EXHIBIT 10.3 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 555 South Henderson Road, King of Prussia, PA 19406 and Dunham's Athleisure Corporation (hereinafter referred to as "Retailer") with an address of 5000 Dixie Highway, Waterford, Michigan. 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. 2 1.19 "GSI Content" shall mean as defined in paragraph 1.6 of the Web Site Development Agreement. 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. 3 1.33 "Receiving Party" shall mean the party receiving Confidential Information. 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 [*] years after the Launch Date ("Expiration Date"). GSI shall use reasonable efforts to advise Retailer ten days 4 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 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 www.Retailer.com. 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 [*] 8 9 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 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 10 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. 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 11 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, 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. 12 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 [*]% 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 order will appear on the customer's credit card under the name of "Retailer.com" 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)[*]. 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. 13 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. 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. 14 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 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 15 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 [*] 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, 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. 16 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 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, www.Retailer.com.; 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. 17 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 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. 18 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 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 19 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. 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. 20 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 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 21 Retailer may register with the United States Patent and Trademark Office. Retailer shall register the fictitious name "Retailer.com" 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 www.Retailer.com 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 "Retailer.com" with Network Solutions or any similar successor entity. Retailer shall list itself as the owner and billing contact for the Domain Name "Retailer.com" and Retailer shall list GSI as the administrative and technical contact for the Domain Name "Retailer.com". 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. 22 10.3 GSI represents and warrants that at all times during the term hereof or any extensions thereof: a. [*]. 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. 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 23 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. 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 24 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 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 25 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. 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, 26 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' 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. 27 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 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 28 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 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. 29 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 ------------ The parties agree that the exclusive jurisdiction and venue of any dispute that arises hereunder shall be in the Court of Common Pleas of Montgomery 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 ------------------------ 30 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: 555 South Henderson Road King of Prussia, PA 19406 Attention: President Copy to: David S. Mandel, Esq. Astor Weiss Kaplan & Rosenblum, LLP The Bellevue Broad & Walnut Streets 6th Floor Philadelphia, Penna., 19102 IF TO RETAILER: 5000 Dixie Highway Waterford, Michigan, 48329 Attn: Sr. Vice President, Marketing Copy to: 5000 Dixie Highway Waterford, Michigan, 48329 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.: DUNHAM'S ATHLEISURE CORPORATION: BY: /s/ Michael Rubin BY: /s/ Jeffrey G. Lynn -------------------------- -------------------------- 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 555 South Henderson Road, King of Prussia, PA 19406 and Dunham's Athleisure Corporation (hereinafter referred to as "Retailer") with an address of 5000 Dixie Highway, Waterford, Michigan, 48329. 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 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 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.: DUNHAM'S ATHLEISURE CORPORATION: By: /s/ Michael Rubin By: /s/ Jeffrey G. Lynn --------------------------- -------------------------- Title: President Title: President & CEO -------------------------- ------------------------ Date: 3/25/99 Date: 3/23/99 -------------------------- ------------------------- Name: Michael Rubin Name: Jeff Lynn --------------------------- ------------------------ (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: Win16, Win-32, 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: ftp.globalsportsinteractive.com 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 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) 45 Agreed to on this ____ day of [DATE], 1999. GLOBAL SPORTS INTERACTIVE, INC. RECIPIENT: BY:___________________________ BY:_________________________ Its:__________________________ Its:________________________ Date:_________________________ Date:_______________________ 46