EXHIBIT 10.18
FLORISTS ONLINE HOSTING
AGREEMENT
This Florists Online Hosting Agreement (this
“Agreement”) is being entered into as of the
day of June, 1999 and is entered into by and between
Florists’ Transworld Delivery, Inc., a Michigan corporation
(“FTDI”), and ftd.com inc., a Delaware corporation
(“ftd.com”).
RECITALS
A. Historically, FTDI was engaged directly in,
among other things, the business of offering consumers the
opportunity to place floral and specialty gift orders directly with
FTDI through its toll free telephone number (1-800-SEND-FTD) and
its Web site (www.ftd.com) (the “Direct Access
Business”).
B. Historically, using its Web site, FTDI
offered various online hosting services for its Internet program,
FTD Florists Online, located at www.ftd.com.
C. Recently, FTDI formed ftd.com as a subsidiary
of FTDI and, pursuant to the Formation Agreement, dated as of May
19, 1999, between FTDI and ftd.com (the “Formation
Agreement”), transferred substantially all of FTDI’s
assets, rights and interests relating to the Direct Access Business
to ftd.com, including FTDI’s Web site.
D. In connection with FTDI’s operation of
FTD Florists Online, FTDI desires to obtain various online hosting
services (“Services”) from ftd.com, and ftd.com desires
to provide such Services to FTDI.
THEREFORE, THE PARTIES HEREBY AGREE AS
FOLLOWS:
Section 1. Services.
(a) ftd.com shall provide, directly, through its
subsidiaries or through a third party vendor reasonably
satisfactory to FTDI, the services described on Exhibit A hereto,
at the cost specified and on the other terms and conditions set
forth on Exhibit A.
(b) In the event that FTDI requests services
that exceed the scope or extent of the Services provided for
herein, and if ftd.com agrees to provide such services, ftd.com and
FTDI will negotiate in good faith the terms and conditions,
including price, under which ftd.com will provide such Services;
provided, however, that the terms and conditions, including price,
upon which ftd.com will provide those Services to FTDI shall be no
less favorable to FTDI than the terms and conditions, including
price, upon which ftd.com provides comparable services to
unaffiliated third parties.
Section 2. Compensation.
FTDI will pay to ftd.com when due a fee for each
of the Services equal to the amount described in Exhibit A hereto
relating to such Service, provided that in the event FTDI
terminates any Service in accordance with Section 3 hereof, the fee
for such Service shall cease to accrue on and after the effective
date of such termination. Late payments shall accrue interest at a
rate equal to ftd.com’s average cost of borrowings at the end
of ftd.com’s most recent fiscal quarter plus 200 basis
points.
Section 3. Term.
(a) The term of this Agreement shall begin on
the date hereof (the “Effective Date”) and shall
continue for a period of 12 months in full force and effect until
it is terminated in accordance with this Section 3 and shall be
automatically renewed for like periods of 12 months unless notice
of election not to renew is given by either party at least 90 days
prior to the commencement of any renewal period.
(b) ftd.com shall have the right (but not the
obligation) to terminate this Agreement and the rights granted to
FTDI hereunder if:
(i) FTDI is in material breach of any of its
obligations hereunder, which breach is not cured within 20 days of
receipt of written notice from ftd.com of such breach;
(ii) FTDI is the subject of a voluntary petition
in bankruptcy or any voluntary proceeding relating to insolvency,
receivership, liquidation or composition for the benefit of
creditors, if such petition or proceeding is not dismissed within
90 days of filing, or becomes the subject of any involuntary
petition in bankruptcy or any involuntary proceeding relating to
insolvency, receivership, liquidation or composition for the
benefit of creditors, if such petition or proceeding is not
dismissed within 90 days of filing;
(iii) FTDI involuntarily dissolves or is
dissolved; or
(iv) FTDI is judicially adjudicated insolvent or
generally is unable to pay its debts as they mature or makes an
assignment for the benefit of its creditors.
(c) FTDI shall have the right (but not the
obligation) to terminate this Agreement and the rights granted to
ftd.com hereunder if:
(i) ftd.com is in material breach of any of its
obligations hereunder, which breach is not cured within 20 days of
receipt of written notice from FTDI of such breach;
(ii) ftd.com is the subject of a voluntary
petition in bankruptcy or any voluntary proceeding relating to
insolvency, receivership, liquidation or composition for the
benefit of creditors, if such petition or proceeding is not
dismissed within 90 days of filing, or becomes the subject of any
involuntary petition in bankruptcy or any involuntary proceeding
relating to insolvency, receivership, liquidation or composition
for the benefit of creditors, if such petition or proceeding is not
dismissed within 90 days of filing;
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(iii) ftd.com involuntarily dissolves or is
dissolved; or
(iv) ftd.com is judicially adjudicated insolvent
or generally is unable to pay its debts as they mature or makes an
assignment for the benefit of its creditors.
(d) FTDI will have the right (but not the
obligation) to terminate this Agreement and the rights granted to
ftd.com hereunder, upon 90 days written notice to ftd.com,
following the acquisition of the beneficial ownership of at least
20% (the “Threshold”) of the voting power represented
by the voting securities of ftd.com, any successor thereto or any
Permitted Assignee (as defined in Section 9(a) of this Agreement)
by any person or “group” within the meaning of Sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) or any successor provision
to either of the foregoing, including any group acting for the
purpose of acquiring, holding or disposing of securities within the
meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor
provision thereof (a “group”) other than FTD
Corporation, a Delaware corporation (“FTDC”), any
affiliate of FTDC, FTDI or any affiliate of FTDI. For purposes of
this Agreement, (i) the term “beneficial ownership”
shall have the meaning set forth in Rule 13d-3 of the Exchange Act
or any successor provisions thereof, (ii) the term “voting
securities” means the Class A Common Stock, par value $.01
per share, and Class B Common Stock, par value $.01 per share, of
ftd.com and any other securities issued by ftd.com having the power
to vote generally in the election of directors of ftd.com and (iii)
the term “affiliate” means a person or entity directly
or indirectly controlled by, controlling or under common control
with another person. For purposes of this Section 3, an acquisition
shall not include (A) the acquisition by a person of voting
securities of ftd.com pursuant to an involuntary disposition by
FTDI through foreclosure or similar event or (B) the acquisition by
a person of voting securities of ftd.com pursuant to a dividend
intended to be on a tax-free basis (a “Tax-Free
Spin-Off”) under the Internal Revenue Code of 1986, as
amended from time to time, but shall include a subsequent
acquisition of voting securities pursuant to a disposition by the
person that acquired the voting securities in such involuntary
disposition or such Tax-Free Spin-Off. In the event any person
acquires beneficial ownership of voting power in excess of the
Threshold as a result of a transaction described in the immediately
preceding sentence, the Threshold with respect to such person shall
be adjusted to an amount equal to the percentage of beneficial
ownership held by such person immediately following such
transaction.
(e) A party may exercise its right to terminate
pursuant to this Section 3 by sending appropriate written notice to
the other party. No exercise by a party of its rights under this
Section 3 will limit its remedies by reason of the other
party’s default, the party’s rights to exercise any
other rights under this Section 3, or any of that party’s
other rights.
Section 4. Records and
Accounts.
ftd.com will maintain accurate books, records
and accounts of all transactions relating to the Services performed
by it pursuant to this Agreement. FTDI may, at its own expense,
examine and copy those books and records as provided in this
Section 4. Such books, records and accounts will be maintained in a
manner that allows FTDI to separate these matters from those
relating to ftd.com’s other operations. Such books, records
and accounts will reflect such
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information as would normally be examined by an
independent accountant in performing an audit pursuant to United
States generally accepted auditing standards for the purpose of
certifying financial statements, and to permit verification thereof
by governmental agencies. FTDI may make examinations pursuant
hereto during ftd.com’s usual business hours, and at the
place in the continental United States where ftd.com regularly
keeps these books and records. FTDI will be required to notify
ftd.com at least two business days before the date of planned
examination. If FTDI’s examination is not completed within
two months from commencement, ftd.com at any time may require FTDI
to terminate such examination on seven days’ notice to FTDI,
provided that ftd.com has cooperated with FTDI in the examination
of such books and records.
Section 5. No
Restrictions.
Nothing in this Agreement shall limit or
restrict the right of any of FTDI’s directors, officers or
employees or any of ftd.com’s directors, officers or
employees to engage directly or indirectly in the same or similar
b
