Document:

<PAGE>

                                                                   EXHIBIT 10.26

                              MARKETING AGREEMENT

          This Marketing Agreement ("Agreement") is made effective as of the
31st day of December, 1999 (the "Effective Date") by and between PETsMART, Inc.,
a Delaware corporation having its address at 19601 N. 27th Avenue, Phoenix, AZ
85027, and its affiliates ("PETsMART"), and PETsMART.com, Inc., a Delaware
corporation having its address at 35 Hugus Alley, Suite 210, Pasadena, CA  91103
("PETsMART.com").

                                    Recitals

A.   PETsMART and PETsMART.com wish to collaborate to market companion-animal-
related products to consumers and to make related information available to
consumers online via an e-commerce website to be operated by PETsMART.com.

B.   PETsMART and PETsMART.com desire to jointly market their products through
means including (but not limited to) co-branded advertising, cross-marketing of
the physical and online stores, in-store promotions, affinity programs, and
mailing lists.

C.   PETsMART and PETsMART.com also wish to provide each other access to
information to facilitate PETsMART.com's online content about PETsMART's
physical stores.

D.   PETsMART and PETsMART.com have previously entered into a Trademark License
Agreement dated May 12, 1999 (the "Trademark Agreement"), pursuant to which
PETsMART will license the use of the PETsMART trademark and the petsmart.com
domain name to PETsMART.com, and are concurrently entering into a Merchandising,
Procurement, Distribution, and Fulfillment Agreement and a Web and Content
Hosting Agreement.

Now, Therefore, the parties agree as follows:

1.   Definitions.

     1.1  "Net Sales" means all revenue received by PETsMART.com, net of
shipping costs, tax, and returns.

     1.2  "Online", whether capitalized or not, means, without limitation, over
the Internet, world wide web (www), commercial online services (e.g., AOL), and
interactive broadcast (e.g., WebTV).
<PAGE>

     1.3  "PETsMART Catalog Fulfillment Center" means PETsMART's catalog
fulfillment enter, located at 1989 Transit Way, Brockport, New York 14420, or
any other catalog fulfillment center operated by PETsMART in the future.

     1.4  "PETsMART Forward Distribution Centers" means PETsMART's distribution
centers other than the PETsMART Catalog Fulfillment Center, whether currently
existing or opened during the Term, that primarily provide deliveries of
consumable products to PETsMART retail stores.

     1.5  "PETsMART Products" means any non-equine product then carried by
PETsMART in its retail stores or made available through its existing consumer
catalogs and which PETsMART has the right to sell to PETsMART.com. "PETsMART
Products" includes products sold under national brands, PETsMART's corporate
brands and any other brands, but specifically excludes equine products.

     1.6  "PETsMART.com URL" refers to the http://www.petsmart.com internet
                                           -----------------------
address.

     1.7  "PETsMART.com Website" means the user interface, functionality and
content made available on pages under the PETsMART.com URL.

     1.8  "SKU" means a stock-keeping unit of any product.

     1.9  "PETsMART Competitor" means any national competitive brand (including
pet specialty retailers such as PETCO, grocers such as Safeway, discount chains
such as Wal-Mart, warehouse clubs such as Sam's Club or Price Costco, and the
like, but not including independently operated small boutique brands such as
Three Dog Bakery).  "PETsMART Competitor" also includes catalog competitors such
as Doctors Foster & Smith.

2.   Exclusivity.  Subject to the terms of this Section 2, PETsMART.com will
operate and maintain the PETsMART.com Website for the online sale of companion-
animal-related products and the PETsMART.com Website will be the exclusive
online exemplification of PETsMART's existing physical stores.

     2.1  Sale of Products.  In addition to selling PETsMART Products online,
and subject to the provisions of Section 2.5 ("No PETsMART.com Catalogs Or
Physical Stores"), PETsMART.com will be able to sell PETsMART Products via other
mutually agreed channels (including catalogues, provided that any such
catalogues do not include any telephone number for PETsMART.com and direct the
reader solely to the PETsMART.com Website) so long as the overall objective is
to actually promote online sales.
<PAGE>

     2.2  Products Offered.  PETsMART.com may sell both PETsMART Products and
products which are not PETsMART Products; provided, however, that PETsMART.com
may not sell products that carry the brand name(s) of PETsMART Competitors, or
are purchased from PETsMART Competitors.

     2.3  PETsMART Products To Be Majority Of SKUs.  PETsMART.com will make
commercially reasonable efforts to ensure that PETsMART Products constitute the
majority (fifty percent (50%) or more) of SKUs on the PETsMART.com Website
(excluding "Direct From  Vendor Shipments"), provided PETsMART makes at least
90% of the products distributed through its PETsMART Catalog Fulfillment Center
or PETsMART Forward Distribution Centers products available to PETsMART.com for
sale on the PETsMART.com Site.  For purposes of this Section 2.3, "Direct From
Vendor Shipments" means those product SKUs offered on the PETsMART.com Website
but as a rule shipped from the original manufacturer, or by distributors in
those lines of business where distributors are the norm (e.g., books), directly
to the consumer (i.e., never physically passing through the PETsMART Catalog
Fulfillment Center or any PETsMART Forward Distribution Center). Subject to the
foregoing and to Section 2.2 ("Products Offered"), PETsMART.com will determine
its own product selection and will set its own price for any products that it
sells.  In the event that PETsMART does not make 90% of such inventory available
as set forth above, PETsMART.com's obligation to ensure that 50% of its SKUs are
comprised of PETsMART Products shall be reduced in proportion to the amount of
PETsMART's shortfall.

          (a) If any such audit shows that PETsMART Products do not constitute
the majority of SKUs on the PETsMART.com Website, the Relationship Managers
shall promptly meet to discuss the reason(s) that the PETsMART Products do not
constitute the majority of SKUs on the PETsMART.com Website, and to develop a
plan for how PETsMART.com can increase the sales of PETsMART Products from the
PETsMART.com Website.  The Relationship Managers will meet weekly to exchange
information concerning PETsMART.com's progress against this plan until
PETsMART.com is able to demonstrate that PETsMART Products have, during the
preceding quarter, constituted the majority of SKUs on the PETsMART.com Website.

     2.4  PETsMART Online Activities.  PETsMART will not market, advertise, or
sell companion-animal-related products online.  Notwithstanding the foregoing,
PETsMART:

          (a) acknowledges that the R.C. Steele companion-animal-related
products e-commerce business (rcsteele.com) will be operated by PETsMART.com;

          (b) may continue to promote and sell equine products online through
its existing e-commerce businesses (e.g., nationalbridle.com and
                                          ------------------
statelinetack.com), and such other equine-product e-commerce business(es) as
-----------------
PETsMART may commence; and
<PAGE>

          (c) may promote and sell companion-animal-related products online
directly to businesses (e.g., through any e-commerce business based on its Pet
Professional Direct (formerly known as Groomer Direct) catalog).  PETsMART
agrees to take commercially reasonable steps (such as the steps performed in
connection with its business-to-business catalog operations) to confirm that a
business to which it sells products is indeed a business.

          (d)  As set forth in, and subject to the conditions of, Section 2.2
("PETsMART Activities") of the Merchandising and Distribution Agreement,
PETsMART reserves the right to commence e-commerce businesses as online
representations of its current Pet Professional Direct (formerly Groomer
Direct), Wiese, and National Bridle catalogs. Nothing in this Agreement
precludes PETsMART from providing procurement, distribution and fulfillment,
customer support, third-party website administration, and other services
("Enumerated Services") on an outsourced basis to third parties selling
companion-animal-related products online, (i) so long as such products or
services are not marketed to consumers using the PETsMART trademark and do not
include any PETsMART corporate or private-label brands, (ii) and provided
PETsMART does not provide such Enumerated Services to any online retailer of
companion-animal-related products whose total SKUs of companion-animal-related
products exceeds 30% of its total number of SKUs offered for sale to consumers
under the auspices of its Corporate identity (e.g., PETsMART could not provide
the Enumerated Services to Buy.com if 30% or more of Buy.com's total SKU's
offered to consumers from any Buy.com entity (such as any buy.home.com,
buy.travel.com, buy.books.com) consists of companion-animal-related products);
and (iii) provided PETsMART shall not provide the Enumerated Services to any of
the following direct competitors of PETsMART.com:  Pets.com, Petopia.com,
Petstore.com, Allpets.com, Petco.com, Petwarehouse.com, Petplanet.com, and
online grocery stores whose primary business is food (i.e., 90% or more of its
revenues are derived from food sales), such as Webvan.com and Webgrocer.com.
Notwithstanding the foregoing, PETsMART may provide the Enumerated Services to
its existing clients as of the Effective Date of this Agreement.  PETsMART
agrees to use reasonable best efforts to assist in introducing any such third
party to PETsMART.com to provide PETsMART.com the opportunity to negotiate with
such party to enter into a relationship with PETsMART.com to integrate the third
party's online offering into the Website.  PETsMART also reserves the right to
place online advertisements with third parties to promote its physical retail
locations and/or catalogs.

     2.5   No PETsMART.com Catalogs Or Physical Stores.  PETsMART.com will not
own or operate, directly or indirectly, any catalogs (other than advertising
catalogues) or physical retail stores which sell companion-animal-related
products, nor will PETsMART.com sell companion-animal-related products for
resale in any catalogs or physical stores operated by third parties.
PETsMART.com reserves the right to place advertisements and/or operate in-store
promotions with third party retail locations and/or catalogs provided such
entities are not PETsMART Competitors and/or whose businesses are not focused on
the supplying of companion-animal products.
<PAGE>

3.   Relationship Managers.  PETsMART and PETsMART.com will each appoint an
individual to serve as Relationship Manager.

     3.1  Identity.  The parties' initial Relationship Managers are listed on
Exhibit A ("Relationship Managers") to this Agreement, and each party may change
its Relationship Manager by providing written notice to the other party of the
new Relationship Manager.

     3.2  Responsibilities.  The Relationship Managers will administer and
coordinate such provisions of this Agreement and any amendments hereto as
specified in this Agreement. Each Relationship Manager will serve as the primary
point of contact for the other party on non-technical matters referenced herein.
The responsibilities of the Relationship Managers include, without limitation,
development of an annual joint marketing plan (which will include detailed plans
regarding co-branding of marketing collateral, affinity programs, mailings, and
additional activities such as joint promotions, information sharing, or special
offers), each party will incur in identifying the costs, implementing such
marketing plan and meeting at least once per quarter thereafter either by
telephone or, if in person, in Arizona or California, to discuss joint marketing
activities pursuant to this Agreement, to identify and resolve any problems and
further to coordinate the joint marketing activities and relationship of the
parties (including, but not limited to, through development and implementation
of subsequent annual joint marketing plans and activities) pursuant to this
Agreement, all with the purpose of cooperation and mutual value creation.
Pricing or cost sharing for these marketing activities will be agreed in advance
through the Relationship Managers.

     3.3  Deadlines.  The Relationship Managers will develop the first joint
marketing plan by March l, 2000, and will update the joint marketing plan by
March l of each subsequent year during the term of this Agreement.

4.   Co-Branding of Marketing Collateral/Specific Placements.  PETsMART and
PETsMART.com will co-brand advertising or marketing collateral (exclusive of
PETsMART's catalogs) and will carry out such co-branding placements, dedicating
significant time or space (as applicable) to promote the other's name, products,
and services, as determined by the Relationship Managers, with detailed plans
set forth in the joint marketing plan and subject to the costs set forth
therein.

5.   Cross-Promotion.  PETsMART and PETsMART.com will engage in such cross-
promotion activities as the following, which activities will be mutually agreed
upon by the parties through their respective Relationship Managers in accord
with the applicable annual joint marketing plans: (i) Online Promotion of
physical PETsMART stores and service through online promotions and links; (ii)
in-store promotion of PETsMART.com using signage, collateral materials and/or
other cross promotional marketing materials; and (iii) affinity programs that
may enable customers of each party to redeem benefits in both retail and online
channels.
<PAGE>

6.   Mailing Lists.  Each party will manage its own mailing lists and will have
no obligation to provide the other party with direct access to such lists.
However, to the extent permitted by applicable law and as mutually agreed upon
by the parties through their respective Relationship Managers as to the content,
costs and logistics of such mailings, the parties may undertake cross-
promotional mailings to the customers on their respective mailing lists.
Notwithstanding the foregoing, PETsMART will not be obligated to include its
equine business(es), third-party catalog, and/or business to business mailing
lists in cross-promotional mailings on behalf of PETsMART.com.

7.   Records and Reports.

     7.1  Access to Information.  For purposes of merchandise planning, each
party will have access to the other party's movement data, such as individual
product velocities and movement, subject to the confidentiality obligations set
forth below at Section 15 ("Confidential Information").

     7.2  Monthly Reports.  Within fifteen (15) days after the end of each
month, PETsMART.com will provide PETsMART with a report for that month setting
forth the number of PETsMART Product SKUs sold by PETsMART.com, the revenue from
such sales, and the total number of, and revenue from sales of, all product SKUs
sold by PETsMART.com.

8.   Payment.

     8.1  Coop Advertising Program Participation.  Beginning calendar year 2000,
PETsMART.com shall have the right to participate in PETsMART's coop advertising
program for its vendors, wherein PETsMART promotes the sale of the program
participants in its general advertising and marketing materials ("Coop
Advertising Program").

          (a) Payment by PETsMART.com to participate in the Coop Advertising
Program in calendar year 2000.  If PETsMART.com elects to participate in the
Coop Advertising Program for calendar year 2000, it shall pay PETsMART [*]
of [*].

          (b) Election by PETsMART.com to participate in the Coop Advertising
Program.  Beginning PETsMART's fiscal year 2001 and thereafter in each PETsMART
fiscal year of the Term, if PETsMART.com desires to participate in the Coop
Advertising Program it shall adhere to the following procedure:

              (i)   Within [*] days after the end of the PETsMART fiscal year,
the parties shall mutually agree upon [*] that PETsMART.com must pay

[*]   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.
<PAGE>

PETsMART in order to participate in the Coop Advertising Program for the
following PETsMART fiscal year.

              (ii)  Within [*] business days after the parties agree upon such
percentage for participation in the program, PETsMART.com shall notify PETsMART
of its desire and intention to participate in the Coop Advertising Program, or
election not to participate, and shall make the applicable payments in accord
with the payment schedule that PETsMART imposes upon the other Coop Advertising
Program participants.

     8.2  Credit of Coop Advertising program Revenue by PETsMART to
PETsMART.com.  Beginning in PETsMART's fiscal calendar year 2000, PETsMART shall
provide a credit to PETsMART.com on its purchases of merchandise from PETsMART
of Coop Advertising Program participant's merchandise. [*] Such credit will be
given in the month following the month in which coop revenue is received by
PETsMART. Notwithstanding the foregoing, at the end of the fiscal year, PETsMART
may adjust the credit for any month in the immediately preceding fiscal year to
accurately reflect the total coop revenue received.

9.   Payment for Marketing Services.  Each party will invoice the other for any
services described herein and provided hereunder on or before the [*] day after
the end of the month in which the services were rendered and the invoiced party
shall pay such invoice on or before the tenth day after receipt of such invoice.

10.  Taxes.

          (a) Indemnity. In the case of the distribution of promotional property
by a party to this Agreement (the "Indemnitee") for the benefit of the other
party to this Agreement (the "Indemnitor") pursuant to the terms of this
Agreement, the Indemnitor shall be liable for, and shall indemnify, defend, and
hold harmless Indemnitee from and against, all "Indemnifiable Taxes," as defined
in this Section 10(a).  For the purposes of this Section 10, "Taxes" shall mean
all taxes (other than taxes based on income), fees, duties, and other
governmental charges (including any taxes, fees, duties, or other governmental
charges imposed on a third party that Indemnitee is required to withhold or
collect) and any interest, additions to tax, or penalties related thereto.  For
the purposes of this Section 10, "Indemnifiable Taxes" shall mean all Taxes
incurred with respect to the acquisition, holding, or distribution of property
pursuant to this Agreement and all reasonable out-of-pocket attorneys' fees and
other reasonable out-of-pocket expenses, including court costs, associated with
the resolution of any Contest (as defined below) with respect to such Taxes.

[*]   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.
<PAGE>

          (b) Notice.  If Indemnitee is made aware as part of an audit or other
administrative proceeding related to Taxes (a "Contest"), that a taxing
authority is asserting a claim for Indemnifiable Taxes, then Indemnitee shall
promptly notify Indemnitor of such claim in writing.

          (c) Control.  Indemnitee shall permit Indemnitor, at Indemnitor's own
cost and expense, to control that portion of the Contest related to
Indemnifiable Taxes; provided, however, that Indemnitor's control must not
unreasonably interfere with the remaining portion of the Contest.  In the event
that Indemnitor does not reasonably contest the imposition of Taxes on
Indemnitee, Indemnitee may assume control of the portion of the Contest
attributable to Indemnifiable Taxes at Indemnitor's reasonable expense.
Indemnitor may re-assume control of that portion of the Contest related to
Indemnifiable Taxes at any time.

          (d) Settlement.  Indemnitee shall not settle or otherwise compromise
any portion of a Contest related to Indemnifiable Taxes without the prior
written consent of Indemnitor, which consent shall not be unreasonably withheld.
Indemnitor must inform Indemnitee of all terms of any proposed settlement prior
to settling that portion of the Contest related to Indemnifiable Taxes and, if
Indemnitee objects to Indemnitor entering into such settlement, Indemnitor shall
pay to Indemnitee the amount that would be payable by Indemnitor under this
Section 10 if such settlement were entered into, and upon payment of such
amount, any liability of Indemnitor under this Section 10 shall terminate for
the portion of the Indemnifiable Taxes that would have been settled.

          (e) Consistency.  Indemnitee shall not take any position that
Indemnifiable Taxes may be due and owing without the prior consent of Indemnitor
which consent may not be unreasonably withheld.  Indemnitee shall not take any
action that could result in any taxing authority asserting a claim subject to
indemnification hereunder. For purposes of this Section 10(e), a position or
action shall not be a breach of this section unless such action or position is
(i) part of a course of conduct, (ii) a significantly frequent practice, or
(iii) intentional.

          (f) Powers of Attorney.  Indemnitee shall execute any powers-of-
attorney or similar documents necessary for Indemnitor to control the portion of
a Contest related to Indemnifiable Taxes.

          (g) Information.  Indemnitor shall promptly notify Indemnitee of
material developments in that portion of a Contest that is controlled by
Indemnitor.

          (h) Cooperation.  Indemnitor and Indemnitee shall provide, or cause to
be provided, to each other, the assistance of officers, employees,
representatives and affiliates, or such assistance as may reasonably be
requested by the other party in connection with the portion of the Contest
related to Indemnifiable Taxes.  The requesting party shall reimburse the other
party for the reasonable out-of-pocket cost of such other party making the
assistance of such per-
<PAGE>

sons available. The parties shall use reasonable best efforts to make available
persons no longer employed. Indemnitor and Indemnitee shall retain, or cause to
be retained, for so long as any taxable year in which this Agreement is in
effect shall remain open for adjustments, any records or information related to
Indemnifiable Taxes; provided however, that Indemnitee shall not be required to
retain, or cause to be retained, records and information that Indemnitor
maintains in the ordinary course of Indemnitor's operations. Indemnitee shall,
in the case of any particular calendar year, be responsible for costs of
retaining any records or information related to Indemnifiable Taxes for the ten
year period following such calendar year and, thereafter, any such costs shall
be borne equally by each of Indemnitee and Indemnitor. With reasonable notice,
any records or information so retained shall be made available to the requesting
party in a commercially reasonable manner. The requesting party shall reimburse
the other party for such party's reasonable out-of-pocket costs, including
without limitation, copying costs, reasonably incurred in making such records or
information available. In addition, the requesting party shall enter into
reasonable non-disclosure and use agreements that limit the use of the records
and the information contained therein by the requesting party to use only in the
particular Contest.

          (i) Non-Compliance.  If Indemnitee fails to comply substantially with
any of the provisions set forth in this Section 10, Indemnitor shall be relieved
of any obligation under this Section 10 to the extent of any actual prejudice
suffered by Indemnitor as a result of such failure.

          (j) Change of Tax Law.  In the event of a "Change in Tax Law", the
parties hereto agree to negotiate in good faith to amend this Section 10, on a
basis consistent with the overall economic substance of this Agreement, to take
into account such Change in Tax Law.   For purposes of this Agreement, a "Change
in Tax Law" shall mean any change in or amendment to the laws, treaties,
regulations, or rulings of any relevant taxing jurisdiction which is proposed
and becomes effective on or after the date of  this Agreement.

11.  Audit Right.  Each party will have the right, during normal business hours
and upon at least thirty (30) days' prior notice, to have a nationally
recognized independent accounting firm selected by and reasonably acceptable to
the other party audit the other party's records related to payments due under
this Agreement in order to verify that each party has paid to the other party
the correct amounts due under this Agreement and has complied with Section 2.3
("PETsMART Products to be a Majority of SKUs") and Section 8.1(a), 8.1(b) and
8.2 ("Coop Advertising Program and Payment").  Any such audit will be conducted
at the auditing party's expense and no more than once in any twelve month period
during the term of this Agreement.  Any confidential information of the audited
party disclosed to the auditing party or to the independent accounting firm in
the course of the audit will be subject to the confidentiality terms set forth
in Section 15 ("Confidential Information") of this Agreement.
<PAGE>

12.  Late Payment.  Each party will pay interest on late payments at the rate of
one and one half percent (1.5%) per month or the highest interest rate allowed,
whichever is lower.

13.  Warranty.  Each party warrants (a) that all advertising and promotional
material created by it or on its behalf and distributed pursuant to this
Agreement will not (i) infringe on any third party's copyright, patent,
trademark, trade secret or other proprietary rights, or right of publicity or
privacy; (ii) be defamatory or trade libelous; (iii) be pornographic or obscene;
or (iv) contain viruses, Trojan horses, time bombs, cancelbots or other similar
harmful or deleterious programming routines; and (b) that its activities
hereunder on behalf of the other party will not violate any law, statute,
ordinance or regulation, including (without limitation) laws against spamming
and laws relating to privacy of consumer information.

14.  Indemnity.

     14.1 Mutual Indemnity.  Subject to the provisions of Section 10 ("Taxes")
above, in the event that any third-party claim, action, suit or proceeding
arises resulting from a party's acts, omissions or misrepresentations under this
Agreement (including, without limitation, breach of the warranty contained in
Section 13 ("Warranty")), that party (the "Indemnifying Party") shall defend and
hold harmless the other party (the "Indemnified Party") against any such claim,
action, suit or proceeding.  Subject to Section 14.2 ("Mechanics of Indemnity"),
the Indemnifying Party shall indemnify the Indemnified Party for all losses,
damages, liabilities and all reasonable expenses and costs incurred by the
Indemnified Party as a result of a final judgment entered against the
Indemnified Party in any such claim, action, suit or proceeding.

     14.2 Mechanics of Indemnity.  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.

15.  Confidential Information.

     15.1 Disclosure Of Confidential Information.  Each party (the "Disclosing
Party") may from time to time during the term of this Agreement disclose to the
other party (the "Receiving Party") certain information regarding the Disclosing
Party's business, including technical, marketing, financial, employees,
planning, and other confidential or proprietary information ("Confidential
Information").  The Disclosing Party will mark all Confidential Information in
tangible form as "confidential" or "proprietary" or with a similar legend. The
Disclosing Party will identify all Confidential Information disclosed orally as
confidential at the time of disclosure and provide a written summary of such
Confidential Information to the Receiving Party within thirty (30) days after
such oral disclosure.  Regardless of whether so marked or identified, how-
<PAGE>

ever, any information that the Receiving Party knew or should have known, under
the circumstances, was considered confidential or proprietary by the Disclosing
Party, will be considered Confidential Information of the Disclosing Party.

     15.2 Protection of Confidential Information.  The Receiving Party will not
use any Confidential Information of the Disclosing Party for any purpose not
expressly permitted by this Agreement, and will disclose the Confidential
Information of the Disclosing Party only to those employees or contractors of
the Receiving Party who have a need to know such Confidential Information for
purposes of this Agreement and who are under a duty of confidentiality no less
restrictive than the Receiving Party's duty hereunder.  The Receiving Party will
protect the Disclosing Party's Confidential Information from unauthorized use,
access, or disclosure in the same manner as the Receiving Party protects its own
confidential or proprietary information of a similar nature and with no less
than reasonable care.

     15.3 Exceptions.  The Receiving Party's obligations under Section 15.2
("Protection of Confidential Information") with respect to any Confidential
Information of the Disclosing Party will terminate if and when the Receiving
Party can document that such information: (a) was already known to the Receiving
Party at the time of disclosure by the Disclosing Party; (b) was disclosed to
the Receiving Party by a third party who had the right to make such disclosure
without any confidentiality restrictions; (c) is or through no fault of the
Receiving Party has become generally available to the public; or (d) is
independently developed by the Receiving Party without access to, or use of, the
Disclosing Party's Confidential Information.  In addition, the Receiving Party
will be allowed to disclose Confidential Information of the Disclosing Party to
the extent that such disclosure is (i) approved in writing by the Disclosing
Party, (ii) necessary for the Receiving Party to enforce its rights under this
Agreement in connection with a legal proceeding; or (iii) required by law or by
the order of a court or similar judicial or administrative body, provided that
the Receiving Party notifies the Disclosing Party of such required disclosure
promptly and in writing and cooperates with the Disclosing Party, at the
Disclosing Party's reasonable request and expense, in any lawful action to
contest or limit the scope of such required disclosure.

     15.4 Return of Confidential Information.  The Receiving Party will return
to the Disclosing Party or destroy all Confidential Information of the
Disclosing Party in the Receiving Party's possession or control promptly upon
the written request of the Disclosing Party on the earlier of the expiration or
termination of this Agreement.  At the Disclosing Party's request, the Receiving
Party will certify in writing that it has fully complied with its obligations
under this Section 15.

     15.5 Confidentiality of Agreement.  Neither party will disclose any
financial or payment terms of the Agreement to anyone other than its attorneys,
accountants and other professional advisors under a duty of confidentiality
except as required by law, pursuant to a mutually
<PAGE>

agreeable press release, or in connection with a proposed merger, financing or
sale of such party's business, provided that any third party to whom the terms
of this Agreement are to be disclosed signs a confidentiality agreement
reasonably satisfactory to the other party to this Agreement.

16.  Dispute Resolution.  PETsMART and PETsMART.com are implementing this
Agreement in good faith.  However, should either party believe that the other
party is in breach of this Agreement, the parties shall attempt in good faith to
resolve any dispute arising out of or relating thereto promptly by negotiations.
All negotiations at all levels pursuant to this Section 16 are confidential and
shall be treated as compromise and settlement negotiations for purposes of the
Federal Rules of Evidence and state rules of evidence.  Each party shall bear
its own expenses.

     16.1 Notice And Cure.  Either party may give the other party written notice
of any breach.  The party so notified shall then have thirty (30) days to cure
the breach.  If the party so notified does not effect a cure to the notifying
party's satisfaction, the Relationship Managers shall, within the following
fifteen (15) days, confer in good faith for the purpose of satisfactorily
resolving the breach.  In the event that the Relationship Managers are unable to
resolve the dispute within the following fifteen (15) days, the Chief Executive
Officers of the parties shall, within the next fifteen (15) day period, confer
in good faith for the purposes of satisfactorily resolving the breach.

     16.2 Mediation.  If a resolution satisfactory to the notifying party is not
achieved within the above thirty-day period, the parties agree promptly to
submit the dispute to a non-binding one-day mediation session held in San
Francisco, California through Judicial Arbitration & Mediation
Services/Endispute, Inc. ("JAMS"), under the then-existing JAMS Rules of
Practice and Procedure, by a mediator jointly selected by the parties or, if no
agreement can be promptly reached on the selection of a mediator, then by a
mediator selected through the procedures for selecting a mediator set forth in
such rules.  The mediation session shall take place no later than thirty (30)
days from the appointment of a mediator.  If the mediation is unsuccessful in
resolving the dispute, either party may then take whatever actions it deems
appropriate, including, without limitation, seeking judicial relief, and/or
terminating this Agreement.

     16.3 Arbitration. PETsMART and PETsMART.com are implementing this Agreement
in good faith.  However, should either party believe that the other party is in
breach of this Agreement, the parties shall attempt in good faith to resolve any
dispute arising out of or relating thereto promptly by negotiations.  All
negotiations at all levels pursuant to this Section 16 are confidential and
shall be treated as compromise and settlement negotiations for purposes of the
Federal Rules of Evidence and state rules of evidence.  Each party shall bear
its own expenses in connection with such negotiations.
<PAGE>

          (a) Arbitrators.  No later than March 15, 2000, the parties will
jointly select a list of at least three, and no more than six, arbitrators (the
"Panel") from whom arbitrator(s) shall be selected to resolve any disputes.

          (b)  In General.  If a resolution satisfactory to the Non-Breaching
Party is not achieved pursuant to Section 16.2, the parties agree promptly to
submit the dispute to binding arbitration before an arbitrator selected from the
Panel, such arbitration to be held in the city of the defending party's home
offices under the then-existing rules for commercial disputes of the American
Arbitration Association.  Each party irrevocably submits to the jurisdiction and
venue set forth in this Section 16.3.

17.  Term and Termination.

     17.1 Term.  The initial term shall commence on the Effective Date of this
Agreement, and, unless earlier terminated, shall expire on the fifth anniversary
of the Effective Date of this Agreement (the "Initial Term") and shall
thereafter automatically continue for two successive one-year terms unless
either party provides notice of non-renewal at least sixty (60) days before the
expiration of the then-current term (which may be the Term or a successor term).
This Agreement shall automatically expire on the final day of the second renewal
term.

     17.2 Termination for Breach.  Either party shall have the right to
terminate this Agreement in the event the other party materially breaches any
term of this Agreement and fails to cure such breach in the course of the
dispute resolution procedures set forth above at Section 16 ("Dispute
Resolution").

     17.3 Effect of Termination.

          (a) Survival.  Sections l ("Definitions"), 13 ("Warranty"), 14
("Indemnity"), 15 ("Confidential Information"), 16 ("Dispute Resolution"), 17
("Term and Termination"), and 18 ("General Provisions") shall survive
termination of this Agreement.

          (b) Return of Marketing Material.  If, upon the expiration or
termination of this Agreement for any reason, either party to this Agreement is
in possession of marketing material of the other party as a result of the joint
marketing and other activities undertaken pursuant to this Agreement, such
material shall be returned to the applicable party within ten (10) business days
following such expiration or termination.

18.  General Provisions.

     18.1 Governing Law and Venue.  This Agreement will be governed and
construed in accordance with the laws of the State of California as applied to
contracts between California
<PAGE>

residents performed entirely within California without giving effect to
principles of conflicts of laws.

     18.2 Force Majeure.  Any party's delay in the performance of any duties or
obligations under this Agreement (except the payment of money owed) will not be
considered a breach of this Agreement if such delay is caused by a labor
dispute, shortage of materials, fire, earthquake, flood or any other event
beyond the control of the party, provided that the party uses reasonable
efforts, under the circumstances, (a) to notify the other party of the
circumstances causing the delay and (b) to resume performance as soon as
possible.

     18.3 Notices.  Any notices given under this Agreement shall be in writing
and shall be delivered to the addresses set forth below the signatures of the
parties or at such other address as the party shall specify in writing.  Notices
shall be deemed effectively given: (a) upon five (5) days after being sent by
certified or registered mail, postage prepaid, return receipt requested; (b)
upon the next business day after being sent overnight by U.S. Express Mail or by
a major U.S. express document courier; or (c) upon receipt of confirmation
following transmission by a facsimile machine.

     18.4 Subcontracting.  Each party may perform its obligations pursuant to
Section 6 ("Mailing Lists") through the use of independent contractors;
provided, however, that neither party shall be relieved of its obligations under
this Agreement by the use of such contractors.

     18.5 No Assignment.  Either party to this Agreement may assign this
Agreement to a successor entity in the event of a merger or other reorganization
in which it is not the survivor or to a third party which purchases all or
substantially all of its assets.  Except as set forth above at Section 18.4
("Subcontracting"), neither party can assign its rights or delegate its
obligations without the prior written consent of the other party in its sole
discretion.  Any assignment or delegation in violation of this Section shall be
void and of no effect.  No assignment or delegation pursuant to this Section
will expand the rights or obligations of the parties.

     18.6 Severability; Waiver.  If any provision of this Agreement is held to
be invalid or unenforceable for any reason, the remaining provisions will
continue in full force and effect without being impaired or invalidated in any
way.  The parties agree to replace any invalid provision with a valid provision
which most closely approximates the intent and economic effect of the invalid
provision.  The waiver by any party of a breach of any provision of this
Agreement will not operate or be interpreted as a waiver of any other or
subsequent breach.

     18.7 Headings.  Headings used in this Agreement are for reference purposes
only and in no way define, limit, construe or describe the scope, intent, or
extent of the section or in any way affect this Agreement.
<PAGE>

     18.8 Independent Contractors; No Agency.  The parties to this Agreement are
independent contractors, and no agency, partnership, joint venture, or employee-
employer is intended or created by this Agreement.  Neither party is the agent
of the other, and neither party shall have the power to obligate or bind the
other party. Personnel supplied by each party shall work exclusively for that
party, and shall not, for any purpose, be considered employees or agents of the
other party, and each party assumes full responsibility for the acts of
personnel supplied by it while performing services hereunder and, with regard to
any personnel supplied by it, each party shall be solely responsible for their
supervision, direction and control, compensation, benefits, and taxes.

     18.9 Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
be taken together and deemed to be one instrument.

     18.10  Entire Agreement.  This Agreement, including the Exhibits attached
hereto, sets forth the entire understanding and agreement between the parties
regarding the subject matter of this Agreement, and supersedes any and all oral
or written agreements or understandings between the parties as to that subject
matter.  It may changed only by a writing signed by both parties.  Neither party
is relying upon any warranties, representations, assurances, or inducements not
expressly set forth herein.

     In Witness Whereof, each of the parties hereto have executed this Agreement
as of the date first written above.

PETsMART.com:                          PETsMART:

/s/ Tom McGovern                       /s/  Philip L. Francis
----------------                       ----------------------------

By:        Tom McGovern                By:        Philip L. Francis
Title:     President and Chief         Title:     President and CEO
           Executive Officer           Address:   19601 North 27th Ave.
Address:   35 Hugus Alley, Suite 210              Phoenix, AZ 85207
           Pasadena, CA 91103          Fax:       (623) 580-6513
Fax:       (626) 817-7101

List of Exhibits:

A - Relationship Managers
<PAGE>

                             Relationship Managers

PETsMART, Inc. - Mr. Ken Banks
PETsMART.com, Inc. - Mr. Michael Houlahan<PAGE>

                                                                   EXHIBIT 10.27

                       PETsMART.com JOINT MARKETING PLAN
                                YEAR 2000 PLANS

1.  Scope.  In accordance with the Marketing Agreement between PETsMART, Inc.
(PETsMART) and PETsMART.com, Inc. (PETsMART.com), this plan outlines the
specific plans to promote PETsMART.com in PETsMART's advertising, promotional
materials and its stores.

2.  Co-Branding of Marketing Collateral.  For the fees set forth below in
Section 5 ("Payment"), PETsMART will co-brand all advertising or marketing
collateral (exclusive of PETsMART's catalogs), dedicating significant time or
space (as applicable) to promote PETsMART.com's name, products, and services as
follows:

    2.1  PETsMART will use reasonable efforts to ensure that the PETsMART.com
URL is prominently mentioned in:

    .  in each print advertisement placed by or on behalf of PETsMART;

    .  in each pay or free television spot advertisement of [*] or more;

    .  all in-store and/or catalog cash register receipts for [*] per year;

    .  in-store collateral and signage for [*] per year.

    2.2  PETsMART will use it's reasonable efforts to ensure that PETsMART.com
is allowed:

    .  to place a marketing message on the PETsMART store shopping bags for [*]
       per year. During such time PETsMART.com will be the exclusive
       advertiser on the bags;

    .  to use [*] page of advertising copy (including graphics) for PETsMART.com
       messages in freestanding newspaper advertising inserts for [*] printings
       (at PETsMART.com's choice). Such freestanding advertising inserts must be
       at least [*] page in size for this provision to apply.

[*]   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.
<PAGE>

3.   Cross-Promotion.  For the fees set forth below in Section 5 ("Payment"),
and more specifically, in Section 5.2 ("Payment For Cross-Promotion"), PETsMART
and PETsMART.com will engage in the following cross-promotional activities:

     3.1  PETsMART will provide PETsMART.com with access and ability, as
necessary, to run in-store promotions in the PETsMART retail stores for the
PETsMART.com Website (e.g., to distribute collateral, host contents, etc.), in
all current and future PETsMART retail store locations (not including any retail
stores operated by PETsMART under a different brand (e.g., "Sporting Dog")).

     3.2  PETsMART will provide in-store assistance in execution, set-up and
distribution of the PETsMART.com marketing material.

4.   Affinity Programs.  For the fees set forth below in Section 5 ("Payment"),
PETsMART and PETsMART.com will develop shared customer benefits and customer
loyalty programs, which shall include the ability by customers to redeem
benefits in both retail and online channels.  Allocation of costs for
administering the programs (as opposed to development of the programs) will be
determined by the Relationship Managers, with the intention of allocating costs
in proportion to the value received by each party.

5.   Payment.

     5.1  In consideration of the above services, PETsMART.com will pay PETsMART
     [*] payable in accordance with Section 9 of the marketing agreement.

     5.2  Payment for Cross-Promotion. PETsMART.com shall bear the cost of
[*] related to in-store cross-promotions. In the event that PETsMART pays
expenses on behalf of PETsMART.com in connection with such cross-promotion
activity, PETsMART.com shall reimburse PETsMART [*] which PETsMART.com shall pay
in accordance with Section 9 of the Marketing Agreement.

6.  Annual Renewal.  The terms of this annual plan remain in effect in
subsequent years until the Relationship Managers agree the successive plan to in
writing.

AGREED AND ACCEPTED

[*]   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.
<PAGE>

PETsMART.com                                PETsMART
Relationship Manager:                       Relationship Manager:

  /s/  Michael Houlahan                       /s/  Ken Banks
---------------------------                 ------------------------------
By:    Michael Houlahan                     By:    Ken Banks
Title:                                      Title:
Add:   35 Hugus Alley, Suite 210            Add:   19601 North 27th Avenue
       Pasadena, CA  91103                         Phoenix, AZ  85207
Fax:   (626) 817-7101                       Fax:   (623) 580-6513

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]