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E-Commerce Agreement [Amendment No. 1] - GSI Commerce Solutions Inc. and Palm Inc.

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                     AMENDMENT NO. 1 TO E-COMMERCE AGREEMENT

        This Amendment No. 1 (the "Amendment") to E-Commerce Agreement (the
"Agreement"), dated as of June 14, 2002, by and between GSI Commerce Solutions,
Inc. ("GSI") and Palm, Inc. (the "Company"), is dated as of December 3, 2002.
All capitalized terms not specifically defined herein shall have the meanings
ascribed to them pursuant to the Agreement.

                                    RECITALS

         WHEREAS, GSI and the Company entered into the Agreement pursuant to
which GSI operates the Company Stores and Specialized Stores; and

         WHEREAS, GSI and the Company desire to enter into this Amendment to the
Agreement in order to amend certain rights and obligations among them.

         NOW, THEREFORE, intending to be legally bound, and in consideration of
the mutual obligations contained herein and in the Agreement, the Parties agree
as follows:

1.       Amendments.

         1.1      Section 3.6 of the Agreement is hereby amended and restated
                  in its entirety as follows:

                  "3.6     Purchase and Sale of Palm Products.

                           (a) Palm Products shall be sold to GSI at the prices
         [*] a current copy of which has been provided to GSI ("Price List").
         [*] Each revised Price List and price change notification will state an
         effective date. The current Price List will be deemed replaced by any
         subsequent Price List. The Company will deliver such Palm Products to
         GSI, at the Company's expense, F.O.B. the Company's warehouse, to a
         facility or facilities designated by GSI and based upon a mutually
         agreed upon delivery schedule. The Company will use good faith efforts
         to deliver such Palm Products to GSI in a manner which minimizes GSI's
         receiving cost, based upon specifications provided by GSI. GSI will
         confirm receipt of product within [*] business days of arrival at GSI
         facility and will have [*] business days to make a claim of shortage or
         damaged shipment.

                           (b) Each calendar quarter, GSI will have the right to
         return to the Company Palm Products with a value (as determined by the
         amount paid by GSI for

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          such Palm Products) of up to [*]% of its aggregate net purchases of
          Palm Product from the Company in the two (2) previous calendar
          quarters (the "Return Allowance") for a refund equal to the aggregate
          amount paid by GSI for such returned Palm Products; provided, however,
          that GSI must use good faith efforts to sell through its remaining
          inventory of Palm Products prior to returning to Company. Net
          purchases include products purchased net of returns, allowances,
          credits and payments by the Company to GSI pursuant to Section 7.4 of
          the Agreement, if any, during such applicable quarters. Once the
          Return Allowance has been reached, the Company will not be required to
          accept the return of Palm Products from GSI until additional purchases
          of Palm Products have been made by GSI. GSI will be responsible for
          the freight costs associated with returns; provided, however, that the
          Company will assist GSI as reasonably requested in filing any
          necessary claims with common carriers.

                           (c) Terms of sale are [*] days from date of shipment.
         The Company will invoice GSI for the aggregate sale price of Palm
         Products shipped to GSI. Payment is not conditioned upon the Palm
         Products meeting any acceptance testing procedures GSI may have. If
         there is any dispute as to a part of a shipment, GSI will pay for the
         undisputed part of that shipment. GSI may not deduct any debit memos
         from payment(s) made to the Company on outstanding invoice(s), without
         prior written approval from the Company. Payments should be submitted
         to the appropriate address as stated on the invoice."

         1.2      Section 7.2 of the Agreement is hereby amended and restated
                  in its entirety as follows:

                  "7.2 Collection of Sales Proceeds. All proceeds from the sale
         of Merchandise and related services through the Company Stores and
         Specialized Stores will be collected and processed by GSI. Other than
         the [*] payments, if any, set forth in Section 7.3, GSI shall retain
         all amounts collected by GSI from transactions through the Company
         Stores and Specialized Stores."

         1.3      Section 7.3 of the Agreement is hereby amended and restated
                  in its entirety as follows:

                  "7.3     [*] Payments.

                           (a) If (i) [*]% of Merchandise Revenue derived from
         the sale of Palm Products which are personal digital assistants shipped
         during the applicable period ("[*] PDA Revenue") exceeds (ii) the
         Merchandise Cost of Sales for Palm Products which are personal digital
         assistants shipped during such period, net of returns ("[*] PDA COGS"),
         then GSI will pay the Company an amount equal to (A) [*]% of [*] PDA
         Revenue, less (B) [*] PDA COGS.


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                           (b) If (i) [*] PDA COGS exceeds (ii) [*]% of [*] PDA
         Revenue, then the Company will pay GSI an amount equal to (A) [*] PDA
         COGS, less (B) [*]% of [*] PDA Revenue.

                           (c) If (i) [*]% of Merchandise Revenue derived from
         the sale of Palm Products other than personal digital assistants
         shipped during the applicable period ("[*] Non-PDA Revenue") exceeds
         (ii) the Merchandise Cost of Sales for Palm Products other than
         personal digital assistants shipped during such period, net of returns
         ("[*] Non-PDA COGS"), then GSI will pay the Company an amount equal to
         (A) [*]% of [*] Non-PDA Revenue, less (B) [*] Non-PDA COGS.

                           (d) If (i) [*] Non-PDA COGS exceeds (ii) [*]% of [*]
         Non-PDA Revenue, then the Company will pay GSI an amount equal to (A)
         [*] Non-PDA COGS, less (B) [*]% of [*] Non-PDA Revenue.

                           (e) GSI will pay the Company an amount equal to [*]%
         of the amount, if any, by which Merchandise Revenue derived from the
         sale of Non-Palm Products shipped during the applicable period exceeds
         the Merchandise Cost of Sales for Non-Palm Products shipped during such
         period, net of returns.

                           (f) GSI will pay the Company an amount equal to [*]%
         of the amount, if any, by which Shipping Revenue derived from the
         provision of shipping and handling services during the applicable
         period exceeds GSI's carrier costs for providing shipping and handling
         services during such period.

                           (g) GSI will pay the Company an amount equal to [*]%
         of the amount, if any, by which Services Revenue derived from the
         provision of gift wrapping and other value added services during the
         applicable period exceeds GSI's actual cost of providing such services
         (not including overhead, but including direct labor and the cost of
         materials used in connection therewith) during the period.

                           (h) GSI will pay the Company an amount equal to [*]%
         of Merchandise Revenue derived from the sale of Extended Warranties and
         Service Contracts during the period.

         1.4      Section 7.4 of the Agreement is hereby amended and restated
                  in its entirety as follows:

                  "7.4 Payments. GSI will account to the Company for the [*]
         payments due under Section 7.3 within [*] days after the end of each
         [*] through a report, showing in reasonable detail, the calculation of
         such payments. The Company may verify the accuracy of such reports in
         accordance with and pursuant to the terms of

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<PAGE>


          Section 7.5. If such calculation indicates that, on an aggregate
          basis, GSI is required to make a payment to the Company, then GSI will
          remit such payment to the Company along with such report. If such
          calculation indicates that, on an aggregate basis, the Company is
          required to make a payment to GSI, then the Company will issue a
          credit


                  memo to GSI as soon as practicable following its receipt of
         such report, but in no event later than [*] days following its receipt
         of such report. Upon receipt of any such credit memo, GSI may (i)
         deduct and set off the amount set forth in the credit memo against any
         amounts payable by GSI to the Company, including amounts payable for
         purchases of Palm Products, or (ii) notify the Company that the Company
         is required to pay GSI the amount set forth in the credit memo, in
         which case payment terms will be net [*] days from the date of such
         notice. GSI will forward to the Company a preliminary report each [*],
         on the last day of the Company's fiscal [*] that estimates the [*]
         payments for such [*], provided that the Company has provided GSI with
         its fiscal calendar. The [*] payments will be calculated at [*] end
         based upon a mutually agreed upon method for projecting returns."

2.       Miscellaneous.

         2.1      This Amendment shall be effective as of the effective date of
the Agreement.

         2.2      Except as specifically amended  herein, the Agreement shall
remain in full force and effect in accordance with its terms.

         2.3      This Amendment may be executed in one or more counterparts,
each of which shall be deemed an original and all of which shall constitute one
agreement.

         2.4      This Amendment will be interpreted, construed and enforced in
accordance with the laws of the State of New York, without reference to its
choice of law rules.

                               *******************
                      (SIGNATURES APPEAR ON FOLLOWING PAGE)


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         IN WITNESS WHEREOF, intending to be legally bound, each of the parties
have caused their duly authorized representatives to enter into this Agreement
on the date first written above.


GSI COMMERCE SOLUTIONS, INC.               PALM, INC.

By: /s/ Steve Davis                        By: /s/ William Lynch
    --------------------------------       ----------------------------------
Name: Steve Davis                          Name: William Lynch
Title: SVP Marketing                       Title: VP Ecommerce

Address:  1075 First Avenue                Address:  M/S 9105
          King of Prussia, PA  19406                 5470 Great America Parkway
                                                     Santa Clara, CA 95054

Telephone:  (610) 265-3229                 Telephone: (408) [*]
Facsimile:  (610) 265-2866                 Facsimile: (408) [*]


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