Exhibit 10.19
August 2, 1999
Xx. Xxx Xxxxxxxxxx
SVP & GM @ Work Division
Excite@Home
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000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000
Re: Letter Agreement
Dear Xx. Xxxxxxxxxx:
This letter confirms the preliminary terms and conditions of an agreement
between E-Stamp Corporation ("E-Stamp") and AtHome Corporation, acting through
its @Work division ("@Work"), effective as of the date first written above
("Effective Date") regarding a business relationship between the parties
("Letter Agreement"). Upon execution of this letter, the parties will pursue the
negotiation and execution of a written agreement setting forth the definitive
terms and conditions governing such a business arrangement (the "Definitive
Agreement").
The parties agree as follows:
1. This Letter Agreement shall be binding with respect to those matters
set forth herein; which will be addressed in greater detail and may be
supplemented in the Definitive Agreement, which the parties will negotiate in
good faith with the objective of entering into and signing the Definitive
Agreement on or before August 31, 1999.
2. The following constitutes the parties' present understanding regarding
E-Stamp's provision of Internet postage on @Work's business portal to be called
"Xxxx.xxx" and the creation of a co-branded business-oriented post office and
services channel for Xxxx.xxx, which the Definitive Agreement will address in
greater detail:
(a) E-Stamp will become the "preferred provider" of Internet postage
on Xxxx.xxx.
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August 2, 1999
Page 2
(b) E-Stamp will build, host and operate a co-branded business post
office and services channel (the "Co-branded Site") for Xxxx.xxx.
(c) The Co-branded Site with include Xxxx.xxx and E-Stamp branding.
@Work's business portal brand (Xxxx.xxx) will be the predominant brand
represented on the co-branded site, and @Work and E-Stamp will mutually agree on
those requirements. @Work will provide E-Stamp with the specifications and E-
Stamp will be responsible for integrating the co-brand elements into the Co-
branded Site. The "look and feel" of the Co-Branded Site will be consistent with
the "look and feel" of Xxxx.xxx, and @Work will have final right of approval
over the branding and the overall "look and feel" of the Co-branded Site. E-
Stamp will provide all support necessary to create the Co-branded Site in time
for the September 15, 1999 launch of Xxxx.xxx subject to conditions and delays
not within E-Stamp's control. The URL of the co-branded post office site will be
specified by @Work (e.g. xxxxxxx.xxxx.xxx).
(d) At @Work's request, E-Stamp will at its own expense perform the
development required to integrate with the Excite@Home Universal Registration
System (URS). Such integration will allow Excite@Home to capture user profile
information (e.g., name, e-mail address, basic demographics, etc.) which E-Stamp
captures from users coming to the Co-branded Site. Until such time that the URS
integration is complete and thereafter to the extent that data is collected
from users outside the URS, E-Stamp will (i) provide to Excite@Home all User
Data, as defined below, in connection with this Agreement within thirty (30)
days after the end of each calendar month in a format to be mutually agreed upon
by the parties, and (ii) work with @Work to ensure User Data capture such that
the data can be integrated into @Work's user databases. User Data collected in
the Co-branded Site will be jointly owned by E-Stamp and @Work. During the term
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of the agreement and for twelve (12) months thereafter, E-Stamp agrees that (i)
it will not use User Data to market products or services that are in any way
competitive to the products or services of Excite@Home or any of its affiliates;
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(ii) it will always give Users an "opt out" choice to not receive marketing
materials from E-Stamp in the future; (iii) Excite@Home will have the right to
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pre-approve in writing all communications targeted specifically at Excite@Home
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or Xxxx.xxx users; and (iv) it will not sell
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August 2, 1999
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User Data to any third party. Both parties agree that none of the above terms
will obligate either party to violate any existing data privacy commitments or
obligations, and E-Stamp agrees to abide by @Work's privacy policies as amended
from time to time. "User Data" means all information submitted on the Co-branded
Site to E-Stamp or @Work, and all information submitted by @Work's (or its
affiliates') registered users, whether or not submitted on the Co-branded Site.
(e) E-Stamp will make available the core postal supplies products
that it offers on E-Stamp's direct web site for inclusion (at @Work's
discretion) in any Master Product database, which Excite@Home or any of its
controlled or foreign affiliates develops and maintains. E-Stamp will help to
develop the tools required to update this product information in a timely
fashion.
(f) E-Stamp will pay @Work $6,000,000 over the 30-month period
beginning from the date of this letter, with the initial nonrefundable
$250,000 payment due on September 1, 1999. E-Stamp will pay the balance in
equal monthly nonrefundable installments starting with the launch of Xxxx.xxx.
E-Stamp will not be obligated to make any subsequent payments (beyond the
initial $250,000 payment) until the launch of Xxxx.xxx.
(g) The $6,000,000 payment is consideration for the right to be the
preferred provider of Internet Postage (i.e., E-Stamp's core postal offering) on
Xxxx.xxx and for an aggregate of [***] impressions over the term of the
agreement. The impressions will be allocated across Xxxx.xxx as follows:
[***] banner impressions ($2M)
[***] sponsorship box impressions ($2M)
[***] text link/tool box impressions ($2M)
(h) The text link and tool box impressions represent the predominant
display of links to the Co-branded Site throughout Xxxx.xxx. In addition, @Work
will not sell text link, tool box and sponsorship box impressions on Xxxx.xxx to
other companies for whom Internet postage represents the largest source of
revenue. These considerations reflect E-Stamp's preferred provider status.
*** Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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August 2, 1999
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(i) If, after six months, E-Stamp (after discussions with @Work)
desires exposure on Xxxxxx.xxx, up to $1M of the Xxxx.xxx banner and/or
sponsorship box impressions noted above may be used for similarly priced banner
and/or sponsorship box impressions on Xxxxxx.xxx. These impressions will be
spread over the remainder of the term of the contract.
(j) Within two weeks of the one year anniversary of Xxxx.xxx's
launch, @Work and E-Stamp will meet to review results of the E-Stamp
promotional efforts outlined in this Section 2. If @Work fails to deliver
[***] E-Stamp impressions on Xxxx.xxx (in approximately the following ratio:
[***]% banners; [***]% sponsorship boxes; and [***]% text link/tool box during
the first twelve (12) months following Xxxx.xxx's launch, @Work will have
three additional months to make up any "Shortfall" with impressions on
Xxxx.xxx that are of the same quantity and of equal or greater value to E-
Stamp as the undelivered impressions that comprise the Shortfall. During this
three month make-up period, @Work will deliver the required impression
commitment under the Agreement plus the Shortfall impressions. If after the
additional three month period (i.e., 15 months from the Xxxx.xxx launch date),
@Work is unable to generate the necessary E-Stamp impressions on Xxxx.xxx,
then E-Stamp will have the right to terminate the Agreement upon written
notice to @Work. Upon termination, E-Stamp will no longer be obligated to make
any additional payments as outlined in Section 2.(f). "Shortfall" shall mean
the difference between [***} impressions and the actual number of impressions
delivered by Excite@Home at the one-year anniversary of the Agreement.
(k) @Work will sell and serve the ad banners on the Co-branded Site
and will retain 70% of such ad revenues (after an allowance for the direct
sales costs which @Work incurs for serving the ads; but such costs will not
exceed 20% of gross ad revenues). @Work will pay to E-Stamp its portion of
such ad revenues within thirty (30) days following the end of any calendar
month. Such payments shall include a report in a reasonable amount of detail
setting forth the amount of gross ad revenues for such month and the amount and
nature of deductions from such revenues.
*** Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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August 2, 1999
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(l) Unless the parties otherwise agree in writing, and except for
termination as a result of a material breach by one party which is not cured
within a reasonable period of time as set forth in the Definitive Agreement,
this agreement will expire after an initial term of thirty (30) months from the
Effective Date. The Definitive Agreement will contain a right of first offer for
E-Stamp to renew the Definitive Agreement under similar economic terms.
(m) All support related to products or services sold on the
Co-branded Site will be the responsibility of E-Stamp. To the extent reasonably
practicable and commercially feasible, this support will be co-branded in a
manner consistent with the overall co-branding. In cases where E-Stamp is
working with a third party vendor to deliver the product or service, it will be
responsible for coordinating all the above support issues. Such support will be
of the same quality as that provided the customers accessing E-Stamp's retail
site (e.g., xxx.xxxxxx.xxx). The Co-branded Site will be generally accessible
from the web twenty-four hours a day, seven days a week, other than for downtime
for reasonable periods for support and maintenance of the Co-branded Site or
downtime resulting from causes beyond E-Stamp's control.
(n) @Work will support publicly the @Work/E-Stamp relationship. This
public relations support will include mention of E-Stamp as @Work's preferred
provider of Internet postage for Xxxx.xxx. E-Stamp and @Work will have joint
approval over all publicity related to the @Work/E-Stamp relationship.
(o) Throughout the term of the contract, E-Stamp will (i) continue
to make available to @Work the latest version of E-Stamp's product and service
portfolio for inclusion (at @Work's discretion) on Xxxx.xxx; and (ii) maintain
the Co-branded Site at the level of performance and functionality (including
without limitation breadth and depth of product and service offerings)
maintained by E-Stamp on its web site available at xxx.xxxxxx.xxx as of the
Effective Date; and (iii) continue to integrate the latest features and
functionality as used on competitive and comparable web sites, including
(without limitation) back-end security, transaction mechanisms, customer
service, user interface enhancements.
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August 2, 1999
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(p) E-Stamp agrees that @Work will be considered a preferred
business portal and commercial ISP partner. As such, E-Stamp agrees to work with
@Work to promote @Work's business portal, hosting and Internet access services
in select E-Stamp marketing efforts.
(q) Both parties acknowledge that any individual use of the Internet
could be a customer of E-Stamp or @Work through activities unrelated to this
Letter Agreement. Except as provided in this Letter Agreement, both parties
further acknowledge that any User Data gathered independent of this Letter
Agreement, even for customers who independently use both parties' services,
shall not be covered by this Agreement. The parties will jointly own User Data
captured as a part of this relationship. Both parties agreed that this joint
ownership will not obligate either party to violate any existing data privacy
commitments or obligations. "@Work Data" means information collected by @Work
outside of the Co-branded Site and provided to E-Stamp by @Work. @Work shall
retain ownership of all @Work Data. "E-Stamp Data" means information collected
by E-Stamp outside of the Co-branded Site. E-Stamp shall retain ownership of all
E-Stamp data.
(r) The business relationship contemplated by this letter is not
exclusive for either party.
(s) The parties agree to keep the terms of this letter confidential.
3. The Definitive Agreement will at a minimum contain provisions in
paragraph 2 and may also contain additional provisions.
4. The parties expressly acknowledge and agree that any rights or
obligations set forth in this letter are expressly conditioned upon E-Stamp
receiving approvals from the United States Postal Service to offer its Internet
postage service on a nationwide basis. As between the parties, E-Stamp will be
solely responsible for acquiring all necessary consents and approvals related to
its offering an Internet postage service on a nationwide basis.
5. Each party will bear its own costs and expenses in connection with its
performance of this letter and negotiation and preparation of the Definitive
Agreement.
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August 2, 1999
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6. The Definitive Agreement will include customary representation,
warranty and indemnity provisions from each party regarding the Co-branded Site
and the products and services offered by E-Stamp, including a warranty by E-
Stamp that the Co-branded Site will be fully Year 2000 compliant and a warranty
from @Work that the @Home service will be fully Year 2000 compliant.
7. The Definitive Agreement will include customary limitations of
liability provisions which will include a mutual waiver of consequential and
similar damages as well as a mutual overall cap on the liability of either
party. Excluded from such waiver and cap will be the indemnity obligations of
E-Stamp and @Work.
8. This letter shall not be assignable or transferable by either party
without the prior written consent of the other party, except that either party
may assign this letter by operation of law or to any entity acquiring
substantially all of the assignor's assets. A public offering of either party's
stock shall not constitute an assignment for purposes of this letter. This
letter shall be governed by the laws of the state of California, excluding that
body of law known as conflicts of laws.
9. This letter represents the parties' entire understanding with respect
to the arrangement between them, and supersedes all prior writings,
understandings and agreements, if any, between them relating to the proposed
business arrangement and other matters addressed herein. The parties hereby
acknowledge their intention to proceed to execution of the Definitive Agreement
as indicated in this letter. Upon execution, the Definitive Agreement shall
supersede the terms contained in this letter.
Please acknowledge @Work's acceptance of the foregoing by signing in the
space provided below and returning a signed copy to us as soon as possible. If
@Work does not accept any of the foregoing, please call me so that we can
discuss your concerns.
Thank you for your cooperation and attention to this matter. We look
forward to the successful negotiation of the Definitive Agreement.
Sincerely,
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August 2, 1999
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E-Stamp Corporation
/s/ Xxxxxx X. Xxxxx
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Title: Pres. & CEO
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ACKNOWLEDGED AND AGREED:
AtHome Corporation
By: /s/ DH (by Xxxx xxx Xxxxxxxxxx for Xxx Xxxxxxxxx)
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Title: SVP & GM @Work
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Date: 8/2/99
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