Employment Agreement - Fogdog Inc. and Tim Joyce


August 23, 1999


Tim Joyce
12 Dover Way
Lake Oswego, OR 97034

Dear Tim,

We are pleased to offer you employment with Fogdog, Inc. (hereinafter "Fogdog")
as President, with a start date of August 26th, 1999.

The terms and commitments of your employment with Fogdog are as follows:

1.  You will be employed to work full time and exclusively for the Company.

2.  Salary.  Base salary of $23,333.33 per month, which is equal to $280,000 per
    ------
    year.

3.  Bonus.  You will have the opportunity to earn a bonus in addition to your
    -----
    base salary. Performance targets to earn the bonus are as attached to this
    agreement. The target for the bonus is 20% of your salary with the
    opportunity to earn more through performance accelerators. You must be
    employed by Fogdog at the time the bonus is payable to be eligible to
    receive the bonus.

4.  Stock Options.  Subject to approval by the Board of Directors of Fogdog, we
    -------------                                                              
    are pleased to offer you participation within Fogdog's stock option plan at
    a level of 1,000,000 common ISO shares. Options are vested over four years,
    with 125,000 options vesting at the end of the first six months and monthly
    vesting in equal increments of 20,833 options thereafter.

    If, within 30 days from your start date, Nike Inc opens Fogdog up as a
    retail account for its premium product (including Nike, Air Jordan, and
    Alpha product lines), you will receive a bonus grant of 125,000 shares,
    which shall be fully vested at the six month cliff date.

    The exercise price per share will be the fair market value (current value is
    $.88 per share) of the options as determined by the Board of Directors after
    your start date.

    In the event of an acquisition (Corporate Transaction) of the company during
    the first twelve months of employment, twenty-four months' of options, to
    the extent outstanding at that time but not otherwise fully exercisable,
    shall automatically accelerate. No such acceleration shall occur if i) the
    options are assumed by any successor corporation or ii) such acceleration
    would impact any pooling of interest. In event ii) the accelerated option
    would be replaced with a cash incentive which preserves the spread existing
    on the unvested option at the time of the Corporate Transaction (excess of
    fair market value of such option over the aggregate exercise price payable).

5.  Relocation Package.  Upon the relocation of your family, you are eligible
    ------------------                                                       
    for reimbursement of allowable relocation expenses, as described in the
    attached Relocation Policy, up to $50,000. Also upon the relocation of your
    family, we will offer you an additional relocation reimbursement of $30,000,
    to be used as you see fit for your moving and living expenses. Additionally,
    we will offer you up to $20,000 to reimburse you for temporary housing for
    yourself until such time as your family relocates.

 
6.   Health Benefits. For the duration of employment, you shall be entitled to
     ---------------                                                          
     participate in the Company's health insurance, life insurance and
     disability insurance plans to the extent permitted by law, that may from
     time to time be adopted by the Board.

7.   401(k).  For the duration of employment, you are eligible to participate in
     ------                                                                     
     Fogdog's 401(k) Savings Plan. The Company reserves the right to amend,
     modify or terminate this benefit at any time for any reason.

8.   Vacation. You will accrue paid vacation days at a rate of one and one-half
     --------                                                                 
     (1.5) days per month of employment.

9.   Family & Sick Leave.  You will accrue paid family and sick leave at a rate
     -------------------                                                      
     of one-half day (1/2) per month of employment (18 days per year).

10.  At Will Employment. Your employment with Fogdog is at-will and can be
     ------------------                                                  
     terminated or modified at any time, with or without cause, at the option of
     either you or Fogdog. This provision may be modified only in writing,
     signed by the CEO of the company.

     Except as otherwise provided herein, upon the termination of your
     employment with Fogdog you shall immediately cease to accrue salary,
     vacation, benefits, vesting of stock options and all other compensation. If
     employment is terminated for reasons other than cause, you will be entitled
     to a 6 month severance package (salary and benefits only).

11.  Expense Reimbursement.   Corporate travel and other company-related
     ---------------------                                              
     expenses incurred by you on your personal accounts shall be reimbursed.
     Those expenses plus any travel and company-related expenses incurred on any
     Fogdog company account are to be approved by your direct supervisor prior
     to event.

12.  Confidentiality.   For the duration of employment and after any termination
     ---------------                                                            
     of employment, you will keep all Cedro information confidential and
     proprietary, including but not limited to, new product development,
     business practices, and corporate initiatives. In any case, Fogdog will, at
     its sole discretion, provide written authorization to allow you to reveal
     such information. You may be asked to sign additional confidentiality
     documentation.

If this offer of employment is acceptable to you, please sign a copy of this
letter and return it to me no later than 5:00pm PST, August 25th, 1999.

Best Regards,

/s/ Marcy von Lossberg

Marcy von Lossberg
Chief Financial Officer


I accept your offer of employment as outlined in this letter. I acknowledge
receiving a copy of my job duties. I understand that my employment can be
terminated at any time, with or without cause.

Signature                                              Date

/s/ Tim Joyce                                          8/25/99
------------------------------                         ------------------------
               Tim Joyce



 TYPE:  EX-10.13
 SEQUENCE:  15
 DESCRIPTION:  ORDER FULFILLMENT SERVICES AGREEMENT



 
                                                                   EXHIBIT 10.13

                      ORDER FULFILLMENT SERVICES AGREEMENT

ORDER FULFILLMENT SERVICES AGREEMENT (this "Agreement") dated as of the
seventeenth day of September 1999, by and between Keystone Fulfillment, Inc.
("Keystone"), a Delaware corporation with a principal place of business located
at 101 Kindig Lane, Hanover, Pennsylvania, and Fogdog, Inc. ("Fogdog,"), a
California corporation with a principal place of business located at 500
Broadway, Redwood City, California.

                              W I T N E S S E T H:

     WHEREAS, Keystone and its affiliates are engaged in the business of direct
response marketing to consumers;

     WHEREAS, Fogdog is engaged in the business of the direct marketing of
sporting goods (the "Fogdog Merchandise") and proposes to continue to conduct
for the Term (as defined below) of this Agreement to market Fogdog Merchandise
to consumers through its website(s) (the "Fogdog Business");

     WHEREAS, Fogdog proposes that Keystone provide fulfillment and other
services respecting the Fogdog Business; and

     WHEREAS, subject to the terms and conditions herein contained, Keystone
desires to provide such services as set forth herein;

     NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter made by the parties hereto, Fogdog and Keystone agree as follows:

1.   Appointment:  Acceptance.  Subject to the terms and conditions set forth in
     ------------------------                                                   
     this Agreement, Fogdog hereby appoints Keystone to coordinate and/or
     perform the services described herein for the Term.  Keystone hereby
     accepts such appointment and agrees to coordinate and/or perform such
     services as provided herein for the Term.

2.   Fulfillment Services.  Keystone will provide or coordinate fulfillment
     --------------------                                                  
     services to Fogdog in connection with the Fogdog, Business such services
     being described, and to be performed in accordance with the Performance
     Standards and Statement of Work set forth, in Exhibit C. Fees for these
                                                   ---------                
     services are to be billed to and paid by Fogdog in accordance with the fee
     schedule set forth in Exhibit A attached hereto and made a part hereof. 
                           ---------                                            
     [*] Except for shipping work performed by third-party carriers,
     Keystone shall remain liable for all work it outsources under this
     Agreement.

3.   Certain Fogdog Obligations.  Fogdog will:
     --------------------------               

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE 
OMITTED PORTIONS.
 
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.


 
     a.   pay Keystone per the fee schedule attached as Exhibit A for, and
                                                        ---------         
          reimburse Keystone for all reimbursable expenses as described and at
          the rates indicated in Exhibit A which are incurred by Keystone in
          connection with, all services performed by Keystone on Fogdog's
          behalf;

     b.   arrange for delivery of Fogdog Merchandise to Keystone's facility, in
          accordance with the standard vendor compliance procedures set forth in
                                                                                
          Exhibit B attached hereto and made a part hereof, as the same may be
          ---------                                                           
          modified from time to time by the parties;

     c.   [*]

     d.   pay for all costs of stationery and packaging and other supplies
          required in connection with the Fogdog Business, such items to be
          billed by Keystone in accordance with Exhibit A;
                                                --------- 

     e.   arrange and pay for the disposition of any overstocks remaining unsold
          at the end of the Term of this Agreement, including payment of all
          costs of customs duties, transportation and insurance after the Term
          of this Agreement; and

     f.   provide Keystone on or prior to the execution and delivery of this
          Agreement with a duly executed original Pennsylvania resale
          certificate and sales tax exemption certificate.

4.   Reporting:  Invoice; Right to Suspend Services for Nonpayment.  [*]
     -------------------------------------------------------------           
     

5.   Representations and Warranties.
     ------------------------------ 

     a.   Each Party represents and warrants to the other: that it has full
          power and authority to enter into this Agreement and to undertake its
          obligations pursuant hereto; that this Agreement constitutes a valid
          and binding agreement of such party, enforceable in accordance with
          its terms (except as enforceability may be limited by creditors'
          rights laws and equitable remedies); that the execution, 

                                       2
 
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.


 
          delivery and performance of this Agreement do not and will not
          conflict with or result in a breach of or constitute a default under
          any provision of the charter or by-laws of such party, or give rise to
          any default under any material contractual obligation of such party or
          violate any provisions of any law, rule, regulation, order, writ,
          judgment, injunction, statute, decree, determination or award having
          applicability to such party or any of its affiliates or its or their
          properties; and that it is duly qualified or licensed in all
          jurisdictions wherein the nature of the business conducted by it or
          the character or location of its properties makes such qualification
          or licensing necessary, except where the failure so to be qualified or
          licensed would not, if left unremedied, impair the other party's
          ability to perform its respective obligations under this Agreement.

     b.   Fogdog represents and warrants to Keystone that in the conduct of the
          Fogdog Business as it pertains to any and all Fogdog Merchandise, and
          other items supplied by Fogdog or one of its vendors, Keystone
          handles, comes into contact with, or has possession of:  Fogdog is the
          absolute owner of all its patents, trademarks, service marks,
          trademark and service mark applications, trade names, copyrights,
          trade secrets and other intellectual property used in its business
          and/or to be used in the Fogdog Business, or has, to its knowledge,
          and will use its best efforts to continue to have during the Term of
          this Agreement, all necessary authority of the corporations,
          partnerships and individuals whose products and services will be
          offered for sale in the Fogdog Business to use their patents,
          trademarks, service marks, trade names, trademark and service mark
          registrations, copyrights, trade secrets and other intellectual
          property for all purposes of conducting the Fogdog Business.  Fogdog's
          Business, as it pertains to any and all Fogdog Merchandise, and other
          items supplied by Fogdog or one of its vendors, Keystone handles,
          comes into contact with, or has possession of, as conducted or as
          currently proposed to be conducted does not and will not, to Fogdog's
          knowledge after due inquiry, cause Fogdog to infringe or violate any
          patents, trademarks, service marks, trade names, copyrights, licenses,
          trade secrets or other proprietary or intellectual property rights
          (including, without limitation, rights of privacy and publicity) of
          any other person or entity.

6.   Vendor.  Fogdog will be the vendor of Fogdog Merchandise to Fogdog Business
     ------                                                                     
     customers.  Fogdog will be responsible for any required sales tax
     registrations, filings and remittances.  Fogdog shall provide Keystone with
     a schedule of all jurisdictions for which Keystone is to bill Fogdog's
     customers for sales and use tax pursuant to section 2(f) of this Agreement.
     For each jurisdiction listed, such schedule shall indicate whether the non-
     merchandise components (e.g. delivery charges, insurance, etc.) of Fogdog's
     customer billing shall be included in the tax base for calculating sales
     and use tax.  Fogdog shall provide Keystone with a product matrix schedule,
     by SKU number and jurisdiction, indicating each jurisdiction in which the
     sales price of such SKU number shall be wholly or partially exempt from
     sales and use tax.  For any SKU number partially exempt from sales and use
     tax, the limits of such exemption shall be indicated.  All products not
     appearing on the product matrix schedule shall be included in the tax base
     in all jurisdictions for which Fogdog has requested Keystone to bill sales
     and use tax.  The schedules to be provided by Fogdog in accordance with
     this section shall be 

                                       3

 
     provided to Keystone no later than thirty (30) days prior to the
     commencement of order processing pursuant to section 2(a) of this
     Agreement. Pursuant to Section 2(f) of this Agreement, Keystone shall bill
     Fogdog's customers for sales and use taxes for Pennsylvania and such other
     jurisdictions appearing on Fogdog's schedule of jurisdictions for which
     Keystone is to bill Fogdog's customers for sales and use tax. Sales and use
     taxes shall be billed at the current rate, as reported by Vertex or such
     other third-party national sales tax rate directory as may be used by
     Keystone, for the date on which orders to Fogdog's customers are received.
     Keystone makes no representations or warranties as to the accuracy of the
     information provided by Vertex or any other third-party national sales tax
     directory. Keystone shall amend the schedule listing the jurisdictions,
     products and/or other amounts billed to Fogdog's customers for which it
     bills sales and use taxes within thirty (30) days of receipt of a written
     request for an amendment from Fogdog. Keystone shall not be held
     responsible for the collection of sales and use taxes that are unpaid by
     Fogdog's customers nor for any failure to bill the proper sales and use
     taxes provided Keystone has complied with the provisions of this section.

7.   Compliance with Laws.  In performing its obligations under this Agreement,
     --------------------                                                      
     each party shall comply with all applicable federal, state and local laws,
     rules, regulations and orders.

8.   Confidentiality.  The parties (including their officers, directors,
     ---------------                                                    
     shareholders, affiliates, agents, employees, consultants, other
     representatives, successors, and assigns) agree that all confidential or
     proprietary information (the "Confidential Information"), including,
     without limitation, customer names, addresses and other related data and
     pricing, fulfillment and other operational information, received by each as
     a result of the project contemplated hereby, shall be maintained in
     strictest confidence, shall not be disclosed to anyone other than employees
     or agents of the respective parties whose duties require access to such
     information, and shall be used solely by the parties to carry out this
     Agreement and the transactions contemplated thereby.  Keystone specifically
     agrees not to use for its own Purposes, or to provide to a third party, any
     customer or mailing lists of Fogdog that comes into its possession without
     the prior written consent of Fogdog,.  The parties further agree that any
     public statements made by either party concerning this Agreement or the
     transactions contemplated herein, unless required by law, shall require the
     prior written approval of the other party.  In addition, should either
     party be required to disclose the Confidential Information or any part of
     it to the Securities and Exchange Commission, the par-ties agree to
     cooperate with each to obtain confidential treatment of such information.

9.   Effectiveness and Termination.
     ----------------------------- 

     a.   This Agreement shall be effective as of the date first set forth above
          and shall continue in full force and effect through [*] ("the Term"),
          unless earlier terminated by either party upon:

 
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.



                                       4

 
          (1)  if not cured within [*] following written notice thereof, the
               failure of the other party to comply substantially with any
               material provision of this Agreement, including but not limited
               to:

               (a)  Section 2 payment obligations and Exhibit A;
               (b)  Section 4;
               (c)  Section 5;
               (d)  Section 12;
               (e)  Exhibit C:  Merchandise Receipt Performance Standards;
               (f)  Exhibit C:  Collate, Printing, Picking, Packing and Shipping
                    Performance Standards for Regular Orders;
               (g)  Exhibit C:  Inventory Shrinkage; and
               (h)  Exhibit C:  Priority Order Processing.

          (2)  the commencement of any voluntary or involuntary bankruptcy,
               insolvency, reorganization, readjustment of debt, dissolution
               (except by way of merger or consolidation), liquidation of debt,
               or other insolvency proceeding by or against the other party;

          (3)  the suspension or termination of the other party's business or
               the appointment of a receiver, trustee, or similar officer to
               take charge of a substantial part of the other party's assets;

          (4)  the other party admitting in writing its inability to pay its
               debts when due; or

          (5)  [*] prior written notice given to the other party.

          Fogdog will pay all reasonable expenses associated with moving
          inventory out of Keystone's facilities should Keystone terminate this
          Agreement pursuant to this Section 9.

     b.   Upon termination of this Agreement, if Fogdog has failed to pay any
          undisputed amounts due hereunder, Keystone shall have a lien against
          any remaining Fogdog Merchandise until payment by Fogdog of all
          undisputed outstanding amounts, subject to the provisions of the
          Uniform Commercial Code or other relevant law.  Such remedy shall be
          cumulative and in addition to any other remedies Keystone may have in
          law or equity.

10.  Automatic Renewal of Agreement.  This Agreement shall be automatically
     ------------------------------                                        
     renewed for successive [*] periods after the Term (each also a "Term")
     unless either party provides the other party with written notice at least
     [*] before the end of the then current Term that such party does not want
     to renew this Agreement.

11.  No-Hire.  Each party agrees that, during and for a period of [*]
     -------                                                                   
     after the Term, or, if this Agreement is earlier terminated, then for the
     period when the Agreement is in effect and thereafter for a period of [*] 
     from the date of the Agreement's 

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

                                       5
 



 
     termination, neither it nor any of its affiliates or associates, directly
     or indirectly, will solicit with a view toward hiring any of the current
     officers, employees, consultants, or other representatives of the other (as
     officer, employee, consultant or otherwise) without obtaining the prior
     written consent of the other party.

12.  Indemnification; Limitation on Liability [*]
     ----------------------------------------                                
 
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

    

 
     [*]

13.  Force Majeure; No Consequential Damages.  In the event that either party
     ---------------------------------------                                 
     shall be unable to perform under this Agreement because of circumstances
     constituting a force majeure, including, without limitation, acts of God,
     accident, fire, flood, explosion, the elements, strikes, embargo, sabotage,
     acts of war or of military authorities, civil disturbances, transportation
     stoppages, acts or omissions of carriers, inability to secure fuel,
     failures of electrical supply or communications services, acts of computer
     hackers, or other causes beyond its control, such party shall not be deemed
     to be in breach of this Agreement or liable to the other for failure to
     perform hereunder.  None of the foregoing, however, shall excuse any
     failure of either party to pay money as and when due hereunder.  In no case
     shall either party be liable to the other for any consequential, incidental
     or indirect losses or damages of any kind arising out of or in any way
     connected with this Agreement, even if such party has been advised of the
     possibility of such losses or damages.

                                       7

 
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.



 
14.  Binding Effect, No Assignment.  This Agreement shall be binding upon and
     -----------------------------                                           
     inure to the benefit of the parties hereto and their respective successors
     and assigns. [*] Any purported assignment or other transfer in violation of
     this section shall be null and void.

15.  Independent Contractors:  No Third-Party Rights.  Nothing contained in this
     -----------------------------------------------                            
     agreement shall be construed to give either party the power to direct or
     control the day-to-day activities of the other.  The parties are, and in
     all respects of their relationship to one another and their respective
     performances hereunder shall be, independent contractors, and neither this
     Agreement nor anything herein contained shall be deemed or construed to
     constitute the parties as partners, joint venturers, principal and agent,
     co-owners or otherwise as participants in a joint or common undertaking.

16.  Modification; No Waiver; Severability.  No modification or waiver of any
     -------------------------------------                                   
     provision of this Agreement shall be effective unless and only to the
     extent expressed in a mutually executed agreement.  No failure or delay by
     any party in exercising any right, power or privilege hereunder shall
     operate as a waiver thereof, nor shall any single or partial exercise
     thereof preclude any other or further exercise of any right, power or
     privilege.  Should any provision of this Agreement be determined to be
     void, invalid or otherwise unenforceable by any court of competent
     jurisdiction, such determination shall not affect the remaining provisions
     hereof, which shall remain in full force and effect.

17.  Governing Law; Jurisdiction.  This Agreement shall be governed by and
     ---------------------------                                          
     construed under the laws of the State of Pennsylvania, without regard to
     such state's conflict of laws rules.  THE PARTIES HEREBY AGREE TO SUBMIT TO
     THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL OR STATE COURTS LOCATED IN
     THE STATE OF PENNSYLVANIA, AND HEREBY WAIVE ANY OBJECTION BASED ON VENUE OR
     FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION INSTITUTED THEREIN AND ANY
     RIGHT TO TRIAL BY JURY.

18.  Notices.  Except as otherwise provided in this Agreement, notices required
     -------                                                                   
     to be given pursuant to this Agreement will be effective upon receipt (or
     upon rejection of receipt) when hand-delivered in writing, sent by prepaid
     express delivery courier, sent by first class certified mail, return
     receipt requested, with postage fully prepaid, or sent by facsimile
     followed by a confirmation letter of such delivery method, to the parties
     at the respective addresses and numbers below:

                                       8

 
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.



 
     (a)  if to Keystone:

               Keystone Fulfillment, Inc.
               5022 Hollins Road
               Roanoke, VA
               Attention:    Gary Firebaugh
                             Vice President
               Telephone:  540-561-7746
               Facsimile:  540-561-7755

               With a copy to:

               Hanover Direct, Inc.
               1500 Harbor Boulevard
               Weehawken, NJ  07087
               Attention:  General Counsel
               Telephone:  201-272-3484
               Facsimile:  201-272-3495


     (b)  if to Fogdog:

               Fogdog, Inc.
               500 Broadway
               Redwood City, CA  94063
               Attention:    Mohan Komanduri
                             Director of Logistics
               Telephone:  650-980-2577
               Facsimile:  650-980-2600

               with a copy to:

               Fogdog, Inc.
               500 Broadway
               Redwood City, CA  94063
               Attention:    Pat McGovern
                             General Counsel
               Telephone:  650-980-2546
               Facsimile:  650-980-2608


19.  Survival; Injunctive Relief; Remedies Cumulative.  The confidentiality and
     ------------------------------------------------                          
     no-hire provisions hereof shall survive the expiration or earlier
     termination of this Agreement and the consummation or termination of the
     transactions contemplated hereby.  The parties agree that the remedy at law
     for any breach of such provisions would be inadequate; that the injured
     party shall be entitled to seek injunctive relief in addition to any other
     remedy to which it may be entitled.  Notwithstanding the expiration or
     earlier termination of this 

                                       9

 
     Agreement neither party hereto shall be released from any liability or
     obligation hereunder (whether in the nature of indemnification or
     otherwise) which has already accrued as of the time of such expiration or
     termination or which thereafter might accrue in respect of any act or
     omission of such party prior to such expiration or termination. The
     remedies provided herein are cumulative and not exclusive of any other
     remedies that a party may have in law or equity.

20.  Entire Agreement; Counterparts.  With respect to the matters contemplated
     ------------------------------                                           
     herein, this Agreement constitutes the entire understanding between the
     parties and supersedes all prior oral and written communications,
     negotiations, understandings and agreements between such parties in
     relation to the subject matter hereof.  This Agreement may be executed in
     two or more counterparts, each of which shall be deemed to be an original,
     but all of which shall constitute the same agreement.

21.  Number and Gender.  Whenever appropriate in this Agreement, terms in the
     -----------------                                                       
     singular number shall include the plural (and vice versa) and each gender
     form shall include all others.

22.  Headings.  Section headings contained in this Agreement are for reference
     --------                                                                 
     purposes only and shall not affect in any way the meaning or interpretation
     of this Agreement.

23.  Drafting.  This Agreement shall be treated as an agreement that was jointly
     --------                                                                   
     drafted by all parties signing it and shall not be read against any
     particular drafter of the Agreement or any provision therein.

24.  Attorneys' Fees and Litigation Expenses.  In the event that any legal
     ---------------------------------------                              
     proceeding concerning the validity, enforcement or interpretation of the
     provisions of this Agreement is instituted, the prevailing party in such
     proceeding shall be entitled to recover its reasonable attorneys' fees and
     other litigation expenses incurred in such proceeding, in addition to any
     other relief to which it may be entitled, from the losing party.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.

KEYSTONE FULFILLMENT, INC.



By: /s/ Gary A. Firebaugh
   -----------------------------------
Name:  Gary A. Firebaugh
Title:  Vice President, Marketing

FOGDOG, INC.

By: /s/ Timothy Harrington
   -----------------------------------
Name: Timothy Harrington
     ---------------------------------
Title: CEO
      --------------------------------

                                       10

 
                                   Exhibit A

                                Schedule of Fees


[*]

                                       11


 
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.



 
                                           Orders/month


[*]

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

                                       12

 



 


                                                   
[*]
 

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

                                     13

 
 
 

                                                    
[*]
 

                                       14

 
 
 
                                                    
[*]


[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.



                                       15

 
                                   Exhibit B

                     Standard Vendor Compliance Procedures

     Packaging

Vendors are expected to deliver merchandise in prepackaged units exactly as they
are to be sold to the customer.  All items require packaging that will protect
them during distribution, storage, handling and shipping.  There are four
package formats that are acceptable to Keystone:

     Polybags
     --------

     Non-fragile items can be packaged in individual, fully vented polybags
     labeled with the Fogdog item number.  Multiple items of the same item
     number may be packed into a master carton.  Polybags are appropriate for
     small items which will not easily break during handling and for textile
     items.

     Boxes
     -----

     Items may be packaged in a retail box made from kraft board or corrugated
     boxes.  This may be appropriate for non-fragile items or where there is
     sufficient inner protection to prevent damage from shock or vibration.  If
     the product is exposed, or the item may fall out of the package during
     conveyance, a polybag, shrink film or over-box must be used.  These items
     must be delivered in a master carton.

     Protective Packaging
     --------------------

     Items which can easily break must have protection sufficient to withstand
     the normal distribution handling and shipping environment.

     Ship-Alone Packaging
     ---------------------

     Items that are greater than 23 inches in length or weigh more than 30
     pounds must be packaged in mailable containers.  These items will be sent
     directly to the customer and will not be over-boxed.

     Master Cartons
     --------------

     Items less than 23 inches in length or less than 30 pounds should be in
     master cartons.  The master carton size should not exceed 36"L x 26"W x
     20"H, nor exceed 50 pounds.  Each master carton must contain only one
     Fogdog item number.

     Labeling

     Individual Unit Label
     ---------------------

                                       16

 
     Each individual selling unit must have an identification label.  The label
     must show the Fogdog item number and the country of origin.  This does not
     necessarily need to be externally marked.

     Master Carton Labeling
     ----------------------

     Each master carton must have the following information clearly marked or
     labeled on the outside of the carton:

     .  Fogdog
     .  Fogdog Item Number
     .  Purchase Order Number
     .  Color
     .  Quantity
     .  Case Number ___ of ____
     .  Made in:
     .  Destination

     Shipping Requirements

     Advance Shipping Notification (ASN)
     -----------------------------------

     All inbound shipments must be scheduled through the Traffic Department
     using an ASN.  This must be faxed to the Traffic Department at (717) 633-
     3202 at least 3 days before shipping.  The Traffic Department will return
     the form within 24 hours with a Request Number.  Questions about ASNs
     should be directed to the Traffic Coordinator at (717) 633-3276.

     Loading the Truck
     -----------------

     The truck must be loaded by purchase order and then by item number within
     that purchase order.

     Packing List
     ------------

     A detailed packing list must accompany each shipment and should be attached
     to the last container/pallet loaded in the trailer.  There should be one
     packing list for each purchase order shipped.

     Routing Guide

For inbound shipments arriving at Keystone with collect freight terms, the
carriers shown in this routing guide should be used.  Other carriers may be used
if agreed to in writing by Keystone before shipments are originated.

     Shipments weighing under 125 pounds:
     ----------------------------------- 

     Use RPS.  Call (800) 762-3725 for instructions or supplies

                                       17

 
     Shipments weighing between 125 pounds and 4,999 pounds and occupying less
     -------------------------------------------------------------------------
     than 1/3 of a 48 foot trailer:
     ----------------------------- 

     Use the carrier shown in the chart following this section.

     Shipments weighing between 5,000 pounds or more and/or occupying more than
     --------------------------------------------------------------------------
     1/3 of a 48 foot trailer:
     ------------------------ 

     Call the Traffic Coordinator at (717) 633-3276 to schedule merchandise
     pickup.

     Items not complying with the requirements contained in this Exhibit may be
     prepped or re-worked by Keystone at the expense of Fogdog at the sole
     discretion of Keystone.

                                       18

 
     Shipments weighing between 125 pounds and 4,999 pounds and occupying less
     -------------------------------------------------------------------------
     than 1/3 of a 48 foot trailer should be shipped by the carrier shown for
     ------------------------------------------------------------------------
     the origin state in this table:
     ------------------------------ 

State                   Carrier
-----                   -------
AL                      Roadway                  NM              Roadway
AR                      Roadway                  NV              Roadway
AZ                      Roadway                  NY              Overnite
CA                      Roadway                  OH              Roadway
CO                      Roadway                  OR              Roadway
CT                      Overnite                 PA              Overnite
DC                      Overnite                 RI              Overnite
DE                      Overnite                 SC              Overnite
FL                      Roadway                  SD              Roadway
GA                      Roadway                  TN              Roadway
IA                      Roadway                  TX              Roadway
ID                      Roadway                  UT              Roadway
IL                      Roadway                  VA              Overnite
IN                      Roadway                  VT              Roadway
KS                      Roadway                  WA              Roadway
KY                      Roadway                  WI              Roadway
LA                      Roadway                  WV              Overnite
MA                      Overnite                 WY              Roadway
MD                      Overnite
ME                      Overnite
MI                      Roadway
MN                      Roadway
MO                      Roadway
MS                      Roadway
MT                      Roadway
NC                      Overnite
ND                      Roadway
NE                      Roadway
NH                      Overnite
NJ                      Overnite

                                       19

 
                                   Exhibit C

        Keystone Services, Performance Standards, and Statement of Work

                                        

     OVERALL SCOPE

     Fogdog will receive orders via the Internet.  Fogdog will authorize credit
     cards and transmit orders to Keystone Fulfillment, Inc. (KFI).  KFI will
     pick, pack and ship the orders.  KFI will prepare and send to Fogdog a file
     for shipped orders, including delivery-tracking information.  Fogdog will
     bill the credit cards and resolve declines and charge backs from the bank.
     KFI will transmit the inventory snapshot and inventory transaction files to
     Fogdog at least once per day.

     Fogdog will transmit to KFI item numbers, purchase orders and vendor
     information.  KFI will update Fogdog with an order status file at least
     twice per work day (actual frequency to be agreed upon by KFI and Fogdog).

     Interfaces and System Setup

     Work will begin on September 15, 1999 to develop system interfaces and
     setup an account on the KFI system.  Programming will be performed by
     Fogdog so files sent to KFI comply with the formats contained in Exhibit G
     of this agreement for purchase order, item, vendor and order files.  KFI
     will perform programming so files sent to Fogdog meet the formats contained
     in Exhibit G of this agreement for order status and inventory status.

     Shipment of products to Fogdog customers will begin no later than October
     11, 1999.

     Information Set Up

     Fogdog will transfer to KFI item, purchase order, and vendor files.

     Forecasting

     Fogdog will make every attempt to provide a daily forecast for receipts,
     shipments, gift box units and gift wrapping units, within [*] of actual
     numbers in order for KFI to meet standards.  Fogdog will have this forecast
     to KFI by 5 PM Eastern Standard Time on each Monday for the week beginning
     three weeks later.  If actuals fall outside of the [*] KFI will not be
     bound to the performance standards contained in this agreement but will do
     everything within reason to meet these standards.

     If actuals are over [*] of the forecast, the account executive will call
     for an operational overview with both KFI and Fogdog representatives.  The
     purpose of this overview will be to determine the best short-term
     operational plan to work out of the backlog situation.

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

                                       20

 
     If actuals fall below [*] of the forecast, Fogdog will pay KFI the
     equivalent of the charge for receiving, shipping, gift boxing, and gift
     wrapping, [*] of the forecasted orders or units respectively.

     Merchandise Receipt

     Fogdog's vendors will follow vendor compliance guidelines contained in this
     Agreement, including providing KFI with advance shipping notification.  KFI
     will receive and enter into inventory all items meeting purchase order
     requirements and not requiring prep within one business day.  KFI will
     provide a 10% basic inspection at the piece level for product
     identification and count verification.

     Receipts requiring sortation into one sku per carton, will be available for
     sale 2 business days after arrival at KFI's facility.  Multi-sku receipts
     with inner packs that will withstand the rigors of material handling within
     the warehouse will be available for sale one business day after arrival at
     KFI's facility.

     For item(s) not meeting purchase order requirements, a problem order manual
     log will be generated and contact made to Fogdog to resolve incoming
     problems within one business day.

     At Fogdog's request, KFI will provide kitting services.

     Quality Inspection

     Any merchandise requiring additional quality control and/or prep work must
     be approved by Fogdog in advance of work performed.

     Merchandise Storage

     Fogdog's inventory will be stored solely in KFI's Kindig Lane facility,
     unless Fogdog authorizes Keystone in writing to store Fogdog's inventory
     off-site, and will be segregated from other active and reserve Keystone
     inventory.

     Merchandise will be stored in a clean, climate controlled space that offers
     reasonable protection from temperature and water damage and includes
     functioning sprinklers.  In addition, for items identified by Fogdog as
     "high value", a secure storage area with limited access will be used.

     Order Origination

     Customers will place orders through the Internet. The inventory snapshot
     and transaction files will be transmitted once per day by KFI to Fogdog and
     will be used to calculate availability at the time of order.  Fogdog will
     authorize the order, check for frauds, and create a file with the
     customer's name, address, product number, and quantity.  KFI will initiate
     a file transfer to its system at least twice per work day (actual frequency
     to be agreed upon by KFI and Fogdog)

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.



                                       21

 
     KFI will, at a frequency to be agreed upon by KFI and Fogdog, but not less
     than twice each work day, transmit files to Fogdog to update inventory and
     order status information, including cancellations.


     COLLATE PRINTING, PICKING, PACKING, AND SHIPPING

     Regular Orders

     All items available for picking (excluding back orders) are released on a
     collate to the distribution center for shipping at the conclusion of the
     order run. [*] of all in stock, non-damaged non-problem orders transmitted
     to KFI prior to the midday order processing run, up to [*] of the Fogdog
     forecast mentioned above, will be shipped on the same day.  If less than
     [*] of all in stock, non-damaged, non-problem orders transmitted to KFI
     prior to the midday order processing run, up to [*] of the Fogdog forecast
     mentioned above, are not shipped the same day, KFI will upgrade its
     shipping services, and bear the costs of such upgrades, to bring the orders
     up to the [*] level as follows: 1) UPS Ground to UPS 3-day select; 2) UPS
     3-day select to UPS 2nd day air; 3) UPS 2nd day air to UPS next day air; 4)
     USPS parcel post to USPS Priority Mail; 5) USPS Priority Mail to USPS
     Express Mail Service.  100% of the orders carried over will be shipped by
     the end of the next business day.  (During high volume periods, as
     determined by Keystone in its sole discretion, Keystone will use reasonable
     efforts to implement weekend and evening schedules to maintain this
     standard.)

     QUALITY ASSURANCE

     On a weekly basis, outbound order accuracy and order presentation will be
     at minimum [*].

     If outbound order accuracy is at or above [*] at the order level for a
     given week, Fogdog and KFI will share equally the cost of return postage
     and shipping charges for replacement items required to correct the outbound
     order accuracy errors.  If outbound order accuracy is below [*], the
     parties shall share equally the cost of return postage and shipping charges
     for replacement items required to correct the first [*] and thereafter KFI
     will bear the entire cost of return postage and shipping charges for
     replacement items required to correct the outbound order accuracy errors.

     Outbound order accuracy is measured by the following criteria: (1) correct
     item(s) in the package; (2) presence of gift boxing and/or gift wrapping
     per Fogdog instructions; and (3) sufficient dunnage to protect item(s)
     during shipping.  Order presentation is defined as correct inserts,
     labeling and/or other package appearance work per Fogdog instructions.

     Distribution

     Distribution will receive the collates (packing slips) at the conclusion of
     each order run.  KFI will pick, pack and ship the order, using a label
     bearing Fogdog's name and logo as specified by Fogdog, together with the
     return address specified by Fogdog.  Products will 

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

                                       22

 
     be shipped using Fogdog's designated carrier(s). Orders shipped via UPS
     will ship under a Fogdog designated UPS Shipper Number and account. The
     completed shipment record and tracking information will be transmitted to
     Fogdog via the order status file. Fogdog will bill the customer and credit
     Fogdog's bank account.

     Credit Card Processing and Charge Backs

     After the order is shipped, KFI will send the shipment confirmation file to
     Fogdog.  Fogdog will process the billing of the credit cards.

     Returns

     Customer returns, including credit card credits, will be processed by
     Fogdog at its facility.  Items to be returned to inventory will be sent by
     Fogdog to KFI and processed as new receipts.

     Order Cancellations

     Fogdog will cancel orders in its system if the file has not been
     transferred to KFI.  Once orders have been transferred to KFI, orders can
     be canceled before they are released to the Distribution Center.  If orders
     have progressed beyond the cancellation point, Fogdog can contact the
     account executive and reasonable efforts will be made by KFI to manually
     track down the orders in the warehouse.  KFI will notify Fogdog whether or
     not KFI was able to locate and cancel the orders.

     Inventory Shrinkage

     KFI will be responsible for inventory accuracy at these levels:

     .  [*] in aggregate as determined by physical inventory
     .  [*] in aggregate on 12 week cycle counts after adjustments made for
        active recounts

     If there is shrinkage above these levels, KFI will pay the cost to replace
     those goods.

     Priority Order Processing

     All priority orders, up to a maximum of [*] per day, received by KFI prior
     to 3:00 p.m. Eastern Standard Time will be shipped that same day.

     Reports

     The reports referred to in Exhibit E of this agreement will be available to
     Fogdog at daily, weekly and/or monthly frequencies as requested in writing
     by Fogdog.

     Inventory

     KFI will conduct cycle counting of the reserve storage for a complete
     turnover every 12 weeks.  An annual physical inventory is also available
     with two months' written notice.

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

                                       23

 
     Return to Vendor and other Inventory Handling

     KFI will destock and return to Fogdog, its vendor(s) or other Fogdog
     designated parties, as the case may be, any rejected or overstock Fogdog
     Merchandise at Fogdog's discretion and at Fogdog's expense.

     Keystone Inserts

     KFI will not include any inserts relating to KFI in any order without the
     prior written consent of Fogdog.

     Certain Definitions:  "Business day," for all purposes of Keystone
     Standards and the Direct Marketing Services Agreement to which this is
     attached, shall mean Monday through Friday except any day that is a United
     States national holiday.

                                       24

 
                                   Exhibit D

                   Keystone Account Executive Job Description


Reports To:  Vice President Operations of Keystone

     SUMMARY

     Provides and leverages service to Fogdog for the purpose of meeting
     contractual obligations and generating additional business by performing
     the following duties.

     ESSENTIAL DUTIES AND RESPONSIBILITIES include the following. Other duties
     may be assigned.

     .  Develops strong working relationships with companies doing business with
        Fogdog.

     .  Provides required reports for Fogdog as specified in this Agreement.

     .  Works with companies doing business with Fogdog to identify and
        communicate marketing projections related to orders, receipts, returns
        or other data that will affect service levels to customer service and
        fulfillment management teams.

     .  Monitors and communicates attainment of contractual performance
        standards to Fogdog's customer service and fulfillment operations,
        making recommendations for improvements as necessary.

     .  Provides Fogdog with information and advice on the best methods to use
        to improve throughput and cost.

     .  Works with all operating divisions to set up new Fogdog accounts.

     .  Schedules meetings and tours for companies doing or potentially doing
        business with Fogdog.

     .  Conducts off-line or on-line research to resolve customer problems.

     .  Assures compliance with pertinent laws and regulations.

     .  Position will require hours outside of normal schedule and may involve
        periodic overnight travel.

     .  Insures that staff has required resources and equipment to perform their
        duties.

     SUPERVISORY RESPONSIBILITIES:  The Account Executive will directly
     supervise 1 to 2 Assistant Account Executives.  The Account Executive will
     carry out supervisory responsibilities in accordance with Keystone's
     policies and applicable laws.  

                                       25

 
     Responsibilities include interviewing, hiring, and training employees;
     planning, assigning and directing work; appraising performance; rewarding
     and disciplining employees; addressing complaints and resolving problems.

     QUALIFICATIONS:  To perform this job successfully, the Account Executive
     must be able to perform each essential duty satisfactorily.  The
     requirements listed below are representative of the knowledge, skill,
     and/or ability required.  Reasonable accommodations may be made to enable
     individuals with disabilities to perform the essential functions.

     EDUCATION and/or EXPERIENCE:  Associate's Degree (A.A.) or equivalent from
     two-year college or technical school; or six months to one year related
     experience and/or training; or equivalent combination of education and
     experience.

     LANGUAGE SKILLS:  Ability to read, analyze, and interpret general business
     periodicals, professional journals, technical procedures, or governmental
     regulations.  Ability to write reports, business correspondence and
     procedure manuals.  Ability to effectively present information and respond
     to questions from groups of managers, Fogdog representatives, customers,
     and the general public.

     MATHEMATICAL SKILLS:  Ability to add, subtract, multiply, and divide in all
     units of measure, using whole numbers, common fractions, and decimals.
     Ability to compute rate, ratio, and percentages and to draw and interpret
     bar graphs.

     REASONING ABILITY:  Ability to define problems, collect data, establish
     facts, and draw valid conclusions.  Ability to interpret an extensive
     variety of technical instructions in mathematical or diagram form and deal
     with several abstract and concrete variables.  Ability to manage multiple
     projects and priorities.

     COMPUTER KNOWLEDGE:  Experience with Microsoft Office Suite products
     including Word, Exchange and Excel.  Ability to create business
     correspondence in Word and Exchange.  Ability to create spreadsheets in
     Excel using simple calculations and equations.  Knowledge of PowerPoint is
     a plus.  Experience in MACS, Lawson, PowerPoint or other software common to
     Keystone/Hanover Direct is a plus.

     PHYSICAL DEMANDS:  The physical demands described here are representative
     of those that must be met by the Account Executive to successfully perform
     the essential functions of this job.  Reasonable accommodations may be made
     to enable individuals with disabilities to perform the essential functions.

     While performing the duties of this job, the Account Executive is regularly
     required to sit and talk and/or listen.  The Account Executive frequently
     is required to stand; use hands to finger, handle, or feel; and reach with
     hands and arms.  The Account Executive is occasionally required to walk and
     stoop, kneel, crouch or crawl.  The Account Executive must occasionally
     lift and/or move up to 25 pounds.

                                       26

 
                                   Exhibit E

                       Standard System Reporting Listing


     Actual Offer Page Analysis
     --------------------------
     Daily Demand
     ------------
     Daily Return
     ------------
     Inventory Value Report
     ----------------------
     Items by Location
     -----------------
     Key History Analysis
     --------------------
     Key History II
     --------------
     Order Fill Rate Analysis
     ------------------------
     Out of Stock Report
     -------------------
     Product Forecast Report
     -----------------------
     Product Return By Date Range
     ----------------------------
     Product Sales By Source
     -----------------------
     Purchase Order Analysis
     -----------------------
     Receiving Recap
     ---------------
     Sales By How Paid Date
     ----------------------
     Shipped Sales By Catalog
     ------------------------
     Shipped Sales By Division
     -------------------------
     Summary Backorder Report
     ------------------------
     Ticket Receiving
     ----------------
     Where It Is
     ------------

                                       27

 
                                   Exhibit F

             1994 Q4 and Year 2000 Order Volume and SKU Projections


The following information reflects Fogdog's projected SKU and order volumes for
product fulfilled through Keystone.

SKU and order information for October 1999 through December 1999:
---------------------------------------------------------------- 

     Average daily orders: [*] by December 1999
     Peak daily orders: [*] (first week of December)
     SKU's: [*] (Approximate breakdown: 30% apparel, 30% footwear, 30% large
          hardgoods, and 10% small accessories)


     SKU and order information for the year 2000:

          Annual order volume: [*]
          SKU's :  growing to [*]

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

                                       28