§4.14[D]    Form Agreement
E-COMMERCE MANAGEMENT AGREEMENT
      THIS E-Commerce Agreement dated the [date] and between [name of E-Commerce Operator] a [State] corporation (hereinafter referred to as “E-Commerce Operator”) with an address of [address of E-Commerce Operator] and [name of Retailer], a [State] corporation (hereinafter referred to as “Retailer”) with an address of [address of Retailer].
W I T N E S S E T H:
      WHEREAS, E-Commerce Operator is in the business of creating and operating all aspects of an E-Commerce Shopping Experience, including servicing and fulfilling the on-line retail sales of selected merchants; and
      WHEREAS, Retailer desires to enter into an exclusive agreement with E-Commerce Operator pursuant to which E-Commerce Operator will act as an Outsourcing Company providing the Retailer's On-Line customers the complete E-Commerce Shopping Experience, all upon the terms and conditions hereinafter set forth.
      NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:
1. DEFINITIONS
      As used herein, the following terms shall have the following meaning:
      1.1. “Advertising Co-op and Discretionary Funds” shall mean amounts earned by or allocated to the Retailer by its vendors, the purpose of which is to advertise that vendor's brand or to use at the Retailer's discretion.
      1.2. “Categories” shall mean the various types of product groups (e.g., athletic footwear, camping, in-line skates, etc.) offered for sale by the Retailer in its Land-Based stores.
      1.3. “Closeout Merchandise” shall mean end-of-season or excess merchandise that is priced at a greater-than-normal discount.
      1.4. “Complete URL Integration” shall mean the display of Retailer's URL in all of Retailer's marketing and communications.
      1.5. “Confidential Information” shall mean as that term is defined in Paragraph 7.1 of this Agreement.
      1.6. “Cross Promotion” shall mean the use of the Retailer's URL, name, and logo on other than the Retailer's Web Site for the purpose of promoting the Retailer's Web Site.
      1.7. “Customary Pricing Structure” shall mean the policy generally employed by the Retailer in determining the prices of merchandise in its Land-Based Stores.
      1.8. “Customer Data” shall mean as that term is defined in Paragraph 4.1 of this Agreement.
      1.9. “Data Bases” shall mean as that term is defined in Paragraph 4.2 of this Agreement.
      1.10. “Defective Allowance” shall mean a discount granted by a manufacturer to a retailer as a result of defective merchandise received by the retailer and pursuant to which, the retailer also retains the merchandise.
      1.11. “Disclosing Party” shall mean the party disclosing Confidential Information.
      1.12. “Domain Name” shall mean as that term is defined in Paragraph 1.1 of the Web Site Development Agreement (as hereinafter defined).
      1.13. “E-Commerce” shall mean the Retailer's specific business conducted through the Internet.
      1.14. “E-Commerce Orders” shall mean the orders for merchandise placed by customers of the Retailer's Web Site.
      1.15. “E-Commerce Outsourcing Manager” shall mean E-Commerce Operator.
      1.16. “E-Commerce Shopping Experience” shall mean the shopping for and purchasing of merchandise through the Internet.
      1.17. “Flight Date” shall mean the date on which Retailer's advertising is scheduled to run for the first time.
      1.18. “Force Majeure Event” shall mean as that term is defined in Article 18 of this Agreement.
      1.19. “E-Commerce Operator Content” shall mean as defined in Paragraph 1.6 of the Web Site Development Agreement.
      1.20. “In-Line Merchandise” shall mean current merchandise available to be carried by the Retailer in its Land-Based Stores from Retailer's current or future vendors.
      1.21. “Internet” shall mean the collection of interconnected networks that all use the TCP/IP protocols.
      1.22. “Land-Based Stores” shall mean the Retailer's stores located in shopping districts, strip shopping centers, and shopping malls.
      1.23. “Land-Based Stores Gift Certificates” shall mean gift certificates offered for sale on the Retailer's Web Site for merchandise sold only in Retailer's Land-Based Stores.
      1.24. “Launch Date” shall mean the date on which E-Commerce Operator commences operation of the Retailer's Web Site to the public.
      1.25. “Markdowns” shall mean merchandise in Retailer's inventory offered for sale at less than the price it was originally offered for.
      1.26. “Milestone Delivery Schedule” shall mean as defined in Paragraph 1.5 of the Web Site Development Agreement.
      1.27. “On-Line Customer” shall mean Retailer's customer who browses for or purchases On-Line Merchandise on the Retailer's Web Site.
      1.28. “On-Line Customer Loyalty Programs” shall mean programs established to encourage repeat business from On-Line Customers.
      1.29. “On-Line Merchandise” shall mean merchandise to be sold on the Retailer's Web Site.
      1.30. “Outsourcing Company” shall mean a company that provides E-Commerce Services for traditional Retailers.
      1.31. “Price Matching” shall mean a Retailer's policy pursuant to which it addresses another retailer's lower price on a particular item of merchandise.
      1.32. “Production Schedule” shall mean as defined in Paragraph 1.9 of the Web Site Development Agreement.
      1.33. “Project Manager” shall mean an employee of Retailers who is assigned exclusively to work with E-Commerce Operator in supplying E-Commerce Operator with Retailer Content.
      1.34. “Receiving Party” shall mean the party receiving Confidential Information.
      1.35. “Retailer Content” shall mean as defined in Paragraph 1.10 of the Web Site Development Agreement.
      1.36. “Retailer's Net Cost” shall mean the amount paid by the Retailer for merchandise from its vendors after deduction of cash or anticipation discounts, marketing allowance, Defective Allowance, volume allowance, and any other discount offered by vendors, but excluding any marketing funds granted to Retailer by a manufacturer as an overall marketing allowance and not based upon the number of units or dollars purchased.
      1.37. “Retailer's Warehouse” shall mean the place at which Retailer receives delivery of merchandise from its vendors.
      1.38. “Special Products” shall mean merchandise manufactured for the Retailer exclusively.
      1.39. “Term” shall be as defined in Section 2.2 of this Agreement.
      1.40. “URL” shall mean the address of the Web Site on the Internet.
      1.41. “Web” shall mean the World Wide Web.
      1.42. “Web Site” shall mean as defined in Paragraph 1.12 of the Web Site Development Agreement.
      1.43. “Web Site Development Agreement” shall mean the agreement by and between E-Commerce Operator and Retailer attached to this Agreement as Exhibit “A.”
      1.44. Product Information” shall mean as defined in Paragraph 1.14 of the Web Site Development Agreement.
2. AGREEMENT AND TERM
      2.1. Agreement. During the Term, E-Commerce Operator shall provide the Retailer with those Web Site services as hereinafter specified.
      2.2. Term. The Term of this Agreement shall commence upon the execution of this Agreement and shall expire [number] (#) years after the Launch Date (“Expiration Date”). E-Commerce Operator shall use reasonable efforts to advise Retailer [number] (#) days prior to the expected Launch Date. Notwithstanding any other dates and/or schedules in the attached Web Site Development Agreement, the Launch Date shall occur between the period of [date] and [date] (“Commencement Period”). E-Commerce Operator's obligation to commence operation of the Web Site during the Commencement Period shall be contingent on Retailer complying with the deadlines set forth on the Milestone Delivery Schedule set forth on Attachment B to the Web Site Development Agreement and on the Production Schedule to be agreed upon by the parties. Retailer acknowledges the urgency of complying with the deadlines set forth in the Milestone Delivery Schedule and the Production Schedule and shall give E-Commerce Operator its full cooperation to ensure that such deadlines are satisfied. Notwithstanding anything contained herein to the contrary, in the event that the Retailer does not comply with such deadlines and E-Commerce Operator has given Retailer written notice of its failure to comply, then, for each day of such non-compliance, the Commencement Period shall be extended by one day.
      2.3. Extensions of Term.
      a. This Agreement shall automatically renew itself for an additional [number] (#) years (“First Option Period”) unless terminated by E-Commerce Operator or Retailer with written notice to the other party no later than [number] (#) days prior to the expiration of the then current Term, as such Term may have been extended.
      b. After the expiration of the First Option Period, this Agreement shall automatically renew itself from year to year unless terminated by E-Commerce Operator or Retailer with written notice to the other party no later than [number] (#) days prior to the expiration of the then current Term, as such Term may have been extended.
3. OBLIGATIONS AND RIGHTS OF THE PARTIES
      3.1. Creation of Retailer's Web Site.
      a. E-Commerce Operator, at its own expense, shall create, maintain, and operate a Web Site for the Retailer on the Web in accordance with the specifications attached to the Web Site Development Agreement. In connection therewith, simultaneous herewith, Retailer and E-Commerce Operator shall execute the Web Site Development Agreement.
      b. The Web Site shall contain the Retailer's E-Commerce Shopping Experience, the URL of which shall be [URL address]. In addition, the Web Site shall contain any or all of the following information, as the Retailer shall elect: corporate information (e.g., historic background, mission statement, names of officers and directors), store locator, public financial information (e.g., SEC filings, annual reports), press releases, community programs, employment opportunities for in store or corporate positions, frequently asked questions, and a “contact us” section.
      c. Following the initial completion of the Web Site, the Retailer shall have the right to update the content thereof as follows:
      1) Employment Opportunities: E-Commerce Operator will provide the Retailer with the technology necessary so that the Retailer will be able to update the employment opportunity portion of the Web Site as frequently as it desires.
      2) Public Financial Information:
      a) Stock Prices—Will be updated daily by a link to another web site offering such information.
      b) SEC Filings and Annual Reports—SEC filings will be provided by a link so long as the government makes such filings available at no cost. Both SEC filings and annual reports will be provided only if available in portable document format; in the alternative, E-Commerce Operator will provide the consumer with a form in order to request such information from the Retailer's investor relations department.
      3) Store Locators—Will be updated by E-Commerce Operator as such information changes and Retailer provides E-Commerce Operator with such information.
      4) Frequently Asked Questions—Will be updated by E-Commerce Operator monthly and Retailer provides E-Commerce Operator with such information.
      5) Corporate Information—Will be updated by E-Commerce Operator as such information changes and Retailer provides E-Commerce Operator with such information.
      6) Community Programs—Will be updated by E-Commerce Operator as such information changes and Retailer provides E-Commerce Operator with such information.
      7) Press Releases—E-Commerce Operator will provide the Retailer with the technology necessary so that the Retailer will be able to post press releases on its Web site as it desires. Retailer shall defend and hold harmless E-Commerce Operator, its employees, officers and directors, agents, and representatives from any liability arising from the posting of press releases on the Retailer's Web Site.
      8) “Contact Us” Section—Will be updated by E-Commerce Operator as such information changes and Retailer provides E-Commerce Operator with such information.
      9) Automatic Links to Retailer's Secondary Web Site—Such links shall be established in accordance with the parameters set forth in Paragraph 8 below.
      d. E-Commerce Operator's use of Retailer's URL, Retailer's Content, and any other Retailer information or material, whether confidential or not, shall be granted and continue only for the Term of this Agreement and shall not be used beyond the end of such Term, and shall be subject to the confidentiality provisions of Paragraph 7 of this Agreement, and shall be subject to Retailer's approval and quality control rights contained in this Agreement and Web site Development Agreement.
      3.2. Creation and Maintenance of the Retailer's Web Site.
      E-Commerce Operator shall create and maintain a Web Site at all times during the term for the Retailer. Commencing with the execution of this Agreement and continuing through the Term, as may be extended, the Retailer, shall cooperate with E-Commerce Operator so as to enable E-Commerce Operator to create and maintain for the Retailer's consumers, the Retailer's Web Site. In connection therewith, the Retailer shall supply E-Commerce Operator with the Product Information (as that term is defined in the Web Site Development Agreement) required pursuant to the terms of the Web Site Development Agreement. This shall include, but not be limited to, printed marketing information, data, text, audio files, video files, graphics, copy, and other assets necessary to create and maintain the Retailer's Web Site as more fully set forth on Attachment A to the Web Site Development Agreement. Notwithstanding anything contained herein to the contrary, and except as it relates to Special Products, it shall be E-Commerce Operator's responsibility to produce and maintain all camera-ready product information including high-resolution images and appropriate product description text and data for use on the Retailer's Web Site and Retailer shall have no responsibility therefor. With respect to Special Products, Retailer shall be responsible to provide E-Commerce Operator with sample product only in a sufficient amount of time to allow E-Commerce Operator to produce camera-ready product information.
      3.3. Sale of Merchandise on the Retailer's Web Site.
      a. E-Commerce Operator, on behalf of the Retailer, shall offer for sale on the Retailer's Web Site all Categories of merchandise offered for sale by the Retailer in its Land-Based Stores. Notwithstanding anything contained herein to the contrary, in no event shall E-Commerce Operator offer firearms and related accessories for sale on the Retailer's Web Site. In addition, if, as a result of a legitimate stated business purpose, should Retailer disapprove of any item listed for sale on the Retailer's Web Site, and which is not offered for sale in the Retailer's Land-Based Stores, upon five (5) days' prior notice from Retailer, E-Commerce Operator shall remove such item from the Retailer's Web Site.
      To protect Retailer's image with its current customers of selling top-quality high-specialty sporting goods equipment and apparel, all such items shall be of a quality equal to or greater than that carried in Retailer's Land-Based Stores. E-Commerce Operator shall promptly e-mail Retailer the same product information that will appear on the Retailer's web site.
      b. Within the Categories, E-Commerce Operator, on behalf of the Retailer shall have the right to offer for sale:
      1) current in-line merchandise ordered by the Retailer from its vendors; and
      2) current in-line merchandise not carried by the Retailer in its Land-Based Stores, but available in those Categories carried by the Retailer; provided, however, no products will be offered for sale on Retailer's Web Site which (a) the Retailer would not be authorized by the manufacturer to sell in its Land-Based Stores; and (b) would not be in accordance with the same type, quality, and price of merchandise carried by the Retailer in its Land-Based Stores; and
      3) Special Products (manufactured for the Retailer exclusively and not carried on any other retailer's web site); and
      4) Closeout Merchandise (but only if the Retailer sells Closeout Merchandise in its Land-Based Stores; otherwise E-Commerce Operator shall not offer for sale Closeout Merchandise on the Retailer's Web Site); and
      5) Markdowns of Retailer's inventory; and
      6) Gift Certificates for On-Line Merchandise (“On-Line Gift Certificates”) [Items 1) through 6) are hereinafter referred to as “On-Line Merchandise”].
      c. Retailer agrees to the addition of logical line extensions to existing product bases specifically within the existing Retailer vendor structure, provided that the individual item within such line extension is approved by Retailer in advance of use on the web site. For example, if Retailer sells [number and description of items] manufactured by a particular vendor in its land-based stores, and E-Commerce Operator desires to add the remaining [number and description of items] to its on-line mix, such approval will not be withheld by Retailer. However, should the vendor offer E-Commerce Operator closeouts, seconds, blemishes, or customer returns to E-Commerce Operator to sell on-line, Retailer would not automatically grant permission, as this is not in keeping with Retailer's stated goal of selling top-of-the-line, first-run, high-quality merchandise.
      d. In addition, E-Commerce Operator, on behalf of the Retailer, shall offer for sale on the Retailer's Web Site, Land-Based Stores Gift Certificates for merchandise available in the Retailer's Land-Based Stores. Notwithstanding anything contained herein to the contrary, Retailer may elect not to offer Land-Based Stores Gift Certificates for sale on its Web Site by notifying E-Commerce Operator of its decision not to do so no later than [date].
      e. In addition, E-Commerce Operator, if requested by Retailer, will advertise on the Retailer's Web Site merchandise that is for sale only in the Retailer's Land-Based Stores provided that, 1) no later than [date] the item has a minimum retail selling price of $[amount]; and 2) Retailer furnishes E-Commerce Operator with a description and sample of the item to be advertised.
      f. In those instances where a written dealer agreement prohibits Retailer from selling a particular vendor's merchandise except in the Retailer's Land-Based Stores, Retailer shall use its reasonable efforts to obtain all consents required to permit the sale of such merchandise on the Retailer's Web Site, but until the required consent is obtained, E-Commerce Operator will comply and not offer the restricted merchandise for sale on the Web Site.
      3.4. Prices of On-Line Merchandise. E-Commerce Operator, on behalf of the Retailer, shall offer the On-Line Merchandise for sale on the Retailer's Web Site on the following basis:
      a. If the On-Line Merchandise is the same as offered for sale in the Retailer's Land-Based Stores, then it shall be offered for sale on-line according to the following pricing process: [description of pricing].
      b. If the On-line Merchandise is not offered for sale in the Retailer's Land-Based Stores, then E-Commerce Operator will use reasonable efforts to get approval from Retailer for sale of the On-line Merchandise provided, however, that Retailer agrees to grant approval or disapproval upon [number] (#) days' prior notice according to the following pricing process: [description of pricing].
      c. If the Retailer offers the same merchandise at different prices in its Land-Based Stores, then On-line Merchandise shall be offered for sale on-line according to the following pricing process: [description of pricing].
      d. E-Commerce Operator, on behalf of Retailer, shall add and collect all applicable taxes and E-Commerce Operator, at its discretion and for its own account, may add reasonable handling and delivery charges which are consistent with industry practice.
      e. The parties shall cooperate with each other so that the entire pricing process between E-Commerce Operator and Retailer may be accomplished electronically.
      3.5. E-Commerce Operator's Supply of On-Line Merchandise.
      a. Invoicing and Shipping of On-Line Merchandise. At such time as directed by E-Commerce Operator, the Retailer shall notify all of its vendors that 1) E-Commerce Operator is the Retailer's E-Commerce Outsourcing Manager; 2) the vendors, for the benefit of the Retailer, should sell their merchandise to E-Commerce Operator at the same prices, with the same Advertising Co-op and Discretionary Funds and on the same terms and conditions as they sell their merchandise to Retailer; and 3) such merchandise should be shipped and invoiced directly to E-Commerce Operator. The form of such notification shall be prepared by E-Commerce Operator and approved by Retailer, such approval not to be unreasonably withheld or delayed. In the event that a vendor deems it more efficient to invoice Retailer for such merchandise, then the Retailer shall place the order for E-Commerce Operator, invoice E-Commerce Operator at its net cost, and E-Commerce Operator shall pay Retailer within thirty (30) days of shipment to E-Commerce Operator. In such instances, E-Commerce Operator shall also pay the Retailer its pro rata share (based upon that portion of the shipment purchased by the Retailer for E-Commerce Operator as it relates to the entire shipment received by the Retailer from that vendor) of the actual freight costs from the manufacturer to the Retailer's point of receipt and the actual freight costs from the Retailer's point of receipt to E-Commerce Operator's fulfillment facility.
      b. In-Line Merchandise. The Retailer shall advise E-Commerce Operator, no later than [number] (#) days after placing a purchase order with a vendor, of the Category, item ordered, net cost, Retailer's retail price, and expected day of delivery to the Retailer's Warehouse.
      c. Special Products. No later than [number] (#) days after ordering Special Products, Retailer shall advise E-Commerce Operator and furnish E-Commerce Operator with a sample of the Special Products and advise E-Commerce Operator of the net cost, color selection, and size range. E-Commerce Operator shall have the right to purchase up to [percentage]% of the Special Products, proportionately as to size and color, as ordered by the Retailer. E-Commerce Operator shall have five (5) business days to advise Retailer whether it desires to order any of the Special Products and, if so, the quantity thereof. Special Products shall be exclusive to Retailer's Web Site and shall not be made available for sale on the web site of any other retailer for whom E-Commerce Operator operates a web site. Retailer shall supply E-Commerce Operator with a sample of the Special Products ordered by E-Commerce Operator for sale on the Retailer's Web Site within ten (10) days of obtaining such sample.
      Notwithstanding anything contained herein to the contrary, E-Commerce Operator recognizes that there may be instances where there will be an insufficient amount of a particular item of Special Products to warrant selling such merchandise on line. In such instances, the Retailer shall not be required to offer such Special Products for sale on line; provided, however, the Retailer acknowledges that with respect to Special Products ordered by Retailer for chain-wide distribution, E-Commerce Operator does not anticipate that this will occur on a regular basis and this should be the exception rather than the usual occurrence. Further, E-Commerce Operator acknowledges that the Retailer may not be able to offer for sale on line certain Special Products that are not available in all of the Retailer's stores.
      d. Closeout Merchandise. Retailer shall advise E-Commerce Operator no later than five (5) business days after issuing a purchase order for Closeout Merchandise from a vendor. At that time, Retailer shall advise E-Commerce Operator of the cost, sizes, and colors available and E-Commerce Operator shall have [number] (#) business days after receipt of such information to advise Retailer that it will purchase, at Retailer's net cost, up to [percentage]% of the Closeout Merchandise to be received by Retailer, proportionately as to size and color, as ordered by Retailer.
      Inasmuch as Retailer operates one Warehouse Outlet Store specializing in one-of-a-kind buys, including individual sales representatives' merchandise, any items ordered for this Warehouse Outlet or any future Warehouse outlet location are excluded from this provision.
      Notwithstanding anything contained herein to the contrary, E-Commerce Operator recognizes that there may be instances where there will be an insufficient amount of a particular item of Closeout Merchandise to warrant selling such merchandise on line. In such instances, the Retailer shall not be required to offer such items of Closeout Merchandise for sale on line; provided, however, the Retailer acknowledges that E-Commerce Operator does not anticipate that this will occur on a regular basis and this should be the exception rather than the usual occurrence.
      Any Closeout Merchandise purchased by E-Commerce Operator from Retailer shall be offered for sale by Retailer only on the Retailer's Web Site.
      e. Markdowns. In the event that the Retailer has available Markdowns, which it would like to offer for sale on its Web Site solely at its discretion, it shall notify E-Commerce Operator and ship the Markdowns to E-Commerce Operator's fulfillment center. The Markdowns shall be shipped to E-Commerce Operator on consignment only. Retailer shall set the selling prices on the Markdowns; provided, however, that E-Commerce Operator on behalf of the Retailer shall have no obligation to offer any Markdowns for sale on the Retailer's Web Site which E-Commerce Operator deems, in its sole discretion, would be inappropriate. Retailer shall retain [percentage]% of the selling price received from the sale of any Markdowns when sold (excluding applicable taxes and shipping and handling charges; the remainder of [percentage]% plus shipping and handling charges shall be retained by E-Commerce Operator as its management fee in connection with the sale of the Markdowns. Any applicable tax collected by E-Commerce Operator on behalf of Retailer shall be deposited into a separate account as more fully discussed in Paragraph 3.9 below, and remitted by E-Commerce Operator to the appropriate taxing authority. E-Commerce Operator shall account to Retailer for the sale of any Markdowns at the same time that it accounts to the Retailer for sale of other On-Line Merchandise on the Retailer's Web Site. The amount of proceeds from the sale of Markdowns shall not be considered the sale of On-Line Merchandise for the purpose of determining the amount to be remitted to Retailer pursuant to Paragraph 3.8 below.
      f. With the exception of Markdowns and Land-Based Gift Certificates, which shall be governed by the provisions of Paragraphs 3.5 e. and 3.6 hereof, respectively, and as part of the performance of its obligations under this Agreement, E-Commerce Operator shall sell to the Retailer, and the Retailer shall purchase from E-Commerce Operator all merchandise to be sold by the Retailer on the Retailer's Web Site at a price equal to [percentage]% of the selling price (excluding applicable taxes, shipping, and handling) at which such On-Line Merchandise is sold to the Retailer's On-Line Customer.
      g. Attached hereto as Schedule “2” is a schedule that summarizes the various levels of management fees to be paid to E-Commerce Operator by the Retailer depending upon the type of On-Line Merchandise sold on the Retailer's Web Site.
      h. The parties shall cooperate with each other so that to the maximum extent commercially reasonable the entire process set forth in Paragraphs 3.5 a, b, c, d, and e between E-Commerce Operator and Retailer may be accomplished electronically.
      3.6. Gift Certificates.
      a. Land-Based Stores Gift Certificates. Subject to Retailer's rights set forth in 3.3 c. above, E-Commerce Operator, on behalf of the Retailer, shall offer for sale on the Retailer's Web Site gift certificates for merchandise in Retailer's Land-Based Store. In order that Retailer may fulfill customer orders for Land-Based Stores Gift Certificate, Retailer shall furnish E-Commerce Operator such gift certificates on an “as requested” basis. The Retailer shall retain [percentage]% of the proceeds received by the Retailer form the sale of Land-Based Stores Gift Certificates (excluding applicable taxes) and the balance shall be paid to E-Commerce Operator as its management fee with respect to the sale of such gift certificates and to cover all costs, including credit card fees. E-Commerce Operator shall account to Retailer for all sales of such certificates at the same time as it accounts to Retailer for the sale of other On-Line Merchandise. The amount of proceeds from the sale of Land-Based Stores Gift Certificates shall not be considered the sale of On-Line Merchandise for the purpose of determining the amount to be remitted to Retailer pursuant to Paragraph 3.8 below.
      b. Online Gift Certificates. E-Commerce Operator on behalf of the Retailer shall offer for sale on the Retailer's Web Site gift certificates for On-Line Merchandise. E-Commerce Operator shall supply the On-Line Gift Certificates, which shall not be redeemable for merchandise purchased in the Retailer's Land-Based Stores. From each On-Line Gift Certificate purchased, the Retailer shall retain as its operating income from the sale of the On-Line Gift Certificate, [percentage]% of the proceeds received by the Retailer from such sale (excluding applicable taxes) and the balance shall be paid to E-Commerce Operator as its management fee with respect to the sale of such gift certificates and to cover all costs, including credit card fees and the cost of the merchandise redeemed with the gift certificate. E-Commerce Operator shall account to Retailer for all sales of such certificates at the same time as it accounts to Retailer for the sale of other On-Line Merchandise. The amount of proceeds from the sale of On-Line Gift Certificates shall not be considered the sale of On-Line Merchandise for the purpose of determining the amount to be paid to E-Commerce Operator pursuant to Paragraph 3.8 below. The proceeds shall be accounted for pursuant to Paragraph 3.9 below; provided, however, should the On-Line Gift Certificate be redeemed for Markdowns, then at such time as the On-Line Gift Certificate is redeemed, E-Commerce Operator shall pay to the Retailer an additional amount equal to [percentage]% of the On-Line Gift Certificate redeemed and the Retailer shall supply the Markdown item requested by the customer.
      3.7. Processing of Customer Orders. E-Commerce Operator shall be solely responsible for processing all on-line merchandise sales business for the Retailer. E-Commerce Operator will promptly process E-Commerce Orders received from the Retailer's Web Site. E-Commerce Operator shall take the customer's credit card number at such time as the merchandise is ordered. E-Commerce Operator, on behalf of the Retailer's account discussed in Paragraph 3.9 below, shall charge the customer's credit card with the amount of the order (including taxes, shipping, and handling) at the time the merchandise is shipped. The order will appear on the customer's credit card under the name of “[web address]” and proceeds from the sale shall be deposited into Retailer's designated bank account at the bank designated by E-Commerce Operator for full credit to Retailer. E-Commerce Operator will make all arrangements for delivery of merchandise purchased on the Retailer's Web Site.
      a. Retailer and E-Commerce Operator shall jointly agree to the formula to be used for computing shipping and handling charges for customer orders submitted to E-Commerce Operator as the outsource operator of www.sportschalet.com. Such approval will not be unreasonably withheld or delayed.
      b. As of [date], E-Commerce Operator will track and report to Retailer the elapsed time between customer orders and submission for picking (“Front-Office Processing Time”) for each customer order. E-Commerce Operator will provide Retailer with reports of average and longest Front-Office Processing Time monthly by the 15th of the month following.
      c. Retailer and E-Commerce Operator shall agree to the back-order policies that E-Commerce Operator will administer for customer orders submitted to E-Commerce Operator as the outsource operator of [web address]. Such approval will not be unreasonably withheld or delayed.
      d. E-Commerce Operator will provide a facility for the acceptance of Visa/MasterCard/American Express and all other credit card accepted by the other clients of E-Commerce Operator, but excluding proprietary cards of each such retailer.
      1) E-Commerce Operator will perform authorization, settlement, and post-settlement operations independently of Retailer;
      2) E-Commerce Operator will at all times operate in conformance with the Operating Rules and Regulations of each national credit card;
      3) E-Commerce Operator will implement procedures as required by each national credit card for merchants engaged in non-face-to-face transactions;
      4) E-Commerce Operator will at its own cost install and staff an inbound toll-free number to respond to inquiries and customer service issues from credit card customers. The customer service facility shall be staffed no fewer hours per week than the total number of hours that Retailer stores are open; and
      5) E-Commerce Operator will submit appropriate data with each credit card settlement file to enable display on the customer's credit card statement of the merchant name “Sportchalet.com” and the toll-free number described in Subsection 4) above.
      e. Order Fill Performance Standards
      E-Commerce Operator will guarantee that more than [percentage]% of items ordered will be shipped to customers within the Visa/MasterCard time limit or credit authorizations.
      f. Service Level Standards
      1) E-Commerce Operator will provide service level reports monthly to Retailer by the 15th of each month following, and
      2) Any two months in a 12-month period where E-Commerce Operator fails to meet the standard shall be considered a breach of this Agreement by E-Commerce Operator.
      g. Customer Service Standards
      1) E-Commerce Operator will submit to Retailer for review and approval the policies that E-Commerce Operator will implement with respect to customer returns and refunds. E-Commerce Operator will not make any substantive changes to these policies and procedures without prior consent from Retailer. Approval will not be unreasonably withheld or delayed.
      2) E-Commerce Operator will provide a systematic capability to track and monitor customer service activity to include such information as original order number, order date, reason for the customer contact, and resolution.
      a) For phone calls, time to answer and call duration;
      b) For e-mail, elapsed times from customer send time/date to E-Commerce Operator response time/date.
      3) E-Commerce Operator will provide Retailer with summary reporting of customer service activity each month by the fifteenth (15th) day of the following month.
      3.8. E-Commerce Operator's Management Fee. In consideration of the services to be rendered by E-Commerce Operator to Retailer hereunder, E-Commerce Operator shall be paid a management fee (“Management Fee”) equal to [percentage]% of the sales price of all On-Line Merchandise for all On-Line Merchandise sold, excluding, however, the sale of Markdowns, Land-Based Gift Certificates, and On-Line Gift Certificates, the management fee for which shall be governed by Paragraphs 3.5 e., 3.6 a., and 3.6 b., respectively. E-Commerce Operator's Management Fee, including any management fee to E-Commerce Operator as a result of the sale of Markdowns, Land-Based Gift Certificates, or On-Line Gift Certificates, shall be paid pursuant to the provisions of Paragraph 3.9 below.
      3.9. Payment and Accounting from the sale of On-Line Merchandise.
      a. The proceeds from the sale of On-Line Merchandise on the Retailer's Web Site shall be deposited into a bank account (“Web Account”) in the Retailer's name at E-Commerce Operator's designated bank (“Bank”). The Web Account shall be owned by the Retailer; provided, however, the only signatures on such account shall be employees of E-Commerce Operator and E-Commerce Operator's designated employees shall have an irrevocable power of attorney, and such power will be exercised solely in conformity with this Agreement and for the benefit of E-Commerce Operator and Retailer pursuant to this Agreement's terms governing the Web Account and the Tax Account, as hereinafter discussed, unless this Agreement is terminated in accordance with the terms of this Agreement. No other funds shall be deposited into the Web Account except for credit and debit card proceeds from the sale of On-Line Merchandise on Retailer's Web Site and no other sums shall be deposited into the Tax Account except applicable taxes collected from the sale of merchandise on the Retailer's Web Site. From each transaction, E-Commerce Operator shall be paid daily the sum of (a) the cost of the On-Line Merchandise sold to Retailer's On-Line Customers, (b) E-Commerce Operator's Management Fee, and c) E-Commerce Operator's shipping and handling charge to the On-Line Customer (collectively, “E-Commerce Operator's Entitlement”), if any. Retailer shall give the Bank instructions that will stand for the term of this Agreement, as such term may be extended, to (a) debit the Web Account daily for the amount owed to E-Commerce Operator, as so directed by E-Commerce Operator, and to credit E-Commerce Operator's designated account for such amount; and (b) to debit the Retailer's Web Account and to credit the Retailer's especially established tax account (“Tax Account”) daily with the amount of any applicable tax collected. Any interest earned on the Web Account and Tax Account shall belong solely to E-Commerce Operator, and any interest earned on the Tax Account shall belong solely to E-Commerce Operator and any charges imposed by the bank as a result of such accounts, shall be paid by E-Commerce Operator. Prior to termination of this Agreement, as permitted herein, Retailer shall have no right to unilaterally offset from E-Commerce Operator's Entitlement any amount that Retailer may believe is owing to Retailer from E-Commerce Operator and Retailer shall obtain from its secured lenders a waiver to claim a security interest in either the Web Account or the Tax Account. In addition, Retailer shall give the Bank instructions that will stand for the term of this Agreement, as such term may be extended, to wire to the Retailer the amount determined (“Retailer's Operating Income”) by E-Commerce Operator to be remaining from the sale of On-Line Merchandise from the Retailer's Web Site after the deduction of E-Commerce Operator's Entitlement on the fifteenth (15th) day following the end of each month. The amount of the Retailer's Operating Income each month shall be certified by E-Commerce Operator's chief financial officer and a copy of the accounting shall be furnished to the Retailer at the same time that the Retailer's monthly Retailer Proceeds are wired to the Retailer. Retailer's Operating Income shall equal [percentage]% after payment of the Retailer's cost of On-Line Merchandise, E-Commerce Operator's management fee, and the shipping and handling charge.
      The Retailer's Operating and E-Commerce Operator's Entitlement shall also take into account the amounts owing pursuant to Paragraph 3.5 e., 3.6 above, and 3.11 below.
      E-Commerce Operator shall be responsible to collect any applicable sales taxes resulting from the sale of On-Line Merchandise, if any. E-Commerce Operator shall complete all required sales tax forms and submit them on the Retailer's behalf. E-Commerce Operator shall indemnify, save, and hold harmless Retailer from any taxes, interest, and penalties that may arise as a result of E-Commerce Operator's failure to pay or timely pay any sales tax resulting from the sale of On-Line Merchandise. E-Commerce Operator shall be in charge of any audit conducted by any taxing authority as it relates to the sale of On-Line Merchandise.
      b. Within ninety (90) days of the end of each calendar year, E-Commerce Operator shall provide the Retailer with a statement certified by its independent auditors and setting forth the total On-Line Sales, the Retailer's Operating Income, and E-Commerce Operator's Entitlement therefrom. For a period of two years after the Retailer receives such certified statement from E-Commerce Operator, Retailer, on one occasion, shall have the right to audit the books and records of E-Commerce Operator with respect to the Retailer's Operating Income and E-Commerce Operator's Entitlement paid during the calendar year to which the certified statement relates. Such audit shall be conducted at E-Commerce Operator's principal office located in the continental United States on [number] (#) weeks' prior notice to E-Commerce Operator. In the event that the audit reveals that the Retailer's Operating Income were understated, E-Commerce Operator shall within [number] (#) days of completion of the audit, pay to the Retailer the remaining balance of the Retailer's Operating Income for the period audited plus interest at the prime rate of interest as provided for in The Wall Street Journal on the date of the audit's certification. In addition, in the event that the audit reveals that the Retailer's Operating Income is understated by more than [percentage]% for the calendar year in question, E-Commerce Operator shall pay the additional amount owing and pay for the reasonable audit costs. In the event E-Commerce Operator's annual accounting is off more than [percentage]% in [number] (#) successive years, or more than [percentage]% in one year, Retailer shall have the option to terminate this Agreement by giving to E-Commerce Operator written notice of its election to do so no later than thirty (30) days after receipt of the Audited results. In addition, E-Commerce Operator will provide Retailer a statement certified by independent auditors setting forth the total On-Line Sales, Retailer's Operating Income, and E-Commerce Operator's Entitlement therefrom within [number] (#) days of the conclusion of retailer's fiscal year ending [date].
      c. E-Commerce Operator takes full responsibility for all credit card chargebacks for all occurrences resulting from an on-line purchase and will accordingly operate with merchant ID numbers different from those used by Retailer for its land-based business.
      3.10. Service of On-Line Customers. E-Commerce Operator shall be responsible for providing all customer service relating to sales from the Retailer's Web Site, including one-click ordering, which shall be provided in a manner consistent with that provided by other reputable on-line retailers representative of the then current state-of-the-art E-Commerce standards.
      3.11. Return of On-Line Merchandise. Retailer's return policy for On-Line Merchandise shall be consistent with the Retailer's return policy for its Land-Based Stores. With each shipment of merchandise, E-Commerce Operator shall specifically instruct all customers that all merchandise purchased on line may not be returned to the Retailer's Land-Based Stores and may only be returned in accordance with the instructions enclosed; provided, however, in the rare instance a customer desires to return On-Line Merchandise to one of the Retailer's Land-Based Stores, the Retailer, in order to maximize customer relations, shall accept such merchandise for return in accordance with the Retailer's return policy, and return the merchandise to E-Commerce Operator's fulfillment center. E-Commerce Operator shall pay the Retailer for the full amount credited to the customer by Retailer's land-based stores with respect to such merchandise, as well as an amount equal to the Retailer's freight cost for returning the merchandise to E-Commerce Operator's fulfillment center.
      Should E-Commerce Operator receive the return of On-Line Merchandise, E-Commerce Operator shall reimburse the Retailer the amount of the E-Commerce Operator Entitlement paid to E-Commerce Operator with respect to that transaction, as well as applicable tax refunded to the On-Line Customer.
      3.12. On-Line Customer Loyalty Programs. E-Commerce Operator shall have the right to establish On-Line Customer Loyalty Programs in order to encourage continued on-line purchases. The On-Line Customer Loyalty Programs established by E-Commerce Operator for Retailer shall be consistent with that program established by Retailer for use in its Land-Based Stores. In addition, the Customer Loyalty Programs established by E-Commerce Operator shall be used only in connection with on-line purchases and Retailer's customer loyalty programs shall be used only in connection with purchases at the Retailer's Land-Based Stores. Notwithstanding anything contained herein to the contrary, E-Commerce Operator shall not establish any On-Line Customer Loyalty Programs without first obtaining the approval of Retailer, which approval shall not be unreasonably withheld. Retailer shall respond to a request for such approval from E-Commerce Operator within fourteen (14) days of receiving the request. In the event Retailer fails to timely respond, E-Commerce Operator shall furnish Retailer with a notice marked “second request.” If Retailer does not respond within [number] (#) business days, E-Commerce Operator's request shall be deemed granted. E-Commerce Operator will be solely and completely responsible for all costs occurring as a result of creating and operating an on-line customer loyalty program.
      3.13. Cross Promotion. E-Commerce Operator shall have the right to use Retailer's URL, name, and logo to cross-promote Retailer's Web Site with other businesses in order to promote Retailer's Web Site; provided, however, E-Commerce Operator shall not promote Retailer's Web Site on any other sporting good retailer's web site or on any other web site that would generally be considered immoral, pornographic, political, or offensive. Notwithstanding anything contained herein to the contrary, E-Commerce Operator shall not establish any Cross Promotions without first obtaining the approval of Retailer, which shall not be unreasonably withheld. Withholding such consent in order to protect or preserve Retailer's reputation and/or intellectual property rights shall not be deemed unreasonable. Retailer shall respond to a request for such approval from E-Commerce Operator within seven (7) days of receiving the request. In the event Retailer fails to timely respond, E-Commerce Operator shall furnish Retailer with a notice marked “second request.” If Retailer does not respond within two (2) business days, E-Commerce Operator's request shall be deemed granted.
      3.14. Price Matching. In the event that the Retailer, at its Land-Based Stores, offers a “Price Matching” policy, E-Commerce Operator's management shall have the right to use and adopt such policy for the Retailer's Web Site; provided, however, E-Commerce Operator shall not under any circumstance, advertise or market the availability of this policy, and may offer it to customers only in E-Commerce Operator's sole discretion.
      3.15. Project Manager. Promptly after the execution of this Agreement, but in no event later than sixty (60) days after such execution, Retailer, at its expense, shall hire or reassign one of its existing employees, to act as Project Manager to work exclusively with E-Commerce Operator in creating and maintaining the Retailer's Web Site. Commencing with the Project Manager's hiring and continuing through the Term, as may be extended, the Project Manager shall be the Retailer's liaison with E-Commerce Operator and shall be responsible for supplying E-Commerce Operator with the Retailer Content and such other information as may reasonably be required of the Retailer in order to create and maintain the Retailer's Web Site in the most efficient manner.
4. ON-LINE DATA AND DATABASES
      4.1. Ownership of Data. Any and all data (“Customer Data”) related to Retailer's customers (including customer names and other identifying information such as addresses, phone numbers and e-mail addresses, credit card numbers, and descriptions of the items and quantities of items purchased) that is collected by E-Commerce Operator shall be owned by E-Commerce Operator.
      4.2. Ownership of Databases. All data structures, data schema, database dictionaries, attributes, validation tests for each element, table sizes and formats, access requirements, data dependencies and other elements involving the storage of Data on the Web Site and all refinements, updates, releases, improvements and enhancements thereto, all intellectual property rights embedded therein and all applications created specifically for use of the data and Retailer Content (collectively, the “Databases”) shall, as between E-Commerce Operator and Retailer, be the sole and exclusive property of E-Commerce Operator.
      4.3. Delivery of Customer Data to Retailer. From time to time, but no more than [number] (#) times per calendar year, E-Commerce Operator shall provide to Retailer any or all of the following information collected from the Customer Data:
      a. customer's names; b. customer's addresses; c. customer's phone number; d. customer's e-mail address; e. items purchased; f. amount spent; g. information as to how customer reached Web Site; h. customer referrals; i. unique visitors to site; j. page views per site; k. top ten most viewed pages; l. bottom ten least viewed pages; m. time-of-day traffic patterns; n. sales by product and brand; o. customer comments and complaints (shall be furnished on a monthly basis); and p. additional information at E-Commerce Operator's discretion.
      E-Commerce Operator shall provide the Customer Data to Retailer in a mutually agreeable, commercially standard format, either via diskette, CD-ROM, electronically, or via another mutually agreeable method. E-Commerce Operator shall use commercially reasonable efforts to ensure that the Customer Data provided to Retailer accurately and completely reflects the Customer Data in the Web Site, but E-Commerce Operator shall have no obligation to check the accuracy, validity, or integrity of the Customer Data and except as set forth in this Section 4.3, the Customer Data are provided “AS-IS.”
      4.4. Restrictions on Use of Customer Data. Each party shall treat the Customer Data as Confidential Information of the other party in accordance with the provisions of Paragraph 7. Neither party may sell, lend, or license the Customer Data to third parties without the prior written consent of the other party, which consent may be withheld at the sole discretion of the other party; provided, however, Retailer grants to E-Commerce Operator the right to combine all Retailer's Customer Data to form trends and overall research as to the online shopping habits of consumers. In addition, Retailer may use the Customer Data relating to Retailer in connection with the operation of its Land-Based Stores only. As set forth above, Retailer may not sell, lend, or license the Customer Data to any third party without E-Commerce Operator's consent, which consent may be withheld by E-Commerce Operator in its sole discretion. The parties acknowledge that the Customer Data referred to herein refers only to Customer Data gathered from On-Line Customers and shall not be applicable to Customer Data gathered by the Retailer from its customers at its Land-Based Stores.
      Retailer, as co-owner of the on-line customer database, will be provided with the results of such data aggregation and analysis, in the form of comparative profiles. E-Commerce Operator will provide the Retailer on-line customer profile as well as the aggregated on-line customer profile. In addition, Retailer will be allowed to promote to its own database of land-based customers.
5. ADVERTISING AND MARKETING
      The Retailer shall, commencing no later than [date], and continuing during the Term, and any extensions thereof, at no cost to E-Commerce Operator provide for Complete URL Integration in its advertising and marketing by:
      5.1. Prominently including as part of all of its print media (including but not limited to newspapers, periodicals, circulars, billboards, print materials, letterhead, business cards, shopping bags, cash register receipts, and arena advertising) its URL, [URL address]; provided, however, Retailer shall not be required to include the URL on print materials such as letterhead, business cards, shopping bags, and cash register receipts until it exhausts its present supply of each such item at which time it will promptly replace that item with items containing the Retailer's URL; and
      5.2. Prominently including, at the end of its television advertising, its URL; and
      5.3. Mentioning its URL at the end of all radio advertisements; provided, however, Retailer may request E-Commerce Operator's consent not to use the URL in up to [percentage]% of its annual radio advertisements, which consent E-Commerce Operator shall not unreasonably withhold.
      Notwithstanding anything contained herein to the contrary, Retailer shall be permitted to exhaust its existing supply of each item of printed materials before instituting the Complete URL Integration with respect to that item.
6. ADVERTISING CO-OP AND DISCRETIONARY FUNDS
      6.1. During the Term and any extensions thereof, E-Commerce Operator shall use all Advertising Co-op and Discretionary Funds received by E-Commerce Operator directly from vendors as a result of the purchase of merchandise for the Retailer's Web Site exclusively, to promote the Retailer's Web Site, as E-Commerce Operator shall elect. All such proposed advertisements shall be submitted to the Retailer for the Retailer's approval as to content and design along with placement information. The Retailer shall have [number] (#) days from receipt to either approve or disapprove. In the event that the Retailer disapproves, it shall advise E-Commerce Operator specifically as to why and E-Commerce Operator shall attempt to address the Retailer's concerns and resubmit the proposal to Retailer for its approval, which shall again have [number] (#) hours from receipt to approve or disapprove. This procedure shall continue until the advertisement has been approved or replaced. In all instances where approval is requested of the Retailer, in the event the Retailer does not respond within the aforementioned [number] (#) hours, Retailer shall be deemed to have granted approval.
      6.2. Any Advertising Co-op and Discretionary Funds received by the Retailer through the Retailer's purchase of product for E-Commerce Operator, ultimately for the Retailer's Web Site, may be retained by the Retailer; provided, however, Retailer acknowledges that it is preferential for Retailer's vendors to sell to E-Commerce Operator directly and both Retailer and E-Commerce Operator shall request Retailer's vendors to do so.
      6.3. Retailer shall retain from vendors any non-item-driven marketing funds; however, Retailer shall use its reasonable efforts to obtain from vendors incremental marketing funds based upon an increase in the sale of the vendor's merchandise on the Retailer's Web Site. Any such incremental marketing funds shall belong to E-Commerce Operator and shall be used in accordance with Paragraph 6.1 above.
7. CONFIDENTIALITY
      7.1. Confidential Information. Each party acknowledges that, in connection with the performance of this Agreement, it may receive Confidential Information of the other party. For the purpose of this Agreement, “Confidential Information” shall mean information or materials that is clearly marked “confidential” or the Receiving Party knows has reason to know is the confidential or proprietary information of the Disclosing Party, either because (a) such information is marked or otherwise identified by the Disclosing Party as confidential or proprietary, or (b) such information has commercial value and is not generally known in the Disclosing Party's trade or industry. Confidential Information shall include, without limitation: (a) concepts and ideas relating to the development and distribution of content in any medium; (b) trade secrets, drawings, inventions, know-how, software programs, and software source documents; (c) information regarding plans for research, development, new service offerings or products, marketing and selling, business plans, business forecasts, budgets and unpublished financial statements, licenses and distribution arrangements, prices and costs, suppliers and customers; and (d) existence of any business discussions, negotiations, or agreements between the parties.
      7.2. Confidentiality. The Receiving Party hereby agrees: (i) to hold and maintain in strict confidence all Confidential Information of the Disclosing Party and not to disclose it to any third party; and (ii) not to use any Confidential Information of the Disclosing Party except as permitted by this Agreement or as may be necessary for the Receiving Party to perform its obligations under this Agreement. The Receiving Party will use at least the same degree of care to protect the Disclosing Party's Confidential Information as it uses to protect its own Confidential Information of like importance, and in no event shall such degree of care be less than reasonable care. The obligations and restrictions imposed by this Article 7 shall not expire.
      7.3. Exceptions. Notwithstanding the foregoing, the parties agree that Confidential Information will not include any information that: (i) was in the public domain at the time it was communicated to the Receiving Party by the Disclosing Party; (ii) entered the public domain subsequent to the time it was communicated to the Recipient by the Disclosing Party through no fault of the Receiving Party; (iii) was in the Receiving Party's possession free of any obligation of confidence at the time it was communicated to the Receiving Party by the Disclosing Party; (iv) was rightfully communicated to the Receiving Party by a third party, free of any obligation of confidence, subsequent to the time it was communicated to the Receiving Party by the Disclosing Party; (v) was developed by employees or agents of the Receiving Party independently of and without reference to any information communicated to the Receiving Party by the Disclosing Party; or (vi) was communicated by the Disclosing Party to an unaffiliated third party free of any obligation of confidence. In addition, the Receiving Party may disclose the Disclosing Party's Confidential Information in response to a valid order by a court or other governmental body, as otherwise required by law, or as necessary to establish the rights of either party under this Agreement; provided, however, in the event that the Receiving Party receives a demand to disclose such Confidential Information in connection with a legal action or proceeding, the Receiving Party, if possible, shall first notify the Disclosing Party of the demand in order to provide the Disclosing Party an opportunity to seek a protective order.
      7.4. Confidentiality of this Agreement. Retailer acknowledges that the terms and conditions of this Agreement constitute Confidential Information, which shall be governed by the terms of this Article 7.
      7.5. Confidentiality of Customer Data and Retailer's Policies. E-Commerce Operator acknowledges that it will be receiving from Retailer, and generating from the performance of its obligations under this Agreement, Confidential Information critical to the Retailer's business and concerning Retailer's customers and various information concerning the operation of Retailer's business including but not limited to net purchasing prices, advertising co-op and discretionary fund amounts, specific marketing plans, specific on-line sales and delivery dates of merchandise. E-Commerce Operator recognizes its obligation to keep such information confidential. Therefore, all E-Commerce Operator employees who may have access to any such Confidential Information will be required to execute confidentiality agreements with E-Commerce Operator with respect to which Retailer will be a third-party beneficiary, and E-Commerce Operator shall use its best efforts to enforce the terms thereof. Such confidentiality agreements will specifically provide that the employee shall not discuss with any other retailers who may or may not be customers of E-Commerce Operator, any information concerning the Retailer or its customers.
      Further, E-Commerce Operator acknowledges it is associated with other subsidiaries of E-Commerce Operator's parent corporation, [name of parent corporation]. E-Commerce Operator therefore represents and warrants to Retailer that it will establish a “Need to Know” policy with respect to such Confidential Information and only disseminate such Confidential Information to those employees and members of E-Commerce Operator's management who have a specific need to know such Confidential Information. In those instances, prior to the dissemination of such Confidential Information to those individuals, they will be required to execute confidentiality agreements with E-Commerce Operator with respect to which Retailer will be a third-party beneficiary specifically prohibiting such disclosure of such Confidential Information to anyone, except as otherwise permitted by the terms of this Agreement.
8. EXCLUSIVE WEB AGREEMENT
      During the Term and any extensions thereof, the Retailer, any subsidiary of the Retailer, shall not sell any sporting goods merchandise on the Internet (including the Web), nor use itself or allow a third party to use its URL, name, or logo on the Web for the purpose of facilitating the sale of merchandise on the Web other than through E-Commerce Operator. Notwithstanding anything contained herein to the contrary, should E-Commerce Operator be unable to satisfy the Retailer's web site requirements with respect to specialized matters such as corporate information, or special services, the Retailer shall have the right to establish a second web site incorporating the name “[name of Retailer store]” which E-Commerce Operator shall provide a link from the Retailer's Web Site; provided, however, under no circumstances shall Retailer sell any merchandise on such second web site.
      8.1. E-Commerce Operator will include in the web site development agreement at no charge to Retailer, links that will enable Retailer's customers to link to a product expert, which expert shall be selected and engaged solely by Retailer; provided, however, that should any such product expert (a) be engaged in e-commerce; (b) be linked to another site that is engaged in e-commerce; or (c) recommend that a consumer patronize another retailer's Land-Based Stores, then E-Commerce Operator shall have the absolute right, which right shall not be subject to dispute by Retailer, not to link the Retailer's web site to the web site of such product expert. Links will be provided by E-Commerce Operator to such product experts or vendors for informational purposes and not for the purpose of conducting any e-commerce business.
      8.2. Inasmuch as Retailer's land-based business includes services and guarantees not specifically related to the actual selling of traditional, off-the-shelf retail merchandise, such as [description of services], and other services, Retailer reserves the right to create its own web page(s) to allow customers to reserve such services. These pages will be consistent with the look and feel of the E-Commerce Operator-created [web address] web site, and furthermore these pages would in no way offer for sale similar or competing product available on the E-Commerce Operator web site; provided, however, that should any such product expert (a) be engaged in e-commerce; (b) be linked to another site that is engaged in e-commerce; or (c) recommend that a consumer patronize another retailer's Land-Based Stores, then E-Commerce Operator, shall have the absolute right, which right shall not be subject to dispute by Retailer, not to link the Retailer's web site to such other web site Links will be provided by E-Commerce Operator to such product experts or vendors for informational purposes and not for the purpose of conducting any e-commerce business. Retailer will bear the cost of developing and maintaining these sites. Retailer will not be obligated to let E-Commerce Operator operate these particular web pages as/when E-Commerce Operator is capable of doing so. At Retailer's request, E-Commerce Operator will provide a link to these additional pages.
      In addition, E-Commerce Operator will support and implement Retailer's ongoing program of providing links from its web site to those web sites of Retailer's vendors, as well as links to related publications such as newspaper and magazine web sites, so as to add value to a customer's on-line shopping experience by providing more detailed product information and descriptions. These vendor sites will not be E-Commerce enabled nor provide links to competitive E-Commerce sites; provided, however, that should any such product expert (a) be engaged in e-commerce; (b) be linked to another site that is engaged in e-commerce; or (c) recommend that a consumer patronize another retailer's Land-Based Stores, then E-Commerce Operator, shall have the absolute right, which right shall not be subject to dispute by Retailer, not to link the Retailer's web site to such other web site Links will be provided by E-Commerce Operator to such product experts or vendors for informational purposes and not for the purpose of conducting any e-commerce business.
9. URL, NAME, AND LOGO USAGE
      9.1. During the Term, the Retailer hereby grants to E-Commerce Operator the right to use, copy, and display the Retailer's name, logo, URL, and such other names and logos as the Retailer owns and as may be listed on Schedule “1” attached hereto and made a part hereof, on the Retailer's Web Site, on invoices and packing slips, in connection with credit card charges, a toll-free Web site customer service telephone line, and generally in connection with the operation of E-Commerce Operator's on-line business; provided, however, E-Commerce Operator shall have no right to modify Retailer's name, logo, or URL without Retailer's consent. Such Schedule shall be modified from time to time during the Term to add any new names and logos, which the Retailer may register with the United States Patent and Trademark Office.
      9.2. E-Commerce Operator has the right to use a toll-free number for web site customer service and credit card calls. This number may be used on the web site, invoices, packing lists, and credit card statements.
10. REPRESENTATIONS AND WARRANTIES
      10.1. Retailer represents and warrants that at all times during the Term hereof or any extensions thereof:
      a. It has or will have the full right to grant to E-Commerce Operator the right to use its URL, names, and logos as discussed in Article 9 above, including its Domain Name; and
      b. Retailer is authorized to advertise and market on its Web Site the brands of merchandise to be sold thereon; and
      c. Prior to the Launch Date, if not already completed, Retailer shall register and maintain the Domain Name “[domain name]” with Network Solutions or any similar successor entity. Retailer shall list itself as the owner for the Domain Name “[domain name]” and Retailer shall list E-Commerce Operator as the administrative and technical contact and billing contact for the Domain Name “[domain name]”;
      d. Neither the Retailer nor its secured lenders shall at any time have any interest in the Web Account or Tax Account.
      10.2. Each party represents and warrants to the other party that: (i) it is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and that it has the power and authority to enter into this Agreement and the transactions contemplated herein; (ii) the consummation of the transactions described by this Agreement shall not conflict with or result in a breach of any of the terms, provisions or conditions of its Articles of Incorporation or Bylaws, or any statute or administrative regulation or of any order, writ, injunction, judgment, or decree of any court, regulatory, or governmental authority or of any agreement or instrument to which it is a party or by which it is bound or constitute a default thereunder; and (iii) this Agreement has been duly authorized, executed, and delivered by it and this Agreement is valid, enforceable, and binding upon each party in accordance with its terms.
      10.3. E-Commerce Operator represents and warrants that during the term of the contract, it is financially responsible for all costs of operating the Retailer's web site, except as specified in Section 8.2.
11. INDEMNIFICATION
      11.1. Retailer, at its own cost and expense, shall defend, indemnify, and hold harmless E-Commerce Operator and any of its officers, directors, employees, or agents from and against all damages, expenses, liabilities, and other costs (including reasonable attorney's fees and court costs) arising as a consequence of E-Commerce Operator providing services pursuant to this Agreement (a) from or related to a claim that E-Commerce Operator infringes a third-party copyright, trademark, or trade secret due to use of Retailer's trade name or any other name set forth on Schedule 1 to this Agreement; with the exception of modifications made to Retailer's marks, names, or logos made by E-Commerce Operator without Retailer's consent or (b) from Retailer's gross negligence or willful or intentional misconduct.
      11.2. E-Commerce Operator, at its own cost and expense, shall defend, indemnify, and hold harmless Retailer and any of its officers, directors, employees, or agents from and against all damages, expenses, fines, penalties, exactments, liabilities, and other costs (including reasonable attorney's fees and court costs) arising (a) from a claim made by any consumer that is related in any way to the Retailer's Web Site or E-Commerce Operator's services to Retailer provided pursuant to this Agreement, but excluding a claim for which E-Commerce Operator would have the right to indemnification pursuant to Paragraph 11.1 above, or (b) from E-Commerce Operator's gross negligence, or willful or intentional misconduct, or (c) arising as a consequence of E-Commerce Operator providing or failing to provide services pursuant to this Agreement.
      11.3. Retailer shall have sole control of any defense of any claim made pursuant to Section 11.1 above, but E-Commerce Operator shall cooperate with Retailer in providing such defense.
      11.4. E-Commerce Operator shall have sole control of any defense of any claim made pursuant to Section 11.2 above, but Retailer shall cooperate with E-Commerce Operator in providing such defense.
      11.5. Any party seeking indemnification shall notify the other party as soon as possible after such party seeking indemnification becomes aware of the claim.
      11.6. E-Commerce Operator will process all credit card orders through its own processor under its own merchant ID number—chargebacks shall be the sole responsibility of E-Commerce Operator.
      11.7. Retailer maintains a risk management program with respect to its land-based businesses, which includes, without limitation, the use of written waivers and releases from customers of certain products and the obtaining of written indemnification agreements from vendors of certain products. Accordingly, the parties agree:
      a. Retailer shall provide E-Commerce Operator from time to time with a list of those products for which it requires a waiver or release from the customer and the form of waiver and release it currently uses;
      b. E-Commerce Operator shall design the web site such that a customer is required to give valid and binding legal assent to a waiver and release substantially equivalent to that used by Retailer in its land-based business before he or she may purchase these products;
      c. E-Commerce Operator shall obtain from vendors of merchandise it purchases for sale on Retailer's web site indemnities of the nature and type then being furnished by such vendors to Retailer with respect to its land-based business; provided, however, that such indemnities so obtained by E-Commerce Operator shall, by their terms, protect both E-Commerce Operator and Retailer; or
      d. E-Commerce Operator shall comply with any requirements of the vendor indemnities mentioned above to the end that such indemnities are enforceable in accordance with their terms.
12. INSURANCE
      12.1. E-Commerce Operator, at its expense, shall maintain in full force and effect products liability insurance coverage for merchandise sold on Retailer's Web Site. The amount of product liability insurance will be equal to the amount Retailer requires of its vendors, with at least a minimum of $[amount], and shall be updated as required. Such policy shall insure Retailer and name E-Commerce Operator as an additional insured.
      12.2. E-Commerce Operator shall deliver to Retailer certificates of insurance that stipulate that no less than [number] (#) days' notice will be given to Retailer prior to the termination of the policy.
13. TERMINATION
      13.1. Termination for Cause by Either Party. This Agreement may be terminated by either party in the event of any material breach of any of the terms and conditions of this Agreement by the other party, which breach continues in effect after the breaching party has been provided with written notice of breach and [number] (#) days to cure such breach and fails to cure such breach. As used herein, “material breach” shall mean a failure by a party to this Agreement to perform any of its obligations, the effect of which would substantially impair the value of this Agreement to the other party. By way of example only and not by way of limitation, E-Commerce Operator's failure to operate the Retailer's Web Site according to commercially reasonable standards as they are established today and as they may continue to develop during the Term of this Agreement or failure to provide customer service equivalent to that provided by other reputable on-line retailers, would be a material breach of this Agreement by E-Commerce Operator. Retailer's failure to comply with its obligations pursuant to Section 5 above, or failure to provide E-Commerce Operator with the Retailer Content necessary to construct and/or maintain the Retailer's Web Site, would be a material breach of the Retailer's obligations under this Agreement.
      13.2. Measures of Performance. In addition, the web site will need to have a large assortment of merchandise as depicted in Retailer Land-Based Stores. The Retailer recognizes time will be required to build an assortment on line, which accurately represents the land-based stores. The percentage of on-line vs. land-based SKU assortments will be as follows:
[date]—the lesser of [percentage]% or [percentage]% of the Retailer's active land-based SKUs.
[date]—the lesser of [percentage]% or [percentage]% of the Retailer's active land-based SKUs.
[date]—the lesser of [percentage]% or [percentage]% of the Retailer's active land-based SKUs.
      The above thresholds have been agreed upon on the basis of the Retailer having [percentage]% active land-based SKUs. Both parties acknowledge that if vendors restrict or prohibit the sale of their merchandise on line, thereby significantly reducing the number of SKUs available for sale on line, then the parties will renegotiate the thresholds set forth above, acting in good faith.
      E-Commerce Operator will be required to report SKU levels monthly by the 15th of the month following, and during any month in a twelve-month period where E-Commerce Operator fails to meet the standard, this failure will be considered to be a breach (without requirement of notice by Retailer). E-Commerce Operator's SKU count of offered SKUs may include items that are listed on the web site with the notation, “available in retail stores only.”
      13.3. Termination for Cause Only by E-Commerce Operator. E-Commerce Operator may terminate this Agreement by giving [number] (#) days' prior written notice to Retailer of its election to terminate upon the occurrence of any of the following events:
      a. Any representation or warranty contained herein becomes materially false or misleading; or
      b. A material change in the Retailer's business or business policies as determined by E-Commerce Operator in its sole reasonable judgment.
      13.4. Termination for Cause by Retailer. Retailer may terminate this Agreement by giving [number] (#) days' prior notice to E-Commerce Operator upon the occurrence of:
      a. A default under 13.2 above; or
      b. If during the first three years of the Term of this Agreement, there is a change in control of the ownership of E-Commerce Operator, including a spin off as a public company so that [name of Chairman] ceases to function as the chairman of the board or chief executive officer of both E-Commerce Operator and its parent corporation, [name of parent corporation]; or
      c. There is a material adverse change in E-Commerce Operator's financial condition directly causing an uncured material breach and/or filing pursuant to Chapter 7 or 11 of the Bankruptcy Code.
      13.5. Termination Without Cause by Either Party. In the absence of a material breach, this Agreement may only be terminated by the expiration of the Term, as may be extended pursuant to Section 2.3 above.
14. LIMITATIONS UPON LIABILITY
      UNDER NO CIRCUMSTANCES SHALL E-COMMERCE OPERATOR BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES (REGARDLESS OF WHETHER SUCH DAMAGES ARISE OUT OF CONTRACTUAL, NEGLIGENCE, OR OTHER LEGAL THEORIES) ARISING FROM OR RELATED TO RETAILER'S OR RETAILER'S CUSTOMERS' USE OF OR INABILITY TO ACCESS ANY PART OF THE INTERNET OR RETAILER'S OR RETAILER'S CUSTOMERS' RELIANCE ON OR USE OF INFORMATION, SERVICES, OR MERCHANDISE PROVIDED ON OR THROUGH THE WEB SITE OR THE SERVICES, OR THAT RESULT FROM MISTAKES, OMISSIONS, INTERRUPTIONS, LOSS, THEFT, OR DELETION OF FILES, ERRORS, DEFECTS, DELAYS IN OPERATION, OR TRANSMISSION, OR ANY FAILURE OF PERFORMANCE. IN NO EVENT SHALL E-COMMERCE OPERATOR BE LIABLE UNDER THIS AGREEMENT FOR AN AMOUNT THAT EXCEEDS, IN THE AGGREGATE THE AMOUNTS PAID TO RETAILER DURING THE MONTHS PRECEDING THE LAST ACT OR OMISSION GIVING RISE TO SUCH LIABILITY. IN ADDITION, RETAILER SHALL BE ENTITLED TO SEEK EQUITABLE RELIEF FROM THE COURT. THE REMEDIES SET FORTH IN THIS ARTICLE 14 CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE TO RETAILER UNDER THIS AGREEMENT. IN NO EVENT SHALL EITHER PARTY BE LIABLE IN ANY RESPECT FOR CLAIMS BROUGHT MORE THAN TWELVE (12) MONTHS AFTER THE LAST ACT OR OMISSION GIVING RISE TO SUCH LIABILITY.
15. PROPERTY RIGHTS AND OWNERSHIP
      The Retailer's Web Site shall consist of, and shall operate in conjunction with, multiple elements, all of which are subject to certain intellectual property rights. The parties' respective rights with respect to such elements shall be as set forth below. For purposes of this Agreement, the term “Ownership” shall refer to ownership of all right, title, and interest in and to the respective elements, including, but not limited to, all patent, copyright, trade secret, trademark, and any other similar intellectual property rights therein, as applicable.
      15.1. Retailer's URL shall be owned solely by the Retailer.
      15.2. Retailer's Web Site shall be owned solely by E-Commerce Operator.
      15.3. Software developed for the Retailer's Web Site, shall be owned solely by E-Commerce Operator subject to any authorizations to use and approvals obtained by the Retailer and granted to E-Commerce Operator.
      15.4. Upon Retailer's request, E-Commerce Operator will provide Retailer with digital images and copy for each and every item offered on the Retailer web site at no charge.
      15.5. Retailer's Content shall be owned exclusively by Retailer.
      15.6. Customer Data shall be owned jointly by Retailer and E-Commerce Operator.
      With respect to intellectual property owned by each of them, Retailer and E-Commerce Operator shall both have rights associated with the ownership of intellectual property, including the right to copyright web sites and domains.
16. E-COMMERCE OPERATOR'S PERIOD TO EXECUTE
      Retailer shall execute this Agreement first and deliver such executed Agreement to E-Commerce Operator, which shall thereafter have [number] (#) days from receipt to countersign the Agreement. During such [number] (#)-day period, Retailer shall have no right to withdraw the agreements that it executed and delivered to E-Commerce Operator.
17. DISCONTINUANCE OR REGULATION OF THE INTERNET
      Retailer acknowledges and agrees that the Internet (including without limitation the Web) is a network of private and public networks, that E-Commerce Operator has no control over the Internet, and that E-Commerce Operator is not liable for the discontinuance of operation of any portion of the Internet or possible regulation of the Internet, which might restrict or prohibit the operation of the Web site.
18. FORCE MAJEURE
      In the event that either party is unable to perform any of its obligations under this Agreement or to enjoy any of its benefits because of any event beyond the control of the affected party including, but not limited to, natural disaster, acts of God, actions or decrees of governmental bodies, or failure of communications lines or networks (a “Force Majeure Event”), the party who has been so affected shall promptly give written notice to the other party and shall use its best efforts to resume performance. Upon receipt of such notice, all obligations under this Agreement shall be immediately suspended for the duration of such Force Majeure Event.
19. WAIVER
      No delay or failure on the part of any party hereto in exercising any right, power, or privilege under this Agreement shall impair any such right, power, or privilege or be construed as a waiver of any default or any acquiescence therein. No single or partial exercise of any such right, power, or privilege shall preclude the further exercise of such right, power, or privilege, or the exercise of any other right, power, or privilege. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified.
20. PRESS RELEASES
      All voluntary public announcements concerning the transactions contemplated by this Agreement shall be mutually acceptable to both E-Commerce Operator and Retailer. Unless required by law, neither E-Commerce Operator on the one hand, and Retailer on the other hand, shall make any public announcement or issue any press release concerning the transactions contemplated by this Agreement without the prior written consent of E-Commerce Operator or Retailer, respectively. With respect to any announcement that any of the parties is required by law to issue, such party shall, to the extent possible under the circumstances, review the necessity for and the contents of the announcement with the other party before issuing the announcement; provided, however, if either party cannot obtain the consent of the other party in a timely manner, the party required to comply with law may issue the press release or public announcement without obtaining the consent of the other party.
21. GOVERNING LAW
      In the event that either party commences any proceeding pursuant to this Agreement, the rights and obligations of the parties hereto, and any claims or disputes thereto, shall be governed by and construed in accordance with the laws of the State of [State] (excluding the choice of law rules thereof).
22. ASSIGNABILITY
      Retailer shall have no right to assign this Agreement without the prior written consent of E-Commerce Operator; provided that Retailer shall have the right to assign this Agreement to any person or entity that acquires or succeeds to all or substantially all of such party's business or assets upon written notice to E-Commerce Operator.
      In addition, should E-Commerce Operator assign this Agreement to a third party and not as part of the sale of all or substantially all its e-commerce business, then Retailer shall have the right to approve the assignee to ensure that the assignee is experienced in the operation of a web site.
23. COUNTERPARTS
      This Agreement may be signed in several counterparts, each of which shall be deemed an original, and all of which when taken together, shall be deemed a complete instrument.
24. ENTIRE AGREEMENT
      This Agreement, including the Web Development Agreement, represents the entire agreement of the parties with respect to the subject matter hereof and may not be modified, except in writing, executed by all of the parties hereto. This Agreement supersedes all prior writings of the parties with respect to this subject matter.
25. JURISDICTION
      Should either party commence any proceeding pursuant to this Agreement, the exclusive jurisdiction and venue of any such dispute shall be in the United States District Court for the [district].
26. INDEPENDENT CONTRACTORS
      The relationship of the parties herein shall hereunder be that of independent contractors and nothing herein shall be construed to create a joint venture or partnership.
27. SIGNING
      The parties' executing this Agreement represents and warrants that they have full corporate authority to do so.
28. BINDING EFFECT
      This Agreement shall be binding upon the parties hereto, their successors, and permitted assigns.
29. HEADINGS
      Section headings contained in this Agreement are inserted for convenience or reference only and shall not be deemed to be a part of this Agreement for any other purpose.
30. DISCLAIMER OF WARRANTIES
      EXCEPT AS TO THE EXPRESS WARRANTIES CONTAINED IN THIS AGREEMENT, E-COMMERCE OPERATOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, IN FACT OR IN LAW WITH RESPECT TO THE CREATION AND MAINTENANCE OF THE PRODUCT AND SERVICES PROVIDED FOR HEREUNDER, AND DISCLAIMS ALL OTHER WARRANTIES. RETAILER ACKNOWLEDGES AND AGREES THAT E-COMMERCE OPERATOR HAS NOT MADE, NOR DOES HEREBY MAKE, ANY OTHER REPRESENTATION, WARRANTY, OR COVENANT OF ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED.
31. NOTICES
      Any notices or writings to be sent hereunder shall be in writing and shall be by personal delivery, facsimile transmission if accompanied by e-mail and/or telephone transmission or by certified or registered mail, return receipt requested, and shall be deemed given upon the earlier of actual receipt, [number] (#) days after deposit in the mail, or receipt by sender of confirmation of facsimile transmission. Notices shall be sent to the following addresses (or such other address as either party may specify in writing):
      IF TO E-Commerce Operator: [name and address of E-Commerce Operator]
      IF TO RETAILER: [name and address of Retailer]
      IN WITNESS WHEREOF, the parties have caused their duly authorized representatives to enter into this Agreement with intent to be legally bound hereby, the date and year first above written.
[name of E-Commerce Operator]
By:
Title:
Date:
[name of Retailer]
By:
Title:
Date:

EXHIBIT A
WEB SITE DEVELOPMENT AGREEMENT
      THIS Web Site Development Agreement (“Agreement”) dated [date] (the “Services Start Date”) by and between [name of E-Commerce Operator], a [State] corporation (hereinafter referred to as “E-Commerce Operator”) with an address of [address of E-Commerce Operator] and [name of Retailer], a [State] corporation (hereinafter referred to as “Retailer”) with an address of [address of Retailer].
W I T N E S S E T H:
      WHEREAS, E-Commerce Operator and Retailer have entered into an E-Commerce Agreement pursuant to which E-Commerce Operator shall provide certain E-Commerce services to Retailer, including the development and maintenance of a web site; and
      WHEREAS, the parties have elected to enter into this Agreement in order to set forth the terms and conditions pursuant to which E-Commerce Operator shall develop a web site for Retailer.
      NOW, THEREFORE, in consideration of the mutual promises and terms herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged; and intending to be legally bound hereby, the parties hereto agree as follows:
1. DEFINITIONS
      1.1. “Domain Name” means the domain name specified for the Web site by Retailer from time to time, each of which is owned by the retailer. The initial Domain Name is specified in Attachment B.
      1.2. “E-Commerce Agreement” means the E-Commerce Agreement by and between Retailers to which this Agreement is attached as Exhibit A.
      1.3. “Features Set” means the requirements set forth in Attachment B, as amended or supplemented in accordance with this Agreement.
      1.4. “Intellectual Property Rights” means any and all now known or hereafter known tangible and intangible (a) rights associated with works of authorship throughout the universe, including but not limited to copyrights, moral rights, (b) trademark and trade name rights and similar rights, (c) trade secret rights, (d) patents, designs, algorithms, and other industrial property rights, (e) all other intellectual and industrial property rights (of every kind and nature throughout the universe and however designated) (including logos, “rental” rights, and rights to remuneration), whether arising by operation of law, contract, license, or otherwise, and (f) all registrations, initial applications, renewals, extensions, continuations, divisions, or reissues hereof now or hereafter in force (including any rights in any of the foregoing).
      1.5. “Milestone Delivery Schedule” means the schedule for development of the Web site set forth in Attachment B.
      1.6. “E-Commerce Operator Content” means product information, text, pictures, sound, graphics, video, and other data and assets supplied by E-Commerce Operator, as such materials may be modified from time to time.
      1.7. “E-Commerce Operator Products” means, collectively, the E-Commerce Operator Tools, the E-Commerce Operator Content, and the E-Commerce Operator Work Product.
      1.8. “E-Commerce Operator Tools” means any tools, both in object code and source code form, which E-Commerce Operator has already developed or which E-Commerce Operator independently develops or licenses from a third party, excluding any tools that E-Commerce Operator creates pursuant to this Agreement. By way of example, E-Commerce Operator Tools may include, without limitation, toolbars for maneuvering between pages, search engines, Java applets, and ActiveX controls.
      1.9. “Production Schedule” shall mean the schedule agreed upon by the parties for the production of the Retailer's Web site, including the delivery of the Retailer Content and E-Commerce Operator Content by Retailer to E-Commerce Operator.
      1.10. “Retailer Content” means the Domain Name and the contents of the Retailer's web site pages that describe or are unique to Retailer and does not include product information that is E-Commerce Operator's responsibility. Such Retailer Content includes, without limitation, Retailer's trademark, copyrights, trade secrets, and confidential information.
      1.11. “Services” means the services provided by E-Commerce Operator hereunder to develop, host, and maintain the Web site, in accordance with this Agreement.
      1.12. “Web site” means, collectively, the E-Commerce Shopping Experience and the Retailer Content made available on web pages under the Domain Name.
      1.13. “E-Commerce Operator Work Product” means all HTML files, Java files, graphics files, animation files, data files, technology, scripts and programs, both in object code and source code form, all documentation and any other deliverable used by E-Commerce Operator to create the Web site.
      1.14. “Product Information” shall mean the camera-ready image, and descriptive text associated with each and every item of merchandise offered for sale on the web site, plus any sound graphics, or video that may also be supplied by E-Commerce Operator for some or all of these same items of merchandise.
2. WEB SITE DEVELOPMENT SERVICES
      2.1. Delivery of Initial Retailer Content. As soon as reasonably possible, E-Commerce Operator and Retailer shall agree upon a Production Schedule for the delivery by Retailer to E-Commerce Operator of the Retailer Content that Retailer intends for E-Commerce Operator to incorporate into the Web site. The parties acknowledge that Retailer will be able to deliver certain “static” information, such as store locations, promptly to E-Commerce Operator, and other product information, such as certain merchandise to be sold on the Retailer's Web site, at a later date closer to the Launch Date. The Retailer Content shall be in the format(s) designated by E-Commerce Operator as set forth on Attachment C hereto. Upon Retailer's request, E-Commerce Operator shall assist Retailer in the conversion of the Retailer Content into an acceptable form for use by the Web site.
      2.2. Web site Development Services. At no cost to Retailer, E-Commerce Operator shall provide design, programming, and other consulting Services as specified in Attachment B to create the Web site. E-Commerce Operator will provide the Web site to Retailer in accordance with the Milestone Delivery Schedule.
      2.3. Project Liaisons. Each party's primary contact for development efforts shall be the project liaisons specified in Attachment B or the person otherwise designated in writing by Retailer or E-Commerce Operator, as the case may be.
      2.4. Acceptance. E-Commerce Operator shall make available final versions of the Web site for Retailer's review and acceptance. Retailer shall have [number] (#) days to review and evaluate the Web site (the “Acceptance Period”) to assess whether it substantially meets the Features Set. During the Acceptance Period, Retailer shall identify in writing to E-Commerce Operator all aspects of the Web site that do not substantially conform to the Features Set. Upon receipt of Retailer's list of non-conformities, E-Commerce Operator shall correct promptly all such non-conformities so that the Web site does substantially conform to the Features Set and E-Commerce Operator shall extend the Acceptance Period for a second [number] (#) day during which Retailer shall confirm that all non-conformities that were previously identified have been corrected. Notwithstanding the foregoing, the Web site shall be deemed accepted upon the earlier of: (i) its use in commerce, provided, however, E-Commerce Operator shall not use the Retailer's Web site in commerce without the Retailer's consent, which shall not be unreasonably withheld or delayed; (ii) Retailer's failure to articulate any non-conformities during an Acceptance Period; or (iii) Retailers acceptance of the Web site; or (iv) E-Commerce Operator's demonstration that all non-conformities have been corrected to Retailer's reasonable satisfaction.
      2.5. The entire web site design, as viewed on line by customers, including typeset, coloration, backgrounds, and overall look are subject to Retailer's approval, which shall not be unreasonably withheld.
3. WEB HOSTING AND MAINTENANCE SERVICES
      Following Retailer's acceptance of the Web site pursuant to Section 2.4, E-Commerce Operator shall, at no cost to Retailer, provide the following web hosting and maintenance Services:
      3.1. Hosting Services. E-Commerce Operator shall load the Web site onto server(s) that are connected to the Internet and readily accessible via the Web through use of the Domain Names. E-Commerce Operator shall ensure that the Web site is functional and ready to process transactions in a reasonably efficient manner.
      3.2. Retailer Content. E-Commerce Operator shall upload all Retailer Content, including updates, and product information to the Web site within [number] (#) days of delivery to E-Commerce Operator. Upon E-Commerce Operator's prior written consent, Retailer may electronically transmit or upload Retailer Content directly to the Web site.
      3.3. Maintenance Services. E-Commerce Operator shall maintain the Web site so that it functions in a reasonably error-free manner. Upon notification of an error in the Web site or of a non-conformity between the Web site and the Features Set, whether from Retailer or from any user of the Web site, E-Commerce Operator shall promptly commence an investigation into the reported error, and E-Commerce Operator shall, upon reproducing such error, use reasonable commercial efforts to correct such error in a timely fashion. During such Maintenance Services, E-Commerce Operator shall ensure that the Web site is functional and ready to process transactions in a reasonably efficient manner, provided, however, E-Commerce Operator may, during low-usage periods, temporarily block access to the Web site to perform Web site maintenance during periodic maintenance windows.
      E-Commerce Operator shall use its best efforts to notify Retailer not less than [number] (#) hours in advance of any planned maintenance of the Retailer's Web site, which will cause E-Commerce Operator to close down the Web site.
      In the event that E-Commerce Operator is forced to close the Retailer's web site as a result of an emergency, E-Commerce Operator shall use its best efforts to advise Retailer of the emergency within twenty-four hours after it occurs.
4. ADDITIONAL SERVICES
      4.1. Search Engine Registration. When E-Commerce Operator makes the Web site available to Retailer, E-Commerce Operator shall register the Web Site and Domain Name with all applicable search engines, but at least the top five search engines as rated by frequency of use at E-Commerce Operator's discretion.
      4.2. Domain Name Assistance. If requested by Retailer, E-Commerce Operator shall cooperate with Retailer in registering the Domain Name with InterNIC. Retailer shall own all right, title, and interest in and to the Domain Name and all Intellectual Property Rights related thereto. Unless otherwise specified by Retailer, E-Commerce Operator shall, at Retailer's expense, assist Retailer in registration of the Domain Name.
5. CONSIDERATION
      In consideration for Retailer entering into the E-Commerce Agreement, at no cost to Retailer, E-Commerce Operator shall perform the Services set forth in this Agreement.
6. TERM AND TERMINATION
      6.1. Term. The term of this Agreement shall be conterminous with the term of the E-Commerce Management Agreement and controlled by the provision of Section 2 thereof. In absence of a material breach, this Agreement may only be terminated by the expiration of the term.
      6.2. Termination. Termination of this Agreement shall be governed by the terms of Section 13 of the E-Commerce Management Agreement.
7. WARRANTIES AND DISCLAIMERS
      7.1. Cross Warranties. Retailer warrants as to the Retailer Content, and E-Commerce Operator warrants as to the E-Commerce Operator Products, that any materials and updates or enhancements thereto shall not: (a) infringe on the Intellectual Property Rights of any third party or any rights of publicity or privacy; (b) violate any law, statute, ordinance, or regulation (including without limitation the laws and regulations governing export control, unfair competition, antidiscrimination, or false advertising); (c) be defamatory, trade libelous, unlawfully threatening, or unlawfully harassing; or (d) be obscene, pornographic, political, or indecent.
      7.2. Representations and Warranties of Each Party. Each party represents and warrants to the other party that: (i) it is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and that it has the power and authority to enter into this Agreement and the transactions contemplated herein; (ii) the consummation of the transactions described by this Agreement shall not conflict with or result in a breach of any of the terms, provisions, or conditions of its Articles of Incorporation or Bylaws, or any statute or administrative regulation or of any order, writ, injunction, judgment, or decree of any court, regulatory, or governmental authority or of any agreement or instrument to which it is a party or by which it is bound or constitute a default thereunder; and (iii) this Agreement has been duly authorized, executed, and delivered by it and this Agreement is valid, enforceable, and binding upon each party in accordance with its terms.
      7.3. Disclaimer. THE WARRANTIES MADE IN THIS SECTION 7 ARE MADE IN LIEU OF ALL OTHER EXPRESS WARRANTIES, WHETHER ORAL OR WRITTEN AND EXCEPT AS SET FORTH IN THIS SECTION 7, E-COMMERCE OPERATOR AND RETAILER MAKE NO OTHER REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.
      7.4. E-Commerce Operator warrants that the web site developed by E-Commerce Operator for Retailer will be fit for E-Commerce as defined in the E-Commerce Management Agreement and will be equivalent to the then current state-of-the-art standards of web sites selling On-Line Merchandise.
8. OWNERSHIP
      8.1. Ownership of E-Commerce Operator Products. Retailer hereby acknowledges and agrees that as between Retailer and E-Commerce Operator, E-Commerce Operator owns all right, title, and interest in and to the E-Commerce Operator Products and all applicable Intellectual Property Rights thereto. This Agreement confers no ownership interest in the E-Commerce Operator Products to Retailer.
      8.2. Ownership of Retailer Content. E-Commerce Operator hereby acknowledges and agrees that as between E-Commerce Operator and Retailer, Retailer owns all right, title, and interest in and to the Retailer Content and all Product Information as defined in Paragraph 1.14 and all applicable Intellectual Property Rights thereto. Except for a limited non-exclusive license during the term to use the Retailer Content and product information solely to perform its obligations hereunder, this Agreement confers no ownership interest in the Retailer Content to E-Commerce Operator. This includes all content on each product page, and copy including, but not limited to, pictures, descriptions, features, benefits, about each and every item offered for sale on line, to the extent Retailer provides such content and such content is not generally available elsewhere.
9. LIMITATION UPON LIABILITY
      UNDER NO CIRCUMSTANCES SHALL E-COMMERCE OPERATOR BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES (REGARDLESS OF WHETHER SUCH DAMAGES ARISE OUT OF CONTRACTUAL, NEGLIGENCE, OR OTHER LEGAL THEORIES) ARISING FROM OR RELATED TO RETAILER'S OR RETAILER'S CUSTOMERS USE OF OR INABILITY TO ACCESS ANY PART OF THE INTERNET OR RETAILER'S OR RETAILER'S CUSTOMERS RELIANCE ON OR USE OF INFORMATION, SERVICES, OR MERCHANDISE PROVIDED ON OR THROUGH THE WEB SITE OR THE SERVICES, OR THAT RESULT FROM MISTAKES, OMISSIONS, INTERRUPTIONS, LOSS, THEFT, OR DELETION OF FILES, ERRORS, DEFECTS, DELAYS IN OPERATION, OR TRANSMISSION, OR ANY FAILURE OF PERFORMANCE. IN NO EVENT SHALL E-COMMERCE OPERATOR BE LIABLE UNDER THIS AGREEMENT FOR AN AMOUNT THAT EXCEEDS, IN THE AGGREGATE THE AMOUNTS PAID TO RETAILER DURING THE [number] (#) MONTHS PRECEDING THE LAST ACT OR OMISSION GIVING RISE TO SUCH LIABILITY. SHOULD A MATERIAL FAILURE OCCUR, THE RETAILER HAS AT ITS SOLE DISCRETION, THE OPTION TO MODIFY THE TERM OF THE E-COMMERCE MANAGEMENT AGREEMENT TO A NEW TERM ACCEPTABLE TO RETAILER. THE REMEDIES SET FORTH IN THIS SECTION 9 CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE TO RETAILER UNDER THIS AGREEMENT. IN NO EVENT SHALL EITHER PARTY BE LIABLE IN ANY RESPECT FOR CLAIMS BROUGHT MORE THAN [number] (#) MONTHS AFTER THE LAST ACT OR OMISSION GIVING RISE TO SUCH LIABILITY.
10. INDEMNITY
      10.1. Retailer Indemnity. Subject to Section 10.3, Retailer shall defend, indemnify, and hold E-Commerce Operator harmless against any third-party claim, action, suit, or proceeding connected with or arising out of (i) Retailer's gross negligence, willful, or intentional misconduct; or (ii) any breach by Retailer of the warranties set forth in Sections 7.1 or 7.2.
      10.2. E-Commerce Operator Indemnity. Subject to Section 10.3, E-Commerce Operator shall defend, indemnify, and hold Retailer harmless against any third-party claim, action, suit, or proceeding connected with or arising out of: (i) E-Commerce Operator's gross negligence, willful or intentional misconduct; or (ii) any breach by E-Commerce Operator of the warranties set forth in Sections 7.1 or 7.2.
      10.3. Mechanic of Indemnities. The indemnifying party's obligations are conditioned upon the indemnified party: (a) giving the indemnifying party prompt written notice of any claim, action, suit, or proceeding for which the indemnified party is seeking indemnity; (b) granting control of the defense and settlement to the indemnifying party; and (c) reasonably cooperating with the indemnifying party at the indemnifying party's expense.
11. MISCELLANEOUS
      11.1. Incorporation of Certain Provisions of the E-Commerce Agreement. Sections [numbers], inclusive, of the E-Commerce Agreement are hereby incorporated in their entirety into this Agreement.
      11.2. Interpretation of Agreements. With respect to the subject matter hereof, the E-Commerce Agreement shall control any conflict between the terms of this Agreement and the E-Commerce Agreement.
      11.3. Definitions. Any terms not specifically defined in this Agreement shall be construed in accordance with the definitions given such terms in the E-Commerce Agreement, or if such terms are not defined in the E-Commerce Agreement, then such terms shall be construed in accordance with their everyday common meaning.
12. MEASURE OF PERFORMANCE
      E-Commerce Operator shall be responsible to comply with the provisions of Paragraph [number] of the E-Commerce Management Agreement, the terms of which are incorporated by reference. E-Commerce Operator's failure to do so shall be a default of both the E-Commerce Management Agreement and this Agreement permitting the Retailer to exercise its remedies set forth in Paragraph [number] of the E-Commerce Management Agreement.
      IN WITNESS WHEREOF, each of the parties has caused their duly authorized representatives to enter into this Agreement to be effected on the Services Start Date.
[name of E-Commerce Operator]
By:
Title:
Date:
[name of Retailer]
By:
Title:
Date:
ATTACHMENT A
RETAILER'S ASSET REQUIREMENTS
Product Assets
Elements: Product Assets should include names, UPCs, and prices. No product photography or description is required.
Store Locations
Store location information should include address, phone number, fax number, store manager's name, and store hours (which vary by mall).
Corporate Assets
Corporate Assets may include the following: Press Releases, Frequently Asked Questions, Contact Information, Jobs Information, Community Programs Information, Annual Reports, and Corporate Identity materials including logo.
All of the above information may be submitted at the retailer's discretion, excluding the corporate identity materials and logos, which are mandatory.
* Please define corporate identity materials.
Attachment B
Domain Name:
Format of Retailer Content:
Project Liaisons:
For E-Commerce Operator:
For Retailer:
FEATURES SET
1. PRODUCT SEARCH
2. BROWSE CATEGORIES
3. RECOMMENDATION TOOLS
4. ADVANCE PRODUCT PRESENTATION
5. SHOPPING CART
6. GIFT GIVING FUNCTIONALITY
7. REMOTE PUBLISHING TOOLS FOR HUMAN RESOURCES AND PRESS ROOM
8. SALES TAX CONFIGURATION
9. PRODUCT REVIEWS
10. 24/7 CUSTOMER SUPPORT
11. AFFILIATE PROGRAM FUNCTIONALITY
12. ON-LINE GIFT CERTIFICATES
13. LAND-BASED STORES GIFT CERTIFICATES
14. STORE LOCATOR
15. FINANCIAL INFORMATION
16. FREQUENTLY ASKED QUESTIONS
17. COMMUNITY PROGRAMS
18. COMPANY PROFILE
19. ON-LINE ORDER STATUS
MILESTONE DELIVERY SCHEDULE:
TASK ESTIMATED COMPLETION DATE:
		
DISCOVERY AND PLANNING	[date]	
COMMENCE ENGINE ENGINEERING	[date]	
ESTABLISH FULFILLMENT CAPABILITIES	[date]	
RETAILER WEB SITE DEVELOPMENT	[date]	
QUALITY CONTROL REVIEW AND REVISIONS	[date]	
ALPHA TESTING	[date]	
BETA (SOFT LAUNCH)	[date]	
WEB SITE LAUNCH TO GENERAL PUBLIC	[date]	
MEDIA AND PROMOTIONS	[date]	
ATTACHMENT C
ASSET SUBMISSION GUIDELINES
This section details how to submit assets.
Source Assets and Final Assets
We require source files for all assets. This means if an image is originally constructed as a layered RGB Photoshop file at 100 × 500 pixels, we need that file, even if the final file is a flattened 4-bit GIF at 20 × 100.
We allow the submission of final assets in some cases, but only by prior arrangement and only in addition to an up-to-date source file. All submitted assets are subject to review and verification by production staff.
Media and Format
We routinely receive assets in the following media and formats.
Digital Media
Media: SyQuest 44mb, 88mb, 200mb, CD-ROM (including Photo CD), Zip, Jaz, 3.5” floppy.
Format: Win-16, Win-32, or Macintosh.
File Formats: Text, Raw, MS-Word 95, RTF, HTML.
Bitmap Graphics: Photoshop, TIFF, PCD (Photo CD), EPS, PICT (JPEG and GIF for final files only and only along with source files).
PostScript Graphics: EPS, Illustrator (7.0 preferred).
Video: QuickTime.
Audio: WAV, AIFF, MIDI.
Non-Digital Media
Contact us to discuss needs and capabilities before submitting any non-digital assets.
Asset Submission
We prefer to receive assets via FTP (file transfer protocol), although we gladly accept assets via standard package delivery services (i.e., FedEx, USPS, UPS, etc.).
Submission via FTP
FTP Area:
Assets should be left in “Incoming,” which is a level below the initial directory. Once assets have been transferred, e-mail confirmation is required.
Submission via Package Delivery
If you wish to submit assets via standard package delivery services, please address the package to this address:
Address:
If you are submitting hard assets like brochures, photographs, etc. please be sure to ship them in a reinforced container to prevent damage to the assets while in transit.
If you are submitting digital media like SyQuests, Zip disks, Jaz disks, etc., be sure to ship them in a well-padded, reinforced container.
SCHEDULE 1
TO E-COMMERCE AGREEMENT
RETAILER'S TRADEMARKS, TRADENAMES, AND LOGOS TO E-COMMERCE OPERATOR
[list of trademarks]
SCHEDULE 2
TO E-COMMERCE MANAGEMENT AGREEMENT
				
TYPE OF ON-LINE GOODS	RETAILER'S OPERATING MERCHANDISE INCOME	MANAGEMENT FEE TO RETAILER	COST OF	
IN-LINE GOODS
SPECIAL MAKE-CLOSEOUTS
MARKDOWNS
LAND-BASED GIFT CERTIFICATES
ON-LINE GIFT CERTIFICATES