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License And E-commerce Agreement Dated 7/6/2001

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EXHIBIT 10.2


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.


EXECUTION COPY


License and E-Commerce Agreement


This License and E-Commerce Agreement (the "Agreement"), is entered into as of July 6, 2001 (the "Effective Date"), by and between The Sports Authority, Inc., a Delaware corporation ("TSA"), The Sports Authority Michigan, Inc., a Michigan corporation ("TSAMI"), and Global Sports Interactive, Inc., a Pennsylvania corporation ("GSI" or "Licensee"), [*]. TSA and TSAMI are sometimes collectively referred to as the "Licensor".


Recitals


WHEREAS, Licensee is in the business of developing and operating e-commerce sporting goods businesses for specialty retailers, general merchandisers, Internet companies and media companies and providing for those companies Licensee's proprietary technology and product database, Web site design and development capabilities, order processing capabilities, customer service capabilities, fulfillment capabilities, centralized inventory management, and on-line marketing to enable those companies to offer e-commerce to their customers;


WHEREAS, Licensor and its retailing subsidiaries are in the business of selling Sporting Goods (as hereinafter defined) and other related goods and services through the TSA Stores (as hereinafter defined);


WHEREAS, through TheSportsAuthority.com, Inc., a subsidiary of Licensee owned in part by TSA (the "Joint Venture"), Licensee operated the TSA.com Site (as defined below) on behalf of Licensor, including offering and selling Sporting Goods, and providing inventory management, Web Site design and development services, hosting, maintenance and operations services and support, order processing, fulfillment and returns services and support, customer service, on-line marketing and other related services and support;


WHEREAS, Licensor and Licensee recently restructured their relationship to terminate the Joint Venture. Licensee shall continue to provide the services and support necessary to operate the TSA.com Site but shall provide such services and support directly on behalf of Licensor rather than through the Joint Venture;


WHEREAS, Licensor desires to continue to extend certain of its lines of retail distribution through the TSA.com Site;


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WHEREAS, Licensor has made a substantial investment to establish its trade name, trademarks, service marks, trade dress and goodwill among consumers and suppliers so as to create a retail identity connoting a specific manner in which merchandise is presented and sold through the TSA Stores;


WHEREAS, both Licensor and Licensee recognize that the protection of Licensor's trade name, trademarks, service marks, trade dress and goodwill, as well as the overall success of the TSA.com Site, depends in part upon consumers perceiving the TSA.com Site to continue to be an extension of the TSA Stores that is as consistent as possible with those stores with respect to merchandise quality, availability, pricing, terms of sale and other aspects of the retail purchasing experience;


WHEREAS, Licensor and Licensee expect that the TSA.com Site will continue to complement the TSA Stores, enhancing Licensor's competitive position relative to other sellers of the same or similar merchandise by offering to Licensor's customers an on-line shopping experience in addition to Licensor's in-store shopping experience; and


WHEREAS, Licensor and Licensee desire to have Licensee continue to provide to Licensor a full e-commerce solution that will be, except as otherwise provided herein, the exclusive means by which Licensor will sell Sporting Goods through the Internet (as defined below) during the Term (as defined below) of this Agreement.


NOW, THEREFORE, in consideration of the promises contained herein, TSA, TSAMI and GSI, intending to be legally bound, agree as follows:


Section 1. Definitions


Whenever used in this Agreement, the following capitalized terms shall have the following specified meanings:


1.1 "Advertising and Marketing Partner(s) of Licensee" means members of Licensee's affiliate programs, search engines, portals, community sites, content sites, on-line retailers, shopping, regional and industry directories, push sites, and any other Internet sites engaged by Licensee to attract Customers to the TSA.com Site, with whom Licensee contracts for exchanges of advertising and promotional services and/or any form of compensation.


1.2 "Affiliate(s)" means, as to any Person, any other Person that directly or indirectly controls (through one or more intermediaries), is controlled by or is under common control with such Person, but only as long as such control exists. For purposes of this Section "control" means the ownership or control of fifty percent (50%) or more of all of the voting power of the shares (or other securities or rights) in question or the power to direct or cause the direction of management or policies of such Person, whether through voting securities, by contract or otherwise.


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1.3 "Business Day" means any day which is not a Saturday, Sunday or official federal holiday in the United States.


1.4 "Confidential Information" means all nonpublic information relating to a Party or its Affiliates that is designated as confidential or that, given the nature of the information or the circumstances surrounding its disclosure, reasonably should be considered as confidential. Confidential Information includes (a) all nonpublic information relating to a Party's or its Affiliates' product plans, designs, product costs, product prices, other costs, allowances, rebates, assortment plans, advertising plans, strategies or buys, marketing plans or strategies, technology, business plans, promotional and marketing activities, finances, strategic business opportunities, personnel, research, development, know-how and other business and financial affairs, (b) all third party information that a Party or its Affiliates is obligated to keep confidential, (c) all information obtained by a Party in connection with any audit conducted hereunder, and (d) all information of the type specifically designated as such in this Agreement. Confidential Information may be contained in tangible materials, such as drawings, data, specifications, reports and computer programs, or may be in the nature of unwritten knowledge. Confidential Information does not include any information that (i) has become publicly available without breach of this Agreement, (ii) can be shown by documentation to have been known to the receiving Party at the time of its receipt from the disclosing Party or its Affiliates, (iii) is received from a third party who did not acquire or disclose such information by a wrongful or tortious act, or (iv) can be shown by documentation to have been independently developed by the receiving Party without reference to any Confidential Information.


1.5 "Customer" means a Person who accesses the TSA.com Site in any manner, whether or not a purchase is made or other Services or Sporting Goods are received from, by or through the TSA.com Site.


1.6 "Customer Information" means any and all identifying information collected or possessed by Licensee and relating to Customers of the TSA.com Site , including information relating to Customers referred by or through the Advertising and Marketing Partners of Licensee to the TSA.com Site. Such data may include names and other identifying information such as addresses, phone numbers and e-mail addresses, credit card numbers and related data, preferences, gift and shipping information, purchase, payment and connection histories, correspondence, inquiries, and the skus and quantities of items purchased by any such persons. "Customer Information" shall not include (i) Financial Information, or (ii) any information obtained by Licensee from Customers independent of the transactions contemplated pursuant to this Agreement or the prior agreements referenced Section 19.12.


1.7 "Databases" means 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 management or storage of data on or for the TSA.com Site, and all refinements, updates, releases, improvements and enhancements thereto, all Intellectual Property Rights embedded therein (except those owned by Licensor) and all software applications created specifically for management and use of the GSI Furnished Materials,


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Customer Information, Financial Information and Licensed Property, but excluding the Customer Information, Financial Information and Licensed Property per se.


1.8 "Designated URL" means the URL http://www.thesportsauthority.com, or any successor or replacement URL, as mutually designated by the Parties.


1.9 "Financial Information" means all information relating to the financial performance and/or operations of the TSA.com Site which is not specific to a Customer, does not refer to or identify any specific Customer, and cannot be used, alone or in conjunction with other information, to identify any specific Customer.


1.10 "Fiscal Year" means Licensee's fiscal year. Licensee shall give at least ninety (90) days prior notice to Licensor of any change in designation of Licensee's Fiscal Year.


1.11 "GSI Content" means any and all content or information owned or controlled (e.g., by license other than this Agreement, or otherwise) by Licensee or any of its Affiliates, including, text, graphics, photographs, video and audio, together with all Intellectual Property Rights associated therewith, and furnished by Licensee or any of its Affiliates in connection with the TSA.com Site or otherwise in connection with the performance of its obligations under this Agreement. "GSI Content" includes any adaptation, modification, improvement and/or derivative work of any GSI Content that is developed by any Party or jointly by the Parties. "GSI Content" shall not include any Licensed Property or any derivative work of any Licensed Property whether developed by any Party or jointly by the Parties.


1.12 "GSI Furnished Materials" means any and all GSI Content, Databases of GSI and GSI Technology, together with all Intellectual Property Rights associated therewith, that (a) is owned or controlled (e.g. by license other than this Agreement, or otherwise) by Licensee or any of its Affiliates, and (b) is made available by Licensee of any of its Affiliates in connection with the transactions contemplated hereunder. "GSI Furnished Materials" includes any adaptation, modification, improvement and/or derivative work of any GSI Furnished Materials that is developed by any Party or jointly by the Parties. "GSI Furnished Materials" shall not include any Licensed Property or any derivative work of any Licensed Property whether developed by any Party or jointly by the Parties.


1.13 "GSI Partners" means any third party, [*] with which Licensee or any its Affiliates contracts to develop and operate all or a substantial portion of such third party's Web Site for e-commerce businesses in the field of Sporting Goods. By way of example, as of the Effective Date, such GSI Partners include [*]. The specific GSI Partners shall be subject to change from time to time throughout the Term.


1.14 "GSI Technology" means all HTML, Java and other language files (and/or all derivatives thereof), graphics files, animation files, data files, Databases, technology, method, user interface, process, software, functionality, features, scripts and programs, both in object and source code form, and all documentation and all other information and materials relating thereto, together with all Intellectual Property Rights associated therewith, used by or on behalf of Licensee in the


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design, development, hosting, maintenance and operation of the TSA.com Site or otherwise made available to Licensor hereunder. "GSI Technology" includes any adaptation, modification, improvement and/or derivative work of any GSI Technology that is developed by any Party or jointly by the Parties. "GSI Technology" shall not include any Licensed Property or any derivative work of any Licensed Property, whether developed by any Party or jointly by the Parties.


1.15 "GSI Venture" or "GSI Ventures" means any Person engaged in the sale of goods over the Internet, including (i) Licensee or any of its Affiliates, or (ii) any Person in which Licensee or any of its Affiliates owns or controls fifty percent (50%) or more of the voting power of the capital stock (or other securities or rights) or the power to direct or cause the direction of management or policies of such Person, whether through voting securities, by contract or otherwise; provided such Person directly or indirectly generates in excess of [*] of its revenues from the sale of Sporting Goods.


1.16 "Intellectual Property Rights" means any and all now or hereafter known tangible and intangible (a) rights associated with works of authorship throughout the universe, including copyrights or works of copyright, moral rights, and mask-works, (b) trademark, trade dress, service mark and trade name rights and similar rights, (c) trade secret rights, (d) patents, designs, algorithms and other industrial property rights, (e) all other intellectual and industrial property rights of every kind and nature throughout the universe and however designated (including domain names, logos, "rental" rights and rights to remuneration), whether arising by operation of law, contract, license, or otherwise, and (f) all registrations, initial applications, renewals, extensions, continuations, divisions or reissues thereof now or hereafter in force (including any derivative rights in any of the foregoing).


1.17 "Internet" means the global network of interconnected computer networks, each using the Transmission Control Protocol/Internet Protocol and/or such other standard network interconnection protocols as may be adopted from time to time, which is used to transmit content that is directly or indirectly delivered to a computer or other digital electronic device for display to an end-user accessing a URL, whether such content is delivered through on-line browsers, off-line browsers, or through "push" technology, electronic mail, broadband distribution, satellite, wireless or other successor technologies.


1.18 "Land Based Stores Gift Certificates" means gift certificates, pre- programmed gift cards, and other successor forms of gift certificates or cards, bearing the marks THE SPORTS AUTHORITY and/or THE SPORTS AUTHORITY & Design, in fixed denominations, printed and distributed by Licensor and which are redeemable only in the TSA Stores and not through the TSA.com Site.


1.19 "Licensed Property" means the Marks, Names, TSA Content and the Look and Feel, together will all Intellectual Property Rights associated therewith, which Licensor has licensed to Licensee hereunder. "Licensed Property" includes any adaptation, modification, improvement and/or derivative work of any Licensed Property that is developed by any Party or jointly by the


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Parties. "Licensed Property" does not include any GSI Furnished Materials or any derivative work of any GSI Furnished Materials, whether developed by any Party or jointly by the Parties.


1.20 "License Guidelines" means the clearance, form, format and use restrictions and instructions set forth in Exhibit A attached hereto.
---------


1.21 "Look and Feel" means, either with respect to the TSA.com Site or the TSA Stores, as the case may be, the appearance, coloring, graphics, fonts, and other look and feel characteristics of the TSA.com Site or TSA Stores, as the case may be, which are unique to the TSA.com Site or TSA Stores, as the case may be, and are generally consistent across all media and applications, and which suggest a common identity for the TSA.com Site or the TSA Stores, as the case may be.


1.22 "Marks" shall mean the mark THE SPORTS AUTHORITY in English in block letters and any equivalent in foreign language characters, certain THE SPORTS AUTHORITY logotypes, and such other trademarks and service marks of Licensor, which are proprietary to Licensor, all as more specifically described in Exhibit
------- B attached hereto and incorporated herein, as Exhibit B may be modified from - --------- time to time in writing by Licensor as set forth in Section 2.1(b), together with all associated Intellectual Property Rights, including trademark and service mark applications and registrations therefor.


1.23 "Materials" shall mean exterior and interior signs, billboards, flags, banners, buttons, Web pages or portions of Web pages, frames, links, icons, packaging, labels, print, electronic and broadcast advertising and promotional media, indexes and pages on Websites (whether visible or not to the general public), meta-tags, manuals, brochures, flyers, posters, sales literature, business forms, gift certificates, credit cards, debit cards, membership or consumer loyalty or gift program cards and related materials, stationery, employee uniforms, badges, merchandise bags and boxes, baskets, trolleys and carts, sales receipts and charge slips, tickets and tags, business forms and stationery, and the like, to the extent that such materials bear any of the Marks and to the extent such materials are developed, controlled or authorized by Licensee (or with respect to the Core Marks, by the Advertising and Marketing Partners of Licensee) for use on or in connection with furnishing the Services, Sporting Goods, advertising or promoting the TSA.com Site, or otherwise in the operation of the TSA.com Site.


1.24 "Names" means those Internet domain names registered in the name of either TSAMI or TSA, or both, together with any additions as may be provided to Licensee from time to time in writing by Licensor, or any deletions as mutually agreed upon by the Parties, [*].


1.25 "Net Revenue(s)" means [*].


1.26 "Non-Shopping Features" means such content and information on the TSA.com Site, provided by or through Licensor, that contain or make accessible as part of the TSA.com Site such information as the following: TSA corporate information (e.g., historic background, mission statement, names of officers and directors), store locator, TSA public financial information (e.g., SEC filings, annual reports, etc.), TSA's press releases (but not Licensee's press releases, unless


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Licensor has reviewed and approved the same), community programs, employment opportunities in TSA Stores or corporate positions, frequently asked questions (concerning the TSA Stores and not the TSA.com Site), a "contact us" section relating to the TSA Stores, and any other information which serves to inform Customers about the TSA Stores, all as set forth in greater detail in Exhibit D
--------- attached hereto.


1.27 "On-Line Gift Certificates" means gift certificates, pre-programmed cards, and other successor forms of gift certificates or gift cards, bearing the marks THE SPORTS AUTHORITY, THE SPORTS AUTHORITY & Design, THESPORTSAUTHORITY.COM, and/or THESPORTSAUTHORITY.COM & Design, in fixed denominations, printed and distributed by Licensee and which are redeemable only through the TSA.com Site and not through the TSA Stores.


1.28 "Order" means an order to purchase Sporting Goods or Services.


1.29 "Party" means Licensor or Licensee; "Parties" shall mean both of them.


1.30 "Person" means, whether or not capitalized, any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or governmental body.


1.31 "Private Label Merchandise" means any Sporting Goods offered and sold under any trademarks owned by Licensor, whether or not such trademarks have been registered in Licensor's name.


1.32 "Royalties" means the compensation for use of the Licensed Property due and payable from Licensee to Licensor hereunder, as set forth in greater detail in Exhibit E and pursuant to Section 11.2. Royalties shall accrue at the time
--------- when any Order is shipped to a Customer.


1.33 "Services" means those services: (a) offered by Licensee to Customers at or through the TSA.com Site, including, without limitation, retail store services in the field of Sporting Goods, as well as, to the extent Licensee chooses to offer in its sole discretion, Sporting Goods assembly, warranty programs, repair and maintenance, racquet stringing, layaway, customer loyalty and gift card programs, and like services; and (b) those advertising and promotional services furnished by Licensee directly or by or through Advertising and Marketing Partners of Licensee, including, without limitation, services intended to increase Customer traffic and purchases at the TSA.com Site, and services intended to attract Customers to the TSA.com Site from the Advertising and Marketing Partners of Licensee.


1.34 "Sporting Goods" means sports, recreational, athletic and/or fitness- related (i) equipment (e.g., bats, balls, gloves, racquets, clubs, helmets, skis, fishing equipment, exercise equipment, table games, memorabilia and licensed products), (ii) apparel (e.g., jerseys and exercise clothing) and (iii) footwear. "Sporting Goods" shall also include any other specific products that are sold from time to time by Licensor in the TSA Stores.


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1.35 "Term" means the period set forth in Section 17.1 of this Agreement.


1.36 "Territory" means throughout the world, excluding Japan and excluding [*].


1.37 "TSA Competitor" means any Person (other than Licensor and each of its Affiliates) which directly or indirectly derives [*] or more of its revenues from the retail or wholesale sale or distribution of Sporting Goods, whether by mail order, home shopping through audio or video programming, over the Internet, or from land-based stores located in the Territory. However, a Sporting Goods manufacturer or distributor that supplies Licensee on a wholesale basis that also happens to operate Sporting Goods retail stores or a business-to-consumer e-commerce Web Site of its own, shall not be considered a TSA Competitor for purposes of this Agreement if the subject manufacturer or distributor derives less than [*] of its revenues from such Sporting Goods retail stores and/or Web Sites.


1.38 "TSA Content" means: (a) all Non-Shopping Features, text, graphics, photographs, video, audio and/or other data or information (excluding Customer Information) owned or controlled by Licensor and furnished by Licensor to Licensee and intended solely for use in connection with the TSA.com Site; (b) Licensor selected print advertisements for the TSA Stores or the goods and services offered by Licensor in the TSA Stores, including run of press and insert advertisements which appear in newspapers and magazines, as well as printed in store signage, point of sale and display signage and information promoting events and the goods and services offered in the TSA Stores; and (c) such information concerning the goods and services offered by Licensor in the TSA Stores in the U.S. as Licensor owns or controls, and which Licensor furnishes to Licensee for use in connection with the TSA.com Site, including information which is related to the sourcing, manufacturing, development, design, fabrication, construction, test procedures, performance features, quality control standards, merchandise specifications, reliability standards, distribution, costs, allowances, pricing, rebates, sizes, colors, decoration, display, margins, vendor economic information, and similar information and know- how necessary to the procurement, merchandising, inventory management and sales of such goods and services in the TSA Stores.


1.39 "TSA Stores" means any land-based retail store operated by TSA or any its Affiliates under the principal name and mark THE SPORTS AUTHORITY and related AUTHORITY marks, and devoted to the sale of Sporting Goods.


1.40 "TSA.com Site" means that Web Site, the primary Home Page for which is identified by the Designated URL (and any successor or replacement Web Site), and any backup or mirror Internet Web site operated by Licensee.


1.41 "URL" means the uniform resource locator of a Web Site.


1.42 "Web" means the Internet client-server hypertext distributed information retrieval system known as the World Wide Web.


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1.43 "Web Site" means any point of presence maintained on the Internet. With respect to any Web Site maintained on the World Wide Web, such Web Site includes all HTML pages (or similar unit of information presented in any relevant data protocol) that either (a) are identified by the same second-level domain (such as http://www.thesportsauthority.com) or by the same equivalent level identifier in any relevant address scheme, or (b) contain branding, graphics, navigation or other characteristics such that a user reasonably would conclude that the pages are part of an integrated information or service offering.


Section 2. Licenses.


2.1 Grant of License by Licensor.


(a) Grant. Subject to the terms and conditions set forth in this Agreement, Licensor hereby grants to Licensee, for the Term and within the Territory only, a non-transferable, exclusive (as to third parties but not as to Licensor and its Affiliates other than as provided herein) right and license to use the Licensed Property on and in connection with the Services and Materials furnished at or in connection with the TSA.com Site if, and only if, such Services and Materials comply with the quality standards set forth herein, and such other mutually agreed upon standards. Licensor may monitor and control, in accordance with the terms of this Agreement, the nature and quality of the Services and Materials as set forth herein to determine whether such Services and Materials are in compliance with such quality standards, and Licensor may appoint one or more representatives to so monitor and to exercise such control on Licensor's behalf. Such monitoring shall in no way lessen or limit Licensee's obligation to use the Marks, Names and TSA Content only as set forth herein. No other, further or different license is granted or implied and no assignment of any right or interest is made or intended herein. In particular, except as set forth in Section 2.3, no license is granted to sublicense or otherwise permit any third party to use the Licensed Property. Licensee is prohibited from using the Marks, or any name or mark incorporating the word AUTHORITY or otherwise confusingly similar to the Marks, including any abbreviations of the Marks, as part of Licensee's registered corporate or business name in any jurisdiction in the world, or as part of any Internet domain name or subdomain name not otherwise registered in Licensor's name. Except as licensed hereunder, Licensee shall not use or apply to register the Licensed Property or any identical or deceptively or confusingly similar trademarks, service marks, corporate names, domain names, trade names, trade dress, copyrights, industrial models or designs, or any derivations thereof, during the Term and thereafter.


(b) Changes to Exhibit B. Licensor and Licensee acknowledge that the "Core Marks" as set forth in Exhibit B are: THE SPORTS AUTHORITY,
--------- THESPORTSAUTHORITY.COM, THESPORTSAUTHORITY.COM & Design and THE SPORTS AUTHORITY & Design. Licensor may make changes to Exhibit B from time to time as it sees
--------- fit to add Marks and to update information in records for existing Marks by delivering an updated version of Exhibit B to Licensee. Licensor may only
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