<PAGE>


                                                                   Exhibit 10.12
                                                                   -------------

                        SERVICES AND LICENSE AGREEMENT


     This Services and License Agreement ("Agreement"), effective as of October
29, 1997 ("Effective Date"), is made by and between Lycos, Inc., a Delaware
Corporation with a principal place of business at 500 Old Connecticut Path,
Framingham, MA. 01701-4576 ("Lycos"), and Engage Technologies, Inc., a
Massachusetts Corporation with a principal place of business at 100 Brickstone
Square, Andover, MA 01810 ("Engage").

                                   Recitals
                                   --------

     A.   Lycos is the owner or Licensee of certain Web services (collectively,
the "Lycos Services"), which are accessible through the URL www.lycos.com (the
"Lycos Site");

     B.   Engage provides open, standards-based software solutions that enable
companies to distinguish, understand and engage prospects and customers in
personalized communications over the Web.

     C.   The purpose of this Agreement is to address Lycos' requirement for a
visitor profiling system with the capability to drive visitor-specific
applications.  The system integrates advanced Neural Network technology from
Nestor, Inc. for the decision rule engine with the Engage large-scale
clickstream data processing capability. The system offers an optimized approach
to Lycos' long-term requirements and is aimed at strengthening the Lycos brand
with an industry-leading capability in visitor profiling, clickstream data
mining and personalization of services and content.

     D.   Engage agrees to provide stated service in exchange for Lycos' public
support of the Engage Suite of products and access to Lycos' clickstream data.

     E.   Lycos and Engage desire to enter other arrangements as more
particularly described herein.

     NOW, THEREFORE, for good and valuable consideration, receipt and
sufficiency of which are hereby acknowledged, Lycos and Engage hereby agree as
follows:
<PAGE>

                                     Terms
                                     -----

     1.   Lycos will:
          ----------

     a)   Lycos will provide Engage with the specifications of the various NT-
     based servers on which Engage will install the Web server kits.

     b)   Lycos will provide Engage with a map of Lycos' Web site operations and
     product areas as well as detailed traffic volume data per respective areas
     to enable resource planning at the hosting facility in Andover.  Lycos will
     include a determination of the amount of data it wishes to maintain online
     at Engage's hosting facility.

     c)   Lycos will provide Engage with a content description of Lycos' Web
     site pages to enable classification and will work with Engage in specifying
     the number of categories which should be addressed by the user profiling
     system.

     d)   Lycos will provide a Windows NT-based server at Lycos' operations site
     to load and operate the Engage Discover decision support module.

     e)   Lycos will facilitate and manage the technical interface between
     Engage, Lycos and Accipiter.

     f)   Lycos will work with Nestor Interactive, Inc. ("Nestor") to develop
     the models for the Communication Strategies driving the personalization
     services application and will endeavor in becoming thoroughly familiar in
     the usage of Nestor-provided operator controls for managing Communications
     Strategies and content serving.

     g)   Lycos will provide open access to its operations team for
     representatives of Engage and Nestor, Inc. and will designate a team leader
     on Lycos' side responsibilities for direct interface with the Engage-Nestor
     team with technical responsibilities in the following three main areas:  a)
     operations and data communications, b) personalization services, and c)
     advertising management.

     h)   Lycos grants to Engage a non-exclusive, perpetual, world wide, fully
     paid up, royalty free license to use all Lycos, Inc. clickstream data
     provided to Engage under this Agreement.  Engage may retain the clickstream
     data indefinitely and shall be allowed to merge, transform, enhance or
     perform operations on the data for further resale on the marketplace with
     the expressed limitations that (i) such data may not be aggregated and
     presented in a form or manner that would permit it to be identified as
     Lycos' and (ii) such data shall not contain the means to identify personal
     and confidential data provided by Lycos' users and/or the means to
     associate identifiable individual Lycos'

                                      -2-
<PAGE>

     users to an observed behavior or interest profile. Engage technologies
     shall be further prohibited from the sale or transfer of unprocessed Lycos
     data to any third party.

     i)   Lycos will provide marketing support of the Engage Suite of products
     in return for successful installment of Engage Suite modules. Furthermore,
     Lycos agrees to endorse commercial versions of the Engage Suite of products
     and allow Lycos' name to be used in Engage's product packaging, advertising
     collateral, press releases (as set forth below) and on the Engage website
     in support of the marketing and sale of commercial versions of the full
     range of Engage' Suite of products. Lycos will provide an overall level of
     marketing support no less than the level of marketing support provided by
     Lycos to Nestor pursuant to that certain Letter Agreement between Lycos and
     Nestor, a true copy of which is attached hereto as Appendix A and
     incorporated herein by reference. Each promotional item must be approved in
     advance by Lycos, which approval shall not be unreasonably withheld.

     j)   Lycos' performance under this Agreement is governed by the Statement
     of Work attached hereto as Appendix B and incorporated herein by reference.

     k)   Lycos will ensure that no action (or inaction, as the case may be) by
     Lycos causes a material breach under that certain Agreement between Nestor
     and Engage, a true copy of which is attached hereto as Appendix C and
     incorporated herein by reference.

     2.   Engage will:
          -----------

     a)   Engage will provide Lycos with software and services defined below as
     "Engage Suite" modules (Engage.Journal, Engage.Portrait, Engage.Link,
     Engage.Discover), the use of which shall be subject to the Engage Software
     License Agreement attached hereto as Appendix D and incorporated herein by
     reference, and "Engage Hosting Services" enabling Lycos to reach the
     following operational objectives:

          1.   To Collect, classify and categorize site visitor activity data,
          also defined as "clickstream data", from the Web servers and product
          areas determined by Lycos;
          2.   To generate and update a database of registered users with their
          corresponding interests and activity log data;
          3.   To generate and update a database of anonymous users with their
          corresponding interests and activity log data;
          4.   To generate user profiles from which personalized services and
          targeted content can be served to users;
          5.   To generate user profiles allowing improved ad targeting; and

                                      -3-
<PAGE>

          6.   To provide reporting and analysis tools for measuring site
          activity.

     b)   Engage will install and test a host server for Lycos' operations at
     Engage's Andover facility.  This host server, defined as "Engage Hosting
     Services", will be configured to provide sufficient data storage and
     processing resources to allow uninterrupted processing of Lycos data on a 7
     day/24 hours per day basis and according to the volume and schedule
     determined by Lycos as well as the length of time required to maintain data
     online.  This is a material term of this Agreement.

     c)   Engage will install and test Web Server kits at Lycos' operations in
     the Windows-NT servers defined by Lycos.  These kits will provide the data
     collection capability (Engage.Journal) and the user registration capability
     (Engage.Portrait).

     d)   Engage will procure, install and test the necessary data communication
     channels, hardware and software, under the sub-contract from Navisite, to
     transmit raw clickstream data from Lycos' operations in Pittsburgh to
     Engage's facility in Andover and return processed user profiles from
     Andover back to Pittsburgh.

     e)   Engage will build the Lycos site classification tables for the
     personalization areas and other sections of Lycos' site which are
     complementary to the search engine function.

     f)   Engage will install and test the Engage.Discover decision support tool
     and database at Lycos' site and at the Andover hosting facility providing
     Lycos with the capability to carry out the queries on the processed data.

     g)   Engage will install and test the Engage.Link Web Server kit at Lycos'
     designated server.  This module will be used by the applications to
     retrieve user profiles for the content personalization application.

     h)   Engage will provide data inputs in the form of user profiles generated
     by the Engage software to Lycos' ad targeting system (Accipiter) and will
     work with Lycos' advertising management team in formatting the data
     according to the ad server engine requirement and as defined by the Lycos
     technical operations team.

     i)   Engage will develop in conjunction with Nestor, an integrated system
     consisting of Engage user profiling software and Nestor Neural Network rule
     engine.  This is a material provision of this Agreement.  Notwithstanding
     the foregoing, however, Engage shall not be liable for any breach of this

                                      -4-
<PAGE>

     Agreement caused by the failure of any software provided by Nestor if
     Engage procures a reasonably acceptable replacement for such failed
     software within forty-five (45) days after written notice from Lycos.  This
     integrated system will be hosted at Engage's facilities in Andover and will
     be the platform from which Lycos' personalization services servers will
     operate.

     j)   Engage will migrate the full Windows NT-based application to the main
     Lycos operation running under Digital UNIX/Netscape 2.0 (or higher) web
     server environment within 30 days of Lycos upgrading to Netscape 2.0 (or
     higher).

     k)   Engage will provide Lycos with software updates for Engage software
     modules installed at Lycos provided Lycos' operations remain on the server
     software environments discussed above.

     l)   Engage will place in escrow with Data Securities International, Inc.
     ("DSI"), pursuant to the FlexSAFE Escrow Agreement attached hereto as
     Appendix E and incorporated herein by reference, a copy of the source code
     for each component of the Engage Suite that is owned by Engage, e.g.,
     Engage.Journal, Engage.Link, and Engage.Portrait, and Engage will use
     commercially reasonable efforts to acquire the rights to place into escrow,
     for Lycos' protection, the source code for each component of the Engage
     Suite that is licensed by Engage from a third party.  In the event the
     Escrow Material is distributed by the Escrow Agent to the License pursuant
     to the FlexSAFE Escrow Agreement, and provided that Lycos is in compliance
     with the terms of the Software License Agreement attached hereto as
     Appendix D and incorporated herein by reference ("Software License
     Agreement"), Engage hereby grants to Lycos a non-exclusive, non-
     transferable limited license to permit only its employees with a "need to
     know," who have signed a confidentiality agreement with Lycos containing
     terms no less protective of Engage's rights than those in this paragraph,
     the right to use the Source Code only on Lycos' facilities and solely to
     support Lycos' use of the object code form of the Engage Suite as permitted
     in the Software License Agreement.  Lycos shall maintain the Source Code in
     strict confidence and shall not use, reproduce, modify, access, disclose,
     reverse engineer, display, transfer or transmit the Source Code, except as
     expressly permitted herein.  This limited Source Code license is further
     subject to the same Software License Agreement restrictions as govern
     Lycos' use of the Engage Suite, provided that the terms of this Section
     2(1) shall govern over any conflicting terms in the Software License
     Agreement.  Without in any way limiting the generality of the foregoing,
     Licensee shall not be permitted to sell or license the Escrow Material to
     any third party and Lycos shall return the Source Code to Engage
     immediately upon the cure, cancellation, removal or other termination or
     expiration of the event giving rise under the Escrow Agreement to the
     release

                                      -5-
<PAGE>

     of the Source Code. Lycos will reimburse Engage, promptly upon receipt of
     an invoice from DSI, $1,750 towards the cost of establishing the FlexSAFE
     Escrow Agreement. Engage will pay all future charges owed to DSI, and will
     provide Lycos with proof of payment.

     m)   Engage's performance under this Agreement is governed by the Statement
     of Work attached hereto as Appendix B and incorporated herein by reference.

     3.   Term.  The term ("Term") of this Agreement shall commence on the
          ----
          Effective Date hereof and continue until October 1, 1998 unless
          terminated earlier as provided in section 10 below.  This Agreement
          shall renew automatically for successive one year periods unless
          either party gives written notice of cancellation to the other party
          within thirty (30) days prior to the commencement of any such renewal
          date.

     4.   Pricing.  The pricing for hosting and integration services provided by
          -------
          Engage to Lycos under this Agreement are set forth in Appendix F
          Pricing.

     5.   License.  Engage grants Lycos a license to use the Engage Suite
          -------
          modules during the term of this Agreement subject to the terms and
          conditions of the Software License Agreement to be put in place
          between Engage and Lycos.

     6.   Representations and Warranties of Engage.  In order to induce Lycos to
          ----------------------------------------
          enter into this Agreement, Engage hereby warrants and represents as
          follows:

     a)   Status. Engage is a corporation in good standing under the laws of the
          ------
     state of its organization, and has the full right, power and authority to
     enter into this Agreement and to grant the rights herein granted.

     b)   No Conflicting Obligations. The performance by Engage pursuant to this
          --------------------------
     Agreement and/or the rights herein granted to Lycos will not conflict with
     or result in a breach or violation of any of the terms or provision of, or
     constitute a default, under any organizational instruments of Engage or any
     agreement to which Engage is a party or to which it is bound.

     c)   Right to License.  Engage possesses the full right and authority to
          ----------------
     license the Engage Suite modules and the Engage's trademarks, service
     marks, and the like (the "Engage Marks") used in connection therewith.
     Engage is the sole owner and/or has the right to license, and shall
     continue to own and/or

                                      -6-
<PAGE>

     have the right to license, throughout the Term of the Agreement the Engage
     Suite modules and each element thereof.

     d)   Compliance with Laws and Regulations.  Engage shall comply with all
          ------------------------------------
     applicable laws, statutes, ordinances, rules and regulations of each
     county, state, city or other political entity.

     e)   Clearances.  Engage shall clear all rights in the Engage Suite modules
          ----------
     and Engage marks and all elements thereof for use as provided herein.  All
     fees of any nature, including, without limitation, residuals, royalties,
     reuse, health and welfare payments, and similar or dissimilar fees due to
     third parties for rights necessary to exploit the Engage Suite modules and
     Engage Marks, as provided herein, shall be the sole responsibility of
     Engage.

     f)   No Infringement. Engage has the right to enter into this Agreement and
          ---------------
     to grant to Lycos the license provided herein and neither the Engage Suite
     modules, Engage Marks, nor any other materials or any elements or parts
     thereof, shall violate or infringe upon the copyright, literary, privacy,
     publicity, trademark, service mark or any other personal, moral or property
     right of any person, or shall same constitute a libel or defamation of any
     person whatsoever.

     g)   General.  EXCEPT FOR THE FOREGOING REPRESENTATIONS AND WARRANTIES AND
          -------
     THE REPRESENTATIONS AND WARRANTIES IN THE SOFTWARE LICENSE AGREEMENT
     ATTACHED AS APPENDIX D, ENGAGE TECHNOLOGIES MAKES NO REPRESENTATIONS OR
     WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER
     INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF FITNESS FOR A
     PARTICULAR PURPOSE, MERCHANTABILITY OR OTHERWISE WHICH WOULD EXTEND BEYOND
     THE REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN.

     7.   Representations and Warranties of Lycos.  In order to induce Engage to
          enter into this Agreement, Lycos represents and warrants that:

     a)   Corporate Status.  Lycos is a corporation in good standing under the
          ----------------
     laws of the State of Delaware, and has the full right, power and authority
     to enter into this Agreement and to grant the rights herein granted.

     b)   No Conflicting Obligations.  The performance by Lycos pursuant to this
          --------------------------
     Agreement and/or the rights herein granted to Engage will not conflict with
     or result in a breach or violation of any of the terms or provisions of, or
     constitute a default under, any organizational instruments of Lycos or any
     agreement to which Lycos is a party or to which it is bound.

                                      -7-
<PAGE>

     c)   Right to License.  Lycos possesses the full right and authority to
          ----------------
     provide access to the Lycos Site and to license the Lycos Services and
     Lycos' trademarks, service marks and the like (the "Lycos Marks").  Lycos
     is the sole owner and/or has the right to license, and shall continue to
     own and/or have the right to license, throughout the term of this
     Agreement, all right, title and interest in and to the Lycos Site and each
     element thereof.

     d)   Compliance with Laws and Regulations.  Lycos shall comply with all
          ------------------------------------
     applicable laws, statutes, ordinances, rules and regulations of each
     county, state, city or other political entity.

     e)   Clearances.  Lycos shall clear all rights in the Lycos site and all
          ----------
     elements thereof for use as provided herein.  All fees of any nature,
     including, without limitation, residuals, royalties, reuse, health and
     welfare payments, and similar or dissimilar fees due to third parties for
     rights necessary to exploit the Lycos Site, as provided herein, shall be
     the sole responsibility of Lycos.

     f)   No Infringement.  Lycos has the right to enter into this Agreement and
          ---------------
     to grant to Engage the license provided herein and neither the Lycos Site
     nor any other materials or any elements or parts thereof, shall violate or
     infringe upon the copyright, literary, privacy, publicity, trademark,
     service mark or any other personal, moral or property right of any person,
     nor shall same constitute a libel or defamation of any person whatsoever.

     g)   General.  EXCEPT FOR THE FOREGOING REPRESENTATIONS AND WARRANTIES,
          -------
     LYCOS MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESS OR
     IMPLIED, AS TO ANY MATTER INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES
     OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY OR OTHERWISE WHICH
     WOULD EXTEND BEYOND THE REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN.

     8.   Indemnification.
          ---------------

     a)   Engage Indemnity. Engage will at all times indemnify and hold harmless
          ----------------
     Lycos and its officers, directors, shareholders, employees, accountants,
     attorneys, agents, successors and assigns from and against any and all
     third party claims, damages, liabilities, costs and expenses, including
     reasonable legal fees and expenses, arising out of or related to any breach
     of any warranty, representation, covenant or agreement made by Engage in
     this Agreement.  Lycos shall give Engage prompt written notice of any
     claim, action or demand for which indemnity is claimed.  Engage shall have
     the right, but not the obligation, to control the defense and/or settlement
     of any claim in

                                      -8-
<PAGE>

     which it is named as a party.  Lycos shall have the right to participate in
     any defense of a claim by Engage with counsel of Lycos' choice at Lycos'
     own expense.  The foregoing indemnity is conditioned upon: prompt written
     notice by Lycos to Engage of any claim, action or demand for which
     indemnity is claimed; complete control of the defense and settlement
     thereof by Engage; and such reasonable cooperation by Lycos in the defense
     as Engage may request.

     b)   Lycos Indemnity.  Lycos will at all times defend, indemnify and hold
          ---------------
     harmless Engage and its officers, directors, shareholders, employees,
     accountants, attorneys, agents, successors and assigns from and against any
     and all third party claims, damages, liabilities, costs and expenses,
     including reasonable legal fees and expenses, arising out of or related to
     any breach of any warranty, representation, covenant or agreement made by
     Lycos in this Agreement.  Engage shall give Lycos prompt written notice of
     any claim, action or demand for which indemnity is claimed.  Lycos shall
     have the right, but not the obligation, to control the defense and/or
     settlement of any claim in which it is named as a party.  Engage shall have
     the right to participate in any defense of a claim by Lycos with counsel
     defense of Engage chose at its own expense.  The foregoing indemnity is
     conditioned upon; prompt written notice by Engage to Lycos of any claim,
     action or demand for which indemnity is claimed; complete control of the
     defense and settlement thereof by Lycos; and such reasonable cooperation by
     Engage in the defense of Lycos may request.

     9.   Confidentiality, Press Release.
          ------------------------------

     a)   Non-Disclosure Agreement. The parties agree and acknowledge that, as a
          ------------------------
     result of negotiating entering into and performing this Agreement, each
     party has and will have access to certain of the other party's Confidential
     Information (as defined below).  Each party also understands and agrees
     that misuse and/or disclosure of that information could adversely affect
     the other party's business. Accordingly, the parties agree that, during the
     Term of this Agreement and thereafter, each party shall use and reproduce
     the other party's Confidential Information only for purposes of this
     Agreement and only to the extent necessary for such purpose and shall
     restrict disclosure of the other party's Confidential Information to its
     employees, consultants or independent contractors with a need to know and
     shall not disclose to the other party's Confidential Information to any
     third party without the prior written approval of the other party.
     Notwithstanding the foregoing, it shall not be a breach of this Agreement
     for either party to disclose Confidential Information of the other party if
     required to do so under law or in a judicial or other governmental
     investigation or proceeding, provided the other party has been given prior
     notice and the disclosing party has sought all available safeguards against
     widespread dissemination prior to such disclosure.

                                      -9-
<PAGE>

     b)   Confidential Information Defined.  As used in this Agreement, the term
          --------------------------------
     "Confidential Information" refers to: (i) the terms and conditions of this
     Agreement; (ii) each party's trade secrets, business plans, strategies,
     methods and/or practices; and (iii) other information relating to either
     party that is not generally known to the public, including information
     relating to either party's personnel, products, customers, marketing
     strategies, services or future business plans.  Notwithstanding the
     foregoing, the term "Confidential Information" specifically excludes (A)
     information that is now in the public domain or subsequently enters the
     public domain by publication or otherwise through no action or fault of the
     other party; (B) information that is known to either party without
     restriction, prior to receipt from the other party under this Agreement,
     from its own independent sources as evidenced by such party's written
     records, and which was not acquired, directly or indirectly, from the other
     party; (C) information that either party receives from any third party
     reasonably known by such receiving party to have a legal right to transmit
     such information, and not under any obligation to keep such information
     confidential; and (D) information independently developed by either party's
     employees or agents provided that either party can show that those same
     employees or agents had no access to the Confidential Information received
     hereunder.

     c)   Press Releases.  Lycos and Engage may jointly prepare press releases
          --------------
     concerning the existence of this Agreement and the terms hereof.
     Otherwise, no public statements concerning the existence or terms of the
     Agreement and shall be made or released to any medium except with the prior
     approval of Lycos and Engage or as required by law.

     10.  Termination.  Either party may terminate this Agreement if (a) the
          -----------
          other party files a petition for bankruptcy or is adjudicated
          bankrupt; (b) a petition in bankruptcy is filed against the other
          party and such petition is not dismissed within sixty (60) days of the
          filing date; (c) the other party becomes insolvent or makes an
          assignment for the benefit if its creditors pursuant to any bankruptcy
          law; (d) a receiver is appointed for the other party or its business.
          In addition, either party may terminate this Agreement (e) upon the
          occurrence of a material breach by the other party if such breach is
          not cured within thirty (30) days after written notice is received by
          the breaching party identifying the matter constituting the material
          breach; (f) by mutual consent of the parties; or (g) for failure by
          either party to fulfill its obligations as set forth in Appendix A
          Statement of Work.

     11.  Survivability.  Lycos will continue to provide clickstream data to
          -------------
          Engage for a period extending six (6) months from the date of any
          termination

                                      -10-
<PAGE>

          of this Agreement. This Sec. 11 shall survive any termination of this
          Agreement.

     12.  Relationship of Parties.  Engage and Lycos are independent contractors
          -----------------------
          under this Agreement, and nothing herein shall be construed to create
          a partnership, joint venture or agency relationship between Engage and
          Lycos.  Neither party has authority to enter into agreements of any
          kind on behalf of the other.

     13.  Assignment, Binding Effect.  Neither Lycos nor Engage may assign this
          --------------------------
          Agreement or any of its rights or delegate any of its duties under
          this Agreement without the prior written consent of the other.

     14.  Choice of Law and Forum.  This Agreement, its interpretation,
          -----------------------
          performance or any breach thereof, shall be construed in accordance
          with, and all questions with respect thereto shall be determined by,
          the laws of the Commonwealth of Massachusetts applicable to contracts
          entered into and wholly to be performed within said state.  Engage
          hereby consents to the personal jurisdiction of the Commonwealth of
          Massachusetts, acknowledges that venue is proper in any state or
          Federal court in the Commonwealth of Massachusetts, agrees that any
          action related to this Agreement must be brought in a state or Federal
          court in the Commonwealth os Massachusetts, and waives any objection
          Engage has or may have in the future with respect to any of the
          foregoing.

     15.  Good Faith.  The parties agree to act in good faith with respect to
          ----------
          this Agreement and any dispute that may arise related hereto.

     16.  Additional Documents/Information.  The parties agree to sign and/or
          --------------------------------
          provide such additional documents and/or information as may reasonably
          be required to carry out the intent of this Agreement and to
          effectuate its purposes.

     17.  Counterparts.  This Agreement may be executed in multiple
          ------------
          counterparts, each of which shall be deemed to be an original, but all
          of which together shall constitute one and the same instrument.

     18.  Entire Agreement.  This Agreement contains the entire understanding of
          ----------------
          the parties hereto with respect to the transactions and matters
          contemplated by hereby, supersedes all previous agreements between
          Lycos and Engage concerning the subject matter, and cannot be amended
          except by a writing signed by both parties.  No party hereto has
          relied on any statement, representation or promise of any other

                                      -11-
<PAGE>

          party or with any other officer, agent, employee or attorney for the
          other party in executing this Agreement except as expressly stated
          herein.

     19.  Limitations of Liability.
          ------------------------

     UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES (EVEN IF THAT
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), ARISING FROM ANY
PROVISION OF THIS AGREEMENT (INCLUDING SUCH DAMAGES INCURRED BY THIRD PARTIES),
SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST
BUSINESS.  IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR DAMAGES IN EXCESS OF THE
AMOUNT RECEIVED BY THE OTHER PARTY UNDER THIS AGREEMENT, PROVIDED THAT THIS
SECTION DOES NOT LIMIT EITHER PARTY'S LIABILITY TO THE OTHER FOR (A) WILLFUL AND
MALICIOUS MISCONDUCT; (B) DIRECT DAMAGES TO REAL OR TANGIBLE PERSONAL PROPERTY;
(C) BODILY INJURY OR DEATH CAUSED BY NEGLIGENCE; OR (D) INDEMNIFICATION
OBLIGATIONS HEREUNDER.

     IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date set forth above.

ENGAGE TECHNOLOGIES, INC.               LYCOS, INC.

By:   /s/Paul Schaut                    By: /s/Edward M. Philip
   ----------------------                  ----------------------------

Name:   Paul Schaut                     Name:   Edward M. Philip
     --------------------                    --------------------------

Title:      CEO                         Title:        COO
      -------------------                     -------------------------

Date:       10/29/97                    Date:        10/29/97
     --------------------                    --------------------------

                                      -12-
<PAGE>

                                  APPENDIX A

October 29, 1997

Lycos, Inc.
500 Old Connecticut Path
Framingham, MA 01701-4576

Attn:  Edward M. Philip, CFO

Dear Ted:

Reference is made to the request by Lycos, Inc. ("Lycos") that Nestor
Interactive, Inc. ("Nestor") deliver and license a copy or copies of Nestor's
software program called InterSite (the "Nestor Software") to Engage
Technologies, Inc. (the "Licensee") and permit the Licensee to sublicense that
copy or copies to Lycos in conjunction with Licensee's license to Lycos of the
Engage Enterprise Suite (the "Subject Product").

Nestor is willing to so license and deliver the Nestor Software to Licensee
conditioned on and subject to Lycos' agreement to the following:

1.   Lycos shall fully comply with all of the terms and conditions of the
     license of the Subject Product between the Licensee and Lycos.

2.   Lycos and Nestor shall jointly release a press release in the form attached
     hereto, the timing of which shall be subject to both parties' reasonable
     approval, but no later than December 1, 1997.

3.   As long as Lycos uses the Nestor Software, Lycos shall:

     (i)    identify Nestor as Lycos's exclusive vendor of "neural network ad
            targeting software";
     (ii)   maintain on Lycos's Web pages on which the Nestor Software
            participates in ad selection or personalization, a GIF image (the
            placements, compositions and sizes of which shall be similar to
            those of the GIF images of other software providers on such Web
            pages (if any) and shall in any event be subject to Nestor's advance
            approval, which approval shall not be unreasonably withheld), which
            shall be linked to such Web pages as Nestor reasonably may elect
            from time to time;
     (iii)  allow and host such visits to its facilities by potential customers
            for the Nestor Software as Nestor may reasonably request;
     (iv)   participate in such sales conference calls for the Nestor Software
            as Nestor may reasonably request;

                                      -13-
<PAGE>

     (v)    recommend the Nestor Software as its preferred solution to all
            Lycos's customers (including without limitation Barnes and Noble,
            Prodigy, Accipiter, Planet Direct, GTE Corporation, United Parcel
            Service of America, Inc., and InfoSpace) and other third parties who
            inquire; and
     (vi)   not in any way disparage the Nestor Software to any third party.

4.   Personnel of Lycos reasonably acceptable to Nestor shall present the
     keynote address at the 1998 InterSite User's Group meeting.

5.   If Lycos at any time pays the Licensee a license fee for or in connection
     with the Subject Product, the continued use of the Nestor Software by
     Licensee shall be subject to such fee as Nestor and Lycos shall then agree
     after good faith negotiation.

6.   Nestor may immediately terminate the license of the Nestor Software to the
     Licensee if (i) Lycos and Nestor, each acting in good faith, fail to agree
     on the fees as provided in paragraph 5 of this letter agreement, (ii) if
     Lycos fails to fully and timely perform any of its obligations under this
     letter agreement.

7.   Lycos will provide Nestor with 3,000,000 banner advertisements, on a run of
     site and space available basis, over a three month period.

8.   Nestor assumes no obligation or liability for, and Lycos will indemnify,
     defend and hold Nestor harmless from, any expenses, damages, costs
     (including reasonable attorneys' fees) or losses resulting from, arising
     from or relating to (i) the breach by Lycos of any of its agreements or
     duties contained in this letter agreement or (ii) the use by Lycos of the
     Nestor Software.

9.   Lycos will maintain the confidentiality of, and not disclose to any third
     party (except the Licensee), the terms and conditions of this letter
     agreement.

10.  THE NESTOR SOFTWARE IS LICENSED TO THE LICENSEE AS-IS.

11.  REGARDLESS OF WHETHER ANY REMEDY HEREIN FAILS OF ITS ESSENTIAL PURPOSE, IN
     NO EVENT WILL NESTOR OR ANY THIRD PARTY SOFTWARE SUPPLIER BE LIABLE FOR ANY
     INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES
     ARISING OUT OF OR RELATING IN ANY WAY TO THIS LETTER AGREEMENT.  THE NESTOR
     SOFTWARE OR THE USE OF THE SAME (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR
     LOST INFORMATION, LOST SAVINGS, LOST PROFITS OR BUSINESS INTERRUPTION),
     EVEN IF NESTOR AND/OR THE THIRD-PARTY SOFTWARE SUPPLIERS HAVE BEEN
     INFORMED, ARE AWARE, OR SHOULD BE OR HAVE BEEN AWARE, OF THE POSSIBILITY OF
     SUCH

                                      -14-
<PAGE>

     DAMAGES.  THE SOLE REMEDY FOR ANY DISK OR OTHER MACHINE READABLE MATERIAL
     SUPPLIED BY NESTOR WHICH IS PHYSICALLY DEFECTIVE SHALL BE REPLACEMENT OF
     SUCH DISK OR MATERIAL.  IN NO EVENT WILL NESTOR OR ANY THIRD-PARTY SOFTWARE
     SUPPLIERS BE LIABLE IN DAMAGES OR OTHERWISE IN EXCESS OF ONE THOUSAND
     DOLLARS ($1,000).

12.  This letter agreement has been entered into, delivered and is to be
     governed by, construed, interpreted and enforced in accordance with the
     laws of the State of New York (without giving reference to choice-of-law
     provisions) from time to time in effect.  The parties agree that the United
     Nations Convention on Contracts for the International Sale of Goods shall
     not apply to any of the transactions which are contemplated by this letter
     agreement.

13.  Any dispute arising out of or relating to this letter agreement, a breach
     hereof, or Lycos' use of the Nestor Software, shall be settled by
     arbitration before one neutral arbitrator (selected from a panel of
     attorneys having experience with the knowledge of computers and the
     computer business) in New York City and administered by the American
     Arbitration Association in accordance with its Commercial Arbitration
     Rules.  Any provisional or equitable remedy which would be available from a
     court of law shall be available from the arbitrator to the Parties.  In any
     such proceeding, limited civil discovery shall be permitted for the
     production of documents, which shall be governed by the Federal Rules of
     Civil Procedure (without reference to any local rules of a particular
     court).  All issues regarding discovery requests shall be decided by the
     arbitrator.  Judgment upon the award of the arbitrator may be enforced in
     any court having jurisdiction with respect thereto.  The parties hereby
     consent to the non-exclusive jurisdiction of the courts of the State of New
     York or to any Federal court located within the State of New York for any
     action (i) to compel arbitration, (ii) to enforce the award of the
     arbitrator or, (iii) at any time prior to the qualification and appointment
     of the arbitrator, for temporary, interim or provisional equitable remedies
     and to service of process in any such action by registered mail, return
     receipt requested, or by any other means provided by law.

Yours very truly,

NESTOR INTERACTIVE, INC.
By: /s/ Christopher L. Scofield
   --------------------------------
Name:  Christopher L. Scofield
     ------------------------------
Title: VP - Nestor Interactive
      -----------------------------

                                      -15-
<PAGE>

ACCEPTED AND AGREED TO AS
OF THE DATE OF THIS LETTER

LYCOS, INC.

By: /s/ Edward M. Philip
   ----------------------------

Name:  Edward M. Philip
     --------------------------

Title:   COO
      -------------------------
                                      -16-
<PAGE>

                                  APPENDIX B

                               STATEMENT OF WORK


The integration of the system subject to the present agreement will include the
following tasks and responsibilities:

I.   Installation of Engage Suite:
     Sub-tasks:

     1.  Installation of Engage Host Server software in Andover. Primary
         responsibility: Engage. Capability provided: Data collection and
         aggregation for Lycos clickstream and registration data at hosting
         site. Identification and profiling of anonymous users. Expected
         completion: 11/6/97
     2.  Installation of Web server kits at Lycos on servers identified by
         Lycos. Primary responsibility: Lycos and Engage. Capability provided:
         redirect of log and portrait data to Andover facility. Expected
         completion: 10/21/97
     3.  Installation of Engage Discover data analysis module at Lycos site on
         server identified by Lycos. Primary responsibility: Lycos and Engage.
         Capability provided: data analysis on Lycos clickstream and user
         registration data. Expected completion: 10/22/97
     4.  Classification of Lycos' site and definition of structure for
         personalization area. Primary responsibility: Lycos and Engage.
         Capability provided: mapping of user interests to pages viewed to
         enable the profiling capability. Expected completion: 11/5/97

II.  Installation of Nestor InterSite software:
     Sub-tasks:

     1.  Installation of Nestor InterSite software at Engage's facility in
         Andover. Primary responsibility: Nestor and Engage. Capability
         provided: Neural Network targeting module. Expected completion:
         12/1/97.
     2.  Installation of InterSite software at Lycos. Primary responsibility:
         Lycos and Nestor. Capability provided: Marketing database for
         categories, category groups, communications, population segments and
         communication strategies. Definition of input required for enhanced
         Accipiter rules for Ad targeting. Expected completion: 12/17/97
     3.  Training of Lycos Marketing team on usage of Communications Workbench.
         Primary responsibility: Lycos and Nestor. Capability provided:
         knowledge in operation of Nestor InterSite software. Expected
         completion: 12/4/97

III. Development of capability for content serving and personalization services:
     Sub-tasks:

     1.  Definition of Lycos layout template. Primary responsibility: Lycos and
         Nestor. Expected completion: 11/14/97
     2.  Integration of Nestor API into Lycos' Personalized services server(s).
         Primary responsibility: Lycos and Nestor. Capability provided: software
         input to drive personalization services. Expected completion: 11/28/97
     3.  Definition of recommendation model and communication strategies.
         Primary responsibility: Lycos and Nestor. Capability provided: rules
         for personalization services. Expected completion: 1/16/98

IV.  Full system implementation at Lycos:
     Sub-tasks:

     1.  Upgrade Lycos Web servers to Netscape 2.0/3.0 Primary responsibility:
         Lycos. Expected completion: 1/1/98
     2.  Installation of Nestor client software on Digital UNIX servers at
         Lycos. Primary responsibility: Lycos and Nestor. Expected completion:
         1/5/98
     3.  Installation of Engage Web server kits on Digital UNIX servers at
         Lycos. Primary responsibility: Lycos and Engage. Capability provided:
         full system implementation across entire Lycos site. Expected
         completion: 1/28/98

                                      -17-
<PAGE>

                                  APPENDIX C
                                   AGREEMENT

     AGREEMENT (the "Agreement") made this __ day of _________, 19__, by and
between Nestor Interactive, Inc., a Delaware corporation, having a place of
business at One Richmond Square, Providence, RI  02906 ("Nestor"), and Engage
Technologies, Inc., a Delaware corporation having a place of business at 100
Brickstone Square, Andover, MA  01810 ("Licensee" and together with Nestor, the
"Parties" and each singularly a "Party").

     Since Licensee wishes to acquire a non-exclusive limited license to copy
and sublicense copies of a product developed by Nestor called InterSite ("Nestor
Software") in connection with the license by Licensee of its product called the
Engage Enterprise Suit (the "Subject Product") described in the Schedule to this
Agreement (the "Schedule") to Lycos, Inc. (the "Sublicensee"), and in
consideration of the mutual promises and covenants herein contained, the Parties
agree as follows:

I.   Grant of License.
     ----------------

     A.   Subject to the provisions of this Agreement, Nestor hereby grants to
Licensee, and Licensee accepts a personal, nontransferable and non-exclusive
license (the "License"), but only to deliver and sublicense to the Sublicensee
for its use with the Subject Product the copies of the Nestor Software
previously delivered to Licensee by Nestor.  Licensee may not duplicate any of
the Nestor Software.  All rights not expressly granted to Licensee are reserved
by Nestor.

     B.   The License includes the Nestor Software in object code only and does
not include source code ("source code" is a computer program or any part thereof
in human-readable form; "object code" is a computer program restricted in its
entirety to machine-executable instructions).

     C.   If and to the extent the Nestor Software includes Software belonging
to third-parties (the "Third-Party Software"), the License includes the right to
use such Third-Party Software in accordance with the terms and conditions of
this Agreement. Unless the context otherwise indicates to the contrary, as used
in this Agreement the term Nestor Software shall include such Third-party
Software.

II.  Right to Sublicense.
     -------------------

     A.   The Nestor Software may be sublicensed only for use with a Subject
Product.  A sublicense of the Nestor Software (a "Sublicense") may not:

     (1)  entail or contemplate a transfer of any right, title or interest in
the Nestor Software,

                                      -18-
<PAGE>

     (2)  be granted except in connection with a license of a Subject Product,

     (3)  be granted except for the internal use of the Nestor Software by the
Sublicensee or,

     (4)  allow the Sublicensee to re-sublicense,

     B.   The Sublicense shall also provide or contain:

     (1)  any terms and conditions contained in this Agreement that specifically
apply to the Sublicense,

     (2)  such terms and conditions as are necessary to effectuate the
provisions and/or limitations on use of paragraphs IB, VB, C and D, VI and VII,

     (3)  such terms and conditions as Nestor deems necessary or desirable to
ensure the Sublicensee's compliance with the terms and conditions of the letter
agreement (the "Letter Agreement") attached hereto in the Exhibit; and

     (4)  that Nestor at its election shall have the right to enforce and/or
enjoy the benefits of the provisions of the Sublicense relating to the Nestor
Software.

     C.   Licensee shall prior to use deliver to Nestor a copy of those
provisions of the Sublicense that pertain to the Nestor Software.

III. Audit
     -----

     Licensee will keep such records as will enable its compliance with the
terms and conditions of this Agreement to be accurately determined by Nestor.
Such records will be retained by Licensee and made available to Nestor for
examination at the request and at the expense of Nestor during reasonable
business hours at the offices of Licensee set forth in the preamble to this
Agreement for a period of at least five (5) years after the date of the
transaction to which the records relate.

IV.  Indemnification.  Nestor assumes no obligation or liability for, and
     ---------------
Licensee will indemnify, defend and hold Nestor harmless from any expenses,
damages, costs (including reasonable attorneys' fees) or losses resulting from,
arising or relating to (i) the breach by Licensee of any of its agreements,
warranties or duties contained in this Agreement or (ii) the use by Licensee of
the Nestor Software and/or the Subject Product or (iii) the use by the
Sublicensee of the Subject Product.

                                      -19-
<PAGE>


V.   Warranties and Covenants.
     ------------------------

     A.   Each Party does hereby warrant that this Agreement has been duly and
validly authorized and executed by it and is its valid and binding obligation.

     B.   NESTOR SOFTWARE IS LICENSED AS IS NESTOR AND ALL THIRD-PARTY SOFTWARE
SUPPLIERS DO NOT WARRANT THAT THE NESTOR SOFTWARE AND THE TECHNOLOGY EMBODIED
THEREIN ARE CAPABLE OF INDUSTRIAL REALIZATION OR COMMERCIAL EXPLOITATION NESTOR
AND ANY THIRD PARTY SOFTWARE SUPPLIERS SHALL HAVE NO RESPONSIBILITY FOR THE
CONSEQUENCES OF ANY SUCH FAILURE OF INDUSTRIAL REALIZATION OR COMMERCIAL
EXPLOITATION.  IT IS UNDERSTOOD THAT NESTOR AND ALL THIRD-PARTY SOFTWARE
SUPPLIERS ARE NOT MAKING AND EXPRESSLY DISCLAIM ANY REPRESENTATIONS OR
WARRANTIES THAT THE MANUFACTURE, USE, SUBLICENSING OR SALE OF THE SUBJECT
PRODUCT WILL NOT INFRINGE THE PATENTS, COPYRIGHTS, TRADEMARKS OR OTHER
PROPRIETARY PROPERTY RIGHTS OF ANY THIRD PARTY.  NESTOR AND ALL THIRD-PARTY.
NESTOR AND ALL THIRD-PARTY SOFTWARE SUPPLIERS EXPRESSLY DISCLAIM, ANY AND ALL
WARRANTIES OR GUARANTEES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.

     C.   REGARDLESS OF WHETHER ANY REMEDY HEREIN FAILS OF ITS ESSENTIAL
PURPOSE, IN NO EVENT WILL NESTOR OR ANY THIRD PARTY SOFTWARE SUPPLIER BE LIABLE
FOR ANY INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT OR CONSEQUENTIAL
DAMAGES, ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT, NESTOR
SOFTWARE OR THE USE OF THE SAME (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOST
INFORMATION, LOST SAVINGS, LOST PROFITS OR BUSINESS INTERRUPTION), EVEN IF
NESTOR AND/OR THE THIRD-PARTY SOFTWARE SUPPLIERS HAVE BEEN INFORMED, ARE AWARE,
OR SHOULD BE OR HAVE BEEN AWARE, OF THE POSSIBILITY OF SUCH DAMAGES.  THE SOLE
REMEDY FOR ANY DISK OR OTHER MACHINE READABLE MATERIAL SUPPLIED BY NESTOR WHICH
IS PHYSICALLY DEFECTIVE SHALL BE REPLACEMENT OF SUCH DISK OR MATERIAL.  IN NO
EVENT WILL NESTOR OR ANY THIRD-PARTY SOFTWARE SUPPLIERS BE LIABLE IN DAMAGES OR
OTHERWISE IN EXCESS OF ONE THOUSAND DOLLARS ($1,000).

                                      -20-
<PAGE>

     D.   Licensee further understands, agrees and/or warrants that:

     (1)  it does not intend to and will not use, market, sublicense,
disseminate or transfer in any way the Nestor Software in violation of any
applicable law, rule or regulation of the United States, or any State of the
United States or any foreign country of applicable jurisdiction (including
without limitation any United States law, rule or regulation relating to
technology export or transfer) and it will obtain at its own cost any required
export licenses;

     (2)  it will not accept any purchase order or contract (including without
limitation any United States or foreign government contract) that by its terms
or by the operation of law will abridge or otherwise diminish Nestor's rights in
and/or to the Nestor Software (and that all such orders or contracts with any
government or governmental agency will include "restricted" or "limited" rights
provisions or be on no less favorable terms to Nestor);

     (3)  it has all legal right and authority to conduct its activities as
contemplated by this Agreement, including but not limited to the production and
license of the Subject Product, which contain substantial valuable technology
belonging to Licensee;

     (4)  this Agreement is a license agreement only, not an agreement for the
sale of any Copy of the Nestor Software, and neither Licensee nor the
Sublicensee obtains any rights in or to the Nestor Software other than the
limited right to use it, and in the case of the Licensee, the limited right to
copy and sublicense, granted by the License and no right (except for such
limited right) to create derivative works from, rent, lease, assign or otherwise
use, sublicense, copy or transfer any Copy is granted, either expressly, by
implication or otherwise;

     (5)  it will not infringe the copyright or other proprietary rights in the
Nestor Software; it will take all steps necessary to fully enforce the
Sublicense against the Sublicensee and it and the Sublicensee are, to the
maximum extent permitted by law, prohibited by law, prohibited from modifying,
disassembling, decompiling, or "reverse engineering" any part of the Nestor
Software;

     (6)  it will take, and be solely responsible and liable for, all necessary
or desirable steps to adequately support and maintain the Subject Product;
provided, however, that the foregoing will not be deemed  to make Licensee
responsible for support and maintenance of the Nestor Software;

     (7)  it will maintain the confidentiality of, and not disclose to any third
party (except the Sublicensee), the existence or terms and conditions of this
Agreement (including, without limitation, the Schedule and Exhibit);

                                      -21-
<PAGE>

     (8)  it is solely responsible for warranting the Subject Products and
liable for any warranty (either express, implied or otherwise) claims therefor
and

     (9)  it is solely responsible for all expenses incurred by it in its
performance of its obligations under this Agreement which shall not include
expenses related to the installation or maintenance of the Nestor Software.

     E.   Nestor agrees to hold the Licensee harmless from any expenses and
obligations relating to the installation, training and support of the Nestor
Software.  Licensee agrees to hold the Nestor harmless from any expenses and
obligations relating to the installation, training and support of the Subject
Product.

VI.  Expiration or Termination
     -------------------------

     A.   This Agreement and the Licensee shall commence on the date hereof and
continue until October 1, 1998 and shall thereafter renew automatically for
successive one (1) year periods unless either Party gives the other written
notice of cancellation at least thirty (30) days prior to the end of the initial
term or any subsequent yearly anniversary date.  It shall immediately terminate:

     (1)  if Licensee or the Sublicensee liquidates, dissolves, shall be
adjudicated insolvent, files or has filed against it a petition in bankruptcy or
for reorganization, takes advantage of any insolvency act or proceeding,
including an assignment for the benefit of creditors, or commits any other act
of bankruptcy or

     (2)  if Nestor's right to license to Licensee any Third-Party Software
terminates or expires.

     B.   Either Party may terminate this Agreement and the License by written
notice to the other Party, if such other Party shall breach any provision of
this Agreement and such breach continues for at least thirty (30) days after
notice thereof, Nestor may terminate this Agreement and the License by written
notice to the Licensee, or if the Sublicensee shall breach any provision of the
Letter Agreement and such breach continues for at least thirty (30) days after
notice thereof to the Sublicensee and the Licensee.

     C.   Termination or expiration of this Agreement and the License shall not
release Licensee from any of its obligations or liabilities accrued or incurred
under this Agreement, or rescind or give rise to any right to rescind any
payment made or other consideration given hereunder.  Upon termination or
expiration of this Agreement and the License, Licensee and the Sublicensee shall
cease all marketing and other activities under the License and shall (i) (at
Nestor's election) immediately deliver to Nestor or irretrievably destroy, or
cause to be so delivered or destroyed, any and all Copies of the Nestor Software
in whatever form and any written or other

                                      -22-
<PAGE>

materials relating to the Nestor Software in Licensee's possession, custody or
control and (ii) within thirty (30) days deliver to Nestor a certification
thereof.

VII. Miscellaneous
     -------------

     A.   Licensee shall not use or make reference to Nestor's patent rights,
copyrights, trademarks, service marks and/or trade names without the advance
written permission of Nestor.

     B.   Neither this Agreement, the License or other interest hereunder shall
be assignable by Licensee.  Subject to the foregoing, this Agreement shall be
for to the benefit of and be binding upon the Parties' successors.

     C.   The headings and captions used in this Agreement are for convenience
only and are not to be used in the interpretation of this Agreement.

     D.   The failure of either Party to require performance of any provision of
this Agreement shall not affect the right to subsequently require the
performance of such or any other provision of this Agreement.  The waiver of
either Party of a breach of any provision shall not be taken or held to be a
waiver of any subsequent breach of that provision or any subsequent breach of
any other provision of this Agreement.

     E.   The Parties are independent contractors and engage in the operation of
their own respective businesses.  Neither Party is the agent or employee of the
other Party for any purpose whatsoever.  Nothing in this Agreement shall be
construed to establish a relationship of co-partners or joint venturers between
the two Parties. Neither Party has the authority to enter into any contracts or
assume any obligations for the other Party or to make any warranties or
representations on behalf of the other Party.

     F.   If any provision of this Agreement is, or is determined to be,
invalid, illegal or unenforceable, all remaining provisions of this Agreement
shall nevertheless remain in full force and effect, and no provision of this
Agreement shall be deemed to be dependent upon any provision so determined to be
invalid, illegal or unenforceable unless otherwise expressly provided for
herein.  Should any provision of this Agreement be found or held to be invalid,
illegal or unenforceable, in whole or in part, such provision shall be deemed
amended to render it enforceable in accordance with the spirit and intent of
this Agreement.

     G.   This Agreement has been entered into, delivered and is to be governed
by, construed, interpreted and enforced in accordance with the laws of the State
of New York (without giving reference to choice-of-law provisions) from time to
time in effect. The Parties agree that the United Nations Convention on
Contracts for the

                                      -23-
<PAGE>

International Sale of Goods shall not apply to any of the transactions which are
contemplated by this Agreement.

     H.   Any dispute arising out of or relating to this Agreement, the License,
a breach thereof or Licensee's or Sublicensee's use of the Nestor Software shall
be settled by arbitration before one neutral arbitrators (selected from a panel
of attorney's having experience with and knowledge of computers and the computer
business) in New York City and administered by the American Arbitration
Association in accordance with its Commercial Arbitration Rules.  Any
provisional or equitable remedy which would be available from a court of law
shall be available from the arbitrators to the Parties.  In any such proceeding
limited civil discovery shall be permitted for the production of documents,
which shall be governed by the Federal Rules of Civil Procedure (without
reference to any local rules of a particular court).  All issues regarding
discovery requests shall be decided by the arbitrator.  Judgment upon the award
of the arbitrator may be enforced in any court having jurisdiction thereof.  The
Parties hereby consent to the non-exclusive jurisdiction of the courts of the
State of New York or to any Federal Court located within the State of New York
for any action (i) to compel arbitration, (ii) to enforce the award of the
arbitrator or (iii) at any time prior to the qualification and appointment of
the arbitrator, for temporary, interim or provisional equitable remedies and to
service of process in any such action by registered mail, return receipt
requested, or by any other means provided by law.

     I.   This Agreement contains the entire and exclusive agreement of the
Parties with respect to its subject matter.  This Agreement supersedes any
agreements and understandings, whether written or oral, entered into by the
Parties prior to its effective date and relating to its subject matter.  No
modification or amendment of this Agreement shall be effective unless it is
stated in writing, specifically refers hereto and is executed on behalf of each
Party.

     J.   Except as otherwise specified, all notices, payments, certificates and
reports hereunder shall be deemed given and in effect as of the date of mailing,
when sent by express mail (or other overnight delivery service), postage
prepaid, addressed to the Parties as set forth in the preamble to this Agreement
directed in each case to the President of the Party receiving the notice or to
such other addresses as the Parties may from time to time given written notice.

     K.   Except for failures to make any payment when due, neither Party hereto
shall be liable to the other for failure or delay in meeting any obligations
hereunder as the result of strikes, lockouts, war, Acts of God, fire, flood or
acts of government, if beyond the control of such Party.

                                      -24-
<PAGE>

     IN WITNESS WHEREOF, the Parties hereto have set their hands and seals by
their duly authorized representatives as of the day and year first above
written.


LICENSEE                                NESTOR INTERACTIVE, INC.


By:________________________             By:_____________________________
Title:                                  Title:
[Seal]                                  [Seal]

                                      -25-
<PAGE>

                                  APPENDIX D
                          SOFTWARE LICENSE AGREEMENT

This agreement ("Agreement") is made effective the 31st day of October, 1997
("Effective Date") between Engage Technologies, Inc., with its principal offices
at 100 Brickstone Square, Andover, Massachusetts 01801 ("ENGAGE") and Lycos,
Inc., with a principal place of business at 500 Old Connecticut Path,
Framingham, MA 01701-4576 ("LYCOS").

1.   SCOPE OF AGREEMENT

This Agreement sets forth the terms and conditions governing ENGAGE's delivery
to LYCOS of the various ENGAGE Products and Services as described in the
Schedule listed below or otherwise expressly made part hereof:

              Schedule A:  Software Product List and License Fees

2.   DEFINITIONS

2.1  "Documentation" means ENGAGE information provided to LYCOS in writing or
fixed on other tangible form, including, but not limited to, manuals, lists,
schematics, drawings and marketing, development, maintenance, pricing and/or
product information.

2.2  "Domain Name(s)" means the name or names used by LYCOS for purposes of
company identification on the Internet or intranets.

2.3  "Enterprise Server" means a computer server used by LYCOS to collect or
combine information from one or more Local Servers.

2.4  "Local Server" means a computer server used by LYCOS to host one or more
Domain Names.

2.5  "Product" and "Services" means any ENGAGE Software, ENGAGE Documentation
and other materials or support services which are generally available from
ENGAGE or are expressly classified as ENGAGE Products and Services herein which
will be furnished by ENGAGE as set forth in Schedule(s) attached hereto.

2.6  "Schedule" means the document(s) incorporated by reference herein which
describe the ENGAGE Products and Services which are to be furnished to LYCOS as
part of this Software License Agreement.

2.7  "Software" means any computer programs in object code provided to LYCOS by
ENGAGE and/or computer programs in which ENGAGE and its Licensors own
proprietary rights, including any and all programs generated by the Software, or
any

                                      -26-
<PAGE>

modifications, enhancements, compilations, releases or updates which are
licensed to ENGAGE by a third party and any related materials, including but not
limited to ENGAGE Documentation relating thereto, as well as any subsequent
revisions, iterations or updates provided to LYCOS by ENGAGE at ENGAGE's option.

3.   GRANT OF LICENSE

3.1  Subject to the terms and conditions of this Agreement and payment of the
applicable license fees set forth in Schedule A:  Software Product List and
License Fees attached, ENGAGE hereby grants to LYCOS a personal, non-
transferable (except for temporary transfer in the event of CPU malfunction),
object code only, non-exclusive license to install and operate the ENGAGE
Software and Documentation solely for the LYCOS's own internal use and only on
one (1) computer central processing unit (CPU) located on one (1) Enterprise
Server and one (1) Local Server and in association with one (1) Domain Name, and
install and operate on additional Local Server CPU's and in association with
additional Domain Names only in the event LYCOS purchases additional Local
Server or Domain Name licenses as indicated in Schedule A or any Schedule
subsequently attached to and made a part of this Agreement.  LYCOS's use of
Engage.Fusion shall be limited to the single designated CPU and single
authorized user basis, or multiple CPU's and multiple users, as indicated in
Schedule A or any Schedule subsequently attached to and made part of this
Agreement, whereby the total number of CPUs and users may not exceed the number
of authorized simultaneous CPU's and users for which Engage.Fusion license has
been granted.

3.2  LYCOS shall not copy or permit any party to copy ENGAGE Software and
Documentation, except to make a single copy solely for backup or archival
purposes as necessary, but only with the inclusion of ENGAGE's and its
licensors' restrictive rights, copyrights, trademarks and proprietary notices.

3.3  LYCOS shall not sublicense, disclose, disseminate, assign, timeshare or
rent the Software in any manner or otherwise make ENGAGE Software available to
any third party.  LYCOS shall not, nor allow third parties to, modify,
decompile, dissassemble or otherwise reverse engineer ENGAGE Software.  The
Software may be installed on computers located solely on the premises of the
LYCOS within the United States of America.  Use of the software for any purpose
outside the stated scope of the software is prohibited.

3.4  Any modifications to the Software shall be considered derivative works
owned by ENGAGE and/or its licensors which are licensed to LYCOS as Software
under this Agreement.

3.5  Title, ownership, and all other rights in patents, copyrights, and trade
secrets in  the Software, including any and all programs generated by the
Software, the

                                      -27-
<PAGE>

Documentation, and any copy, portion, or modification thereof, including all
Derivative Works, shall remain in ENGAGE and/or its licensors and shall not
transfer to LYCOS.

3.6  ENGAGE's licensors as well as Red Brick Systems, Inc. and its licensors
remain third party beneficiaries to this Agreement.

3.7  This license is effective from the Effective Date and shall remain in
effect until it is terminated as per Section 11.

4.   ENGAGE'S PERSONNEL POLICIES

4.1  ENGAGE reserves the right to determine the assignment of ENGAGE personnel
for performance of this Agreement, replace or reassign such personnel, or
subcontract with qualified third persons for part or all of the services
required under any Schedule attached to this Agreement.  No person performing
services on behalf of ENGAGE hereunder shall be restricted or prevented from
performing services for others that are similar to the services provided under
this Agreement.

4.2  If services will be performed on LYCOS's premises, ENGAGE personnel will
conform to LYCOS's reasonable work hours and security procedures.

5.   RISK OF LOSS

5.1  Risk of loss for all ENGAGE Products shall pass to LYCOS upon shipment by
ENGAGE as herein provided.  Unless otherwise provided in attached Schedule(s),
all ENGAGE Products shall be shipped F.O.B. origin and LYCOS is responsible for
all shipping and insurance costs.  ENGAGE Products shall be deemed to be
accepted on date of delivery.

6.   FEES AND PAYMENTS

6.1  The fees and payments are set forth in the Schedule A:  Software Product
List and License Fees and any other Schedules subsequently attached to this
Agreement and exclude all costs of handling, transportation and insurance.
LYCOS agrees to pay amounts equal to any taxes, including state and local use,
sales, property, ad valorem and similar taxes resulting from this Agreement or
any activities under this Agreement except for taxes based on ENGAGE's net
income.  All invoices are payable thirty (30) calendar days after the date of
invoice.  A finance charge shall be made on all past due invoiced balances at
the rate of 1.5% per month or at the maximum rate permitted by law.

6.2  Deleted.

                                      -28-
<PAGE>

7.   OWNERSHIP OF INTELLECTUAL PROPERTY

7.1  All patent, copyright, trade secrets and other intellectual property or
proprietary rights in ENGAGE Products or any parts or copies thereof, and title
to and ownership of ENGAGE Products and Documentation shall not transfer to
LYCOS but shall remain in ENGAGE and/or its licensors.  ENGAGE Products are
confidential and proprietary to ENGAGE and its licensors and LYCOS shall observe
the proprietary nature thereof. LYCOS shall not disclose, provide or otherwise
make available such ENGAGE Products or any parts or copies to any third party
without the prior express written permission of ENGAGE.  LYCOS shall take action
by instruction or agreement with its employees who are permitted access to such
ENGAGE Products, to protect the confidentiality thereof. LYCOS shall keep such
ENGAGE Products secure, and prevent unauthorized access, copying or use thereof.
LYCOS agrees to notify ENGAGE immediately of any unauthorized possession or use
of such ENGAGE Products by any person or entity.

8.   PATENT AND COPYRIGHT INDEMNITY

8.1  ENGAGE shall defend any action, suit or proceeding brought against LYCOS
which alleges that any ENGAGE Product infringes any U.S. patent or U.S.
copyright and ENGAGE shall pay LYCOS's reasonable legal costs and damages
awarded against LYCOS provided that LYCOS promptly notifies ENGAGE of the action
and gives ENGAGE the opportunity, full authority, information and assistance for
the defense of the action, but ENGAGE shall not be responsible for any legal
costs incurred or settlement made without its consent.  ENGAGE may, at its sole
option and at its expense either:  (i) replace or modify the ENGAGE Product so
that infringement will not exist; (ii) remove the ENGAGE Product involved and
refund LYCOS a portion of the price thereof as depreciated over a two (2) year
life of the Software commencing upon the date of delivery; or (iii) obtain for
LYCOS the right to continue using the ENGAGE Product.  ENGAGE disclaims all
other liability for copyright, patent or other infringement, including any
incidental or consequential damages.  ENGAGE shall have no liability for any
infringement or claim thereof based upon:  (i) the combination of ENGAGE
Products with products not produced by ENGAGE, or (ii) modification or
alteration of ENGAGE Products by third parties.

8.2  Any provision of this Agreement to the contrary notwithstanding, ENGAGE
shall have no liability to LYCOS for any patent, copyright or other intellectual
property infringement for any Product not produced by ENGAGE, whether alone or
in combination with ENGAGE Products.  Any vendor obligations regarding patent or
copyright infringement for non-ENGAGE Products, if any, will be set forth in the
applicable vendor agreement.

                                      -29-
<PAGE>

9.    LIMITED WARRANTY

9.1   ENGAGE warrants (i) each ENGAGE Product that is Software which is operated
on ENGAGE approved hardware and software will substantially conform, for a
period of ninety (90) days from shipment, to ENGAGE's specifications for
software and hardware requirements prevailing at time of shipment.  Receipt by
ENGAGE of a written claim under this warranty, and return of such Software must
occur within such period as a condition of this warranty.  ENGAGE does not
warrant that such Software will be error free or that all errors will be
remedied.  ENGAGE's entire liability and LYCOS's exclusive remedy under this
warranty shall be for ENGAGE to make commercially reasonable efforts to remedy,
in a manner deemed suitable to ENGAGE, any nonconformance reported in writing
within the warranty period; and (ii) each ENGAGE Product that is classified as a
Service will be performed in a workmanlike manner in accordance with reasonable
commercial standards.

9.2   THE WARRANTIES STATED IN THIS SECTION AND THE REMEDIES SET FORTH HEREIN
ARE EXCLUSIVE AND IN LIEU OF ALL OTHERS, ORAL OR WRITTEN, EXPRESS, IMPLIED OR
STATUTORY, RESPECTING THIS AGREEMENT AND THE ENGAGE PRODUCTS AND SERVICES
PROVIDED HEREUNDER. EXCEPT AS PROVIDED HEREIN ENGAGE AND IT'S LICENSORS MAKE NO
REPRESENTATIONS, WARRANTIES OR INDEMNIFICATION, WHETHER EXPRESS, IMPLIED OR
STATUTORY, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OR
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT
RESPECTING THIS AGREEMENT OR THE ENGAGE PRODUCTS OR SERVICES PROVIDED HEREUNDER.
IN NO EVENT SHALL ENGAGE'S LIABILITY EXCEED THE TOTAL CHARGES PAID OR PAYABLE
WITH RESPECT TO THE ENGAGE PRODUCTS OR SERVICES INVOLVED IN THE DAMAGE.

9.3   THE NESTOR SOFTWARE IS BEING LICENSED BY ENGAGE TO LICENSEE UNDER THIS
AGREEMENT AS-IS.  ENGAGE, NESTOR AND ALL THIRD-PARTY SOFTWARE SUPPLIERS DO NOT
WARRANT THAT THE NESTOR SOFTWARE AND THE TECHNOLOGY EMBODIED THEREIN ARE CAPABLE
OF INDUSTRIAL REALIZATION OR COMMERCIAL EXPLOITATION.  ENGAGE, NESTOR AND ANY
THIRD-PARTY SOFTWARE SUPPLIERS SHALL HAVE NO RESPONSIBILITY FOR THE CONSEQUENCES
OF ANY SUCH FAILURE OF INDUSTRIAL REALIZATION OR COMMERCIAL EXPLOITATION.

10.   LIMITATION OF LIABILITY AND REMEDIES

10.1  ENGAGE'S LIABILITY FOR DAMAGES FOR ANY CAUSE WHATSOEVER REGARDLESS OF THE
FORM OF ACTION, WHETHER IN CONTRACT OR TORT, INCLUDING NEGLIGENCE, PATENT,
COPYRIGHT OR OTHER INTELLECTUAL PROPERTY INFRINGEMENT, SHALL BE LIMITED TO THE
TOTAL AMOUNT PAID

                                      -30-
<PAGE>


TO ENGAGE UNDER THIS AGREEMENT.  LYCOS RECOGNIZES THAT THE FEES HEREUNDER ARE
BASED IN PART ON THE LIMITED WARRANTY AND LIMITATION OF LIABILITY AND REMEDIES
SET FORTH ABOVE.

10.2  IN NO EVENT WILL ENGAGE OR ITS LICENSORS BE LIABLE FOR ANY (a) DAMAGES
CAUSED BY LYCOS'S FAILURE TO PERFORM LYCOS' OBLIGATIONS, (b) DIRECT, INCIDENTAL,
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST
PROFITS, LOST SAVINGS OR LOST DATA, EVEN IF ENGAGE HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, (c) CLAIM AGAINST LYCOS BY ANY THIRD PARTY EXCEPT
AS PROVIDED IN SECTION 8.1 PATENT AND COPYRIGHT INDEMNITY (d) CLAIM, WHETHER IN
CONTRACT OR TORT, THAT AROSE MORE THAN ONE (1) YEAR PRIOR TO INSTITUTION OF SUIT
THEREON, OR (e) DAMAGES, INCLUDING PRODUCT LIABILITY DAMAGES, CAUSED BY ANY NON-
ENGAGE PRODUCT.

10.3  IN NO EVENT WILL ENGAGE, NESTOR OR ANY THIRD-PARTY SOFTWARE SUPPLIER BE
LIABLE IN DAMAGES OR OTHERWISE IN EXCESS OF ONE THOUSAND DOLLARS WITH REGARD TO
THE NESTOR SOFTWARE.

11.   TERM AND TERMINATION

11.1  Deleted.

11.2  LYCOS's license to use ENGAGE Products shall terminate upon LYCOS's
failure to cure any breach of this Agreement within thirty (30) days of receipt
of notice from ENGAGE of such breach

11.3  Section 11.1 notwithstanding, and except as permitted by this Agreement,
the Software License provided hereunder shall automatically terminate if LYCOS
copies, decompiles, disassembles, reverse engineers, provides, attempts to
provide, or makes available the Software to any third party.

11.4  Upon any termination, LYCOS shall cease use of all such ENGAGE Products
and immediately either return or destroy all copies and all other proprietary
materials, including Confidential Information (as defined in Section 12.1) and
certify in writing as to such destruction or return.

11.5  Sections of this Agreement which by their nature are meant to survive any
termination thereof, including sections 2, 3, 7, 9, 10, 12, and 13, together
with LYCOS's obligation to pay outstanding amounts due ENGAGE, shall survive the
expiration or

                                      -31-
<PAGE>

termination of this Agreement. Such provisions shall apply to each party's
successors and assigns.

12.   CONFIDENTIAL INFORMATION

12.1  All information submitted by either LYCOS or ENGAGE to the other in
connection with this Agreement and expressly identified in writing thereon as
confidential or proprietary, including without limitation, ENGAGE Products and
Services and LYCOS information, product and marketing information (collectively
"Confidential Information"), shall be safeguarded by the recipient to the same
extent recipient safeguards its own proprietary or confidential information and
in any event with not less than a reasonable degree of protection.  However,
neither party is responsible for safeguarding information which is publicly
available, or in its possession prior to this  Agreement or obtained by it from
third parties without restriction on disclosure, or developed without reference
to the confidential or proprietary information hereby disclosed.

12.2  LYCOS agrees to treat the results of its evaluation and bench mark testing
of the Software and any of LYCOS's suggestions for modifications or enhancements
(collectively "Results") as Confidential Information.  LYCOS shall grant no
interviews or make public statements or presentations, either written or verbal,
regarding the Results  without the prior written permission of ENGAGE.

13.   GENERAL

13.1  LYCOS acknowledges that the export of any ENGAGE Products is or may be
subject to export or import control and LYCOS agrees that any such items or the
direct or indirect product thereof will not be exported (or re-exported from a
country of installation) directly or indirectly, unless LYCOS obtains all
necessary licenses from the U.S. Department of Commerce or other agency as
required by law.

13.2  LYCOS may not sublicense, assign or otherwise transfer any license or any
right, duty or obligation under this Agreement without ENGAGE's prior written
consent.

13.3  Failure or delay by either party to exercise any right or remedy under
this Agreement shall not constitute a waiver of such right or remedy.

13.4  This Agreement, including any attached Schedules, constitutes the entire
agreement between the parties with respect to the subject matter hereof.
Different or additional terms contained in purchase orders, other documents
supplied by LYCOS, and all other communications, both oral and written, between
the parties relating thereto, shall not apply.  This Agreement may only be
modified by a mutually agreed signed amendment executed by duly authorized
representatives of the parties and attached hereto.

                                      -32-
<PAGE>

13.5   If any provision or portion of this Agreement or attached Schedule is
held to be unenforceable or invalid, the remaining provisions and portions
thereof shall nevertheless be given full force and effect, and the parties agree
to negotiate, in good faith, a substitute valid provision which most nearly
effects the parties' intent in entering this Agreement or attached Schedule.

13.6   Neither party will be deemed in default of any obligation hereunder nor
be liable for any failure or delay in performance which results directly or
indirectly from any cause beyond its reasonable control, including without
limitation, "Acts of God", acts of civil or military authority, strikes, fire,
theft, delays by suppliers, or action or inaction by the other party or any
third party.

13.7   Nothing in this Agreement shall be construed to imply a joint venture,
partnership or agency relationship between the parties and ENGAGE shall be
considered an independent contractor when performing any Services under this
Agreement.

13.8   Any written notice required to be provided pursuant to this Agreement
shall be deemed given (a) if by hand delivery, upon receipt hereof; (b) if
mailed, three (3) days after deposit in the U.S. mails, postage prepaid,
certified mail, return receipt requested. All notices shall be addressed to the
parties at the respective addresses indicated herein.

13.9   The ENGAGE Software and Product are a "commercial item," as that term is
defined in 48 C.F.R. 2.101, consisting of "commercial computer software" and
"commercial computer software documentation," as such terms are used in 48
C.F.R. 12.212.  The ENGAGE Software and Product are also "commercial computer
software" as defined in 48 C.F.R. 252.227-7014(a)(1).  Consistent with 48 C.F.R.
12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4, all U.S. Government entities
shall have only those rights, and shall be subject to all restrictions, set
forth in this Agreement.  Use, duplication, or disclosure by the U.S. Government
is subject to the restrictions set forth in subparagraph (c) of the Commercial
Computer Software-Restricted Rights clause of FAR 52.227-19.

13.10  The laws of the Commonwealth of Massachusetts shall govern this
Agreement, excluding its choice of laws provisions. The U.N. Convention on the
International Sale of Goods shall not apply to this Agreement. LYCOS waives all
objections to personal jurisdiction and venue being in the appropriate federal,
state and local courts in the Commonwealth of Massachusetts.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.

                                      -33-
<PAGE>

ENGAGE TECHNOLOGIES, INC.               LYCOS



  /s/ Andrew J. Hajducky                   /s/ Edward M. Philip
----------------------------------      -----------------------------------
Signature                               Signature

   Andrew J. Hajducky                       Edward M. Philip
----------------------------------      -----------------------------------
Name                                    Name

   Treasurer                                COO
----------------------------------      -----------------------------------
Title                                   Title


                                      -34-
<PAGE>

                                  Schedule A:

                         Product List and License Fees


                         No. of Copies            Location(s)

Engage.Discovery(TM)          1                   Lycos, Inc.
                                                  500 Old Connecticut Path
                                                  Framingham, MA  01701

Engage.Journal(TM)            1                   Lycos, Inc.
                                                  One Oxford Center
                                                  301 Grant St. Suite 525
                                                  Pittsburgh, PA 15219

Engage.Link(TM)               1                   Lycos, Inc.
                                                  One Oxford Center
                                                  301 Grant St. Suite 525
                                                  Pittsburgh, PA 15219

Engage.Portrait(TM)           1                   Lycos, Inc.
                                                  One Oxford Center
                                                  301 Grant St. Suite 525
                                                  Pittsburgh, PA 15219

InterSite(TM)*                1                   Lycos, Inc.
                                                  One Oxford Center
                                                  301 Grant St. Suite 525
                                                  Pittsburgh, PA 15219


Hereinafter these Engage Technologies products are also referred to as the
Engage Suite as the term is used in the Service and License Agreement ("Service
and License Agreement") between Lycos, Inc. and Engage Technologies Inc. dated
as of October 29, 1997, which sets forth the mutually agreed consideration upon
which this Engage Technologies Software License with Lycos, Inc. is based.  The
Engage Technology Software licensed hereunder may only be used in conjunction
with Lycos Inc.'s performance of the Service and License Agreement.  Any usage
beyond the scope of the Service and License Agreement is prohibited unless
agreed to in writing by Engage Technology and such permission shall not be
unreasonably withheld.

                                      -35-
<PAGE>

*InterSite software is supplied to LYCOS subject to the attached Schedule B:
Additional Terms and Conditions in the software license between Nestor
Interactive, Inc. and Engage Technologies, Inc.

                                      -36-
<PAGE>

                                  Schedule A:

                         Product List and License Fees


                         No. of Copies            Location(s)

Engage.Discover(TM)            1                To Be Determined

Engage.Journal(TM)             1                    T.B.D.

Engage.Link(TM)                1                    T.B.D.

Engage.Portrait(TM)            1                    T.B.D.

InterSite(TM)*                 1                    T.B.D.


Hereinafter these Engage Technologies products are also referred to as the
Engage Suite as the term is used in the Service and License Agreement ("Service
and License Agreement") between Lycos, Inc. and Engage Technologies Inc. dated
as of September __, 1997, which sets forth the mutually agreed consideration
upon which this Engage Technologies Software License with Lycos, Inc. is based.
The Engage Technology Software licensed hereunder may only be used in
conjunction with Lycos Inc.'s performance of the Service and License Agreement.
Any usage beyond the scope of the Service and License Agreement is prohibited
unless agreed to in writing by Engage Technology and such permission shall not
be unreasonably withheld.


*InterSite software is supplied to LYCOS subject to the attached Schedule B:
Additional Terms and Conditions.

                                      -37-
<PAGE>


                                  APPENDIX F

                                    PRICING

1.   Engage Software suite

     No charge (and subject to Engage Software License Agreement terms and
     conditions).

2.   Hosting Services

     Engage will provide the functionality described in Section 2 of the
     Agreement according to the following pricing schedule:

     2.1  Online Storage
          Up to 100,000 users requiring 4.5 gigabytes of storage at
                $500/gigabyte/month:
                $2,250 per month

     2.2  Processing
          Up to 100,000 users generating 300,000 hits
          Per day, requiring 2 hours of processing per Day at $100 per
          processing hour:
                $6,000 per month


     2.3  Staffing
          One staff dedicated to Lycos interface at $5,000 /month:
                                                          $5,000 per month

               Total minimum monthly charge:              $13,250 per month

3.   Integration

     One-time system integration charge:        $15,000

4.   Price Review

     Engage and Lycos will meet at three month intervals from the date of
     signature of the present contract to review hosting charges based on
     Engage's costs and Lycos' volume ramp-up.

5.   Terms

     Net 30 days.

                                      -38-