INTERACTIVE MKTG AGREEMENT

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.



INTERACTIVE MARKETING AGREEMENT



This Agreement, dated as of May 1, 1997 (the "Effective Date"), is made and entered into by and between America Online, Inc. ("AOL"), a Delaware corporation, with its principal offices at 22000 AOL Way, Dulles, Virginia 20166 and 800 Flowers, Inc. ("FLOWERS"), a New York corporation, with its principal offices at 1600 Stewart Avenue, Westbury, New York 11590 (each a "Party" and collectively the "Parties").





AOL and FLOWERS each desires that FLOWERS provide the Online Area on the AOL Network, subject to the terms and conditions set forth in this Agreement. Defined terms used but not defined in the body of the Agreement shall be as defined on Exhibit A attached hereto.





1. ONLINE AREA - CONTENT AND PROGRAMMING. The Parties shall have the following duties and rights with respect to the content and programming of the Online Area:



1.1 ONLINE AREA. FLOWERS shall work diligently to maintain the

Online Area, consisting of the categories and types of Content

and Products contained within the Online Area as of the

Effective Date, and such other Content and Products as may be

added pursuant to Section 1.2. FLOWERS shall develop any

redesign of the Online Area in consultation with AOL and in

accordance with (i) a mutually agreed upon Design Package and

(ii) any standard design and content publishing guidelines

provided to FLOWERS by AOL. FLOWERS shall not authorize or

permit any third party to distribute the Licensed Content or

any other Content of FLOWERS through the AOL Network absent

AOL's prior written approval; provided that FLOWERS shall not

be prohibited from (a) placing advertisements for Products

with third party content providers on the AOL Service (so long

as such advertisements link only to the Online Area) or (b)

licensing portions of the Licensed Content relating to such

Products to such providers in order to create "mini-store"

screens on those providers' areas (e.g., on the Romance

Channel) (so long as such screens link only to the Online

Area).



1.2 ADDITIONAL CONTENT; ADVERTISING; OTHER TRANSACTIONS. In the

event that FLOWERS wishes to offer any categories or types of

Content or Products (including, without limitation, any

third-party advertising or promotion on the Online Area) in

addition to those categories or types specifically contained

within the Online Area as of the Effective Date (the

"Additional Content"), FLOWERS shall notify AOL in writing.

FLOWERS's right to offer any such Additional Content shall be

subject to AOL's prior written approval, which shall not be

unreasonably withheld. Any third party advertising or

promotion on the Online Area (including, without limitation,

classifieds listings) shall be subject to AOL's then standard

advertising terms and conditions, including, without

limitation, applicable revenue sharing terms (as such terms

are mutually agreed upon).





1.3 INTERNET AREAS. FLOWERS shall not be permitted to establish

any links between the Online Area and any other area on or

outside of the AOL Network, including, without limitation,

sites on the World Wide Web portion of the Internet, without

the prior written approval of AOL. In the event that AOL

approves any such links or pointers, such approval shall, in

each case, be subject to FLOWERS's compliance with the

then-current terms and conditions for such links or pointers,

as such terms and conditions may be amended by AOL from time

to time; provided that there shall be no fees assessed for

such links or pointers, except as provided in Section 1.2 for

links or pointers relating to third-party advertising or



1.4 CONTESTS. FLOWERS shall take all commercially reasonable steps

necessary to ensure that any contest, sweepstakes or similar

promotion conducted or promoted through the Online Area (a

"Contest") complies with all applicable federal, state and

local laws and regulations. FLOWERS shall provide AOL with at

least thirty (30) days prior written notice of any Contest.



1.5 NAVIGATIONAL ICONS. AOL shall be entitled to establish

navigational icons, links and pointers connecting the Online

Area (or portions thereof) with other content areas on or

outside of the AOL Network; provided that the Parties shall

meet following execution hereof and thereafter, as

appropriate, to develop guidelines for such navigational icons

(e.g., pre-approved logos, copy, content categories for

placement of icons, etc.).



1.6 [****] COMMITMENT; SPECIAL OFFERS. FLOWERS shall ensure

that the [****] for Products in the Online Area [****] for

substantially similar Products offered by or on behalf of

FLOWERS through any online or Internet-based interactive

sites. In addition, FLOWERS shall, on a reasonably periodic

basis, promote a reasonable number of special offers

through the Online Area (e.g., free gift certificates to

AOL Members upon the purchase of Product(s) and tie-ins to

AOL's reward or frequent purchaser points program (upon

development of such program by AOL, and on terms of

participation in such program by FLOWERS that are mutually

agreed by the parties), etc.) (the "Special Offers").

FLOWERS shall (a) provide AOL with reasonable prior notice

of Special Offers so that AOL can market the availability

of such Special Offers in the manner AOL deems appropriate

in its editorial discretion and (b) ensure that the Special

Offers are the best offers in all material respects when

compared with any other such offers made available by or on

behalf of FLOWERS through any interactive, online or

Internet media during the same time the Special Offers are

made available; provided that clause (b) shall not apply to

a Special Offer to the extent that FLOWERS cannot make such

offer available in the event such offer requires certain

support technology from AOL which AOL cannot, or elects not

to, provide. In addition, FLOWERS shall provide reasonably

increased support for online contest and other special

promotions, including, without limitation, greater

contribution of flowers and gifts for use as prizes and

give-aways.





**** 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.





1.7 SERVICE CHARGES. In connection with any Product ordered

through the AOL Network, FLOWERS may not, without the prior

written consent of AOL, require the purchaser to pay (a) any

shipping, handling or similar charges or (b) any processing,

service or similar charges (the "Service Charges") in excess

of (i) the Service Charge assessed for similar orders placed

through FLOWERS telephone order system or (ii) [****] of the

Service Charge assessed by FLOWERS inany online or Internet-

based sales channel; provided that, except as mutually agreed

by the Parties, the AOL Service Charge shall never be lower

than [****].



1.8 DISCLAIMERS. FLOWERS agrees that a product disclaimer in

substantially the following form will be displayed in a legal

notice screen to be placed in a mutually agreed upon spot in

the listbox in the Customer Service portion of the Online

Area:



"AOL AND ITS AFFILIATES WILL NOT BE A PARTY TO ANY

TRANSACTION BETWEEN ANY PURCHASER AND FLOWERS, AND,

EXCEPT AS EXPRESSLY PROVIDED IN AOL'S SHOPPING

CHANNEL SATISFACTION GUARANTEE (AVAILABLE AT KEYWORD

"GUARANTEE"), ALL ASPECTS OF SUCH TRANSACTIONS

INCLUDING BUT NOT LIMITED TO PURCHASE TERMS, PAYMENT

TERMS, WARRANTIES, GUARANTEES, MAINTENANCE, AND

DELIVERY ARE SOLELY BETWEEN PURCHASER AND FLOWERS.

AOL AND ITS AFFILIATES PROVIDE NO GUARANTEES OR

WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE

QUALITY, MAKE, OR PERFORMANCE OF THE PRODUCTS OR

SERVICES AVAILABLE THROUGH THIS AREA. ALL SUCH

GUARANTEES OR WARRANTIES, IF ANY, ARE DIRECTLY

BETWEEN FLOWERS OR CATALOGER AND THE PURCHASER."



1.9 LICENSE. FLOWERS hereby grants AOL a non-exclusive worldwide

license to market, license, distribute, display, perform,

transmit and promote the Online Area contained therein through

the AOL Network solely for the purposes described herein. AOL

Members shall have the right to access and use the Online Area

free of charge during the term of the Agreement. Subject to

such license, FLOWERS retains all right, title to and interest

in the Licensed Content.



1.10 AOL LOOK AND FEEL. FLOWERS acknowledges and agrees that AOL

shall own all right, title and interest in and to the AOL Look

and Feel, subject to FLOWERS's ownership rights in the

Licensed Content, including, without limitation, any "look and

feel" rights of FLOWERS specifically associated with the

Licensed Content and the Online Area.







**** 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. ONLINE AREA - MANAGEMENT AND MAINTENANCE.



2.1 MANAGEMENT OF ONLINE AREA. FLOWERS shall manage, review,

delete, edit, create, update and otherwise manage all content

and services available on or through the Online Area,

including but not limited to the Licensed Content and message

boards, in a timely and professional manner and in accordance

with the terms of this Agreement and AOL's applicable Terms of

Service. As set forth in further detail in Section 2.1 of

Exhibit C, FLOWERS shall be responsible for all costs and

expenses related to production work for the Online Area.

FLOWERS shall use reasonable efforts to keep the Online Area

current, accurate and well-organized. FLOWERS warrants that

the Online Area (i) will not infringe on or violate any

copyright, U.S. patent or any other third-party right; and

(ii) will not contain any Content which violates any

applicable law or regulation. FLOWERS will use commercially

reasonable best efforts to ensure that the Online Area

conforms to AOL's applicable Terms of Service. AOL shall have

no obligations with respect to the Content available on or

through the Online Area, including, but not limited to, any

duty to review or monitor any such Content.



2.2 ACCESS EQUIPMENT. FLOWERS shall provide all computer,

telephone and other equipment or resources necessary for

FLOWERS to access the AOL Network, except for the AOL

proprietary client software necessary to access the AOL

Network and the publishing tools to be provided by AOL

pursuant to Exhibit C.



2.3 DUTY TO INFORM. FLOWERS shall use all reasonable efforts to

promptly inform AOL of any written information (or any verbal

information received by a senior executive of FLOWERS) related

to the Online Area which could reasonably lead to a claim,

demand, or liability of or against AOL and/or its Affiliates

by any third party.



2.4 OVERHEAD ACCOUNTS. FLOWERS shall be granted a reasonable

number of Overhead Accounts, as mutually determined by AOL and

FLOWERS, for the exclusive purpose of enabling it and its

agents to perform FLOWERS's duties under this Agreement.

FLOWERS shall be responsible for the actions taken under or

through its Overhead Accounts, which actions are subject to

AOL's applicable Terms of Service and for any surcharges,

including, without limitation, all premium charges,

transaction charges, and any applicable communication

surcharges incurred by any Overhead Account issued to FLOWERS,

but FLOWERS shall not be liable for charges incurred by any

Overhead Account relating to AOL's standard monthly usage fees

and standard hourly charges, which charges AOL shall bear.

Upon the termination of this Agreement, all Overhead Accounts,

related screen names and any associated usage credits or

similar rights, shall automatically terminate. AOL shall have

no liability for loss of any data or content related to the

proper termination of any Overhead Account.



2.5 CUSTOMER SERVICE. It is the sole responsibility of FLOWERS to

provide customer service to persons or entities purchasing

Products through the AOL Network







("Customers") regarding any Products or related transactions.

In addition to complying with the Customer Service

Requirements set forth in Exhibit E, and any reasonable

changes thereto that AOL may make from time to time, FLOWERS

shall ensure same-day delivery for orders received before

12:30 p.m. in the time zone where the order is to be

delivered. If same-day service will not be feasible for a

particular order, FLOWERS agrees to use its best efforts

(e-mail, phone, etc.) to notify the customer that the order

will be delivered the next day. Next-day delivery will always

be attempted, even during busy holiday seasons. Furthermore,

the "cut-off" time of 12:30 p.m. may be expanded or contracted

by FLOWERS during holiday periods according to significant

changes in market demand. FLOWERS will use all reasonable

efforts to notify AOL before the "cutoff" time is changed.

FLOWERS agrees that the cutoff time for accepting orders from

AOL customers shall be no sooner than the cutoff time for any

other FLOWERS online or Internet-based partner, subject to

earlier cutoff times for AOL customers during specific

performance failures of the AOL Network (e.g., downtime of

e-mail, Standard Clerk Tools). FLOWERS shall bear all

responsibility for compliance with federal, state and local

laws in the event the Products are out of stock or are no

longer available at the time an order is received. Title to

Product(s) shall remain in FLOWERS and shall be transferred

directly from FLOWERS to the Customers. Payment for FLOWERS

Product(s) shall be collected by FLOWERS directly from

Customer. FLOWERS shall bear the entire economic risk of

shipment and payment for FLOWERS Product(s).



2.6 ERROR RATES. Recognizing the subjective nature of a

custom-made floral order, to the extent that an error does

occur or is alleged to occur by an AOL Member, FLOWERS will

rectify the situation as set forth in Exhibit E. FLOWERS will

use its best efforts to achieve an error rate on orders taken

through the AOL Network that does not exceed [****]

(the "Performance Standard"). For purposes of this paragraph,

an "error" is defined as an order that, due primarily to

the failure of FLOWERS or its florists, (i) is not

delivered pursuant to FLOWERS customary delivery schedules,

(ii) is delivered to an incorrect location, (iii) or does

not arrive in reasonably good condition. In the event that

FLOWERS fails to meet the Performance Standard, as

determined on a monthly basis, for a period of two

consecutive months, then AOL shall send FLOWERS a written

notice specifying the details of any such failures and

affording FLOWERS thirty (30) days to comply with the

Performance Standard. If FLOWERS does not cure said default

within thirty (30) days then AOL shall have the right to

terminate this Agreement. Flowers agrees to use best

efforts in correcting any problems reported by AOL and will

act accordingly to correct any problems. FLOWERS will

provide a monthly report to AOL no later than thirty (30)

days after the end of each calendar month that shows all

known errors and measures the rate of properly-completed

orders versus orders processed with an "error" (as defined

above). Without limiting the foregoing, in the event

(a) the error rate achieved by FLOWERS is above [****] but

below [****] and (b) AOL receives a significant number of

complaints from AOL Members





**** 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.





regarding errors, the parties shall discuss in good faith the

means by which the error rate may be improved.



2.7 TECHNICAL CONFORMANCE. FLOWERS shall take all commercially

reasonable steps necessary to conform its promotion and sale

of Products through the Online Area to the then-existing

commerce technologies made available to FLOWERS by AOL.

Notwithstanding the foregoing, FLOWERS and AOL shall take all

commercially reasonable efforts to develop and implement a new

order transfer mechanism (to be mutually agreed upon by the

Parties as soon as commercially practicable following

execution hereof) to replace the FTP process currently used by

FLOWERS for receipt of orders from AOL.



2.8 ADDITIONAL TRANSACTION MECHANISMS. FLOWERS shall only be

permitted to promote and/or offer Products to be sold through

the Online Area using AOL's then-available "clerk" transaction

tools ("Standard Clerk Tools"). To the extent the Parties

agree that FLOWERS shall be permitted to sell Products from

FLOWERS's site on the World Wide Web through a hybrid browser

or other similar form, the Parties shall mutually agree upon a

transaction mechanism (an "Alternative Transaction Mechanism")

for the purchase of Products, which Alternative Transaction

Mechanism shall include FLOWERS's plan for reporting

information to AOL regarding sales of Products. In the event

an Alternative Transaction Mechanism is agreed upon, the

parties shall mutually agree on (a) any new revenue-sharing

provisions relating to the sales occurring through such means

and (b) any changes in the revenue targets set forth in

Sections 4 and 10. All sales under the Alternative Transaction

Mechanism shall count towards such revenue targets.



3. MARKETING AND PROMOTION.



3.1 BY FLOWERS. FLOWERS shall use commercially reasonable efforts

to market the Online Area, and shall, at a minimum, perform

the following obligations:



3.1.1 FLOWERS shall cooperate with and reasonably assist

AOL in supplying material for AOL's marketing and

promotional activities which relate to the Online



3.1.2 FLOWERS shall perform any New Member acquisition

obligations set forth in Exhibit D and shall not

perform any member or subscriber acquisition

obligations on behalf of any interactive, online or

Internet service provider (including, without

limitation, NetCom, EarthLink, CompuServe, Microsoft

Network; and AT&T WorldNet).



3.1.3 FLOWERS shall prominently and regularly promote the

Online Area (making specific mention of its

availability through the America Online(R)service) in

(i) approximately [****] of FLOWERS-controlled

television, radio or print advertisements that are

produced after







**** 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.





the Effective Date and that specifically mention any

of FLOWERS's online or Internet-based shopping

functionality and (ii) approximately [****] of any

publications, programs, features or other forms of

media under FLOWERS's control (excluding the

advertisements subject to clause (i)). In this

regard, in any instances when FLOWERS makes

promotional reference in any print advertisements to

its World Wide Web site(s) (each a "FLOWERS Web

Site") (each reference, a "Web Reference"), FLOWERS

shall include a specific reference to the Online

Area's availability through the America

Online(R)service of at least equal prominence to the

Web Reference; any listings of the applicable

"URL(s)" for such web site(s) (each a "Web

Reference") shall include a listing of the AOL

"keyword" for the Online Area of at least equal

prominence to the Web Reference. AOL acknowledges

that an occasional, unintentional failure to comply

with the foregoing promotional commitments shall not

be deemed a breach of the Agreement.



3.1.4 FLOWERS shall ensure that (a) AOL is given the

exclusive first opportunity to participate in

[****] of any online or Internet-related marketing

and promotional activities, initiated and/or

controlled by (directly or through an advertising

agency) FLOWERS, which FLOWERS desires to conduct

with any entity which could reasonably be

constru ...