ADVERTISING AND PROMOTION AGREEMENT

Exhibit 10.18



ADVERTISING AND PROMOTION AGREEMENT



THIS ADVERTISING AND PROMOTION AGREEMENT (the "Agreement") is made this 14

--------- day of May, 1999 (the "Effective Date") between YAHOO!, INC., a California

-------------- corporation, with offices at 3420 Central Expressway, Santa Clara, CA 95051, ("YAHOO") and E-Stamp Corporation, ("Advertiser"), a Delaware corporation, with

---------- offices at 2855 Campus Drive, San Mateo, California, 94403.



In consideration of the mutual promises contained herein, the parties agree as follows:



SECTION 1: DEFINITIONS - -------------------------



The following terms are used in this Agreement with the respective meanings set forth below:



"Advertiser Brand Features" shall mean Advertiser's trademarks, service

------------------------- marks, logos and other distinctive brand features of Advertiser.



"Advertiser Competitor" shall mean a company or a division of a company

--------------------- primarily in the business of selling U.S. electronic postage or U.S. electronic postage software. The agreed upon list of such companies at the Effective Date is as follows: Stamps.com, Pitney Bowes and Neopost. In the event Advertiser Competitor is acquired by another company which is not an Advertiser Competitor, the acquiring company, or the division of such company that assumes the business of Advertiser Competitor, shall be considered Advertiser Competitor, provided such company or division is primarily in the business of selling U.S. electronic postage or U.S. electronic postage software. From time to time, but no more than one time per calendar quarter, Advertiser may request additions to this list of Advertiser Competitors of certain companies that receive PC postage certification from the USPS. Such companies shall be included as Advertiser Competitors upon Yahoo approval, which shall not be unreasonably withheld, provided that Yahoo may honor any agreements with such newly designated Advertiser Competitors entered into prior to such designation.



"Advertiser Links" shall mean the hyperlinks placed by Yahoo in connection

---------------- with this Agreement including but not limited to those links described on Exhibit A. For the avoidance of doubt, Advertiser Links includes hyperlinks to - --------- Advertiser Site embedded in Yahoo Delivers email and the EZ Venture Program, placed in connection with this Agreement.



"Advertiser Site" shall mean the web site owned and operated by, or on

--------------- behalf of, Advertiser dedicated to the sale of electronic postage services or software and currently located at http://www.estamp.com.

--------------

"Affiliate" shall mean any entity controlled by, controlling, or under

--------- common control with a party hereto but only for so long as such control exists, where "control" means ownership of more than fifty percent of the equity

------- entitled to vote in the election of directors or if not a corporation, the corresponding managing authority.





"Click-through" shall mean the initiation of a user presence at the

------------- Advertiser Site that originated from an Advertiser Link as recorded by Yahoo's advertiser reporting system.



"EZ Venture Promotion" shall mean that Yahoo promotional program, the

-------------------- specifications of which are attached as Exhibit E hereof.



"Included Pages" shall mean those pages on the Yahoo Properties containing

-------------- Advertiser Links. Included Pages includes EZ Venture Promotion pages containing Advertiser Links but excludes Yahoo Direct email messages delivered by Yahoo in connection with this Agreement.



"Jump Page" shall mean the page of the Advertiser Site dedicated to the

--------- promotion of electronic postage services or software which is the first page a user sees when clicking on an Advertiser Link (other than a Promotion Link) and which includes an application for a user to sign up for such services or a direct hyperlink to such application.



"Launch Date" shall mean the date on which the program described herein is

----------- launched and by which Advertiser Site is Fully Operational (as defined in Section 5.3 hereof), which date is originally scheduled as July 15, 1999.



"Promotion Link" shall mean a front page graphic link which: (a) contains

-------------- Advertiser brand features, (b) has dimensions no larger than 230 pixels wide by 33 pixels high, (c) may contain animation of up to 6 seconds with no looping, (d) has a maximum file size of three (3) kilobytes, (e) conforms to Yahoo's promotional specifications and guidelines, which may be amended by Yahoo from time-to-time, and (f) links to a promotional Jump Page.



"Yahoo Brand Features" shall mean Yahoo's trademarks, service marks, logos

-------------------- and other distinctive brand features of Yahoo.



"Yahoo Post Office" shall mean a Yahoo Property, under the editorial

----------------- control of Yahoo, dedicated to postal content and services.



"Yahoo Main Site" shall mean Yahoo's principal U.S. based directory to the

--------------- World Wide Web currently located at http://www.yahoo.com.



"Yahoo Properties" shall mean any Yahoo branded or co-branded media

---------------- properties, including, without limitation, global Internet guides that are developed in whole or in part by Yahoo or its Affiliates. A description of certain applicable Yahoo Properties can be found on Exhibit A.

---------



SECTION 2: THE PROGRAM - -------------------------



2.1 Program Elements. Yahoo shall make available a program comprised of

the elements set forth in this Section 2.1 (the "Program")



(a) Advertiser Links. During the Term of the Agreement Yahoo shall

----------------

place the Advertiser Links as specified on Exhibit A.

Notwithstanding the foregoing, Yahoo reserves the right, at its

sole discretion, to remove keywords and category pages set forth

in Exhibit A, which it reasonably believes are trademarks,

tradenames, product names or brand names belonging to an entity

not party to this Agreement, and substitute such words with





inventory. The Yahoo Post Office shall be launched by Yahoo by

the Launch Date or July 15, 1999, whichever is later. Yahoo may

launch the Yahoo Post Office prior to such date provided the

exclusivity provisions of Section 6.3 shall still apply.



(b) Front Page Promotions. During the Term, Yahoo shall include

----------------------

Advertiser in one multi-sponsor promotion on the Front Page of

the Yahoo Main Site. Such front page promotion shall (i) be

subject to available inventory, it being understood and agreed

that the promotion will be scheduled as close to the Launch Date

as possible, (ii) continue for at least one week, and (iii) be

conducted in accordance with Yahoo's then current standard

policies and procedures for promotions (including but not limited

to those policies pertaining to user information) and applicable

law. Yahoo shall place a Promotion Link on the Front Page in

connection with such promotion.



(c) EZ Venture Promotion. Commencing after the Launch Date and

---------------------

continuing to the extent possible through Period 1 (as defined in

Section 2.3 below), Yahoo shall include Advertiser in an EZ

Venture Promotion.



(d) Yahoo Delivers. During Period 1 (as defined in Section 2.3

---------------

below), Yahoo will send a total of [***] emails to Yahoo users

that have opted to participate in the receipt of emails as part

of the registration process for Yahoo. Such emails will be

targeted and contain content as mutually agreed to by the

parties. The email will comply with the guidelines and

specifications provided in Exhibit A.



2.2 Advertiser Link Requirements. As requested by Yahoo from time to time,

----------------------------

Advertiser shall execute the standard Yahoo insertion order set forth in

Exhibit C in connection with all Advertiser Links for administrative

purposes only. The standard terms and conditions generally attached to such

insertion order shall not apply. Advertiser shall provide all materials for

the Advertiser Links in accordance with Yahoo's policies in effect from

time to time regarding (i) the manner of transmission to Yahoo, (ii) the

lead-time prior to publication, (iii) content/creative and (iv) promotions.

Such policies may be found at www.yahoo.com/docs/advertising and the

------------------------------

current version of the most relevant such policies are attached as Exhibit

F. Yahoo shall not be required to publish any Advertiser Link that is not

received in accordance with such policies. All contents of Advertiser Links

are subject to Yahoo's approval. Yahoo reserves the right to reject or

cancel any Advertiser Link, at any time, for any reason whatsoever

(including belief by Yahoo that placement of Advertiser Link may subject

Yahoo to criminal or civil liability). In the event of such cancellation,

and provided Advertiser is not otherwise in breach of this Agreement, Yahoo

shall work with Advertiser to promptly replace such Advertiser Link with an

acceptable Advertiser Link. All Advertiser Links provided by Advertiser

must be in compliance with and contain all disclosures required by all

applicable U.S. federal, state and local laws, rules and regulations,

including, without limitation, consumer protection laws and rules and

regulations governing product claims, truth in labeling, and false



[***] 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.







2.3 Performance Guarantees. During the Term and subject to Section 5.3

----------------------

hereof: (a) Yahoo shall deliver a minimum of [***] page views of the

Included Pages, ("Total Page Views") and shall use reasonable efforts to

deliver such Total Page Views in accordance with the following schedule:



(5/14/99 - 12/31/99, "Period 1")(1/1/00-6/30/00) ("Period 2") - ------------------------------------------------------------- [***]% ([***] page views) [***]% ([***] page views)





(7/1/00-12/31/00) ("Period 3") - ------------------------------ [***]% ([***] page views)



(includes all EZ Venture clicks)



In the event Yahoo fails to deliver the percentage of the Total Page Views

required during Period 1 or 2, Yahoo will "make good" the shortfall during

the following period, and in the event the failure occurs with respect to

Period 3, Yahoo will "make good" the shortfall during the six month period

following the expiration of Period 3.



(b) Yahoo shall deliver page views of the various Advertiser Links in the

quantities provided in Exhibit A.



(c) Yahoo shall deliver [***] page views of the Promotion Link in

connection with the Promotion provided in accordance with Section 2.1(b)



(d) Yahoo shall deliver [***] clicks to an offer page in connection with

the EZ Venture Promotion provided in accordance with Section 2.1(c).



(e) Yahoo shall deliver [***] emails in accordance with Section 2.1(d)

during Period 1.



(f) In the event, by the end of the Term, Yahoo fails to deliver (i) the

Total Page Views under Section 2.3(a), (ii) the page views provided in

Sections 2.3(b) and 2.3(c), (iii) the clicks provided in Section 2.3(d), or

(iv) the Yahoo Delivers email messages provided in Section 2.3(e), Yahoo

will "make good" the shortfall by extending its obligations in similar

areas and placement as those described in Section 2.3, as mutually agreed

upon, beyond the end of the Term until such obligations are satisfied. This

section 2.3 sets forth the entire liability of Yahoo, and Advertiser's sole

remedy for Yahoo's breach of its obligations under Section 2.1 or Yahoo's

failure to deliver the number of page views described in this Sections 2.3.



2.4 Delivery Statistics. Delivery statistics provided by Yahoo are the

-------------------

official, definitive measurements of Yahoo's performance of its delivery

obligations hereunder (or under any related insertion order). No other such

statistics (including any provided by Advertiser or a third party ad

server) shall be accepted by Yahoo. Yahoo represents that the process and

technology used to generate such statistics have been certified and audited

by an independent agency.



SECTION 3: COMPENSATION

------------



[***] 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.







3.1 Slotting Fee and Holding Fee. Advertiser shall pay Yahoo a non-

----------------------------

refundable slotting fee of three million three hundred thousand dollars

($3,300,000) and a non-refundable, non-creditable holding fee of seven

hundred thousand dollars ($700,000) as set forth below. Except for the

first two payments which shall be made on the dates set forth below, such

amounts shall be paid to Yahoo within thirty (30) days after receipt of

invoice submitted in accordance with Section 3.2 below but no earlier than

the dates set forth below.



Upon signing of the Agreement: $500,000

May 14, 1999 $ 20,000

July 1, 1999 $280,000

September 15, 1999 $520,000

December 15, 1999 $670,000

March 15, 2000 $670,000

June 15, 2000 $670,000

September 15, 2000 $670,000



The first seven hundred thousand dollars ($700,000) to be paid are

designated as a holding fee for the Program ("Holding Fee"). The Holding

Fee shall be earned by Yahoo as follows:



May 14, 1999 -- May 31, 1999 $ 76,000

June 1, 1999 -- June 30, 1999 $156,000

July 1, 1999 - July 31, 1999 $156,000

August 1, 1999 -- August 31, 1999 $156,000

September 1, 1999 -- September 30, 1999 $156,000



If the Launch Date occurs prior to September 30, 1999, the number of days

between the Launch Date and September 30, 1999 shall be calculated. The

portion of the Holding Fee corresponding to this number of days (according

to the schedule above) shall be applied as an additional slotting fee. The

remaining $3,300,000 of the slotting fee shall be creditable only in

connection with Section 5.3(d).



3.2 Payment Information. Except for the first two payments, Yahoo shall

-------------------

submit invoices to Advertiser thirty (30) days prior to the date of payment

set forth above. All scheduled payments pursuant to Sections 3.1 above

shall be made by Advertiser via wire transfer into Yahoo's main account

pursuant to the wire transfer instructions set forth on Exhibit D. All

payments to Yahoo shall be exclusive of sales, use or value-added taxes

(other than taxes based on Yahoo's net income), which taxes shall be the

sole responsibility of Advertiser.



3.3 Late Payments. Any portion of the above payments which has not been

-------------

paid to Yahoo on the dates set forth above shall bear interest at the

lesser of (i) one and one-half percent (1.5%) per month or (ii) the maximum

amount allowed by law.



SECTION 4: INDEMNIFICATION - --------------------------











4.1 Advertiser Indemnification. Advertiser, at its own expense, will

--------------------------

indemnify, defend and hold harmless Yahoo and its employees,

representatives, agents and Affiliates, against any claim, suit, action, or

other proceeding brought against Yahoo based on or arising from a claim

that any Advertiser Brand Feature, content, material, product, information,

software data or service produced, distributed, offered or provided by

Advertiser, including, without limitation, the distribution of postage, or

any material presented on any site on the Internet produced, maintained, or

published by Advertiser, infringes in any manner any copyright, patent,

trademark, trade secret or any other intellectual property right of any

third party, is or contains any material or information that is obscene,

defamatory, libelous, slanderous, or that violates any law or regulation,

is negligently performed, or otherwise violates or breaches any duty

toward, or rights of any person or entity, including, without limitation,

rights of publicity, privacy or personality, or has otherwise resulted in

any consumer fraud, product liability, tort, breach of contract, injury,

damage or harm of any kind to any person or entity; provided, however, that

in any such case: (x) Yahoo provides Advertiser with prompt notice of any

such claim, (y)Yahoo permits Advertiser to assume and control the defense

of such action upon Advertiser's written acknowledgment of the obligation

to indemnify and (z) upon Advertiser's written request, and at no expense

to Yahoo, Yahoo will provide to Advertiser all available information and

assistance necessary for Advertiser to defend such claim. Advertiser will

not enter into any settlement or compromise of any such claim without

Yahoo's prior written consent, which shall not be unreasonably withheld.

Advertiser will pay any and all costs, damages, and expenses, including,

but not limited to, reasonable attorneys' fees and costs awarded against or

otherwise incurred by Yahoo in connection with or arising from any such

claim, suit, action or proceeding. The aforementioned indemnification shall

not apply to the extent such claims (i) are not somehow related to this

Agreement, (ii) have occurred as a result of Yahoo breaching its

obligations under this Agreement or (iii) have occurred as a result of

Yahoo modifying, without Advertiser authorization, Advertiser materials

provided by Advertiser pursuant to this Agreement.



4.2 Limitation of Liability.

-----------------------



EXCEPT AS PROVIDED IN THIS SECTION 4, UNDER NO CIRCUMSTANCES SHALL

ADVERTISER, YAHOO, OR ANY AFFILIATE BE LIABLE TO THE OTHER PARTY FOR

INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES ARISING

FROM THIS AGREEMENT, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY

OF SUCH DAMAGES, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR

ANTICIPATED PROFITS OR LOST BUSINESS.



SECTION 5: TERM AND TERMINATION - -------------------------------



5.1 Term and Renewals. The Term of this Agreement shall commence on May 14,

-----------------

1999 and expire on December 31, 2000, unless earlier terminated as provided

in this Agreement.







5.2 Termination for Cause. This Agreement may be terminated at any time by

----------------------

either party: (i) immediately upon written notice if the other party: (a)

is declared insolvent by an administrative party; (b) files a petition in

bankruptcy; or (c) makes an assignment for the benefit of its creditors; or

(ii) upon the expiration of thirty (30) days after written notice to the

other party of such other party's breach of any of its obligations under

this Agreement in any material respect (ten (10) days in the case of a

failure to pay), which breach is not remedied within such thirty (30) or

ten (10) day period as applicable. Failure to make payments as set forth

herein shall be deemed a material breach of this Agreement giving rise to

the notice and cure provisions set forth above and the right by Yahoo to

suspend performance hereunder until such breach is cured. Any termination

pursuant to Section 5.2 shall be without any liability or obligation of the

terminating party, other than with respect to any breach of this Agreement

prior to termination. For the avoidance of doubt, if this Agreement is

terminated by Advertiser for Yahoo's breach, Advertiser shall have no

obligation to make any payments payable after the date of termination.

However, Slotting Fee payments made prior to the date of termination

representing page views not delivered or foregone (as calculated on a daily

basis per the schedule provided in 2.3(a)) shall not be refunded, but shall

be creditable against Advertiser's future placements of advertising,

promotions, email deliveries, hyperlinks and any other related services

made available by Yahoo to third parties or Advertiser from time to time

based on availability and then current rates ). The first $200,000 of any

such credits must be applied by June 30, 2000 and any remaining credits

must be applied prior to December 31, 2000.



5.3 Pro-ration Periods.

------------------



(a) First Pro-ration Period. This Agreement is being executed with

-----------------------

the understanding that by July 15, 1999, Advertiser shall have

secured the appropriate clearances and licenses in the United

States to legally sell electronic postage and electronic postage

software ("USPS PC Postage Certification"), and shall be

technically and operationally able to conduct commerce on

Advertiser Site on a nationwide scale (along with this

certification, "Fully Operational"). In the event Advertiser is

not Fully Operational by September 30, 1999, both parties shall

mutually agree to a new Laun ...