Strategic Alliance Agreement

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


Exhibit 10.4


Global Sports, Inc.
______________________


Strategic Alliance Agreement


BETWEEN


Global Sports, Inc.


AND


BUY.COM Inc.


17


Table of Contents


Section Page ------- ---- 1 Definitions................................. 1 2 Development and Operation of the Web Site... 3 3 Customer Service/Account Support............ 3 4 Licensed Materials.......................... 4 5 Supply of Merchandise....................... 4 6 Order Processing............................ 5 7 Fulfillment of Accepted Orders and Returns.. 6 8 Form of Communication....................... 7 9 Payment..................................... 7 10 No Merchandise Warranty..................... 8 11 GSI Representations and Warranties.......... 8 12 GSI Indemnification......................... 9 13 Buy.com Representations and Warranties...... 10 14 Buy.com Indemnification..................... 10 15 Customer Data............................... 10 17 Confidentiality............................. 10 18 Mutual Limitation of Liability.............. 12 19 Term and Termination........................ 13 20 Force Majeure............................... 15 21 Miscellaneous Provisions.................... 15


Schedule --------


Schedule A: Designated Web Sites
Schedule B: Operations Manual
Schedule C: Sporting Goods Categories


Strategic Alliance Agreement


This Strategic Alliance Agreement is made by and between Global Sports, Inc., ("GSI") a Pennsylvania corporation with a place of business located at 1075 First Avenue, King of Prussia, Pennsylvania, 19406, and BUY.COM Inc. ("Buy.com") a Delaware corporation with a place of business located at 85 Enterprise, Aliso Viejo, California 92656, effective this 20th day of April, 2000.


RECITALS


A. GSI is in the business of creating and operating e-commerce enabled Web
sites on behalf of retailers and others, providing for those retailers the
technology, expertise, infrastructure, and operational support necessary to
offer e-commerce to their customers.


B. Buy.com is in the business of owning and operating an e-commerce enabled
Web site offering a comprehensive selection of goods through several
specialty stores within its Web site.


C. Buy.com desires to develop a sporting goods specialty store to add to its
Web site and desires to outsource the selection and acquisition of
merchandise and fulfillment functions for the sporting goods specialty
store.


D. GSI desires to provide to Buy.com the fulfillment services and merchandise
for sales through the Buy.com sporting goods specialty store.


AGREEMENT


GSI and Buy.com (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 Customer means a person who places an Order.
--------


1.3 Designated Web sites means the Web sites identified on Schedule A
-------------------- ----------
attached to this Agreement as such schedule may be amended from time
to time upon the mutual agreement of the Parties. Notwithstanding the
foregoing, GSI, in its sole discretion, may amend Schedule A [***.]


1.4 Effective Date means April 20, 2000.
--------------


[***] Confidential treatment has been requested for the bracketed portions. the confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.


1


1.5 GSI Product 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, including product reviews, that (a) is reasonably
available to GSI; (b) GSI is not prohibited from licensing as required
by this Agreement; and (c) is generally available to the Designated
Web Sites, any other Web sites operated by GSI or any party for which
GSI provides any supply or fulfillment services.


1.6 GSI Product Database means the database maintained and updated by GSI,
--------------------
in computer-readable format, of information regarding Merchandise
which information includes, without limitation, SKU numbers,
Merchandise availability, product availability, catalog product
descriptions, pricing and such other characteristics as set forth in
the Operations Manual.


1.7 Launch Date means the date on which the Web Site is first available to
-----------
the public on the Web, which date shall be set by mutual agreement of
the Parties. The Parties shall determine the date of the Launch Date
within 30 days of the Effective Date.


1.8 Licensed Materials means GSI Product Content and the GSI Product
------------------
Database as provided to Buy.com and as may be modified, revised, or
updated in accordance with this Agreement and the Operations Manual.


1.9 Markdowns means Merchandise offered for sale by GSI under this
---------
Agreement at a price reduced from its original price and available
only in limited quantities.


1.10 Merchandise means Sporting Goods merchandise offered for sale through
-----------
the Designated Web sites and other merchandise that GSI may offer, in
its sole discretion, for sale under this Agreement. Merchandise
includes without limitation, Markdowns. Merchandise does not include
(a) merchandise manufactured exclusively for, or sold under a
trademark of, the retailer related to a Designated Web site; (b)
except for Markdowns offered to Buy.com, markdowns offered through the
Designated Web sites; or (c) merchandise that GSI is prohibited from
providing to Buy.com by the related licensee or licensor of licensed
merchandise or the related manufacturer.


1.11 Operations Manual means the Buy.com Operations Manual attached to this
-----------------
Agreement as Schedule B. Notwithstanding anything in the Operations
----------
Manual to the contrary, the Operations Manual may be amended only by
the mutual agreement of the Parties.


1.12 Order means an order for Merchandise through the Web Site.
-----


1.13 SKU means a stock keeping unit of merchandise.
---


1.14 Sporting Goods means products in the sporting goods and recreational
--------------
equipment categories listed on Schedule C attached to this Agreement.
----------


1.15 Web Site means the e-commerce enabled Web site operated by Buy.com as
--------
its online retail store for Sporting Goods.


2


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. Buy.com shall develop the Web
Site and beginning on the Launch Date and throughout the Term shall operate
and maintain the Web Site. Buy.com shall give as much prior notice as
practicable of Buy.com's failure to launch the Web Site by the Launch Date.
GSI shall be Buy.com's [***] subject to Section 5 of this Agreement.


3 Customer Service/Account Support.


3.1 Buy.com Customer Service. Buy.com shall be responsible for providing
------------------------
customer support to Customers and prospective Customers of the Web
Site. GSI shall provide to Buy.com the following information in
accordance with the specifications contained in the Operations Manual:
(a) Merchandise inventory levels and availability; (b) Order and
shipping confirmations; (c) Order shipping tracking information as
made available to GSI by the common carrier; and (d) such other
Merchandise information and Order information that is commercially
reasonably available to GSI and reasonably necessary for Buy.com's
customer service. GSI shall also provide Buy.com with [***] the
information discussed above. GSI shall assign the necessary customer
service personnel to provide such information to Buy.com in accordance
with this Agreement.


3.2 GSI Customer Service Support Personnel. GSI shall provide a dedicated
--------------------------------------
account manager that is responsible for the oversight of the business
relationship between Buy.com and GSI, the management of the customer
service representatives and any performance issues that may arise
during the Term. GSI shall also provide to Buy.com toll-free telephone
access to GSI customer service personnel, 24 hours per day, 7 days per
week, to support Buy.com's customer service and as a resource for
Merchandise and Order issues and inquiries (e.g., order status, order
availability, etc.) and questions raised by Customers to Buy.com's
customer service call center. All such calls and contacts, other than
those that are classified as Service Contacts (defined below), shall
be [***]. GSI is not obligated to provide any customesupport
directly to Customers or prospective Customers. Notwithstanding the
foregoing, in any calendar month that the Service Contact rate is
greater than [***], Buy.com shall pay GSI [***] for total
Service Contact Time (defined below) for that month. Service Contact
means a telephone call, email, or other communication to GSI from the
Buy.com call center that relates to an issue for which the Buy.com
customer service representatives have been timely provided with the
necessary information from GSI to adequately answer such Customer
inquiry. Service Contact Time shall be the number of minutes that GSI
customer service personnel spend replying to Service Contacts, and
such number of minutes shall be equal to (a) the number of Service
Contacts for a given month, less the number of contacts equal to [***]
of the Orders for such month, multiplied by (b) the quotient
obtained by dividing the total number of minutes devoted by GSI
personnel responding to Service Contacts for that month, divided by
the total number of Service Contacts for that month. GSI shall provide
detailed support for any fees charged to Buy.com under this Section
3.2


[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.


3


4 Licensed Materials


4.1 License to GSI Product Content and the GSI Product Database. GSI shall
-----------------------------------------------------------
provide to Buy.com the Licensed Materials subject to, and grants to
Buy.com, a fully-paid, personal, nontransferable, nonexclusive,
limited license (without the right to sublicense) for the Term to use,
display and distribute the Licensed Materials solely in connection
with the sale of Merchandise by Buy.com in accordance with this
Agreement. Buy.com 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 Buy.com; or (d) sell, market, license,
sublicense, distribute (except as provided in this Section 4.1), 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 in accordance with the Operations Manual and
shall use commercially reasonable efforts to develop the capability to
update the information in the GSI Product Database more frequently.


4.3 Updating the GSI Product Content. GSI shall periodically update the
--------------------------------
GSI Product Content for all new or additional Merchandise SKUs within
the GSI Product Database from time to time during the Term. GSI shall
also update the GSI Product Content for any new content related
information that may become available during the Term of the Agreement
for existing Merchandise SKUs, including product reviews (where
available). GSI shall provide the GSI Product Content to Buy.com when
such GSI Product Content becomes generally available from GSI.


5 Supply of Merchandise


5.1 [***] of Sporting Goods. GSI will fulfill and distribute Buy.com's
-----------------
requirements of Merchandise that is ordered by Buy.com on behalf of
its customers. [***].


5.1.1 [***].


5.1.2 [***].


5.1.3 Golf Equipment, Accessories, Apparel, and Footwear. Buy.com may
--------------------------------------------------
[***] golf equipment, golf accessories, golf apparel, golf
footwear, and other related golf merchandise for sale through
the Web Site.


5.1.4 Sports-Related Products. Buy.com may [***] for sale through the
-----------------------
Web Site the sports-related products (i.e., electronic games,
software, books, videos, other


[***] Confidential treatment has been requested for the bracketed portions.
the confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.


4


copyrighted works in any media, etc.) that Buy.com [***]
through its online specialty stores. In the future, Buy.com may
[***] of its specialty stores, provided that such specialty
stores [***].


5.2 Conformance with GSI Product Content. Merchandise shall conform in all
------------------------------------
material respects with the product descriptions and illustrations
provided by GSI in the related, then current GSI Product Content.


5.3 Markdowns. From time to time, GSI may, at its sole discretion, offer
---------
Markdowns to Buy.com for sale through the Web Site or otherwise. GSI
shall provide to Buy.com a broad assortment of Markdowns on
competitive terms, when such Markdown Merchandise becomes available.


5.4 Inventory. GSI's inventory of Merchandise shall be maintained at its
---------
current facility or at facilities owned or controlled by GSI. GSI
shall be responsible for warehousing, at no expense to Buy.com, all
Merchandise sold through the Web Site.


5.5 Product Selection. GSI shall make all of its Merchandise available to
-----------------
Buy.com during the Term. GSI shall maintain [***]. In addition, GSI
will use commercially reasonable efforts (a) to expand the current SKU
selection within existing product categories and (b) to expand into
new product categories of Sporting Goods. In particular, GSI agrees to
use commercially reasonable efforts to obtain authorization to
distribute, and to allow Buy.com to sell through the Web Site,
Sporting Goods products sold under brand names that GSI is currently
not authorized to sell.


5.6 Manufacturer Directed Products. GSI shall use commercially reasonable
------------------------------
efforts to support commercially reasonable allocations of products
that are designated for Buy.com by particular product manufacturers or
vendors.


6 Order Processing


6.1 Buy.com Submission of Orders. Buy.com shall transmit Orders to GSI by
----------------------------
electronic means in accordance with the Operations Manual. 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
(other than APO/FPO addresses after October 1, 2000),
6.1.4 the Customer's telephone number if required for delivery by the
requested shipping method,
6.1.5 all shipping instructions,
6.1.6 the SKU numbers and product descriptions for each SKU, and
6.1.7 any other information reasonably requested by GSI.


[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.


5


6.2 GSI's Acceptance or Rejection of Orders. GSI shall accept Orders for
---------------------------------------
shipment to addresses in the United States (except for APO/FPO
addresses) that include the information required by Section 6.1 of
this Agreement and for which the related Merchandise is available or
in GSI's reasonable judgment, will be available in time to meet the
required shipping date. GSI shall reject all other Orders. GSI shall
accept Orders for shipment to APO/FPO addresses after October 1, 2000,
in accordance with this Section 6.2.


6.3 GSI Confirmation. In accordance with the Operations Manual, GSI shall
----------------
confirm to Buy.com GSI's receipt of an Order. Such Order confirmation
shall state whether the Order was accepted, rejected due to incomplete
information, or rejected due to unavailable Merchandise.
Notwithstanding the foregoing, GSI shall accept Orders if such
Merchandise is marked as available for sale even if GSI does not yet
have such Merchandise in inventory.


6.4 Export Capabilities. At Buy.com's request, but subject to approval of
-------------------
the owner of the brand for such Merchandise, GSI shall use
commercially reasonable efforts to facilitate the export of
Merchandise to foreign countries to which such export is permitted and
is commercially feasible during the Term.


7 Fulfillment of Accepted Orders and Returns. In addition to this Section 7,
the fulfillment of Orders and the return of Orders shall be subject to the
terms and conditions of the Operations Manual.


7.1 Assembly and Packaging. In accordance with the Operations Manual, GSI
----------------------
shall provide fulfillment (picking, packing and shipping) for Buy.com
customers wo purchase Merchandise. Orders will be packaged with no
reference to GSI except when required by law and, whenever
practicable, GSI will package and ship SKU's in a single Order
together.


7.2 Risk of Loss. As between the Parties, title and risk of loss shall
------------
pass to Buy.com upon GSI's delivery of the Merchandise to the common
carrier at the point of shipment. GSI shall not be responsible for
damage and loss of Merchandise during shipment to the Customers. GSI
shall use commercially reasonable efforts to cause any common carriers
that it utilizes to pr ...