Confidential Treatment has been requested with respect to portions of the
agreement indicated with an asterisk [*]. A complete copy of this agreement,
including the redacted terms, has been separately filed with the Securities and
Exchange Commission.
E COMMERCE AGREEMENT
--------------------
THIS E - Commerce Agreement dated the 23rd day of March, 1999 by and
between Global Sports Interactive, Inc., a Pennsylvania corporation (hereinafter
referred to as "GSI") with an address of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇'▇ Athleisure Corporation (hereinafter referred to
as "Retailer") with an address of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, GSI is in the business of creating and operating all aspects of an
E-Commerce Shopping Experience, including servicing and fulfilling the on-line
retail sales of selected merchants; and
WHEREAS, Retailer desires to enter into an exclusive agreement with GSI
pursuant to which GSI will act as an Outsourcing Company providing the
Retailer's on-line customers the complete E-Commerce Shopping Experience, all
upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. DEFINITIONS. As used herein, the following terms shall have the following
-----------
meaning:
1.1 "Advertising Co-op and Discretionary Funds" shall mean amounts earned
by or allocated to the Retailer by its vendors, the purpose of which
is to advertise that vendor's brand or to use at the Retailer's
discretion.
1.2 "Categories" shall mean the various types of product groups (e.g.
athletic footwear, camping, in line skates, etc.) offered for sale by
the Retailer in its Land Based stores.
1.3 "Closeout Merchandise" shall mean end of season or excess merchandise
that is priced at a greater than normal discount.
1.4 "Complete URL Integration" shall mean the display of Retailer's URL in
all of Retailer's marketing and communications.
1.5 "Confidential Information" shall mean as that term is defined in
paragraph 7.1 of this Agreement.
1.6 "Cross Promotion" shall mean the use of the Retailer's URL, name and
logo on other than the Retailer's Web Site for the purpose of
promoting the Retailer's Web Site.
1.7 "Customary Pricing Structure" shall mean the policy generally employed
by the Retailer in determining the prices of merchandise in its Land
Based Stores.
1.8 "Customer Data" shall mean as that term is defined in paragraph 4.1 of
this Agreement.
1.9 "Data Bases" shall mean as that term is defined in paragraph 4.2 of
this Agreement.
1.10 "Defective Allowance" shall mean a discount granted by a manufacturer
to a retailer as a result of defective merchandise received by the
retailer and pursuant to which, the retailer also retains the
merchandise.
1.11 "Disclosing Party" shall mean the party disclosing Confidential
Information.
1.12 "Domain Name" shall mean as that term is defined in paragraph 1.1 of
the Web Site Development Agreement (as hereinafter defined).
1.13 "E-Commerce" shall mean the Retailer's specific business conducted
through the Internet.
1.14 "E-Commerce Orders" shall mean the orders for merchandise placed by
customers of the Retailer's Web Site.
1.15 "E-Commerce Outsourcing Partner" shall mean GSI.
1.16 "E-Commerce Shopping Experience" shall mean the shopping for and
purchasing of merchandise through the Internet.
1.17 "Flight Date" shall mean the date on which Retailer's advertising is
scheduled to run for the first time.
1.18 "Force Majeure Event" shall mean as that term is defined in Article 18
of this Agreement.
1.19 "GSI Content" shall mean as defined in paragraph 1.6 of the Web Site
Development Agreement.
2
1.20 "In Line Merchandise" shall mean current merchandise available to be
carried by the Retailer in its Land Based Stores from Retailer's
current or future vendors.
1.21 "Internet" shall mean the collection of interconnected networks that
all use the TCP/IP protocols.
1.22 "Land Based Stores" shall mean the Retailer's stores located in
shopping districts, strip shopping centers and shopping malls.
1.23 "Land Based Stores Gift Certificates" shall mean gift certificates
offered for sale on the Retailer's Web Site for merchandise sold only
in Retailer's Land Based Stores.
1.24 "Launch Date" shall mean the date on which GSI commences operation of
the Retailer's Web Site to the public.
1.25 "Markdowns" shall mean merchandise in Retailer's inventory offered for
sale at less than the price it was originally offered for.
1.26 "Milestone Delivery Schedule" shall mean as defined in paragraph 1.5
of the Web Site Development Agreement.
1.27 "On Line Customer Loyalty Programs" shall mean programs established to
encourage repeat business from on line customers.
1.28 "On Line Merchandise" shall mean merchandise to be sold on the
Retailer's Web Site.
1.29 "Outsourcing Company" shall mean a company which provides E-Commerce
Services for traditional Retailers.
1.30 "Price Matching" shall mean a Retailer's policy pursuant to which it
addresses another retailer's lower price on a particular item of
merchandise.
1.31 "Production Schedule" shall mean as defined in paragraph 1.9 of the
Web Site Development Agreement.
1.32 "Project Manager" shall mean an employee of Retailers who is assigned
exclusively to work with GSI in supplying GSI with Retailer Content.
1.33 "Receiving Party" shall mean the party receiving Confidential
Information.
3
1.34 "Retailer Content" shall mean as defined in paragraph 1.10 of the Web
Site Development Agreement.
1.35 "Retailer's Net Cost" shall mean the amount paid by the Retailer for
merchandise from its vendors after deduction of cash or anticipation
discounts, marketing allowance, Defective Allowance, volume allowance
and any other discount offered by vendors, but excluding any marketing
funds granted to Retailer by a manufacturer as an overall marketing
allowance and not based upon the number of units or dollars purchased.
1.36 "Retailer's Warehouse" shall mean the place at which Retailer receives
delivery of merchandise from its vendors.
1.37 "Revenue Share" shall mean as defined in paragraph 3.8 of this
Agreement.
1.38 "Special Make-Ups" shall mean merchandise manufactured for the
Retailer exclusively.
1.39 "Term" shall be as defined in Section 2.2 of this Agreement.
1.40 "URL" shall mean the address of the Web Site on the Internet.
1.41 "Web" shall mean the World Wide Web.
1.42 "Web Site" shall mean as defined in paragraph 1.12 of the Web Site
Development Agreement.
1.43 "Web Site Development Agreement" shall mean the agreement by and
between GSI and Retailer attached to this Agreement as Exhibit "A".
2. AGREEMENT AND TERM
------------------
2.1 Agreement. During the Term GSI shall provide the Retailer with those
---------
Web Site services as hereinafter specified.
2.2 Term. The Term of this Agreement shall commence upon the execution of
----
this Agreement and shall expire ten (10) years after the Launch Date
("Expiration Date"). GSI shall use reasonable efforts to advise
Retailer ten days prior to the expected Launch Date. The Launch Date
shall occur between the period of October 1, 1999 and December 1, 1999
("Commencement Period"); provided however, unless
4
the delay is caused by Retailer, in no event shall the Launch Date of
Retailer's Web Site be later than thirty days after GSI launches its
first retailer's web site. GSI's obligation to commence operation of
the Web Site during the Commencement Period shall be contingent on
Retailer complying with the deadlines set forth on the Milestone
Delivery Schedule set forth on Attachment B to the Web Site
Development Agreement and on the Production Schedule to be agreed upon
by the parties. Retailer acknowledges the urgency of complying with
the deadlines set forth in the Milestone Delivery Schedule and the
Production Schedule and shall give GSI its full cooperation to ensure
that such deadlines are satisfied. Notwithstanding anything contained
herein to the contrary, in the event that the Retailer does not comply
with such deadlines and GSI has given Retailer written notice of its
failure to comply,then, for each day of such non compliance, the
Commencement Period shall be extended by one day.
2.3 Extension of Term. At the expiration of the Term, this Agreement
-----------------
shall automatically terminate unless extended by the mutual agreement
of both parties.
3. OBLIGATIONS AND RIGHTS OF THE PARTIES
-------------------------------------
3.1 Creation of Retailer's Web Site.
-------------------------------
a. GSI, at its own expense, shall create, maintain and operate a Web
Site for the Retailer on the Web in accordance with the
specifications attached to the Web Site Development Agreement. In
connection therewith, simultaneous herewith, Retailer and GSI
shall execute the Web Site Development Agreement.
b. The Web Site shall contain the Retailer's E-Commerce hopping
Experience, the URL of which shall be ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇. In
addition, the Web Site shall contain any or all of the following
information, as the Retailer shall elect: corporate information
(e.g. historic background, mission statement, names of officers
and directors), store locator, public financial information (e.g.
SEC filings, annual reports), press releases, community programs,
employment opportunities for in store or corporate positions,
frequently asked questions and a "contact us" section.
5
c. Following the initial completion of the Web Site, the Retailer
shall have the right to update the content thereof as follows:
1) Employment Opportunities - GSI will provide the Retailer
with the technology necessary so that the Retailer will be
able to update the employment opportunity portion of the Web
Site as frequently as it desires.
2) Public Financial Information -
a) Stock Prices - Will be updated daily by a link to
another web site offering such information.
b) SEC Filings and Annual Reports - SEC filings will be
provided by a link so long as the government makes such
filings available at no cost. Both SEC filings and
annual reports will be provided only if available in
portable document format; in the alternative, GSI will
provide the consumer with a form in order to request
such information from the Retailer's investor relations
department.
3) Store Locators - Will be updated by GSI as such information
changes and Retailer provides GSI with such information.
4) Frequently Asked Questions - Will be updated by GSI monthly
and Retailer provides GSI with such information.
5) Corporate Information - Will be updated by GSI as such
information changes and Retailer provides GSI with such
information.
6) Community Programs - Will be updated by GSI as such
information changes and Retailer provides GSI with such
information.
7) Press Releases - GSI will provide the Retailer with the
technology necessary so that the Retailer will be able to
post press releases on its Web site as it desires. Retailer
shall defend and hold harmless GSI, its employees, officers
and directors, agents and representatives from any liability
arising from the posting of press releases on the Retailer's
Web Site.
6
8) "Contact Us" Section - Will be updated by GSI as such
information changes and Retailer provides GSI with such
information.
d. GSI's use of Retailer's URL, Retailer's Content and any other
Retailer information or material, whether confidential or not,
shall be granted and continue only for the Term of this Agreement
and shall not be used beyond the end of such Term.
3.2 Creation and Maintenance of the Retailer's Web Site.
----------------------------------------------------
GSI shall create and maintain a Web Site for the Retailer. Commencing
with the execution of this Agreement and continuing through the Term,
as may be extended, the Retailer, shall cooperate with GSI so as to
enable GSI to create and maintain for the Retailer's consumers, the
Retailer's Web Site. In connection therewith, the Retailer shall
supply GSI with the Retailer Content (as that term is defined in the
Web Site Development Agreement) required pursuant to the terms of the
Web Site Development Agreement. This shall include, but not be limited
to printed marketing information, data, text, audio files, video
files, graphics and other assets necessary to create and maintain the
Retailer's Web Site as more fully set forth on Attachment A to the Web
Site Development Agreement. Notwithstanding anything contained herein
to the contrary, and except as it relates to Special Make- Ups, it
shall be GSI's responsibility to produce and maintain all camera ready
product information for use on the Retailer's Web Site and Retailer
shall have no responsibility therefor. With respect to Special Make-
Ups, Retailer shall be responsible to provide GSI with sample product
only in a sufficient amount of time to allow GSI to produce camera
ready product information.
3.3 Sale of Merchandise on the Retailer's Web Site.
------------------------------------------------
a. GSI shall have the right to offer for sale on the Retailer's Web
Site all Categories of merchandise offered for sale by the
Retailer in its Land Based Stores Notwithstanding anything
contained herein to the contrary, in no event shall GSI offer
firearms for sale on the Retailer's Web Site. In addition, should
Retailer disapprove of any items listed for sale on the
Retailer's Web Site, and which are not listed for sale in the
Retailer's Land Based Stores, upon five days prior notice from
Retailer, GSI shall remove such item from the Retailer's Web
Site.
7
b. Within the Categories, GSI shall have the right to offer for
sale:
1) current in line merchandise ordered by the Retailer from its
vendors; and
2) current in line merchandise not carried by the Retailer in
its Land Based Stores, but available in those Categories
carried by the Retailer; provided however, no products will
be offered for sale on Retailer's Web Site which the
Retailer would not be authorized to sell by the manufacturer
in its Land Based Stores; and
3) Special Make-Ups; and
5) Closeout Merchandise; and
6) Markdowns of Retailer's inventory
7) Gift Certificates for On Line Merchandise
[Items 1) through 7) are hereinafter referred to as "On Line
Merchandise"]
c. In addition, GSI shall have the right to offer for sale Land
Based Stores Gift Certificates for merchandise available in the
Retailer's Land Based Stores. These certificates shall be
provided to GSI on consignment as set forth in Paragraph 3.6
below. Notwithstanding anything contained herein to the contrary,
Retailer may elect not to offer Land Based Stores Gift
Certificates for sale on its Web Site by notifying GSI of its
decision no later than August 1, 1999.
d. In those instance where a written dealer agreement prohibits
Retailer from selling a particular vendor's merchandise except in
the Retailer's Land Based Stores, Retailer shall use its
reasonable efforts to obtain all consents required to permit the
sale of such merchandise on the Retailer's Web Site.
e. Within each Category, 1) provided that Retailer is authorized by
the vendor to carry such item of merchandise; and 2) subject to
GSI's rights pursuant to paragraph 3.4 g. below, GSI shall offer
for sale on the Retailer's Web Site any item of merchandise
offered for sale by a retailer on its web site and for whom GSI
operates its web site.
3.4 Prices of On-Line Merchandise. GSI shall offer the On-Line
-----------------------------
Merchandise for sale on the Retailer's Web Site on the following
basis:
8
a. If the On-Line Merchandise is the same as offered for sale in the
Retailer's Land Based Stores, then it shall be offered for sale
on-line at the same price as offered in Retailer's Land Based
Stores. In order to facilitate this pricing, Retailer shall [*].
Retailer acknowledges that this is essential in order to [*]; and
b. If the On-line Merchandise is not offered for sale in the
Retailer's Land Based Stores, but is offered for sale on another
retailer's web site operated by GSI then, subject to GSI's rights
pursuant to paragraph 3.4 g. below, [*] at a price equal to [*]
c. If the Retailer offers the same merchandise at different prices
in its Land Based Stores, then [*], but in no event shall such
price be [*]; provided however, upon five days prior notice from
Retailer, GSI may [*].
d. GSI shall add all applicable taxes and at its discretion, may add
reasonable handling and delivery charges which are consistent
with industry practice.
e. In order to ensure that GSI may [*] Retailer shall furnish GSI
with copies of all [*] at least [*] prior to its [*].
f. The parties shall cooperate with each other so that the entire
pricing process between GSI and Retailer may be accomplished
electronically.
g. Retailer acknowledges that GSI, unless it elects to do so, [*].
In such event, [*] shall have the right to [*]. In addition, if
pursuant to this paragraph, GSI elects not to carry an item on a
retailer's web site, GSI shall promptly remove such item from
Retailer's Web Site.
h. In the event that [*] subject to GSI's rights pursuant to
paragraph 3.4 g. above, [*] shall have the right to [*].
3.5 GSI's Supply of On Line Merchandise.
-----------------------------------
a. Invoicing and Shipping of On Line Merchandise. At such time as
----------------------------------------------
directed by GSI, the Retailer shall notify its vendors of In Line
Merchandise, Special Make-Ups and Closeouts, that 1) GSI is the
Retailer's E-Commerce Outsourcing Partner; 2) the vendors, for
the benefit of the Retailer, should
9
sell their merchandise to GSI at the same prices, with the same
Advertising Co-op and Discretionary Funds and on the same terms
and conditions as they sell their merchandise to Retailer;
provided however, Retailer cannot assure GSI that with respect to
merchandise shipped to Retailer on consignment, that vendors will
provide GSI the same accommodation; and 3) such merchandise
should be shipped and invoiced directly to GSI. The form of such
notification shall be prepared by GSI and approved by Retailer.
In the event that a vendor deems it more efficient to invoice
Retailer for such merchandise, then the Retailer and GSI shall
agree on the terms and conditions on which Retailer is willing to
place such order for GSI at the Retailer's net cost. If the
parties are able to agree on such terms and conditions, then
Retailer shall thereafter order the merchandise and GSI shall pay
for it as agreed. In such instances, GSI shall also pay the
Retailer its pro rata share (based upon that portion of the
shipment purchased by the Retailer for GSI as it relates to the
entire shipment received by the Retailer from that vendor) of the
actual freight costs from the manufacturer to the Retailer's
point of receipt and the actual freight costs from the Retailer's
point of receipt to GSI's fulfillment facility.
b. In Line Merchandise. The Retailer shall advise GSI, no later
--------------------
than ten days after placing a purchase order with a vendor, of
the Category, item ordered, net cost, Retailer's retail price and
expected day of delivery to the Retailer's Warehouse.
c. Special Make-Ups. No later than five business days after ordering
-----------------
Special Make-Ups, Retailer shall advise GSI of the net cost,
color selection and size range of such Special Make-Ups. GSI
shall have the right to purchase up to [*] per cent of the
Special Make-Up, proportionately as to size and color, as ordered
by the Retailer. GSI shall have five business days to advise
Retailer whether it desires to order any of the Special Make-Ups
and, if so, the quantity thereof. Special Make-Ups shall be
exclusive to Retailer's Web Site and shall not be made available
for sale on the web site of any other retailer for whom GSI
operates a web site. Retailer shall supply GSI with a sample of
the Special Make-Ups ordered by GSI for sale on the Retailer's
Web Site within ten days of obtaining such sample.
10
Notwithstanding anything contained herein to the contrary, GSI
recognizes that there may be instances where there will be an
insufficient amount of a particular item of Special Make-Ups to
warrant selling such merchandise on line. In such instances the
Retailer shall not be required to offer such Special Make-Ups to
GSI to sell on line; provided however, the Retailer acknowledges
that with respect to Special Make-Ups ordered by Retailer for
chainwide distribution, GSI does not anticipate that this will
occur on a regular basis and this should be the exception rather
than the usual occurrence. Further, GSI acknowledges that the
Retailer may not be able to offer GSI certain Special Make-Ups
which are not available in all of the Retailer's stores.
d. Closeout Merchandise. Retailer shall advise GSI no later than
---------------------
five business days after issuing a purchase order for Closeout
Merchandise from a vendor. At that time, Retailer shall advise
GSI of the cost, sizes and colors available and GSI shall have
five business days after receipt of such information to advise
Retailer that it will purchase, at Retailer's net cost, up to [*]
per cent of the Closeout Merchandise to be received by Retailer,
proportionately as to size and color, as ordered by Retailer.
Notwithstanding anything contained herein to the contrary, GSI
recognizes that there may be instances where there will be an
insufficient amount of a particular item of Closeout Merchandise
to warrant selling such merchandise on line. In such instances
the Retailer shall not be required to offer such items of
Closeout Merchandise to GSI to sell on line; provided however,
the Retailer acknowledges that GSI does not anticipate that this
will occur on a regular basis and this should be the exception
rather than the usual occurrence.
Any Closeout Merchandise purchased by GSI from Retailer shall be
offered for sale by Retailer only on the Retailer's Web Site.
e. Markdowns. In the event that the Retailer has available Markdowns
----------
which it would like to offer for sale on its Web Site solely at
its discretion, it shall notify GSI and ship the Markdowns to
GSI's fulfillment center. The Markdowns shall be shipped to GSI
on consignment only. Retailer shall set the selling prices on the
Markdowns; provided however,
11
that GSI shall have no obligation to offer any Markdowns for sale
on the Retailer's Web Site which GSI deems, in its sole
discretion, would be inappropriate. Retailer shall receive [*] of
the proceeds received from the sale of any Markdowns when sold,
which shall be calculated as follows: [*]of the sale price plus
the Retailer's [*] Revenue Share. By way of example only, if
Retailer consigns an athletic shoe to GSI with an original price
of $75.00 and a Markdown price of $50.00, if the Markdown is sold,
Retailer shall receive [*] ([*] of $50.00 and [*] of $50.00). GSI
shall account to Retailer for the sale of any Markdowns at the
same time that it accounts to the Retailer for Retailer's Revenue
Share.
f. The parties shall cooperate with each other so that the entire
process set forth in paragraphs 3.3 a, b, c, and d between GSI and
Retailer may be accomplished electronically.
g. In the event that GSI elects to open retail outlets in order to
sell remaining On Line Merchandise, GSI covenants that during the
Term of this Agreement, it will not open such an outlet within a
ten mile radius of any Land Based Store owned and operated by the
Retailer.
3.6 Land Based Stores Gift Certificates. Subject to Retailer's rights set
------------------------------------
forth in 3.3 c. above, GSI shall offer for sale on the Retailer's Web
Site gift certificates for merchandise in Retailer's Land Based Store.
Retailer shall furnish such gift certificates to GSI on consignment.
GSI shall remit to Retailer 90.5% of all proceeds received from the
sale of Land Based Stores Gift Certificates, the balance being
retained by GSI as its fee and to cover all costs, including credit
card fees. GSI shall account to Retailer for all sales of such
certificates at the same time as it accounts to Retailer for
Retailer's Revenue Share from the sale of On Line Merchandise
(excluding Land Based Stores Gift Certificates). The amount of
proceeds from the sale of Land Based Stores gift certificates shall
not be included in calculating Revenue Share.
3.7 Processing of Customer Orders. GSI shall be solely responsible for
-----------------------------
processing all E - Commerce business. GSI will promptly process E -
Commerce Orders received from the Retailer's Web Site. GSI shall take
the customer's credit card number at such time as the merchandise is
ordered. GSI shall charge the customer's credit card at the time the
merchandise is shipped. The
12
order will appear on the customer's credit card under the name of
"▇▇▇▇▇▇▇▇.▇▇▇" and proceeds shall be deposited into GSI's designated
bank account for full credit to GSI. GSI will make all arrangements
for delivery of merchandise purchased on the Retailer's Web Site.
3.8 Payment and Accounting of Revenue Share to Retailers.
----------------------------------------------------
The Retailer shall receive a [*] per cent share of the revenue
("Revenue Share") on the amount of all E-Commerce Orders (excluding
taxes, delivery, handling, and net of returns); provided, however,
should [*] Within ten (10) days after the end of each calendar month
during the Term (with the exception of the end of December, which
shall be thirty days), GSI shall account to the Retailer for the sale
of all On Line Merchandise from the Retailer's Web Site. At the time
of such accounting, GSI shall remit to the Retailer its Revenue Share
earned from the sale of On Line Merchandise on the Retailer's Web Site
during the prior month. Remittance shall be by the wire transfer of
funds to an account designated by Retailer.
Within ninety (90) days of the end of each calendar year, GSI shall
provide the Retailer with a statement certified by its independent
auditors and setting forth the Revenue Share earned by the Retailer
during the prior calendar year. For a period of two years after the
Retailer receives such certified statement from GSI, Retailer, on one
occasion, shall have the right to audit the books and records of GSI
with respect to the Retailer's Revenue Share earned during the
calendar year to which the certified statement relates. Such audit
shall be conducted at GSI's principal office located in the
continental United States on two weeks prior notice to GSI. In the
event that the audit reveals that the Revenue Share was understated,
GSI shall within thirty days of completion of the audit, pay to the
Retailer the remaining balance of the Revenue Share for the period
audited plus interest at the prime rate of interest as provided for in
The Wall Street Journal on the date of the audit's certification. In
addition, in the event that the audit reveals that the Revenue Share
is understated by more than [*] per cent for the calendar year in
question, GSI shall pay the additional amount owing and pay for the
reasonable audit costs and this shall be Retailer's sole remedy. In
the event that the audit reveals that the Revenue Share is
underreported by more than [*] per cent in any year, then that shall
be considered a material breach of this Agreement by GSI entitling
Retailer to exercise its remedies set forth in paragraph 13.1 below.
13
3.9 Service of On Line Customers. GSI shall be responsible for providing
----------------------------
all customer service relating to sales from the Retailer's Web Site.
3.10 Return of On Line Merchandise. GSI's return policy shall be
-----------------------------
consistent with the Retailer's return policy. With each shipment of
merchandise, GSI shall specifically instruct all customers that all
merchandise purchased on line may not be returned to the Retailer's
Land Based Stores and may only be returned in accordance with the
instructions enclosed; provided however, in the rare instance a
customer desires to return On Line Merchandise to one of the
Retailer's Land Based Stores, the Retailer, in order to maximize
customer relations, shall accept such merchandise for return in
accordance with the Retailer's return policy, and return the
merchandise to GSI's fulfillment center. At the next such time that
GSI pays the Retailer pursuant to paragraph 3.8 above, and upon
receipt of such merchandise, GSI shall credit the Retailer the amount
refunded by the Retailer to the customer and the actual freight
charges incurred by Retailer in order to return the merchandise to
GSI.
3.11 On Line Customer Loyalty Programs. GSI shall have the right to
---------------------------------
establish On Line Customer Loyalty Programs in order to encourage
continued on line purchases. Customer Loyalty Programs established by
GSI shall be used only in connection with on line purchases and
Retailer's customer loyalty programs shall be used only in connection
with purchases at the Retailer's Land Based Stores.
Notwithstanding anything contained herein to the contrary, GSI shall
not establish any On Line Customer Loyalty Programs without first
obtaining the approval of Retailer. Retailer shall respond to a
request for such approval from GSI within seven days of receiving the
request. In the event Retailer fails to timely respond, GSI shall
furnish Retailer with a notice marked "second request". If Retailer
does not respond within two business days, GSI's request shall be
deemed granted.
3.12 Cross Promotion. GSI shall have the right to use Retailer's URL, name
---------------
and logo to cross promote Retailer's Web Site with other businesses in
order to promote Retailer's Web Site; provided however, GSI shall not
promote Retailer's Web Site on any other sporting good retailer's web
site, or on any other web site which would generally be considered
immoral, pornographic or offensive. Notwithstanding anything contained
herein to the contrary, GSI shall not establish any Cross Promotions
without first obtaining the approval of Retailer. Retailer shall
respond to a request for such
14
approval from GSI within seven days of receiving the request. In the
event Retailer fails to timely respond, GSI shall furnish Retailer
with a notice marked "second request". If Retailer does not respond
within two business days, GSI's request shall be deemed granted.
3.13 Price Matching. In the event that the Retailer, at its Land Based
--------------
Stores offers a "Price Matching" policy, GSI's management shall have
the right to use and adopt such policy for the Retailer's Web Site;
provided however, GSI shall not under any circumstance, advertise or
market the availability of this policy, and may offer it to customers
only in GSI's sole discretion.
3.14 Project Manager. Promptly after the execution of this Agreement, but
---------------
in no event later than sixty days after such execution, Retailer, at
its expense, shall hire or reassign one of its existing employees, to
act as Project Manager to work exclusively with GSI in creating and
maintaining the Retailer's Web Site. Commencing with the Project
Manager's hiring and continuing through the Term, as may be extended,
the Project Manager shall be the Retailer's liaison with GSI and shall
be responsible for supplying GSI with the Retailer Content and such
other information as may reasonably be required of the Retailer in
order to create and maintain the Retailer's Web Site in the most
efficient manner.
4. ON-LINE DATA AND DATABASES
--------------------------
4.1 Ownership of Data. Any and all data ("Customer Data") related to
-----------------
Retailer's customers (including customer names and other identifying
information such as addresses, phone numbers and e-mail addresses,
credit card numbers, and descriptions of the items and quantities of
items purchased) that is collected by GSI shall be owned [*].
4.2 Ownership of Databases. All data structures, data schema, database
----------------------
dictionaries, attributes, validation tests for each element, table
sizes and formats, access requirements, data dependencies and other
elements involving the storage of Data on the Web Site and all
refinements, updates, releases, improvements and enhancements thereto,
all intellectual property rights embedded therein and all applications
created specifically for use of the data and Retailer Content
(collectively, the "Databases") shall, as between GSI and Retailer, be
the sole and exclusive property of GSI.
4.3 Delivery of Customer Data to Retailer. From time to time, but no more
-------------------------------------
than four (4) times per calendar year,
15
Retailer may request that GSI provide to Retailer any or all of the
following information collected from the Customer Data:
a. customer's names;
b. customer's addresses;
c. customer's phone number;
d. customer's e-mail address;
e. items purchased;
f. amount spent;
g. information as to how customer reached Web Site;
h. refers;
i. unique visitors to site;
j. page views per site;
k. top ten most viewed pages;
l. bottom ten least viewed pages;
m. time of day traffic patterns;
n. sales by product and brand;
o. customer comments and complaints (shall be furnished on a monthly
basis);
p. additional information at GSI's discretion.
Upon receipt of such request, GSI shall provide the Customer Data to
Retailer in a mutually agreeable, commercially standard format, either via
diskette, CD-ROM, electronically, or via another mutually agreeable method.
GSI shall use commercially reasonable efforts to ensure that the Customer
Data provided to Retailer accurately and completely reflects the Customer
Data in the Web Site, but GSI shall have no obligation to check the
accuracy, validity or integrity of the Customer Data and except as set
forth in this Section 4.3, the Customer Data is provided "AS-IS".
4.4 Restrictions on Use of Customer Data. Each party shall treat the
------------------------------------
Customer Data as Confidential Information of the other party in
accordance with the provisions of Article 7. Neither party may sell,
lend, or license the Customer Data to third parties without the prior
written consent of the other party, which consent may be withheld at
the sole discretion of the other party; provided however, Retailer
grants to GSI the right to combine all retailers' Customer Data to
form trends and overall research as to the on line shopping habits of
consumers. Prior to furnishing such Customer Data to a third party,
GSI shall provide Retailer a copy thereof, which Retailer may retain
for its own personal use in connection with the operation of its
business. If Retailer finds any Customer Data reported therein which
is so regionally specific that an executive in the sporting goods
industry could reasonably identify the Retailer from such Customer
Data, Retailer may, within ten days of receipt, notify GSI, and GSI
shall amend the Customer Data to delete such
16
references which are objectionable to Retailer on those grounds.
5. ADVERTISING AND MARKETING
-------------------------
The Retailer shall,commencing no later than October 1, 1999, and continuing
during the Term, and any extensions thereof, at no cost to GSI provide for
Complete URL Integration in its advertising and marketing by:
5.1 prominently including as part of all of its print media including but
not limited to newspapers, periodicals, circulars, billboards, print
materials, letterhead, business cards, shopping bags, cash register
receipts and arena advertising) its URL, ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇.; and
5.2 prominently including, at the end of its television advertising, its
URL; and
5.3 mentioning its URL at the end of all radio advertisements.
Notwithstanding anything contained herein to the contrary, the Retailer may
a) exhaust its present inventory of print media and b) rerun existing
television and radio advertisements that do not contain the Retailer's URL,
but all new orders of print media and all new productions of television
and/or radio advertisements shall prominently contain the Retailer's URL.
All advertisements and marketing appearing in newspapers, circulars and
periodicals shall contain the following disclaimer: "On Line Merchandise
offerings may vary from products offered in Dunham's store."
6. ADVERTISING COOP AND DISCRETIONARY FUNDS
----------------------------------------
6.1 During the Term and any extensions thereof, GSI shall use all
Advertising Co-op and Discretionary Funds received by GSI directly
from vendors as a result of the purchase of merchandise for the
Retailer's Web Site exclusively, to promote the Retailer's Web Site,
as GSI shall elect. All such proposed advertisements shall be
submitted to the Retailer for the Retailer's approval as to content
and design. The Retailer shall have five business days from receipt to
either approve or disapprove. In the event that the Retailer
disapproves, it shall advise GSI specifically as to why and GSI shall
attempt to address the Retailer's concerns and resubmit the proposal
to Retailer for its approval, which shall again have forty eight hours
from receipt to approve or disapprove. This procedure shall continue
until the advertisement has been
17
approved or replaced. In all instances where approval is requested of
the Retailer, in the event the Retailer does not respond within the
aforementioned forty eight hours, Retailer shall be deemed to have
granted approval.
6.2 Any Advertising Co-op and Discretionary Funds received by the Retailer
through the Retailer's purchase of product for GSI, ultimately for the
Retailer's Web Site, may be retained by the Retailer; provided
however, Retailer acknowledges that it is preferential for Retailer's
vendors to sell to GSI directly and both Retailer and GSI shall
request Retailer's vendors to do so.
6.3 Retailer shall retain from vendors any non item driven marketing
funds; however, Retailer shall use its reasonable efforts to obtain
from vendors incremental marketing funds based upon an increase in the
sale of the vendor's merchandise on the Retailer's Web Site. Any such
incremental marketing funds shall belong to GSI and shall be used in
accordance with paragraph 6.1 above.
7. CONFIDENTIALITY
---------------
7.1 Confidential Information. Each party acknowledges that, in connection
------------------------
with the performance of this Agreement, it may receive Confidential
Information of the other party. For the purpose of this Agreement,
"Confidential Information" shall mean information or materials that is
clearly marked "confidential" or the Receiving Party knows has reason
to know is the confidential or proprietary information of the
Disclosing Party, either because a) such information is marked or
otherwise identified by the Disclosing Party as confidential or
proprietary, or b) such information has commercial value and is not
generally known in the Disclosing Party's trade or industry.
Confidential Information shall include, without limitation: (a)
concepts and ideas relating to the development and distribution of
content in any medium; (b) trade secrets, drawings, inventions, know-
how, software programs, and software source documents; (c) information
regarding plans for research, development, new service offerings or
products, marketing and selling, business plans, business forecasts,
budgets and unpublished financial statements, licenses and
distribution arrangements, prices and costs, suppliers and customers;
and (d) existence of any business discussions, negotiations or
agreements between the parties.
7.2 Confidentiality. The Receiving Party hereby agrees: (i) to hold and
---------------
maintain in strict confidence all
18
Confidential Information of the Disclosing Party and not to disclose it to
any third party; and (ii) not to use any Confidential Information of the
Disclosing Party except as permitted by this Agreement or as may be
necessary for the Receiving Party to perform its obligations under this
Agreement. The Receiving Party will use at least the same degree of care to
protect the Disclosing Party's Confidential Information as it uses to
protect its own Confidential Information of like importance, and in no
event shall such degree of care be less than reasonable care. The
obligations and restrictions imposed by this Article 7 shall terminate five
(5) years after the expiration or termination of this Agreement.
7.3 Exceptions. Notwithstanding the foregoing, the parties agree that
----------
Confidential Information will not include any information that: (i)
was in the public domain at the time it was communicated to the
Receiving Party by the Disclosing Party; (ii) entered the public
domain subsequent to the time it was communicated to the Recipient by
the Disclosing Party through no fault of the Receiving Party; (iii)
was in the Receiving Party's possession free of any obligation of
confidence at the time it was communicated to the Receiving Party by
the Disclosing Party; (iv) was rightfully communicated to the
Receiving Party by a third party, free of any obligation of
confidence, subsequent to the time it was communicated to the
Receiving Party by the Disclosing Party; (v) was developed by
employees or agents of the Receiving Party independently of and
without reference to any information communicated to the Receiving
Party by the Disclosing Party; or (vi) was communicated by the
Disclosing Party to an unaffiliated third party free of any obligation
of confidence. In addition, the Receiving Party may disclose the
Disclosing Party's Confidential Information in response to a valid
order by a court or other governmental body, as otherwise required by
law, or as necessary to establish the rights of either party under
this Agreement; provided however, in the event that the Receiving
Party receives a demand to disclose such Confidential Information in
connection with a legal action or proceeding, the Receiving Party, if
possible, shall first notify the Disclosing Party of the demand in
order to provide the Disclosing Party an opportunity to seek a
protective order.
7.4 Confidentiality of this Agreement. Retailer and GSI acknowledge that
---------------------------------
the terms and conditions of this Agreement constitute Confidential
Information which shall be governed by the terms of this Article 7.
19
7.5 Confidentiality of Customer Data and Retailer's Policies.
--------------------------------------------------------
GSI acknowledges that it will be receiving from Retailer, and
generating from the performance of its obligations under this
Agreement, Confidential Information critical to the Retailer's
business and concerning Retailer's customers and various information
concerning the operation of Retailer's business may include net
purchasing prices, advertising co-op and discretionary fund amounts,
specific marketing plans, specific on line sales and delivery dates of
merchandise. GSI recognizes its obligation to keep such information
confidential. Therefore, all GSI employees who may have access to any
such Confidential Information will be required to execute
confidentiality agreements and GSI shall use its best efforts to
enforce the terms thereof. Such confidentiality agreements will
specifically provide that the employee shall not discuss with any
other retailers who may or may not be customers of GSI, any
information concerning the Retailer or its customers.
Further, GSI acknowledges it is associated with other subsidiaries of
GSI's parent corporation, Global Sports, Inc. GSI therefore represents
and warrants to Retailer that it will establish a "Need to Know"
policy with respect to such Confidential Information and only
disseminate such Confidential Information to those employees and
members of GSI's management who have a specific need to know such
Confidential Information. In those instances, prior to the
dissemination of such Confidential Information to those individuals,
they will be required to execute confidentiality agreements
specifically prohibiting such disclosure of such Confidential
Information to anyone, except as otherwise permitted by the terms of
this Agreement.
8. EXCLUSIVE WEB AGREEMENT
-----------------------
During the Term and any extensions thereof, the Retailer, any subsidiary of
the Retailer, shall not sell any sporting goods merchandise on the Internet
(including the Web), nor use itself or allow a third party to use its URL,
name or logo on the Web for the purpose of facilitating the sale of
merchandise on the Web other than through GSI.
Notwithstanding anything contained herein to the contrary, should Retailer
be acquired by another established retailer who changes the name of
Retailer to the acquirer's tradename, and should such acquirer have an
existing web site,then this Agreement shall become non exclusive for the
remainder of the Term. In addition, should Retailer acquire another
retailer which has a web site, and change the name of that retailer to
20
Retailer's tradename, then Retailer shall cease to use the acquired
retailer's web site. If Retailer acquires another retailer which has a web
site, and does not change the name of that Retailer to Retailer's
tradename, then Retailer may continue to use the acquired retailer's web
site.
9. URL, NAME AND LOGO USAGE
------------------------
During the Term, the Retailer hereby grants to GSI the exclusive right to
use, copy, modify and display the Retailer's name, logo and URL and such
other names and logos as the Retailer owns and as may be listed on Schedule
"1" attached hereto and made a part hereof, on the Retailer's Web Site, on
invoices and packing slips, in connection with credit card charges, a toll
free Web site customer service telephone line, and generally in connection
with the operation of GSI's on-line business; provided however, GSI shall
have no right to modify Retailer's name, logo or URL without Retailer's
consent. Such Schedule shall be modified from time to time during the Term
to add any new names and logos which the Retailer may register with the
United States Patent and Trademark Office.
Retailer shall register the fictitious name "▇▇▇▇▇▇▇▇.▇▇▇" and grants to
GSI the exclusive right to use such name for the sole purpose of conducting
business on the Retailer's Web Site. Retailer shall also register the
domain name ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇ and grants to GSI the exclusive right to use
such domain name in connection with the operation of the Retailer's Web
Site. GSI's exclusive rights shall terminate at the end of the Term of this
Agreement.
10. REPRESENTATIONS AND WARRANTIES.
-------------------------------
10.1 Retailer represents and warrants that at all times during the Term
hereof or any extensions thereof:
a. it has or will have the full right to grant to GSI the right to
use its URL, names and logos as discussed in Article 9 above,
including its Domain Name; and
b. Prior to the Launch Date, if not already completed, Retailer
shall register and maintain the Domain Name "▇▇▇▇▇▇▇▇.▇▇▇" with
Network Solutions or any similar successor entity. Retailer shall
list itself as the owner and billing contact for the Domain Name
"▇▇▇▇▇▇▇▇.▇▇▇" and Retailer shall list GSI as the administrative
and technical contact for the Domain Name "▇▇▇▇▇▇▇▇.▇▇▇".
21
10.2 Each party represents and warrants to the other party that: (i) it is
a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation and that it has the power
and authority to enter into this Agreement and the transactions
contemplated herein; (ii) the consummation of the transactions
described by this Agreement shall not conflict with or result in a
breach of any of the terms, provisions or conditions of its Articles
of Incorporation or Bylaws, or any statute or administrative
regulation or of any order, writ, injunction, judgment or decree of
any court, regulatory or governmental authority or of any agreement or
instrument to which it is a party or by which it is bound or
constitute a default thereunder; and (iii) this Agreement has been
duly authorized, executed and delivered by it and this Agreement is
valid, enforceable and binding upon each party in accordance with its
terms.
10.3 GSI represents and warrants that at all times during the term hereof
or any extensions thereof:
a. No other Full Line Sporting Goods E-Commerce Partner (as
hereinafter defined) of GSI [*]. Notwithstanding anything
contained herein to the contrary, Retailer acknowledges that, a
Full Line Sporting Goods E-Commerce Partner of GSI [*] and, as
such, should that Full Line Sporting Goods E-Commerce Partner of
GSI [*]. By way of example only, the terms of this representation
and warranty shall not apply to [*]. As used herein, a Full Line
Sporting Goods E-Commerce Partner shall refer to a sporting goods
retailer which carries in its Land Based Stores, merchandise in a
variety of Categories such as (by way of example only) baseball,
basketball, golf, bowling, football, hockey, aerobics and
fishing.
b. As of the Launch Date and continuing throughout the Term, GSI
shall have a minimum, including Retailer, of 1) [*] Full Line
Sporting Goods E-Commerce Partners, each (excluding Retailer)
with annual Land Based Store Sales of more than [*] dollars [*] ;
and 2) [*] other sporting good E-Commerce partners, which are
either a) Full Line Sporting Goods E-Commerce Partners or b)
Specialty Store E-Commerce Partners (as hereinafter defined) so
that the total Land Based Store sales of all of GSI's E-Commerce
Partners annually exceed [*] dollars [*]. As used herein,
"Specialty Store E-Commerce Partners" shall mean sporting goods
retailers which sell limited categories of sporting goods (i.e.
22
athletic footwear) and are not considered a Full Line Sporting
Goods E-Commerce Partner. In determining the annual Land Based
Store Sales of a retailer, the sales of all franchisees shall be
included. In the event that GSI is notified by Retailer that it
is in violation of this representation and warranty, then,
notwithstanding anything contained in this Agreement to the
contrary, GSI shall have one year from the date of such
notification to make such agreements as are necessary to make
this representation true and correct. This shall not include a
violation of this representation and warranty as of the Launch
Date, which shall be deemed a breach of this provision with no
cure period.
Should any of the representations and warranties made by GSI in
Section 10.3 a. above become materially false and not corrected within
the time permitted, then Retailer's sole remedy shall be to terminate
this Agreement and neither party shall have any further liability
hereunder.
11. INDEMNIFICATION
---------------
11.1 Retailer, at its own cost and expense, shall defend, indemnify and
hold harmless GSI and any of its officers, directors, employees or
agents from and against all damages, expenses, liabilities and other
costs (including reasonable attorneys fees and court costs) arising as
a consequence of GSI providing services pursuant to this Agreement a)
from or related to a claim that GSI infringes a third party copyright,
trademark or trade secret relating to Retailer's tradename or any
other name set forth on Schedule 1 to this Agreement; or b) from
Retailer's gross negligence, wilful or intentional misconduct.
11.2 GSI, at its own cost and expense, shall defend, indemnify and hold
harmless Retailer and any of its officers, directors, employees or
agents from and against all damages, expenses, liabilities and other
costs (including reasonable attorneys fees and court costs) arising a)
from a claim made by any consumer that is related in any way to the
Retailer's Web Site or GSI's services to Retailer provided pursuant to
this Agreement, but excluding a claim for which GSI would have the
right to indemnification pursuant to Paragraph 11.1 above, or b) from
GSI's gross negligence, wilful or intentional misconduct and arising
as a consequence of GSI providing services pursuant to this Agreement.
23
11.3 Retailer shall have sole control of any defense of any claim made
pursuant to Section 11.1 above, but GSI shall cooperate with Retailer
in providing such defense.
11.4 GSI shall have sole control of any defense of any claim made pursuant
to Section 11.2 above, but Retailer shall cooperate with Retailer in
providing such defense.
11.5 Any party seeking indemnification shall notify the other party as soon
as possible after such party seeking indemnification becomes aware of
the claim.
12. INSURANCE
---------
12.1 GSI shall maintain in full force and effect products liability
insurance coverage for merchandise sold on Retailer's Web Site. Such
policy shall name Retailer as an additional insured.
12.2 GSI shall deliver to Retailer certificates of insurance which
stipulate that no less than ten days notice will be given to Retailer
prior to the termination of the policy.
13. TERMINATION
-----------
13.1 Termination for Cause by Either Party.
-------------------------------------
a. This Agreement may be terminated by either party in the event of
any material breach of any of the terms and conditions of this
Agreement by the other party which breach continues in effect
after the breaching party has been provided with written notice
of breach and ninety (90) days to cure such breach and fails to
cure such breach. As used herein, "material breach" shall mean a
failure by a party to this Agreement to perform any of its
obligations the effect of which would substantially impair the
value of this Agreement to the other party. By way of example
only and not by way of limitation, GSI's failure to operate the
Retailer's Web Site according to commercially reasonable
standards as they are established today and as they may continue
to develop during the Term of this Agreement, failure to pay the
Retailer its Revenue Share (or any other amount due to Retailer
hereunder) or failure to provide customer service equivalent to
that provided by other reputable on line retailers, would be a
material breach of this Agreement by GSI. Retailer's failure to
comply with its obligations pursuant to Section 5 above, or
failure to provide GSI with the Retailer Content
24
necessary to construct and/or maintain the Retailer's Web Site,
would be a material breach of the Retailer's obligations under
this Agreement.
b. In addition to the right to terminate this Agreement as a result
of a material breach of this Agreement, either party may
terminate this Agreement in the event that the sale of On Line
Merchandise on the Retailer's Web Site does not equal or exceed
the following minimum requirements ("Inadequate Sales"):
YEAR WEB SITE SALES
---- --------------
2001 $[*]
2002 $[*]
2003 $[*]
2004 $[*]
2005 $[*]
2006 $[*]
2007 $[*]
2008 $[*]
2009 $[*]
In the event that a party desires to terminate this Agreement as
a result of Inadequate Sales it shall do so by notifying the
other party within thirty days of receiving the audited report of
sales on the Retailer's Web Site from GSI's independent auditor
by sending written notice to the other party of its intention to
do so. In such event the termination shall be effective sixty
days after receipt of such notice by the party receiving it.
Notwithstanding anything contained herein to the contrary, should
the Retailer elect to terminate this Agreement as a result of
Inadequate Sales, GSI shall have the option to void the
termination notice by paying to the Retailer [*] dollars within
thirty days of receipt of the Retailer's termination notice. In
such event, the Retailer's termination notice shall be null and
void and this Agreement shall remain in full force and effect.
RETAILER ACKNOWLEDGES THAT RETAILER'S RIGHT TO TERMINATE THIS
AGREEMENT AS A RESULT OF INADEQUATE SALES IS UNIQUE TO THE
RETAILER AND DISCLOSURE OF SUCH WOULD CAUSE GSI IRREPARABLE HARM.
ACCORDINGLY RETAILER REAFFIRMS ITS OBLIGATION SET FORTH IN
ARTICLE SEVEN ABOVE TO KEEP THIS PROVISION AND THE OTHER TERMS OF
THIS AGREEMENT CONFIDENTIAL, EXCEPT AS DISCLOSURE MAY BE
PERMITTED PURSUANT TO ARTICLE SEVEN ABOVE.
25
13.2 Termination for Cause Only by GSI. GSI may terminate this Agreement
---------------------------------
by giving five days prior written notice to Retailer of its election
to terminate upon the occurrence of any of the following events:
a. any representation or warranty contained herein becomes
materially false or misleading; or
b. closure by Retailer of more than one third of its Land
Based Stores; or
c. the filing for protection by the Retailer under any federal
or state bankruptcy law.
13.3 Termination Without Cause by Either Party. In the absence of a
-----------------------------------------
material breach, this Agreement may only be terminated by the
expiration of the Term, as may be extended pursuant to Section 2.3
above.
14. LIMITATIONS UPON LIABILITY
--------------------------
UNDER NO CIRCUMSTANCES SHALL GSI BE LIABLE TO RETAILER FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES (REGARDLESS OF
WHETHER SUCH DAMAGES ARISE OUT OF CONTRACTUAL, NEGLIGENCE OR OTHER LEGAL
THEORIES) ARISING FROM OR RELATED TO RETAILER'S OR RETAILER'S CUSTOMERS'
USE OF OR INABILITY TO ACCESS ANY PART OF THE INTERNET OR RETAILER'S OR
RETAILER'S CUSTOMERS' RELIANCE ON OR USE OF INFORMATION, SERVICES OR
MERCHANDISE PROVIDED ON OR THROUGH THE WEB SITE OR THE SERVICES, OR THAT
RESULT FROM MISTAKES, OMISSIONS, INTERRUPTIONS, LOSS, THEFT, OR DELETION OF
FILES, ERRORS, DEFECTS, DELAYS IN OPERATION, OR TRANSMISSION, OR ANY
FAILURE OF PERFORMANCE. IN NO EVENT SHALL GSI BE LIABLE TO RETAILER UNDER
THIS AGREEMENT FOR AN AMOUNT THAT EXCEEDS, IN THE AGGREGATE THE AMOUNTS
PAID TO RETAILER DURING THE [*] MONTHS PRECEDING THE LAST ACT OR
OMISSION GIVING RISE TO SUCH LIABILITY. IN ADDITION, RETAILER SHALL BE
ENTITLED TO SEEK EQUITABLE RELIEF FROM THE COURT. THE REMEDIES SET FORTH IN
THIS ARTICLE 14 CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE TO
RETAILER UNDER THIS AGREEMENT. IN NO EVENT SHALL EITHER PARTY BE LIABLE IN
ANY RESPECT FOR CLAIMS BROUGHT MORE THAN TWELVE (12) MONTHS AFTER THE LAST
ACT OR OMISSION GIVING RISE TO SUCH LIABILITY.
15. PROPERTY RIGHTS AND OWNERSHIP
-----------------------------
The Retailer's Web Site shall consist of, and shall operate in conjunction
with, multiple elements, all of which are subject to certain intellectual
property rights. The parties'
26
respective rights with respect to such elements shall be as set forth
below. For purposes of this Agreement, the term "Ownership" shall refer to
ownership of all right, title and interest in and to the respective
elements, including, but not limited to, all patent, copyright, trade
secret, trademark and any other similar intellectual property rights
therein, as applicable.
15.1 Retailer's URL shall be owned solely by the Retailer;
15.2 Retailer's Web Site shall be owned solely by GSI;
15.3 Software developed for the Retailer's Web Site, shall be owned
solely by GSI, subject to any authorizations to use and
approvals obtained by the Retailer and granted to GSI.
With respect to intellectual property owned by each of them, Retailer and
GSI shall both have rights associated with the ownership of intellectual
property, including the right to copyright web sites and domains.
16. GSI'S TWENTY DAY PERIOD TO EXECUTE
----------------------------------
Retailer shall execute this Agreement first and deliver such executed
Agreement to GSI which shall thereafter have twenty days from receipt to
countersign the Agreement. During such twenty day period, Retailer shall
have no right to withdraw the agreements which it executed and delivered to
GSI.
17. DISCONTINUANCE OR REGULATION OF THE INTERNET.
---------------------------------------------
Retailer acknowledges and agrees that the Internet (including without
limitation the Web) is a network of private and public networks, that GSI
has no control over the Internet, and that GSI is not liable for the
discontinuance of operation of any portion of the Internet or possible
regulation of the Internet which might restrict or prohibit the operation
of the Web site.
18. FORCE MAJEURE
-------------
In the event that either party is unable to perform any of its obligations
under this Agreement or to enjoy any of its benefits because of any event
beyond the control of the affected party including, but not limited to,
natural disaster, acts of God, actions or decrees of governmental bodies or
failure of communications lines or networks (a "Force Majeure Event"), the
party who has been so affected shall promptly give written notice to the
other party and
27
shall use its best efforts to resume performance. Upon receipt of such
notice, all obligations under this Agreement shall be immediately suspended
for the duration of such Force Majeure Event.
19. WAIVER
------
No delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Agreement shall impair any such right,
power or privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such right,
power or privilege shall preclude the further exercise of such right, power
or privilege, or the exercise of any other right, power or privilege. No
waiver shall be valid against any party hereto unless made in writing and
signed by the party against whom enforcement of such waiver is sought and
then only to the extent expressly specified.
20. PRESS RELEASES
--------------
Notwithstanding anything in this Agreement to the contrary, GSI shall not
make any announcement, advertisement, statement or press release
(collectively "Announcement") concerning the existence of this Agreement,
that Retailer and GSI are developing a Web Site or the fact that Retailer
and GSI are E-Commerce partners, prior to the Launch Date. If GSI desires
to disclose the existence of this Agreement to any third party including
but not limited to an investor, potential investor, analyst, professional
advisor, business affiliate, business associate, lender, or employee that
individual or entity must first enter into a Confidentiality Agreement with
GSI, in a form acceptable to Retailer, or substantially similar to that
attached hereto as Exhibit "B" agreeing not to make any disclosure as set
forth above. If this particular restriction is violated by an individual
or entity other than a member of the senior management of GSI, Retailer
agrees not to take action against GSI and enforce its rights directly
against the individual or entity and GSI will cooperate with Retailer in
enforcing those rights. Notwithstanding anything contained herein to the
contrary, GSI may disclose in an Announcement the fact that an E-Commerce
partner is a "non-disclosed retailer with sales in excess of $200,000,000."
If GSI or a member of its senior management breaches this particular
restriction, GSI shall be required to pay Retailer [*] as liquidated
damages, and Retailer may terminate this Agreement. After the Launch Date,
all voluntary public announcements concerning the transactions contemplated
by this Agreement shall be mutually acceptable to both GSI and Retailer.
Unless required by law, neither GSI on the one hand, and Retailer on the
other hand, shall make any public announcement or issue
28
any press release concerning the transactions contemplated by this
Agreement without the prior written consent of GSI or Retailer,
respectively. With respect to any announcement that any of the parties is
required by law to issue, such party shall, to the extent possible under
the circumstances, review the necessity for and the contents of the
announcement with the other party before issuing the announcement; provided
however, if either party cannot obtain the consent of the other party in a
timely manner, the party required to comply with law may issue the press
release or public announcement without obtaining the consent of the other
party.
21. GOVERNING LAW
-------------
This Agreement, the rights and obligations of the parties hereto, and any
claims or disputes thereto, shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania (excluding the
choice of law rules thereof).
22. ASSIGNMENT
----------
Retailer shall have no right to assign this Agreement without the prior
written consent of GSI; provided, that Retailer shall have the right to
assign this Agreement to any person or entity that acquires or succeeds to
all or substantially all of such party's business or assets upon written
notice to GSI.
GSI shall not assign this Agreement to any traditional land based sporting
goods retailer or any manufacturer of sporting goods without the Retailer's
consent.
23. COUNTERPARTS
------------
This Agreement may be signed in several counterparts, each of which shall
be deemed an original, and all of which when taken together, shall be
deemed a complete instrument.
24. ENTIRE AGREEMENT
----------------
This Agreement, including the Web Development Agreement, represents the
entire agreement of the parties with respect to the subject matter hereof
and may not be modified, except in writing, executed by all of the parties
hereto. This Agreement supersedes all prior writings of the parties with
respect to this subject matter.
25. JURISDICTION
------------
29
The parties agree that the exclusive jurisdiction and venue of any dispute
that arises hereunder shall be in the Court of Common Pleas of ▇▇▇▇▇▇▇▇▇▇
County, Pennsylvania or the United States District Court for the Eastern
District of Pennsylvania.
26. INDEPENDENT CONTRACTORS
-----------------------
The relationship of the parties herein shall hereunder be that of
independent contractors and nothing herein shall be construed to create a
joint venture or partnership.
27. SIGNING
-------
The parties executing this Agreement represents and warrants that they have
full corporate authority to do so.
28. BINDING EFFECT
--------------
This Agreement shall be binding upon the parties hereto, their successors
and permitted assigns.
29. HEADINGS
--------
Section headings contained in this Agreement are inserted for convenience
or reference only and shall not be deemed to be a part of this Agreement
for any other purpose.
30. DISCLAIMER OF WARRANTIES
------------------------
EXCEPT AS TO THE EXPRESS WARRANTIES CONTAINED IN THIS AGREEMENT, GSI MAKES
NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, IN FACT OR IN LAW
WITH RESPECT TO THE CREATION AND MAINTENANCE OF THE PRODUCT AND SERVICES
PROVIDED FOR HEREUNDER, AND DISCLAIMS ALL OTHER WARRANTIES. RETAILER
ACKNOWLEDGES AND AGREES THAT GSI HAS NOT MADE, NOR DOES HEREBY MAKE, ANY
OTHER REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER,
EXPRESSED OR IMPLIED.
31. NOTICES
-------
Any notices or writings to be sent hereunder shall be in writing and shall
be by personal delivery, facsimile transmission or by certified or
registered mail, return receipt requested, and shall be deemed given upon
the earlier of actual receipt, five (5) days after deposit in the mail, or
receipt by sender of confirmation of facsimile transmission. Notices shall
be sent to the following addresses (or such other address as either party
may specify in writing):
IF TO GSI: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
The Bellevue
▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇., ▇▇▇▇▇
IF TO RETAILER: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attn: Sr. Vice President, Marketing
Copy to: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attn: Legal Department
(SIGNATURES CONTAINED ON THE FOLLOWING PAGE)
31
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to enter into this Agreement with intent to be legally bound
hereby, the date and year first above written.
GLOBAL SPORTS INTERACTIVE, INC.: ▇▇▇▇▇▇'▇ ATHLEISURE CORPORATION:
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------- --------------------------
Title: President Title: President & CEO
----------------------- -----------------------
Date: 3/28/99 Date: 3/23/99
------------------------ -----------------------
32
EXHIBIT A
WEB SITE DEVELOPMENT AGREEMENT
------------------------------
THIS Web site Development Agreement ("Agreement") dated the ____ day of
______________, 1999 (the "Services Start Date") by and between Global Sports
Interactive, Inc., a Pennsylvania corporation (hereinafter referred to as "GSI")
with an address of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇'▇ Athleisure Corporation (hereinafter referred to as "Retailer") with an
address of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, GSI and Retailer have entered into a E - Commerce Agreement
pursuant to which GSI shall provided certain E - Commerce services to Retailer,
including the development and maintenance of a web site; and
WHEREAS, the parties have elected to enter into this Agreement in order to
set forth the terms and conditions pursuant to which GSI shall develop a web
site for Retailer.
NOW, THEREFORE, in consideration of the mutual promises and terms herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged; and intending to be legally bound
hereby, the parties hereto agree as follows:
1. DEFINITIONS
1.1 "Domain Name" means the domain name specified for the Web site by
Retailer from time to time. The initial Domain Name is specified in Attachment
B.
1.2 "E-Commerce Agreement" means the E-Commerce Agreement by and between
Retailer to which this Agreement is attached as Exhibit A.
1.3 "Features Set" means the requirements set forth in Attachment B, as
amended or supplemented in accordance with this Agreement.
1.4 "Intellectual Property Rights" means any and all now known or
hereafter known tangible and intangible (a) rights associated with works of
authorship throughout the universe,
33
including but not limited to copyrighs, moral rights, and mask-works, (b)
trademark and trade name rights and similar rights, (c) trade secret rights, (d)
patents, designs, algorithms and other industrial property rights, (e) all other
intellectual and industrial property rights (of every kind and nature throughout
the universe and however designated) (including logos, "rental" rights and
rights to remuneration), whether arising by operation of law, contract, license,
or otherwise, and (f) all registrations, initial applications, renewals,
extensions, continuations, divisions or reissues hereof now or hereafter in
force (including any rights in any of the foregoing).
1.5 "Milestone Delivery Schedule" means the schedule for development of
the Web site set forth in Attachment B.
1.6 "GSI Content" means all text, pictures, sound, graphics, video and
other data and assets supplied by Retailer to GSI, as such materials may be
modified from time to time.
1.7 "GSI Products" means, collectively, the GSI Tools, the GSI Content and
the GSI Work Product.
1.8 "GSI Tools" means any tools, both in object code and source code form,
which GSI has already developed or which GSI independently develops or licenses
from a third party, excluding any tools which GSI creates pursuant to this
Agreement. By way of example, GSI Tools may include, without limitation,
toolbars for maneuvering between pages, search engines, Java applets, and
ActiveX controls.
1.9 "Production Schedule" shall mean the schedule agreed upon by the
parties for the production of the Retailer's Web site, including the delivery of
the Retailer Content and GSI Content by Retailer to GSI.
1.10 "Retailer Content" means the Domain Name and all text, pictures,
sound, graphics, video and other data and assets supplied by Retailer to GSI, as
such materials may be modified from time to time.
1.11 "Services" means the services provided by GSI hereunder to develop,
host and maintain the Web site, in accordance with this Agreement.
1.12 "Web site" means, collectively, the E - Commerce Shopping Experience
and the Retailer Content made available on web pages under the Domain Name.
1.13 "GSI Work Product" means all HTML files, Java files, graphics files,
animation files, data files, technology, scripts and programs, both in object
code and source code form, all
34
documentation and any other deliverable used by GSI to create the Web site.
2. WEB SITE DEVELOPMENT SERVICES
2.1 Delivery of Initial Retailer Content. As soon as reasonably possible,
GSI and Retailer shall agree upon a Production Schedule for the delivery by
Retailer to GSI of the Retailer Content that Retailer intends for GSI to
incorporate into the Web site. The parties acknowledge that Retailer will be
able to deliver certain "static" information, such as store locations, promptly
to GSI, and other Retailer Content, such as certain merchandise to be sold on
the Retailer's Web site, at a later date closer to the Launch Date. The Retailer
Content shall be in the format(s) designated by GSI as set forth on Attachment C
hereto. Upon Retailer's request, GSI shall assist Retailer in the conversion of
the Retailer Content into an acceptable form for use by the Web site.
2.2 Web site Development Services. At no cost to Retailer, GSI shall
provide design, programming and other consulting Services as specified in
Attachment B to create the Web site. GSI will provide the Web site to Retailer
in accordance with the Milestone Delivery Schedule.
2.3 Project Liaisons. Each party's primary contact for development
efforts shall be the project liaisons specified in Attachment B or the person
otherwise designated in writing by Retailer or GSI, as the case may be.
2.4 Acceptance. GSI shall make available final versions of the Web site
for Retailer's review and acceptance. Retailer shall have ten (10) days to
review and evaluate the Web site (the "Acceptance Period") to assess whether
it substantially meets the Features Set. During the Acceptance Period, Retailer
shall identify in writing to GSI all aspects of the Web site that do not
substantially conform to the Features Set. Upon receipt of Retailer's list of
non-conformities, GSI shall correct promptly all such non-conformities so that
the Web site does substantially conform to the Features Set and GSI shall extend
the Acceptance Period for a second ten (10) day Acceptance Period during which
Retailer shall confirm that all non-conformities that were previously identified
have been corrected. Notwithstanding the foregoing, the Web site shall be
deemed accepted upon the earlier of: (i) its use in commerce, provided however,
GSI shall not use the Retailer's Web site in commerce without the Retailer's
consent, which shall not be unreasonably withheld or delayed; (ii) Retailer's
failure to articulate any non-conformities during an Acceptance Period; or (iii)
Retailer's acceptance of the Web site; or (iv) GSI's demonstration that all non-
conformities have been corrected.
35
3. WEB HOSTING AND MAINTENANCE SERVICES
Following Retailer's acceptance of the Web site pursuant to Section 2.4,
GSI shall, at no cost to Retailer, provide the following web hosting and
maintenance Services:
3.1 Hosting Services. GSI shall load the Web site onto server(s) that are
connected to the Internet and readily accessible via the Web through use of the
Domain Names. GSI shall ensure that the Web site is functional and ready to
process transactions in a reasonably efficient manner.
3.2 Retailer Content. GSI shall upload all Retailer Content, including
updates, to the Web site within seven days of delivery to GSI. Upon GSI's prior
written consent, Retailer may electronically transmit or upload Retailer Content
directly to the Web site.
3.3 Maintenance Services. GSI shall maintain the Web site so that it
functions in a reasonably error free manner. Upon notification of an error in
the Web site or of a non-conformity between the Web site and the Features Set,
whether from Retailer or from any user of the Web site, GSI shall promptly
commence an investigation into the reported error, and GSI shall, upon
reproducing such error, use reasonable commercial efforts to correct such error
in a timely fashion. During such Maintenance Services, GSI shall ensure that the
Web site is functional and ready to process transactions in a reasonably
efficient manner, provided, however, GSI may, during low usage periods,
-------- -------
temporarily block access to the Web site to perform Web site maintenance during
periodic maintenance windows.
4. ADDITIONAL SERVICES
4.1 Search Engine Registration. When GSI makes the Web site available to
Retailer, GSI shall register the Web Site and Domain Name with all applicable
search engines, at GSI's discretion.
4.2 Domain Name Assistance. If requested by Retailer, GSI shall cooperate
with Retailer in registering the Domain Name with InterNIC. Retailer shall own
all right, title and interest in and to the Domain Name and all Intellectual
Property Rights related thereto. Unless otherwise specified by Retailer, GSI
shall, at Retailer's expense, assist Retailer in registration of the Domain
Name.
36
5. CONSIDERATION
In consideration for Retailer entering into the E Commerce Agreement, at no cost
to Retailer, GSI shall perform the Services set forth in this Agreement.
6. TERM AND TERMINATION
6.1 Term. The term of this Agreement shall be conterminous with the term
of the E- Commerce Agreement. In absence of a material breach, this Agreement
may only be terminated by the expiration of the term.
6.2 Termination. Termination of this Agreement shall be governed by the
terms of Article 13 of the E - Commerce Agreement.
7. WARRANTIES AND DISCLAIMERS.
7.1 Cross Warranties. Retailer warrants as to the Retailer Content, and
GSI warrants as to the GSI Products, that any materials and updates or
enhancements there to shall not: (a) infringe on the Intellectual Property
Rights of any third party or any rights of publicity or privacy; (b) violate any
law, statute, ordinance or regulation (including without limitation the laws and
regulations governing export control, unfair competition, antidiscrimination or
false advertising); (c) be defamatory, trade libelous, unlawfully threatening or
unlawfully harassing; (d) be obscene, pornographic or indecent.
7.2 Representations and Warranties of Each Party. Each party represents
and warrants to the other party that: (i) it is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation and that it has the power and authority to enter into this
Agreement and the transactions contemplated herein; (ii) the consummation of the
transactions described by this Agreement shall not conflict with or result in a
breach of any of the terms, provisions or conditions of its Articles of
Incorporation or Bylaws, or any statute or administrative regulation or of any
order, writ, injunction, judgment or decree of any court, regulatory or
governmental authority or of any agreement or instrument to which it is a party
or by which it is bound or constitute a default thereunder; and (iii) this
Agreement has been duly authorized, executed and delivered by it and this
Agreement is valid, enforceable and binding upon each party in accordance with
its terms.
7.3 Year 2000. GSI warrants that the Web site shall not suffer any
material adverse effect as a result of a failure in any GSI Work Product or GSI
Tools to be Y2K Compliant. A product or service which is "Y2K Compliant" is one
that provides accurate results using data having date ranges spanning from
January 1, 1980
37
through December 31, 2019 (the "Y2K Period"). By way of example and not of
limitation, "Y2K Compliant" means, with respect to a product or service, that it
can currently and shall, during the Y2K Period, continue to (a) manage and
manipulate data involving all dates within the Y2K Period (including the fact
that the year 2000 is a leap year) without functional or data abnormality
related to such dates; (b) manage and manipulate data involving all dates within
the Y2K Period without inaccurate results related to such dates; (c) have user
interfaces and data fields formatted to distinguish between dates within the Y2K
Period; and (d) accurately identify and either reject or correct invalid date
data during the Y2K Period. Provided a party otherwise complies with this
Section 7.4, it will not be liable to the other party for any failure to perform
obligations under this Agreement to the extent such failure arises from a
failure to be Y2K Compliant that (1) affects the non-performing party's
customers or suppliers or (2) is beyond its reasonable control (e.g., a failure
---
to be Y2K Compliant affecting a governmental entity).
7.4 Disclaimer. THE WARRANTIES MADE IN THIS SECTION 7 ARE MADE IN LIEU OF
ALL OTHER EXPRESS WARRANTIES, WHETHER ORAL OR WRITTEN AND EXCEPT AS SET FORTH IN
THIS SECTION 7, GSI MAKES NO OTHER REPRESENTATIONS OR WARRANTIES, WHETHER
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF
TITLE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
8. OWNERSHIP
8.1 Ownership of GSI Products. Retailer hereby acknowledges and agrees
that as between Retailer and GSI, GSI owns all right, title and interest in and
to the GSI Products and all applicable Intellectual Property Rights thereto.
This Agreement confers no ownership interest in the GSI Products to Retailer.
8.2 Ownership of Retailer Content. GSI hereby acknowledges and agrees
that as between GSI and Retailer, Retailer owns all right, title and interest in
and to the Retailer Content and all applicable Intellectual Property Rights
thereto. Except for a limited non-exclusive license during the term to use the
Retailer Content solely to perform its obligations hereunder, this Agreement
confers no ownership interest in the Retailer Content to GSI.
9. LIMITATION UPON LIABILITY.
UNDER NO CIRCUMSTANCES SHALL GSI BE LIABLE TO RETAILER FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES (REGARDLESS OF WHETHER
SUCH DAMAGES ARISE OUT OF CONTRACTUAL, NEGLIGENCE OR OTHER LEGAL THEORIES)
ARISING FROM OR RELATED TO RETAILER'S OR RETAILER'S CUSTOMERS' USE OF OR
INABILITY TO ACCESS ANY PART OF THE INTERNET OR RETAILER'S OR RETAILER'S
CUSTOMERS' RELIANCE ON OR USE OF INFORMATION, SERVICES OR
38
MERCHANDISE PROVIDED ON OR THROUGH THE WEB SITE OR THE SERVICES, OR THAT RESULT
FROM MISTAKES, OMISSIONS, INTERRUPTIONS, LOSS, THEFT, OR DELETION OF FILES,
ERRORS, DEFECTS, DELAYS IN OPERATION, OR TRANSMISSION, OR ANY FAILURE OF
PERFORMANCE. IN NO EVENT SHALL GSI BE LIABLE UNDER THIS AGREEMENT TO RETAILER
FOR AN AMOUNT THAT EXCEEDS, IN THE AGGREGATE THE AMOUNTS PAID TO RETAILER DURING
THE [*] MONTHS PRECEDING THE LAST ACT OR OMISSION GIVING RISE TO SUCH LIABILITY.
THE REMEDIES SET FORTH IN THIS SECTION 9 CONSTITUTE THE SOLE AND EXCLUSIVE
REMEDIES AVAILABLE TO RETAILER UNDER THIS AGREEMENT. IN NO EVENT SHALL EITHER
PARTY BE LIABLE IN ANY RESPECT FOR CLAIMS BROUGHT MORE THAN TWELVE (12) MONTHS
AFTER THE LAST ACT OR OMISSION GIVING RISE TO SUCH LIABILITY.
10. INDEMNITY.
10.1 Retailer Indemnity. Subject to Section 10.3, Retailer shall defend,
indemnify and hold GSI harmless against any third party claim, action, suit or
proceeding: (i) Retailer's gross negligence, willful or intentional misconduct;
or (ii) any breach by Retailer of the warranties set forth in Sections 7.1 or
7.2.
10.2 GSI Indemnity. Subject to Section 10.3, GSI shall defend, indemnify
and hold Retailer harmless against any third party claim, action, suit or
proceeding: (i) GSI's gross negligence, willful or intentional misconduct; or
(ii) any breach by GSI of the warranties set forth in Sections 7.1 or 7.2.
10.3 Mechanic of Indemnities. The indemnifying party's obligations are
conditioned upon the indemnified party: (a) giving the indemnifying party prompt
written notice of any claim, action, suit or proceeding for which the
indemnified party is seeking indemnity; (b) granting control of the defense and
settlement to the indemnifying party; and (c) reasonably cooperating with the
indemnifying party at the indemnifying party's expense
11. MISCELLANEOUS.
11.1 Incorporation of Certain Provisions of the E-Commerce Agreement.
Sections 7, 8, 12, and Sections 17 through 29, inclusive, of the E-Commerce
Agreement are hereby incorporated in their entirety into this Agreement.
11.2 Interpretation of Agreements. With respect to the subject matter
hereof, the E-Commerce Agreement shall control any conflict between the terms of
this Agreement and the E-Commerce Agreement.
39
11.3 Definitions. Any terms not specifically defined in this Agreement
shall be construed in accordance with the definitions given such terms in the E-
Commerce Agreement, or if such terms are not defined in the E-Commerce
Agreement, then such terms shall be construed in accordance with their every
day, common meaning.
IN WITNESS WHEREOF, each of the parties have caused their duly authorized
representatives to enter into this Agreement to be effected on the Services
Start Date.
GLOBAL SPORTS INTERACTIVE, INC.: ▇▇▇▇▇▇'▇ ATHLEISURE CORPORATION:
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------- --------------------------
Title: President Title: President & CEO
------------------------- ----------------------
Date: 3/25/99 Date: 3/23/99
-------------------------- ------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇
-------------------------- ------------------------
(Please type or print) (Please type or print)
40
ATTACHMENT A
RETAILER'S ASSET REQUIREMENTS
FOR GLOBAL SPORTS INTERACTIVE'S PARTNERS
----------------------------------------
Product Assets
Elements: Product Assets should include names and prices. No product photography
or description are required.
Store Locations
Store location information should include address, phone number and fax numbers.
Corporate Assets
Corporate Assets may include the following:
. Press Releases
. Frequently Asked Questions
. Contact Information
. Jobs Information
. Community Programs Information
. Annual Reports
. Corporate Identity materials including logo
All above information may be submitted at the retailers discretion, excluding
the corporate identity materials and logos, which are mandatory.
41
ATTACHMENT B
(TO BE COMPLETED)
Domain Name:
Format of Retailer Content:
Project Liaisons:
For GSE.C: For Retailer:
FEATURES SET
------------
1. PRODUCT SEARCH
2. BROWSE CATEGORIES
3. RECOMMENDATION TOOLS
4. ADVANCE PRODUCT PRESENTATION
5. SHOPPING CART
6. GIFT GIVING FUNCTIONALITY
7. REMOTE PUBLISHING TOOLS FOR HUMAN RESOURCES AND PRESS ROOM
8. SALES TAX CONFIGURATION
9. PRODUCT REVIEWS
10. 24/7 CUSTOMER SUPPORT
11. AFFILIATE PROGRAM FUNCTIONALITY
12. ON LINE GIFT CERTIFICATES
13. LAND BASED STORES GIFT CERTIFICATES
14. STORE LOCATOR
15. FINANCIAL INFORMATION
16. FREQUENTLY ASKED QUESTIONS
17. COMMUNITY PROGRAMS
18. COMPANY PROFILE
19. ON LINE ORDER STATUS
MILESTONE DELIVERY SCHEDULE:
---------------------------
TASK ESTIMATED COMPLETION DATE
---- -------------------------
DISCOVERY AND PLANNING MARCH 15, 1999
COMMENCE ENGINE ENGINEERING JULY 31, 1999
ESTABLISH FULFILLMENT CAPABILITIES APRIL 30, 1999
RETAILER WEB SITE DEVELOPMENT JULY 31, 1999
QUALITY CONTROL REVIEW AND REVISIONS AUGUST 21, 1999
ALPHA TESTING SEPTEMBER 1, 1999
BETA (SOFT LAUNCH) SEPTEMBER 30, 1999
WEB SITE LAUNCH TO GENERAL PUBLIC OCTOBER 1 - DECEMBER 1,1999
MEDIA AND PROMOTIONS OCTOBER 1 - DECEMBER 1,1999
42
ATTACHMENT C
ASSET SUBMISSION GUIDELINES
This section details how to submit assets.
Source Assets and Final Assets
--------------------------------------------------------------------------------
We require source files for all assets. This means if an image is originally
constructed as a layered RGB Photoshop file at 100x500 pixels, we need that
file, even if the final file is a flattened 4-bit GIF at 20x100.
We allow the submission of final assets in some cases, but only by prior
arrangement and only in addition to an up-to-date source file. All submitted
assets are subject to review and verification by production staff.
Media and Format
--------------------------------------------------------------------------------
We routinely receive assets in the following media and formats.
Digital Media
--------------------------------------------------------------------------------
Media:
SyQuest 44mb, 88mb, 200mb, CD-ROM (including PhotoCD), Zip, Jaz, 3.5"
floppy.
Format:
▇▇▇▇▇, ▇▇▇-▇▇, or Macintosh
File Formats:
Text: Raw, MS Word 95, RTF, HTML
Bitmap Graphics:
Photoshop, TIFF, PCD (PhotoCD), EPS, PICT (JPEG and GIF for final files
only and only along with source files)
PostScript Graphics:
EPS, Illustrator (7.0 preferred)
Video:
QuickTime
Audio:
WAV, AIFF, MIDI
Non-Digital Media
--------------------------------------------------------------------------------
43
Contact us to discuss needs and capabilities before submitting any non-digital
assets.
Asset Submission
-----------------------------------------------------------------
We prefer to receive assets via FTP (file transfer protocol) although we gladly
accept assets via standard package delivery services (i.e., FedEx, USPS, UPS,
etc.).
Submission via FTP
FTP Area: ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Assets should be left in "Incoming" which is a level below the initial
directory. Once assets have been transferred, e-mail confirmation is required.
Submission via Package Delivery
If you wish to submit assets via standard package delivery services, please
address the package to this address:
Address TBD
If you are submitting hard assets like brochures, photographs, etc. please be
sure to ship them in a reinforced container to prevent damage to the assets
while in transit.
If you are submitting digital media like SyQuests, Zip disks, Jaz disks, etc.,
be sure to ship them in a well-padded, reinforced container.
44
SCHEDULE 1 TO E - COMMERCE AGREEMENT
------------------------------------
RETAILER'S TRADEMARKS, TRADENAMES AND LOGOS
--------------------------------------------
45
▇▇▇▇▇▇'▇ ATHLEISURE CORPORATION
. Dunham's
. ▇▇▇▇▇▇'▇ Sports
. ▇▇▇▇▇▇'▇ Sporting Goods
. Since 1917 ▇▇▇▇▇▇'▇ Sports Outfitters
. DSO Sport
. Mega Sports
. Get in the Game
46
EXHIBIT "B"
-----------
CONFIDENTIALITY AGREEMENT
-------------------------
[DATE]
[Company]
[Company Address]
In connection with the disclosure to you of certain confidential information,
this document sets forth the confidentiality agreement (the "Agreement") by and
between Global Sports Interactive, Inc. ("GSI") and [Company Name](the
"Recipient").
In consideration of the release of certain valuable and confidential information
relating to GSI's E-Commerce arrangements ("Material"), Recipient hereby agrees
to keep such Material strictly confidential and to (1) use the Material only for
the purpose of ____________________________________________; (2) not to
reproduce the Material in whole or in part without the prior written consent of
GSI; and (3) return the Material and any analysis prepared using the Material to
GSI upon request.
In addition, Recipient agrees that they shall not disclose to, nor allow access
to the Material or the names of GSI's E-Commerce partner(s) to any other party
or make any announcement, statement or press release with regard to the name(s)
of GSI's E-Commerce partner(s) prior to the Launch Date of the E-Commerce
partners. Recipient understands that it has represented to one of its E-Commerce
Partners that it would not release any Materials to any third party without that
third party executing a confidentiality agreement, and that should the Material
become public, then GSI could be liable for [*]. Accordingly, if Recipient
breaches this agreement, Recipient shall pay GSI [*] as liquidated damages and
the E-Commerce partner whose confidentiality was breached may collect the same
amount directly from the Recipient in the place of and on GSI's behalf.
Recipient agrees to take all measures, including, but not limited to, court
proceedings, at it's own expense, to restrain any such party; including
employees or former employees, from unauthorized use or disclosure of the
Material.
The Agreement shall be governed by and construed in accordance with the law of
the State of Pennsylvania.
(SIGNATURES CONTAINED ON THE FOLLOWING PAGE)
Agreed to on this ____ day of [DATE], 1999.
47
GLOBAL SPORTS INTERACTIVE, INC. RECIPIENT:
BY:___________________________ BY:_________________________
Its:__________________________ Its:________________________
Date:_________________________ Date:_______________________