Exhibit 10.7
FLORISTS ONLINE HOSTING AGREEMENT
This Florists Online Hosting Agreement (this "Agreement") is being entered
into as of the ___ day of June, 1999 and is entered into by and between
Florists' Transworld Delivery, Inc., a Michigan corporation ("FTDI"), and
xxx.xxx inc., a Delaware corporation ("xxx.xxx").
RECITALS
A. Historically, FTDI was engaged directly in, among other things, the
business of offering consumers the opportunity to place floral and
specialty gift orders directly with FTDI through its toll free
telephone number (0-000-XXXX-XXX) and its Web site (xxx.xxx.xxx) (the
"Direct Access Business").
B. Historically, using its Web site, FTDI offered various online hosting
services for its Internet program, FTD Florists Online, located at
xxx.xxx.xxx.
C. Recently, FTDI formed xxx.xxx as a subsidiary of FTDI and, pursuant to
the Formation Agreement, dated as of May 19, 1999, between FTDI and
xxx.xxx (the "Formation Agreement"), transferred substantially all of
FTDI's assets, rights and interests relating to the Direct Access
Business to xxx.xxx, including FTDI's Web site.
D. In connection with FTDI's operation of FTD Florists Online, FTDI
desires to obtain various online hosting services ("Services") from
xxx.xxx, and xxx.xxx desires to provide such Services to FTDI.
THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
Section 1. Services.
(a) xxx.xxx shall provide, directly, through its subsidiaries or through a
third party vendor reasonably satisfactory to FTDI, the services described on
Exhibit A hereto, at the cost specified and on the other terms and conditions
set forth on Exhibit A.
(b) In the event that FTDI requests services that exceed the scope or
extent of the Services provided for herein, and if xxx.xxx agrees to provide
such services, xxx.xxx and FTDI will negotiate in good faith the terms and
conditions, including price, under which xxx.xxx will provide such Services;
provided, however, that the terms and conditions, including price, upon which
xxx.xxx will provide those Services to FTDI shall be no less favorable to FTDI
than the terms and conditions, including price, upon which xxx.xxx provides
comparable services to unaffiliated third parties.
Section 2. Compensation.
FTDI will pay to xxx.xxx when due a fee for each of the Services equal to
the amount described in Exhibit A hereto relating to such Service, provided that
in the event FTDI terminates any Service in accordance with Section 3 hereof,
the fee for such Service shall cease to accrue on and after the effective date
of such termination. Late payments shall accrue interest at a rate equal to
xxx.xxx's average cost of borrowings at the end of xxx.xxx's most recent fiscal
quarter plus 200 basis points.
Section 3. Term.
(a) The term of this Agreement shall begin on the date hereof (the
"Effective Date") and shall continue for a period of 12 months in full force and
effect until it is terminated in accordance with this Section 3 and shall be
automatically renewed for like periods of 12 months unless notice of election
not to renew is given by either party at least 90 days prior to the commencement
of any renewal period.
(b) xxx.xxx shall have the right (but not the obligation) to terminate
this Agreement and the rights granted to FTDI hereunder if:
(i) FTDI is in material breach of any of its obligations hereunder,
which breach is not cured within 20 days of receipt of written notice from
xxx.xxx of such breach;
(ii) FTDI is the subject of a voluntary petition in bankruptcy or any
voluntary proceeding relating to insolvency, receivership, liquidation or
composition for the benefit of creditors, if such petition or proceeding is
not dismissed within 90 days of filing, or becomes the subject of any
involuntary petition in bankruptcy or any involuntary proceeding relating
to insolvency, receivership, liquidation or composition for the benefit of
creditors, if such petition or proceeding is not dismissed within 90 days
of filing;
(iii) FTDI involuntarily dissolves or is dissolved; or
(iv) FTDI is judicially adjudicated insolvent or generally is unable
to pay its debts as they mature or makes an assignment for the benefit of
its creditors.
(c) FTDI shall have the right (but not the obligation) to terminate this
Agreement and the rights granted to xxx.xxx hereunder if:
(i) xxx.xxx is in material breach of any of its obligations
hereunder, which breach is not cured within 20 days of receipt of written
notice from FTDI of such breach;
(iii) xxx.xxx is the subject of a voluntary petition in bankruptcy or
any voluntary proceeding relating to insolvency, receivership, liquidation
or composition for the benefit of creditors, if such petition or proceeding
is not dismissed within 90 days of filing, or becomes the subject of any
involuntary petition in bankruptcy or any involuntary proceeding relating
to insolvency, receivership, liquidation or composition
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for the benefit of creditors, if such petition or proceeding is not dismissed
within 90 days of filing;
(iii) xxx.xxx involuntarily dissolves or is dissolved; or
(iv) xxx.xxx is judicially adjudicated insolvent or generally is
unable to pay its debts as they mature or makes an assignment for the
benefit of its creditors.
(d) FTDI will have the right (but not the obligation) to terminate this
Agreement and the rights granted to xxx.xxx hereunder, upon 90 days written
notice to xxx.xxx, following the acquisition of the beneficial ownership of at
least 20% (the "Threshold") of the voting power represented by the voting
securities of xxx.xxx, any successor thereto or any Permitted Assignee (as
defined in Section 9(a) of this Agreement) by any person or "group" within the
meaning of Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") or any successor provision to either of
the foregoing, including any group acting for the purpose of acquiring, holding
or disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act or any successor provision thereof (a "group") other than FTD
Corporation, a Delaware corporation ("FTDC"), any affiliate of FTDC, FTDI or any
affiliate of FTDI. For purposes of this Agreement, (i) the term "beneficial
ownership" shall have the meaning set forth in Rule 13d-3 of the Exchange Act or
any successor provisions thereof, (ii) the term "voting securities" means the
Class A Common Stock, par value $.01 per share, and Class B Common Stock, par
value $.01 per share, of xxx.xxx and any other securities issued by xxx.xxx
having the power to vote generally in the election of directors of xxx.xxx and
(iii) the term "affiliate" means a person or entity directly or indirectly
controlled by, controlling or under common control with another person. For
purposes of this Section 3, an acquisition shall not include (A) the acquisition
by a person of voting securities of xxx.xxx pursuant to an involuntary
disposition by FTDI through foreclosure or similar event or (B) the acquisition
by a person of voting securities of xxx.xxx pursuant to a dividend intended to
be on a tax-free basis (a "Tax-Free Spin-Off") under the Internal Revenue Code
of 1986, as amended from time to time, but shall include a subsequent
acquisition of voting securities pursuant to a disposition by the person that
acquired the voting securities in such involuntary disposition or such Tax-Free
Spin-Off. In the event any person acquires beneficial ownership of voting power
in excess of the Threshold as a result of a transaction described in the
immediately preceding sentence, the Threshold with respect to such person shall
be adjusted to an amount equal to the percentage of beneficial ownership held by
such person immediately following such transaction.
(e) A party may exercise its right to terminate pursuant to this Section 3
by sending appropriate written notice to the other party. No exercise by a party
of its rights under this Section 3 will limit its remedies by reason of the
other party's default, the party's rights to exercise any other rights under
this Section 3, or any of that party's other rights.
Section 4. Records and Accounts.
xxx.xxx will maintain accurate books, records and accounts of all
transactions relating to the Services performed by it pursuant to this
Agreement. FTDI may, at its own expense, examine and copy those books and
records as provided in this Section 4. Such books, records and accounts will be
maintained in a manner that allows FTDI to separate these matters from those
relating to xxx.xxx's other operations. Such books, records and accounts will
reflect such
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information as would normally be examined by an independent accountant in
performing an audit pursuant to United States generally accepted auditing
standards for the purpose of certifying financial statements, and to permit
verification thereof by governmental agencies. FTDI may make examinations
pursuant hereto during xxx.xxx's usual business hours, and at the place in the
continental United States where xxx.xxx regularly keeps these books and records.
FTDI will be required to notify xxx.xxx at least two business days before the
date of planned examination. If FTDI's examination is not completed within two
months from commencement, xxx.xxx at any time may require FTDI to terminate such
examination on seven days' notice to FTDI, provided that xxx.xxx has cooperated
with FTDI in the examination of such books and records.
Section 5. No Restrictions.
Nothing in this Agreement shall limit or restrict the right of any of
FTDI's directors, officers or employees or any of xxx.xxx's directors, officers
or employees to engage directly or indirectly in the same or similar business
activities or lines of business as FTDI or xxx.xxx, respectively, or limit or
restrict the right of FTDI or xxx.xxx, as the case may be, to engage in any
other business or to render or obtain, as the case may be, services of any kind
to or from, as the case may be, any corporation, firm, individual, trust or
association.
Section 6. Independent Contractors.
xxx.xxx and FTDI are independent contractors. There is no relationship of
partnership, joint venture, employment, franchise or agency between xxx.xxx and
FTDI. Neither xxx.xxx nor FTDI shall have the power to bind the other or incur
obligations on the other's behalf without the other's prior written consent.
When xxx.xxx's employees act under the terms of this Agreement, they shall be
deemed at all times to be under the supervision and responsibility of xxx.xxx;
and no person employed by xxx.xxx and acting under the terms of this Agreement
shall be deemed to be acting as agent or employee of FTDI or any customer of
FTDI for any purpose whatsoever.
Section 7. Confidentiality.
xxx.xxx and FTDI each agree to hold in strict confidence, and to use
reasonable efforts to cause each of their employees and representatives to hold
in strict confidence, all confidential information concerning xxx.xxx or FTDI,
as the case may be, furnished to or obtained by the other party, in the course
of performing the obligations provided for under this Agreement except to the
extent that (a) such information has been in the public domain through no fault
of xxx.xxx or FTDI, as the case may be, (b) disclosure or release is compelled
by judicial or administrative process or (c) in the opinion of counsel to
xxx.xxx or FTDI, as the case may be, disclosure or release is necessary pursuant
to requirements of law or the requirements of any governmental entity including,
without limitation, disclosure requirements under the securities laws of the
United States or similar laws of other jurisdictions applicable to xxx.xxx or
FTDI, as the case may be.
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Section 8. Dispute Resolution.
(a) In the event that any party to this Agreement has any claim, right or
cause of action against any other party to this Agreement, which the parties
shall be unable to settle by agreement between themselves, such claim, right or
cause of action, to the extent that the relief sought by such party is for
monetary damages or awards, shall be determined by arbitration in accordance
with the provisions of this Section 8.
(b) The party or parties requesting arbitration shall serve upon the other
or others a demand therefor, in writing, specifying the matter to be submitted
to arbitration, and nominating a competent disinterested person to act as an
arbitrator. Within 30 days after receipt of such written demand and nomination,
the other party or parties shall, in writing, nominate a competent disinterested
person, and the two (2) arbitrators so designated shall, within 15 days
thereafter, select a third arbitrator. The three (3) arbitrators shall give
immediate written notice of such selection to the parties and shall fix in said
notice a time and place of the meeting of the arbitrators which shall be as soon
as conveniently possible (but in no event later than 30 days after the
appointment of the third arbitrator), at which time and place the parties to the
controversy shall appear and be heard with respect to the right, claim or cause
of action.
(c) In case the notified party or parties shall fail to make a selection
upon notice within the time period specified, the party asserting such claim
shall appoint an arbitrator on behalf of the notified party. In the event that
the first two (2) arbitrators selected shall fail to agree upon a third
arbitrator within 15 days after their selection, then such arbitrator may, upon
application made by either of the parties to the controversy, be appointed by
any judge of any United States court of record having jurisdiction in the State
of Illinois.
(d) Each party shall present such testimony, examinations and
investigations in accordance with such procedures and regulations as may be
determined by the arbitrators and shall also recommend to the arbitrators a
monetary award to be adopted by the arbitrators as the complete disposition of
such claim, right or cause of action. After hearing the parties in regard to
the matter in dispute, the arbitrators shall adopt as their determination with
respect to such claim, right or cause of action, within 45 days of the
completion of the examination, by majority decision signed in writing (together
with a brief written statement of the reasons for adopting such recommendation),
one of the recommendations submitted by the parties to the dispute and shall
grant no other relief or remedy. The decision of said arbitrators, absent
fraud, duress or manifest error, shall be final and binding upon the parties to
such controversy and may be enforced in any court of competent jurisdiction.
(e) The expense and cost of such arbitration shall be borne by the party or
parties whose recommendation was not adopted by the arbitrators. Each party
shall pay the fees and expenses of its own counsel.
(f) Notwithstanding any other provisions of this Section 8, in the event
that a party against whom any claim, right or cause of action is asserted
commences, or has commenced against it, bankruptcy, insolvency or similar
proceedings, the party or parties asserting such claim, right or cause of action
shall have no obligations under this Section 8 and may assert such
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claim, right or cause of action in the manner and forum it deems appropriate,
subject to applicable laws. No determination or decision by the arbitrators
pursuant to this Section 8 shall limit or restrict the ability of any party
hereto to obtain or seek in any appropriate forum, any relief or remedy that is
not a monetary award or money damages.
Section 9. Miscellaneous.
(a) Neither party may assign this Agreement, or their respective rights and
obligations hereunder, in whole or in part without the other party's prior
written consent. Any attempt to assign this Agreement without such consent shall
be void and of no effect ab initio. Notwithstanding the immediately preceding
sentence, either party may assign this Agreement or all, but not less than all,
of its rights and obligations hereunder to any entity controlled by it or to any
entity that acquires it by purchase of stock or by merger or otherwise, or by
obtaining all or substantially all of its assets (a "Permitted Assignee"),
provided that any such Permitted Assignee, or any division thereof, thereafter
succeeds to all of the rights and is subject to all of the obligations of the
assignor under this Agreement; provided, however, the provisions of this Section
9(a) shall in no way modify the provisions of Section 3(d).
(b) This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Illinois applicable to agreements made and to
be performed entirely within such State, without regard to the conflicts of law
principles of such State. Each party shall comply in all respects with all laws
and regulations applicable to its activities under this Agreement.
(c) Notwithstanding the provisions of Section 8, each party hereto
irrevocably submits to the exclusive jurisdiction of (a) the courts of the State
of Illinois, DuPage County, or (b) the United States District Court for the
Northern District of Illinois, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby
or thereby. Each of FTDI and xxx.xxx agrees to commence any such action, suit or
proceeding either in the United States District Court for the Northern District
of Illinois or if such suit, action or other proceeding may not be brought in
such court for jurisdictional reasons, in the courts of the State of Illinois,
DuPage County. Each of FTDI and xxx.xxx further agrees that service of any
process, summons, notice or documents by U.S. registered mail to such party's
respective address set forth below shall be effective service of process for any
action, suit or proceeding in Illinois with respect to any matters to which it
has submitted to jurisdiction in this Section 9(c). Each of FTDI and xxx.xxx
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby and thereby in (i) the courts of the State of Illinois,
DuPage County, or (ii) the United States District Court for the Northern
District of Illinois, and hereby and thereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
(d) If any provision of this Agreement (or any portion thereof) or the
application of any such provision (or any portion thereof) to any person or
circumstance shall be held invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision hereof (or the remaining portion thereof)
or the application of such provision to any other persons or circumstances.
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(e) All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered by hand or sent, postage
prepaid, by registered, certified or express mail or reputable overnight courier
service and shall be deemed given when so delivered by hand, or if mailed, three
days after mailing (one business day in the case of express mail or overnight
courier service), as follows:
(i) if to xxx.xxx,
xxx.xxx inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: President
(ii) if to FTDI,
Florists' Transworld Delivery, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: President
(f) The provisions of Sections 7, 8 and 9 hereof shall survive any
termination of this Agreement.
(g) No failure of either party to exercise or enforce any of its rights
under this Agreement shall act as a waiver of such right.
(h) This Agreement, along with the Exhibits hereto, contains the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. Neither party shall be liable or bound to any
other party in any manner by any representations, warranties or covenants
relating to such subject matter except as specifically set forth herein.
(i) This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more such counterparts have been signed by each of the parties and
delivered to each of the other parties.
(j) This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto; provided, however, that as long
as (1) FTDC beneficially owns 25% or more of the voting power represented by the
voting securities of xxx.xxx, and no other Person directly or beneficially owns
a greater percentage of such voting power, or (2) directors, officers or
affiliates of FTDC or its subsidiaries constitute a majority of the members of
xxx.xxx's board of directors, no amendment of this Agreement will be valid
unless it has been approved by at least a majority of the members of xxx.xxx's
board of directors, which majority must include at least one-half of members of
xxx.xxx's board of directors who are "independent" directors pursuant to the
applicable rules of Nasdaq or any national stock exchange on which xxx.xxx's
equity securities are then traded or listed.
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(k) This Agreement is for the sole benefit of the parties hereto and
nothing herein expressed or implied shall give or be construed to give to any
person, other than the parties hereto any legal or equitable rights hereunder.
(l) The headings contained in this Agreement or in any Exhibit hereto are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All Exhibits annexed hereto or referred to
herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein. Any capitalized terms used in any Exhibit but not
otherwise defined therein, shall have the meaning as defined in this Agreement.
When a reference is made in this Agreement to a Section or an Exhibit, such
reference shall be to a Section of, or an Exhibit to, this Agreement unless
otherwise indicated.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
xxx.xxx inc.
By:
----------------------------
Name:
Title:
Florists' Transworld Delivery, Inc.
By:
----------------------------
Name:
Title:
EXHIBIT A
ONLINE HOSTING SERVICES
If requested by FTDI, xxx.xxx will provide, by itself or through its
subsidiaries, the services described below:
(a) Scope and Description of Services. xxx.xxx will provide FTDI with all
online hosting services currently provided to FTDI directly by xxx.xxx or by
xxx.xxx through third party contracts, including, without limitation, the
development and maintenance for FTD florists of Commerce Web Subsites (as
defined below) within the xxx.xxx.xxx web site on the Internet based on each
member florist's completed FTD Florists Online Enrollment and Information Forms
submitted by the florist in conformance with FTDI's instructions.
Notwithstanding anything herein to the contrary, xxx.xxx and FTDI will mutually
agree, from time to time, with respect to the placement of the link to this
information and the manner in which this link appears on its web site. If a
consumer places an order directly on a florist's Commerce Web Subsite, xxx.xxx
agrees to transmit such order to FTDI's Mercury Network and FTDI will convert
that order to a Mercury message and direct the order to that florist for
fulfillment, with FTDI receiving 100% of the order's value subject to any
processing charges. For the purposes of this Agreement, the term "Commerce Web
Subsite" means a Web site through which a consumer can place an order for floral
or specialty gift products.
(b) Price. For the services described above, FTDI will pay xxx.xxx a
monthly fee of $50 for each florist Commerce Web Subsite hosted on xxx.xxx.
(c) Payment and Accounting. xxx.xxx will invoice FTDI within 15 days of
the end of each month for services rendered in such month. FTDI will pay such
invoice within 30 days of receipt.
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