CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION, PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
EXHIBIT 10.9
DEVELOPMENT AND HOSTING AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of the
18th day of June, 1999 (the "Effective Date"), by and between Fry Multimedia,
Inc., a Michigan corporation, with offices at 0000 Xxxxx Xxxxxxxx Xxxx Xxxxx,
Xxx Xxxxx, Xxxxxxxx 00000 ("Fry"), and 800-Gifthouse, Inc. a New York
corporation, with offices at 0000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 000000
("Client").
Recitals
WHEREAS, Fry is in the business of offering Internet services
relating to, among other things, development, maintenance and hosting of
Internet sites, including those on the World Wide Web portion of the Internet;
WHEREAS, Fry has, and continues to, provide Internet development,
maintenance and hosting services to Client; and
WHEREAS, Client owns various web sites, including without limitation
at the domains xxx.0000xxxxxxx.xxx, xxx.xxxxxxxxxx.xxx and xxx.xxxxxxxxx.xxx and
from time to time will develop, own and operate other web sites (collectively,
the "Client Sites");
WHEREAS, Client desires to engage Fry to continue to provide, and
Fry desires to continue to be engaged by Client, to provide such services with
respect to the Client Sites on the terms and subject to the conditions set forth
below.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, Fry and Client (each a "Party," collectively, the "Parties") hereby
agree as follows:
1. Fry Services. Fry agrees to provide to Client the development,
maintenance and hosting services set forth in this Agreement (the
"Services"). Each [****], by on or about [****], Client shall submit to Fry a
written plan with the proposed development, maintenance and hosting
requirements of Client for the [****] period commencing [****] of that year.
Within [****] days of receipt of such plan, Fry shall respond to Client in
writing with respect to its capacity, pricing (on a fixed-price basis unless
otherwise specified) and timetable for each of the development, maintenance
and hosting services for such upcoming year (provided that pricing as to all
hourly rates shall not increase as to any service or item at more than at the
rate of [****] during the most recent [****] month period). Client and Fry
shall then negotiate in good faith to agree upon a final plan for such period
and upon execution by each party of such plan and the Specifications,
Deliverables (each as defined below), terms and conditions thereof shall
become an exhibit to this Agreement and incorporated herein as the "Annual
Plan." In addition to the Annual Plan, Client may request additional services
from Fry and Fry shall provide such additional services as set forth in this
Agreement. With respect to the period from the date hereof until [****] or
such later date as the next Annual Plan shall be
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
A-1
agreed upon by the parties, the Annual Plan attached as Exhibit A hereto shall
be deemed to be the current Annual Plan hereunder. In the event for any reason
that the Annual Plan for a year is not agreed upon by the parties by [****] of
any year, the Annual Plan then in effect (for the prior period) shall remain in
effect until the new Annual Plan is agreed upon.
2. Development Services.
2.1 Specifications; Deliverables, Pricing and Timetable. Fry
shall perform the development services set forth in the Annual Plan in
accordance with the specifications (the "Specifications"), deliverables (the
"Deliverables"), pricing and timetable therefor contained in the Annual Plan, or
if Client desires to engage Fry for the provision of any other development
services from time to time, in a project brief negotiated in good faith by the
parties containing such information (each a "Project Brief") in the form
attached hereto as Exhibit B as mutually agreed by the parties. Each fully
executed Project Brief shall be incorporated into the then applicable Annual
Plan and shall be subject to the terms and conditions of this Agreement (except
as specifically superseded by the relevant Project Brief).
2.2 Acceptance Testing. Promptly after the delivery of any
Deliverable, Client shall test the Deliverable (the "Acceptance Tests") for
up to [****] business days to determine whether the Deliverable: (i) performs
in accordance with the Specifications and without failure in all material
respects and (ii) operates with internal consistency. In the event that the
Deliverable is accepted by Client, Client shall notify Fry in writing that it
accepts the Deliverable, and the date of such written notification (the
"Acceptance Date ") shall be the date on which Fry shall be entitled to
invoice the payment for the Deliverable. In the event that any Deliverable is
not accepted, Client shall provide written notice to Fry describing the
deficiency in sufficient detail to allow Fry to attempt to correct the
deficiency. After receiving written notice of a deficiency, Fry will exert
its best efforts to correct the deficiency so that the Deliverable: (i)
performs appropriately and repetitively without failure in all material
respects and (ii) operates with internal consistency. The acceptance
procedure in this Section 2.2 will be repeated with respect to the revised
Deliverable to determine whether it is acceptable to Client, unless and until
Client issues a final rejection of the revised Deliverable after rejecting
the Deliverable on at least [****] prior occasions. If Client issues such a
final rejection of the revised Deliverable or notifies Fry in writing that it
chooses to not proceed with development due to failure of Fry to deliver a
Deliverable within [****] days of the due date therefor in the project
schedule, Fry shall promptly refund to Client any fees paid by Client for
such Deliverable. In the event that any Deliverable or revised Deliverable is
not rejected in writing and delivered to Fry within [****] business days
after delivery, the Deliverable or revised Deliverable shall be deemed
accepted by Client and Fry shall be entitled to invoice Client for payment
therefor. In the event that any Deliverable or revised Deliverable is finally
rejected, it shall be returned with all copies to Fry at the time of
rejection.
2.3 Limited Warranty. Fry warrants to Client that each
Deliverable shall perform and operate in accordance with the Specifications
therefor for a period of [****] following their acceptance by Client.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
2.4 Ongoing Consultation. Fry agrees to consult, strategize
and coordinate with Client, throughout the provision of Fry's services hereunder
to ensure Client's satisfaction with and approval of each aspect of its
development services and Deliverables.
3. Proprietary Rights and Confidentiality.
3.1 Work for Hire; Assignment. Except for Fry Material, Fry
agrees that all the results and proceeds of Fry's work on or for Client or its
affiliates, including relating to any of the Client Sites, and the content of
the Client Sites itself, shall be owned exclusively by Client (or Client's
designee), including the copyright and other intellectual property rights
thereto (including the look and feel and user interface portions of any work).
Fry agrees that all work performed under this Agreement (and the results
thereof) shall be deemed as "work for hire," of which Client shall be deemed the
author, to the extent such works qualify as such in accordance with applicable
law. In the event, for any reason, any such results or proceeds are not
qualified as work for hire, Fry hereby irrevocably assigns to Client all of its
right, title and interest in such results and proceeds and content to Client.
Fry agrees that Fry (and his affiliates or subcontractors) will sign all papers
and do all acts reasonably necessary or desirable for Client to perfect such
ownership rights, provided that Fry shall not be responsible for the payment of
any filing fees or other out-of-pocket costs associated with perfection of such
ownership rights. Fry hereby irrevocably transfers and assigns to Client any and
all Moral Rights that it may have in any of the services or work. Fry also
hereby forever waives and agrees never to assert against Client, its successors
or licensees, any and all Moral Rights Fry may have in any Services or work
hereunder (except for Fry Material), even after expiration or termination of
this Agreement. "Moral Rights" means any right to claim authorship of a work,
any right to object to any distortion or other modification of the work, and any
similar right, existing under the law of any country in the world or under any
treaty.
3.2 Fry Material. Fry hereby grants to Client and its
sublicensees, successors and assigns a nonexclusive, perpetual and irrevocable
license to use the software or materials owned by Fry which is used to maintain,
update, edit, modify, terminate, redesign and otherwise operate and service the
Client Sites and any version or derivation thereof, without further payment
("Fry Material"), but only to the extent necessary to maintain, update, edit,
modify, terminate, redesign and otherwise operate and service the Client Sites
(wherever hosted) developed as a result of work directly performed and delivered
under this Agreement, including without limitation any back-up, mirrored or
disaster recovery sites or servers.
3.3 Third Party Licensed Material. Attached as Exhibit C is a
complete inventory of the third-party software (including version numbers) used
or needed to maintain, update, edit, modify, terminate, redesign and otherwise
operate and service the Client Sites and a breakdown between software directly
licensed by Client and software licensed by Fry. This exhibit will be updated by
Fry (and to the extent of its knowledge, by Client) from time to time as soon as
practicable after such software inventory changes. In the event Client desires
to be a direct licensee of any software on Exhibit C for which it is not the
direct licensee, Fry shall arrange for Client to be a direct licensee of such
software at Client's expense. Client (or Fry as applicable) shall have perpetual
irrevocable licenses to all software listed on Exhibit C (except as otherwise
indicated on Exhibit C), as the same shall be modified and supplemented from
time to time.
3.4 Proprietary Rights of Client; Domain Names. As between
Client and Fry, all data, information and other property, tangible and
intangible, provided by or created on behalf of Client or its subcontractors or
information providers, including without limitation software (including
algorithms and source code), firmware and hardware, technical processes and
formulas, source codes, product designs, sales data, store data, product data,
transaction data, customer data, usage data, advertising data, cost and pricing
data, other non-publicly disclosed financial information, product information,
product, marketing and business plans, advertising revenues and relationships,
usage rates, projections and marketing data and all other data received,
transmitted or stored on behalf of Client. or relating to Client and/or Client
Sites or those of its affiliates ("Client Content") shall remain the sole and
exclusive property of Client, including, without limitation, all copyrights,
trademarks, patents, trade secrets and any other proprietary rights therein.
Nothing in this Agreement shall be construed to xxxxx Xxx any ownership right
in, or license to, the Client Content. Fry shall assist Client at Fry's standard
charges (plus third party registration fees) in obtaining domain names (and, if
applicable, Internet Protocol addresses) but shall ensure that Client's
designated employee is named as the Administrative Contact for each such
registration on behalf of Client.
3.5 Client's Ownership. Client shall be the exclusive owner of
the Client Sites and all aspects thereof, except as set forth in Sections 3.2
and 3.3 above. Client shall have the right to modify, edit, destroy, license,
exploit or use the Client Sites in any way, without compensation or consultation
with Fry. Fry shall have no obligation to repair, modify or maintain the Client
Sites to the extent that Client's use of such component of the Client Sites is
in violation of law or regulation.
3.6 Confidentiality. Fry acknowledges that Client has provided
Fry to date with extensive confidential information concerning its business,
procedures, plans, and other confidential information and each party agrees that
during the course of this Agreement, that such confidential information and
other information that is confidential or proprietary may be disclosed to the
other party, including, but not limited to all software (including without
limitation source code (including algorithms) written on behalf of Client by
Fry, except as otherwise provided herein), technical processes and formulas,
source codes, product designs, sales data, store data, product data, transaction
data, customer data, usage data, advertising data, cost and pricing data, other
non-publicly disclosed financial information, product information and product
and business plans, , advertising revenues and relationships, usage rates,
projections and marketing data and all other data received, transmitted or
stored on behalf of Client. or relating to Client and/or Client Sites or those
of its affiliates, ("Confidential Information"). Confidential Information shall
not include information that the receiving party can demonstrate (a) is, as of
the time of its disclosure, or thereafter becomes part of the public domain
through a source other than the receiving party, (b) was known to the receiving
party as of the time of its disclosure, (c) is independently developed by the
receiving party w/o use of the Confidential Information, or (d) is subsequently
learned from a third party not under a confidentiality obligation to the
providing party. Except as provided for in this Agreement, each party shall not
make any disclosure of the Confidential Information to anyone other than its
employees who have a need to know in connection with this Agreement. Each party
shall notify its employees of their confidentiality obligations with respect to
the Confidential Information and shall require its employees to comply with
these obligations. In the event that either Party is compelled by law (whether
through court order or subpoena) to disclose Confidential Information, the
disclosing
Party shall provide the other Party with notice of such compelled disclosure and
a reasonable opportunity to contest it and shall seek a protective order. In the
event that a Party divulges or seeks to divulge or otherwise improperly use any
such Confidential Information, the other Party shall have the right, in addition
to any other remedies available to it, to seek injunctive relief to enjoin such
acts, it being specifically acknowledged by the Parties that any other remedies
are inadequate. The confidentiality obligations of each party and its employees
shall survive the expiration or termination of this Agreement. The particular
terms and conditions of this Agreement are confidential and shall not be
disclosed by either party without the prior written consent of the other party
(except as deemed necessary or appropriate by counsel to Client to comply with
securities and other applicable laws or as required pursuant to judicial or
other government order provided that notice of such order is given to the other
party promptly after its receipt). Except for mutually agreeable press releases
(with each party's prior written consent, which shall not be unreasonably
withheld or delayed), no public announcements relating to this Agreement shall
be issued by either party. Notwithstanding anything stated herein, the parties
agree to allow each other to issue individual press releases announcing the
relationship initiated or continued hereunder and as appropriate to cooperate in
other joint promotional opportunities and announcements.
3.7 Grant of License -- Client. Client hereby grants to Fry a
non-exclusive, worldwide, royalty-free license for the Initial Term and any
Renewal Term (as those terms are hereinafter defined) to edit, modify, adapt,
translate, exhibit, publish, transmit, participate in the transfer of,
reproduce, create derivative works at Client's direction from, distribute,
perform, display and otherwise use Client Content as necessary to render the
Services to Client under this Agreement. In no event will Fry remove or alter
any proprietary notice of Client, or any third party, contained on any of the
Client Sites without the prior written consent of Client.
3.8 Grant of License -- Fry. Fry hereby grants to Client a
limited, non-exclusive, non-transferable perpetual license to make use of Fry
Materials which are incorporated in the Client Sites and which are required for
the operation of the Client Sites solely to operate the Client Sites on the Fry
Server as well as on any back-up, disaster recovery or mirrored servers and web
sites of Client or its affiliates whether hosted by Fry, Client or by a third
party. Fry hereby reserves for itself all rights in and to the Fry Materials not
expressly granted to Client in the immediately foregoing sentence. In no event
shall Client use any trademarks or service marks of Fry without Fry's prior
written consent.
4. Hosting, Communications and Maintenance Services
4.1 Hosting Services. Fry agrees to provide Client with
services for hosting of each of the Client Sites specified in the Annual Plan.
Fry shall provide the hosting services in a professional, workmanlike manner,
and high grade of service, so that the Client Sites are accessible to third
parties via the Internet as specified herein and in the Configuration.
4.2 Availability of the Client Sites. Unless otherwise
indicated on Schedule 1.2 hereto, the Client Sites shall be accessible to third
parties and Client via the Internet and otherwise as specified in the Annual
Plan or the Configuration twenty-four (24) hours a day, seven (7) days a week,
except for scheduled maintenance and required repairs
during such non-Key Time Periods as Client and Fry mutually agreed in advance
("Scheduled Maintenance").
4.3 Updates. As part of the hosting Services, Fry shall
provide Client with a system and the necessary software to allow Client to
transmit revisions, updates, deletions, Deliverables or modifications (the
"Updates") to a staging server designated and maintained by Fry (the "Staging
Server"). Fry shall update the Fry Server with the Updates according to a
written schedule agreed upon by Client and Fry and contained in the Annual Plan.
4.4 Proprietary Rights of Client. As between Client and Fry,
Client Content shall remain the sole and exclusive property of Client,
including, but not limited to data generated by the Client Sites such as Client,
end user and usage data. Nothing in this Agreement shall be construed to grant
to Fry any ownership right in, license to, or authority to edit, modify or adapt
the Client Content provided by Client to Fry.
4.5 Access and Security. Fry shall maintain a secure room(s)
in which all of Client's equipment and data shall be located and stored (the
"Client Area"). Access to the Client Area shall be limited by Fry solely to (i)
the individuals identified and authorized by Client to have access to the Client
Area in accordance with this Agreement, as identified in the writing to Fry, as
amended from time to time, which is hereby incorporated by this reference (the
"Representatives") and Fry's engineers, senior engineers, system administrators,
equivalent systems personnel and senior management (and as necessary and with
appropriate supervision, other service personnel) authorized by Fry based on
their need to have access to perform the services hereunder. Representatives
shall have access to the Client Area and any other location in where any Client
equipment or data is located twenty-four (24) hours a day, seven (7) days a
week.
4.6 Backup; Redundancy. Fry shall provide Client at all
times with the equipment, software, communications capacity and carriers and
power backup and redundancy set forth in the Configuration attached hereto as
Exhibit D, provided that in any event Fry shall always provide Client with
sufficient local generator backup power capacity to fully operate all of
Client's equipment and each of the Client Sites for at least [****]
consecutive hours. The parties acknowledge that Fry currently has [****]
under construction in [****] and that Fry shall use its best efforts to
provide complete redundancy for each of the Client Sites (and all related
data and Client Content) in at least one such facility as soon as possible
and in accordance with the Annual Plan and Configuration, but not later than
[****].
All Client data and customer data and all transaction and other data
generated by any of the Sites (including all Client Content contained on or
generated by any of the Sites) , directly or indirectly, will be copied and
stored off-site by Fry (or through a subcontractor to be identified by Fry and
approved by Fry) on at least weekly basis with a third-party fireproof storage
facility.
4.7 Communications Services. Fry shall provide the
communications services and capacities set forth in the Annual Plan and
Configuration.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
4.8 Client Equipment. Fry acknowledges that the computer
hardware and other tangible equipment listed on Exhibit E hereto is owned by
Client and shall be returned unencumbered to Client in good working order
(ordinary wear and tear excepted) promptly upon Client's request; provided
however if any such equipment is leased by Client from a third party, Fry shall
cooperate with Client with respect to the return and safekeeping of such
equipment as required by the lessor.
4.9 Maintenance, Error Correction and Support Obligations.
(a) Definitions.
Authorized Caller. "Authorized Caller" means a person or
persons designated by Client as the technical/engineering support interface for
the Work performed hereunder or any of the Client Sites.
Designated Support Engineer. "Designated Support
Engineer" means a person or persons designated by Fry as the
technical/engineering support interface for the Work performed hereunder or any
of the Client Sites.
End User. "End User" means a customer or other user of
any of the Client Sites.
Error. "Error" means a defect in the Services performed
or provided under this Agreement or in the operation of any of the Client Sites
which causes such Services performed hereunder or the performance of any of the
Client Sites not to function substantially in conformance with the
documentation, end user documentation, or other related documentation, including
without limitation any functional documentation or other engineering
documentation for the Services performed hereunder or in any of the Client
Sites, or commonly accepted operating principles as defined by industry
standards. Errors are classified as follows:
Severity 1: System or subsystem failure which results in
a critical impact to business operations. No viable workaround is known to
Client.
Severity 2: Critical System or subsystem service
interruption or degradation creating difficulty in the execution of a material
function. Client acceptable workaround is available.
Severity 3: Significant system or subsystem problems
which prevent some material functions from meeting the Specifications. Some
business operations are impaired, but the system and subsystems continue to
function. Client acceptable workaround is available.
Severity 4: Failure to perform in substantial
accordance with the Documentation, but not a Severity 1-3 Error.
Severity 5: Deliverable requests for hardware, software,
manuals or services.
Incident. "Incident" means a situation which
necessitates an End User to contact Client for assistance.
Problem. "Problem" means the perceived failure or
functional impairment that causes reduced functionality to the Work performed
hereunder or in any of the Client Sites.
Problem Priorities. "Problem Priorities" classify the
criticality of a problem at a Client site. Problem Priorities are assigned at
the time of Client's initial contact with Fry. Problem Priorities may be changed
based upon new information or Client situation. Problem Priorities refer the
classification of the Incident, not any resulting Error which may be identified
during the resolution of the Incident. Problem Priorities are classified as
follows:
Severity 1: Client is "hot"; there is risk of losing
business.
Severity 2: Client "temperature is rising"; there is
potential risk of losing actual or future business.
Severity 3: The problem is impacting the Client's day to
day business; there is no risk of losing business.
Severity 4: The problem is not currently impacting the
Client's day to day business, but may in the future; there is no risk of losing
business.
Repair. "Repair" means the repair or replacement of a
Work performed hereunder or in any of the Client Sites or part.
Technical Support Levels. "Level" means a certain class
of service provided to authorized resellers and end users. Definitions are as
follows:
Level One: First call support on all Client calls;
technical support staff answers technical inquiries regarding Work performed
hereunder or in any of the Client Sites, performs Work performed hereunder or in
any of the Client Sites installation and configuration support, provides broad
troubleshooting expertise.
Level Two: Specialist level technical support; technical
support/escalation staff performs Problem isolation and replication, lab
simulations and interoperability testing, provides remote diagnostics
capabilities and on-Client Sites troubleshooting, if required, and implements a
solution for a Problem that is not the result of a Work performed hereunder or
in any of the Client Sites Error. In the case of a Work performed hereunder or
in any of the Client Sites Error, the technical staff is able to identify the
source of the Error, create a reproducible test case, and document the details
of the Error for escalation to Fry.
Level Three: Backup engineering and technical support;
staff isolates a Work performed hereunder or in any of the Client Sites error
and implements a solution through a Work performed hereunder or in any of the
Client Sites change.
Workaround. A "Workaround" is a feasible change in
operating procedures whereby an end user can avoid any deleterious effects of an
Error.
(b) Error Correction. Client and Fry shall promptly
agree in good faith to any information and/or documentation which may be
required to permit Fry to identify and resolve Errors (meaning to correct the
Error to restore compliance with specifications and Documentation) in any of the
Services performed hereunder or in any of the Client Sites. The Error correction
period begins after Fry (a) has enough information to profile the Error and (b)
can recreate the Error or has access to a facility where the Error can be
recreated. Fry agrees to respond to identified Errors based on the following
time-table:
Severity 1 Errors. Fry shall use best efforts to
resolve or reduce the severity via Workaround and/or patch within [****]
(during any Key Time Period and [****] during any non-Key Time Period) of
receipt of notice of such Error and use best efforts to resolve the Error
within [****] days of receipt of notice of such Error. Fry shall provide its
action plan within [****] days of such notice, and shall provide regular
status updates. A final engineering resolution shall be identified in the
action plan. Client and Fry problem managers shall review the incident after
such [****] day period.
Severity 2 Errors. Fry shall use best efforts to
resolve or reduce the severity via Workaround and/or patch within [****]
(during any Key Time Period and [****] during any non-Key Time Period) of
receipt of notice of such Error and use best efforts to resolve the Error
within [****] days of receipt of notice of such Error. Fry shall provide an
action plan within [****] days of such notice, and provide regular status
updates. Client and Fry problem managers shall review incident after [****]
days. A final engineering resolution shall be identified in the action plan.
A final engineering resolution shall be identified in the action plan. Client
and Fry problem managers shall review the incident after such [****]day
period.
Severity 3 Errors. Fry shall use reasonable
commercial efforts to resolve or reduce the severity via Workaround and/or
patch within [****] ([****] during any non-Key Time Period) of receipt of
notice and use best efforts to resolve within [****] days of receipt of
notice. Fry shall provide an action plan within [****] days of such notice,
and provide regular status updates. Client and Fry problem managers shall
review incident after [****] days. A final engineering resolution shall be
identified in the action plan. A final engineering resolution shall be
identified in the action plan. Client and Fry problem managers shall review
the incident after such [****]day period.
Severity 4 Errors. Fry shall use reasonable
commercial efforts to resolve or reduce the severity via Workaround and/or
patch within [****] ([****] during any non-Key Time Period) of receipt of
notice and use best efforts to resolve within [****] days of receipt of
notice. Fry shall provide an action plan within [****] days of such notice,
and provide regular status updates. Client and Fry problem managers shall
review incident after [****] days. A final engineering resolution shall be
identified in the action plan. A final engineering resolution shall be
identified in the action plan. Client and Fry problem managers shall review
the incident after such [****] day period.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
Severity 5 Errors. Fry shall use its reasonable
commercial efforts to acknowledge the Error within [****] days of receipt
of notice of such Error. A final engineering resolution will be determined
and scheduled through mutual agreement.
(c) Technical Support
(i) Support Issues. Client is responsible for
providing Level One support services to its end users. Fry shall provide
Levels One, Two and Three back-up technical support to Client, and shall make
support available to Client via telephone to Client's Authorized Caller(s).
Client agrees to use reasonable commercial efforts to ensure that no more
than [****] Client's Authorized Callers will be requesting support from Fry at
any given time. Fry will provide such support 24 hours a day seven days a
week every day of the year. .
The Authorized Callers and Designated Support Engineers will be the
primary contacts between Client's and Fry's technical support and/or escalation
centers. Client will provide a list of Authorized Callers including names,
address, phone numbers, and internet e-mail address. Fry will provide a list of
Designated Support Engineers.
(ii) Resolution of Support Issues. In the event
that Client cannot successfully resolve any Problem, Client may request
assistance from Fry. Fry will not contact or provide direct support to Client's
end users with respect to the Work performed hereunder or in any of the Client
Sites pursuant to this Agreement. Fry will provide an initial response
acknowledging receipt of the support request to all Client support inquiries
within four hours of receipt and Client and Fry will agree, in good faith, what
additional information and/or documentation will be required for resolution.
Technical support managers and engineers for each party will work in good faith
to devise and carry out an action plan that will provide a timely and
satisfactory resolution. Fry shall work with Client in attempting to reproduce
any such problem.
5. Client Content.
5.1 Accuracy and Review of Client Content. Client assumes sole
responsibility for: (a) acquiring any authorization(s) necessary for hypertext
links to third-party Web sites; and (b) the accuracy of materials provided to
Fry, including, without limitation, Client Content, descriptive claims,
warranties, guarantees, nature of business, and address where business is
conducted; and (c) ensuring that the Client Content does not infringe or violate
any right of any third party.
5.2 Limitations on Client Content. Client shall use reasonable
commercial efforts to provide Client Content that does not contain any content
or materials which are obscene, malicious, which infringe on or violate any
applicable law or regulation or any proprietary, contract, moral, privacy or
other third-party right, or which otherwise expose Fry to civil or criminal
liability.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
6. Fees and Taxes.
6.1 Maintenance Fees. To the extent that Fry is to provide
Maintenance under Exhibit A hereto, Client shall pay for all Maintenance-related
tasks as provided in Exhibit A hereto.
6.2 Out-of-Pocket Expenses. Client shall pay, or reimburse
Fry, upon receipt of appropriate receipts and documentation, for any reasonable
out-of-pocket expenses, including, without limitation, travel and travel-related
expenses, incurred by Fry in connection with the performance of the Services;
provided, however, that any single expense in excess of [****] shall require the
prior written approval of Client.
6.3 Additional Service Fees. Unless otherwise agreed to by the
Parties in a Project Brief or Annual Plan, Client shall pay to Fry all fees for
Additional Services on a time and materials basis as invoiced by Fry.
6.4 Late Payment. Client shall pay to Fry all fees not
specifically itemized on Exhibit A within [****] days of receipt of the
applicable Fry invoice. If Client fails to pay any fees within [****] days of
any written late payment notice from Fry, late charges of the lesser of [****]
per month or the maximum allowable under applicable law shall also become
payable by Client to Fry.
6.5 Taxes. Client shall pay or reimburse Fry for all sales,
use, transfer, privilege, excise and all other taxes and all duties, whether
international, national, state or local, however designated, which are levied or
imposed by reason of the performance by Fry under this Agreement; excluding,
however, income taxes which may be levied against Fry.
6.6 [****]
7. Exclusivity. Except with the prior written consent of Client,
Fry agrees that during the term of this Agreement and for two (2) years
thereafter Fry shall not provide any development, maintenance, hosting or
related services to any person or entity providing floral products or engaged
in the floral and/or gardening industries except for Client and Client's
affiliates.
8. Insurance. Fry agrees to maintain at its expense the following
insurance policies during the term of this Agreement and for two years
thereafter: commercial general liability coverage of at least [****] million
and Internet professional liability coverage of at least [****] million (and
shall name Client as an additional insured thereunder); provided, however,
that upon the signing hereof, such coverage amounts may be [****] million,
but shall be increased to the [****] million level by [****]. In addition,
Fry shall maintain appropriate xxxxxxx'x compensation and all other policies
required by law. Upon the signing hereof and
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
any increase in coverage amount referred to above, Fry shall provide Client with
certificates of insurance evidencing the foregoing.
9. Fry Warranties.
(a) General Warranties. Fry represents and warrants
that: (i) Fry has the power and authority to enter into and perform its
obligations under this Agreement, (ii) Fry's Services under this Agreement shall
be performed in a professional workmanlike manner with the degree of skill and
care that is required by current, good and sound professional procedures and
practices and in conformance with generally accepted professional standards for
the completion of such work prevailing at the time, (iii) that it owns all
rights of any nature in the Fry Material without encumbrance and has the right
to grant to Client the rights and licenses granted herein and that neither any
design nor programming, nor any other material or facet added to the Client
Sites by Fry (provided that Fry makes no representations with respect to
material provided by Client) infringes any person or entity's copyright,
trademark, patent or other proprietary right, is libelous, an invasion of
privacy, obscene or otherwise violates any law or right of any person or entity,
or contains any recipe, formula or instruction harmful to any person or
property; (iv) that all Services and property as delivered by Fry is and shall,
during the Initial Term and any Renewal Term, and for a period of [****]
thereafter, remain free of any (a) back door, time bomb, drop dead device, or
other software routine designed to disable a computer program automatically with
the passage of time or under the positive control of the warranting party or (b)
any virus, Trojan horse, worm, or other software routine or hardware component
designed to permit unauthorized access, to disable, erase, modify or otherwise
harm any software, hardware or data or to perform any other such actions and (v)
that all software, firmware and hardware delivered to Client or used by Fry in
connection with any of the Client Sites will, except to the extent covered by a
third party manufacturer's year 2000 compliance warranty disclosed in advance to
Client in writing and accepted by Client, (1) correctly handle date information
before, during, and after January 1, 2000 including accepting date input,
providing date output and performing calculation on dates or portions of dates;
(2) function accurately and without interruption before, during, after and
including January 1, 2000 without changes in operation associated with the
advent of the new century assuming correct configuration; (3) respond to two
digit date input in a way that resolves the ambiguity as to century in a
disclosed, defined and pre-determined manner; (4) store and provide Output of
date information in ways that-are unambiguous as to century; (5) correctly
manage the leap years occurring in the year 2000 and subsequently; and (6) use
fields providing at least four decimal digits for the year portion of all stored
dates.
(b) Service Level Warranty. In the event Client
experiences any of the following which is not as a result of any actions or
inactions of Client or any third parties not under control of Fry (including
Client Equipment and third party equipment), Fry will credit Client's account as
described below:
(i) Inability to Access the Internet
(Downtime). If Client is unable to transmit or receive information from Fry's
Internet Data Center (i.e., Xxx'x XXX and WAN) to other portions of the
Internet because Fry failed to provide the Internet Data Center Services for
more than [****] ("Internet Access Failure"), Fry will
credit Client's account an amount equal to [****] of the [****]
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
then paid by Client under this Agreement ([****] (meaning the [****] days
prior to and the day of the following days each year in the United States:
Thanksgiving, Christmas, Valentines Day, Easter, Secretary's Day, and Mothers
Day)) for each such [****] (but such credits in any given [****] shall not
exceed the [****] due for such [****]). Fry's Scheduled Maintenance of shall
not be deemed to be a failure of Fry to provide the hosting Services
hereunder. For purposes of the foregoing, "unable to transmit or receive"
shall mean sustained packet loss in excess of [****] based on Fry's
reasonable measurements.
Fry shall continue to provide Client with real-time reporting
information concerning server performance and other relevant performance,
transactional and processing data in the same manner as it currently provides to
Client plus such additional information and reporting as the parties shall agree
or as shall be contained in the Annual Plan.
(ii) Response Time and Equipment Availability. Fry
shall respond as follows within the following minimum response times:
(1) Time to Discover; Inability to Access
the Internet; Notification of Client. As soon as practicable, but within
[****](during Key Time Periods and [****] during other times) of discovering
the existence of an Internet Access Failure, Fry will determine whether the
source of the an Internet Access Failure is limited to the Client Equipment
and the Fry equipment connecting the Client Equipment to Xxx'x XXX ("Client
Specific Failure"). If an Internet Access Failure is not a Client Specific
Failure, Fry will determine the source of the Internet Access Failure as soon
as practicable, but within [****] (during Key Time Periods, and [****] during
other times) after determining that it is not a Client Specific Failure. In
any event, Fry will notify Client of the source of an Internet Access Failure
within [****] after identifying the source.
(2) Remedy of Inability to Access the
Internet. If an Internet Access Failure remedy is within the sole control of
Fry, Fry will remedy an Internet Access Failure as soon as practicable, but
within [****] (during Key Time Periods, and [****] during other times) of
determining the source of an Internet Access Failure . If an Internet Access
Failure is caused from outside of the Xxx XXX or WAN, Fry will notify Client
and will use commercially reasonable efforts to promptly notify the
party(ies) responsible for the source and cooperate with it(them) to resolve
the problem as soon as possible.
(3) Failure to Determine Source and/or
Resolve Problem. In the event that Fry is unable to determine the source of
and remedy the Internet Access Failure within the time periods described
above, Fry will credit Client's account the pro-rata connectivity charges for
[****] of service for every failure to satisfy the above response time
commitments ([****] days during Key Time Periods) and an extra day of credit
for every [****] ([****] for non-Key Time Periods) in excess of the above time
periods that it takes Fry to resolve the problem (but such credits in any
given [****] shall not exceed the [****] due for such [****]).
(iii) Termination Option for Chronic Problems: If,
in any thirty day period , Client would be able to receive credits totaling
[****]
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
resulting from [****] or more events, or if any single event entitling
Client to credits under this Section exists for a period of [****]
consecutive hours, then, Client may terminate this Agreement for cause and
without penalty by notifying Fry no later than [****] business days following
the end of such calendar month. Such termination will be effective on the
date set by Client.
10. Client Warranties. Client represents and warrants that (a)
Client has the power and authority to enter into and perform its obligations
under this Agreement, (b) commencing as of the date of this Agreement Client
Content does not and shall not contain any content, materials, advertising or
services that are materially inaccurate or that infringe on or violate any
applicable law, regulation or right of a third party, including, without
limitation, export laws, or any proprietary, contract, or any other third-party
right, (c) that Client owns the Client Content or otherwise has the right to
place the Client Content on the Client Sites on which it is placed, (d) that its
services, products, materials, data, information and Client Equipment used by
Client in connection with this Agreement as well as Client's Equipment does not
operate in any manner that would violate any applicable law or regulation in any
material respect and (e) Client has obtained any authorization(s) necessary
under law for hypertext links from the any Client Sites to other third-party Web
sites.
11. Disclaimers of Warranty. EXCEPT FOR THE LIMITED WARRANTIES SET
FORTH IN SECTIONS 9 AND 10 ABOVE, THE PARTIES MAKE NO WARRANTIES HEREUNDER, AND
THE PARTIES EXPRESSLY DISCLAIM ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
FRY DOES NOT AND CANNOT CONTROL THE FLOW OF DATA TO OR FROM FRY'S
FACILITIES AND OTHER PORTIONS OF THE INTERNET. SUCH FLOW DEPENDS IN LARGE PART
ON THE PERFORMANCE OF INTERNET SERVICES PROVIDED OR CONTROLLED BY THIRD PARTIES.
AT TIMES, ACTIONS OR INACTIONS CAUSED BY THESE THIRD PARTIES CAN PRODUCE
SITUATIONS IN WHICH CLIENTS' CONNECTIONS TO THE INTERNET (OR PORTIONS THEREOF)
MAY BE IMPAIRED OR DISRUPTED. ALTHOUGH FRY WILL USE COMMERCIALLY REASONABLE
EFFORTS TO TAKE ACTIONS IT DEEMS APPROPRIATE TO REMEDY AND AVOID SUCH EVENTS,
FRY CANNOT GUARANTEE THAT THEY WILL NOT OCCUR. ACCORDINGLY, FRY DISCLAIMS ANY
AND ALL LIABILITY TO THE EXTENT RESULTING FROM OR RELATED TO SUCH EVENTS.
EACH REPRESENTATIVE OF CLIENT AND ANY OTHER PERSONS VISITING THE
INTERNET DATA CENTERS DOES SO AT ITS OWN RISK AND FRY ASSUMES NO LIABILITY
WHATSOEVER FOR ANY HARM TO SUCH PERSONS RESULTING FROM ANY CAUSE OTHER THAN
FRY'S NEGLIGENCE OR WILLFUL MISCONDUCT RESULTING IN PERSONAL INJURY TO SUCH
PERSONS DURING SUCH A VISIT.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
12. Indemnification.
12.1 Client. Client will indemnify, defend and hold Fry, its
affiliates and Clients harmless from and against any and all Losses resulting
from or arising out of any Action brought by or against Fry, its affiliates or
Clients alleging: (a) with respect to the Client's Business: (i) infringement or
misappropriation of any intellectual property rights; (ii) defamation, libel,
slander, obscenity, pornography, or violation of the rights of privacy or
publicity; or (iii) spamming, or any other offensive, harassing or illegal
conduct; or (b) any damage or destruction to Fry's facility or the equipment of
Fry or any other client of Fry by Client or its Representatives (except for
ordinary wear and tear).
12.2 Fry. Fry will indemnify, defend and hold Client harmless
from and against any and all costs, liabilities, losses, and expenses
(including, but not limited to, reasonable attorneys' fees) (collectively,
"Losses") resulting from any claim, suit, action, or proceeding (each, an
"Action") brought against Client alleging (i) if true, a breach of any of Fry's
representations, warranties or agreements hereunder; (ii) the infringement of
any third party copyright, patent, trademark or other intellectual property
right resulting from the provision of the Services or (iii) personal injury to
Client's Representatives from Fry's negligence or willful misconduct.
12.3 Notice. In claiming any indemnification hereunder, the
indemnified party shall promptly provide the indemnifying party with written
notice of any claim which the indemnified party believes falls within the scope
of the foregoing paragraphs. The indemnified party may, at its own expense,
assist in the defense if it so chooses, provided that the indemnifying party
shall control such defense and all negotiations relative to the settlement of
any such claim and further provided that any settlement intended to bind the
indemnified party shall not be final without the indemnified party's written
consent, which shall not be unreasonably withheld.
12.4 Limitation of Liability. NEITHER PARTY SHALL HAVE
LIABILITY WITH RESPECT TO OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE FOR
CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES, EVEN IF THE
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
EXCEPT FOR CLIENT'S INDEMNIFICATION OBLIGATIONS UNDER [****],
CLIENT'S AGGREGATE LIABILITY FOR ANY REASON AND UPON ANY CAUSE OF ACTION IN
CONNECTION WITH THIS AGREEMENT SHALL BE LIMITED TO [****]. THIS LIMITATION
APPLIES TO ALL CAUSES OF ACTION IN THE AGGREGATE, INCLUDING WITHOUT
LIMITATION, BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT
LIABILITY, MISREPRESENTATIONS AND OTHER TORTS.
EXCEPT FOR FRY'S INDEMNIFICATION OBLIGATIONS UNDER SECTION [****]
AND BREACHES OF SECTION [****] OR ANY OTHER INTELLECTUAL
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
PROPERTY PROVISIONS OF THIS AGREEMENT, FRY'S AGGREGATE LIABILITY FOR ANY
REASON AND UPON ANY CAUSE OF ACTION IN CONNECTION WITH THIS AGREEMENT SHALL
BE LIMITED TO [****]. THIS LIMITATION APPLIES TO ALL CAUSES OF ACTION IN THE
AGGREGATE, INCLUDING WITHOUT LIMITATION, BREACH OF CONTRACT, BREACH OF
WARRANTY, NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATIONS AND OTHER TORTS.
The parties agree that all of the limitations and exclusions of
liability and disclaimers specified in this Agreement will survive and apply
even if found to have failed of their essential purpose.
13. Termination and Renewal.
13.1 Term. This Agreement shall be effective when signed by
the Parties and thereafter shall remain in effect for two (2) years, unless
earlier terminated as otherwise provided in this Agreement (the "Initial
Term"). This Agreement shall automatically be renewed beyond the Initial Term
for additional two (2) year terms (each, a "Renewal Term") unless Client
provides Fry with a written notice of termination at least sixty (60) days
prior to the expiration of the Initial Term or the then-current Renewal Term.
13.2 Should a Party breach this Agreement, the
non-breaching Party shall provide the breaching Party with prompt written
notice of such breach. Upon receipt of such notice, the breaching Party shall
have thirty (30) days to cure such breach, unless the breach is of the
confidentiality, license or ownership provisions of this Agreement, in which
case the non-breaching Party may terminate this Agreement immediately upon
written notice to the other party. If a breach of other than the
confidentiality, license or ownership provisions of this Agreement is not
cured within such cure period, the non-breaching Party may terminate this
Agreement upon written notice to the breaching Party. Fry shall, at the
Client's discretion, complete any work assigned or scheduled during the
notice period in accordance with the terms and conditions of this Agreement.
Subject to making the payments (except for the hold-back specified below) ,
Client shall own all the results and proceeds of Fry's Services rendered to
the date of termination as "work for hire" in accordance with the terms
hereof, and Fry shall promptly deliver all materials, information, documents,
drafts and any other property secured, produced and/or developed by Fry
pursuant to this Agreement, in full satisfaction of the Parties' obligations
to each other under this Agreement. Regardless of termination under this or
any other provision of this Agreement, Client shall be entitled, in its
discretion, to continue, discontinue, modify, or change its plans regarding
the Client Sites project.
13.3 All rights and licenses granted under or pursuant to this
Agreement by Fry to Client are, and shall be deemed to be, for purposes of
Section 365(n) of the United States Bankruptcy Code, 11 U.S.C. Section 101, et.
seq. (the "Bankruptcy Code"), licenses of rights to "intellectual property" as
defined under Section 101(56) of the Bankruptcy Code. The Parties agree that
Client, as a licensee of such rights and licenses, shall retain and may fully
exercise all of its rights and elections under the Bankruptcy Code, provided it
abides by the terms of this Agreement including without limitation, payment of
all sums due hereunder. The Parties
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
further agree that, in the event that any proceedings shall be instituted by or
against Fry seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking an entry of an
order for relief for the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property, or Fry shall take any
action to authorize any of the foregoing actions (each a "Proceeding"), Client
shall have the right to retain and enforce its rights under this Agreement
including, but not limited to, the following rights, provided it abides by the
terms of this Agreement: (i) the right to continue to use the Fry Material and
all source and object code developed under this Agreement and all versions and
derivatives thereof, and all documentation and other supporting material related
thereto, in accordance with the terms and conditions of this Agreement; and (ii)
the right to complete access to, as appropriate, all Fry Material and all source
and object code and all embodiments of such to be provided under this Agreement,
including documentation therefore to the extent provided for hereunder, and the
same, if not already in Client's possession, shall promptly be delivered to
Client: (a) upon any such commencement of a Proceeding upon written request
therefor by Client, unless Fry elects to continue to perform all of its
obligations under this Agreement; or (b) if not delivered under (a) above, upon
the rejection of this Agreement by or on behalf of Fry upon written request
therefor by Client.
13.4 Termination and Payment. Upon any termination or
expiration of this Agreement (except for an amount of up to $100,000 which
Client may hold-back until the return to Client of all of Client's Content and
other property by Fry), Client shall pay all unpaid and outstanding fees through
the effective date of termination or expiration of this Agreement and Fry shall
deliver to Client all work completed prior to the effective date of termination.
13.5 Designated Contact. Each party shall designate one person
who will act as the primary liaison for all communications regarding the
Services to be rendered by Fry hereunder.
14. Miscellaneous.
14.1 Entire Agreement. This Agreement and attached Exhibits
(including the then applicable Annual Plan) constitute the entire agreement
between Client and Fry with respect to the subject matter hereof and there are
no representations, understandings or agreements which are not fully expressed
in this Agreement.
14.2 Cooperation. The Parties acknowledge and agree that
successful completion of the Services shall require the full and mutual good
faith cooperation of each of the Parties.
14.3 Independent Contractors. Fry and its personnel, in
performance of this Agreement, are acting as independent contractors and not
employees or agents of Client.
14.4 No Joint Ventures. Nothing in this Agreement shall be
construed to establish a joint venture, agency, employment or partnership
relationship between the Parties.
14.5 Amendments. No amendment, change, waiver, or discharge
hereof shall be valid unless in writing and signed by the party against which
such amendment, change, waiver or discharge is sought to be enforced.
14.6 Force Majeure. Except for the obligation to pay money,
neither party will be liable for any failure or delay in its performance under
this Agreement due to any cause beyond its reasonable control, including act of
war, acts of God, earthquake, fire, flood, embargo, riot, sabotage, labor
shortage or dispute, governmental act or failure of the Internet, provided that
the delayed party: (a) gives the other party prompt notice of such cause, and
(b) uses its reasonable commercial efforts to correct promptly such failure or
delay in performance and Client may terminate if service is down for more than
[****] consecutive hours.
If the performance of any part of this Agreement by either party is
prevented, hindered, delayed or otherwise made impracticable by reason of any
flood, riot, fire, judicial or governmental action, labor disputes, act of God
or any other causes beyond the control of either party, that party shall be
excused from such to the extent that it is prevented, hindered or delayed by
such causes provided, however, that if such delay or default by Fry exceeds
[****] consecutive business days, then Client may terminate this Agreement
effective upon written notice to the other party.
14.7 Arbitration. Any claim, dispute or controversy with
respect to, in connection with or arising out of this Agreement shall be
subject to and decided by arbitration in Nassau County, New York, by a panel
of three arbitrators. Each Party shall designate one disinterested arbitrator
and the two arbitrators so designated shall select a third arbitrator. The
persons selected as arbitrators need not be professional arbitrators, and
persons such as lawyers, accountants, brokers and bankers shall be
acceptable, but each shall have substantial experience with respect to
information technology and development. The arbitration proceeding shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association then and there pertaining. Any party may initiate
arbitration proceedings hereunder by providing written notice ("Demand for
Arbitration") to the other party to such claim, dispute or controversy. A
Demand for Arbitration shall be made within a reasonable time after the
claim, dispute or controversy has arisen; provided, however, that no Demand
for Arbitration may be made after the date when institution of such claim,
dispute or controversy would be barred by the applicable statutes of
limitations. Arbitration proceedings shall be commenced within thirty (30)
days of such notice or as soon thereafter as practicable, and the arbitrators
shall be required to render a written determination within thirty (30) days
after the commencement of such arbitration proceedings. The written award of
a majority of the arbitrators shall be final and binding upon the parties and
judgement may be entered upon it in accordance with applicable law in any
court having jurisdiction thereof, including the federal district courts
located in Nassau County, New York. All costs of any such arbitration shall
be borne equally by the parties.
This Section shall not be construed to prohibit either party from
seeking preliminary or permanent injunctive relief in any court of competent
jurisdiction, however, the arbitrator hearing the dispute to which the
injunction pertains will have the power to modify or dissolve any such
injunction, or to order additional injunctive relief, in connection with the
final arbitration award. The parties, their representatives, other participants,
and the mediator and
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
arbitrator shall hold the existence, content, and result of any mediation and
arbitration in confidence except to the extent necessary to enforce a final
settlement agreement or to obtain and secure enforcement of or a judgment on an
arbitration decision and award.
14.8 Choice of Law and Venue. This Agreement shall be governed
in all respects by the laws of the State of New York without regard to its
conflict of laws provisions.
Subject to Section 14.7, each of the parties hereto irrevocably
and voluntarily submits to personal jurisdiction of the New York Supreme
Court located in Nassau County, New York and the Federal and state courts
located in the Eastern District of New York in any action or proceeding
arising out of or relating to this Agreement and agrees that all claims in
respect of such action or proceeding may be heard and determined in any such
court. Each of the parties hereto further consents and agrees that such party
may be served with process in the same manner as a notice may be given under
Section 14.10. Each of the parties hereto agrees that any action or
proceeding instituted by any of them against any other party with respect to
this Agreement will be instituted exclusively in the state courts located in,
and in the United States District Court for, the Eastern District of New
York. The parties hereto irrevocably and unconditionally waive and agree not
to plead, to the fullest extent permitted by law, any objection that they may
now or hereafter have to the laying of venue or the convenience of the forum
of any action or proceeding with respect to this Agreement in any such courts.
14.9 Assignment. Neither party shall assign, without the prior
written consent of the other Party, its rights, duties or obligations under this
Agreement to any person or entity, in whole or in part, whether by assignment,
merger, transfer of assets, sale of stock, operation of law or otherwise, and
any attempt to do so shall be deemed a material breach of this Agreement, except
to affiliate.
14.10 Notice. Any notice pursuant to this Agreement, if
specified to be in writing, shall be in writing and shall be deemed given (i) if
by hand delivery, upon receipt thereof, (ii) if by mail, three (3) days after
deposit in the United States mails, postage prepaid, certified mail, return
receipt requested, (iii) if by facsimile transmission, upon electronic
confirmation thereof, or (iv) if by next day delivery service, upon such
delivery. All notices shall be addressed as follows (or such other address as
either party may in the future specify in writing to the other):
In the case of Fry: Fry Multimedia, Inc.
0000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxx, President
In the case of Client: 800-Gifthouse, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 000000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
With a copy to: Xxxxxxxxx Xxxxxx & Xxxxxx
00 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
14.11 Waiver. The waiver of failure of either party to
exercise any right in any respect provided for herein shall not be deemed a
waiver of any further right hereunder.
14.12 Severability. If any provision of this Agreement is
determined to be invalid under any applicable statute or rule of law, it is to
that extent to be deemed omitted, and the balance of the Agreement shall remain
enforceable.
14.13 Counterparts. This Agreement may be executed in several
counterparts, all of which taken together shall constitute the entire agreement
between the Parties hereto.
14.14 Headings. The section headings used herein are for
reference and convenience only and shall not enter into the interpretation
hereof.
14.15 Approvals and Similar Actions. Where agreement,
approval, acceptance, consent or similar action by either party hereto is
required by any provision of this Agreement, such action shall not be
unreasonably delayed or withheld.
14.16 Survival. The provisions of Sections 3, 4.8, 7, 8, 9(a),
12, 13.2, 13.3 and 14 of this Agreement shall survive the termination or
expiration of this Agreement.
14.17 Government Regulations. Client will not export,
re-export, transfer, or make available, whether directly or indirectly, any
regulated item or information to anyone outside the U.S. in connection with this
Agreement without first complying with all applicable export control laws and
regulations of the U.S. Government and any country or organization of nations
within whose jurisdiction Client operates or does business.
14.18 Non-Solicitation. During the period beginning on the
date hereof and ending on the first anniversary of the termination or expiration
of this Agreement in accordance with its terms, Fry and Client agrees that they
will not, and will ensure that their affiliates do not, directly or indirectly,
solicit or attempt to solicit for employment or other work persons employed by
the other Party during such period.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.
CLIENT FRY
800-GIFTHOUSE, INC. FRY MULTIMEDIA, INC.
By: /s/ Xxxxxxxxxxx X. XxXxxx By: /s/ Xxxxx Xxx
-------------------------- -----------------------
(Signature) (Signature
Name: Xxxxxxxxxxx X. XxXxxx Name: Xxxxx Xxx
Title: Vice President Title: President
EXHIBIT A
ANNUAL PLAN
====================
[LOGO] INTERACTIVE SERVICES
PROJECT BRIEF
====================
PROJECT TITLE: Annual Plan--Fiscal Year 2000 BRIEF NUMBER: 0199-1003
PROJECT SPONSOR: Xxxxx Xxxxxxxx BRIEF DATE: Jan-13-1999
BACKGROUND:
1-800-FLOWERS(R) currently maintains a business to consumer based
transactional Web Site at xxx.0000xxxxxxx.xxx. The Site, which is developed,
managed, and maintained by Fry Multimedia in Ann Arbor, Michigan was recently
redesigned and launched on November 16, 1998. Given several new opportunities
which have presented themselves, the Company's e-commerce strategy has been
changed to support the housing of the totality of the 1-800-FLOWERS, Inc.
product and service offerings as available through its various subsidiaries
including 800-FLOWERS, 800-BASKETS, 800-GROWERS, 800-GOODIES, Plow & Hearth,
Fresh Home & Garden, and American Country Home under one "master"
Network-concept Web Site. The theme of the Network [new Web Site] is to
revolve around "living and giving" with 1-800-FLOWERS as it is bringing
customers the "best of" floral, home and gardening products. The goal is to
convey that the Network offers products and ideas for self-consumption as
well as gifting.
Due to increased competition within the floral and related gardening and gifting
categories - both online and off-line, the window of opportunity to develop and
successfully launch the Network is narrow with it being imperative to achieve a
live date of early spring.
IT IS IMPORTANT TO NOTE THAT THE STRATEGY IS BEING EVOLVED AS A RESULT OF NEW
OPPORTUNITIES AND NOT BECAUSE THE CURRENT SITE IS FLAWED IN ANY WAY. IT IS OUR
INTENT TO BUILD UPON ALL OF THE FUNCTIONALITY AVAILABLE IN THE CURRENT SITE AND
THAT IS BEING PURSUED IN PHASE II IN THE NETWORK.
While 1-800-FLOWERS has emerged as the online market leader in the fresh floral
category, it has a tremendous opportunity to expand beyond this product category
to others, which are related. Four general or umbrella categories are being
pursued including:
1. FRESH PRODUCTS - Flowers, Plants, Fruit, Vegetables, Gourmet,
Etc.
2. BASKETS & RELATED PRODUCTS - Gourmet Baskets, Novelty Gift
Baskets, Balloons, Etc.
3. GARDEN PRODUCTS - Seeds, Plants, Bulbs, Garden Tools, Garden
Ornaments, Clothing and Accessories, Etc.
4. HOME / HOME DECORATING - Indoor & Outdoor Furniture, Decorative
Containers, Accessories, Dried Floral Products, Clothing, etc.
--------------------------------------------------------------------------------
1-800-FLOWERS, Inc. Page 1 of 18 Confidential
536615.1-XXXXXX-6/17/99 12:35:15 PM
ASSIGNMENT:
1-800-FLOWERS(R) is interested in having Fry Multimedia develop a Web Site so
that it reflects the new [Fresh] Floral, Home & Garden Network strategy. This
Network Site should leverage as much of the recent development for Version 5
[introduced on Nov-16-98] and Plow & Hearth [introduced on Dec-08-98] as
possible so as to be completed in a cost efficient manner, and one that
recognizes the time constraints under which the Network is expected to
launch. The Network strategy is being designed to position 1-800-FLOWERS as
one of the emerging online commerce hubs and is intended to aggregate all of
the products of the 1-800-FLOWERS organization under one umbrella and master
Web Site so as to gain economies of scale and not need to develop
individually branded efforts for [****] subsidiary company. Products to be
featured on the site include those of the brands 800-FLOWERS, 800-BASKETS,
800-GROWERS, 800-GOODIES, Plow & Hearth, Fresh Home & Garden, and American
Country Home as well as others if appropriate. This Network Web Site should
be robust enough to accommodate [****] of products [and attributes] as well
as provide for a [****] defined further down in this document.
OBJECTIVE[S]:
1-800-FLOWERS(R) has aggressive sales growth expectations from its Web Site in
Fiscal 2000 and views the ability to offer the totality of the 1-800-FLOWERS'
product line under one umbrella and master Web Site as critical in order to
achieve the growth. As such, 1-800-FLOWERS expects to satisfy the following
objectives with the Network concept:
1. ENABLING THE OFFERING OF GREATER VARIETY, DEPTH AND BREADTH OF
SELECTION. One of the most attractive things about online retailing for
both the retailer and the consumer is the fact that there is an endless
supply of [virtual] shelf space. Without the physical restrictions of
brick and mortar, a retailer has the ability to present millions of
products for sale to prospective shoppers. While successful in its
efforts, 1-800-FLOWERS actually offers one of the [****] inventories
of products available for sale online typically averaging approximately
[****] products. By aggregating our [****] product offerings under the
Network, 1-800-FLOWERS can make the leap from [****] to several [****]
products.
2. INCREASING SALES REVENUE. By adding products designed for [****] to
complement the [****], and adding [****] merchandise, 1-800-FLOWERS
will be able to grow sales revenue faster.
3. LEVERAGING ONLINE RETAILING & MERCHANDISING EXPERTISE. Over the years,
1-800-FLOWERS has built a reputation for its expertise in online
retailing and merchandising. This expertise should be leveraged so as to
be able to generate hundreds of orders for new product categories
introduced almost overnight. This will only work by deploying a Network
strategy.
4. MINIMIZING DEVELOPMENT & MAINTENANCE COSTS. Building and maintaining
multiple Web Sites that are on par with the 1-800-FLOWERS Web Site
will be expensive and challenging. With the initial cost of subsidiary
sites ranging from $100,000 to $250,000, plus maintenance, the return
on investment might not be realized with each individual effort. The
Plow & Hearth Web Site went live on December 9th. It now needs to be
maintained on a day-to-day basis and a marketing strategy and budget
needs to be developed to drive traffic to it. This will be both
time-consuming and expensive. And, the Web Site development for other
1-800-FLOWERS subsidiary efforts including Fresh Home & Garden,
American Country Home, and GardenWorks has also been discussed.
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1-800-FLOWERS, Inc. Page 2 of 18 Confidential
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**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
5. PIGGY-BACKING ON MARKETING & DISTRIBUTION DEALS. As we are finding,
driving traffic to the Web Site is getting more expensive every day.
Portal and distribution deals [****]. Negotiating each of these
relationships is time-consuming, as is the implementation once the
agreement is signed. By focusing on a Network strategy, the
relationships and marketing programs in place to support the fresh
floral product line can be leveraged to support additional product
offers. [****] This Network strategy is the exact one being
successfully deployed by [****]. 1-800-FLOWERS can do the exact same
thing, and own valuable online real estate for not only flowers, but
also gardening and home.
6. LEVERAGING OPERATIONS & CUSTOMER SERVICE EXPERIENCE. Over the past
5 years, 1-800-FLOWERS has learned many valuable lessons as a
result of its online retailing and interactive marketing efforts -
none of the mistakes made which led to lessons learned should be
repeated, if possible. While the Plow & Hearth Web Site is up and
running, its features and capabilities are [****] to where
1-800-FLOWERS is today. For example: [****]. 1-800-FLOWERS has not
processed online orders manually since April of [****]. There is
[****] and there is [****]. Given our leadership position online, we
cannot "afford" to role out related or subsidiary efforts this way
without the potential for negatively impacting our reputation.
7. PERSONALIZED CONTENT. While we have researched the integration of
personalized capabilities as offers by Net Perceptions and others, these
applications are expensive and not really designed to support gifting
sites. By aggregating all efforts under one site, we can create an
intelligent, interactive environment that targets the appropriate
audience(s) with the appropriate product(s), value-added service(s), and
information while supporting and motivating the visitor toward trial,
repeat purchase, brand adoption, and long-term loyalty by offering
products and information for self consumption as well as gifting.
8. MULTIPLE SELLING OPPORTUNITIES. With the introduction of additional
products and product categories, many more merchandising and
cross-selling opportunities become available on the Home Page and
throughout the Web Site, which can increase the conversion of browsers
to shoppers. This might include multiple featured products, buttons,
banners, and text links on the home page; the creation of a gift center
which provides for profiling of the recipient; integration of general
gifting, floral, home decorating, and light gardening information
[or editorial] which integrates products for sale.
9. CO-BRANDING. Given the new "look & feel," there will be the need to
create a "standard" presentation for co-branded content to be
implemented primarily by the expansion of the affiliate network and
general distribution relationships. The co-branding in place today
might be able to be leveraged.
10. RECOGNITION OF REFERRING URL. We recognize the tremendous marketing
potential presented by printed catalogs and general brand recognition of
1-800-FLOWERS subsidiary companies. The Network Site should be created
in a manner enabling the many domain names currently owned by
1-800-FLOWERS such as XXX.XXXXXXXXXX.XXX to remain live and to take
customers to the Network while acknowledging where they came from. For
example: "Plow & Hearth products found here!"
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1-800-FLOWERS, Inc. Page 3 of 18 Confidential
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**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
FUNCTIONAL REQUIREMENTS:
A. [****]:
1. The Network Site will become the central online point of contact
for customers interested in shopping with 1-800-FLOWERS and its
subsidiary companies. [****]
2. The "look and feel" of the Site will need to convey the
availability of fresh floral, home and garden products as
presented within a living and giving context in the most
efficient manner. A streamlined and tight masthead or primary
navigation element is desired along with high performance at a
28.8 dial-up modem speed. [****]
3. [****]
4. Web Sites to review to their efficiency and compactness include
the following: [****].
B. SHOPPING FUNCTIONALITY:
1. The Network Site should support shopping by [****] - i.e.
800-FLOWERS or Plow & Hearth as well as by [****] or [****] -
i.e. flowers, plants, outdoor furniture, etc. It should also
allow for searching by keywords.
2. The Network Site should also feature a [****] which offers
suggested products based on [****] - i.e. [****]; based on
relationship to the [****] - i.e. [****]; based on [****] -
i.e. gifts under [****]; and, based on [****] - i.e. same
day, within [****] hours, within [****] hours. A special
holiday [****] should also be available at Christmas,
Valentine's Day, Mother's Day, etc.
3. The Network Site will need to support a product database
consisting of [****] of products with attributes or features,
and be able to guide people through the searching process so
as not to be overwhelmed by the potential number of products
returned. The current of the XXX.0-000-XXXXXXX.XXX and
XXX.XXXXXXXXXX.XXX sites should be integrated.
4. The Network Site should offer [****]. All orders taken on the
Site will be processed by 1-800-FLOWERS in Westbury, New York
automatically.
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1-800-FLOWERS, Inc. Page 4 of 18 Confidential
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**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
5. The Network Site will integrate special features as created for
the 0-000-XXXXXXX.xxx Site namely the [****] including [****].
These can all be enhanced through the additional of software as
provided by Net Perceptions or others.
6. The Network Site should allow [****] between companies
and departments featured on the Site.
7. The Network Site needs to support [****] including
select local florist, Federal Express, United Parcel Service,
and the US Postal Service.
8. The Network Site MUST support intelligence in the [****]
with the ability to pro-active present the [****] date and/or
[****] date to consumers.
9. Departmentalized Web shopping sites to review include:
[****].
C. CUSTOMER SERVICE FUNCTIONALITY:
1. Given the potential number of product offerings and the fact
that many more of the offerings require being inventoried and
available for purchase, the Network Site will need to
communicate in real time or close to it with company-wide
inventory management systems. This will prevent the purchasing
of products, which are out of stock and/or inform customers of
any back orders.
2. Given that a majority of the products to be purchased will be
fulfilled [****] from vendors using Federal Express,
United Parcel Service, or some other service, the ability of a
customer to [****] would offer a value added customer service
benefit to shoppers. The Site should allow customers to generate
[****] messages or [****] online.
3. Real time customer service [****] - as provided by [****] -
would need to be supported on the Network.
4. Customer service inquiries via email would also need to be
supported on the Network.
--------------------------------------------------------------------------------
1-800-FLOWERS, Inc. Page 5 of 18 Confidential
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**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
D. MERCHANDISING FUNCTIONALITY:
1. Given the potential number of product offerings, the Network
Site offers tremendous opportunity for [****] and [****]
as well as the presentation of great variety. Products will
need to be presented with [****]. The [****] should
allow for several products to be returned quickly.
2. As with the 0-000-XXXXXXX.xxx Web Site, there will be the need
to communicate important information to customers at certain
points. This might include holiday "cut-offs," products being
out of stock, new products, etc. This information will be might
be vendor, product or Network specific.
3. The Network Site should further enable merchandising within
[****] and on the [****].
4. The Network Site should support [****] as well as [****]
to support merchandising and the presentation of special offers,
holiday reminders, etc.
5. The Network Site needs to support [****] delivery and
shipping for certain vendors and/or products.
6. The Network Site needs to support a [****] of product selection
in the case of a product [*****].
E. CONTENT FUNCTIONALITY:
1. All editorial information related to fresh flowers, gardening
and home should reside in [****] predominant place - i.e. the
[****] area. Content should however be [****] throughout the
Site - especially within the shopping section so as to
support merchandising within an editorial context. Editorial
should also support impulse buying and the integration of
merchandise.
2. Content should support selling including [****] with [****]
embedded within the content and not only available as [****]
on the [****] of pages.
3. The Network should support truly [****] content, which will
enable a customer to [****] of the service as related to
their [****]. For example: a [****] area where customers would
provide us details about [****].
4. The Network should enable integration of other content - i.e. we
might want to partner with [****] to support [****] area.
5. [****] content areas should allow for [****], as some of
the content will be written by 1-800-FLOWERS, some [****],
some [****], etc.
--------------------------------------------------------------------------------
1-800-FLOWERS, Inc. Page 6 of 18 Confidential
536615.1-XXXXXX-6/17/99 12:35:15 PM
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
F. ADVERTISING AND PROMOTIONAL FUNCTIONALITY:
1. Given the potential number of product offerings and multiple
brands that will be available on the Network, there should be
some [****] functionality built in which enables [****] to run
promoting products, services, brands or concepts available
within the Network.
2. [****] should be available on the Site's [****] for possible
use by the Network or for sale to [****] such as a [****]
company.
3. Integrate an [****] such as provided by [****] or [****] to
serve and track [****] within the Network Site.
4. Support for standard linking with tracking capability as it
exists today. Links to: 0-000-XXXXXXX.xxx [****], individual
product pages, product collections, [****] content areas,
promotional pages, [****], etc.
5. Support for special partner programs such as [****] of [****]
information for [****], pre-population of order form for
[****], and 0-000-XXXXXXX.xxx "keyword search" feature.
6. Promotional areas should enable 1-800-FLOWERS to use in-house
resources to create, update and maintain holiday or seasonal
theme areas.
G. RELATIONSHIP MARKETING FUNCTIONALITY:
1. Registration should be easy and encouraged often. Getting people
to register is high priority. There should be many real benefits
including the ability to customize the Network - i.e. the My
Flower Shop concept which will need to be renamed. Registration
should enable customers to receive information in general
about the Network or specific to an area of interest
[i.e. gardening].
2. Interaction with the Network should enable learning about the
customer in order to serve them better. This "learning" might
need to be facilitated by the software of a company such as is
offered by Net Perceptions.
3. Registration layout and information gathered will need to be
revised to accommodate customer preferences for self-consumption
as well as gifting. Personalization software should enable this
[i.e. Amazon's book recommendation service).
4. Information being captured during the registration process
should allow for profiling as well as prospecting. A much more
[****] role in [****] is being requested.
5. [****] tools should be state-of-the-art and usable at
1-800-FLOWERS as well as at Fry Multimedia.
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1-800-FLOWERS, Inc. Page 7 of 18 Confidential
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**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
6. The following [****] for programs and general communication
need to be in place and a determination of the communication
source (1-800-FLOWERS, Fry Multimedia, Plow & Hearth) will need
to be made in each case. All communication sent to each customer
would need to be [****] as part of the [****] in the
[****].
[****]
7. The Network Site will need to incorporate [****] so to be
able to speak to customers individually and uniquely. This
can take on many forms. Keep it simple in the beginning
through [****] at [****] without buying, [****], etc.).
Eventually enhance to dynamically generate content or views
based on customer learning. (i.e. [****])
--------------------------------------------------------------------------------
1-800-FLOWERS, Inc. Page 8 of 18 Confidential
536615.1-XXXXXX-6/17/99 12:35:15 PM
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
H. BRANDING FUNCTIONALITY:
1. While the Network Site should be branded in a manner that
conveys "Fresh Floral, Home & Gardening" as well as "Living &
Giving," the equity in the brand building efforts of
1-800-FLOWERS should not be abandoned. They should instead be
leveraged. While the company has not [****] on the [****], it
is receptive to suggestions from Fry Multimedia. Discussions
to date have lead to:
a. The concept that given the Company's reputation as an
online retailing leader [and pioneer] there is a big
benefit to branding the Network as being offered "by
1-800-FLOWERS" or "from 1-800-FLOWERS."
b. The fact that domain names including XXX.000XXXXXXX.XXX,
XXX.0000XXXXXXX.XXX, XXX.XXXXXXX.XXX as well as the
various other combinations owned should all take one to
the Network.
c. The fact that we might be able to create a brand for the
Network through another domain name such as the
[****] or [****].
d. The fact that given the catalog efforts of Plow & Hearth
and Fresh Home & Garden, they should be able to promote
branded or vanity URLs which take customers to the
Network while allowing customers to "know" want the
referring company / domain name was. For example: a
positioning that would allow for "Plow & Hearth products
featured here!" Branding and co-branding for the
subsidiary companies needs to be further investigated.
e. A well-branded site with flanking brands for review
includes that of [****]. While [****] is the primary
site, customers have access to [****], which is
branded as [****] and an educational support site
branded as the [****] at [****].
--------------------------------------------------------------------------------
1-800-FLOWERS, Inc. Page 9 of 18 Confidential
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**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
I. EDITORIAL FUNCTIONALITY:
1. The Network Site should feature [****] that is [****] to [****]
of the editorial or magazine like content, and might also be
branded as the [****]. This editorial area will need to
support a varied about of information as outlined below:
a. Floral Information - care and handling, how-to
information, meanings of flowers, floral design trends,
etc.
b. Gardening Information - what to plant, when to plant,
regional gardening tips and information, descriptions of
plants/bulbs/seeds, etc.
c. Home Decorating - trends, ideas, suggestions, etc.
d. Gifting - trends, hot products, etc.
J. REPORTING / TRACKING FUNCTIONALITY:
NOTE: THIS SECTION WILL REQUIRE FURTHER DISCUSSION AS IT PERTAINS TO
HOW WE ISSUE [****] TO PEOPLE ON THE SITE TODAY AS WELL AS [****] AND
[****] PROCEDURES SO AS TO INTERACT WITH A CUSTOMER CENTERED DATABASE
PRODUCT.
1. [****] / Customer Performance [****]
The Site will need to [****] identify and report on customers
(purchasers) / Shoppers (browsers). - All reports should be
able to be run based on the following criteria: [****]
selection By [****] range, [****] ([****] and [****]), [****]
([****]). Ability to compare over [****] period a [****] ago.
a. Number of new [****] and number of new
[****].
b. Number of [****] and [****].
c. Registered vs. Non Registered [****]
d. [****] rate of shoppers to customers (first
time)
e. [****] rates of [****] customers
f. [****] rates of [****] visitors.
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1-800-FLOWERS, Inc. Page 10 of 18 Confidential
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**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
2. [****] Analysis
We need the ability to count visits to the Site by each
[****] identified visitor and then determine their purchase
[****]. What we hope to do is to identify the [****] on
average and for particular customer segments. - [****]
shopper, [****] customer, [****] customer, [****] customer
[****], [****] customer [****], [****] customer by [****] of
[****], [****] customer by [****] of [****], [****] shoppers
[****], etc. This report would include the ability to set a
[****] (i.e. [****] customers for [****] all, registered,
etc.) This should also include the ability to define the
[****] for particular segments and by the customers [****].
The information on this report should be available [****]
as well as in a [****] format that can be easily copied
into [****].
3. Establish a linkage between [****], 1-800-FLOWERS [****], and
[****]
The [****] of customers from each source should be included
in the file layouts of each of these sources. The [****] should
be passed to 1-800-FLOWERS and to [****] and retained. [****]
should correspond to 1-800-FLOWERS [****] and where multiple
customer numbers exist those records should be consolidated
or linked to obtain complete customer [****]. Based on [****]
at this level [****] or [****] can be set so that the next time
the customer comes to the web site or calls they could be [****]
for a specific [****]. Customers' will fall into specific
defined groups and be appropriately targeted.
4. Customer Purchase History
Purchase history of all customers that we can speak to via
[****]. History to include [****] dates, [****], zip code
[****] zip code [****], [****] type. We have discussed
offering this [****] to registered users and then to all
1-800-FLOWERS customers.
On the Fry side determine what [****] information can be
retained and tied to the [****] so that we can use the
[****] as a trigger for [****] that treat customers
[****]. The ultimate goal is to be able to have Fry maintain
a usable database of information that will enable us to
remember and act upon customer [****] and [****]. The [****]
portion of this equation will be incorporated into the new
registration area.
5. Metrics Numbers
Should be [****] reporting or scheduled and automated for
[****] delivery daily. Includes [****] all compared to
[****] ago numbers as defined by 1-800-FLOWERS.
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1-800-FLOWERS, Inc. Page 11 of 18 Confidential
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**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
6. Basic Marketing Questions to be answered:
a. Who are my customers?
Name, Address, City, State, Zip
[****]
b. Ability to define customer [****]?
[****] visitors and buyers, [****], Buyers by
[****], [****] buyers by [****], [****], [****],
Geographically. By [****] relationship, by [****]
location (ADI, ZIP) By customer to [****] location.
c. What are my customers [****]?
Break up floral purchases to cut flowers, arrangements,
etc. and gift products. Floral vs. Fed Ex, add new items
by category
d. How much are my customers [****]?
[****]?, Last [****] Months, [****].
e. Source of Acquisition? Affiliates, search engines,
[****], etc.
f. [****]
With [****], shopping to buying seasonally issues:
[****] reports by Quarter, Month by Month, Holiday vs.
Same Holiday year ago.
7. Web Analysis
[****] Analysis - [****] the consumer through the Site to
determine [****] areas on the site [****] before leaving
site.
8. Reporting Tools
Fry to review additional Web [****] tools such as [****]
for support on the Site.
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1-800-FLOWERS, Inc. Page 12 of 18 Confidential
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**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
9. Site Speed
Stimulus / response data - target [****] offers to segments
with [****] to measure [****] over standard to determine best
incentives by audience. Ability to offer dynamic [****]
messages.
Ability to identify [****] Customers / Visitors [****] and for
any date range selected numerically and graphically. Need to
know how many customers are [****] on a [****] basis.
10. [Redefine] Affiliate Reporting
By [****] ([****] effort code, [****] code or combination of
[****] code and [****] code - TBD)
By [****] to determine which products were purchased as a
result (promotional products vs. other products). (By [****]
Code).
Reports would show [****] numbers, graphs of results and updated
results.
ELEMENTS TO BE INCLUDED:
[****]
K. WEB SITE ADMINISTRATION:
1. The Network Site should allow for updating and maintenance by
1-800-FLOWERS remotely. Current administration area would need
to be enhanced to support the Network.
L. WEB SITE REMOTE MONITORING:
1. 1-800-FLOWERS is interested in being able to [****] traffic,
usage, etc. [****] from Westbury, New York.
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1-800-FLOWERS, Inc. Page 13 of 18 Confidential
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**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
M. HOSTING / REDUNDANCY:
1. 1-800-FLOWERS is asking Fry Multimedia to re-evaluate hosting
needs and projected server capacity with respects to increased
traffic and sales volume. Determine feasibility of [****] in
[****] or other location as a [****] measure.
MESSAGE[S]:
The messages to convey to users of the Network Site include:
1. That 1-800-FLOWERS means more than just flowers.
2. That 1-800-FLOWERS is leveraging its size and online retailing
expertise to bring Web customers the "best of" flowers,
gardening, and home decorating products.
3. That 1-800-FLOWERS means "Solutions/Products for Living &
Giving!"
4. That 1-800-FLOWERS is an electronic commerce / Internet
retailing leader that is an emerging online commerce hub.
5. That 1-800-FLOWERS has the expertise in "living and giving" as
evidenced through the editorial and general content available on
the Network Site.
TARGET AUDIENCE:
The Web site should speak to the follow target audiences:
1. PRIME: Given the nature of our product, the primary audience is
pretty [****]. It includes men and women ages [****]
and living primarily in [****].
2. SECOND: We have the opportunities to attract both [****]
and [****] men and women as well. We also have
the opportunities to attract Americans living and
working [****] of the [****] as well as [****]
interested in shopping with [****] companies.
3. THIRD: A growing number of [****], which maintain [****]
are [****] to our site in support of [****]. These
companies have [****] programs for their [****]
and/or [****] for [****] gift giving needs.
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1-800-FLOWERS, Inc. Page 14 of 18 Confidential
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**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
NETWORK CONTENTS:
As suggested, the Network should offer a broader array of products, which are
brought to consumers by 1-800-FLOWERS. While there should be editorial
information to support the merchandising and selling process as well as to
establish credibility and expertise, the products available for sales are
critical. Here is a suggested approach to our merchandising efforts:
---------------------------------------- -------------------------------------- --------------------------------------
FRESH [FLOWERS & RELATED] GARDENING HOME
---------------------------------------- -------------------------------------- --------------------------------------
FLOWERS [****]: BULBS & SEEDS [****]: DECORATING [****]:
--------------- --------------------- ------------------
- Floral Arrangements - Assorted bulbs - Wreaths
- Roses - Assorted seeds - Candles
- Plants - Starter kits / supplies - Vases
- Wreaths / Topiaries - Pots & Containers
- Balloons TOOLS [****]: - Dried Floral
--------------------- - Table Settings
- Tools - Garden-Inspired Art
FLOWERS [****]: - Boots, clogs & gloves - Books
--------------- - Apparel
- Plants - Greenhouses
- Floral bouquets - Irrigation
- Roses KITCHEN GARDENING [****]:
- Plants -------------------------
- Continuity Products - Cooking Herbs
PLANTS, TREES & SHRUBS [****] - Vegetables
----------------------------- - Fruiting Trees
- Perennials
GIFT BASKETS [****] - Herbs OUTDOOR FURNITURE [****]:
- Gourmet Baskets - Fruit trees & plants -------------------------
- Novelty Baskets - Roses, orchids, etc. - Wood/Iron/Wicker Furniture
- Branded Baskets - Fencing
- Floral/Aromatherapy Baskets WATER GARDENING [****] - Bird Feeders & Houses
---------------------- - Garden Ornaments
- Water garden plants - Storage Containers
FRUIT, CANDIES, & COOKIES [****] - Supplies & accessories
--------------------------------
- Fruit Baskets ORGANIC [****]:
- Citrus Baskets/Boxes/Crates -------------- INDOOR FURNITURE [****]:
- Candied & Dried Fruit Containers - [****] -----------------------
- Nuts in Containers - Bedroom Furniture
- Jellies, Jams, & Marmalades OUTDOOR FURNITURE [****]: - Other Indoor Furniture
- Chocolate Products ------------------------- - Indoor Accessories
- Cookie Products - Wood/Iron Furniture - Blankets
- Fencing
- Bird feeders & houses
- Garden ornaments FIREPLACE / HEARTH [****]:
--------------------------
- Fireplace Screens/Glass
PEST TRAPS [****]: - Firewood Containers/Carriers
----------------- - Wood Splitting Tools
VEGETABLES [****] - Traps - Accessories
-----------------
- Assorted in Crates APPAREL & ACCESSORIES [****]:
LANDSCAPE GARDENING [****]: -----------------------------
[****] --------------------------- [****]
--------------------- - Other
- Flowers
- Floral Arranging [****]
- Other - TBD --------------------- [****]
- Gardening/Gardens of the World -------------------
- [****] - Home Decorating
OTHERS - Other - TBD - Other--TBD
------
- To Be Determined OTHERS OTHERS
------- ------
- To Be Determined - To Be Determined
---------------------------------------- -------------------------------------- --------------------------------------
--------------------------------------------------------------------------------
1-800-FLOWERS, Inc. Page 15 of 18 Confidential
536615.1-XXXXXX-6/17/99 12:35:15 PM
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
COMPETITIVE SET:
While 1-800-FLOWERS has a growing number of competitors online, there is
[****] is the [****] being pursued by the Network - namely floral, home and
gardening products [****]. The following sites are however important for
their competition potential and individual efforts.
1. EMERGING COMMERCE HUBS:
[****]
2. FLORAL RELATED SITES:
[****]
3. GARDENING:
[****]
4. RETAIL AGGREGATORS:
[****]
1-800-FLOWERS FURTHER EXPECTS FRY MULTIMEDIA TO REVIEW/RESEARCH OTHER
TRANSACTIONAL AND/OR CONTENT SITES FOR [****] ELEMENTS AND SUGGESTIONS.
--------------------------------------------------------------------------------
1-800-FLOWERS, Inc. Page 16 of 18 Confidential
536615.1-XXXXXX-6/17/99 12:35:15 PM
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
TONE & MANNER:
We want our customers to perceive us as online retailer first and foremost -
not a warehouse or telemarketing organization. We want to convey that we have
a passion for the products we sell and know "everything" there is to know
about them. We have the broadest selection, access to the best grower farms
around the world, the best care and handling procedures, the best vendors,
and the best customer service.
MANDATORIES:
1. FAST PERFORMANCE: The Site should be optimized for best possible
performance most notably by the fast loading of its pages and searches in
its database. Given that we are broadening the product line beyond flowers,
the Network site does not have to be [****] or [****].
2. [****] FRIENDLY: Given the strategy, 1-800-FLOWERS would be interested in
[****] its native [****] on [****]. As such, our [****] marketing and
merchandising efforts would point and link to the [****]. Given the [****],
the Site would need to be maximized for performance via the [****]
browser. [See the information at the following location for optimizing
Web Site for performance via [****].
3. REDUNDANCY: With the size and scope of the effort, the Network needs to be
developed and maintained as a "mission critical" effort requiring [****]
for all of the possible points of failure and redundancy to successfully
accommodate the high volume of traffic and sales activity.
BUDGET:
Given the investment in the 0-000-XXXXXXX.xxx Version 5.0 site and the
Plow & Hearth Version 1.0 made over the past 6 months, and the Company's
intent to leverage as much of the development as possible, it will rely
on Fry Multimedia to submit an estimate for the Network's development.
An estimate is expected as early as possible during the month of
January 1999.
TIMING:
The new site needs to be completed and live in the spring of 1999 so as to
maximize its appeal and launch. The launch will be supported with a [****],
which includes [****] and [****].
--------------------------------------------------------------------------------
1-800-FLOWERS, Inc. Page 17 of 18 Confidential
536615.1-XXXXXX-6/17/99 12:35:15 PM
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
406 of the Securities Act of 1933, as amended.
================================================================================
PROJECT BRIEF SUBMISSION APPROVAL:
This Project Brief is being submitted on the part of 1-800-FLOWERS as approved
by:
XXXXX X. XXXXXXXX
-------------------------------
[Print Name]
_______________________________ Date: __________________
[Signature]
RETURN COST ESTIMATE & AGGRESSIVE TIME SCHEDULE BY FEBRUARY 01, 1999 TO:
XXXXX XXXXXXXX, VICE PRESIDENT
1-800-FLOWERS, INC.
0000 XXXXXXX XXXXXX
XXXXXXXX, XXX XXXX 00000
FAX NUMBER: [516] 000-0000
E-MAIL: XXXXXXXXX@0000XXXXXXX.XXX
--------------------------------------------------------------------------------
1-800-FLOWERS, Inc. Page 18 of 18 Confidential
536615.1-XXXXXX-6/17/99 12:35:15 PM
EXHIBIT B
PROJECT BRIEF FORM
B-1
========================
[GRAPHIC OMITTED] INTERACTIVE SERVICES
1-800-FLOWERS(R) PROJECT BRIEF TEMPLATE
========================
PROJECT TITLE: BRIEF NUMBER:
PROJECT SPONSOR: BRIEF DATE:
BACKGROUND:
ASSIGNMENT:
OBJECTIVE[S]:
FUNCTIONAL REQUIREMENTS:
MESSAGE[S]:
TARGET AUDIENCE:
COMPETITIVE SET:
TONE & MANNER:
MANDATORIES:
BUDGET:
TIMING:
--------------------------------------------------------------------------------
1-800-FLOWERS, Inc. Page 1 of 2 Confidential
PROJECT BRIEF SUBMISSION APPROVAL:
This Project Brief is being submitted on the part of 1-800-FLOWERS as approved
by:
-------------------------------
[Print Name]
Date:
------------------------------- ----------------
[Signature]
RETURN COST ESTIMATE & TIME SCHEDULE BY [DATE GOES HERE] TO:
Contact Information Goes Here
--------------------------------------------------------------------------------
1-800-FLOWERS, Inc. Page 2 of 2 Confidential
EXHIBIT C
THIRD PARTY LICENSES
C-1
EXHIBIT C
Software licensed directly by Client
[****]
Software licensed by Fry but made available for the Client's sites
[****]
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
EXHIBIT D
CONFIGURATION
0-000-XXXXXXX.XXX
Voice and Data Networks
[****] [one chart omitted]
1-800-FLOWERS
Final Configuration
w/o Disaster Recovery
[****] [one chart omitted]
D-1
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
EXHIBIT E
CLIENT-OWNED EQUIPMENT
[****]
E-1
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
