Exhibit 10.43
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.
GLOBAL SPORTS INTERACTIVE, INC.
______________________
E-COMMERCE AGREEMENT
BETWEEN
GLOBAL SPORTS INTERACTIVE, INC.,
AND
OSHMAN'S SPORTING GOODS, INC.-SERVICES
1
2
TABLE OF CONTENTS
Section Page
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1 Definitions 2
2 Term 4
3 Operation of the Web Site 5
3.1 Creation and Maintenance of the Web Site 5
3.1.1 GSI Obligations 5
3.1.2 Scalability, Security, and Redundancy 6
3.1.3 Quality Standard 6
3.1.4 Retailer Approval of Initial Web Site 6
3.1.5 Retailer Approval of Web Site Modifications 6
3.1.6 Web Site Address 6
3.1.7 Retailer Information 6
3.1.8 Retailer Information Updates 7
3.1.9 License of the URL and Retailer's Content 7
3.1.10 Maintenance of the Web Site 7
3.2 [*] 8
3.3 GSI's Supply of Certain Online Merchandise 8
3.3.1 Special Make-Ups 8
3.3.2 Closeout Merchandise and Markdowns 9
3.3.3 Form of Communication 9
3.4 Land Based Stores Gift Certificates 9
3.5 Cooperation 9
3.6 Land Based Store Kiosks 9
3.7 Payment and Accounting of Revenue Share to Retailer 10
3.8 Service of Online Customers 10
3.9 Audit 11
3.10 Return of Online Merchandise 11
3.11 Retailer Personnel Discounts 12
3.12 Promotions 12
3.13 Retailer Project Manager 12
3.14 Government Notices 12
4 Online Data and Databases 12
4.1 [*] 12
4.2 Ownership of Databases 13
4.3 Delivery of Customer Data to Retailer 13
5 Advertising and Marketing 13
6 Advertising Co-op and Discretionary Funds 14
7 Confidentiality 14
8 Press Releases 15
9 Exclusive Web Agreement 16
10 Use of URL, Trademarks, Service Marks, Trade Names, and Logos 17
11 Property Rights and Ownership 17
12 Representations and Warranties 18
13 Disclaimer of Warranties 19
14 Indemnification 19
15 Insurance 20
16 Termination and Other Remedies 20
17 Limitations of Liability 22
3
18 Discontinuance or Regulation of the Internet; Termination of Access to the Web Site 23
19 Force Majeure 23
20 Notices 23
21 Assignment 24
22 Independent Contractors 24
23 Waiver 24
24 Governing Law 24
25 Jurisdiction 24
26 Binding Effect 24
27 Severability 25
28 Headings 25
29 Entire Agreement 25
30 Counterparts 26
Schedules
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Schedule 1: Web Site Development Agreement
Schedule 2: URL Integration
Schedule 3: Marks
Schedule 4: Retailer Facilities
Schedule 5: Customer Data
Schedule 6: Secondary URLs
Schedule 7: GSI Infrastructure and Practices
Schedule 8: Database Tools
Schedule 9: Consignment Terms
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E-COMMERCE AGREEMENT
This E-Commerce Agreement dated the 30th day of December, 1999, ("Effective
Date") by and between Global Sports Interactive, Inc., ("GSI") a Pennsylvania
corporation with an address of 1075 First Avenue, King of Prussia, Pennsylvania
19406 and Oshman's Sporting Goods, Inc.-Services (Retailer") a Delaware
corporation with an address of 2302 Maxwell Lane, Texas 77023.
WHEREAS, GSI is in the business of creating and operating e-commerce
enabled Web sites on behalf of retailers, providing for those vendors the
technology, expertise, infrastructure, and operational support necessary to
offer e-commerce to their customers;
WHEREAS, Retailer is in the business of selling sports equipment, apparel,
footwear, and other related items to consumers through land-based retail stores;
WHEREAS, Retailer has made a substantial investment to establish its trade
name among consumers and suppliers so as to create a retail image connoting a
specific manner in which merchandise is presented and sold throughout Retailer's
network of land based retail stores;
WHEREAS, Retailer desires to extend its lines of retail distribution
through an e-commerce enabled Web site bearing its trade name and trademarks;
WHEREAS, both Retailer and GSI recognize that the protection of Retailer's
trade name, trademarks, and goodwill, as well as the overall success of the Web
site, depend on consumers' perceiving the Web Site to be an Internet extension
of Retailer's land-based stores that is as consistent as possible with those
stores with respect to merchandise quality, availability, pricing, terms of
sale, and other aspects of the retail purchasing experience;
WHEREAS, Retailer and GSI expect that the Web Site will complement
Retailer's land-based stores, enhancing Retailer's competitive position relative
to other sellers of the same or similar merchandise by offering to Retailer's
customer's an Internet alternative to in-store shopping;
WHEREAS, Retailer and GSI desire to have GSI provide to Retailer a complete
Web site solution that shall be the exclusive means by which Retailer will
conduct e-commerce through the Web during the term of this Agreement; and
WHEREAS, Retailer desires to obtain e-commerce capability from GSI in a
manner that reserves to Retailer ultimate control over merchandising, sales,
pricing, and customer service practices, policies, and strategies that may be
critical to the protection of Retailer's trade name, trademarks, and goodwill
and that will allow the Internet initiative to compliment, and not hinder,
Retailer's in-store shopping strategies.
NOW, THEREFORE, in reliance upon the recitals above (which are made a part
of the Agreement below) and in consideration of the agreements, representations,
and warranties in this Agreement, Retailer and GSI (each a "Party" and
collectively, the "Parties",) intending to be legally bound, agree as follows.
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1 DEFINITIONS
Capitalized terms have the following meanings in this Agreement.
1.1 "Advertising Co-op and Discretionary Funds" means amounts earned by or
-----------------------------------------
allocated to a Party by its vendors, the purpose of which is to
support the Party's advertising and promotional programs.
1.2 "Affiliate" means, as to any Person, any other Person controlled by,
---------
under common control with or controlling such Person, directly or
indirectly (through one or more intermediaries or otherwise). Without
limiting the foregoing, as to any Person that is an entity, a Person
shall be deemed an affiliate of such entity if (a) such Person
beneficially owns or holds, directly or indirectly (through one or
more intermediaries or otherwise), more than 10% of the voting or
equity securities of such entity or such entity beneficially owns or
holds, directly or indirectly (through one or more intermediaries or
otherwise), more than 10% of the voting or equity securities of such
Person or (b) is currently or becomes an executive officer or director
of such Person (provided, however, that a Person shall not be deemed
an affiliate solely by reason of this (b) if the Person has not been
an officer or director of the entity at anytime on or within one year
of the date of determination. The term "beneficial ownership" has the
meaning given to it in Rule 13d-3, and the term "officer" has the
meaning given to it in Rule 16a-1(f), both promulgated by the
Securities and Exchange Commission under the Securities Exchange Act
of 1934, as amended, and both as in effect on the date hereof.
1.3 "Categories" means the various types of product groups offered for
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sale in Land Based Stores.
1.4 "Closeout Merchandise" means end-of-season or excess merchandise that
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is priced at a greater than normal discount.
1.5 "Closeout Site Pages" means the those Web pages incorporated into the
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Web Site that offer primarily Closeout Merchandise and Markdowns.
1.6 "Content" means all text, images, pictures, sound, graphics, video and
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other information or data appearing in or through the pages of the Web
Site.
1.7 "Customer" means a Person who accesses the Web Site in any manner,
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whether or not a purchase is made.
1.8 "Customer Information" means all data and information provided by or
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obtained from Customers through the Web Site and all information
generated or obtained by virtue of the use of the Web Site by
Customers, including without limitation, all Customer Data.
1.9 "Governmental Authority" means any (a) nation, state, county, city,
----------------------
town, village, district, or other jurisdiction of any nature; (b)
federal, state, local, municipal, foreign, or other government; (c)
governmental or quasi-governmental authority of any nature (including
any governmental agency, branch, department, official, or entity and
any court or other tribunal); (d) multi-national organization or body;
or (e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
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authority or power of any nature.
1.10 "GSI Content" is defined in Section 1.6 of Schedule 1 attached to this
-----------
Agreement.
1.11 "GSI Products" is defined in Section 1.7 of Schedule 1 attached to
-------------
this Agreement.
1.12 "In Line Merchandise" means merchandise available to be carried by
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Retailer in its Land Based Stores.
1.13 "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, including but not limited
to copyrights, 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
domain names, 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).
1.14 "Internet" means the system of computer networks interconnected with
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routers, worldwide in scope, that facilitates data communication
services such as remote login, file transfer, electronic mail, and the
Web, and any successor to such system.
1.15 "Land Based Stores" means all sites and all channels other than the
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Web Site, whether a walk-in store or otherwise, from or through which
Retailer conducts business.
1.16 "Land Based Stores Gift Certificates" means gift certificates, pre-
-----------------------------------
programmed cards, and other forms of credit in fixed denominations
redeemable only in Land Based Stores.
1.17 "Launch Date" means the date on which the Web Site is fully
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functional, and is first available to the public on the Web.
1.18 "Law" means any federal, state, local, municipal, foreign,
---
international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation,
statute, or treaty of any Governmental Authority.
1.19 "Link" means a hypertext link to any Web site from or to the Web Site.
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1.20 "Markdowns" means merchandise in Retailer's inventory offered for sale
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at a price permanently and substantially reduced from its original
price.
1.21 "Marks" is defined in Section 10 of this Agreement.
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1.22 "Online Merchandise" means merchandise to be sold through the Web
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Site.
1.23 "Other GSI Retailers" means sporting goods retailers (a) that own,
-------------------
franchise, or operate land based stores through which sporting goods
are sold; and (b) whose Web site is owned and operated by GSI.
7
1.24 "Person" means, whether or not capitalized, any individual,
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corporation (including any non-profit corporation), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or
governmental body.
1.25 "Project Manager" means a representative of Retailer whose primary
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duties are to supply Retailer Content to GSI and to coordinate with
GSI regarding Retailer Content.
1.26 "Retailer Content" is defined in Section 1.10 of Schedule 1 attached
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to this Agreement including without limitation, all information
provided by Retailer for the operation of the Web Site.
1.27 "Retailer's Net Cost" means, with respect to Special Make-Ups, the
-------------------
aggregate of (i) amount paid by Retailer to manufacturer for such
merchandise, plus (ii) Retailer's actual costs incurred in connection
with such goods (including without limitation transportation, customs
duties, finance and insurance, agent commissions, and freight
forwarding costs), plus (iii) an amount for overhead and handling
equal to [*] of the sum of the amounts in clauses (i) and (ii), plus
(iv) an amount for advertising co-op equal to [*] of the sum of the
amounts in clauses (i) and (ii).
1.28 "Revenue Share" is defined in Section 37 of this Agreement.
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1.29 "Secondary URL" means uniform resource locators other than the URL
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that include one or more of Retailer's trade names, trademarks, or
service marks or any variant of such trade names, trademarks, or
service marks or other references to Retailer or Retailer's business.
1.30 "Special Make-Ups" means merchandise manufactured exclusively for
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Retailer and includes without limitation, such merchandise sold under
a Retailer's trademark.
1.31 "Specifications" means the prescribed standards, descriptions, and
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characteristics (including look and feel requirements) relating to the
Web Site set forth in Schedule 1 or otherwise described in this
Agreement, as modified from time to time as provided in this
Agreement.
1.32 "Term" is defined in Section 21 of this Agreement.
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1.33 "URL" means the uniform resource locator of the Web Site.
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1.34 "Web" means the Internet client-server hypertext distributed
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information retrieval system known as the World Wide Web.
1.35 "Web Site" is defined in Section 1.12 of Schedule 1 attached to this
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Agreement, and includes without limitation, the Closeout Site Pages.
2 TERM
2.1 Term. The Term of this Agreement shall commence upon the execution of
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this
8
Agreement and shall expire at 1700 G.M.T. on [*], unless terminated in
accordance with Section 16 of this Agreement. GSI shall advise
Retailer thirty days prior to the expected Launch Date. The Launch
Date shall occur during the period beginning [*], and ending
240 days after the Effective Date ("Commencement Period"). The
Commencement Period shall be extended to the extent directly delayed
by Retailer's failure to comply with the Milestone Delivery Schedule
set forth on Attachment B to Schedule 1 attached to this Agreement and
the Production Schedule to be agreed upon by the Parties; provided,
however, that, without expanding the foregoing, delays associated with
the Retailer's objections (or revisions to the Web Site based on
Retailer's objections) pursuant to Section 314 shall not be deemed to
be a failure to comply with the Milestone Delivery Schedule. Each
Party shall give the other Party prompt notice of any failure to
comply with the Milestone Delivery Schedule that occurs or is
reasonably likely to occur.
3 OPERATION OF THE WEB SITE
3.1 Creation and Maintenance of the Web Site.
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3.1.1 GSI Obligations. GSI, at its own expense, shall create,
---------------
maintain, host and operate the Web Site in accordance with this
Agreement and Schedule 1 attached to this Agreement. Through
the Term, the Web Site shall use GSI's proprietary engine that
is used for GSI's other retailer sites and will use other
technologies consistent with current e-commerce industry
practice. No more frequently than annually, Retailer may
request that a mutually acceptable, independent third party be
engaged to review retail e-commerce Web sites offering general
merchandise to determine the methods of operation, features,
and functionality of such Web sites. The cost of each such
review shall be shared equally by the Parties. Retailer may
suggest to GSI methods of operating the Web Site or that
features or functionality be included in the Web Site. GSI
shall implement such methods, features, or functionality that
are implemented on [*] or more of the [*] retail e-commerce Web
sites offering general merchandise ranked highest by Media
Metrix or such other mutually acceptable Person during the most
recent monthly reporting period. GSI shall implement such
methods, features, or functionality that are implemented on [*]
or more of the [*] retail e-commerce Web sites offering general
merchandise ranked highest by Media Metrix or such other
mutually acceptable Person during the most recent monthly
reporting period unless such method, feature, or functionality
would be inconsistent with GSI's reasonable business needs.
Such methods, features or functionality, as the case may be,
shall be added no later than six (6) months after GSI's receipt
of such suggestion from Retailer in writing; provided that in
the event that such methods, features or functionality cannot
be implemented reasonably within such six month period, then
within nine months from receipt of such notice so long as GSI
has commenced and proceeded diligently to said implementation
within a reasonable period. Notwithstanding the foregoing, GSI
is not required to implement any methods, features, or
functionality if the actual cost of adding such feature or
functionality would exceed [*]% of the revenues on which the
Revenue Share is based for the immediately preceding 12 months
or if implementing the method, feature, or functionality would
be illegal, would result in the infringement or violation of
any third party's rights, would cause a breach of
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any agreement to which GSI is a party, or would require GSI to
enter into a commercially unreasonable license. All upgrades to
GSI's proprietary engine shall be implemented for the Web Site
when the upgrades are made generally available for GSI's other
retailer Web sites. Any upgrade to GSI's proprietary engine
that has been in commercial use for an Other GSI Retailer site
for pre-release testing for more than 6 months shall be made
available for the Web Site.
3.1.2 Scalability, Security, and Redundancy. The Web Site shall be
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scalable, secure, and GSI shall provide redundancy and Customer
response times all in accordance with the practices employed by
retail e-commerce Web sites offering general merchandise as
such practices may change from time to time. Schedule 7
attached to this Agreement sets forth GSI's infrastructure and
practices as of the Effective Date that will be implemented to
support the Web Site.
3.1.3 Quality Standard. GSI shall operate the Web Site consistent
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with the goodwill, quality, and brand image associated with
Retailer and the Marks.
3.1.4 Retailer Approval of Initial Web Site. GSI shall not launch
-------------------------------------
the Web Site without Retailer's approval of the appearance and
functionality of the proposed Web Site. GSI shall make
available to Retailer complete versions of the Web Site for
Retailer's review and acceptance. Retailer shall use all
commercially reasonable efforts to review and evaluate the Web
Site within 5 business days of its obtaining such access to the
Web Site but in no event more than 15 business days (the
"Acceptance Period"). The design, layout, and look and feel of
the Web Site (including without limitation the placement and
positioning of Marks, advertising and Links) (the "Template")
shall be subject to Retailer's approval in its sole discretion;
in all other cases, Retailer's approval shall not be
unreasonably withheld. The initial Web Site shall be deemed
approved if GSI does not receive Retailer's notice of
disapproval within 15 business days of such Web Site's
availability to Retailer. Retailer shall not disapprove any
aspect of the Web Site if such disapproval would result in the
material degradation of the performance of the Web Site.
3.1.5 Retailer Approval of Web Site Modifications No changes to the
-------------------------------------------
Marks, Retailer Content or Retailer information provided
pursuant to Section 317 and no changes to the approved Template
shall be made (including the placement and positioning thereof)
without Retailer's prior written approval, which may be
withheld in its discretion. Any other material changes to the
appearance and functionality of the Web Site's user interface
initiated after the Launch Date shall be subject to the prior
approval of Retailer, which shall not be unreasonably withheld.
Such changes shall be deemed approved if GSI does not receive
Retailer's notice of disapproval within 7 business days of such
changes' availability to Retailer. Retailer shall not
disapprove any changes to the Web Site if such disapproval
would result in the material degradation of the performance of
the Web Site.
3.1.6 Web Site Address. The URL shall be www.oshmans.com.
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3.1.7 Retailer Information. GSI shall, at its cost and expense,
--------------------
incorporate in the Web
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Site any or all of the following information (which shall for
the purposes of Section 11 be deemed Retailer Content ), as
Retailer shall elect: corporate information, store locator,
public financial information, press releases, community
programs, employment opportunities for store or corporate
positions, vendor compliance policy, Women & Sports, grants for
girls program information and registration, gift card
registration, frequently asked questions and a "contact us"
section. Retailer shall provide such information in a format
acceptable to GSI and shall have sole and complete control over
the such information. The Links on the Web Site to such
information shall be on the Template (as defined in Section
314).
3.1.8 Retailer Information Updates. Following the Launch Date,
----------------------------
Retailer shall have the right to update the Content provided
pursuant to Section 317 of this Agreement, and GSI shall
incorporate such updates at GSI's cost, as follows:
(a) Public Financial Information.
----------------------------
(i) Stock Prices. Stock prices will be updated daily
through a Link to another Web site offering such
information.
(ii) SEC Filings and Annual Reports. SEC filings will be
provided through a Link to another Web site
offering such information.
(iii) Stock prices and SEC filings and annual reports
will be provided only if available in a format
acceptable to GSI.
(b) Press Releases and Employment Opportunities. GSI shall
-------------------------------------------
permit Retailer directly to upload to the Web Site any
Retailer-created revisions to press releases and
employment opportunities for store or corporate positions
provided pursuant to Section 317 of this Agreement
(c) Other Information. GSI shall, at no cost to Retailer,
-----------------
upload to the Web Site any Retailer-created revisions to
the corporate information, store locator, community
programs, vendor compliance policy, Women & Sports, grants
for girls program information and registration, gift card
registration, frequently asked questions, or the "contact
us" Content provided pursuant to Section 317 of this
Agreement. Retailer may from time to time provide other
information, and GSI shall, at no cost to Retailer, upload
to the Web Site such other information unless uploading
such information would be inconsistent with GSI's
reasonable business needs.
3.1.9 License of the URL and Retailer's Content. Except as
-----------------------------------------
specifically provided on Schedule 6, Retailer grants to GSI for
the Term a nontransferable (except in connection with the
assignment of this Agreement), irrevocable license to use,
copy, modify, adapt, translate, create derivative works based
upon, sublicense, reproduce, distribute, publicly perform,
publicly display, and digitally perform the URL and any
Secondary URLs registered in Retailer's name to GSI and
designate GSI as the technical and billing contact for the URL
and all such Secondary URLs with the registrar. Retailer's
representatives shall be designated as the administrative and
other contacts with the registrar. GSI shall promptly pay any
fees and take all other steps as may be necessary to maintain
the URL and such Secondary URLs. Retailer grants to GSI a
license to use, copy, modify, adapt, translate, create
derivative works based upon Retailer Content, sublicense,
reproduce, distribute, publicly perform, publicly display, and
digitally perform Retailer
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Content in connection with GSI's performance of its obligations
under and in accordance with this Agreement.
3.1.10 Maintenance of the Web Site. GSI shall maintain the Web Site
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to keep it consistent with good practice associated with retail
e-commerce Web sites offering general merchandise as such
practices may change. Retailer shall cooperate with GSI in the
maintenance of the Web Site at GSI's cost and expense.
3.2 [*]
3.3 GSI's Supply of Certain Online Merchandise.
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3.3.1 Special Make-Ups. Prior to ordering Special Make-Ups, Retailer
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shall provide to GSI a description of such Special Make-Ups and
advise GSI of Retailer's price to GSI, quantity, and color
selection and size range of such Special Make-Ups. GSI may
purchase, and Retailer shall sell to GSI at estimated
Retailer's Net Cost, the Special Make-Ups, in quantities,
colors and sizes determined by GSI. GSI shall have five
business days after GSI's receipt of Retailer's notice of
availability to advise Retailer of the quantity of any of the
Special Make-Ups that it has elected to purchase. Special Make-
Ups purchased by GSI shall not be sold on any Web site other
than the Web Site.
3.3.2 Closeout Merchandise and Markdowns. Retailer may at its sole
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discretion offer Closeout Merchandise or Markdowns for sale on
consignment through the Web Site. Retailer shall ship such
Closeout Merchandise or Markdowns to GSI's fulfillment center.
Notwithstanding the foregoing, GSI shall not be required to
accept a number of styles of Closeout Merchandise and Markdowns
that is greater than [*] in the first two years of the
Agreement, and greater than [*] in the remaining years of this
Agreement. Retailer shall set the selling prices on the
Closeout Merchandise and Markdowns. Retailer shall receive [*]%
of the proceeds from the sale of any Closeout Merchandise and
Markdowns received by GSI excluding amounts received for taxes,
delivery, handling, and net of returns, which shall be
calculated as follows: [*]% of the sale price plus 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 Closeout Merchandise or Markdown price of $50.00,
then when the athletic shoe is sold, Retailer shall receive
$[*] ([*]% of $50.00 and [*]% of $50.00). GSI shall hold the
inventory of Closeout Merchandise or Markdowns In accordance
with Schedule 9 attached to this Agreement and shall account to
Retailer and remit to Retailer amounts due under this
Agreement, for the sale of any Closeout Merchandise and
Markdowns when it accounts to Retailer for and remits the
Revenue Share. The proceeds from the sale of Closeout
Merchandise and Markdowns shall not be included in calculating
Revenue Share.
3.3.3 Form of Communication. Any and all information required or
---------------------
permitted to be provided by one Party to the other pursuant to
this Section 33 shall be provided in a mutually acceptable
form.
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3.4 Land Based Stores Gift Certificates. Retailer shall furnish Land
-----------------------------------
Based Stores Gift Certificates to GSI on consignment in accordance
with Schedule 9 attached to this Agreement in quantities and
denominations requested by GSI. Any Land Based Store Gift Certificates
not returned unsold to Retailer within 180 days after GSI receipt of
such Land Based Store Gift Certificates shall be deemed to be sold by
GSI and the face value of such Land Based Store Gift Certificates
shall be deemed proceeds received from the sale of Land Based Store
Gift Certificates. GSI shall remit to Retailer [*]% 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 without limitation, credit card fees. GSI shall remit to
Retailer all amounts due from, account to Retailer for, all sales of
Land Based Store Gift Certificates concurrently with its accounting to
Retailer for the Revenue Share. The proceeds from the sale of Land
Based Store Gift Certificates shall not be included in calculating
Revenue Share.
3.5 Cooperation. The Parties acknowledge and agree that their mutual
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cooperation and good faith are important to the success of the Web
Site and the implementation of Retailer's strategies. Accordingly,
each Party agrees reasonably to cooperate with, and to supply
information to, the other Party to facilitate the operation and
evaluation of the Web Site and implement Retailer's strategies.
3.6 Land Based Store Kiosks. By December 31, 2001, GSI shall have
-----------------------
installed terminals with access to the Web Site and from which
purchases can be made through the Web Site in each Land Based Store
with annual revenues for 1999 greater than $[*] million. GSI shall
install such terminals in other Land Based Stores when their annual
revenues exceed $[*] million. GSI shall maintain all such terminals at
its own cost and expense.
3.7 Payment and Accounting of Revenue Share to Retailer. All proceeds and
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other compensation received through the Web Site other than proceeds
from the sales of Closeout Merchandise, Markdowns, and Land Based
Stores Gift Certificates shall be revenues of GSI. Retailer shall
receive a [*]% share of the revenue received by GSI from the sale of
Online Merchandise other than Closeout Merchandise or Markdowns
excluding amounts received for taxes, delivery, handling, and net of
returns ("Revenue Share"). GSI shall properly remit any taxes due on
sales through the Web Site. Within ten (10) days after the end of each
GSI fiscal month during the Term (with the exception of December,
which period shall be thirty days), GSI shall account to Retailer for
the related Revenue Share due under this Agreement and shall remit to
Retailer such Revenue Share and shall account to Retailer for any
related taxes due and remitted by GSI.
Within ninety (90) days after the end of each GSI fiscal year, GSI
shall provide Retailer with a statement, certified by its independent
auditors, setting forth the Revenue Share earned by Retailer during
the prior GSI fiscal year and an accounting of the amounts due under
Sections 332 and 34. For a period of three years after Retailer's
receipt of such certified statement, Retailer may perform a single
audit of the books and records of GSI only with respect to the Revenue
Share earned during the related GSI fiscal years. Such audit shall be
conducted at GSI's principal office located in the continental United
States on two weeks' prior notice to GSI. If the audit reveals that
the Revenue Share or other amounts due Retailer under this Agreement
were understated, GSI shall within thirty days of completion of the
audit, pay to Retailer the unpaid balance for the period audited plus
interest at the prime rate of interest reported in The Wall Street
Journal on the date of the
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audit's certification, which interest shall accrue from the date that
the related understated amounts were due. If the audit reveals that
the accounting by GSI is understated by more than [*] ([*]%) percent
for the related GSI fiscal year, GSI shall pay to Retailer (a) the
unpaid balance of the Revenue Share or other amounts due Retailer
under this Agreement for the period audited plus (b) interest at the
rate of 18%, which interest shall accrue from the date that the
related understated amounts were due plus (c) Retailer's reasonable
costs of the audit.
3.8 Service of Online Customers. GSI shall be responsible for providing
---------------------------
all customer service relating to sales through the Web Site in
accordance with current e-commerce industry standards. GSI shall
provide online order tracking capability and toll-free telephone
ordering assistance to Customers. GSI shall use commercially
reasonable efforts to ship 98% of orders within 48 hours of GSI's
receipt of orders.
3.8.1 Independent Evaluation. No more frequently than annually,
----------------------
Retailer may request that a mutually acceptable, independent
third party be engaged to review retail e-commerce Web sites
offering general merchandise to determine the customer service
provided at such Web sites. The cost of each such review shall
be shared equally by the Parties. Upon Retailer's request, GSI
shall implement such customer service methods that are
implemented on [*] or more of the [*] of such sites that are
ranked highest by Media Metrix or such other mutually
acceptable Person during the most recent monthly reporting
period. Upon Retailer's request, GSI shall implement such
methods that are implemented on [*] or more of the [*] of such
sites that are ranked highest by Media Metrix or such other
mutually acceptable Person during the most recent monthly
reporting period unless such methods would be inconsistent with
GSI's reasonable business needs. Notwithstanding the foregoing,
GSI is not required to implement any method if it would be
illegal, would result in the infringement or violation of any
third party's rights, would cause a breach of any agreement to
which GSI is a party, or would require GSI to enter into a
commercially unreasonable license.
3.8.2 Customer Complaints and Surveys. GSI shall contemporaneously
-------------------------------
transmit to Retailer by email copies of email correspondence
between GSI and Customers that lodge complaints about the
customer service related to the Web Site and on a quarterly
basis, shall provide copies of all other correspondence from
Customers that lodge complaints about the customer service
related to the Web Site. GSI shall provide to Retailer the
compiled results of any of GSI's surveys of Web Site customer
satisfaction with the Web Site.
3.9 Audit. Upon 30 days prior written notice and no more frequently than
-----
once per 12 month period, GSI shall provide to Retailer reasonable
access during normal business hours to GSI's books, records, and data
that document the sales, shipment, and return of merchandise through
the Web Site for the limited purpose of Retailer's review of GSI's
performance under this Agreement. Retailer may inspect such books,
records, and data and all such information (other than Customer
Information) shall be Confidential Information of GSI as defined in
Section 7 of this Agreement, and subject to Section 7 of this
Agreement. Retailer may only make copies of such books, records, and
data as are reasonably related to disputed matters and only with prior
notice to GSI.
3.10 Return of Online Merchandise. GSI's return policy shall be consistent
----------------------------
with Retailer's
14
return policy. With each shipment of merchandise to a Customer, GSI
shall instruct the Customer that the merchandise purchased through the
Web Site may be returned to the Land Based Stores or to the Web Site
fulfillment center and that such returned merchandise ("Online
Return") may only be returned in accordance with the instructions
enclosed with the merchandise.
3.10.1 Online Return to GSI. GSI will deduct any Revenue Share
--------------------
related to the sale of an Online Return to and accepted by GSI.
Such deduction will be made from the next Revenue Share payment
and shall be identified in the related accounting.
3.10.2 Online Return to GSI of Markdowns and Closeout Merchandise.
----------------------------------------------------------
GSI will issue a refund to Customers for Online Returns of
Markdowns and Closeout Merchandise accepted by GSI. Proceeds
paid to Retailer for the sale of such Markdowns and Closeout
Merchandise will be credited to GSI in the next payment to
Retailer under this Agreement.
3.10.3 Online Returns to Land Based Store. Retailer shall ship, at
----------------------------------
GSI's cost (which may include, without limitation, reasonable
fees to third party RTV consolidators or processors), Online
Returns to Land Based Stores to GSI's fulfillment center. GSI
shall credit to Retailer the amount refunded to the Customer
less the related Revenue Share. If such merchandise is Closeout
Merchandise or a Markdown, GSI shall credit to Retailer the
portion of the sale proceeds retained by GSI pursuant to this
Agreement and such merchandise shall be returned to the
Closeout Merchandise and Markdown inventory. Any credit for
Online Returns to Land Based Stores will be applied to the
Revenue Share payment for the month following GSI's receipt of
the related merchandise. No credit shall be due for merchandise
that is not accompanied by proof of the purchase of the
merchandise through the Web Site and proof of refund by
Retailer.
3.11 Retailer Personnel Discounts. GSI shall offer to officers, directors,
----------------------------
and employees of Retailer discounts on purchases of services and
merchandise through the Web Site identical to the discounts offered by
Retailer to such personnel for purchases at Land Based Stores. The
discount may not be used in combination with any other discount.
Retailer shall promote the discount for such purchases through the Web
Site to the same extent that it promotes the discount for such
purchases at Land Based Stores.
3.12 Promotions. GSI may use the URL and Retailer's name and logo to
----------
promote the Web Site with other businesses; provided however, GSI
shall not promote the Web Site on any other sporting goods retailer's
Web site or on any Web site that would generally be considered
immoral, pornographic or otherwise offensive.
3.13 Retailer 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 appoint a Project Manager who shall be
authorized to act on behalf of Retailer for all purposes under this
Agreement and whose primary duties shall be to work with GSI regarding
this Agreement and the Web Site. Commencing with the Project Manager's
appointment and continuing through the Term, the Project Manager shall
be Retailer's contact point with GSI and shall be responsible for
supplying GSI with the Retailer Content, notices permitted or required
under this Agreement, and such other information as may reasonably be
required of Retailer to create, maintain, and operate the Web Site
efficiently.
15
3.14 Government Notices. GSI shall comply in all material respects with
------------------
all applicable Laws, including without limitation, all applicable Laws
relating to disclosure, advertisement, unfair competition, tax, and
consumer matters. GSI shall provide immediate notice to Retailer of
all government notices and legal process regarding the Web Site,
including without limitation notices of deceptive trade practices,
infringement, false advertising, defamation, and Federal Trade
Commission notices. All such notices and legal process and the
existence of all such notices and legal process shall be Confidential
Information of GSI as defined in Section 7 of this Agreement, and
subject to Section 7 of this Agreement.
4 ONLINE DATA AND DATABASES
4.1 [*]
4.1.1 Compliance with the Web Site Privacy Policy. During the Term
-------------------------------------------
and thereafter, GSI and Retailer shall hold and use Customer
Data in strict compliance with the Web Site privacy policy as
such policy may be revised by mutual agreement at any time and
from time to time. GSI shall provide prompt notice of changes
to the Web Site privacy policy and each Party will provide
prompt notice to the other Party of changes to the elections
under such policy by the individuals to which the Customer Data
relates.
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 GSI's storage of data and all refinements, updates,
releases, improvements and enhancements thereto, all Intellectual
Property Rights therein, and all applications created for use of the
data and Retailer Content (collectively "Databases") shall, as between
GSI and Retailer, be the sole and exclusive property of GSI.
4.3 Delivery of Customer Data to Retailer. Beginning 30 days after the
-------------------------------------
Launch Date and during the Term, GSI shall permit Retailer to access
and use Customer Data in the Databases in accordance with this
Agreement. GSI shall use commercially reasonable efforts to provide to
Retailer for its use solely in accordance with this Agreement, the
tools available to GSI to access Customer Data, which tools available
as of the Effective Date are identified on Schedule 8. Retailer's use
of such tools shall be limited to accessing Customer Data from the
Databases during the Term and shall be subject to such other
restrictions as may be reasonably required by GSI. GSI shall use
commercially reasonable efforts to ensure that the Customer Data
accurately and completely reflects the Customer Data collected by GSI,
but GSI shall have no obligation to check the accuracy, validity or
integrity of such Customer Data and except as set forth in this
Section 4, the Customer Data is provided "AS-IS" and without any
warranty of any kind, either express or implied, including, without
limitation, any implied warranties of title, merchantability, or
fitness for a particular purpose, or any warranty against infringement
of patents, copyrights, trade secrets, or other Intellectual Property
Rights. Customer Data is Confidential Information of GSI and Retailer,
as defined in Section 7 of this Agreement, and subject to Section 7 of
this Agreement.
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5 ADVERTISING AND MARKETING
5.1 Retailer's Obligations. Retailer shall, commencing no later than the
----------------------
Launch Date and continuing during the Term, at no cost to GSI
integrate the URL into its advertising and marketing in accordance
with Schedule 2 attached to this Agreement.
5.2 GSI's Obligations. GSI's marketing and promotion of the Closeout
-----------------
Merchandise and Markdowns will be consistent with the number of
Closeout Merchandise and Markdown stock keeping units offered for sale
through the Web Site relative to the number of other merchandise stock
keeping units offered for sale through the Web Site. GSI shall, at
its own cost and expense, use commercially reasonable efforts to
establish and maintain an affiliate program linking other Web sites to
the Web Site for the purpose of referring Customers to the Web Site.
GSI shall, through December 31, 2000, provide [*] impressions on the
Yahoo! Web site promoting the Web Site and services or merchandise
offered through the Web Site or such other promotion through the Web
mutually acceptable to the Parties. Such promotion shall be subject to
Retailer's prior approval, which approval shall not be unreasonably
withheld. Such promotions shall be deemed approved if GSI does not
receive Retailer's notice of disapproval within 5 days of such
promotions' availability to Retailer. GSI shall use commercially
reasonable efforts to advise Retailer on other Web based marketing and
promotional opportunities for increasing public awareness of the Web
Site, including without limitation, email relationship marketing
programs.
5.3 Search Engine Registration. GSI shall register the Web Site with each
--------------------------
Web search engine or directory site that does not impose a material
charge for such registration with which GSI registers the Web site of
any Other GSI Retailer.
6 ADVERTISING CO-OP AND DISCRETIONARY FUNDS
During the Term, GSI shall use all Advertising Co-op and Discretionary
Funds received by GSI directly from vendors (including without limitation,
Retailer in its capacity as vendor of Special Make-Ups) as a result of the
purchase of merchandise that was sold through the Web Site solely to
promote the Web Site and not to defray any operating or development
expenses. GSI shall provide an accounting of all such funds to Retailer
upon Retailer's reasonable request.
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 material that is
clearly marked "confidential" or that the Party receiving the
Confidential Information ("Receiving Party") knows, or has reason to
know, is the confidential or proprietary information of the Party
disclosing such Confidential Information ("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,
17
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 shall (a) hold and maintain in
---------------
strict confidence all Confidential Information of the Disclosing Party
and shall not disclose it to any third party and (b) shall not 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 obligations and
restrictions imposed by this Section 7 shall terminate five (5) years
after the expiration or termination of this Agreement.
Notwithstanding the foregoing, the Receiving Party may disclose
Confidential Information to a director, officer, employee, or agent of
the Receiving Party provided that (a) the responsibilities of such
Person to the Receiving Party reasonably require access to
Confidential Information; (b) the Receiving Party advises each such
Person before he or she receives access to or possession of
Confidential Information of the confidential nature of, and the
Receiving Party's obligations regarding, the Confidential Information;
and (c) for any Person who is not otherwise obligated by written
agreement to comply with this Section 7, as a condition of obtaining
access to any Confidential Information, each such Person is bound by
written agreement the terms of which regarding Confidential
Information are no less restrictive than those of this Agreement. The
Receiving Party shall be liable for any duplication, use, or
disclosure of any Confidential Information by any Person who obtains
access to or possession of Confidential Information through the
Receiving Party.
7.3 Exceptions. Notwithstanding the foregoing, the Parties agree that
----------
Confidential Information other than Customer Information will not
include any information that: (a) was published or becomes available
to the general public other than through a breach of this Agreement;
(b) was possessed by the Receiving Party prior to receipt or access
pursuant to this Agreement, other than through prior disclosure by the
Disclosing Party, as evidenced by the Receiving Party's written
records; (c) was obtained by the Receiving Party from a third party
with a valid right to disclose such Confidential Information, provided
that the Receiving Party did not know and reasonably should not have
known that such third party was under a confidentiality obligation to
the Disclosing Party; or (d) was independently developed by the
Receiving Party without the benefit of disclosure by the Disclosing
Party as evidenced by the Receiving Party's written records; or (e)
was required to be disclosed by governmental agencies, regulatory
authorities, or pursuant to court order to the extent such disclosure
is required by law and provided that the Receiving Party provides
reasonable prior notice to the Disclosing Party of the disclosure.
7.4 Confidentiality of this Agreement. Retailer and GSI acknowledge that
---------------------------------
the terms and conditions of this Agreement constitute Confidential
Information of each Party governed by the terms of this Section 7 and
each Party shall be deemed to be a Receiving Party with respect to
such Confidential Information.
7.5 Remedy. The Receiving Party acknowledges that the Disclosing Party
------
will be irreparably harmed if the Receiving Party's obligations under
this Section 7 are not performed, and
18
that the Disclosing Party would not have an adequate remedy at law in
the event of a violation by the Receiving Party of such obligations.
The Receiving Party agrees and consents that the Disclosing Party
shall be entitled, in addition to all other rights and remedies to
which the Disclosing Party may be entitled, to have a decree of
specific performance or an injunction issued requiring any such
violation to be cured and enjoining all Persons involved from
continuing the violation. The existence of any claim or cause of
action that the Receiving Party or any other Person may have against
the Disclosing Party shall not constitute a defense or bar the
enforcement of this Section 7. The Receiving Party acknowledges that
the restrictions in this Section 7 are reasonable and necessary to
protect legitimate business interests of the Disclosing Party.
8 PRESS RELEASES
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 nor Retailer shall make any public
announcement or issue any press release concerning the transactions
contemplated by this Agreement without the prior written consent of the
other Party. Each Party may make any public announcement or issue any
press release it is required by law to issue provided such Party gives
reasonable prior notice of such announcement or press release to the other
Party.
9 EXCLUSIVE WEB AGREEMENT
9.1 Exclusive Retailer Web Site. During the Term, other than through the
---------------------------
Web Site or other Web site operated by GSI, and except to promote the
Web Site or Land Based Stores, neither Retailer nor any Affiliate of
Retailer shall, alone or with others, directly or indirectly (a)
promote or offer for sale through the Internet any merchandise in a
Category or distribute or fulfill orders for any merchandise in a
Category sold through the Internet or (b) use or permit any other
Person to use its name, logo, or other trademarks, service marks,
trade names, or trade dress, whether or not registered, on the
Internet; provided, however, that if (a) Retailer develops an
alternative business model involving sales of sporting goods under a
trade name other than Oshman's Sporting Goods or Oshman's SuperSports
USA and having a substantially different product mix than presently
carried in the Land Based Stores, and (b) GSI declines to provide a
Web site to Retailer for such business on substantially the same terms
as this Agreement, the provisions of this Section 91 shall not apply
to such business.
9.2 [*]
9.3 Retailer's Existing Web Site. For the period commencing 30 days after
----------------------------
the execution of this Agreement and ending on the Launch Date, GSI
shall host Retailer's currently existing Web site and shall use
commercially reasonable efforts to make such Web site publicly
accessible to users of the Internet at all times except for reasonable
periods for
19
system maintenance. GSI may offer for sale and accept and fulfill
orders for Land Based Stores Gift Certificates through such site in
accordance with this Agreement as if the Land Based Stores Gift
Certificates were offered, sold, and fulfilled through the Web Site.
9.3.1 Ownership of Retailer's Existing Web Site. As between Retailer
-----------------------------------------
and GSI, Retailer's existing Web site shall remain the sole and
exclusive property of Retailer. GSI shall have no rights in
such Web site, other than the limited right to use such Web
site for the performance of its obligations and exercising its
rights under this Agreement.
9.3.2 Retailer Warranty. Retailer represents, warrants, and
-----------------
covenants (a) that Retailer has the full legal right to grant
to GSI any and all ownership rights and licenses granted to GSI
under this Section 93 and (b) that during the term of this
Agreement, Retailer shall not distribute through its existing
Web site any material that (a) infringes on the Intellectual
Property Rights of any Person or any rights of publicity or
privacy of any Person; (b) violates any Law (including without
limitation, the laws and regulations governing export control,
unfair competition, anti-discrimination, or false advertising);
(c) is defamatory, trade libelous, unlawfully threatening, or
unlawfully harassing; (d) is obscene, child pornographic, or
indecent; (e) violates any community or Internet standard; or
(f) contains any viruses, Trojan horses, worms, time bombs,
cancelbots, or other computer programming routines that are
intended to damage, detrimentally interfere with,
surreptitiously intercept, or expropriate any system, data or
personal information.
9.3.3 Remedy. In addition to any remedies that GSI may have at law
------
or in equity, if GSI reasonably determines that Retailer has
breached or is likely to breach its representations,
warranties, or covenants of this Section 93, GSI may take any
action GSI reasonably deems necessary to cure or avoid the
breach, including without limitation, the immediate disabling
of the Web site and the removal from or refusal to upload to
the Web site the related materials.
10 USE OF URL, TRADEMARKS, SERVICE MARKS, TRADE NAMES, AND LOGOS
During the Term, Retailer hereby grants to GSI the exclusive license to
use, copy, modify and display in accordance with this Agreement the URL and
Retailer's trade names, trademarks, trade dress, service marks, and logos
and such other names and logos as are listed on Schedule 3 attached to this
Agreement ("Marks"), on the Web Site, and a nonexclusive license to use,
copy, modify, and display the Marks on invoices and packing slips, in
connection with credit card charges, in connection with a toll free Web
Site customer service telephone line, as otherwise permitted by this
Agreement, and generally in connection with the operation and promotion of
the Web Site; provided however, GSI shall have no right to modify the Marks
without Retailer's prior approval. Schedule 3 shall be modified from time
to time during the Term to add any new trademarks, service marks, trade
names and logos that Retailer uses during the Term, and any such additions
to Schedule 3 shall be Marks under this Agreement.
GSI recognizes the great value of the publicity and goodwill associated
with the Marks and acknowledges that such goodwill belongs exclusively to
and shall inure to the benefit of Retailer, and that the Marks have
acquired a secondary meaning in the minds of the purchasing public.
20
GSI will not acquire any rights in the Marks as a result of its use and all
use of the Marks shall inure to Retailer's benefit. Retailer may terminate
the license in this Section 10 to the extent that GSI's use of the Marks
does not conform to Retailer's standards and GSI does not cure such failure
within 10 days of GSI's receipt of Retailer's notice of such failure. GSI
shall use the Marks in the form provided to GSI and as may be modified in
accordance with this Agreement and in conformance with any Retailer
trademark usage policies. GSI shall (a) not take any action inconsistent
with Retailer's ownership of the Marks; (b) not attack or assist any third
party in attacking the Marks; (c) use proper symbols indicating the
registered status of the Marks; (d) not attempt to register the Marks
anywhere; and (e) not adopt or use confusingly similar marks. GSI's
obligation under this Section 10 shall survive the termination of this
Agreement.
GSI shall use the Marks only in a manner that reflects the goodwill and
quality reflected by the Marks. Upon notice from Retailer, GSI shall remove
from the Web Site any Links to Web sites that in Retailer's reasonable
judgment (a) are obscene, child pornographic, or violate any community or
Internet standard or (b) would offer competitive merchandise or services or
merchandise or services that would place Retailer in an adverse light or
tarnish its reputation. The use of the Marks as otherwise permitted by
this Agreement are deemed to comply with this Section 10.
11 PROPERTY RIGHTS AND OWNERSHIP
The 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' respective rights with respect to such
elements shall be as set forth below and subject to the terms of this
Agreement. 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.
11.1 The Web Site shall be owned solely by GSI.
11.2 GSI Products shall be owned solely by GSI.
11.3 Retailer Content shall be owned solely by Retailer.
11.4 Marks shall be owned solely by Retailer.
12 REPRESENTATIONS AND WARRANTIES
12.1 Retailer represents and warrants that
12.1.1 it has the full right to transfer to or grant to GSI the right
to use its URL, Secondary URLs, Marks, and Retailer Content as
transferred or granted in this Agreement;
12.1.2 during the Term of this Agreement, as used in accordance with
this Agreement, the Retailer information provided pursuant to
Section 317 and Retailer Content, as provided by Retailer and
as updated, are accurate, complete, and not misleading and (a)
do not violate any Law (including without limitation, the laws
or
21
regulations governing export control, unfair competition, anti-
discrimination, or false advertising); (b) do not breach any
contract and has not resulted in and will not result in any
consumer fraud, product liability, tort, injury, damage, or
harm of any kind to any third party; or (c) do not violate any
Person's property rights or rights to publicity, privacy,
personality, or other rights, and are not defamatory, libelous,
unlawfully threatening, unlawfully harassing, obscene,
indecent, or pornographic;
12.1.3 Retailer's use and maintenance of Customer Information shall be
in strict compliance with the Web Site privacy policy as such
policy may be revised at any time and from time to time without
notice; and
12.1.4 Schedule 4 attached to this Agreement is, and shall be promptly
revised by Retailer to continue to be, an accurate and complete
list of the addresses of every facility owned or operated by
Retailer.
12.1.5 Schedule 6 attached to this Agreement is, and shall be
maintained by Retailer to continue to be, an accurate and
complete list of the Secondary URLs registered in Retailer's
name, and Retailer shall give 30 days prior notice to GSI of
any and all additions or changes to the Secondary URLs on
Schedule 6.
12.2 GSI represents and warrants that during the term of this Agreement,
the Web Site, GSI Content, all material available on the Web Site, and
all advertising that is not Retailer Information or Retailer Content
will not (a) infringe on the Intellectual Property Rights of any
Person or any rights of publicity or privacy of any Person; (b)
violate any Law (including without limitation, the laws and
regulations governing export control, unfair competition, anti-
discrimination, or false advertising); (c) be defamatory, trade
libelous, unlawfully threatening, or unlawfully harassing; (d) be
obscene, child pornographic, or indecent; (e) violate any community or
Internet standard; or (f) contain any viruses, Trojan horses, worms,
time bombs, cancelbots, or other computer programming routines that
are intended to damage, detrimentally interfere with, surreptitiously
intercept, or expropriate any system, data or personal information.
12.3 Each Party represents and warrants to the other Party that: (a) 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; (b) 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 (c) 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.
12.4 In addition to any remedies that either Party may have at law or in
equity, if either Party reasonably determines that the other Party has
breached or is likely to breach Section 1212 or 122, the non-breaching
Party may take any action it reasonably deems necessary to cure or
avoid the breach, including without limitation, the immediate removal
from or refusal to upload to the Web Site the related materials.
22
13 DISCLAIMER OF WARRANTIES
EXCEPT FOR THE EXPRESS WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER
RETAILER NOR GSI MAKES ANY, AND BOTH DISCLAIM ALL, REPRESENTATIONS AND
WARRANTIES, EXPRESS OR IMPLIED, ORAL OR WRITTEN, IN FACT OR IN LAW,
INCLUDING WITHOUT LIMITATION ALL WARRANTIES OF TITLE, NON-INFRINGEMENT,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTIES THAT
ARISE FROM TRADE USAGE OR CUSTOM. EACH PARTY ACKNOWLEDGES AND AGREES THAT
THE OTHER PARTY HAS NOT MADE, NOR DOES HEREBY MAKE, ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER, EXPRESSED OR
IMPLIED.
14 INDEMNIFICATION
14.1 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
from or related to (a) claims that GSI's possession or use in
accordance with this Agreement of Retailer Content, the Marks, or
other items provided by Retailer pursuant to this Agreement infringes
a third party patent, copyright, trademark, trade secret, or other
proprietary right; (b) claims by third parties arising from or related
to Retailer's breach of any representation or warranty in this
Agreement; or (c) Retailer's gross negligence, willful or intentional
misconduct.
14.2 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
from or related to (a) claims made by third parties to the extent that
they are based on information (including Content) on, or transactions
through, the Web Site or GSI's services to Retailer provided pursuant
to this Agreement other than claims for which GSI is entitled to
indemnification pursuant to Section 141 of this Agreement or (b) GSI's
gross negligence, willful or intentional misconduct.
14.3 An indemnitor under this Section 14 shall have the right to control
the defense and settlement of any claims or actions for which it is
obligated to defend, but the indemnitee shall have the right to
participate in such claims or actions at its own cost and expense. An
indemnitor under this Section 14 shall have no liability under this
Section 14 to the extent that the indemnitor is actually prejudiced by
the indemnitee's failure to give notice to the indemnitor promptly
after the indemnitee learns of such claim so as to not prejudice the
indemnitor.
15 INSURANCE
15.1 GSI shall maintain in full force and effect products liability
insurance coverage for merchandise sold through the Web Site in an
amount not less than $[*] million. Such policy shall name Retailer as
an additional insured.
23
15.2 GSI shall deliver to Retailer certificates of insurance that stipulate
that no less than ten days notice will be given to Retailer prior to
the termination of the related policy. Such certificates shall
identify the coverage and state that Retailer is an additional insured
under the policy.
16 TERMINATION AND OTHER REMEDIES
16.1 Termination for Cause by Either Party. Except as otherwise provided
-------------------------------------
in this Agreement, this Agreement may be terminated by either Party
16.1.1 if a material breach of the terms or conditions of this
Agreement by the other Party which breach is not cured within
30 days of the breaching Party's receipt of notice of such
breach or such longer period as may be reasonably necessary
provided that the Party in breach is diligently pursuing a
cure. As used herein, "material breach" shall mean a failure by
a Party to perform any of its obligations the effect of which
would substantially impair the value of this Agreement to the
other Party;
16.1.2 if the other Party fails to pay to the Party within 10 days
after Party makes written demand for any past-due amount
payable under this Agreement;
16.1.3 if a voluntary petition is commenced by the other Party under
the Bankruptcy Code, as amended, 11 U.S.C. (S) 101 et seq; the
other Party has an involuntary petition commenced against it
under the Bankruptcy Code and such petition is not dismissed
within 60 days after filing; the other Party becomes insolvent;
or any substantial part of the other Party's property becomes
subject to any levy, seizure, assignment, application, or sale
for or by any creditor or governmental agency; or liquidates or
otherwise discontinues all or a significant part of its
business operations.
16.1.4 if a Party's non-performance is excused by Section 19 and such
non-performance continues for 30 days.
16.2 Termination for Cause by Retailer.
---------------------------------
16.2.1 Retailer may terminate this Agreement upon 180 days' notice if
(a) Revenue Share-generating sales do not equal or exceed the
following amounts for the related GSI fiscal years and (b) GSI
does not pay twice the shortfall in Revenue Share to Retailer
by March 31 of the following year.
2001 $[*] million
2002 $[*] million
2003 $[*] million
2004 $[*] million
16.2.2 Retailer may terminate this Agreement immediately upon notice
if (a) GSI or any Affiliate of GSI (except for Affiliates of
GSI in a business relationship structure substantially similar
to that between GSI and The Sports Authority (excluding the
24
economics)) promotes, offers for sale, or distributes any
sports equipment, sports apparel, or athletic footwear through
the Internet under a trade name, trademark, or service mark
owned by GSI or any Affiliate of GSI; (b) GSI does not offer
(and is not prohibited by the manufacturer from offering) to
Retailer the option to offer on the Web Site all merchandise
that is offered on such GSI Web site; and (c) Retailer gives
notice of termination within 30 days of Retailer's receipt of
GSI's notice refusing to so offer such option.
16. Effect of Termination.
---------------------
16.3.1 Upon the expiration or termination by Retailer of this
Agreement, (a) all licenses granted to either Party under this
Agreement shall terminate; (b) GSI shall transfer the
registration of the URL to Retailer and designate Retailer as
the administrative, technical, billing contact, and any other
contact for the URL and all Secondary URLs with the registrar;
(c) GSI shall return to Retailer or at Retailer's option,
destroy Retailer Content in GSI's possession; and (d) upon
Retailer's request, GSI shall continue to operate the Web Site
in accordance with this Agreement for no more than 180 days and
reasonably cooperate with Retailer in closing the Web Site at
the end of such period, including without limitation,
completing the processing of all orders and requests for
customer service.
16.3.2 Upon the expiration or termination by Retailer of this
Agreement, GSI shall release to Retailer Customer
Identification Data (defined below), which shall remain subject
to Section 4 of this Agreement. "Customer Identification Data"
means Customer Data that identifies the names, addresses,
telephone numbers, email addresses, and purchasing history of
Customers who during the Term have placed an order for Online
Merchandise.
16.3.3 Upon the expiration or termination by Retailer of this
Agreement, GSI grants to Retailer a perpetual, transferable,
irrevocable license throughout the universe to use, copy,
modify, adapt, translate, create derivative works based upon,
sublicense, reproduce, distribute, publicly perform, publicly
display, and digitally perform the appearance and operational
patterns of the user interface of the Web Site. The foregoing
license does not include any rights to any computer software or
programming code.
16.3.4 Sections 4, 7, 13, 14, 163, and 17 shall survive any
termination by GSI of this Agreement.
16.4 Other Remedies. In addition to any other payment to be made
--------------
hereunder, any amounts owed to a Party shall bear interest at the
lesser of 18% per annum or the maximum rate allowed by law from the
date such amounts were required to be paid until payment. Nothing
contained herein shall limit a Party's ability to obtain injunctive or
equitable relief with respect to the breach of Sections 9 or 10.
17 LIMITATIONS OF LIABILITY
EXCEPT FOR ANY LIABILITY UNDER SECTIONS 7 AND 14 OF THIS AGREEMENT, UNDER
NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
25
INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES
(REGARDLESS OF WHETHER SUCH DAMAGES ARISE OUT OF CONTRACT, NEGLIGENCE OR
OTHER LEGAL THEORIES OR OTHERWISE) ARISING FROM OR RELATED TO THIS
AGREEMENT OR 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. EXCEPT FOR ANY LIABILITY UNDER SECTIONS 7 AND 14 OF THIS
AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY
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; PROVIDED, HOWEVER, THAT IF FEWER
THAN [*] MONTHS HAVE ELAPSED FROM THE LAUNCH DATE THROUGH THE DATE OF SUCH
LAST ACT OR OMISSION, THEN THE LIABILITY CAP SHALL BE EQUAL TO TWELVE TIMES
THE AVERAGE MONTHLY PAYMENT TO RETAILER DURING SUCH PERIOD. THE REMEDIES
SET FORTH IN THIS SECTION 17 CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES
AVAILABLE TO THE PARTIES UNDER THIS AGREEMENT. THE REMEDIES SPECIFICALLY
PROVIDED BY THIS AGREEMENT AND THE PROVISIONS OF THIS SECTION 17 SET FORTH
EACH PARTY'S EXCLUSIVE REMEDIES AND ALLOCATE BETWEEN GSI AND RETAILER THE
RISKS UNDER THIS AGREEMENT, SOME OF WHICH MAY BE UNKNOWN OR UNDETERMINABLE.
SUCH LIMITATIONS WERE A MATERIAL INDUCEMENT FOR GSI AND RETAILER TO ENTER
INTO THIS AGREEMENT, AND THE PARTIES HAVE RELIED UPON SUCH LIMITATIONS IN
DETERMINING WHETHER TO ENTER INTO THIS AGREEMENT, AND THE PARTIES INTEND
THEM TO BE ENFORCEABLE WHETHER OR NOT THE DAMAGES WERE FORESEEABLE OR ,
EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OR PROBABILITY OF SUCH
DAMAGES AND EVEN IF THE EXCLUSIVE REMEDIES PROVIDED BY THIS AGREEMENT FAIL
OF THEIR ESSENTIAL PURPOSE. IN NO EVENT SHALL EITHER PARTY BE LIABLE IN
ANY RESPECT FOR CLAIMS BROUGHT MORE THAN [*] MONTHS AFTER THE LAST ACT OR
OMISSION GIVING RISE TO SUCH LIABILITY.
18 DISCONTINUANCE OR REGULATION OF THE INTERNET; TERMINATION OF ACCESS TO THE
WEB SITE
18.1 Discontinuance or Regulation of the Internet. Retailer acknowledges
--------------------------------------------
that the Internet (including without limitation the Web) is a network
of private and public networks and that GSI has no control over the
Internet. GSI shall not be 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.
18.2 Termination of Access to the Web Site. GSI may terminate access to
-------------------------------------
the Web Site at any time and without notice (a) to prevent damage or
degradation to the Web Site; (b) to comply with any Law; or (c)
otherwise protect GSI from liability to third parties. GSI will use
reasonable commercial efforts to notify Retailer of any such
termination of access as soon as reasonably practicable after such
termination of access and promptly to restore such access upon the
cessation of the condition leading to such termination.
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19 FORCE MAJEURE
Neither Party shall be liable to the other Party for non-performance of
this Agreement in whole or in part, if (a) the non-performance is caused by
the other Party or events or conditions beyond that Party's reasonable and
actual control and for which that Party is not responsible under this
Agreement, (b) the Party gives prompt notice under Section 20, and (c) the
Party makes all commercially reasonable efforts to perform.
20 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: Global Sports Interactive, Inc.
1075 First Avenue
King of Prussia, PA 19406
Attention: President
Copy to: Arthur H. Miller, Esquire
Executive Vice President and General Counsel
1075 First Avenue
King of Prussia, PA 19406
If to Retailer: Oshman's Sporting Goods, Inc.-Services
2302 Maxwell Lane
Houston, TX 77023
Attention: Steven U. Rath
Copy to: Legal Department
Oshman's Sporting Goods, Inc.-Services
2302 Maxwell Lane
Houston, TX 77023
21 ASSIGNMENT
Neither GSI nor Retailer may assign this Agreement without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld, except that either Party may assign this Agreement upon written
notice to the other Party to an Affiliate of the assignor or to any Person
that acquires or succeeds to all, or substantially all, of assignor's
business or assets.
22 INDEPENDENT CONTRACTORS
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The relationship of the Parties herein shall be that of independent
contractors and nothing herein shall be construed to create a joint venture
or partnership.
23 WAIVER
The waiver or failure of either Party to exercise in any respect any right
provided hereunder shall not be deemed a waiver of such right in the future
or a waiver of any other rights established under this Agreement.
24 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 State of Delaware (excluding the choice of
law rules thereof).
25 JURISDICTION
The Parties agree that the exclusive jurisdiction and venue of any dispute
that arises hereunder shall be in federal or state courts of competent
jurisdiction in the jurisdiction of the defendant's principal place of
business.
26 BINDING EFFECT
This Agreement shall be binding upon the Parties hereto, their successors
and permitted assigns.
27 SEVERABILITY
Should any term or provision of this Agreement be held to any extent
unenforceable, invalid, or prohibited under law, then such provision shall
be deemed restated to reflect the original intention of the Parties as
nearly as possible in accordance with applicable law and the remainder of
this Agreement, or the application of such term or provision to Persons,
property, or circumstances other than those as to which it is invalid,
unenforceable, or prohibited, shall not be affected thereby, and each term
and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
28 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. All references to "Section" or "Sections" refer to
the corresponding Section or Sections of this Agreement. All words used in
this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms, but is rather
intended to signify that some of many examples follow. The words "hereof,"
"thereof," "herein" and the like are intended to refer to the Agreement as
a
28
whole unless the context clearly and unambiguously indicates otherwise.
29 ENTIRE AGREEMENT
This Agreement, including the Schedules attached to this 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 the
Parties hereto. This Agreement supersedes all prior writings of the
Parties with respect to this subject matter.
30 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.
The Parties accept this Agreement and have caused this Agreement to be
executed and do each hereby warrant and represent that its respective signatory
whose signature appears below has been and is on the date executed duly
authorized by all necessary and appropriate corporate action to execute this
Agreement on its behalf.
GLOBAL SPORTS INTERACTIVE, INC. OSHMAN'S SPORTING GOODS,
INC.-SERVICES
By: /s/ Michael Rubin
By: /s/ Steven U. Rath
Name: Michael Rubin
Name: Steven U. Rath
Title: CEO
Title: Exec. Vice Pres.
Date: 12/30/99
Date: 12/30/99
29