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