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EXHIBIT 10.1
ADDENDUM TO MASTER SERVICES AND SUPPLY AGREEMENT
THIS ADDENDUM (this "Addendum"), dated as of September 29, 2000, by and
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among PeoplePC, Inc. a Delaware corporation, having its principal place of
business at 100 Pine Street, Suite 1100, San Francisco, California 94111
("PeoplePC"), Ford Motor Company, a Delaware corporation, having its principal
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place of business at The American Road, Dearborn, Michigan 48120, ("Ford") and
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Ford Motor Credit Company, a Delaware corporation, having its principal place of
business at One American Road, Dearborn, Michigan 48121 ("Ford Credit") amends
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that certain Master Services and Supply Agreement, dated April 4, 2000, by and
between PeoplePC and Ford (the "Agreement").
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R E C I T A L S:
A. PeoplePC and Ford entered into the Agreement without contemplating that
Ford Credit could effectively provide financial services to the Members.
B. PeoplePC and Ford have agreed to permit Ford Credit to be the exclusive
provider of the Financial Services that are offered through the PeoplePC Buyers
Club (i) to the Members and (ii) to those Customers who elect to participate in
the Customer Program.
C. Pursuant to Section 15.4 and Exhibit C of the Agreement, PeoplePC and
Ford desire to amend the Agreement and to add Ford Credit as a party to the
Agreement for the limited purpose of being the exclusive provider of Financial
Services to the Members and Customers under the terms and conditions set forth
in this Addendum.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, PeoplePC, Ford and Ford Credit agree as follows:
A. Addendum. Exhibit E hereby is added to the Agreement to read as
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follows:
"1. Definitions. As used in this Addendum, all capitalized terms, unless
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otherwise defined in this Addendum, shall have the meanings set forth in the
Agreement, as amended by this Addendum. Except as expressly set forth in this
Addendum, all defined terms of the Agreement shall remain unchanged and in full
force and effect. The following terms are added to the Agreement and shall have
the meanings ascribed to them below:
1.1 "Customers" shall mean all authorized Ford customers, Ford dealers and
Ford dealers' employees who elect to participate in the free ISP or computer
programs under the terms and conditions offered to them in accordance with the
LOI or the definitive agreement(s) that will be based on the LOI.
1.2 "Customer Program" means those free ISP and/or bundled computer
offerings made by Ford, Ford Credit and PeoplePC to the Customers and/or the
Eligible Employees (if an additional offering is made to them beyond the FECP)
as such offerings are further described
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in the LOI, the definitive agreement(s) that will be based on the LOI or such
other agreements as the Parties may mutually agree.
1.3 "Effective Date of the Addendum" shall mean the date that the
Addendum is duly executed by all of the Parties.
1.4 "Exclusivity Period" means the three (3) years commencing on the
Effective Date of the Addendum, plus any additional time remaining on the
Fulfillment Period, but in no event shall the Exclusivity Period exceed six
years from the date of the Effective Date of the Addendum.
1.5 "Financial Services" means the following banking and financial
services: checking accounts, savings accounts, money market accounts, NOW
accounts, cash deposit accounts, loans and loan services, mortgages and mortgage
services, retirement accounts (including IRAs, KEOGHs, 401Ks and similar
retirement accounts), retirement account services, mutual funds and mutual fund
services, brokerage accounts and brokerage account services, insurance and
insurance services, financial planning, personal financial services aggregators,
bill presentment services, consumer credit account information and Ford-branded
tax preparation services, but specifically excluding financial software and
books, PeoplePC-offered tax preparation services and a PeoplePC-branded credit
card offering provided that such credit card offering will not directly market
the above banking and financial services to any Member or Customer accepting
such credit card.
1.6 "Financial Services Exclusivity" shall have the meaning defined in
Paragraph 2 of this Addendum.
1.7 "Ford Revenues" means the revenues actually received, directly or
indirectly, by Ford Credit Company for the sale and/or bounty of a Financial
Service through the Buyers Club to a Member and/or Customer.
1.8 "Fulfillment Period" means the period that commences on the
Effective Date of the Addendum and ends on the expiration of the last Ford
Member Agreement that was executed on or before the third anniversary of the
Effective Date of the Addendum.
1.9 "LOI" shall mean that Letter of Intent by and between Ford Credit
and PeoplePC executed on even date herewith that sets forth the terms and
conditions of the offerings to be made by the Parties to the Customers.
1.10 "Members" means those Eligible Employees who elect to participate
in the Ford Employee Connectivity Program and who execute the Ford Member
Agreement with PeoplePC.
1.11 "Territory" means the United States and Canada and their
respective territories and possessions as of the Effective Date of the Addendum.
2. Financial Services Exclusivity. During the Exclusivity Period, Ford
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Credit, by
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itself or through any third party it selects, shall be the exclusive provider of
Financial Services presented to the Members in the Territory by the PeoplePC
Solutions, Buyers Club and PeoplePC website offerings. Unless specifically
authorized in writing by Ford Credit, PeoplePC shall not contract with or permit
any third party to advertise, promote or display any Financial Services
presented to the Members in the Territory by the PeoplePC Solutions, Buyers Club
and PeoplePC website offerings. On the Effective Date of the Addendum, Ford
Credit shall pay to PeoplePC a single, non-refundable payment of Three Million
Seven Hundred Fifty Thousand and No/100 Dollars ($3,750,000.00) for Financial
Services Exclusivity under this Paragraph 2 of the Addendum. The Parties agree
and acknowledge that such fee shall also guarantee that Ford Credit, by itself
or through any third party it selects, shall be the exclusive provider of
Financial Services presented to the Customers under the Customer Program by the
PeoplePC Solutions, Buyers Club and PeoplePC website offerings. Unless
specifically authorized in writing by Ford Credit, PeoplePC shall not contract
with or permit any third party to advertise, promote or display any Financial
Services presented to the Customers under the Customer Program by the PeoplePC
Solutions, Buyers Club and PeoplePC website offerings. The Parties shall use all
good faith efforts to negotiate and execute promptly the definitive agreement(s)
based upon and further described in the LOI. Notwithstanding the foregoing, the
ability or inability of the Parties to successfully implement the Customer
Program shall in no way alter or invalidate the terms, conditions, right and
obligations of this Addendum.
3. Revenue Sharing. For the avoidance of doubt, the Parties shall use the
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following methods to allocate revenues generated from Members and/or Customers.
For the Financial Services sold to Members and/or Customers, Ford shall retain
100% of the Ford Revenues earned. Each Party shall retain 100% of the revenues
derived from (i) the sale of tax preparation services that it individually
offers to the Members and/or Customers and (ii) the sale of co-branded credit
card services that it individually offers to the Members and/or Customers.
During the Term, PeoplePC shall pay to Ford Credit a sum that is equal to fifty
percent (50%) of Net Revenues derived from the sales of Partner Products to
Customers or Members by a Buyers Club Partner (i) immediately upon launch of the
Customer Program for sales to Customers and (ii) according to Exhibit C for
sales to Members. Net Revenues are defined as gross revenues actually received
by PPC from a Buyers Club Partner for the sale of a Partner Product through the
Buyers Club to a Member and/or Customer less amounts paid or credited to a
Buyers Club Partner for returns, refunds or other allowances, such other
allowances are subject to Ford's approval.
4. Format of Offering. The presentation and delivery to the Buyer's Club
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of the Financial Services offered or provided by or through Ford Credit or its
Affiliates to the Members shall be substantially in the form and content
provided in Schedule 1 of this Addendum and will be no less prominent then other
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products and services presented to Members and Customers on the Buyer's Club or
other PeoplePC partner buyers forum.
5. Counterparts. This Addendum may be executed in counterparts or
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multiple originals, all of which shall be regarded as one and the same
instrument, and which shall be the official and governing version in the
interpretation of this Addendum."
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IN WITNESS WHEREOF, PeoplePC and Ford have caused this Addendum to be
executed by duly authorized officers or representatives as of the Effective Date
of the Addendum.
PeoplePC, Inc. Ford Motor Company
By:/S/ Wayne Gattwell By:__________________________
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Name: WAYNE GATTWELL Name:________________________
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Title: CMO Title:_______________________
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IN WITNESS WHEREOF, PeoplePC and Ford have caused this Addendum to be
executed by duly authorized officers or representatives as of the Effective Date
of the Addendum.
PeoplePC, Inc. Ford Motor Company
By:___________________ By:/s/ James A. Yost
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Name:_________________ Name: JAMES A. YOST
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Title:________________ Title: VP & CIO
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Schedule 1
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To be determined by mutual agreement of the Parties.
