EXHIBIT 10.22
CONFIDENTIAL
INTERACTIVE MARKETING AGREEMENT
This amended and restated Interactive Marketing Agreement (the
"Agreement"), made and entered into on September 1, 1999, but for all purposes
of this Agreement deemed to be effective as of July 1, 1999 (the "Effective
Date"), is between America Online, Inc. ("AOL"), a Delaware corporation, with
offices at 22000 AOL Way, Dulles, Virginia 20166, and 800-FLOWERS.COM, Inc.
("1-800-FLOWERS" or "MP"), a New York corporation, with offices at 1600 Stewart
Avenue, Westbury, NY 11590. AOL and 1-800-FLOWERS may be referred to
individually as a "Party" and collectively as the "Parties." This Agreement is
intended to amend and restate in their entirety (i) that certain Interactive
Marketing Agreement between the Parties dated May 1, 1997 and (ii) that certain
additional Interactive Marketing Agreement dated as of January 1, 1998 between
the Parties (collectively, the "Original IMAs"). Upon the Effective Date, the
Original IMAs shall be terminated and of no further force and effect.
INTRODUCTION
Each of AOL and 1-800-FLOWERS desires to enter into an interactive
marketing relationship whereby AOL shall promote and distribute interactive
sites referred to (and further defined) herein as the Affiliated 1-800-FLOWERS
Sites. This relationship is further described below and is subject to the terms
and conditions set forth in this Agreement. Defined terms used but not defined
in the body of the Agreement shall be as defined on Exhibit B attached hereto.
TERMS
1. PROMOTION, DISTRIBUTION AND MARKETING.
1.1. AOL PROMOTION OF AFFILIATED 1-800-FLOWERS SITES. AOL shall
provide 1-800-FLOWERS with the promotions for the Affiliated
1-800-FLOWERS Sites described on Exhibit A hereto. Subject to
1-800-FLOWERS' approval (which shall not be unreasonably
withheld), AOL shall have the right to fulfill its promotional
commitments with respect to any of the foregoing promotions by
providing 1-800-FLOWERS with comparable promotional placements
in appropriate alternative areas of the same AOL Properties;
PROVIDED, HOWEVER, that unless otherwise agreed upon by the
Parties, any such comparable promotional placements shall be
within the same Tier as the promotions for which such
comparable promotional placements are being substituted. In
addition, if AOL is unable to deliver any particular
promotion, AOL shall work with 1-800-FLOWERS to provide
1-800-FLOWERS, as its sole remedy, with a comparable
promotional placement (i.e., a placement which is not less
valuable, in terms of the applicable CPM, than the promotion
being replaced) within the same Tier (as described on Exhibit
A to this Agreement). AOL reserves the right to redesign or
modify the organization, structure, "look and feel,"
navigation and other elements of the AOL Network at any time.
In the event such modifications materially and adversely
affect any specific promotion, AOL shall work with
1-800-FLOWERS to provide 1-800-FLOWERS, as its sole remedy, a
comparable promotional placement in the same Tier as the
promotion being replaced. The promotions described on Exhibit
A and any comparable promotions provided herein shall be
referred to as the "Promotions." On a periodic basis (but in
no event less than quarterly), the Parties shall review and
modify, as applicable, the promotional plan for the Promotions
in a continuing effort to have a current and effective
promotional plan. In addition, in order to expand
1-800-FLOWERS' exposure on the AOL Network beyond the
AOL-Controlled Areas, (i) AOL shall use commercially
reasonable efforts to assist 1-800-FLOWERS in establishing
promotional, marketing, advertising and/or distribution
relationships with AOL's Content providers to permit
1-800-FLOWERS to be the provider
1
to or through such entities of the Products described on
Exhibit D hereto and (ii) the Parties shall work together
in good faith to approach other entities (e.g., those entities
in which AOL has an ownership interest) to promote, market and
distribute the Products set forth on Exhibit D through such
entities (the activities in clauses (i) and (ii) above,
collectively, the "Promotional Activities"); PROVIDED,
HOWEVER, that 1-800-FLOWERS shall have no obligation to
enter into any such contractual arrangement. With respect to
the Promotional Activities that result in a contractual
relationship between 1-800-FLOWERS and any third party, AOL
shall be entitled to receive a negotiated percentage (as
agreed upon in good faith by the Parties) of the gross
revenues (as defined in any such contract) and up-front
payments (if any) made pursuant to any such arrangement.
1-800-FLOWERS hereby acknowledges and agrees that AOL does
not guarantee that (x) any of the entities to be approached
under this Section 1.1 will agree to enter into a
contractual arrangement with 1-800-FLOWERS and/or (y) the
terms and conditions of any such contractual arrangement into
which any such entity may agree to enter will resemble in any
respect the terms and conditions of this Agreement (including,
without limitation, the promotion and exclusivity provisions
hereof).
1.2. IMPRESSIONS COMMITMENT. During the Term, AOL shall deliver
*** Impressions to 1-800-FLOWERS through the Promotions (the
"Impressions Commitment"). In the event that, by the end of
any Year, AOL does not reach the Annual Impressions Target
for such Year as set forth on Exhibit A hereto (a
"Shortfall"), (i) such Shortfall shall not be deemed a
breach of the Agreement by AOL, but instead shall be added to
the Annual Impressions Target for the subsequent Year and
(ii) the Impressions Commitment shall be increased (subject to
the AOL Setoff Right) by *** Impressions (the "Shortfall
Penalty") for each Year in which any such Shortfall exists.
With respect to the Annual Impressions Targets specified on
Exhibit A, AOL shall not be obligated to provide Impressions
in excess of any Annual Impressions Target in any Year. In the
event AOL provides Impressions in excess of any Annual
Impressions Target in any Year during the Initial Term (the
"Excess Impressions"), AOL shall have the right to credit any
such Excess Impressions (the "AOL Setoff Right") against any
future Shortfall solely for purposes of determining the
applicability of any Shortfall Penalty (e.g., AOL would have
the right to credit *** of Excess Impressions in Year 1
against a Shortfall of *** in Year 3 such that AOL would not
be required to pay any Shortfall Penalty due to such Year 3
Shortfall, and the remaining *** Excess Impressions would be
available to credit against any Shortfall of up to ***
Impressions in Year 4 solely for purposes of determining the
applicability of any Shortfall Penalty in Year 4); PROVIDED,
HOWEVER, that AOL will use commercially reasonable efforts to
deliver the Impressions in accordance with the target amounts
set forth on Exhibit A hereto. In the event that 1-800-FLOWERS
requests that AOL reduce its promotional commitments hereunder
in any Year of the Term, and as a result, AOL fails to satisfy
the Annual Impressions Target in such Year, then AOL shall not
be responsible for the delivery of such Shortfall, and the
Impressions Commitment shall not be increased by the Shortfall
Penalty. Within thirty (30) days following any Year of the
Initial Term (other than the final Year thereof) in which
there is a Shortfall in Impressions, the Parties shall meet to
discuss the means by which AOL will attempt to rectify such
Shortfall in the subsequent Year. In the event there is a
shortfall in Impressions as of the end of the Initial Term (a
"Final Shortfall"), AOL shall provide 1-800-FLOWERS (as
1-800-FLOWERS's sole remedy), during the greater of (x) the
*** month period immediately following the expiration of
the Initial Term or (y) the period in which it would require
AOL to deliver the Final Shortfall to 1-800-FLOWERS at a rate
not to exceed *** per month (collectively, the "Make-Whole
Period") and as 1-800-FLOWERS' sole remedy, with comparable
promotional placements for the same number of Impressions
(equal to the Final Shortfall) in the same Tiers on the
applicable
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
2
AOL Properties (as mutually agreed upon by the Parties);
PROVIDED that AOL shall not deliver to 1-800-FLOWERS more
than *** Impressions of any such Final Shortfall in any
one (1) month of the Make-Whole Period, unless otherwise
agreed upon by the Parties.
1.3. CONTENT OF PROMOTIONS. The Promotions for 1-800-FLOWERS shall
link only to the Affiliated 1-800-FLOWERS Sites and shall
promote only the Exclusive Products and any other Products
that 1-800-FLOWERS is permitted to offer on the Affiliated
1-800-FLOWERS Sites pursuant to the terms of this Agreement
***. The specific 1-800-FLOWERS Content to be contained within
the Promotions (including, without limitation, advertising
banners and contextual promotions) (the "Promo Content") shall
be determined by 1-800-FLOWERS, subject to AOL's technical
limitations, the terms of this Agreement and AOL's
then-applicable policies relating to advertising and
promotions. 1-800-FLOWERS and AOL shall work together to
develop a quarterly online marketing plan (which 1-800-FLOWERS
shall submit to AOL in advance of each quarter during the Term
for AOL's final review) with respect to the Affiliated
1-800-FLOWERS Sites. The Parties shall meet in person or by
telephone at least monthly to review operations and
performance hereunder, including a review of the Promo Content
to ensure that it is designed to maximize performance.
1-800-FLOWERS shall consistently update the Promo Content no
less than twice per month. Except to the extent expressly
described herein (e.g., the Promotions as described on Exhibit
A hereto), the specific form, placement, duration and nature
of the Promotions shall be as determined by AOL in its
reasonable editorial discretion (consistent with the editorial
composition of the applicable screens).
2. AFFILIATED 1-800-FLOWERS SITES.
2.1. CUSTOMIZED AFFILIATED 1-800-FLOWERS SITES. 1-800-FLOWERS shall
create, at its sole cost and expense, a customized Affiliated
1-800-FLOWERS Site for each of the AOL Properties, through
which 1-800-FLOWERS can promote, advertise, market and
complete transactions regarding the Products set forth on
Exhibit D hereto (which interactive sites collectively shall
be referred to herein as the "Affiliated 1-800-FLOWERS
Sites"), and warrants that it also shall implement, at its own
cost and expense, any appropriate infrastructure additions to
the Affiliated 1-800-FLOWERS Sites to support the projected
traffic growth on such Affiliated 1-800-FLOWERS Sites. Each
Affiliated 1-800-FLOWERS Site shall be customized to comply
with the co-branding requirements for the relevant AOL
Property, as set forth on Exhibit I hereto.
2.2. CONTENT. 1-800-FLOWERS shall make available through the
Affiliated 1-800-FLOWERS Sites the comprehensive offering of
Products and related Content (under "Brands" owned by
1-800-FLOWERS that are selected by 1-800-FLOWERS) described on
Exhibit D. Except as mutually agreed in writing by the Parties
and as otherwise permitted under Section 2.8.2(a)(iii) of this
Agreement, the Affiliated 1-800-FLOWERS Sites shall contain
only Content that is directly related to the Products listed
on Exhibit D and shall not contain any third-party products,
services, programming or other Content other than that within
the categories set forth on Exhibit D. All sales of Products
through the Affiliated 1-800-FLOWERS Sites shall be conducted
through a direct sales format; 1-800-FLOWERS shall not
promote, sell, offer or otherwise distribute any products
through any format other than a direct sales format ***
without the prior written consent of AOL. 1-800-FLOWERS
shall review, delete, edit, create, update and otherwise
manage all Content available on or through the Affiliated
1-800-FLOWERS Sites in accordance with the terms of this
Agreement.
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
3
2.3. PRODUCTION WORK. Except as agreed to in writing by the Parties
pursuant to Section 10 of Exhibit F hereto, 1-800-FLOWERS
shall be responsible for all production work associated with
the Affiliated 1-800-FLOWERS Sites, including all related
costs and expenses.
2.4. TECHNOLOGY. 1-800-FLOWERS shall take all reasonable steps
necessary to conform its promotion and sale of Products
through the Affiliated 1-800-FLOWERS Sites to the
then-existing technologies identified by AOL which are
optimized for the AOL Service (including, without limitation,
any "quick checkout" tool which AOL may implement to
facilitate purchase of Products by AOL Users through the
Affiliated 1-800-FLOWERS Sites). AOL shall be entitled to
require reasonable changes to the Content (including, without
limitation, the features or functionality) within any linked
pages of any Affiliated 1-800-FLOWERS Site to the extent such
Content shall, in AOL's good faith judgment, adversely affect
any operational aspect of the AOL Network. AOL reserves the
right to review and test any Affiliated 1-800-FLOWERS Site
from time to time to determine whether the site is compatible
with AOL's then-available client and host software and the AOL
Network.
2.5. PRODUCT OFFERING. During the Term and subject to Section 2.2
of this Agreement, 1-800-FLOWERS shall use commercially
reasonable efforts to ensure that the Affiliated 1-800-FLOWERS
Sites include substantially all of the Products and other
Content (including, without limitation, any features, offers,
contests, functionality or technology) that are then made
available by or on behalf of 1-800-FLOWERS through any
Additional 1-800-FLOWERS Channel; PROVIDED, HOWEVER, that (i)
such inclusion shall not be required where it is commercially
or technically impractical to either Party (i.e., inclusion
would cause either Party to incur substantial incremental
costs) or where such inclusion is prohibited by the terms of
(a) this Agreement or (b) another agreement (in full force and
effect on the Effective Date) to which 1-800-FLOWERS is a
party, (ii) the specific changes in scope, nature and/or
offerings required by such inclusion shall be subject to AOL's
review and approval, and to the terms of this Agreement, and
(iii) in the event that 1-800-FLOWERS makes a special offer on
any additional 1-800-FLOWERS Channel, then 1-800-FLOWERS shall
use commercially reasonable efforts to offer a comparable
Special Offer on the 1-800-FLOWERS Affiliated Sites.
2.6. ***AND TERMS. During the Term and subject to Section 2.5,
1-800-FLOWERS shall ensure that: (i) the *** for the
Merchandise Value of the Products in any Affiliated
1-800-FLOWERS Site *** the *** for the Merchandise Value of
the Products or substantially similar Products offered by or
on behalf of 1-800-FLOWERS through any Additional
1-800-FLOWERS Channel; and (ii) the terms and conditions
related to Products offered on or through the Affiliated
1-800-FLOWERS Sites (when taken as a whole) are *** to the
terms and conditions for the Products or substantially
similar Products offered by or on behalf of 1-800-FLOWERS on
or through any Additional 1-800-FLOWERS Channel.
2.7. SPECIAL OFFERS/MEMBER BENEFITS. During the Term, 1-800-FLOWERS
shall on a reasonably periodic basis (but in no event less
than *** per quarter), promote throughout the Affiliated
1-800-FLOWERS Sites special offers exclusively available to
AOL Members and/or AOL Users ("Special Offers"). Each Special
Offer made available by 1-800-FLOWERS shall provide a
substantial member benefit to AOL Users, either by virtue of a
meaningful price discount, product enhancement, unique service
benefit or other special feature. 1-800-FLOWERS shall provide
AOL with reasonable prior notice of such Special Offers so
that AOL can market the availability of such Special Offers in
the manner AOL deems appropriate in its editorial discretion.
1-800-FLOWERS shall ensure that such Special Offers are ***
when compared with
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
4
any other such offers made by or on behalf of 1-800-FLOWERS
through any Additional 1-800-FLOWERS Channel during the same
time the Special Offers are made available on the Affiliated
1-800-FLOWERS Sites; PROVIDED, HOWEVER, that the foregoing
obligation shall not apply to a particular Special Offer to
the extent that 1-800-FLOWERS cannot make such offer available
due to the fact that such offer requires certain support
technology from AOL which AOL cannot, or elects not to,
provide. 1-800-FLOWERS shall use commercially reasonable
efforts to provide an AOL Special Offer (to be mutually agreed
upon by the Parties) during each year of the Term to new
CompuServe 2000 members.
2.8. OPERATING STANDARDS; NON-COMPLIANT CONTENT.
2.8.1 1-800-FLOWERS TECHNICAL PROBLEM.
1-800-FLOWERS shall ensure that each of the Affiliated
1-800-FLOWERS Sites complies at all times with the standards
set forth in Exhibit E hereto. In the event of (i) any
1-800-FLOWERS Technical Problem, AOL shall have the right to
block AOL User access to the Affiliated 1-800-FLOWERS Site(s)
affected by the 1-800-FLOWERS Technical Problem until such
time as 1-800-FLOWERS cures such 1-800-FLOWERS Technical
Problem. In the event that 1-800-FLOWERS fails to cure any
such 1-800-FLOWERS Technical Problem within five (5) business
days, (a) AOL shall have the right (in addition to any other
remedies available to AOL hereunder (e.g., any blocking
right)) to reduce (on a PRO RATA basis) the Annual Impressions
Target for such Year (and for any subsequent Year, in the
event that such 1-800-FLOWERS Technical Problem carries over
from one Year to the next) until such time as 1-800-FLOWERS
cures such 1-800-FLOWERS Technical Problem (and in such event,
AOL shall be relieved of the proportionate amount of the
Impressions Commitment corresponding to such reduction in
Impressions) and (b) any revenue threshold(s) set forth in
Section 4 of this Agreement shall each be adjusted
proportionately to correspond to such reduction in Impressions
during the period of non-compliance (e.g., for each day such
1-800-FLOWERS Technical Problem exists beyond such initial
five (5) business day period, the Impressions Commitment shall
be reduced by 1/365 of the Impressions to be provided by AOL
hereunder, and the relevant revenue threshold(s) also shall be
reduced by such percentage). In the event that 1-800-FLOWERS
fails to cure such 1-800-FLOWERS Technical Problem within
thirty (30) days, AOL shall have the right to terminate this
Agreement. Any Dispute regarding the existence of a
1-800-FLOWERS Technical Problem (or any cure thereof) shall be
subject to the Dispute resolution provisions of Section 6 of
this Agreement.
2.8.2 NON-COMPLIANT CONTENT.
(a) RESTRICTIONS ON CONTENT, SERVICES AND PRODUCTS ON
THE AFFILIATED 1-800-FLOWERS SITES. 1-800-FLOWERS shall ensure
that each Affiliated 1-800-FLOWERS Site does not in any
respect:
(i) promote, advertise or market the Products,
services or Content of (a) any Interactive
Service other than AOL or (b) except as not
prohibited under Section 2.8.2(a)(iv), any
entity reasonably construed to be in
competition with any third party with which
AOL has an exclusive or premier (i.e.,
exclusivity granted by AOL to more than one
third party in a particular category)
relationship;
5
(ii) distribute the Products, services or Content
of any Interactive Service other than AOL;
(iii) promote, advertise, market, distribute or
otherwise offer any Products, services or
Content other than the Products, services or
Content contained on Exhibits D or J hereto,
except (a) in a manner whereby the
Transaction Revenues generated by the
Products, services and Content other than
that contained on Exhibits D or J hereto
(the "*** Products") shall not exceed ***
(***) of the aggregate Transaction Revenues
generated under this Agreement and (b) in
accordance with the terms of Exhibit D
hereto; or
(iv) contain any promotions, advertisements,
marketing or links on the home pages of any
1-800-FLOWERS Affiliated Site in any way
related to any of the *** Products with
respect to which AOL has entered into an
exclusive or premier arrangement with a
third party prior to the date on which
1-800-FLOWERS begins to offer (on the
relevant Affiliated 1-800-FLOWERS Site(s))
the Products, services or Content (as
applicable) covered by such exclusive or
premier relationship.
(b) VIOLATION; AOL BLOCKING RIGHT. In the event that
(x) AOL shall notify 1-800-FLOWERS of a violation of either of
clauses (i) or (ii) of Section 2.8.2(a), AOL shall have the
right to block AOL User access immediately to any relevant
portion of the 1-800-FLOWERS Affiliated Site(s) (the "AOL
Blocking Right") and 1-800-FLOWERS shall have five (5)
business days (following such notice) to remove such
non-compliant Products, services or Content (together with the
non-compliant Products, services or Content set forth in
clauses (iii) and (iv) of Section 2.8.2(a), collectively, the
"Non-Compliant Content"). In the event that AOL shall notify
1-800-FLOWERS of a violation of either of clauses (iii) or
(iv) of Section 2.8.2(a) above, AOL may exercise its AOL
Blocking Right in the event that 1-800-FLOWERS shall not have
removed such Non-Compliant Content within five (5) business
days following such notice. In connection with the exercise by
AOL of its AOL Blocking Right, AOL shall use commercially
reasonable efforts to block the minimum portion of any
1-800-FLOWERS Affiliated Site necessary to address the
violation by 1-800-FLOWERS of the provisions of this Section
2.8.2.
(c) VIOLATION; RIGHT TO REDUCE ANNUAL IMPRESSIONS
TARGET AND IMPRESSIONS COMMITMENT. In the event that
1-800-FLOWERS fails to remove any such Non-Compliant Content
within five (5) business days, (a) AOL shall have the right
(in addition to any blocking right) to reduce the Annual
Impressions Target *** for such Year (and for any subsequent
Year, in the event that such Non-Compliant Content carries
over from one Year to the next) until such Time as
1-800-FLOWERS corrects such Non-Compliant Content (and in
such event, AOL shall be relieved of the proportionate amount
of the Impressions Commitment corresponding to such decrease
in promotion) and (b) any revenue threshold(s) set forth in
Section 4 of this Agreement shall each be adjusted
proportionately to correspond to such decrease in Impressions
and other obligations during the period of non-compliance
(e.g., for each day beyond the five (5) business day cure
period 1-800-FLOWERS fails to cure such Non-Compliant Content,
the Impressions Commitment shall be reduced by *** of the
Impressions to be provided by AOL hereunder, and the relevant
revenue threshold(s) also shall be reduced by such
percentage).
(d) VIOLATION; AOL RIGHT TO TERMINATE. In the event
that 1-800-FLOWERS fails to cure any such Non-Compliant
Content within thirty (30) days, AOL shall have the right to
terminate this Agreement.
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
6
(e) DISPUTES. Any Dispute regarding the existence of
Non-Complaint Content (or any cure thereof) shall be subject
to the Dispute resolution provisions of Section 6 of this
Agreement.
2.9. ADVERTISING SALES. Neither Party shall sell promotions,
advertisements, links, pointers or similar services or rights
through the Affiliated 1-800-FLOWERS Sites ("Advertisements")
unless and until the Parties have mutually agreed upon a
written advertising program whereby the Parties coordinate to
establish advertising inventory space and shall share mutually
agreed upon revenues generated from such advertising sales.
2.10. TRAFFIC FLOW. 1-800-FLOWERS shall take reasonable efforts to
ensure that AOL traffic is either kept within the applicable
Affiliated 1-800-FLOWERS Site or channeled back into the AOL
Network (with the exception of advertising links sold and
implemented pursuant to the Agreement). The Parties shall work
together on implementing mutually acceptable links from the
Affiliated 1-800-FLOWERS Sites back to the AOL Service.
3. AOL EXCLUSIVITY OBLIGATIONS.
3.1 FRESH-CUT FLOWERS EXCLUSIVITY. To the extent provided for in
this Section 3.1, 1-800-FLOWERS shall be the exclusive
provider of fresh-cut flowers and Plants on the AOL
Properties. AOL shall not promote, market or advertise the
sale by any third-party of (or permit any third party to
promote market or advertise the sale of) fresh-cut flowers on
or through the AOL-Controlled Areas during the Fresh-Cut
Flowers Exclusivity Period, nor shall AOL promote, market or
advertise the sale by any third party of (or permit any third
party to promote, market or advertise the sale of) any Plants
on AOL.com and the AOL Service during the Fresh Cut Flowers
Exclusivity Period. In addition, vis-a-vis the 1-800-FLOWERS
Competitors, 1-800-FLOWERS shall be the exclusive provider of
fresh-cut flowers and Plants on the AOL Properties. For
purposes of this Section 3, the terms "promote", "market" and
"advertise" shall include not only their customary meanings,
but also any and all promotional linking and pointing. During
the Fresh-Cut Flowers Exclusivity Period, AOL shall use
commercially reasonable efforts to prevent any third party
promoted or marketed by AOL (or to whom AOL sells advertising)
on the AOL Properties, as may be permitted hereunder, from
promoting, marketing or advertising fresh-cut flowers or
Plants on the home pages of such third parties' affiliated
Interactive Sites (if any).
3.2 GARDENING EXCLUSIVITY. During the Gardening Exclusivity
Period, AOL shall not (i) promote, market or advertise the
sale by any third party (other than 1-800-FLOWERS) of the
Gardening Products on or through the AOL Properties, nor (ii)
permit any such third party to promote, market or advertise
the sale of Gardening Products on or through the AOL
Properties. In addition, prior to the expiration of the
Gardening Exclusivity Period, AOL shall not enter into any
agreement with any Gardening Competitor that contains, as a
component thereof, the promotion, marketing or advertising by
AOL of the sale of Gardening Products by any such Gardening
Competitor (on the AOL Properties) during the Gardening
Exclusivity Period. Prior to (and during) the Gardening
Exclusivity Period, the Parties shall meet on a quarterly
basis (or more frequent basis, as mutually agreed upon by the
Parties) to discuss, among other things, the development of
the 1-800-FLOWERS Online Gardening Channel. At such meetings
prior to the Gardening Exclusivity Period, the Parties shall
discuss the Gardening Products to be offered on the
1-800-FLOWERS Online Gardening Channel during such period, in
an effort to optimize the range of Gardening Product
categories to be offered on such channel as set forth on
Exhibit J hereto. However, 1-800-FLOWERS shall make the final
determination as to the
7
Gardening Products it will offer on its Gardening Channel.
When AOL shall have removed from the AOL Properties all
promotions, marketing and advertising related to the sale of
Gardening Products, AOL shall notify 1-800-FLOWERS in writing
(e.g., by e-mail) of such removal and the Gardening
Exclusivity Period shall commence on October 31, 1999.
In the event that AOL shall not have provided 1-800-FLOWERS
with such notice by October 31, 1999, then the Gardening
Exclusivity Period shall be extended by one day for each day
after October 31, 1999 in which AOL fails to provide
1-800-FLOWERS with such notice. 1-800-FLOWERS shall cause the
1-800-FLOWERS Online Gardening Channel (including, without
limitation, substantially all of the Products and Content set
forth on Exhibit J hereto) to be launched by October 31, 1999;
PROVIDED, that for each day following October 31, 1999 in
which 1-800-FLOWERS shall not have launched the 1-800-FLOWERS
Online Gardening Channel, the Gardening Exclusivity Period
shall be reduced by one (1) day. Any Dispute regarding the
Gardening Exclusivity shall be subject to the Dispute
resolution provisions of Section 6 of this Agreement.
During the Gardening Exclusivity Period, AOL shall use
commercially reasonable efforts to prevent any third
party promoted or marketed by AOL (or to whom AOL sells
advertising) on the AOL Properties, as may be permitted
herein, from promoting, marketing or advertising the sale of
Gardening Products on the home pages of such third parties'
affiliated Interactive Sites (if any).
3.3 EXCEPTIONS. Notwithstanding anything to the contrary in this
Section 3 (and without limiting any actions which may be taken
by AOL without violation of 1-800-FLOWERS' rights hereunder),
no provision of this Agreement shall limit AOL's ability (on
or off the AOL Network) to:
(i) undertake activities or perform duties pursuant to
existing arrangements with third parties that include (as a
component thereof) the promotion, marketing or advertising of
any Gardening Products, PROVIDED, HOWEVER, that AOL shall not
(to the extent not contractually prohibited and to the extent
within AOL's control) renew or otherwise extend any portion of
any such agreement that relates to the sale, promotion,
advertising or marketing of Gardening Products during the
Gardening Exclusivity Period; PROVIDED, FURTHER, that AOL
hereby represents that to the best of AOL's knowledge and the
knowledge of each of the AOL Properties (as the case may be)
(a) as of the Effective Date, there are no existing
arrangements to which AOL is a party that would have a
material adverse effect on the Gardening Products exclusivity
granted to 1-800-FLOWERS during the Gardening Exclusivity
Period under this Agreement and (b) there are no agreements
with any third party whose primary product line is gardening
products that will not expire on or before October 31, 1999;
(ii) undertake or perform duties pursuant to any agreements
to which AOL becomes a party subsequent to the Effective Date
as a result of Change of Control, merger (where AOL is the
surviving entity) or acquisition, PROVIDED, HOWEVER, that in
the context of any agreements to which AOL becomes a party
following the Effective Date, AOL (a) shall use commercially
reasonable efforts to provide 1-800-FLOWERS with an
opportunity during the applicable Exclusivity Period to bid
for the right to sell the Exclusive Products on any new AOL
property acquired by AOL and distributed through any AOL
Property in connection with any such Change or Control, merger
or acquisition and (b) shall not promote, market or advertise
the Exclusive Products (or the sale of the Exclusive Products
by any third party acquired pursuant to any such Change of
Control, merger or acquisition) on the AOL Properties nor
permit any third party to promote, market or advertise the
Exclusive Products on the AOL-Controlled Areas;
(iii) promote, market or sell advertising to any third-
party (other than a 1-800-FLOWERS
8
Competitor (except as permitted by Section 3.3(viii) below)),
PROVIDED that (a) AOL does not promote, market or advertise
the Exclusive Products of any such third party on any of the
AOL Properties nor permit any third party to promote, market
or advertise the Exclusive Products on the AOL-Controlled
Areas and (b) AOL shall use commercially reasonable efforts
to ensure that such third parties do not promote, market or
advertise the Exclusive Products on the home pages of such
third parties' affiliated Interactive Sites;
(iv) enter into an arrangement with any third party for
the primary purpose of acquiring incremental AOL Users
whereby such party is allowed to promote or market products
or services (other than on the AOL Properties) solely to the
incremental AOL Users that are acquired as a result of such
agreement;
(v) enter into any arrangement with any Full Service Home
Improvement Partner, PROVIDED, that any such Full Service Home
Improvement Partner shall only be permitted to sell, promote,
market or advertise its Gardening Products on the Gardening
Area (or any successor area) of the Shopping Channel (on each
AOL Property) and in any gardening Content areas within any
AOL Property so long as such third party promotes, markets or
advertises its Gardening Products in combination with at least
two (2) other lines of products;
(vi) create contextual links or editorial commentary
(provided that any third parties referenced in such contextual
links or editorial commentary shall not have paid for any such
references for the purpose of selling their Exclusive
Products) relating to content describing the Exclusive
Products or any third party marketer of the Exclusive
Products;
(vii) promote, market or advertise the gardening content of
any third party (including, without limitation, any Gardening
Competitor but excluding any 1-800-FLOWERS Competitor) on the
AOL Properties; PROVIDED, HOWEVER that (a) during the
Gardening Exclusivity Period, such promotions, marketing or
advertisements (1) promote gardening content, (2) do not
promote the sale, directly or indirectly, of Gardening
Products and (3) do not link to a commerce area of any such
third party and (b) AOL shall not promote, market or advertise
the Gardening Competitors in the Shopping Channel during the
Gardening Exclusivity Period; or
(viii) enter into any agreement with any local merchant of
fresh-cut flowers or Gardening Products on Digital City,
PROVIDED that AOL shall not (a) promote, market or advertise
any such fresh-cut flowers or Gardening Products on any of the
other AOL Properties nor (b) promote, market or advertise any
such local merchants within the national areas of Digital
City; PROVIDED, FURTHER, that AOL shall use commercially
reasonable efforts to ensure that such local merchants do not
promote, market or advertise or sell fresh-cut flowers or
Gardening Products on the national areas of Digital
Cities(other than the local areas of Digital City) during the
Exclusivity Period; PROVIDED, HOWEVER, that 1-800-FLOWERS
acknowledges that an occasional, unintentional failure to
comply with the foregoing obligation shall not be deemed a
breach of this Agreement.
4. PAYMENTS.
4.1. GUARANTEED PAYMENTS. During the Initial Term and while this Agreement
is in full force and effect, 1-800-FLOWERS shall pay AOL a
non-refundable guaranteed payment of Forty Two Million Dollars
($42,000,000) as follows:
(i) Five Million Dollars (US$5,000,000) paid to AOL by
1-800-FLOWERS prior to the Effective Date;
9
(ii) Five Million Dollars (US$5,000,000) to be paid to AOL
no later than September 1, 1999;
(iii) One Million Five Hundred Thousand Dollars
(US$1,500,000), to be paid to AOL no later than
September 30, 1999;
(iv) One Million Dollars (US$1,000,000) to be paid to AOL
no later than March 1, 2000;
(v) Seven Million Three Hundred Seventy Five Thousand
Dollars (US$7,375,000), to be paid on May 30, 2000;
(vi) Seven Million Three Hundred Seventy Five Thousand
Dollars (US$7,375,000), to be paid on May 30, 2001;
(vii) Seven Million Three Hundred Seventy Five Thousand
Dollars (US$7,375,000), to be paid on May 30, 2002;
and
(vii) Seven Million Three Hundred Seventy Five Thousand
Dollars (US$7,375,000), to be paid on December 30,
2002.
4.2. SHARING OF TRANSACTION REVENUES.
(i) BASE REVENUE SHARE. If at any time during the Initial
Term, the aggregate amount of Transaction Revenues generated
(excluding the amounts set fort hin clauses (ii) and (iii) of this
Section 4.2) exceeds *** (the "Revenue Threshold"), then 1-800-FLOWERS
shall pay AOL *** percent *** of the Transaction Revenues (the "Base
Revenue Share") generated during the remainder of the Term.
1-800-FLOWERS shall pay all of the foregoing amounts on a quarterly
basis within thirty (30) days following the end of the any such
quarter in which the applicable Transaction Revenues above the
Revenue Threshold were generated.
(ii) INCREMENTAL YEAR 1 REVENUE SHARE. In addition to the
Base Revenue Share, within thirty (30) days following the end of
Year 1, 1-800-FLOWERS shall pay AOL an amount equal to (a) ***
percent (***%) of all Transaction Revenues up to and including ***
generated on the AOL Service and AOL.com during Year 1 PLUS (b) ***
of all Transaction Revenues generated in excess of *** on the AOL
Service and AOL.com during Year 1 (collectively, the Incremental
Year 1 Revenue Share").
(iii) INCREMENTAL YEAR 2 REVENUE SHARE. In addition to the
Base Revenue Share, within thirty (30) days following the end of
Year 2, 1-800-FLOWERS shall pay AOL an amount equal to (a) ***
percent (***%) of all Transaction Revenues up to and including ***
generated on the AOL Service and AOL.com during Year 2 PLUS (b) ***
of all Transaction Revenues generated in excess of *** on the AOL
Service and AOL.com during Year 2 (collectively, the Incremental
Year 2 Revenue Share").
4.3. LATE PAYMENTS; WIRED PAYMENTS. All amounts owed hereunder not
paid when due and payable shall bear interest from the date
such amounts are due and payable *** in effect at such time.
Unless otherwise agreed upon by the Parties, all payments
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
10
required hereunder shall be paid in immediately available,
non-refundable U.S. funds wired to the "America Online" account,
Account Number *** at The Chase Manhattan Bank, 1 Chase
Manhattan Plaza, New York, NY 10081 (ABA: 021000021).
4.4. AUDITING RIGHTS. 1-800-FLOWERS shall maintain complete, clear
and accurate records of all expenses, revenues and fees in
connection with the performance of this Agreement. For the sole
purpose of ensuring compliance with this Agreement, AOL (or its
representative) shall have the right to conduct a reasonable and
necessary inspection of portions of the books and records of
1-800-FLOWERS which are relevant to the amounts payable by
1-800-FLOWERS pursuant to this Agreement. Any such audit may be
conducted after twenty (20) business days' prior written notice to
1-800-FLOWERS; PROVIDED, HOWEVER, that no such audit shall occur
during the months of July or August in any Year, and AOL shall be
limited to one (1) such audit per any Year of the Term, unless
otherwise agreed upon by the Parties. AOL shall bear the expense
of any audit conducted pursuant to this Section 4.4 unless such
audit shows an error in AOL's favor amounting to a deficiency to
AOL in excess of the greater of (i) *** of the actual amounts due and
payable to AOL hereunder or (ii) ***, in which event 1-800-FLOWERS
shall bear the reasonable expenses of the audit (not to exceed ***).
1-800-FLOWERS shall pay AOL the amount of any deficiency discovered
by AOL within thirty (30) days after receipt of notice thereof from
AOL, unless such amount is contested in good faith by 1-800-FLOWERS,
in which case such Dispute shall be subject to the terms of Section 6
of this Agreement. In the event that 1-800-FLOWERS has good-faith
grounds to question AOL's tracking and reporting of Impressions,
1-800-FLOWERS shall be entitled to a report issued by a qualified
independent auditor describing AOL's methodologies regarding the
tracking and reporting of Impressions and certifying AOL's
compliance with such methodologies and with AOL's obligations
hereunder.
4.5. TAXES. 1-800-FLOWERS shall collect and pay, and indemnify and hold
AOL harmless from, any sales, use, excise, import or export value
added or similar tax or duty not based on AOL's net income,
including any penalties and interest, as well as any costs
associated with the collection or withholding thereof, including
attorneys' fees.
4.6. REPORTS. Each Party shall provide the other Party with certain
reports (the form and substance of which may be amended from time
to time upon the mutual agreement of the Parties) evidencing the
reporting Party's compliance with its obligations under this
Agreement and detailing certain information, all as set forth below.
4.6.1. SALES REPORTS. Consistent with the reports currently
supplied by 1-800-FLOWERS to AOL, 1-800-FLOWERS shall
provide AOL with periodic reports, detailing the following
activity in each such period (and any other information
mutually agreed upon by the Parties or reasonably required
for measuring revenue activity by 1-800-FLOWERS through the
Affiliated 1-800-FLOWERS Sites): Transaction Revenues,
chargebacks and credits for returned or cancelled goods or
services (and, where possible, an explanation of the type
of reason therefor (e.g., bad credit card information, poor
customer service, etc.)) and credit card processing fees
charged and/or collected by relevant credit card
associations or issuing institutions (collectively, the
"Sales Reports"). AOL shall be entitled to use the Sales
Reports in its internal business operations, subject to the
terms of this Agreement.
4.6.2. USAGE REPORTS. AOL shall provide 1-800-FLOWERS with
standard monthly usage information related to the
Promotions (e.g. a schedule of the Impressions delivered by
AOL at such time) which are similar in substance and form
to the
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
11
reports provided by AOL to other interactive marketing
partners similar to 1-800-FLOWERS.
4.6.3. PROMOTIONAL REPORTS. Each Party shall provide the other
Party with a quarterly report documenting its compliance
with any promotional commitments that it has undertaken
under this Agreement. In reporting any promotion, the Party
should describe the nature of the promotion, its duration
and any other relevant information regarding such promotion
(including, without limitation, any required information
set forth in the description of any such promotion).
4.6.4. FRAUDULENT TRANSACTIONS. To the extent permitted by
applicable laws, 1-800-FLOWERS shall provide AOL with a
prompt report of any fraudulent order, including the date,
screen name or email address and amount associated with
such order, promptly following 1-800-FLOWERS obtaining
knowledge that the order is, in fact, fraudulent.
5. TERM; RENEWAL; TERMINATION.
5.1. TERM. Unless earlier terminated as set forth herein, the initial
term of this Agreement shall begin on the Effective Date and end on
August 31, 2003 (the "Initial Term").
5.2. CONTINUED LINKS. Upon expiration of the Initial Term, AOL may, at
its discretion (for a period not to exceed two (2) years), (i)
continue to promote one or more "pointers" or links from the AOL
Network to (a) an agreed-upon 1-800-FLOWERS Affiliated Site or (b)
a 1-800-FLOWERS Interactive Site to be selected by 1-800-FLOWERS,
and (ii) continue to use 1-800-FLOWERS' trade names, trade marks
and service marks (approved for AOL use by 1-800-FLOWERS during the
Initial Term) solely in connection therewith (collectively, a
"Continued Link"). At the end of such two (2) year period (and at
the end of each subsequent year thereafter), the Continued Link
period shall automatically be extended by one (1) additional year
unless either Party elects to terminate such Continued Link period
prior to the end of any such year (any such Continued Link period,
together with the Initial Term, collectively referred to herein as
the "Term"). So long as AOL maintains a Continued Link, (i)
1-800-FLOWERS shall pay AOL *** of the Transaction Revenues generated
during such period and (ii) the obligations of the Parties under
Sections 1, 2, 3, 4.1, 4.2, 4.6.2, 8 and Exhibits
A, C, D, E, F, G, H, I and J shall no longer apply.
5.3. TERMINATION FOR BREACH. Except as expressly provided elsewhere in
this Agreement, either Party may terminate this Agreement at any
time in the event of a material breach of the Agreement by the
other Party which remains uncured after thirty (30) days written
notice thereof to the other Party (or such shorter period as may be
specified elsewhere in this Agreement); PROVIDED, HOWEVER, that the
cure period with respect to either Party's failure to make any
payment to the other Party required hereunder shall be ten (10)
days from the date of receipt of written notice regarding such
payment. Notwithstanding the foregoing, in the event of a material
breach of a provision that expressly requires action to be
completed within an express period shorter than thirty (30) days,
either Party may terminate this Agreement if the breach remains
uncured after written notice thereof to the other Party.
5.4. TERMINATION FOR BANKRUPTCY/INSOLVENCY. Either Party may terminate
this Agreement immediately following written notice to the other
Party if the other Party (i) ceases to do business in the normal
course, (ii) becomes or is declared insolvent or bankrupt, (iii) is
the subject of any proceeding related to its liquidation or
insolvency (whether voluntary or involuntary) which is not
dismissed within ninety (90) calendar days or (iv) makes an
assignment for the benefit of creditors.
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
12
5.5. TERMINATION ON CHANGE OF CONTROL. In the event of a Change of
Control of 1-800-FLOWERS resulting in control of 1-800-FLOWERS by
an Interactive Service, AOL may terminate this Agreement by
providing thirty (30) days' prior written notice of such intent to
terminate.
5.6. EFFECT OF TERMINATION BY 1-800-FLOWERS FOR AOL MATERIAL BREACH. In
the event of termination of this Agreement by 1-800-FLOWERS due to
any material breach of this Agreement by AOL during any Year of
this Agreement, 1-800-FLOWERS shall not be required to pay AOL any
amounts otherwise due to AOL (after any such material breach)
during the remainder of any such Year or the remainder of the Term.
Furthermore, in such event, 1-800-FLOWERS reserves all legal and
equitable remedies it may have related to any such material breach
by AOL.
6. MANAGEMENT COMMITTEE/ARBITRATION.
6.1. MANAGEMENT COMMITTEE. The Parties shall act in good faith and use
commercially reasonable efforts to promptly resolve (and in any
event, within ten (10) business days) any claim, dispute, claim,
controversy or disagreement between the Parties or any of their
respective subsidiaries, affiliates, successors and assigns under
or related to this Agreement or any document executed pursuant to
this Agreement or any of the transactions contemplated hereby
(each, a "Dispute"). If the Parties cannot resolve any such Dispute
within such time frame, the Dispute shall be submitted to the
Management Committee for resolution. For ten (10) days following
submission of the Dispute to the Management Committee, the
Management Committee shall have the exclusive right to resolve such
Dispute. If the Management Committee is unable to amicably resolve
the Dispute during such ten (10) day period, then the Dispute shall
be subject to the resolution mechanisms described below.
"Management Committee" shall mean a committee of two (2) people,
made up of a senior executive from each of the Parties for the
purpose of resolving Disputes under this Section 6 and generally
overseeing the relationship between the Parties contemplated by
this Agreement. Neither Party shall seek, nor shall be entitled to
seek, binding outside resolution of the Dispute unless and until
the Parties have been unable amicably to resolve the Dispute as set
forth in this Section 6.1 and then, only in compliance with the
procedures set forth in this Section 6.
6.2. ARBITRATION. Except for Disputes relating to issues of proprietary
rights, including but not limited to intellectual property and
confidentiality, any Dispute not resolved by amicable resolution as
set forth in Section 6.1 shall be governed exclusively and finally
by arbitration. Such arbitration shall be conducted by the American
Arbitration Association ("AAA") in New York, New York, and shall be
initiated and conducted in accordance with the Commercial
Arbitration Rules ("Commercial Rules") of the AAA, including the
AAA Supplementary Procedures for Large Complex Commercial Disputes
("Complex Procedures"), as such rules shall be in effect on the
date of delivery of a demand for arbitration ("Demand"), except to
the extent that such rules are inconsistent with the provisions set
forth herein. Notwithstanding the foregoing, the Parties may agree
in good faith that the Complex Procedures shall not apply in order
to promote the efficient arbitration of Disputes where the nature
of the Dispute, including without limitation the amount in
controversy, does not justify the application of such procedures.
6.3. SELECTION OF ARBITRATORS. The arbitration panel shall consist of
three (3) arbitrators. Each Party shall name one (1) arbitrator
within ten (10) days after the delivery of the Demand, and the
third arbitrator shall be selected by the first two arbitrators. If
the two arbitrators are unable to select a third arbitrator within
ten (10) days, a third neutral arbitrator shall be appointed by the
AAA from the panel of commercial arbitrators of any of the AAA
Large
13
and Complex Resolution Programs. If a vacancy in the arbitration
panel occurs after the hearings have commenced, the remaining
arbitrator or arbitrators may not continue with the hearing and
determination of the controversy, unless the Parties agree
otherwise.
6.4. GOVERNING LAW. The Federal Arbitration Act, 9 U.S.C. Secs. 1-16,
and not state law, shall govern the arbitrability of all Disputes.
The arbitrators shall allow such discovery as is appropriate to the
purposes of arbitration in accomplishing a fair, speedy and
cost-effective resolution of the Disputes. The arbitrators shall
reference the Federal Rules of Civil Procedure then in effect in
setting the scope and timing of discovery. The Federal Rules of
Evidence shall apply IN TOTO. The arbitrators may enter a default
decision against any Party who fails to participate in the
arbitration proceedings.
6.5. ARBITRATION AWARDS. The arbitrators shall have the authority to
award compensatory damages only or other equitable relief. Any
award by the arbitrators shall be accompanied by a written opinion
setting forth the findings of fact and conclusions of law relied
upon in reaching the decision. The award rendered by the
arbitrators shall be final, binding and non-appealable, and
judgment upon such award may be entered by any court of competent
jurisdiction. The Parties agree that the existence, conduct and
content of any arbitration shall be kept confidential and no Party
shall disclose to any person any information about such
arbitration, except as may be required by law or by any
governmental authority or for financial reporting purposes in each
Party's financial statements.
6.6. FEES. Each Party shall pay the fees of its own attorneys, expenses
of witnesses and all other expenses and costs in connection with
the presentation of such Party's case (collectively, "Attorneys'
Fees"). The remaining costs of the arbitration, including without
limitation, fees of the arbitrators, costs of records or
transcripts and administrative fees (collectively, "Arbitration
Costs") shall be borne equally by the Parties. Notwithstanding the
foregoing, the arbitrators may modify the allocation of Arbitration
Costs and award Attorneys' Fees in those cases where fairness
dictates a different allocation of Arbitration Costs between the
Parties and an award of Attorneys' Fees to the prevailing Party as
determined by the arbitrators.
6.7 NON ARBITRATABLE DISPUTES. Any Dispute that is not subject to final
resolution by the Management Committee or to arbitration under this
Section 6 or by law (collectively, "Non-Arbitration Claims") shall
be brought in a court of competent jurisdiction in the State of New
York. Each Party irrevocably consents to the exclusive jurisdiction
of the courts of the State of New York and the federal courts
situated in New York City in the State of New York, over any and
all Non-Arbitration Claims and any and all actions to enforce such
claims or to recover damages or other relief in connection with
such claims.
7. PRESS RELEASES. Each Party shall submit to the other Party, for its
prior written approval, which shall not be unreasonably withheld or
delayed, any press release or any other public statement ("Press
Release") regarding the transactions contemplated hereunder.
Notwithstanding the foregoing, either Party may issue any disclosures
as required by law without the consent of the other Party and in such
event, the disclosing Party shall provide at least five (5) business
days prior written notice of such disclosure.
8. STANDARD TERMS. The Standard Online Commerce Terms & Conditions set
forth on Exhibit F attached hereto and Standard Legal Terms &
Conditions set forth on Exhibit G attached hereto are each hereby made
a part of this Agreement.
14
[REMAINDER OF PAGE INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.
AMERICA ONLINE, INC. 800-FLOWERS.COM, INC.
By: _______________________________ By: _______________________________
Name: David Colburn Name: Christopher G. McCann
Title: Senior Vice President, Title: Senior Vice President
Business Affairs
EXHIBIT A
PLACEMENT/PROMOTION
A. CARRIAGE PERIOD, FRESH-CUT FLOWERS EXCLUSIVITY PERIOD AND GARDENING
EXCLUSIVITY PERIOD
- --------------------------- ----------------------- ---------------------------------------------------------
AOL PROPERTY CARRIAGE AND CARRIAGE AND FRESH-CUT FLOWERS EXCLUSIVITY
EXCLUSIVITY BEGINS PERIOD ENDS
- --------------------------- ----------------------- ---------------------------------------------------------
AOL.com July 1, 1999 August 31, 2003 (end of Initial Term)
- --------------------------- ----------------------- ---------------------------------------------------------
AOL Service July 1, 1999 August 31, 2003 (end of Initial Term)
- --------------------------- ----------------------- ---------------------------------------------------------
CompuServe September 1, 1999 October 31, 2002
- --------------------------- ----------------------- ---------------------------------------------------------
DCI September 1, 1999 October 31, 2002
- --------------------------- ----------------------- ---------------------------------------------------------
ICQ September 1, 1999 April 30, 2003 (or earlier, in the event of an
Affirmative Election pursuant to Exhibit A)
- --------------------------- ----------------------- ---------------------------------------------------------
Netcenter February 5, 2000 February 28, 2003* (with possibility of extension
through March 30, 2003**)
*if carriage begins by 11:59p.m., February 7, 1999
**if carriage begins following 12:00 a.m.,
February 8, 1999
- --------------------------- ----------------------- ---------------------------------------------------------
- --------------------------- ----------------------- ---------------------------------------------------------
GARDENING EXCLUSIVITY CARRIAGE AND CARRIAGE AND GARDENING EXCLUSIVITY PERIOD ENDS
EXCLUSIVITY BEGINS
- --------------------------- ----------------------- ---------------------------------------------------------
The AOL Properties November 1, 1999 October 31, 2000 (with possibility of extension,
pursuant to and subject to Section 3.2 of this
Agreement).
- --------------------------- ----------------------- ---------------------------------------------------------
17
B. CARRIAGE PLAN
1. CARRIAGE PLAN SUMMARY BY AOL PROPERTY AND TIER
YEAR 1 AOL SERVICE NETSCAPE NETCENTER DCI
------------------------ ------------------------ ------------------------
IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS
----------- ----------- ----------- ----------- ----------- -----------
ENDEMIC *** *** *** *** *** ***
DEMO TARGETED *** *** *** *** *** ***
BROAD REACH *** *** *** *** *** ***
----------------------------------------------------------------------------
*** *** *** ***
CPM BY BRAND:
BRAND IMPS AS % OF TOTAL: *** *** ***
YEAR 2 AOL SERVICE NETSCAPE NETCENTER DCI
------------------------ ------------------------ ------------------------
IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS
----------- ----------- ----------- ----------- ----------- -----------
ENDEMIC *** *** *** *** *** ***
DEMO TARGETED *** *** *** *** *** ***
BROAD REACH *** *** *** *** *** ***
----------------------------------------------------------------------------
*** *** *** ***
YEAR 3 AOL SERVICE NETSCAPE NETCENTER DCI
------------------------ ------------------------ ------------------------
IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS
----------- ----------- ----------- ----------- ----------- -----------
ENDEMIC *** *** *** *** *** ***
DEMO TARGETED *** *** *** *** *** ***
BROAD REACH *** *** *** *** *** ***
----------------------------------------------------------------------------
*** *** *** ***
YEAR 4 AOL SERVICE NETSCAPE NETCENTER DCI
------------------------ ------------------------ ------------------------
IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS
----------- ----------- ----------- ----------- ----------- -----------
ENDEMIC *** *** *** *** *** ***
DEMO TARGETED *** *** *** *** *** ***
BROAD REACH *** *** *** *** *** ***
----------------------------------------------------------------------------
*** *** *** ***
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
18
YEAR 1 AOL SERVICE NETSCAPE NETCENTER DCI
------------------------ ------------------------ ------------------------
IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS
----------- ----------- ----------- ----------- ----------- -----------
ENDEMIC *** *** *** *** *** ***
DEMO TARGETED *** *** *** *** *** ***
BROAD REACH *** *** *** *** *** ***
----------------------------------------------------------------------------
*** *** *** ***
CPM BY BRAND:
BRAND IMPS AS % OF TOTAL: *** *** ***
YEAR 2 AOL SERVICE NETSCAPE NETCENTER DCI
------------------------ ------------------------ ------------------------
IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS
----------- ----------- ----------- ----------- ----------- -----------
ENDEMIC *** *** *** *** *** ***
DEMO TARGETED *** *** *** *** *** ***
BROAD REACH *** *** *** *** *** ***
----------------------------------------------------------------------------
*** *** *** ***
YEAR 3 AOL SERVICE NETSCAPE NETCENTER DCI
------------------------ ------------------------ ------------------------
IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS
----------- ----------- ----------- ----------- ----------- -----------
ENDEMIC *** *** *** *** *** ***
DEMO TARGETED *** *** *** *** *** ***
BROAD REACH *** *** *** *** *** ***
----------------------------------------------------------------------------
*** *** *** ***
YEAR 4 AOL SERVICE NETSCAPE NETCENTER DCI
------------------------ ------------------------ ------------------------
IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS IMPRESSIONS % TIER IMPS
----------- ----------- ----------- ----------- ----------- -----------
ENDEMIC *** *** *** *** *** ***
DEMO TARGETED *** *** *** *** *** ***
BROAD REACH *** *** *** *** *** ***
----------------------------------------------------------------------------
*** *** *** ***
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
19
2. CARRIAGE SUMMARY WITH DETAIL BY TIER
E=ENDEMIC
D=DEMOGRAPHIC
B=BROAD REACH
AOL SERVICE YEAR 1 YEAR 2 YEAR 3 YEAR 4 TOTALS
IMPS/Y1 IMPS/Y2 IMPS/Y3 IMPS/Y4 IMPS
- -------------------------------------------------------------------------------------------------------------------------------
HOLIDAY AREA CO-SPONSORSHIP
E V-Day, Easter, Mother's Day, Fathers Day,
Hween, Winter Holidays *** *** *** *** ***
E Families ROS Banners *** *** *** *** ***
E Women's ROS Banners *** *** *** *** ***
E Home & Garden ROS Banners *** *** *** *** ***
E Lifestyles ROS Banners *** *** *** *** ***
E Interests ROS Banners *** *** *** *** ***
E Love @ AOL-Insta ROSE Banners
Sponsorship (Nov-Feb) *** *** *** *** ***
E Member Perks *** *** *** *** ***
E Quarterly Contest Promotion (Women 18+) *** *** *** *** ***
D AOL ROS Banners Women 18+ *** *** *** *** ***
D AOL ROS Banners Women 18+, Own Home *** *** *** *** ***
D Channel Newsletters (Families, Women's,
Interests, Lifestyles) *** *** *** *** ***
D What's New Banners *** *** *** *** ***
B Email In-Box Banner *** *** *** *** ***
B AOL Network ROS Banners *** *** *** *** ***
B Welcome Screen-No Graphic *** *** *** *** ***
B Welcome Screen-Graphic *** *** *** *** ***
B Sign-Off Screen *** *** *** *** ***
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
*** *** *** *** ***
AOL.COM YEAR 1 YEAR 2 YEAR 3 YEAR 4 TOTALS
IMPS/Y1 IMPS/Y2 IMPS/Y3 IMPS/Y4 IMPS
- ------------------------------------------------------------------------------------------------------------------------------
E Net Find (Targeted Search Terms-Flowers, Gifts) *** *** *** *** ***
E Targeted Industry Packages *** *** *** *** ***
E Yellow Pages Shopping and Services Gifts
and Flowers *** *** *** *** ***
E Yellow Pages Home and Garden *** *** *** *** ***
E Run of Love@AOL Web *** *** *** *** ***
E Valentine's Day and Mother's Day-Special Promotions *** *** *** *** ***
E Run of Home & Garden *** *** *** *** ***
E Home & Garden Webcenter Home Department *** *** *** *** ***
E Home & Garden Webcenter-Home & Family Timesaver *** *** *** *** ***
D Entertainment ROS Banners *** *** *** *** ***
D Hometown AOL-Home & Garden Member Pages *** *** *** *** ***
D My News ROS-Entertainment, Sports, Top News *** *** *** *** ***
B AOL.com Home Page *** *** *** *** ***
B Net Find Home Page *** *** *** *** ***
B NetFind General Rotation *** *** *** *** ***
B AOL Instant Messenger *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
*** *** *** *** ***
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
DCI YEAR 1 YEAR 2 YEAR 3 YEAR 4 TOTALS
IMPS/Y1 IMPS/Y2 IMPS/Y3 IMPS/4 IMPS
- -----------------------------------------------------------------------------------------------------------------------------------
E Personals Sponsorship (65 Cities) *** *** *** *** ***
B Personals Promotional Contest Screen *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
*** *** *** *** ***
NETSCAPE NETCENTER YEAR 1 YEAR 2 YEAR 3 YEAR 4 TOTALS
IMPS/Y1 IMPS/Y2 IMPS/Y3 IMPS/4 IMPS
- -----------------------------------------------------------------------------------------------------------------------------------
E Family Channel Main Page Banner *** *** *** *** ***
E Family Channel Main Page Text Link *** *** *** *** ***
E Calendar Holiday/Special Occasion Reminder Button *** *** *** *** ***
E Holiday Specials (Mother's Day,
Valentine's Day, Christmas) *** *** *** *** ***
E Netscape Search (Flowers, Gifts) *** *** *** *** ***
D Family Channel ROS Banner *** *** *** *** ***
D Family Channel ROS Text Link *** *** *** *** ***
B NSCP ROS Text Link *** *** *** *** ***
B NSCP Home Page Banner *** *** *** *** ***
B NSCP ROS Banner *** *** *** *** ***
B Calendar ROS Banners *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
*** *** *** *** ***
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
20
ICQ YEAR 1 YEAR 2 YEAR 3 YEAR 4 TOTALS
IMPS/Y1 IMPS/Y2 IMPS/Y3 IMPS/Y4 IMPS
- -----------------------------------------------------------------------------------------------------------------------------------
EIQO/Reminder Service-Integrated *** *** *** *** ***
Contract List-Integrated *** *** *** *** ***
ICQ Plug Ins-Integrated *** *** *** *** ***
Portal Channels (Channels TBD)
Banners & Promotions-Women *** *** *** *** ***
Portal Channels (Channels TBD)
Banners & Promotions-Family *** *** *** *** ***
Portal Channels (Channels TBD)
Banners & Promotions-Greetings *** *** *** *** ***
Portal Channels (Channels TBD)
Banners & Promotions-Romance *** *** *** *** ***
Portal Channels (Channels TBD)
Banners & Promotions-Teens *** *** *** *** ***
ICQ Portal: Promotions on Women *** *** *** *** ***
ICQ Portal: Promotions on Family *** *** *** *** ***
ICQ Portal: Promotions on Greetings *** *** *** *** ***
ICQ Portal: Promotions on Romance *** *** *** *** ***
ICQ Portal: Promotions on Teens *** *** *** *** ***
Web Directory Banners (Target TBD) *** *** *** *** ***
Search (Terms TBD) Results Banner *** *** *** *** ***
Co-Browsing Banners (Target URLs TBD) *** *** *** *** ***
Portal Channel "What's Related" Links *** *** *** *** ***
Portal Channel Community Links *** *** *** *** ***
Broad Reach *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
*** *** *** *** ***
COMPUSERVE SERVICE YEAR 1 YEAR 2 YEAR 3 YEAR 4 TOTALS
IMPS/Y1 IMPS/Y2 IMPS/Y3 IMPS/Y4 IMPS
- -----------------------------------------------------------------------------------------------------------------------------------
Today's Deals-Rotated Placements (4/month) *** *** *** *** ***
WebCenter Placements *** *** *** *** ***
Headline Placements (1/month) *** *** *** *** ***
Promotions (as agreed upon) *** *** *** *** ***
COMPUSERVE SERVICE - - -
Home & Family Mindset Package Banners *** *** *** *** ***
Quarterly Service-Wide announcements *** *** *** *** ***
Featured Link in What's New *** *** *** *** ***
Featured Link in Today's Features *** *** *** *** ***
Content/Editorial placement in all
channels as deemed appropriate *** *** *** *** ***
Rotational Placement in Member Perks *** *** *** *** ***
Rotational Placement in Channel Oriented
Insider Newsletters *** *** *** *** ***
High Reach Menus (Banners Rotated through
various channel menus) *** *** *** *** ***
Compuserve Instant Messenger Banners *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
*** *** *** *** ***
SHOPPING YEAR 1 YEAR 2 YEAR 3 YEAR 4 TOTALS
IMPS/Y1 IMPS/Y2 IMPS/Y3 IMPS/Y4 IMPS
- -----------------------------------------------------------------------------------------------------------------------------------
ANCHOR TENANT IN FLOWERS, CARDS, GIFTS *** *** *** *** ***
ANCHOR TENANT IN HOME IMPROVEMENT *** *** *** *** ***
ANCHOR TENANT IN GIFT SUGGESTION *** *** *** *** ***
GOLD TENANT IN GIFTS *** *** *** *** ***
ANCHOR TENANT IN GIFTS *** *** *** *** ***
ANCHOR TENANT IN GOURMET GIFTS *** *** *** *** ***
DCI SHOPPING MAIN PERMANENT PLACEMENT
(1 OF 5) *** *** *** *** ***
DCI DEPARTMENT PLACEMENT W/HOLIDAY PACKAGE
(4 HOLIDAYS W/R) *** *** *** *** ***
DCI PROMO PLACEMENT W/HOLIDAY PACKAGE
(4 HOLIDAYS W/ROS BA) *** *** *** *** ***
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
*** *** *** *** ***
NOTES TO CARRIAGE PLAN:
*The Promotions designated for placement on the AOL Service and AOL.com
shall be placed thereon throughout the Initial Term.
**The Promotions designated for placement on (i) the CompuServe Service
and Digital City shall be placed in each such service during the thirty-eight
(38) month period immediately following September 1, 1999 and (ii) the
Promotions designated for placement on the ICQ Service shall be placed therein
during the forty-four (44) month period immediately following September 1, 1999;
PROVIDED, HOWEVER, that during the period from June 30, 2001 to July 31, 2001
(the "Affirmative Election Period"), 1-800-FLOWERS may elect to cease receiving
Promotions on ICQ (the "Affirmative Election") and reallocate (a) any unutilized
non-integrated Promotions designated for placement on ICQ and (b) the PRO RATA
share of the remaining integrated Promotions (collectively, up to an aggregate
maximum amount of *** Impressions) within the same respective Tier(s) selected
by 1-800-FLOWERS on other AOL Properties during the remainder of the Initial
Term (and the Make-Whole Period), subject to availability. As described in this
Exhibit, some Promotions for 1-800-FLOWERS on ICQ shall be integrated with the
ICQ Client (PROVIDED that the manner of such integration shall be in the sole
reasonable discretion of ICQ, after consultation with 1-800-FLOWERS). For the
purposes of meeting AOL's obligations under Section 1.2 of this Agreement, the
Parties agree that the Integrated ICQ Promotions described in this Exhibit are
worth the equivalent of *** Impressions spread out evenly over the forty-four
(44) month period immediately following September 1, 1999. Following the
exercise by 1-800-FLOWERS of the Affirmative Election, any right of exclusivity
granted to 1-800-FLOWERS on the ICQ Service pursuant to the terms of this
Agreement shall terminate.
***The Promotions designated for placement on Netscape Netcenter shall
begin on February 5, 2000 (or as promptly
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
thereafter as commercially reasonable) and shall extend for three (3) years
thereafter; PROVIDED, HOWEVER, that any failure of AOL to implement such
Promotions (due to any technological or other operational reason) by February
5, 2000 shall not be a breach of this Agreement. If AOL fails to place the
aforementioned Promotions on Netscape Netcenter by 11:59 p.m. on February 7,
2000, then (as 1-800-FLOWERS's sole and exclusive remedy) the three (3) year
term for placement of such Promotions shall be extended through March 30,
2003.
****AOL shall provide 1-800-FLOWERS with the Shopping Channel anchor
tenancies (the "Anchor Tenancies") set forth on the above Carriage Plan. Such
Anchor Tenancies shall entitle 1-800-FLOWERS to placement that is no less
prominent and favorable in size and position on such screen than any other
promotion on such screen. In addition, AOL will ensure that (a) the term
"Flowers" (or a term similar thereto, as mutually agreed upon by the Parties)
will be a part of the top-level department category description for a Shopping
Channel department in which 1-800-FLOWERS has a Shopping Channel placement and
offers fresh-cut flowers and Plants for sale and (b) the term "Garden" (or a
term similar thereto, as mutually agreed upon by the Parties) will be a part of
the top level-department category description of a Shopping Channel department
in which 1-800-FLOWERS has a Shopping Channel placement and offers Gardening
Products for sale. The Anchor Tenancy in Gifts shall commence April 1, 2000. The
Anchor Tenancy in Gourmet Gifts shall commence on the date of execution of this
Agreement.
***** Excluding Shopping Channel placements, all placements described
in the above carriage plan are examples of placements within the respective
Tiers and are meant as guidelines. The Parties understand that the actual plan
may vary from the above.
****** Upon agreement in writing by Netscape UK, for a period of one
(1) year from the later of (i) the launch of the Netscape UK Online platform or
(ii) delivery to 1-800-FLOWERS of any Netscape UK Promotions (as defined below),
1-800-FLOWERS shall receive the following placements in Netscape UK
(collectively, the "Netscape UK Promotions"): (a) an anchor tenancy on the front
screen of the Netscape UK Online shopping channel; (b) an anchor tenancy on the
flowers/gifts (or similar) area on the Netscape UK Online shopping channel; (c)
opportunities to promote 1-800-FLOWERS special offers, etc., within the relevant
portions of the Netscape UK Online editorial area (subject to editorial
approval); and (d) a minimum guarantee of *** Impressions on Netscape UK Online
over the one-year term (PROVIDED that such Impressions shall not constitute part
of the Impressions Commitment for purposes of this Agreement). In the event that
Netscape UK does not agree in writing to provide the Netscape UK Promotions, AOL
will provide 1-800-FLOWERS with One Million Dollars (US$1,000,000) of comparable
promotional placements within the AOL Properties to be mutually agreed upon by
the Parties in good faith.
C. KEYWORD SEARCH TERMS AND GO WORD SEARCH TERMS
During the Term, subject to the terms and conditions hereof, 1-800-FLOWERS shall
have the right to use (i) the following Keyword Search Terms and (ii) the
following Go Word Search Terms:
Keyword Search Terms: ***
***
Go Word Search Terms: ***
***
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
22
EXHIBIT B
DEFINITIONS
The following definitions shall apply to this Agreement:
AAA. "AAA" shall have the meaning set forth in Section 6.2 of this Agreement.
ACTION. "Action" shall have the meaning set forth in Section 9(d) of Exhibit
G to this Agreement.
ADDITIONAL 1-800-FLOWERS CHANNEL. Any other on-line or internet-based
distribution channel (e.g., an Interactive Service other than AOL) through
which 1-800-FLOWERS makes available an offering comparable in nature to any
Affiliated 1-800-FLOWERS Site.
ADVERTISEMENTS. "Advertisements" shall have the meaning set forth in Section
2.9 of this Agreement.
AFFILIATED 1-800-FLOWERS SITES. "Affiliated 1-800-FLOWERS Sites" shall have
the meaning set forth in Section 2.1 of this Agreement.
ANCHOR TENANCIES. "Anchor Tenancies" shall have the meaning set forth in
Exhibit A to this Agreement.
ANCILLARY GARDENING ITEMS. Hand-held gardening tools, trowels, soil scoops,
shears, pruners, spades, watering cans, hand rakes and hand-held forks;
provided, HOWEVER, that such term shall not include any gardening-related
machinery (e.g., roto-tillers, weed-whackers, lawn mowers, etc.) or home
improvement products (e.g., power tools, building materials, paint, etc.).
ANNUAL IMPRESSIONS TARGET. Each of the annual Impressions target amounts set
forth in Section B of Exhibit A to this Agreement.
AOL BLOCKING RIGHT. "AOL Blocking Right" shall have the meaning set forth in
Section 2.8.2(b) of this Agreement.
AOL-CONTROLLED AREAS. All areas of the AOL Properties which are owned,
maintained or controlled by AOL.
AOL INTERACTIVE SITE. Any Interactive Site that is managed, maintained,
owned or controlled by AOL or its agents or its affiliates.
AOL LOOK AND FEEL. The elements of graphics, design, organization,
presentation, layout, user interface, navigation and stylistic convention
(including the digital implementations thereof) which are generally
associated with Interactive Sites within the AOL Service or AOL.com.
AOL MEMBER. Any authorized user of the AOL Properties, including any
sub-accounts thereof under an authorized master account.
AOL NETWORK. (i) The AOL Properties and (ii) any other product or service
owned, operated, distributed or authorized to be distributed by or through
AOL or its affiliates worldwide (and including those properties excluded from
the definitions of the AOL Service or AOL.com). It is understood and agreed
that the rights of 1-800-FLOWERS relate only to the AOL Properties and not
generally to the AOL Network.
AOL PROPERTIES. The AOL Service, AOL.com, the CompuServe Service, Netscape
Netcenter (after February 5, 2000), the ICQ Service and Digital City.
23
AOL PURCHASER. Any person or entity who enters any Affiliated 1-800-FLOWERS
Site from the AOL Network including, without limitation, from any third party
area therein (to the extent entry from such third party area is traceable
through both Parties' commercially reasonable efforts), and generates
Transaction Revenues (regardless of whether such person or entity provides an
e-mail address during registration or entrance to any such Affiliated
1-800-FLOWERS Site which includes a domain other than an "AOL.com" domain).
AOL SERVICE. The standard U.S. version of the America Online-Registered
Trademark- brand service (including, the "Shop@AOL" area thereon),
specifically excluding (a) AOL.com or any other AOL Interactive Site, (b) the
international versions of the AOL Service (E.G., AOL Japan), (c) the
CompuServe-Registered Trademark- brand service and any other CompuServe
products or services (d) "Driveway," "ICQ-TM-," "AOL NetFind-TM-," "AOL
Instant Messenger-TM-," "Digital City," "NetMail-TM-," "Electra", "Thrive",
"Real Fans", "Love@AOL", "Entertainment Asylum," "AOL Hometown," "My News" or
any similar product, service or property which may be offered by, through or
with the U.S. version of the America Online-Registered Trademark- brand
service, (e) Netscape Netcenter-TM- and any additional Netscape products or
services, (f) any programming or Content area offered by or through the U.S.
version of the America Online-Registered Trademark- brand service over which
AOL does not exercise complete or substantially complete operational control
(including, without limitation, Content areas controlled by other parties and
member-created Content areas), (g) any yellow pages, white pages, classifieds
or other search, directory or review services or Content offered by or
through the U.S. version of the America Online-Registered Trademark- brand
service, (h) any property, feature, product or service which AOL or its
affiliates may acquire subsequent to the Effective Date and (i) any other
version of an America Online service which is materially different from the
standard U.S. version of the America Online brand service, by virtue of its
branding, distribution, functionality, Content or services, including,
without limitation, any co-branded and/or customized version of the service
and any version distributed primarily through any broadband distribution
platform or through any platform or device other than a desktop personal
computer.
AOL SETOFF RIGHT. "AOL Setoff Right" shall have the meaning set forth in
Section 1.2 of this Agreement.
AOL USER. Any user of the AOL Service, AOL.com, CompuServe, Digital City,
ICQ, Netcenter or the AOL Network.
AOL.COM. AOL's primary Internet-based Interactive Site marketed under the
"AOL.COM-TM-" brand (or any successor or substitute brand for the
"AOL.COM-TM-" brand), including the "Shop@AOL.com" area thereon, but
specifically excluding (a) the AOL Service, (b) any international versions of
AOL.com, (c) "ICQ-TM-," "AOL NetFind-TM-," "AOL Instant Messenger-TM-,"
"NetMail-TM-," "AOL Hometown," "My News" or any similar product or service
offered by or through such site or any other AOL Interactive Site, (d) any
programming or Content area offered by or through such site over which AOL
does not exercise complete or substantially complete operational control
(including, without limitation, Content areas controlled by other parties and
member-created Content areas), (e) Netscape Netcenter-TM- and any additional
Netscape products or services, (f) any programming or Content area offered by
or through the U.S. version of the America Online-Registered Trademark- brand
service which was operated, maintained or controlled by the former AOL
Studios division (e.g., Electra), (g) any yellow pages, white pages,
classifieds or other search, directory or review services or Content offered
by or through such site or any other AOL Interactive Site, (h) any property,
feature, product or service which AOL or its affiliates may acquire
subsequent to the Effective Date and (i) any other version of an America
Online Interactive Site which is materially different from AOL's primary
Internet-based Interactive Site marketed under the "AOL.COM-TM-" brand, by
virtue of its branding, distribution, functionality, Content or services,
including, without limitation, any customized and/or co-branded versions and
any version distributed primarily through any broadband distribution platform
or through any platform or device other than a desktop personal computer.
ARBITRATION COSTS. "Arbitration Costs" shall have the meaning set forth in
Section 6.6 of this Agreement.
ATTORNEYS' FEES. "Attorneys' Fees" shall have the meaning set forth in
Section 6.6 of this Agreement.
24
BASE REVENUE SHARE. The revenue sharing arrangement set forth in Section
4.2(i) of this Agreement.
CHANGE OF CONTROL. The consummation of a reorganization, merger or
consolidation or sale or other disposition of substantially all of the assets
of a party or (b) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of more than 50% of the combined voting power of
the then outstanding voting securities of such party entitled to vote
generally in the election of directors.
COMMERCIAL RULES. "Commercial Rules" shall have the meaning set forth in
Section 6.2 of this Agreement.
COMPLEX PROCEDURES. "Complex Procedures" shall have the meaning set forth in
Section 6.2 of this Agreement.
COMPUSERVE SERVICE. The standard U.S. version of the CompuServe brand service
(including the "Shop@CompuServe" area thereon), specifically excluding (a)
any international versions of such service, (b) Content areas owned,
maintained or controlled by CompuServe affiliates or any similar
"sub-service," (c) any programming or Content area offered by or through the
U.S. version of the CompuServe brand service over which CompuServe does not
exercise complete or substantially complete operational control (e.g.,
third-party Content areas), (d) Netscape Netcenter-TM- and any additional
Netscape products or services, (e) any yellow pages, white pages, classifieds
or other search, directory or review services or Content, (f) any co-branded
or private label branded version of the U.S. version of the CompuServe brand
service, (g) any version of the U.S. version of the CompuServe brand service
which offers Content, distribution, services and/or functionality materially
different from the Content, distribution, services and/or functionality
associated with the standard U.S. version of the CompuServe brand service,
including, without limitation, any version of such service distributed
primarily through any broadband distribution platform or through any platform
or device other than a desktop personal computer and (h) any property,
feature, product or service which CompuServe or its affiliates may acquire
subsequent to the Effective Date.
CONFIDENTIAL INFORMATION. Any information relating to or disclosed in the
course of the Agreement, which is or should be reasonably understood to be
confidential or proprietary to the disclosing Party, including, but not
limited to, the material terms of this Agreement, information about AOL
Members, AOL Users, AOL Purchasers and 1-800-FLOWERS customers, technical
processes and formulas, source codes, product designs, sales, cost and other
unpublished financial information, product and business plans, projections,
and marketing data. "Confidential Information" shall not include information
(a) already lawfully known to or independently developed by the receiving
Party, (b) disclosed in published materials, (c) generally known to the
public, or (d) lawfully obtained from any third party.
CONTENT. Text, images, video, audio (including, without limitation, music
used in synchronism or timed relation with visual displays) and other data,
Products, advertisements, promotions, links, pointers and software, including
any modifications, upgrades, updates, enhancements and related documentation.
CONTEST. "Contest" shall have the meaning set forth in Section 3 of Exhibit F
to this Agreement.
CONTINUED LINK. "Continued Link" shall have the meaning set forth in Section
5.2 of this Agreement.
CUSTOMERS. "Customers" shall have the meaning set forth in Section 9(a) of
Exhibit F to this Agreement.
CUT-OFF TIME. "Cut-Off Time" shall have the meaning set forth in Section 9(b)
of Exhibit F to this Agreement.
25
DEMAND. "Demand" shall have the meaning set forth in Section 6.2 of this
Agreement.
DIGITAL CITY. The standard U.S. version of Digital City's local content
offerings marketed under the Digital City-Registered Trademark- brand name
(including the "Shop@Digital City" area thereon), specifically excluding (a)
the AOL Service, AOL.com or any other AOL Interactive Site, (b) any
international versions of such local content offerings, (c) the
CompuServe-Registered Trademark- brand service and any other CompuServe
products or services, (d) "Driveway," "ICQ-TM-," "AOL NetFind-TM-," "AOL
Instant Messenger-TM-," "Digital City," "NetMail-TM-," "Electra", "Thrive",
"Real Fans", "Love@AOL", "Entertainment Asylum," "AOL Hometown," "My News" or
any similar product, service or property which may be offered by, through or
with the standard version of Digital City's local content offerings, (e)
Netscape Netcenter-TM-and any additional Netscape products or services, (f)
any programming or Content area offered by or through such local content
offerings over which AOL does not exercise complete or substantially complete
operational control (including, without limitation, Content areas controlled
by other parties and member-created Content areas), (g) any yellow pages,
white pages, classifieds or other search, directory or review services or
Content offered by or through such local content offerings, (h) any property,
feature, product or service which AOL or its affiliates may acquire
subsequent to the Effective Date, (i) any other version of a Digital City
local content offering which is materially different from the U.S. version of
Digital City's local content offerings marketed under the Digital
City-Registered Trademark- brand name, by virtue of its branding,
distribution, functionality, Content or services, including, without
limitation, any co-branded and/or customized version of the offerings and any
version distributed primarily through any broadband distribution platform or
through any platform or device other than a desktop personal computer, and
(j) Digital City-branded offerings in any local area where such offerings are
not owned or operationally controlled by AOL, Inc. or DCI (e.g., Chicago,
Orlando, South Florida, and Hampton Roads).
DISCLAIMED DAMAGES. "Disclaimed Damages" shall have the meaning set forth in
Section 9(a) of Exhibit G to this Agreement.
DISPUTE. "Dispute" shall have the meaning set forth in Section 6.1 of this
Agreement.
EXCESS IMPRESSIONS. "Excess Impressions" shall have the meaning set forth in
Section 1.2 of this Agreement.
EXCLUSIVE PRODUCTS. (i) Fresh-cut flowers and Plants and (ii) Gardening
Products, solely during the Fresh-Cut Flowers Exclusivity Period and the
Gardening Exclusivity Period, respectively.
EXCLUSIVITY PERIOD. The Fresh-Cut Flowers Exclusivity Period and the
Gardening Exclusivity Period (as applicable).
FINAL SHORTFALL. "Final Shortfall" shall have the meaning set forth in
Section 1.2 of this Agreement.
FULL SERVICE HOME IMPROVEMENT PARTNER. Any online provider of home
improvement products and services (e.g., lawn mowers, paint supplies, power
tools, or other home appliances), provided that such Full Service Home
Improvement Partner also may sell gardening tools and supplies, fertilizer,
seeds, plants, etc.
FRESH-CUT FLOWERS EXCLUSIVITY PERIOD. With respect to fresh-cut flowers and
Plants to be offered on or through the Affiliated 1-800-FLOWERS Sites, the
dates set forth on Exhibit A (Section A) hereto, solely to the extent as such
dates apply to each respective AOL Property.
GARDENING AREA. The area on the Shopping Channel (or any successor area
thereto) of the AOL Service that is primarily dedicated to the promotion and
sale of gardening-related Products.
GARDENING COMPETITORS. Those entities listed on Exhibit L to this Agreement.
26
GARDENING EXCLUSIVITY PERIOD. November 1, 1999 until October 31, 2000,
subject to the terms of Section 3.2 of this Agreement.
GARDENING PLANT. Any bulbs, live plants, bare-root materials, seeds, trees,
herbs, topiaries and any other living horticultural or gardening-related
plants or shrubs explicitly for use in a garden.
GARDENING PRODUCTS. Any Gardening Plants or Ancillary Gardening Items.
GIFT BASKET. A collection of Products packaged together with a theme in mind
and sold as a single unit.
GO WORD SEARCH TERMS. The Go Word online search terms made available on the
CompuServe Service for use by CompuServe Service members, combining the
CompuServe Service's Go word online search modifier (i.e., "Go:") with a term
or phrase specifically related to 1-800-FLOWERS (and determined in accordance
with the terms of this Agreement).
ICQ CLIENT. (i) The persistent, desktop-based instant messaging, chat and
"buddy list" client software developed by or for ICQ and distributed by or
for ICQ that enables ICQ Users to send messages, chat, track the online
status of other users and use the ICQ Service, and (ii) any Updates thereto.
The ICQ Client shall not include (a) any discrete applications providing
substantially different services, regardless of any shared use of the ICQ
Service backend (e.g., presence engine, directory server, etc.), (b) any
desktop search application, ICQ desktop information "ticker," ICQ mail client
or ICQ co-browser, (c) any version of the ICQ Client that is co-branded with
an unaffiliated third party, or (d) plug-ins to other clients (e.g., browser
plug-ins).
ICQ SERVICE. The standard English language version of the ICQ brand
communications and messaging service available in the U.S. and
internationally (e.g., to U.S.- and internationally-based ICQ Members),
including the "Shop@ICQ" area thereon, but specifically excluding (a) "ICQ
It!" or any similar product, service or property which may be offered by,
through or with the English language version of the ICQ brand service, (b)
any programming or Content area offered by or through the English language
version of the ICQ brand service over which ICQ does not exercise complete or
substantially complete operational control (including, without limitation,
Content areas controlled by other parties, whether or not co-branded with
ICQ, and ICQ user-created Content areas), (c) any yellow pages, white pages,
classifieds or other search, directory or review services or Content offered
by or through the English language version of the ICQ brand service, (d) any
property, feature, product or service which ICQ or its affiliates may acquire
subsequent to the effective date hereof and (e) any other version of an ICQ
service which is materially different from the standard English language
version of the ICQ brand service, by virtue of its branding, language (e.g.,
the Japanese-language version), distribution, functionality, Content or
services, including, without limitation, any co-branded and/or customized
version of the service or any version distributed primarily through any
broadband distribution platform or through any platform or device other than
a desktop personal computer.
IMPRESSION. User exposure to the applicable Promotion, as such exposure may
be reasonably determined and measured by AOL in accordance with its standard
methodologies and protocols.
IMPRESSIONS COMMITMENT. "Impressions Commitment" shall have the meaning set
forth in Section 1.2 of this Agreement.
INCREMENTAL YEAR 1 REVENUE SHARE. "Incremental Year 1 Revenue Share" shall
have the meaning set forth in Section 4.2(ii) of this Agreement.
INCREMENTAL YEAR 2 REVENUE SHARE. "Incremental Year 2 Revenue Share" shall
have the meaning set forth in Section 4.2(iii) of this Agreement.
27
INDEMNIFIED PARTY. "Indemnified Party" shall have the meaning set forth in
Section 9(d) of Exhibit G to this Agreement.
INDEMNIFYING PARTY. "Indemnifying Party" shall have the meaning set forth in
Section 9(d) of Exhibit G to this Agreement.
INITIAL TERM. "Initial Term" shall have the meaning set forth in Section 5.1
of this Agreement.
INTERACTIVE SERVICE. An entity offering one or more of the following: (i)
online or Internet connectivity services (e.g., an Internet service
provider); (ii) an interactive site or service featuring a broad selection of
aggregated third party interactive content (or navigation thereto) (e.g., an
online service or search and directory service) and/or marketing a broad
selection of products and/or services across numerous interactive commerce
categories (e.g., an online mall or other leading online commerce site);
(iii) a persistent desktop client; and (iv) communications software capable
of serving as the principal means through which a user creates, sends and
receives electronic mail or real time online messages (whether by telephone,
computer or other means), including, without limitation, greeting cards but
excluding virtual bouquets or similar items.
INTERACTIVE SITE. Any interactive site or area, including, by way of example
and without limitation, (i) an 1-800-FLOWERS site on the World Wide Web
portion of the Internet or (ii) a channel or area delivered through a "push"
product such as the *** or interactive environment such as ***
KEYWORD SEARCH TERMS. (i) The Keyword-TM- online search terms made available
on the AOL Service for use by AOL Members, combining AOL's Keyword-TM- online
search modifier with a term or phrase specifically related to 1-800-FLOWERS
(and determined in accordance with the terms of this Agreement), and (ii) the
Go Word Search Terms.
LIABILITIES. "Liabilities" shall have the meaning set forth in Section 9(c)
of Exhibit G to this Agreement.
LICENSED CONTENT. All Content offered through the Affiliated 1-800-FLOWERS
Sites pursuant to this Agreement or otherwise provided to AOL by
1-800-FLOWERS or its agents in connection herewith (e.g., offline or online
promotional Content, Promotions, AOL "slideshows", etc.), including in each
case, any modifications, upgrades, updates, enhancements, and related
documentation.
MAKE-WHOLE PERIOD. "Make-Whole Period" shall have the meaning set forth in
Section 1.2 of this Agreement.
MANAGEMENT COMMITTEE. "Management Committee" shall have the meaning set forth
in Section 6.1 of this Agreement.
MARKS. "Marks" shall have the meaning set forth in Section 3 of Exhibit G to
this Agreement.
MERCHANDISE VALUE. The gross sales price of a Product, less taxes, service
charges, shipping and handling charges, discounts, gift certificates,
refunds, chargebacks, rebates and credit card processing fees.
NETSCAPE NETCENTER. The U.S. version of the Netscape Netcenter internet based
interactive site marketed under the "Netcenter" brand (including the
"Shop@Netcenter" area thereon), specifically excluding (a) any other Netscape
or Netscape Affiliate owned or operated internet based interactive sites, (b)
the international versions of Netcenter or any similar Netscape or Affiliate
service or interactive site; (c) "Netscape AOL Instant Messenger-TM-,"
"Netscape Custom Netcenter," Netscape WebMail, or any
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
28
similar independent product, service or property which may be offered by,
through or by Netscape; (d) any programming or content area offered by or
through the U.S. version of the Netcenter brand service over which Netscape
does not exercise complete or substantially complete operational control
(including, without limitation, Content areas controlled by other parties),
(e) any yellow pages, white pages, classifieds or other search, directory or
review services or Content offered by or through the U.S. version of the
Netcenter brand service, (f) any property, feature, product or service which
Netscape or its Affiliates may acquire subsequent to the Effective Date and
(g) any other version of a Netscape service which is materially different
from Netcenter by virtue of its branding, distribution, functionality,
Content or services, including, without limitation, any co-branded and/or
customized version of the service or any version distributed primarily
through any broadband distribution platform or through any platform or device
other than a desktop personal computer.
NEW FUNCTIONALITY. "New Functionality" shall have the meaning set forth in
Section 8.v of Exhibit E to this Agreement.
NON-ARBITRATION CLAIMS. "Non-Arbitration Claims" shall have the meaning set
forth in Section 6.7 of this Agreement.
NON-COMPLIANT CONTENT. "Non-Compliant Content" shall have the meaning set
forth in Section 2.8.2(b) of this Agreement.
1-800-FLOWERS COMPETITORS. "1-800-FLOWERS Competitors" shall have the meaning
set forth on Exhibit K hereto.
1-800-FLOWERS INTERACTIVE SITE. Any Interactive Site (other than the
Affiliated 1-800-FLOWERS Sites) which is managed, maintained, owned or
controlled primarily by 1-800-FLOWERS or its agents.
1-800-FLOWERS LOOK AND FEEL. The elements of graphics, design, organization,
presentation, layout, user interface, navigation and stylistic convention
(including the digital implementations thereof) which are generally
associated with 1-800-FLOWERS Interactive Sites.
1-800-FLOWERS ONLINE GARDENING CHANNEL. The specific area or web site to be
launched by 1-800-FLOWERS in 1999, through which 1-800-FLOWERS shall market
and complete transactions regarding Gardening Products.
1-800-FLOWERS TECHNICAL PROBLEM. "1-800-FLOWERS Technical Problem" shall have
the meaning set forth in Section 4 of Exhibit E to this Agreement.
ORIGINAL IMAS. "Original IMAs" shall have the meaning set forth in the first
paragraph of this Agreement.
PLANT. A live, flowering plant (e.g., azalea plant, gardenia plant, juniper
bonsai, lavender plant, hibiscus (in a cache pot), chrysanthemum plant,
kalanchoe in a window box and "dish gardens") (but expressly excluding
Gardening Plants, wreaths, bulbs, bare-root materials, dried flowers, seeds,
trees, herbs, shrubs, topiaries and other horticultural or gardening-related
plants). Nothing herein is intended to prevent 1-800-FLOWERS from selling any
plant through the Affiliated 1-800-FLOWERS Sites.
PRESS RELEASE. "Press Release" shall have the meaning set forth in Section 7
of this Agreement.
PRODUCT. Any product, good or service which 1-800-FLOWERS (or others acting
on its behalf or as distributors) offers, sells, provides, distributes or
licenses to AOL Users directly or indirectly through (i) any Affiliated
1-800-FLOWERS Site (including through any Interactive Site linked thereto),
(ii) any other electronic means directed at AOL Users (e.g., e-mail offers),
or (iii) an "offline" means (e.g., toll-free number) for receiving orders
related to specific offers within the Affiliated 1-800-FLOWERS Sites
requiring
29
purchasers to reference a specific promotional identifier or tracking code,
including, without limitation, products sold through surcharged downloads (to
the extent expressly permitted hereunder).
PRODUCTION PLAN. "Production Plan" shall have the meaning set forth in
Section 10 of Exhibit F to this Agreement.
PROMO CONTENT. "Promo Content" shall have the meaning set forth in Section
1.3 of this Agreement.
PROMOTIONS. "Promotions shall have the meaning set forth in Section 1.1 of
this Agreement.
PROMOTIONAL ACTIVITIES. "Promotional Activities" shall have the meaning set
forth in Section 1.1 of this Agreement.
PROMOTIONAL MATERIALS. "Promotional Materials" shall have the meaning set
forth in Section 1 of Exhibit G to this Agreement.
QUALIFIED INTERACTIVE SERVICE. An entity offering one or more of the
following: (i) online or Internet connectivity services (e.g., an Internet
service provider); (ii) an interactive site or service featuring a broad
selection of aggregated third party interactive content (or navigation
thereto) (e.g., an online service or search and directory service) and/or
marketing a broad selection of products and/or services across numerous
interactive commerce categories (e.g., an online mall or other leading online
commerce site); (iii) a persistent desktop client; and (iv) communications
software capable of serving as the principal means through which a user
creates, sends and receives electronic mail or real time online messages
(whether by telephone, computer or other means).
REVENUE THRESHOLD. "Revenue Threshold" shall have the meaning set forth in
Section 4.2(i) of this Agreement.
SALES REPORTS. "Sales Reports" shall have the meaning set forth in Section
4.6.1 of this Agreement.
SHOPPING CHANNEL. "Shopping Channel" shall mean the areas within the
"Shop@AOL," Shop@AOL.com," Shop@CompuServe," "Shop@Digital City,"
"Shop@Netcenter" and "Shop@ICQ" that are owned, maintained or controlled by
the respective AOL Properties.
SHORTFALL. "Shortfall" shall have the meaning set forth in Section 1.2 of
this Agreement.
SHORTFALL PENALTY. "Shortfall Penalty" shall have the meaning set forth in
Section 1.2 of this Agreement.
SPECIAL OFFERS. "Special Offers" shall have the meaning set forth in Section
2.7 of this Agreement.
TIER. "Tier" shall have the meaning set forth in Exhibit A hereto.
TERM. "Term" shall have the meaning set forth in Section 5.2 of this
Agreement.
TRANSACTION REVENUES. Aggregate amounts paid by AOL Purchasers in connection
with the sale, licensing, distribution or provision of any Products which
1-800-FLOWERS sells to AOL Purchasers on or through any 1-800-FLOWERS
Affiliated Site, including, in each case, handling, shipping, Service
Charges, and excluding, in each case, (a) amounts collected for sales or use
taxes or duties, (b) credit card processing fees to the extent charged and/or
collected by the credit card issuer and (c) credits and chargebacks for
returned or canceled goods or services, but not excluding cost of goods sold
or any similar cost.
*** PRODUCTS. "*** Products" shall have the meaning set forth in Section
2.8.2(a)(iii) of this Agreement.
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
30
YEAR. The time period between each of (i) the Effective Date and the first
anniversary thereof; (ii) the first anniversary of the Effective Date and the
second anniversary thereof; (iii) the second anniversary of the Effective
Date and the third anniversary thereof; and (iv) the third anniversary of the
Effective Date and the fourth anniversary thereof.
YEAR 1. The first Year of this Agreement.
YEAR 2. The second Year of this Agreement.
31
EXHIBIT C
1-800-FLOWERS CROSS-PROMOTION
A. 1-800-FLOWERS shall prominently and regularly promote the Affiliated
1-800-FLOWERS Sites (making specific mention of their availability through
the AOL Properties) in (i) approximately *** of 1-800-FLOWERS-controlled
television, radio or print advertisements that are produced after the
Effective Date and that specifically mention any of 1-800-FLOWERS' online
or Internet-based shopping functionality and (ii) approximately *** of any
publications, programs, features or other forms of media under
1-800-FLOWERS' control (excluding the advertisements subject to clause
(i)). In this regard, in *** instances when 1-800-FLOWERS makes promotional
reference in *** print advertisements to *** 1-800-FLOWERS Interactive Site
(each such reference, a "Web Reference"), 1-800-FLOWERS shall include a
specific reference to the availability of the Affiliated 1-800-FLOWERS
Sites through AOL and its affiliated interactive properties of at least
equal prominence to the Web Reference by the use of the Keyword Search
Term for the AOL Service or otherwise); any listings of the applicable
"URL(s)" for such Affiliated 1-800-FLOWERS Site(s) shall include a
listing of the Keyword for the AOL Service of at least equal prominence
to the Web Reference. AOL acknowledges that an occasional, unintentional
failure to comply with the foregoing promotional commitments shall not be
deemed a breach of this Agreement.
B. 1-800-FLOWERS shall ensure that (a) AOL is given the exclusive first
opportunity to participate in *** of any online or
Internet-related marketing and promotional activities, initiated and/or
controlled by (directly or through an advertising agency) 1-800-FLOWERS,
which 1-800-FLOWERS desires to conduct with any Interactive Service
subsequent to execution hereof (so long as AOL informs 1-800-FLOWERS of its
desire to participate in any such activity within five (5) business days
following receipt of written notice from 1-800-FLOWERS detailing the
opportunity) and (b) AOL receives substantially more promotion and
marketing (in value, duration, prominence, etc.) from 1-800-FLOWERS than
any such other Interactive Service receives from FLOWERS.
C. 1-800-FLOWERS shall include each of the following promotions for the Online
Area and AOL within each 1-800-FLOWERS Interactive Site during the term of
the Agreement: (i) a prominent "Try AOL" feature in the area where
1-800-FLOWERS mentions its business partners (which is currently known as
"About 1-800-FLOWERS") where users can obtain promotional information about
AOL products and services and, at AOL's option, download or order AOL's
then-current version of client software for the America Online-Registered
Trademark- brand service and (ii) a link from the 1-800-FLOWERS Interactive
Site to AOL's primary site on the World Wide Web.
D. During the Initial Term, 1-800-FLOWERS shall not promote any Qualified
Interactive Service (other than AOL) as its preferred Interactive Service.
E. In exchange for *** of cooperative advertising to be provided by AOL to
1-800-FLOWERS during the 1999 holiday season, 1-800-FLOWERS will provide
AOL with *** of bookable in-kind advertising (to be mutually agreed upon by
the Parties) during the Initial Term. Such in-kind advertising shall
conform to requirements to be mutually agreed upon by the Parties, it being
understood that it is the Parties' intention (i) to structure the in-kind
advertising to allow for the recognition by AOL of *** of revenue
therefrom, based on a valuation by an independent third-party valuation
agency and (ii) unless otherwise agreed upon by the Parties, to have such
in-kind advertising provided to AOL as evenly as possible over the course
of the Term. The Parties acknowledge and agree that (i) AOL shall have the
right to use a qualified third party to make such valuations and that (ii)
such third party will value the in-kind advertising provided to AOL by
1-800-FLOWERS based upon the portion of such advertising (e.g., in terms of
space, seconds, etc., as applicable) that features AOL. For the avoidance
of doubt, subject to the requirements of this Section
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
32
E, 1-800-FLOWERS shall have the right to credit in-kind
advertising set forth in Section A of this Exhibit C towards the
aforementioned *** commitment.
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
33
EXHIBIT D
DESCRIPTION OF PRODUCTS AND OTHER CONTENT
The Products to be offered by 1-800-FLOWERS on the Affiliated 1-800-FLOWERS
Sites shall include:
1. Fresh-cut flowers, Gardening Products and Plants
2. Balloons
3. Gift Baskets (which may include books related to the Products listed
on this Exhibit D and Exhibit J)
4. Gourmet foods and candy
5. Home decor
6. Books and videos related to fresh-cut flowers, Gardening Products and
Plants; PROVIDED that such books and videos (excluding those books and
videos promoted as part of a Gift Basket or promoted as part of a
theme package (i.e., "Books and Blooms")) shall not be promoted,
marketed or advertised by or on behalf of 1-800-FLOWERS on any home
page of any Affiliated 1-800-FLOWERS Site; PROVIDED, FURTHER, that
books shall not constitute more than *** of the annual gross revenues
generated by the 1-800-FLOWERS Sites in any Year of the Initial Term.
7. Sentiment expression products and specialty gifts
8. Products listed on Exhibit J
For the avoidance of doubt, during the Initial Term, 1-800-FLOWERS also
shall be permitted to continue to offer on the Affiliated 1-800-FLOWERS
Sites any Products or services offered by 1-800-FLOWERS on the AOL Service
and AOL.com pursuant to the terms of the Original IMAs prior to the
Effective Date hereof.
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
34
EXHIBIT E
OPERATIONS
1. AFFILIATED 1-800-FLOWERS SITES INFRASTRUCTURE. 1-800-FLOWERS shall be
responsible for all communications, hosting and connectivity costs and
expenses associated with the Affiliated 1-800-FLOWERS Sites.
1-800-FLOWERS shall provide all hardware, software, telecommunications
lines and other infrastructure necessary to meet traffic demands on
the Affiliated 1-800-FLOWERS Sites from the AOL Network. 1-800-FLOWERS
shall design and implement the network between the AOL Service and
Affiliated 1-800-FLOWERS Sites such that (i) no single component
failure shall have a materially adverse impact on AOL Members seeking
to reach the Affiliated 1-800-FLOWERS Sites from the AOL Network and
(ii) no single line under material control by 1-800-FLOWERS shall run
at more than 70% average utilization for a 5-minute peak in a daily
period. In this regard, 1-800-FLOWERS shall provide AOL, upon request,
with a detailed network diagram regarding the architecture and network
infrastructure supporting the Affiliated 1-800-FLOWERS Sites. In the
event that 1-800-FLOWERS elects to create a custom version of any
Affiliated 1-800-FLOWERS Site in order to comply with the terms of
this Agreement, 1-800-FLOWERS shall bear responsibility for all
aspects of the implementation, management and cost of such customized
site.
2. OPTIMIZATION; SPEED. 1-800-FLOWERS shall use commercially reasonable
efforts to ensure that: (a) the functionality and features within the
Affiliated 1-800-FLOWERS Sites are optimized for the client software
then in use by AOL Members; and (b) each of the Affiliated
1-800-FLOWERS Sites is designed and populated in a manner that
minimizes delays when AOL Members attempt to access such site. At a
minimum, 1-800-FLOWERS shall ensure that each Affiliated 1-800-FLOWERS
Site's data transfers initiate within fewer than fifteen (15) seconds
on average. Prior to commercial launch of any material promotions
described herein, 1-800-FLOWERS shall permit AOL to conduct
performance and load testing of the Affiliated 1-800-FLOWERS Sites (in
person or through remote communications), with such commercial launch
not to commence until such time as AOL is reasonably satisfied with
the results of any such testing.
3. USER INTERFACE. 1-800-FLOWERS shall maintain a graphical user
interface within each Affiliated 1-800-FLOWERS Site that is
competitive in all material respects with interfaces of other similar
sites based on similar form technology. AOL reserves the right to
review the user interface and site design prior to launch of the
Promotions and to conduct focus group testing to assess compliance
with respect to such consultation and with respect to 1-800-FLOWERS'
compliance with the preceding sentence.
4. TECHNICAL PROBLEMS. 1-800-FLOWERS agrees to use commercially
reasonable efforts to address material technical problems (over which
1-800-FLOWERS exercises control) affecting use by AOL Members of the
Affiliated 1-800-FLOWERS Sites (a "1-800-FLOWERS Technical Problem")
promptly following notice thereof. In the event that 1-800-FLOWERS is
unable to promptly resolve a 1-800-FLOWERS Technical Problem following
notice thereof from AOL (including, without limitation, infrastructure
deficiencies producing user delays), AOL shall have the right to
regulate the promotions it provides to 1-800-FLOWERS hereunder until
such time as 1-800-FLOWERS corrects the 1-800-FLOWERS Technical
Problem at issue.
5. MONITORING. 1-800-FLOWERS shall use commercially reasonable efforts to
ensure that the performance and availability of each Affiliated
1-800-FLOWERS Site is monitored on a reasonably continuous basis.
1-800-FLOWERS shall provide AOL with contact information (including
e-mail, phone, pager and fax information, as applicable, for both
during and after business hours) for 1-800-FLOWERS' principal business
and technical representatives, for use in cases when issues or
problems arise with respect to any Affiliated 1-800-FLOWERS Site.
6. TELECOMMUNICATIONS. Where applicable 1-800-FLOWERS shall utilize
encryption methodology to secure data communications between the
Parties' data centers. The network between the Parties shall be
configured such that no single component failure shall significantly
impact AOL Users. The network shall be sized such that no single line
over which the 1-800-FLOWERS has material control runs at more than
70% average utilization for a 5-minute peak in a daily period.
7. SECURITY. 1-800-FLOWERS shall utilize Internet standard encryption
technologies (e.g., Secure Socket Layer - SSL) to provide a secure
environment for conducting transactions and/or transferring private
member information (e.g. credit card numbers, banking/financial
information, and member address information) to and from any
Affiliated 1-800-FLOWERS Site. 1-800-FLOWERS shall facilitate periodic
reviews of the Affiliated 1-800-FLOWERS Sites by AOL in order to
evaluate the security risks of such site. 1-800-FLOWERS shall promptly
remedy any
35
security risks or breaches of security as may be identified by AOL's
Operations Security team.
8. TECHNICAL PERFORMANCE.
i. 1-800-FLOWERS shall design the Affiliated 1-800-FLOWERS Sites to
support the AOL-client embedded versions of the Microsoft Internet
Explorer 3.XX and 4.XX browsers (Windows and Macintosh)and the
Netscape Browser 4.XX and make commercially reasonable efforts to
support all other AOL browsers listed at:
"http://webmaster.info.aol.com."
ii. To the extent 1-800-FLOWERS creates customized pages on any
Affiliated 1-800-FLOWERS Site for AOL Members, 1-800-FLOWERS shall
develop and employ a methodology to detect AOL Members (e.g. examine
the HTTP User-Agent field in order to identify the "AOL Member-Agents"
listed at: "http://webmaster.info.aol.com)."
iii. 1-800-FLOWERS shall periodically review the technical information
made available by AOL at http://webmaster.info.aol.com.
iv. 1-800-FLOWERS shall design its site to support HTTP 1.0 or later
protocol as defined in RFC 1945 and to adhere to AOL's parameters for
refreshing or preventing the caching of information in AOL's proxy
system as outlined in the document provided at the following URL:
http://webmaster.info.aol.com. 1-800-FLOWERS is responsible for the
manipulation of these parameters in web-based objects so as to allow
them to be cached or not cached as outlined in RFC 1945.
v. Prior to releasing material, new functionality or features
through any Affiliated 1-800-FLOWERS Site ("New Functionality"),
1-800-FLOWERS shall use commercially reasonable efforts to (i) test
the New Functionality to confirm its compatibility with AOL Service
client software and (ii) provide AOL with written notice of the New
Functionality so that AOL can perform tests of the New Functionality
to confirm its compatibility with the AOL Service client software.
Should any new material, new functionality or features through any
Affiliated 1-800-FLOWERS Site be released without notification to AOL,
AOL shall not be responsible for any adverse member experience until
such time that compatibility tests can be performed and the new
material, functionality or features qualified for the AOL Service
9. AOL INTERNET SERVICES 1-800-FLOWERS SUPPORT. AOL shall provide
1-800-FLOWERS with access to the standard online resources, standards
and guidelines documentation, technical phone support, monitoring and
after-hours assistance that AOL makes generally available to similarly
situated web-based partners. AOL support shall not, in any case, be
involved with content creation on behalf of 1-800-FLOWERS or support
for any technologies, databases, software or other applications which
are not supported by AOL or are related to any 1-800-FLOWERS area
other than the Affiliated 1-800-FLOWERS Sites. Support to be provided
by AOL is contingent on 1-800-FLOWERS providing to AOL demo account
information (where applicable), a detailed description of the
respective Affiliated 1-800-FLOWERS Site's software, hardware and
network architecture and access to the respective Affiliated
1-800-FLOWERS Site for purposes of such performance and load testing
as AOL elects to conduct.
36
EXHIBIT F
STANDARD ONLINE COMMERCE TERMS & CONDITIONS
1. AOL NETWORK DISTRIBUTION. 1-800-FLOWERS shall not authorize or knowingly
permit any third party to distribute or promote the Products or any
1-800-FLOWERS Interactive Site through the AOL Network absent AOL's prior
written approval. The Promotions and any other promotions or advertisements
purchased from or provided by AOL shall link only to the Affiliated
1-800-FLOWERS Sites, shall be used by 1-800-FLOWERS solely for its own
benefit and shall not be resold, traded, exchanged, bartered, brokered or
otherwise offered to any third party.
2. PROVISION OF OTHER CONTENT. In the event that AOL notifies 1-800-FLOWERS
that (i) as reasonably determined by AOL, any Content within the Affiliated
1-800-FLOWERS Sites violates AOL's then-standard Terms of Service (as set
forth on the America Online-Registered Trademark- brand service at Keyword
term "TOS"), the terms of this Agreement or any other standard, written AOL
policy or (ii) AOL reasonably objects to the inclusion of any Content
within the Affiliated 1-800-FLOWERS Sites (other than any specific items of
Content which may be expressly identified in this Agreement), then
1-800-FLOWERS shall take commercially reasonable steps to block access by
AOL Users to such Content using 1-800-FLOWERS' then-available technology.
In the event that 1-800-FLOWERS cannot, through its commercially reasonable
efforts, block access by AOL Users to the Content in question, then
1-800-FLOWERS shall provide AOL prompt written notice of such fact. AOL may
then, at its option, restrict access from the AOL Network to the Content in
question using technology available to AOL. 1-800-FLOWERS shall cooperate
with AOL's reasonable requests to the extent AOL elects to implement any
such access restrictions.
3. CONTESTS. 1-800-FLOWERS shall take all steps necessary to ensure that any
contest, sweepstakes or similar promotion conducted or promoted through the
Affiliated 1-800-FLOWERS Sites (a "Contest") complies with all applicable
federal, state and local laws and regulations. 1-800-FLOWERS shall use
commercially reasonable efforts to provide AOL of at least thirty (30) days
prior written notice of any such Contest.
4. NAVIGATION. Subject to the prior consent of 1-800-FLOWERS, which consent
shall not be unreasonably withheld, AOL shall be entitled to establish
navigational icons, links and pointers connecting the Affiliated
1-800-FLOWERS Sites (or portions thereof) with other content areas on or
outside of the AOL Network. Additionally, in cases where an AOL User
performs a search for 1-800-FLOWERS through any search or navigational tool
or mechanism that is accessible or available through the AOL Network (e.g.,
Promotions, Keyword Search Terms, or any other promotions or navigational
tools), AOL shall have the right to direct such AOL User to the applicable
Affiliated 1-800-FLOWERS Site, or any other 1-800-FLOWERS Interactive Site
determined by AOL in its reasonable discretion.
5. DISCLAIMERS. Upon AOL's request, 1-800-FLOWERS agrees to include in a
prominent area to be agreed upon by the Parties of each Affiliated
1-800-FLOWERS Site, a product disclaimer to be mutually agreed upon by the
Parties and indicating that transactions are solely between 1-800-FLOWERS
and AOL Users purchasing Products from 1-800-FLOWERS.
6. LOOK AND FEEL. 1-800-FLOWERS acknowledges and agrees that AOL shall own all
right, title and interest in and to the elements of graphics, design,
organization, presentation, layout, user interface, navigation and
stylistic convention (including the digital implementations thereof) which
are generally associated with online areas contained within the AOL
Network, subject to 1-800-FLOWERS' ownership rights in any 1-800-FLOWERS
trademarks or copyrighted material within the Affiliated 1-800-FLOWERS
Sites and the 1-800-FLOWERS Look and Feel. AOL acknowledges and agrees that
1-800-FLOWERS shall own all right, title and interest in and to the
1-800-FLOWERS Look and Feel and the Affiliated 1-800-FLOWERS Site, subject
to the AOL Look and FEEL.
7. MANAGEMENT OF THE AFFILIATED 1-800-FLOWERS SITES. 1-800-FLOWERS shall
manage, review, delete, edit, create, update and otherwise manage all
Content available on or through the Affiliated 1-800-FLOWERS Sites, in a
timely and professional manner and in accordance with the terms of this
Agreement. 1-800-FLOWERS shall ensure that each Affiliated 1-800-FLOWERS
Site is current, accurate and well-organized at all times. 1-800-FLOWERS
warrants that the Products and other Licensed Content: (i) shall not
infringe on or violate any copyright, trademark, U.S. patent or any other
third party right, including without limitation, any music performance or
other music-related rights; (ii) shall not violate AOL's then-applicable
Terms of Service or any other standard, written AOL policy available online
or otherwise provided to 1-800-FLOWERS; and (iii) shall not violate any
applicable law or regulation, including those relating to contests,
sweepstakes or similar promotions. Additionally, 1-800-FLOWERS represents
and warrants that it owns or has a valid license to all rights to any
Licensed Content used in AOL "slideshow" or other formats embodying
elements such as graphics, animation and sound, free and clear of all
encumbrances and without violating the rights of any other person or
entity. 1-800-FLOWERS also warrants that a reasonable basis exists for all
Product performance or comparison claims appearing through the Affiliated
1-800-FLOWERS Sites. 1-800-FLOWERS shall not in any manner, including,
without limitation in any Promotion, the Licensed Content or the Materials
state or
37
imply that AOL recommends or endorses 1-800-FLOWERS or 1-800-FLOWERS'
Products (e.g., no statements that 1-800-FLOWERS is an "official" or
"preferred" provider of products or services for AOL); PROVIDED,
HOWEVER, that 1-800-FLOWERS shall have the right (provided that
1-800-FLOWERS is in compliance with the terms and conditions of this
Agreement) upon the prior approval of AOL to state that it is the
exclusive marketer of the Exclusive Products on the AOL Properties (as
defined herein). AOL shall have no obligations with respect to the
Products available on or through the Affiliated 1-800-FLOWERS Sites,
including, but not limited to, any duty to review or monitor any such
Products.
8. DUTY TO INFORM. 1-800-FLOWERS shall promptly inform AOL of any information
related to the Affiliated 1-800-FLOWERS Sites which could reasonably lead
to a claim, demand, or liability of or against AOL and/or its affiliates by
any third party.
9. CUSTOMER SERVICE.
(a) GENERAL. It is the sole responsibility of 1-800-FLOWERS to provide
customer service to persons or entities purchasing Products through the AOL
Network ("Customers"), as further described in Exhibit H to this Agreement.
1-800-FLOWERS shall bear full responsibility for all customer service,
including without limitation, order processing, billing, fulfillment,
shipment, collection and other customer service associated with any
Products offered, sold or licensed through the Affiliated 1-800-FLOWERS
Sites, and AOL shall have no obligations whatsoever with respect thereto.
1-800-FLOWERS shall receive all emails from Customers via a computer
available to 1-800-FLOWERS' customer service staff and generally respond to
such emails within one business day of receipt. 1-800-FLOWERS shall receive
all orders electronically and generally process all orders within one
business day of receipt, provided Products ordered are not advance order
items. 1-800-FLOWERS shall ensure that all orders of Products are received,
processed, fulfilled and delivered on a timely and professional basis.
1-800-FLOWERS shall offer AOL Users who purchase Products through such
Affiliated 1-800-FLOWERS Sites its customary satisfaction guarantee.
1-800-FLOWERS shall bear all responsibility for compliance with federal,
state and local laws in the event that Products are out of stock or are no
longer available at the time an order is received. 1-800-FLOWERS shall also
comply with the requirements of any federal, state or local consumer
protection or disclosure law. Payment for Products shall be collected by
1-800-FLOWERS directly from customers. 1-800-FLOWERS' order fulfillment
operation shall be subject to AOL's reasonable review.
(b) CUT-OFF TIME. In addition to the customer service requirements set
forth in Section 9(a) above (as the same may be reasonably amended by AOL
from time to time), 1-800-FLOWERS shall ensure same-day delivery for orders
received before 12:30 p.m. (the "Cut-Off Time") in the time zone in which
the order is to be delivered; PROVIDED, HOWEVER, that the Cut-Off Time may
be expanded or contracted by 1-800-FLOWERS during holiday periods due to
significant changes in market demand; PROVIDED, FURTHER, that 1-800-FLOWERS
shall use all reasonable efforts to notify AOL before the Cut-Off Time is
changed. Notwithstanding the foregoing, 1-800-FLOWERS hereby acknowledges
and agrees that the Cut-Off Time with respect to AOL Purchasers shall be no
earlier than the cut-off time for any other 1-800-FLOWERS partner (except
due to specific performance failures of the AOL Network (e.g., downtime of
e-mail, etc.). If same-day service will not be feasible for a particular
order, 1-800-FLOWERS hereby agrees to use its best efforts (by e-mail,
phone, etc.) to notify the customer that the order will be delivered the
next day. Next-day delivery shall always be attempted, even during busy
holiday seasons.
10. PRODUCTION WORK. In the event that 1-800-FLOWERS requests AOL's production
assistance in connection with (i) ongoing programming and maintenance
related to the Affiliated 1-800-FLOWERS Sites, (ii) a redesign of or
addition to the Affiliated 1-800-FLOWERS Sites (e.g., a change to an
existing screen format or construction of a new custom form), (iii)
production to modify work performed by a third party provider or (iv) any
other type of production work, 1-800-FLOWERS shall work with AOL to develop
a detailed production plan for the requested production assistance (the
"Production Plan"). Following receipt of the final Production Plan, AOL
shall notify 1-800-FLOWERS of (i) AOL's availability to perform the
requested production work, (ii) the proposed fee or fee structure for the
requested production and maintenance work and (iii) the estimated
development schedule for such work. To the extent the Parties reach
agreement regarding implementation of the agreed-upon Production Plan, such
agreement shall be reflected in a separate work order signed by the
Parties. To the extent 1-800-FLOWERS elects to retain a third party
provider to perform any such production work, work produced by such third
party provider must generally conform to AOL's standards & practices (as
provided on the America Online brand service at Keyword term "styleguide").
The specific production resources which AOL allocates to any production
work to be performed on behalf of 1-800-FLOWERS shall be as determined by
AOL in its sole discretion. With respect to any routine production,
maintenance or related services which AOL reasonably determines are
necessary for AOL to perform in order to support the proper functioning and
integration of the Affiliated 1-800-FLOWERS Sites ("Routine Services"),
1-800-FLOWERS shall pay the then-standard fees charged by AOL for such
Routine Services.
11. OVERHEAD ACCOUNTS. To the extent AOL has granted 1-800-FLOWERS any overhead
accounts on the AOL Properties, 1-800-FLOWERS shall be responsible for the
actions taken under or through its overhead accounts, which actions are
subject to AOL's applicable Terms of Service and for any surcharges,
including, without limitation, all premium charges, transaction charges,
and any applicable communication surcharges incurred by any overhead
Account issued to 1-800-FLOWERS, but 1-800-FLOWERS shall not be liable for
charges incurred by any overhead account relating to AOL's standard monthly
usage fees and standard hourly charges, which charges AOL shall bear. Upon
the termination of this Agreement, all overhead accounts, related screen
names and any associated usage credits or similar rights, shall
automatically terminate. AOL shall have no liability for loss of any data
or content related to the proper termination of any overhead account.
38
12. NAVIGATION TOOLS. In addition to the Keyword Search Terms granted to
1-800-FLOWERS under the Original IMAs and set forth on Exhibit A hereto,
any further Keyword Search Terms to be directed to any Affiliated
1-800-FLOWERS Site shall be (i) subject to availability for use by
1-800-FLOWERS and (ii) limited to the combination of the Keyword-TM- search
modifier (i.e., "Keyword:") combined with a registered trademark of
1-800-FLOWERS. AOL reserves the right to revoke at any time 1-800-FLOWERS'
use of any Keyword Search Terms which do not incorporate registered
trademarks of 1-800-FLOWERS. 1-800-FLOWERS acknowledges that its
utilization of a Keyword Search Term shall not create in it, nor shall it
represent it has, any right, title or interest in or to such Keyword Search
Term, other than the right, title and interest 1-800-FLOWERS holds in
1-800-FLOWERS' registered trademark independent of the Keyword Search Term.
Without limiting the generality of the foregoing, 1-800-FLOWERS shall not:
(a) attempt to register or otherwise obtain trademark or copyright
protection in the Keyword Search Term; or (b) use the Keyword Search Term,
except for the purposes expressly required or permitted under this
Agreement. To the extent AOL allows AOL Users to "bookmark" the URL or
other locator for any Affiliated 1-800-FLOWERS Site, such bookmarks shall
be subject to AOL's control at all times. Upon the termination of this
Agreement, 1-800-FLOWERS' rights to any Keyword Search Terms and
bookmarking shall terminate.
13. MERCHANT CERTIFICATION PROGRAM. 1-800-FLOWERS shall participate in any
generally applicable "Certified Merchant" program operated by AOL or its
authorized agents or contractors. Such program may require merchant
participants on an ongoing basis to meet certain reasonable, generally
applicable standards relating to provision of electronic commerce through
the AOL Network (including, as a minimum, use of 40-bit SSL encryption and
if requested by AOL, 128-bit encryption) and may also require the payment
of certain reasonable certification fees to the applicable entity operating
the program. Each Certified Merchant in good standing shall be entitled to
place on its affiliated Interactive Site an AOL designed and approved
button promoting the merchant's status as an AOL Certified Merchant.
14. PROHIBITION OF PROMOTIONAL PROGRAMS. On the Affiliated 1-800-FLOWERS Sites,
1-800-FLOWERS shall not offer, provide, implement or otherwise make
available any promotional programs or plans that are intended to provide
customers with rewards or benefits in exchange for, or on account of, their
past or continued loyalty to, or patronage or purchase of, the products or
services of 1-800-FLOWERS or any third party (e.g., a promotional program
similar to a "frequent flier" program) other than travel-related or
1-800-FLOWERS' proprietary flowers-related frequent purchasing programs,
unless such promotional program or plan is provided exclusively through
AOL's "AOL Rewards" program, accessible on the AOL Service at Keyword: "AOL
Rewards" (unless otherwise consented to by AOL, which consent shall not be
unreasonably withheld).
39
EXHIBIT G
STANDARD LEGAL TERMS & CONDITIONS
1. PROMOTIONAL MATERIALS/PRESS RELEASES. Each Party shall submit to the other
Party, for its prior written approval, which shall not be unreasonably
withheld or delayed, any marketing, advertising, or other promotional
materials, related to the Affiliated 1-800-FLOWERS Sites and/or referencing
the other Party and/or its trade names, trademarks, and service marks (the
"Promotional Materials"); PROVIDED, HOWEVER, that either Party's use of
screen shots of the Affiliated 1-800-FLOWERS Sites for promotional purposes
shall not require the approval of the other Party so long as America
Online-Registered Trademark- is clearly identified as the source of such
screen shots; PROVIDED, FURTHER, that following the initial public
announcement of the business relationship between the Parties in accordance
with the approval and other requirements contained herein, either Party's
subsequent factual reference to the existence of a business relationship
between the Parties in Promotional Materials, shall not require the approval
of the other Party. Each Party shall solicit and reasonably consider the
views of the other Party in designing and implementing such Promotional
Materials. Once approved, the Promotional Materials may be used by a Party
and its affiliates for the purpose of promoting the Affiliated 1-800-FLOWERS
Sites and the content contained therein and reused for such purpose until
such approval is withdrawn with reasonable prior notice. In the event such
approval is withdrawn, existing inventories of Promotional Materials may be
depleted. It is agreed and understood that the Parties shall work together to
prepare a press release to be issued as soon as reasonably possible following
the execution of this Agreement, and in no event, more than ten (10) business
days thereafter (unless otherwise required by applicable law).
2. LICENSE. During the Term, 1-800-FLOWERS hereby grants AOL a non-exclusive
worldwide license to market, license, distribute, reproduce, display,
perform, transmit and promote the Licensed Content (or any portion thereof)
through such areas or features of the AOL Network as AOL deems appropriate
solely in accordance with the terms and conditions hereof. 1-800-FLOWERS
acknowledges and agrees that the foregoing license permits AOL to distribute
portions of the Licensed Content in synchronism or timed relation with visual
displays prepared by 1-800-FLOWERS or AOL on behalf of 1-800-FLOWERS at
1-800-FLOWERS' request (e.g., as part of an AOL "slideshow"). Subject to such
license, 1-800-FLOWERS retains all right, title and interest in the Licensed
Content. In addition, AOL Users shall have the right to access and use the
Affiliated 1-800-FLOWERS Sites.
3. TRADEMARK LICENSE. In designing and implementing the Materials and subject
to the other provisions contained herein, 1-800-FLOWERS shall be entitled to
use the following trade names, trademarks, and service marks of AOL and
CompuServe (respectively): the "America Online-Registered Trademark-" brand
service, "AOL-TM-" service/software, AOL's triangle logo and the "CompuServe"
trademark; and AOL and its affiliates shall be entitled to use the trade
names, trademarks, and service marks of 1-800-FLOWERS for which 1-800-FLOWERS
holds all rights necessary for use in connection with this Agreement (e.g.,
1-800-Flowers, Gift Concierge Service, World's Favorite Florist, Freshness
Care System, Fresh Thoughts, 1-800-FLOWERS.com, Gardenworks, etc.)
(collectively, together with the AOL marks listed above, the "Marks");
provided that each Party: (i) does not create a unitary composite mark
involving a Mark of the other Party without the prior written approval of
such other Party; and (ii) displays symbols and notices clearly and
sufficiently indicating the trademark status and ownership of the other
Party's Marks in accordance with applicable trademark law and practice.
4. OWNERSHIP OF TRADEMARKS. Each Party acknowledges the ownership right of the
other Party in the Marks of the other Party and agrees that all use of the
other Party's Marks shall inure to the benefit, and be on behalf, of the other
Party. Each Party acknowledges that its utilization of the other Party's Marks
shall not create in it, nor shall it represent it has, any right, title, or
interest in or to such Marks other than the licenses expressly granted herein.
Each Party agrees not to do anything contesting or impairing the trademark
rights of the other Party (including, without limitation, seeking to register
the other Party's Marks as part of a composite mark).
5. QUALITY STANDARDS. Each Party agrees that the nature and quality of its
products and services supplied in connection with the other Party's Marks
shall conform to quality standards set by the other Party. Each Party agrees
to supply the other Party, upon request, with a reasonable number of samples
of any Materials publicly disseminated by such Party which utilize the other
Party's Marks. Each Party shall comply with all applicable laws, regulations,
and customs and obtain any required government approvals pertaining to use of
the other Party's marks.
6. INFRINGEMENT PROCEEDINGS. Each Party agrees to promptly notify the other
Party of any unauthorized use of the other Party's Marks of which it has
actual knowledge. Each Party shall have the sole right and discretion to bring
proceedings alleging infringement of its Marks or unfair competition related
thereto; provided, however, that each Party agrees to provide the other Party
with its reasonable cooperation and assistance with respect to any such
infringement proceedings.
7. REPRESENTATIONS AND WARRANTIES. Each Party represents and warrants to the
other Party that: (i) such Party has the full corporate
40
right, power and authority to enter into this Agreement and to perform the
acts required of it hereunder; (ii) the execution of this Agreement by such
Party, and the performance by such Party of its obligations and duties
hereunder, do not and shall not violate any agreement to which such Party is
a party or by which it is otherwise bound; (iii) when executed and delivered
by such Party, this Agreement shall constitute the legal, valid and binding
obligation of such Party, enforceable against such Party in accordance with
its terms; and (iv) such Party acknowledges that the other Party makes no
representations, warranties or agreements related to the subject matter
hereof that are not expressly provided for in this Agreement. 1-800-FLOWERS
hereby represents and warrants that it possesses all authorizations,
approvals, consents, licenses, permits, certificates or other rights and
permissions necessary to sell the Products.
8. CONFIDENTIALITY. Each Party acknowledges that Confidential Information may
be disclosed to the other Party during the course of this Agreement. Each
Party agrees that it shall take reasonable steps, at least substantially
equivalent to the steps it takes to protect its own proprietary information,
during the term of this Agreement, and for a period of two (2) years
following expiration or termination of this Agreement, to prevent the
duplication or disclosure of Confidential Information of the other Party,
other than by or to its employees or agents who must have access to such
Confidential Information to perform such Party's obligations hereunder, who
shall each agree to comply with this section. Notwithstanding the foregoing,
either Party may issue a press release or other disclosure containing
Confidential Information without the consent of the other Party, to the
extent such disclosure is required by law, rule, regulation or government or
court order. In such event, the disclosing Party shall provide at least five
(5) business days prior written notice of such proposed disclosure to the
other Party. Further, in the event such disclosure is required of either
Party under the laws, rules or regulations of the Securities and Exchange
Commission or any other applicable governing body, such Party shall (i)
redact mutually agreed-upon portions of this Agreement to the fullest extent
permitted under applicable laws, rules and regulations and (ii) submit a
request to such governing body that such portions and other provisions of
this Agreement receive confidential treatment under the laws, rules and
regulations of the Securities and Exchange Commission or otherwise be held in
the strictest confidence to the fullest extent permitted under the laws, rules
or regulations of any other applicable governing body.
9. LIMITATION OF LIABILITY; DISCLAIMER; INDEMNIFICATION.
(a) LIABILITY. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY
DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES), ARISING FROM BREACH OF THE AGREEMENT, THE SALE OF PRODUCTS, THE USE
OR INABILITY TO USE THE AOL NETWORK, THE AOL SERVICE, AOL.COM OR THE
AFFILIATED 1-800-FLOWERS SITES, OR ARISING FROM ANY OTHER PROVISION OF THIS
AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED
PROFITS OR LOST BUSINESS (COLLECTIVELY, "DISCLAIMED DAMAGES"); PROVIDED THAT
EACH PARTY SHALL REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT ANY
DISCLAIMED DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE SUBJECT TO
INDEMNIFICATION PURSUANT TO SECTION 9(c). EXCEPT AS PROVIDED IN SECTION 9(c),
(I) LIABILITY ARISING UNDER THIS AGREEMENT SHALL BE LIMITED TO DIRECT,
OBJECTIVELY MEASURABLE DAMAGES, AND (II) THE MAXIMUM LIABILITY OF ONE PARTY
TO THE OTHER PARTY FOR ANY CLAIMS ARISING IN CONNECTION WITH THIS AGREEMENT
SHALL BE THE AGGREGATE AMOUNT OF PAYMENT OBLIGATIONS TO BE PAID TO AOL BY
1-800-FLOWERS HEREUNDER IN THE YEAR IN WHICH THE EVENT GIVING RISE TO THE
LIABILITY OCCURS; PROVIDED THAT EACH PARTY SHALL REMAIN LIABLE FOR THE
AGGREGATE AMOUNT OF ANY PAYMENT OBLIGATIONS OWED TO THE OTHER PARTY PURSUANT
TO THE AGREEMENT.
(B) NO ADDITIONAL WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE AOL NETWORK,
THE AOL SERVICE, AOL.COM OR THE AFFILIATED 1-800-FLOWERS SITES, INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND
IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AOL SPECIFICALLY DISCLAIMS
ANY WARRANTY REGARDING THE PROFITABILITY OF THE AFFILIATED 1-800-FLOWERS
SITES.
(c) INDEMNITY. Either Party shall defend, indemnify, save and hold harmless
the other Party and the officers, directors, agents, affiliates, distributors,
franchisees and employees of the other Party from any and all third party
claims, demands, liabilities, costs or expenses, including reasonable
attorneys' fees ("Liabilities"), resulting from the indemnifying Party's
material breach of any duty, representation, or warranty of this Agreement.
(d) CLAIMS. If a Party entitled to indemnification hereunder (the
"Indemnified Party") becomes aware of any matter it believes is indemnifiable
hereunder involving any claim, action, suit, investigation, arbitration or
other proceeding against the Indemnified Party by any third party (each an
"Action"), the Indemnified Party shall give the other Party (the
"Indemnifying Party") prompt written notice of such Action. Such notice shall
(i) provide the basis on which indemnification is being asserted and (ii) be
accompanied by copies of all relevant pleadings, demands, and other papers
related to the Action and in the possession of the Indemnified Party. The
Indemnifying Party shall have a period of ten (10) days after delivery of
such notice to respond. If the Indemnifying Party elects to defend the Action
or does not respond within the requisite ten (10) day
41
period, the Indemnifying Party shall be obligated to defend the Action, at
its own expense, and by counsel reasonably satisfactory to the Indemnified
Party. The Indemnified Party shall cooperate, at the expense of the
Indemnifying Party, with the Indemnifying Party and its counsel in the
defense and the Indemnified Party shall have the right to participate fully,
at its own expense, in the defense of such Action. If the Indemnifying Party
responds within the required ten (10) day period and elects not to defend
such Action, the Indemnified Party shall be free, without prejudice to any of
the Indemnified Party's rights hereunder, to compromise or defend (and
control the defense of) such Action. In such case, the Indemnifying Party
shall cooperate, at its own expense, with the Indemnified Party and its
counsel in the defense against such Action and the Indemnifying Party shall
have the right to participate fully, at its own expense, in the defense of
such Action. Any compromise or settlement of an Action shall require the
prior written consent of both Parties hereunder, such consent not to be
unreasonably withheld or delayed.
10. ACKNOWLEDGMENT. AOL and 1-800-FLOWERS each acknowledges that the
provisions of this Agreement were negotiated to reflect an informed, voluntary
allocation between them of all risks (both known and unknown) associated with
the transactions contemplated hereunder. The limitations and disclaimers
related to warranties and liability contained in this Agreement are intended
to limit the circumstances and extent of liability. The provisions of this
Section 10 shall be enforceable independent of and severable from any other
enforceable or unenforceable provision of this Agreement.
11. SOLICITATION OF AOL USERS. During the term of the Agreement and for a one
(1) year period following the expiration or termination of this Agreement,
1-800-FLOWERS shall not use the AOL Network (including, without limitation,
the e-mail network contained therein) to solicit AOL Users on behalf of
another Interactive Service. More generally, 1-800-FLOWERS shall not send
unsolicited, commercial e-mail (i.e., "spam") or other online communications
through or into AOL's products or services, absent a Prior Business
Relationship. For purposes of this Agreement, a "Prior Business Relationship"
shall mean that the AOL User to whom commercial e-mail or other online
communication is being sent has voluntarily either (i) engaged in a
transaction with 1-800-FLOWERS or (ii) provided information to 1-800-FLOWERS
through a contest, registration, or other communication, which included
reasonably clear notice to the AOL User that the information provided could
result in commercial e-mail or other online communication being sent to that
AOL User by 1-800-FLOWERS or its agents. Any commercial e-mail or other online
communications to AOL Users which are otherwise permitted hereunder, shall (a)
include a prominent and reasonably easy means to "opt-out" of receiving any
future commercial communications from 1-800-FLOWERS, and (b) shall also be
subject to AOL's then-standard restrictions on distribution of bulk e-mail
(e.g., related to the time and manner in which such e-mail can be distributed
through or into the AOL product or service in question).
12. AOL USER COMMUNICATIONS. During the Term of this Agreement and for a
period of one (1) year thereafter, to the extent that 1-800-FLOWERS is
permitted to communicate with AOL Users under Section 11 of this Exhibit G,
in any such communications to AOL Users on or (specifically targeting AOL
Users) off the Affiliated 1-800-FLOWERS Sites (including, without limitation,
e-mail solicitations), 1-800-FLOWERS shall not encourage AOL Users to use an
Interactive Site other than the Affiliated 1-800-FLOWERS Sites for the
purchase of Products, (ii) using Content other than the Licensed Content;
(iii) bookmarking of Interactive Sites; or (iv) changing the default home
page on the AOL browser. Additionally, with respect to such AOL User
communications, in the event that 1-800-FLOWERS encourages an AOL User to
purchase products through such communications, 1-800-FLOWERS shall ensure
that (a) the AOL Network is promoted as the primary means through which the
AOL User can access the Affiliated 1-800-FLOWERS Sites and (b) any link to
any Affiliated 1-800-FLOWERS Site shall link to a page which indicates to the
AOL User that such user is in a site which is affiliated with the AOL Network.
13. COLLECTION AND USE OF USER INFORMATION. 1-800-FLOWERS shall ensure that
its collection, use and disclosure of information obtained from AOL Users
under this Agreement and through any Affiliated 1-800-FLOWERS Site ("User
Information") complies with (i) all applicable laws and regulations and (ii)
AOL's standard privacy policies, available on the AOL Service at the keyword
term "Privacy" (or, in the case of the Affiliated 1-800-FLOWERS Sites,
1-800-FLOWERS' standard privacy policies so long as such policies are
prominently published on the site and provide adequate notice, disclosure and
choice to users regarding 1-800-FLOWERS' collection, use and disclosure of
user information). 1-800-FLOWERS shall not disclose User Information
collected hereunder to any third party in a manner that identifies AOL Users
as end users of an AOL product or service or during the Term (and thereafter,
to the extent expressly provided for herein) use Member Information collected
under this Agreement to market another Interactive Service
14. EXCUSE. Neither Party shall be liable for, or be considered in breach of
or default under this Agreement on account of, any delay or failure to
perform as required by this Agreement as a result of any causes or conditions
which are beyond such Party's reasonable control and which such Party is
unable to overcome by the exercise of reasonable diligence.
15. INDEPENDENT CONTRACTORS. The Parties to this Agreement are independent
contractors. Neither Party is an agent, representative or employee of the
other Party. Neither Party shall have any right, power or authority to enter
into any agreement for or on behalf of, or incur any obligation or liability
of, or to otherwise bind, the other Party. This Agreement shall not be
interpreted or construed to create an association, agency, joint venture or
partnership between the Parties or to impose any liability attributable to
such a relationship upon either Party.
42
16. NOTICE. Any notice, approval, request, authorization, direction or other
communication under this Agreement shall be given in writing and shall be
deemed to have been delivered and given for all purposes (i) on the
delivery date if delivered by electronic mail on the AOL Network (to
screenname "AOLNotice@AOL.com" in the case of AOL) or by confirmed
facsimile; (ii) on the delivery date if delivered personally to the Party
to whom the same is directed; (iii) one business day after deposit with a
commercial overnight carrier, with written verification of receipt; or (iv)
five business days after the mailing date, whether or not actually
received, if sent by U.S. mail, return receipt requested, postage and
charges prepaid, or any other means of rapid mail delivery for which a
receipt is available. In the case of AOL, such notice shall be provided to
both the Senior Vice President for Business Affairs (fax no. 703-265-1206)
and the Deputy General Counsel (fax no. 703-265-1105), each at the address
of AOL set forth in the first paragraph of this Agreement. In the case of
1-800-FLOWERS, except as otherwise specified herein, the notice address
shall be the address for 1-800-FLOWERS set forth in the first paragraph of
this Agreement (to the attention of Chris McCann and with a copy to Jerry
Gallagher, Esq.), with the other relevant notice information, including the
recipient's fax number or AOL e-mail address, to be as reasonably
identified by AOL.
17. NO WAIVER. The failure of either Party to insist upon or enforce strict
performance by the other Party of any provision of this Agreement or to
exercise any right under this Agreement shall not be construed as a waiver
or relinquishment to any extent of such Party's right to assert or rely
upon any such provision or right in that or any other instance; rather, the
same shall be and remain in full force and effect.
18. RETURN OF INFORMATION. Upon the expiration or termination of this
Agreement, each Party shall, upon the written request of the other Party,
return or destroy (at the option of the Party receiving the request) all
confidential information, documents, manuals and other materials specified
the other Party.
19. SURVIVAL. Section 4 (to the extent any such amounts are due and payable
pursuant to the terms of this Agreement) and Section 6 of the body of the
Agreement, and Sections 8, 9, 11, 12, 13, 16, 19, 24, 25 and 26 of this
Exhibit G, (and any other Sections shall survive the completion,
expiration, termination or cancellation of this Agreement.
20. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
supersedes any and all prior agreements of the Parties with respect to the
transactions set forth herein. Neither Party shall be bound by, and each
Party specifically objects to, any term, condition or other provision which
is different from or in addition to the provisions of this Agreement
(whether or not it would materially alter this Agreement) and which is
proffered by the other Party in any correspondence or other document,
unless the Party to be bound thereby specifically agrees to such provision
in writing.
21. AMENDMENT. No change, amendment or modification of any provision of this
Agreement shall be valid unless set forth in a written instrument signed by
the Party subject to enforcement of such amendment, and in the case of
either Party, by an executive with a title of at least Senior Vice
President.
22. FURTHER ASSURANCES. Each Party shall take such action (including, but not
limited to, the execution, acknowledgment and delivery of documents) as may
reasonably be requested by any other Party for the implementation or
continuing performance of this Agreement.
23. ASSIGNMENT. Except for the assignment transfer or delegation by either
Party to an affiliate by way of merger, consolidation or sale of all (or
substantially all) of such party's outstanding voting securities or assets,
neither Party shall assign this Agreement or any right, interest or benefit
under this Agreement without the prior written consent of the other Party.
Subject to the foregoing, this Agreement shall be fully binding upon, inure
to the benefit of and be enforceable by the Parties hereto and their
respective successors and assigns.
24. CONSTRUCTION; SEVERABILITY. In the event that any provision of this
Agreement conflicts with the law under which this Agreement is to be
construed or if any such provision is held invalid by a court with
jurisdiction over the Parties to this Agreement, (i) such provision shall
be deemed to be restated to reflect as nearly as possible the original
intentions of the Parties in accordance with applicable law, and (ii) the
remaining terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect.
25. REMEDIES. Except where otherwise specified, the rights and remedies granted
to a Party under this Agreement are cumulative and in addition to, and not
in lieu of, any other rights or remedies which the Party may possess at law
or in equity; provided that, in connection with any dispute hereunder,
Neither Party shall be entitled to offset any amounts that it claims to be
due and payable from the other Party against amounts otherwise payable by
the other Party to such Party.
26. APPLICABLE LAW. Except as otherwise expressly provided herein, this
Agreement shall be interpreted, construed and enforced in all respects in
accordance with the laws of the State of New York except for its conflicts
of laws principles.
27. EXPORT CONTROLS. Both Parties shall adhere to all applicable laws,
regulations and rules relating to the export of technical data and shall
not export or re-export any technical data, any products received from the
other Party or the direct product of such technical data to any proscribed
country listed in such applicable laws, regulations and rules unless
properly authorized.
43
28. HEADINGS. The captions and headings used in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
29. COUNTERPARTS. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one
and the same document
44
EXHIBIT H
CUSTOMER SERVICE REQUIREMENTS
1. Commercially reasonable best efforts to process orders electronically
within one (1) hour from receipt (if between 7A.M. and 7P.M. EST) and
to promptly transmit orders to the receiving supplier.
2. Deliver all merchandise in professional packaging. All packages should
arrive undamaged, well packed and neat (barring any shipping
disasters).
3. Make available customer service personnel dedicated to the online
medium (i.e., people whose primary concern is the online customer's
orders) and make at least one customer service representative
available from 9:00 p.m. - midnight E.S.T. during the week before each
peak holiday period such as Thanksgiving, Christmas/Chanukkah,
Valentine's Day, Easter, Mother's Day, New Years and Secretaries'
Week, to answer questions in an "online conference room" set up
specifically for the relevant 1-800-FLOWERS store. Online customers
shall be given as much priority as customers coming through any other
sales channel.
4. Respond promptly and professionally to questions, comments, complaints
and other reasonable requests from AOL Members regarding the Products,
including, at a minimum, best efforts to receive and respond to
e-mails within twenty-four (24) hours of receipt via a computer
available to the customer service staff.
5. Provide the customer with an order confirmation within twenty-four
(24) hours of receipt. Order confirmation should include any
information such order status (temporary back order or out of stock
situations), and expected delivery times.
6. Have the ability to handle volumes in excess of twenty-five percent
(25%) to fifty percent (50%) of 1-800-FLOWERS' average daily order
volumes.
7. Regularly monitor on-line store to minimize/eliminate the promotion of
out-of-stock merchandise.
8. Ship the displayed product at the price displayed in any Affiliated
1-800-FLOWERS Site without substituting.
9. Offer all AOL Purchasers a 100% satisfaction guarantee, pursuant to
which, 1-800-FLOWERS agrees to replace or refund orders upon such AOL
Purchaser's or AOL's request, in accordance with 1-800-FLOWERS'
standard customer service policy.
10. Comply with all applicable disclosure laws.
45
EXHIBIT I
CO-BRANDING REQUIREMENTS ON THE 1-800-FLOWERS AFFILIATED SITES
I. AOL SERVICE. The AOL Service will maintain the current co-branding as
in effect under the Original IMA (including, without limitation, the
use of the "Rainman" screens).
II. AOL.COM. Commencing on a mutually agreed upon date(s) after the
Effective Date. 1-800-FLOWERS shall create a version of the principal
1-800-FLOWERS Interactive Site customized for distribution through
AOL.com (the "1-800-FLOWERS/AOL.com Site") by (w) developing the
1-800-FLOWERS/AOL.com Site as a "cul de sac" site containing no links
outside of the 1-800-FLOWERS/AOL.com Site other than to AOL.com, other
AOL or third party Content determined by AOL, or advertisements
permitted under this Agreement, (x) displaying on each page of the
1-800-FLOWERS/AOL.com Site headers and footers of size and type
determined by AOL and which contain both AOL.com and 1-800-FLOWERS
branding, links to AOL.com, a Netfind search box and two (2)
promotional spaces to be programmed by AOL, (y) programming each page
of the 1-800-FLOWERS/AOL.com Site with a co-branded domain name (e.g.,
1800Flowers.aol.com) and (z) matching the look and feel of AOL.com on
the 1-800-FLOWERS/AOL.com Site. All registration and community-related
utilities and functionality (including, without limitation, chat,
message boards, and web page community services such as AOL Hometown)
shall be managed by AOL. The 1-800-FLOWERS/AOL.com Site shall contain
Content of substantially the same quality, scope, functionality, terms
and conditions as the Content on any other 1-800-FLOWERS Interactive
Site. 1-800-FLOWERS will, in accordance with the Programming Plan, and
subject to the terms of this Agreement, (1) provide AOL with Content
for the areas and screens of AOL.com described in the Programming Plan,
and (2) program and manage the Content on the 1-800-FLOWERS/AOL.com
Site for distribution through AOL.com. All terms and conditions of this
Agreement applicable to any 1-800-FLOWERS Interactive Site shall apply
to the 1-800-FLOWERS/AOL.com Site except as expressly otherwise stated.
III. COMPUSERVE SERVICE. Commencing on a mutually agreed upon date(s) after
the Effective Date. 1-800-FLOWERS shall create a version of the
principal 1-800-FLOWERS Interactive Site customized for distribution
through the CompuServe Service (the "1-800-FLOWERS/CIS Site") by (w)
developing the 1-800-FLOWERS/CIS Site as a "cul de sac" site containing
no links outside of the 1-800-FLOWERS/CIS Site other than to the
CompuServe Service, other AOL or third party Content determined by AOL,
or advertisements permitted under this Agreement, (x) displaying on
each page of the 1-800-FLOWERS/CIS Site headers and footers of size and
type determined by AOL or CompuServe and which contain both CIS and
1-800-FLOWERS branding, links to the CompuServe Service and two (2)
promotional spaces to be programmed by AOL or CompuServe, (y)
programming each page of the 1-800-FLOWERS/CIS Site with a co-branded
domain name (e.g., 1800Flowers.compuserve.com) and (z) matching the
look and feel of the CompuServe Service on the 1-800-FLOWERS/CIS Site.
All registration and community-related utilities and functionality
(including, without limitation, chat, message boards, and web page
community services) shall be managed by AOL or CompuServe. The
1-800-FLOWERS/CIS Site shall contain Content of substantially the same
quality, scope, functionality, terms and conditions as the Content on
any other 1-800-FLOWERS Interactive Site. 1-800-FLOWERS will, in
accordance with the Programming Plan, and subject to the terms of this
Agreement, (1) provide AOL with Content for the areas and screens of
the CompuServe Service described in the Programming Plan, and (2)
program and manage the Content on the 1-800-FLOWERS/CIS Site for
distribution through the CompuServe Service. All terms and conditions
of this Agreement applicable to any 1-800-FLOWERS Interactive Site
shall apply to the 1-800-FLOWERS/CIS Site except as expressly otherwise
stated.
IV. NETSCAPE NETCENTER. The Service Pages will be co-branded by Netscape
and 1-800-FLOWERS. The co-branding will be subject to Netscape's
Guidelines and will include 1-800-FLOWERS' company name and logo.
Furthermore, 1-800-FLOWERS shall take reasonable efforts to ensure that
Netscape traffic is generally either
46
kept within the Service Pages or channeled back into Netcenter. To
the extent that Netscape notifies Participant in writing that, in
Netscape's reasonable judgment, links from the Service Pages cause
an excessive amount of user traffic to be diverted outside of such
site and Netscape Netcenter in a manner that has a detrimental
effect on the traffic flow of the user audience, then 1-800-FLOWERS
shall immediately reduce the number of links out of such site(s). In
the event that 1-800-FLOWERS cannot or does not so limit diverted
traffic from such site, Netscape (or AOL, as the case may be)
reserves the right to take control of the relevant Service Pages.
For purposes of these co-branding requirements, "Service Pages"
shall mean all pages of the specific area within the Netscape
Network which shall be developed, managed or marketed by
1-800-FLOWERS pursuant to this Agreement, including but not limited
to the Licensed Content, any functionality or services, message
boards, chat and other Netscape Member-supplied content areas
contained therein (but excluding any site or area outside of
Netscape Netcenter that is linked to Netscape Netcenter (through a
"pointer" or similar link) in accordance with the terms and
conditions of this Agreement).
V. ICQ SERVICE. Commencing on a mutually agreed upon date(s) after the
Effective Date. 1-800-FLOWERS shall create a version of the principal
1-800-FLOWERS Interactive Site customized for distribution through the
ICQ Service (the "1-800-FLOWERS/ICQ Site") by (w) developing the
1-800-FLOWERS/ICQ Site as a "cul de sac" site containing no links
outside of the 1-800-FLOWERS/ICQ Site other than to the ICQ Service,
other AOL or third party Content determined by AOL, or advertisements
permitted under this Agreement, (x) displaying on each page of the
1-800-FLOWERS/ICQ Site headers and footers of size and type determined
by AOL and which contain both ICQ and 1-800-FLOWERS branding, links to
the ICQ Service and two (2) promotional spaces to be programmed by AOL,
(y) programming each page of the 1-800-FLOWERS/ICQ Site with a
co-branded domain name (e.g., 1800Flowers.icq.com) and (z) matching the
look and feel of the ICQ Service on the 1-800-FLOWERS/ICQ Site. All
registration and community-related utilities and functionality
(including, without limitation, chat, message boards, and web page
community services) shall be managed by AOL or ICQ. The
1-800-FLOWERS/ICQ Site shall contain Content of substantially the same
quality, scope, functionality, terms and conditions as the Content on
any other 1-800-FLOWERS Interactive Site. 1-800-FLOWERS will, in
accordance with the Programming Plan, and subject to the terms of this
Agreement, (1) provide AOL with Content for the areas and screens of
the ICQ Service described in the Programming Plan, and (2) program and
manage the Content on the 1-800-FLOWERS/ICQ Site for distribution
through the ICQ Service. All terms and conditions of this Agreement
applicable to any 1-800-FLOWERS Interactive Site shall apply to the
1-800-FLOWERS/ICQ Site except as expressly otherwise stated.
VI. DIGITAL CITY. Commencing on a mutually agreed upon date(s) after the
Effective Date. 1-800-FLOWERS shall create a version of the principal
1-800-FLOWERS Interactive Site customized for distribution through the
CompuServe Service (the "1-800-FLOWERS/DCI Site") by (w) developing the
1-800-FLOWERS/DCI Site as a "cul de sac" site containing no links
outside of the 1-800-FLOWERS/DCI Site other than to Digital City, other
AOL or third party Content determined by AOL, or advertisements
permitted under this Agreement, (x) displaying on each page of the
1-800-FLOWERS/DCI Site headers and footers of size and type determined
by AOL and which contain both DCI and 1-800-FLOWERS branding, links to
Digital City and two (2) promotional spaces to be programmed by AOL,
(y) programming each page of the 1-800-FLOWERS/DCI Site with a
co-branded domain name (e.g., 1800Flowers.digitalcity.com) and (z)
matching the look and feel of Digital City on the 1-800-FLOWERS/DCI
Site. All registration and community-related utilities and
functionality (including, without limitation, chat, message boards, and
web page community services) shall be managed by AOL. The
1-800-FLOWERS/DCI Site shall contain Content of substantially the same
quality, scope, functionality, terms and conditions as the Content on
any other 1-800-FLOWERS Interactive Site. 1-800-FLOWERS will, in
accordance with the Programming Plan, and subject to the terms of this
Agreement, (1) provide AOL with Content for the areas and screens of
Digital City described in the Programming Plan, and (2) program and
manage the Content on the 1-800-FLOWERS/DCI Site for distribution
through Digital City. All terms and conditions of this Agreement
applicable to any 1-800-FLOWERS Interactive Site shall apply to the
1-800-FLOWERS/DCI Site except as expressly otherwise stated.
47
EXHIBIT J
CATEGORIES OF GARDENING-RELATED ITEMS TO BE OFFERED ON
THE 1-800-FLOWERS AFFILIATED SITES
GARDEN
Annuals
Books/Videos related to gardening
Bulbs
Seeds
Composting
Fencing
Edging
Apparel related to gardening
Footwear related to gardening
Lawn Care
Perennials
Vines
Pest Control
Indoor Plants
Roses
Tools
Supplies related to gardening
Trees
Shrubs
Trellises
Arbors
Pottery related to gardening
Vases
Tropical Plants
Water Gardening
OUT DOOR LIVING
Birds/Nature
Doormats/Rugs
Fireplace
Furniture
Lighting
48
EXHIBIT K
1-800-FLOWERS COMPETITORS
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
The above entities also include any of their affiliates whose primary business
is the sale of fresh-cut flowers and Plants. During the Fresh-Cut Flowers
Exclusivity Period, 1-800-FLOWERS can replace any of the above entities with
another entity whose primary business is the sale of fresh-cut flowers and
Plants.
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
49
EXHIBIT L
GARDENING COMPETITORS
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
- - ***
The above entities also include any of their affiliates whose primary
business is the sale of Gardening Products. During the Gardening
Exclusivity Period, 1-800-FLOWERS can replace any of the above entities
with another entity whose primary business is the sale of Gardening
Products.
*** Confidential treatment has been requested for this portion pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
50