability targets to be
mutually agreed upon by the parties. There will be a review period every six (6)
months to evaluate if monthly revenues or profitability are below target, in
which case we will jointly re-architect the AdBureau service without affecting
current clients.
Upon the completion of the initial term, the Definitive shall automatically
renew for an additional one (1) year term, unless either party gives written
notice to terminate ninety (90) days prior to the expiration of the initial term
or any renewal term.
Additional provisions:
---------------------
. All contracts with customers will be signed with a 1-year minimum to
ensure that any additional infrastructure incurred by NaviSite/ServerCast
will be covered. Variations from the 1-year contract will require
NaviSite/Servercast's approval.
. Engage will provide NaviSite/Sercast with the standard AdBureau contract
for its review/approval. Variations from this standard contract will
require approval by both parties to ensure mutual acceptability.
. NaviSite/Servercast will participate in testing all Beta versions of
AdManager. It will roll out new version based on reasonable best efforts
and reflecting the commercial viability of these new versions. Engage will
make reasonable best efforts to develop these new versions of AdManager
with the needs of NaviSite/Servercast and AdBureau customers in mind.
The information contained in this document is propriety and confidential. 2
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
. Monthly minimum prices:
Tier One (small customers with limited capital; ad serving size,[**]
impressions per month). For these small customers Navisite/Servercast will
not use Oracle.
There will be a cold back-up which means ad serving will be down for about 5 to
10 minutes (in the early am) daily. Fee: [**] monthly minimum with a set-up
charge of [**] upgrade to move to Oracle/Tier two. (To complete the sale, Engage
may drop the minimum charges to [**] monthly and [**] set up.)
Tier Two (customers with greater financial resources; ad serving volume, 1 ad on
up). For these customers NaviSite/Servercast will be using Oracle databases with
a hot back-up. Fee: [**] monthly minimum which corresponds to serving roughly
[**] ad impressions a month at the [**] CPM. (To complete the sale, Engage may
drop the minimum charges to [**] monthly and a [**] set-up.)
The parties hereby execute this Agreement by signing this letter in the space
provided below.
AGREED AND ACCEPTED:
------------------------------------------------------------------------
NaviSite Internet Services Engage Technologies, Inc.
------------------------------------------------------------------------
By: /s/ [signature By: /s/ Xxxx Xxxxxx
illegible]
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Name: CFO Name: Xxxx Xxxxxx
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Title: Title: CEO
-----------------------------------------------------------------------
Date: 9/22/98 Date: 9/16/98
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Servercast Communications, L.L.C.
-----------------------------------------------------------------------
By: /s/ [signature
illegible]
-----------------------------------------------------------------------
Name:
-----------------------------------------------------------------------
Title: CFO
-----------------------------------------------------------------------
Date: 9/22/98
-----------------------------------------------------------------------
[SIGNATURE PAGE TO LETTER AGREEMENT DATED SEPTEMBER 16, 1998]
The information contained in this document is propriety and confidential. 3
