Strategic Alliance Agreement - Global Sports Interactive Inc. and Bluelight.com LLC
Global Sports Interactive, Inc.
______________________
Strategic Alliance Agreement
among
Global Sports Interactive, Inc.
and
Bluelight.Com LLC
<PAGE>
Table of Contents
Section Page
------- ----
1 Definitions................................................. 1
2 Development and Operation of the Web Site................... 2
3 Customer Service............................................ 3
4 Licensed Materials.......................................... 3
5 Supply of Merchandise and Warehousing....................... 3
6 Order Processing............................................ 4
7 Fulfillment of Accepted Orders and Returns.................. 5
8 Form of Communication....................................... 6
9 Payment..................................................... 6
10 No Merchandise Warranty..................................... 7
11 GSI Representations and Warranties.......................... 7
12 GSI Indemnification......................................... 7
13 Blue Representations and Warranties......................... 7
14 Blue Indemnification........................................ 7
15 Customer Data............................................... 8
16 Confidentiality............................................. 8
17 Limitation of Liability..................................... 10
18 Term and Termination........................................ 10
19 Force Majeure............................................... 11
20 Miscellaneous Provisions.................................... 11
Schedules
---------
Schedule A: Designated Web Sites
Schedule B: Fulfillment Requirements Structure
i
<PAGE>
Strategic Alliance Agreement
This Strategic Alliance Agreement is made by and among Global Sports
Interactive, Inc., ("GSI") a Pennsylvania corporation with its principal place
of business located at 1075 First Avenue, King of Prussia, Pennsylvania, 19406,
Bluelight.Com LLC ("Blue") a Delaware limited liability company with its
principal place of business located at 150 Post, Suite 670 San Francisco, CA
94105, this 28th day of February, 2000 (the "Effective Date").
RECITALS
1 GSI is in the business of, inter alia, providing retailers with selection
----------
and acquisition of merchandise, warehousing and fulfillment functions in
connection with such retailers e-commerce business.
2 Blue is in the business of owning and operating an e-commerce enabled Web
site offering a comprehensive selection of goods, including Sporting Goods,
through its on-line stores.
3 Blue desires to outsource the selection and acquisition of merchandise,
warehousing and fulfillment functions for Sporting Goods in connection with
its on-line stores.
4 GSI desires to provide Blue selection and acquisition of merchandise,
warehousing and fulfillment services for sales of Sporting Goods through
the Blue on-line stores for shipment to customers within the United States.
5 GSI and Blue desire to enter into this Agreement in order to set forth
their respective rights and obligations with respect to GSI's selection and
acquisition of merchandise, warehousing and fulfillment functions for
Sporting Goods in connection with Blue's on-line stores.
AGREEMENT
GSI and Blue (each a "Party" and collectively, the "Parties"), in
consideration of the mutual promises contained herein, and intending to be
legally bound, agree as follows.
1 Definitions. Capitalized terms have the following meanings in this
Agreement.
1.1 Agreement means this Strategic Alliance Agreement.
---------
1.2 Blue Light Specials means Merchandise offered for sale on the Web Site
-------------------
at a price reduced by at least [*] percent ([*]) from (i) the
manufacturers suggested retail price if such price is available, or
(ii) if there is no manufacturers suggested price, the Retail Price;
or (iii) such other mutually agreed upon price.
1.3 Customer means a person who places an Order.
--------
1.4 Designated Web sites means the Web sites identified on Schedule A
--------------------
attached to this Agreement as such schedule may be amended by GSI.
Page 1 of 15
<PAGE>
1.5 GSI Content means illustrations, graphics, audio, video, text,
-----------
photographs, films, slides, prints, negatives, recordings, drawings,
sketches, artwork, digital images, and other renderings and
information, depicting, describing, identifying, or otherwise related
to Merchandise that (a) is reasonably available to GSI; (b) GSI is not
prohibited from licensing as required by this Agreement; and (c) is
generally available on Web sites operated by GSI.
1.6 GSI Product Database means the database maintained by GSI, in
--------------------
computer-readable format, of information regarding Merchandise which
information includes, without limitation, SKU numbers, Merchandise
availability, product availability, and pricing.
1.7 Launch Date means the date on which Sporting Goods on the Blue Web
-----------
Site are first available to the public and which are supplied by GSI
under this Agreement.
1.8 Licensed Materials means GSI Content and the GSI Product Database as
------------------
provided to Blue and as may be modified, revised, or updated in
accordance with this Agreement.
1.9 Markdowns means Merchandise offered for sale on the Designated Web
---------
sites or to Blue under this Agreement at a price reduced from its
original price and available only in limited quantities.
1.10 Merchandise means Sporting Goods merchandise generally offered for
-----------
sale through the Designated Web sites and other merchandise that GSI
may offer and Blue may, in its sole discretion, accept for sale under
this Agreement. Merchandise includes without limitation, Blue Light
Specials. Merchandise does not include (a) merchandise acquired by
GSI exclusively for, or manufactured exclusively for, or sold under a
trademark of, the retailer related to a Designated Web site; (b)
except for Blue Light Specials and Markdowns, merchandise offered for
sale through such Designated Web sites at a price reduced from its
original price and available only in limited quantities, including
without limitation end-of-season or excess merchandise; or (c)
merchandise that GSI is prohibited from providing to Blue by the
related licensee or licensor of licensed merchandise or the related
manufacturer.
1.11 Order means an order for Merchandise through the Web Site, through
-----
800 numbers or by any other electronic medium.
1.12 Retail Price means the lowest initial selling price that an item is
------------
originally made available to the public on the Designated Web sites.
1.13 SKU means a stock keeping unit of merchandise.
---
1.14 Sporting Goods means sports equipment, recreational equipment,
--------------
sporting apparel, and athletic footwear.
1.15 Web Site means the e-commerce enabled Web site operated by or on
--------
behalf of Blue as its online retail store for Sporting Goods.
1.16 Web means the Internet client-server hypertext distributed
---
information retrieval system known as the World Wide Web.
2 Development and Operation of the Web Site. Blue shall develop the Sporting
Goods portion of the Web Site and beginning on the Launch Date and
throughout the term of this Agreement, shall
Page 2 of 15
<PAGE>
operate and maintain the Web Site. Except for the services to be provided
by GSI hereunder, Blue shall be solely responsible for all operating
functions of the Web Site, including, but not limited to, Order processing,
second-level customer service (except as provided in Section 3),
development, maintenance and hosting of the Web Site. Subject to Section 5
hereof, Blue shall not offer Sporting Goods offered for sale by GSI under
this Agreement for sale through any Web site, any kiosks in any Kmart
stores or otherwise except through the Web Site unless such Sporting Goods
is acquired from GSI. At Blue's discretion, GSI will have the right to
operate kiosks in the Sporting Goods departments of Kmart stores.
3 Customer Service. GSI shall provide to Blue, Merchandise inventory levels
and availability, Order and shipping confirmations, Order shipping tracking
information as made available to GSI by the common carrier, and such other
Merchandise and Order information that is commercially reasonably available
to GSI and reasonably necessary for Blue's customer service, in compliance
with the standards set forth in Blue's Vendor Packet, a copy of which is
attached hereto as Schedule B. GSI shall provide such customer service to
Blue's as shall be mutually agreed upon by the parties. Additionally, GSI
shall use commercially reasonable efforts to satisfy the service level
standards with regard to fulfillment and customer services, as set forth on
Schedule B.
4 Licensed Materials
4.1 License to GSI Content and the GSI Product Database. GSI shall
---------------------------------------------------
provide to Blue the Licensed Materials subject to, and grants to Blue,
a personal, nontransferable (except in accordance with this
Agreement), nonexclusive, limited license for the term of this
Agreement to use, reproduce, display, transmit, and publicly perform
the Licensed Materials solely in connection with the sale of
Merchandise through the Web Site. Blue shall not (a) copy (except as
reasonably necessary to use the Licensed Materials in accordance with
this Agreement); (b) modify, adapt, translate or create derivative
works based upon the Licensed Materials; (c) remove, erase, or tamper
with any copyright or other proprietary notice printed or stamped on,
affixed to, or encoded or recorded in the Licensed Materials, or fail
to preserve all copyright and other proprietary notices in any copy of
any of the Licensed Materials made by Blue; or (d) sell, market,
license, sublicense, distribute, or otherwise grant to any person any
right to use the Licensed Materials without the prior consent of GSI.
Any and all rights not explicitly granted under this Agreement are
expressly reserved by and to GSI.
4.2 Updating the GSI Product Database. GSI shall update the information
---------------------------------
in the GSI Product Database no less frequently than once per day.
Such updates shall include the addition of SKU numbers and other
information for added SKUs, the removal of SKU numbers and other
information for unavailable SKUs, revised SKU availability,
information, pricing, shipping, and special handling fees, and
inventory availability provided throughout each day based upon Blue's
reasonable requirements.
5 Pricing, Supply of Merchandise and Warehousing
5.1 Exclusive Source of Sporting Goods. Subject to the exceptions in this
----------------------------------
Section 5.1, GSI shall be the exclusive source of Sporting Goods for
sale through the Web Site. GSI will be responsible for purchasing,
directly from manufactures, all Sporting Goods to be sold on the Web
Site. GSI will use commercially reasonable efforts to (i) maintain the
level of products currently available on the Designated Web sites, and
(ii) ensure that the availability of Sporting Goods on the Web Site
exceeds the current level of Sporting Goods available at a typical
Kmart store.
Page 3 of 15
<PAGE>
5.1.1 Unavailable Brand Names. Blue may obtain from third parties
-----------------------
for sale through the Web Site brand name Sporting Goods if such
brand name is not available through GSI provided that, if such
Sporting Goods subsequently become available through GSI, Blue
shall obtain such Sporting Goods from GSI under this Agreement
after the termination of such replacement third-party vendor
contracts, Blue agrees that it shall terminate, without causing
a breach, such replacement third-party vendor contract as soon
as possible after such Sporting Goods become available through
GSI, but, in no event, shall Blue be required to terminate any
such contract prior to 180 days after such Sporting Goods become
available through GSI.
5.1.2 Unavailable Products. Blue may obtain from third parties for
--------------------
sale through the Web Site specific products of brand name
Sporting Goods if Blue determines that such products are
regularly sold in Kmart stores and are not available through
GSI; provided that, if such products subsequently become
available through GSI Blue shall obtain such products from GSI
under this Agreement after the termination of such replacement
third-party vendor contracts. Blue agrees that it shall
terminate, without causing a breach, such replacement third-
party vendor contract as soon as possible after such Sporting
Goods become available through GSI, but, in no event, shall Blue
be required to terminate any such contract prior to180 days
after such Sporting Goods become available through GSI.
5.2 Blue Light Specials. GSI and Blue agree that during each twelve (12)
-------------------
month period of this Agreement, GSI and Blue will mutually agree to
provide no less than [*] Blue Light Specials for sale on the Web Site.
All procurement and fulfillment functions for products designated as
Blue Light Specials which GSI and Blue have agreed upon shall be
performed, at Blue's option, either by Blue or GSI. In the event that
Blue and GSI do not agree on any particular Blue Light Special, Blue
shall have the right to provide such Blue Light Special for sale on
the Web Site; provided, however, GSI shall not have any special or
extra obligations (beyond its regular contractual duties hereunder)
with respect to such Blue Light Special and Blue shall pay GSI such
amount for such Blue Light Special as set forth in Section 9.1 hereof.
Nothing herein restricts or otherwise limits Blue's rights and ability
to provide Blue Light Specials involving Sporting Goods in conjunction
with Kmart Corporation without GSI's involvement.
5.3 Inventory and Warehousing. GSI will arrange for all Merchandise that
-------------------------
it procures and makes available to Blue to be delivered, received and
stored by GSI. GSI's inventory of Merchandise to be provided for sale
on Blue's Web Site shall be maintained at facilities owned,
controlled, or under contract to GSI.
5.4 Pricing. Blue shall determine the pricing and product selection of
--------
Merchandise on the Web Site.
6 Order Processing
6.1 Blue Submission of Orders. Blue shall transmit Orders to GSI. Each
-------------------------
Order shall include
6.1.1 the Customer's name,
6.1.2 the recipient's name if different from the Customer's name,
6.1.3 the complete shipping address which address shall be a street
address and shall not be a post office box or similar address,
Page 4 of 15
<PAGE>
6.1.4 the Customer's telephone number,
6.1.5 the Customer's email address,
6.1.6 all shipping instructions, and
6.1.7 the SKU numbers, product descriptions, and prices charged by
Blue to the Customer for each SKU.
6.2 GSI's Acceptance or Rejection of Orders. GSI shall accept Orders for
---------------------------------------
shipment to addresses worldwide that include the information required
by Section 6.1 of this Agreement and for which the related Merchandise
is available; provided that such Orders to be shipped outside the
United States are shipped on Blue's shipping account. GSI shall reject
all other Orders.
6.3 GSI Confirmation. Within 4 hours of GSI's receipt of an Order, GSI
----------------
shall confirm to Blue GSI's receipt of such Orders which confirmation
shall state whether the Order was accepted, rejected due to incomplete
information, or rejected due to unavailable Merchandise.
7 Fulfillment of Accepted Orders and Returns
7.1 Assembly and Packaging. GSI shall assemble and package for shipping
----------------------
all accepted Orders in accordance with Schedule B attached to this
Agreement. Orders will be packaged under the Blue name and with no
reference to GSI and, whenever practicable, GSI will package and ship
SKUs in a single Order together. Blue shall provide initial packing
slip schema to GSI, with GSI to bear subsequent reproduction costs
consistent with GSI's current proportional costs with regard to the
Designated Web sites as such amounts are determined by GSI and
demonstrated to Blue.
7.2 Risk of Loss. As between the Parties, title and risk of loss shall
------------
pass to Blue upon GSI's delivery of the Merchandise to the common
carrier at the point of shipment.
7.3 Order Priority. All accepted orders, including without limitation,
--------------
accepted Orders, shall be processed by GSI in the order that they were
received by GSI.
7.4 Shipping Methods. GSI shall coordinate the shipping of all accepted
----------------
Orders with United Parcel Service through Blue's account. Blue shall
provide for shipping by United Parcel Service standard, United Parcel
Service second day, or United Parcel Service next day service or by
common carrier. GSI shall comply with the special shipping
instructions included with an Order unless the Merchandise does not
meet the shipper's requirements for the requested methods.
7.5 Returns. For all Merchandise shipped by GSI on behalf of Blue, GSI
-------
shall provide instructions on how to return Merchandise directly to
the fulfillment center or other location designated by Blue. GSI shall
accept the return of Merchandise sold through the Web Site that is
returned by the Customer for any reason. GSI shall accept the return
of Merchandise sold through the Web Site that is returned to GSI
unused and in a condition suitable for resale as new goods. GSI shall
be obligated to accept the return of any Merchandise under this
Section 7.5 only if such Merchandise (a) is returned to GSI within 30
days of GSI's issuance of its return authorization and (b) which
return authorization was issued by GSI within 30 days of GSI's
shipment of the Merchandise. Blue will make commercially reasonable
efforts to ensure that, to the extent any merchandise sold by Blue is
returnable at Kmart stores, the Merchandise sold hereunder will also
be returnable
Page 5 of 15
<PAGE>
at Kmart stores, whether or not Kmart carries such Merchandise in its
stores. GSI shall credit Blue for [*] of the amount Blue paid to GSI
for such Merchandise returned.
7.6 Reports. GSI shall transmit to Blue the reports identified on and in
-------
accordance with Schedule B.
8 Form of Communication. All Orders transmitted by Blue and all confirmations
of Orders and shipments and reports transmitted by GSI pursuant to this
Agreement shall be provided in a form reasonably acceptable to the recipient
and shall be communicated electronically.
9 Payment
9.1 Price for Merchandise. Blue shall pay to GSI, for each unit of
---------------------
Merchandise sold on the Web Site, an amount equal to the [*]; provided
that during the [*] month period commencing on the Effective Date, the
[*], shall be the price used for the purpose of the calculation in
clause (b), unless [*]; provided further, that after the end of such
[*] month period, [*].
9.2 Markdowns. Blue shall pay to GSI, for Markdowns sold on the Web Site,
----------
an amount equal to [*] of the marked down selling price provided by
GSI.
9.3 Other Charges. In addition to amounts due GSI for Merchandise, Blue
-------------
Light Specials and Markdowns, Blue shall pay to GSI its actual costs
in connection with shipping Orders, its actual costs for post-delivery
assembly of Merchandise or other similar post-delivery services, any
and all other amounts due GSI under this Agreement, and for taxes, if
any, assessed on Orders paid by GSI unless such taxes are paid by
Blue.
9.4 Invoices. GSI shall submit invoices to Blue for amounts due under
--------
this Agreement on the last day of each month.
9.5 Payment. Blue shall pay all amounts due under this Agreement within
--------
15 days of the invoice date. All payments shall be by wire transfer to
such account as GSI may designate.
9.6 Late Payment. Interest at the rate of one and one-half percent (1.5%)
------------
per month (or, if lower, the maximum rate permitted by applicable law)
shall accrue from the date due to the date paid on any amount not paid
by when such amount was due.
9.7 Advertising Revenue.
-------------------
9.7.1 Nothing herein limits Blue's right and ability to sell banner
and other types of advertisements (the "Advertisements") on the
Sporting Goods section of the Web Site at its own cost and
expense.
9.7.2 Blue shall pay to GSI [*] of all "Net Revenue Received" from
the sale of any Advertisements to [*], based on those [*]
identified in writing by [*] (which [*] list shall be updated
by [*]. For purpose of this Agreement, Net Revenue Received
shall equal the cash consideration actually received from an
advertiser, less any selling expenses incurred by Blue in the
sale of such Advertisement; provided, however, such selling
expenses cannot exceed [*] of the aggregate amounts received
for such Advertising. All amounts due from Blue to GSI
hereunder shall
Page 6 of 15
<PAGE>
be due and payable monthly by the 30th day after the end of the
calendar month in which Net Revenue Received was received by or
on behalf of Blue.
10 No Merchandise Warranty. Blue acknowledges that GSI is not the manufacturer
of the Merchandise. GSI agrees to pass on to Blue any and all warranties
made to GSI by manufacturers and vendors of the Merchandise, if any such
warranties are made and if such warranties can be passed on to Blue. EXCEPT
FOR WARRANTIES, IF ANY, FROM MANUFACTURERS OR VENDORS OF THE MERCHANDISE,
GSI IS FURNISHING THE MERCHANDISE TO CUSTOMERS "AS IS," WITHOUT ANY, AND
DISCLAIMS ALL, WARRANTIES 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.
11 GSI Representations and Warranties. GSI represents and warrants that during
the term of this Agreement, GSI Content as delivered to Blue shall not (a)
infringe any intellectual property rights of any person or any rights of
publicity, personality, or privacy of any person; (b) violate any law,
statute, ordinance, or regulation (including without limitation, the laws
and regulations governing export control, unfair competition, anti-
discrimination, consumer protection, or false advertising); (c) be
defamatory, libelous or trade libelous, unlawfully threatening, or
unlawfully harassing; (d) be obscene, pornographic, or indecent; or (e)
violate any community or Internet standard.
12 GSI Indemnification. GSI shall defend Blue and its affiliates, and the
directors, officers, employees, and agents of Blue and its affiliates
("Indemnitees"), at GSI's sole cost and expense, against any and all third-
party claims, actions, suits, or other proceedings against Indemnitees (a)
arising from or related to any injuries, including without limitation,
death, to persons or any damage to property occurring as a result of the
negligence or willful misconduct of GSI (or its employees) or GSI's breach
of this Agreement or (b) arising from or related to any breach of any of
GSI's representations or warranties in this Agreement, or (c) based on the
GSI Content, and GSI shall indemnify and hold Indemnitees harmless from and
against any and all judgments, losses, liabilities, damages, costs, and
expenses (including without limitation, reasonable attorney's fees and
attorney's disbursements) arising out of or incurred in connection with such
claims, actions, suits, or other proceedings. GSI shall have the right to
control the defense and settlement of any claims or actions that GSI is
obligated to defend, but Blue shall have the right to participate in such
claims or actions at its own cost and expense.
13 Blue Representations and Warranties. Blue represents and warrants that
during the term of this Agreement, it shall have and abide by the terms of
its Web site privacy policy, which policy shall be consistent with the then
current generally accepted privacy policies of retail e-commerce Web sites.
14 Blue Indemnification. Blue shall defend GSI and its affiliates, and the
directors, officers, employees, and agents of GSI and its affiliates
("Indemnitees"), at Blue's sole cost and expense, against any and all third-
party claims, actions, suits, or other proceedings against Indemnitees (a)
alleging the failure to pay or underpayment of any sales or similar tax
arising from the sale of Merchandise through the Web Site; (b) arising from
or related to any injuries, including without limitation, death, to persons
or any damage to property occurring as a result of the negligence or willful
misconduct of Blue or Blue's employees; (c) alleging claims based on the Web
Site (exclusive of any GSI Content); (d) by a Customer alleging breach of
warranty; or (e) arising from or related to any breach of any of Blue's
representations or warranties in this Agreement, and shall indemnify and
hold Indemnitees harmless from and against any and all judgments, losses,
Page 7 of 15
<PAGE>
liabilities, damages, costs, and expenses (including without limitation,
reasonable attorney's fees and attorney's disbursements) arising out of or
incurred in connection with such claims, actions, suits, or other
proceedings. Blue shall have the right to control the defense and settlement
of any claims or actions that Blue is obligated to defend, but GSI shall
have the right to participate in such claims or actions at its own cost and
expense.
15 Customer Data. All "User Data" and related information collected from
Customers' use of the Web Site and Orders shall be the [*]and shall be
deemed Confidential Information of [*] under Section 16 of this Agreement.
[*] For purposes of this Agreement, "User Data" shall mean all names,
mailing addresses, shipping addresses, telephone numbers, e-mail addresses,
purchasing data and any other identifying information submitted or disclosed
by Customers.
16 Confidentiality
16.1 Confidential Information. The term "Confidential Information" means
------------------------
any and all technical and non-technical information including, without
limitation, patent, copyright, trade secret, and proprietary
information, techniques, sketches, drawings, models, inventions, know-
how, processes, apparatus, equipment, algorithms, software programs,
software source documents, and formulae related to the current,
future, and proposed products and services of either Party, and
includes without limitation, their respective information concerning
research, development, design details and specifications, engineering,
financial information, procurement requirements, purchasing,
manufacturing, key personnel, suppliers, customers, prospective
customers, policies or operational methods, plans for future
developments, business forecasts, sales and merchandising, and
marketing plans and information, in whatever form disclosed.
Confidential Information does not include items that were
16.1.1 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;
16.1.2 independently developed by the receiving Party without the
benefit of disclosure by the disclosing Party as evidenced by
the receiving Party's written records;
16.1.3 published or available to the general public other than through
a breach of this Agreement or breach by a third party of its
confidentiality obligations to the disclosing Party;
16.1.4 obtained by the receiving Party from a third party with a valid
right to disclose such Confidential Information, provided that
such third party is not under a confidentiality obligation to
the disclosing Party; or
A combination of features or disclosures shall not be deemed to fall
within the foregoing exclusions merely because individual features are
published or available to the general public or in the rightful
possession of the receiving Party unless the combination is published
or is available to the general public or in the rightful possession of
the receiving Party.
16.2 Obligation of Confidentiality. Each Party shall permanently hold,
-----------------------------
and cause their respective personnel to hold, Confidential Information
in strict confidence. The receiving Party may disclose Confidential
Information that is required to be disclosed by
Page 8 of 15
<PAGE>
governmental agencies, regulatory authorities, or pursuant to court
order only to the extent such disclosure is required by law and only
provided that the receiving Party provides reasonable prior notice to
the disclosing Party of the disclosure. Except as specifically
permitted by this Agreement, neither Party shall duplicate or use, or
permit the duplication or use of, Confidential Information or disclose
or permit the disclosure of Confidential Information to any person or
entity. Each Party shall limit the duplication and use of Confidential
Information to the performance of its obligations under this Agreement
and shall limit access to and possession of Confidential Information
only to those of its personnel whose responsibilities under this
Agreement reasonably require such access or possession. Each Party
shall advise all such persons before they receive access to or
possession of Confidential Information of the confidential nature of
the Confidential Information and require them to abide by the terms of
this Agreement. Any duplication, use, disclosure, or other act or
omission by any person that obtains access to or possession of
Confidential Information through the receiving Party that would be a
breach of this Agreement if committed by the receiving Party is deemed
a breach of this Agreement by the receiving Party for which the
receiving Party shall be responsible. If disclosure of a Party's
Confidential Information is sought pursuant to judicial process, the
Party receiving such request shall promptly notify the Party whose
Confidential Information is so requested and shall cooperate with such
Party to maintain the confidentiality of such Confidential Information
(e.g., through opposition proceedings or a protective order).
16.3 Ownership of Confidential Information and Other Materials. All
---------------------------------------------------------
Confidential Information, and any Derivatives (as defined below)
thereof whether the Derivative was created by the disclosing or
receiving Party, shall remain the property of the disclosing Party and
except as specifically provided by this Agreement, no license or other
rights to such Confidential Information or Derivatives is granted or
implied by this Agreement. For purposes of this Agreement,
"Derivatives" shall mean (a) for copyrightable or copyrighted
material, any translation, abridgement, revision or other form in
which an existing work may be recast, transformed or adapted; (b) for
patentable or patented material, any improvement thereon; and (c) for
material that is or may be subject to protection as a trade secret,
any new material derived from such material, including new material
which may be protected by copyright, patent, or trade secret or other
proprietary rights.
16.4 Return of Confidential Information. Each Party shall deliver, or at
----------------------------------
the disclosing Party's option destroy, all Confidential Information
and deliver, or at the disclosing Party's option destroy, all copies
to the disclosing Party upon the expiration or termination of this
Agreement or at the disclosing Party's request. Notwithstanding the
foregoing, with Blue's prior written consent, GSI may retain such
Confidential Information of Blue as may be reasonably necessary to
document its performance under this Agreement but such Confidential
Information shall remain subject to this Section 16.
16.5 Remedy. The Parties each acknowledge that the disclosing Party will
------
be irreparably harmed if the receiving Party's obligations under this
Section 16 are not performed, and 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
Page 9 of 15
<PAGE>
shall not constitute a defense or bar the enforcement of this Section
16. The receiving Party acknowledges that the restrictions in this
Section 16 are reasonable and necessary to protect legitimate business
interests of the disclosing Party.
17 Limitation of Liability. Except for (i) the parties' indemnification
obligations pursuant to sections 12 and 14, (ii) any liability due to breach
of [*] obligations concerning [*], and (iii) any liability for money owed by
Blue to GSI for the purchase of Merchandise hereunder, the total liability
of either party under this Agreement shall under no circumstances exceed the
amounts actually paid by Blue to GSI during the immediately preceding 12
months under this Agreement. Under no circumstances shall either party be
liable to the other or to any other person for lost revenues, lost profits,
loss of business, or any indirect, incidental, special, punitive, or
consequential damages of any nature, regardless of legal theory and whether
or not foreseeable, even if the exclusive remedies provided by this
agreement fail of their essential purpose and even if either Party has been
advised of the possibility or probability of such damages. The remedies
specifically provided by this Agreement and the provisions of this Section
17 set forth the parties' exclusive remedies and allocate between the
parties the risks under this Agreement, some of which may be unknown or
indeterminable. Such limitations were a material inducement for each party
to enter into this Agreement, and the Parties have relied upon such
limitations in determining whether to enter into this Agreement.
18 Term and Termination
18.1 Term. The term of this Agreement shall commence on the Effective Date
----
and continue until 11:59 p.m. Philadelphia time on the fifth (60
month) anniversary date of the Launch Date unless earlier terminated
in accordance with Section 18.2 or 18.3 below; provided, however, that
if at least 30 days, but not more than 60 days, prior to the two and
one-half year (30 month) anniversary date of the Launch Date, [*].
18.2 Termination by Blue. Blue may terminate this Agreement immediately
-------------------
by giving notice of termination to GSI and without prejudice to any
other rights or remedies Blue may have, upon the occurrence of any of
the following events:
(1) GSI breaches any of its material obligations under this
Agreement and does not cure the breach within 30 days after
GSI's receipt of Blue's notice of the breach; or
(2) a voluntary petition is commenced by GSI under the
Bankruptcy Code, as amended, 11 U.S.C. (S) 101 et seq; GSI
has an involuntary petition commenced against it under the
Bankruptcy Code and such petition is not dismissed within 60
days after filing; GSI becomes insolvent; or any substantial
part of GSI'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.
18.3 Termination by GSI. GSI may terminate this Agreement immediately by
------------------
giving notice of termination to Blue and without prejudice to any
other rights or remedies GSI may have, upon the occurrence of any of
the following events:
Page 10 of 15
<PAGE>
(1) Blue breaches any of its material obligations under this
Agreement and does not cure the breach within 30 days after
Blue's receipt of GSI's notice of the breach; or
(2) a voluntary petition is commenced by Blue under the
Bankruptcy Code, as amended, 11 U.S.C. (S) 101 et seq; Blue
has an involuntary petition commenced against it under the
Bankruptcy Code and such petition is not dismissed within 60
days after filing; Blue becomes insolvent; or any
substantial part of Blue'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.
18.4 Effect of Expiration or Termination. Upon the expiration or
-----------------------------------
termination of this Agreement, whether under this Section 18 or
otherwise, each Party shall return or destroy all Confidential
Information of the other Party pursuant to Section 16, Blue shall
discontinue all use of the Licensed Materials, and Blue shall promptly
return to GSI all copies of Licensed Materials in Blue's possession.
Blue shall remain liable for all payments due GSI, and GSI for all
refund credits, with respect to the period ending on the date of
termination.
18.5 Survival. Sections 1, 10, 11, 12, 13, 14, 15, 16, 17, 18.4, 18.5,
--------
19, and 20 of this Agreement survive any expiration or termination of
this Agreement.
19 Force Majeure. Except for the obligation to pay money, 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 20.1, and (c) the Party makes all
commercially reasonable efforts to perform.
20 Miscellaneous Provisions
20.1 Notice. All notices, consents, and other communications under or
------
regarding this Agreement shall be in writing and shall be deemed to
have been received on the earlier of the date of actual receipt, the
third business day after being mailed by certified mail, or the first
business day after being sent by a reputable overnight delivery
service. Any notice may be given by facsimile, provided that a signed
written original is sent by one of the foregoing methods within 24
hours thereafter. Blue's address for notices is
Bluelight.Com, Inc.
150 Post Street
San Francisco, CA 94105
Attention: CEO
Facsimile: [*]
with a copy to
Cooley Godward LLP
Five Palo Alto Square
Palo Alto CA 94306
Attention: [*]
Page 11 of 15
<PAGE>
Facsimile: [*]
GSI's address for notices is
Global Sports Interactive, Inc.
1075 First Avenue
King of Prussia, PA 19406
Attention: Chief Executive Officer
Facsimile: (610) 265-2866
with a copy to: Global Sports Interactive, Inc.
1075 First Avenue
King of Prussia, PA 19406
Attention: General Counsel
Facsimile: (610) 265-2866
Either Party may change its address for notices by giving written
notice of the new address to the other Party in accordance with this
Section 20.1.
20.2 Competitor Restrictions. GSI agrees that during the calendar year
-----------------------
ending December 31, 2000, GSI shall not operate an e-commerce Sporting
Goods business for Wal-Mart, Target or Costco, any entity operating
under the same brand name as any of the foregoing, or any subsidiary
or affiliate of any of the foregoing.
20.2 Assignment. This Agreement may not be assigned by either Party
----------
without the prior written consent of the other Party, which consent
shall not be unreasonably withheld. Notwithstanding the foregoing,
(a) either Party may assign this Agreement upon notice to, and without
the consent of, the other Party to any person or entity that acquires
the assignor's business or substantially all of the assignor's assets
by merger, stock sale, or other means provided that the assignee is
capable of performing assignor's obligations under this Agreement and
(b) GSI may assign this agreement upon notice to Blue to a subsidiary
of GSI or to any subsidiary of Global Sports, Inc., again provided
that the assignee is capable of performing assignor's obligations
under this Agreement. Any attempted assignment in violation of this
Section 20.2 shall be void.
20.3 No Third-Party Beneficiaries. The Parties do not intend, nor shall
----------------------------
any clause be interpreted, to create under this Agreement any
obligations or benefits to, or rights in, any third party from either
Blue or GSI.
Page 12 of 15
<PAGE>
20.4 Independent Contractor. GSI and Blue are each independent
----------------------
contractors and neither Party shall be, nor represent itself to be,
the franchiser, partner, broker, employee, servant, agent, or legal
representative of the other Party for any purpose whatsoever. Neither
Party is granted any right or authority to assume or create any
obligation or responsibility, express or implied, in behalf of, or in
the name of, the other Party, or to bind the other Party in any
matter or thing whatsoever. The Parties do not intend to form a
partnership or joint venture as a result of this Agreement.
20.5 Publicity. Neither Party shall issue any press release regarding
---------
this Agreement or otherwise disclose the existence or terms of this
Agreement without the prior written consent of the other Party except
to the extent such disclosure is required by law, including, but not
limited to, required disclosure to the Securities and Exchange
Commission, and only if the disclosing Party provides reasonable
prior notice to other Party of the disclosure. If GSI determines that
it is required to disclose the terms hereof to the Securities and
Exchange Commission, GSI agrees to seek confidential treatment of any
such disclosure of financial terms.
20.6 Cumulative Remedies. All remedies available to either Party for
-------------------
breach of this Agreement are cumulative and may be exercised
concurrently or separately, and the exercise of any one remedy shall
not be deemed an election of such remedy to the exclusion of other
remedies.
20.7 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.
20.8 Enforceability. This Agreement shall be enforceable notwithstanding
--------------
the existence of any claim or cause of action one Party may have
against the other Party.
20.9 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 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.
20.10 Headings. Section headings are for reference only and shall not
--------
affect the interpretation of this Agreement.
20.11 Successors in Interest. This Agreement and all of the provisions in
----------------------
this Agreement shall be binding upon and inure to the benefit of the
successors in interest and assigns of the Parties, subject to the
provisions of Section 20.2 of this Agreement.
20.12 Applicable Law. This Agreement shall be governed in all respects by
--------------
the laws of the State of Delaware without giving effect to its rules
relating to conflict of laws. In any action between the parties
arising out of or relating to this Agreement, the prevailing party
shall be entitled to an award of its reasonable legal fees and
expeneses in connection therewith.
20.13 Order of Precedence. Any and all ambiguities or inconsistencies
-------------------
between a Schedule and this document shall be resolved by giving
precedence to the Schedule over this document. Silence on any matter
in a Schedule will not negate the provision in this document as to
that matter.
20.14 Entire Agreement. This Agreement and the attached Schedules
----------------
constitute the complete and exclusive statement of the agreement
between the Parties with respect to the subject matter of this
Agreement, and this Agreement supersedes any and all prior oral or
written communications, proposals, representations, and agreements.
It may be amended only by mutual agreement expressed in writing and
signed by both Parties.
20.15 Counterparts. This Agreement may be executed in any number of
------------
separate counterparts each of which when executed by and delivered to
the other Party shall be an original as against the Party whose
signature appears thereon, but all such counterparts shall together
constitute one and the same instrument.
Page 13 of 15
<PAGE>
The Parties accept this Agreement and have caused this Agreement to be
executed and do each hereby represent and warrant 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. Bluelight.com LLC
By: ________________________ By: ________________________
Name: Michael R. Rubin Name: Mark H. Goldstein
Title: Chief Executive Officer Title: Chief Executive Officer
Date: February 28, 2000 Date: February 28, 2000______
Page 14 of 15
<PAGE>
Schedule A
Designated Web Sites
The Designated Web sites are the Web sites accessible through the Web at
the uniform resource locators listed on this Schedule A. Terms defined in the
Agreement have the same meaning in this Schedule A.
Dunham's Sports at www.dunhams.com
MC Sports at www.mcsports.com
Oshman's Sporting Goods at www.oshmans.com
Sport Chalet at www.sportchalet.com
The Athlete's Foot at www.theathletesfoot.com
The Sports Authority at www.thesportsauthority.com
Page 15 of 15
<PAGE>
SCHEDULE B
The parties agree that they shall cooperate in good faith during the
term of the Agreement to mutually agree upon appropriate guidelines and
specifications with regard to, inter alia, the service levels referred to in
----------
Section 3, certain order processing, fulfillment and return processes and
performance metrics, including the reports referred to in Section 8, data
interchange and other such processes and procedures as shall needed between the
parties.
Page 16 of 15