Corporate Customer Agreement

CORPORATE CUSTOMER AGREEMENT



This Corporate Customer Agreement (the "Agreement") is made effective as of January 31, 2000 (the "Effective Date") by and between PeoplePC Inc., a Delaware corporation having a place of busine ss at 100 Pine Street, 11/th/ Floor, San Francisco, California 94111 ("PeoplePC"), and Delta Air Lines, Inc., a Delaware corporation having a place of business at 1030 Delta Blvd., Atlanta, Georgia 30320 ("Customer"). PeoplePC and Customer are referred to herein collectively as the "Parties" and each individually as a "Party."





A. PeoplePC is engaged in the business of, among other things, providing corporations with a customized Internet-access offering package (which may include personal computer hardware and software, Internet access, extended hardware service, customer support and promotional offers from third-party merchants) for use by a corporation's employees (the "PeoplePC Corporate Plan").



B. Customer desires to make the PeoplePC Corporate Plan, excluding connectivity services, which will be obtained by Customer separately, available to its employees for use in connection with their employment by Customer.



C. PeoplePC and Customer desire to enter into a relationship whereby Customer can offer the PeoplePC Corporate Plan to Employees as customized as set forth herein.





Article I -- Definitions



As used in this Agreement:



"Affiliate" means any individual, corporation, partnership, association, or business that directly or indirectly through intermediaries, controls, is controlled by or is under common control with a party. "Control", for the purpose of this definition, shall mean an ownership, voting or similar interest (including any right or option to obtain such an interest) representing at least 50% of the total interests then outstanding of the pertinent entity.



"Connectivity Vendor" shall mean the company that provides Internet connectivity (including, connectivity to Customer's VPN f acility) to Employees (as defined herein) for use with the Corporate Offering (as defined herein) (the "Connectivity Services").



"Corporate Offering" shall mean the combination of products and services for Employees, as described in the Corporate Offering Description set forth in



Exhibit C ("Corporate Offering Description") hereto, as such exhibit shall be - --------- developed and refined as required by this Agreement and updated from time to time by written agreement of the Parties. "Corporate Offe ring Website" means the website whose home page is currently (as of the Effective Date) located at the URL "[http://delta.peoplepc.com]", as such website may be modified or updated by PeoplePC from time to time.



"Customer Marks" means the trademarks, service marks, trade names, and logos of Customer listed in Exhibit A-1 ("Customer Marks"), as such list may be

----------- updated from time to time by Customer.





Confidential treatment has been requested with respect to the omitted portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commissi on.

"Employee" shall mean an employee of Customer or, as to those Affiliates mutually agreed to by PeoplePC and Customer from time to time, an employee of any such Affiliate.



"Employee Service Term" shall have the meaning set forth in Exhibit C.

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"Intellectual Property Rights" means all current and future worldwide copyrights, trade secrets, patents and other patent rights, utility models, moral rights, trademarks, tr ade names, service marks, and all other intellectual property rights, including all applications and registrations with respect thereto.



"Launch Date" means the date on which the Corporate Offering and the Connectivity Services are first made generally available to employees of Customer.



"Link" means a hypertext link, in a textual or graphical form, from one website to another website.



"Participating Employee" means an Employee who places an order for products or services under the Corporate Offering.



"Participating Employee Order" means the specific applicable information provided to PeoplePC necessary for PeoplePC to process an order for an Employee under the Corporate Offering, including, employee name, selection of computer hardwa re/software packages, optional equipment, delivery address and, if provided for in the Corporate Offering, credit card information.



"PeoplePC Marks" means the trademarks, service marks, trade names, and logos of PeoplePC listed in Exhibit A-2, as such list may be updated from time

----------- to time by PeoplePC.



"Target Dates" means the target dates listed in Exhibit B for completion of

--------- various aspects of the work to be undertaken by the Parties pursuant to this Agreement, as such list may be modified and updated from time to time by written agreement of the Parties.



Article II - Corporate Offering



2.1 Design and Development . The Parties shall use good faith efforts to design and develop their respective components of the Corporate Offering by the applicable Target Dates. It is understood and agreed that neither Party can guarantee the results or success of these efforts, t he Target Dates are subject to change as circumstances warrant, and neither Party will have liability for any change in the Target Dates, or any failure to complete any portion of this work by the applicable Target Date, as long as such Party is using goo d faith, commercially reasonable efforts to fulfill its responsibilities in performing this work. This work is expected to include, among other things, (a) the elaboration of technical specifications and interfaces requires to implement the Corporate Offe r ing; (b) the interface and coordination with the Connectivity Vendor; (c) the modification or adaptation of existing infrastructure to support the Corporate Offering; (d) the development of technical and functional specifications for such features, based o n the specifications for the Corporate Offering, when completed; and (e) the evaluation and testing of the Corporate Offering until both Parties are satisfied with its quality and reliability and suitability for general release. Customer acknowledges tha t the geographic availability of the Corporate Offering may be limited by the Connectivity Vendor. The Parties shall cooperate to plan and coordinate geographic roll-out.





2.2 Marketing and Applications. Customer shall provide promotional literature to and shall actively solicit the participation of all current Employees and future Employees in using the products and services available through the Corporate Offering. Specifically, Customer shall (i) provide each Non-Participating Employee with liter a ture describing such products and services, (ii) provide information meetings to all Non-Participating Employees to explain such products and services and (iii) designate a program liaison to its Employees and to PeoplePC, who shall be responsible for coo r dinating all internal marketing of such products and services at the Customer. PeoplePC shall provide a dedicated toll-free number and Internet application page for processing Employee applications for such products and services and shall cooperate with C u stomer in the development of descriptive literature, informational displays and other marketing related marketing collateral (the "Marketing Materials"). If required by the Corporate Offering, PeoplePC shall confirm all equipment upgrade requests from emp l oyees with Customer prior to shipment, unless Customer has pre-authorized such requests. During the first year of the Term, Customer shall spend at least [*] on marketing expenses for the Corporate Offering (including internal marketing expense and market i ng payments to other parties). Six months following the parties' satisfaction of the contingencies set forth in Sections 2.5(c) and 2.5(d), the parties shall measure the number of then-current Participating Employees, and Customer shall be required to spe n d an additional amount on marketing expenses during the first year of the Term equal to [*] minus the then-current number of Participating Employees ([*] -- then-current number of Participating Employees)), up to a maximum additional amount of [*]. During each subsequent year during the term, Customer shall be required to spend a minimum of [*] per non-Participating Employee on marketing expenses, up to a maximum [*].



2.3 Terminating Employees. Customer shall promptly notify PeoplePC when Participati ng Employees terminate employment with Customer (a "Terminating Employee"). The Parties shall cooperate to develop a transition process under the Corporate Offering for Terminating Employees and Customer shall remain responsible for payments to PeoplePC r elated to such Employee through the end of any applicable Employee Service Term (notwithstanding termination of employment or this Agreement) until such transition is completed. Customer shall cause the Connectivity Vendor to terminate Internet Connectiv ity Services for Terminating Employees. Customer shall remain responsible for payments to PeoplePC as described in Exhibit C.

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2.4 Launch Date and Supply Forecast. The Parties shall cooperate to establish a Launch Date, rollout schedule and rolling-demand forecast for the Corporate Offering, all of which shall be based on and consistent with the applicable Target Date and the availability of equipment and services from third-party vendors (including the Connectivity Vendor).



2.5 Provision of Corporate Offering.



(a) PeoplePC shall make available, manage, and provide the Corporate Offering to Participating Employees throughout the Term, in substantial accordance with the terms of this Agreement, Exhibit C, and th e Service Level Agreement, expect for those aspects of the Corporate Offering which the parties determine to be the responsibility of Customer. PeoplePC will have sole responsibility for first-line customer support of Participating Employees for the Corp orate Offering and shall host and maintain the operation of the Corporate Website (excluding any Customer or third-party Links therefrom).





*****Certain information on this page has been omitted and filed separately with

the Securities and Exchange Commission. Confidential treatment has been

requested with respect to the omitted portions.

(b) PeoplePC shall be responsible for the management and coordination of the delivery of the Corporate Offering, including the Connectivity Services. Notwithstanding the foregoing, or anything to the contrary in the Agreement, PeoplePC shall not be responsible for performance or non-performance of the Connectivity Vendor's obligations to Customer.



(c) This Agreement shall be contingent on C ustomer and the Connectivity Vendor entering into an agreement for Connectivity Services, including relevant service level agreements, within thirty (30) days of the Effective Date (the "Connectivity Agreement"). The Connectivity Agreement will require the Connectivity Vendor to reasonably cooperate with PeoplePC in the delivery of the Corporate Offering and in PeoplePC's coordination role.



(d) This Agreement shall be contingent upon a third party agreeing to make a loan [to PeoplePC] on the basis of the Corporate Offering on terms similar to the terms that a company with Delta's credit rating could obtain.



2.6 Fees and Payment; Shipment and Delivery



(a) Development Costs. Each party shall be responsible for its respective costs associated with the design, development and deployment of the Corporate Offering.



(b) Fees. PeoplePC will send a monthly invoice for (i) the payments required from Customer for the provision of the Corporate Offering at the rates set forth in Exhibit D (including, without limitation, Monthly Payment, Shipping

--------- Charges and Upgrade Fees (unless PeoplePC has directly billed an Employee's credit card for such amounts) and (ii) all payments then due to the Connectivity Ve ndor for the provision of Connectivity Services (the "Connectivity Payment"). Customer shall not make Connectivity Payments directly to the Connectivity Vendor but shall instead make all such payments to PeoplePC for the account of the Connectivity Vendor . On receipt from Customer, PeoplePC shall pay to the Connectivity Vendor all Connectivity Payments, without setoff or reduction for any reason. Such invoice shall be due and payable thirty (30) days after the invoice date and, to the extent the invoice r emains unpaid after the due date, it shall accrue a late payment fee of 1.5% per month or the maximum rate allowed by law, whichever is less.





(c) Shipping. All products shall be shipped to the destination indicated in the applicable order in ac cordance the terms of this Agreement. Terms are EXW PeoplePC's original equipment manufacturer's distribution facility. PeoplePC shall establish and conform to packaging standards which will protect shipments in accordance with established industry practi c es. PeoplePC shall mark shipping containers or packages with the order number, contact person, and address of the destination and the shipper applicable to a particular Participating Employee Order. A complete packing list containing order number, contac t person, quantity of product, configuration and specifications for products, date shipped, and requested destination shall be enclosed with all shipments.



(d) Title; Risk of Loss. Title to personal computer hardware products and software media provided by PeoplePC under a Participating Employee Order shall pass to Customer upon delivery [free of liens, encumbrances, and claims of any type]. The risk of loss of such products shall remain with PeoplePC until delivery to Customer, at the address specified in the Participating Employee Order or other specified destination. As set forth in the Corporate Offering, Customer or its Employees shall pay all freight and insurance en route.



2.7 Deliverables and Licenses.



(a) Customer Deli verables. Customer will timely deliver to PeoplePC those components and information specified in the Corporate Offering for PeoplePC to develop, operate and maintain the Corporate Offering and to perform its obligations hereunder (which may include, but n ot necessarily be limited to, employee pre-registration information, employee lists, employee list updates and employee application confirmation) (collectively, the "Customer Deliverables"). PeoplePC will have a non-exclusive, non-transferable, royalty-fr e e, limited license during the term of this Agreement to use and reproduce the Customer Deliverables, solely for the purpose of PeoplePC's performing its obligations hereunder. The Customer Deliverables will be considered Confidential Information of Custom er subject to the provisions of Section 3.2. PeoplePC shall be excused from performance of its obligations under this Agreement to the extent such performance is prevented by Customer's failure to provide accurate Customer Deliverables.



(b) Peo plePC Deliverables. PeoplePC will timely deliver to Customer those components and information specified in the Corporate Offering for Customer to perform its obligations hereunder (collectively, the "People PC Deliverables"). Customer will have a non-ex c lusive, non-transferable, royalty- free, limited license during the term of this Agreement to use and reproduce the PeoplePC Deliverables, solely for the purpose of Customer performing its obligations hereunder. The PeoplePC Deliverables will be considere d Confidential Information of PeoplePC subject to the provisions of Section 3.2. Customer shall be excused from performance of its obligations under this Agreement to the extent such performance is prevented by PeoplePC's failure to provide accurate Custom er Deliverables.



2.8 Warrant. As soon as practicable, but in any event within ten (10) business days after the Effective Date, PeoplePC shall issue to Customer a warrant exerciseable for 250,000 shares of PeoplePC Common Stock at an exercise price p er share equal to $12.45 (subject to adjustment, for stock splits, stock dividends, merger, reclassification and the like). Such warrant shall vest immediately upon issuance and (i) expire six (6) months after the Closing of the initial public offering of the Company's common stock (the "IPO"), or three (3) years after the Effective





Date, whichever occurs first and (ii) contain a cash-less exercise feature if the warrant is exercised at or after the IPO.



2.9 Revenue-Sharing. PeoplePC shall credi t against any payments due from Customer (i) [*] of the revenue recognized by PeoplePC from commerce activities from Employees originating from the Corporate Offer of the Day (as described in Exhibit C) and (ii) [*] of the revenue - --------- recognized b y PeoplePC from Employees' participation in the Corporate Offering Buyer's Club to the extent such revenue exceeds PeoplePC's expenses attributable to such club and is fairly allocated to Customer in proportion to PeoplePC's entire consumer and corporate c u stomer base (including, without limitation, maintenance, operational, marketing and promotional expenses). For a period of one year after the Effective Date (with the exception of Company A), should PeoplePC enter into a revenue-sharing arrangement that is economically more favorable to any third-party corporate customer at comparable volume levels, PeoplePC will make such terms available to Customer retroactive to the date such terms were extended to such third-party corporate customer.



2.10 Manage ment Access. PeoplePC will make its management available to confer with Customer on other e-business issues as part of their overall relationship, including discussions with the Chief Executive Officer and the Director of Online Communications for websit e operations as Customer may reasonably request from time to time. PeoplePC will use good faith efforts to provide introductions of Customer to Softbank portfolio companies as Customer may reasonably request from time to time.



2.11 Title. All product s and services rendered by PeoplePC pursuant to this agreement shall be deemed to be offered and delivered solely to Customer and Customer shall be responsible for payment for all products and services of Employees through the full service term. Customer shall retain title to all computer hardware products and software media delivered under the Corporate Offering irrespective of whether these products are shipped directly to an Employee. Notwithstanding the foregoing, title to, and responsibility for paym ent for, peripherals and upgrades will be as set forth in the Corporate Offering.



2.12 Service Levels. Performance levels relating to the Corporate Offering, including, but not limited to, those respecting order taking, fulfillment, and end-user call center support for the Corporate Offering, shall be as mutually agreed and set forth in a Service Level Agreement that will be incorporated as

-- Exhibit G to this Agreement. The Service Level Agreement shall also contain - --------- mutually-agreeable financial consequences for PeoplePC's failure to achieve required service levels, once the number of Participating Employees exceeds 40,000. PeoplePC shall support and maintain the C orporate Offering at the highest of the standard that it uses to support and maintains it general consumer offering, other corporate offerings at comparable volumes, or the standards required by this Agreement. PeoplePC shall not be responsible for suppor t of the Connectivity Vendor or the Connectivity Service, except as specifically set forth in Exhibit G. The parties shall substantially achieve the service level targets set forth in Exhibit E, or such other targets that the

--------- parties agree to from time to time.





*****Certain information on this page has been omitted and filed separately with

the Securities and Exchange Commission. Confidential treatment has been

requested with respect to the omitted portions.





Article III - General



3.1 Trademark License.



(a) Customer. Subject to the terms and conditions set forth in this paragraph, Customer grants to PeoplePC a limited, non-exclusive, non- transferable lic ense during the term of this Agreement to use the Customer Marks in connection with the marketing, operation, promotion and administration of the Corporate Offering. PeoplePC's use of the Customer Marks other than in accordance with the Customer Trademar k Usage Guidelines shall in each instance be subject to Customer's prior written authorization and approval. In addition, PeoplePC will comply with Customer's then-current, trademark usage guidelines or policies that Customer may furnish to PeoplePC in w riting from time to time concerning use of the Customer Marks (the "Customer Trademark Usage Guidelines"). A copy of such guidelines presently in effect is set forth in



Exhibit E-1 attached hereto. All use of the Customer Marks hereunder will inure - --- -------- to the benefit of Customer. Customer has and will retain exclusive ownership of the Customer Marks, and PeoplePC will not contest or challenge, or do anything inconsistent with, Customer's exclusive ownership of the Customer Marks.



(b) PeoplePC. Subject to the terms and conditions set forth in this paragraph, PeoplePC grants to Customer a limited, non-exclusive, non- transferable license during the term of this Agreement to use the PeoplePC Marks in connection with the marketing, oper a tion, promotion and administration of the Corporate Offering. Customer's use of the PeoplePC Marks other th ...