Exhibit 10.19
FORD MOTOR COMPANY
Xxxx Xxxxx
Vice President &
Chief Information Officer
December 14, 2001
Xx. Xxxx Xxxxx
Chairman and CEO
PeoplePC, Inc.
000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Dear Xxxx:
Ford Motor Company ("Ford") and PeoplePC, Inc. ("PeoplePC") are parties to the
Master Services and Supply Agreement made as of April 4, 2000, as amended from
time to time (the "Master Agreement"), whereby Ford and PeoplePC established the
Ford Employee Connectivity Program consisting of bundled packages of hardware,
software and Internet access service sold by PeoplePC to Ford's and Ford
Affiliates' Eligible Employees (the "Eligible Employees"). Further, pursuant to
the terms of certain Membership Agreements and the Ford Employee Connectivity
Program Employee Payment Agreements by and between PeoplePC and the Eligible
Employees (collectively, the "Eligible Employee Agreements"), among other
things, the Eligible Employees purchase Membership in the Ford Employee
Connectivity Program for a term of thirty six (36) months from the date of the
Eligible Employee membership application (the "Membership Term"). The number of
Eligible Employees covered by this Letter Agreement is 167,397, which is the
number of Eligible Employees with Memberships in the Ford Employee Connectivity
Program as of the date of this letter.
Voluntary Payments. PeoplePC agrees and acknowledges that Xxxx has, as of the
date of this Letter Agreement, satisfied all its payment obligations under the
Master Agreement and that neither Ford nor any of the Eligible Employees has or
shall have any obligation to provide any further or additional monies to
PeoplePC for any reason whatsoever.
Performance Bonus. Provided that PeoplePC has provided the Delivered Services
(set forth below) and performed its other obligations under the Master Agreement
and Eligible Employee Agreements, in each case without disruption, during a
calendar month, and subject to the terms of this Letter Agreement, Xxxx agrees
to make performance bonus payments ("Performance Bonus") to PeoplePC which in
the aggregate will not exceed $6,300,000. Each Performance Bonus shall be
payable monthly, in arrears, in the amount of $317,545. On the last business day
of each month, commencing December 31, 2001,
for up to twenty (20) consecutive months, PeoplePC agrees to submit an invoice
to Ford. If Delivered Services have all been provided in accordance with the
terms of the Master Agreement, Eligible Employee Agreement and this Letter
Agreement, Xxxx agrees to pay PeoplePC within five (5) business days of receipt
of Invoice.
Reaffirmation of Obligations. PeoplePC hereby reaffirms all of its obligations
to Ford and to the Eligible Employees under the Master Agreement and the
Eligible Employee Agreements. Therefore, PeoplePC represents and warrants that
all of the terms and conditions of the Master Agreement and the Eligible
Employee Agreements are and shall remain in full force and effect, without
waiver or modification of any kind whatsoever (unless embodied in a written
document signed by both parties), and are ratified and confirmed in all
respects. PeoplePC further agrees and acknowledges that any failure to provide
the services contemplated by the Ford Employee Connectivity Program and/or to
fulfill its performance obligations under the Master Agreement and/or the
Eligible Employee Agreements shall constitute a nonmonetary default that cannot
be cured.
Delivered Services. PeoplePC agrees to:
1. Maintain no less than the current level of connectivity to the
Internet for the Eligible Employees.
2. Manage the ISP network and supplies to maintain and continue to
improve present coverage and performance levels, PeoplePC
acknowledges that it presently provides over 6,700 POPs, covering
approximately 91% of the Eligible Employees.
3. Continue to provide monthly metrics identifying coverage and
performance status.
4. Maintain Email at the present levels of access, functionality,
capacity, and performance.
5. Restore the Ford Customer Care Escalation Process.
6. Continue to manage Customer Care processes to improve present
performance metrics while aiming to achieve or exceed industry
standards.
7. Continue to provide weekly Customer Care metrics.
8. Continue to provide monthly an electronic file with data on the
Eligible Employees (name, address, phone, member name).
9. Continue to facilitate the provision of warranty coverage for the 3
years defined in the Membership Agreement.
No Default. PeoplePC agrees that on the date of payment of each Performance
Bonus, it shall be in compliance with all the terms and provisions set forth
herein on its part to be observed or performed, and no Event of Default shall
have occurred under the Master Agreement and/or the Eligible Employees
Agreements.
Events of Default. Any one or more of the following events will constitute an
event of default by PeoplePC hereunder:
1. The occurrence of a default under the Master Agreement or the
Eligible Employee Agreements.
2. The breach of this Agreement, the Master Agreement or any of the
Eligible Employee Agreements.
3. The delivery to Ford by PeoplePC of any communication advising Ford
that PeoplePC intends to, or is likely to, breach any of the
foregoing agreements.
4. The commencement of an insolvency proceeding including, without
limitation, an assignment for the benefits of creditors, a
standstill agreement, or the filing of a voluntary or involuntary
bankruptcy case by or against PeoplePC.
5. Failure of PeoplePC to provide assurances adequate under the
circumstances within two business days in the event that (i) Xxxx
receives any communication from any source advising Ford that
PeoplePC intends to, or is likely to, breach this Agreement, the
Master Agreement or any of the Eligible Employee Agreements, and
(ii) Ford faxes a letter to the CEO of PeoplePC requesting
assurances that PeoplePC will continue to perform its obligations
under the foregoing agreements.
Remedies Upon Occurrence of an Event of Default.
1. Ford, in its sole and absolute discretion, may terminate this Letter
Agreement by delivering a notice of termination to PeoplePC
effective on the date specified in the notice.
2. Immediately upon delivery of the notice of termination, Ford shall
be free to enter into and make any contracts with any third parties
to avoid any disruption of services whatsoever to the Eligible
Employees.
3. If PeoplePC commences a bankruptcy case, the automatic stay of
Bankruptcy Code Section 362 shall be deemed automatically vacated
for all purposes to achieve the objectives of the Ford Employee
Connectivity Program.
4. The rights and remedies of Ford hereunder are cumulative and not
exclusive. Any waiver, permit, consent or approval of any kind by
Xxxx of any breach or default hereunder must be in writing and shall
be effective only to the extent set forth in writing.
No Joint Venture, Management or Control. Notwithstanding any provision of this
Letter Agreement and/or any other agreement between Ford and PeoplePC, PeoplePC
acknowledges and agrees that Xxxx is not and shall not be construed to be a
partner, joint venturer, alter ego, manager, controlling person or other
business associate or participant
of any kind of PeoplePC. In addition, Xxxx shall not be deemed responsible to
perform or participate in any acts, omissions, or decisions of PeoplePC.
If this Letter Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart of this Agreement and delivering
such counterpart to Ford, whereupon this Letter Agreement will become binding
between Ford and PeoplePC in accordance with its terms.
Very truly yours,
FORD MOTOR COMPANY,
A Delaware corporation
By : ________________________________
Xxxx Xxxxx
Its: Vice President
Accepted and agreed to as of the date of this Letter Agreement:
PEOPLEPC, INC.
A Delaware corporation
By: ________________________________
Xxxx Xxxxx
Its: Chairman and CEO
