Document:

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                                                                  EXHIBIT 10.22

                                  CONFIDENTIAL
                         INTERACTIVE MARKETING AGREEMENT

         This Interactive Marketing Agreement (the "Agreement"), made and
entered into on September 1, 2000, but for all purposes of this Agreement deemed
to be effective as of October 1, 2000 (the "Effective Date"), is between America
Online, Inc. ("AOL"), a Delaware corporation, with offices at 22000 AOL Way,
Dulles, Virginia 20166, and 800-FLOWERS.COM, Inc. ("1-800-FLOWERS" or "MP"), a
New York corporation, with offices at 1600 Stewart Avenue, Westbury, NY 11590.
AOL and 1-800-FLOWERS may be referred to individually as a "Party" and
collectively as the "Parties." The Parties expressly acknowledge and agree that
the Original IMAs have been terminated and are of no further force and effect.

                                  INTRODUCTION

         Each of AOL and 1-800-FLOWERS desires to enter into an interactive
marketing relationship whereby AOL shall promote and distribute interactive
sites referred to (and further defined) herein as the Affiliated 1-800-FLOWERS
Sites. This relationship is further described below and is subject to the terms
and conditions set forth in this Agreement. Defined terms used but not defined
in the body of the Agreement shall be as defined on Exhibit B attached hereto.

                                      TERMS

1.       PROMOTION, DISTRIBUTION AND MARKETING.

         1.1.     AOL PROMOTION OF AFFILIATED 1-800-FLOWERS SITES. AOL shall
                  provide 1-800-FLOWERS with the promotions for the Affiliated
                  1-800-FLOWERS Sites described on Exhibit A hereto, which
                  promotions the Parties shall mutually agree upon in writing on
                  or before September 8, 2000 or another date (prior to the
                  Effective Date) mutually agreed upon by the Parties, and
                  attach as Exhibit A. The Parties agree that such promotions
                  described in Exhibit A (the "Carriage Plan") will be designed
                  to support a goal (i.e., not an obligation) of [****] for
                  Year 1 of the Agreement, and the Parties also agree that
                  the Carriage Plans going forward under this Agreement shall
                  have the goal (i.e., not an obligation) of achieving at least
                  [****] during the Initial Term; provided that in any case the
                  Partiesexpressly acknowledge and agree that the ability to
                  reach such goals may be the result of factors within the
                  exclusive control of AOL (only to the extent of AOL's
                  obligations under the Agreement and otherwise within AOL's
                  exclusive control to promote and drive its users to the AOL
                  Properties), 1-800-FLOWERS and/or third parties; and provided,
                  further, that a failure to reach such goals is not a breach of
                  this Agreement by AOL or 1-800-FLOWERS. Subject to
                  1-800-FLOWERS' approval (which shall not be unreasonably
                  withheld), AOL shall have the right to fulfill its promotional
                  commitments with respect to any of the foregoing promotions by
                  providing 1-800-FLOWERS with comparable promotional placements
                  in appropriate alternative areas of the same AOL Properties;
                  PROVIDED, HOWEVER, that unless otherwise agreed upon by the
                  Parties, any such comparable promotional placements shall be
                  within the same Tier as the promotions for which such
                  comparable promotional placements are being substituted. In
                  addition, if AOL is unable to deliver any particular
                  promotion, AOL shall work with 1-800-FLOWERS to provide
                  1-800-FLOWERS, as its sole remedy, with a comparable
                  promotional placement (i.e., a placement which is not less
                  valuable, in terms of the applicable CPM, than the promotion
                  being replaced) within the same Tier (as described on Exhibit
                  A to this Agreement).

**** Represents material which has been redacted 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.

CONFIDENTIAL

<PAGE>

AOL reserves the right to redesign or modify the organization, structure, "look
and feel," navigation and other elements of the AOL Network at any time. In the
event such modifications materially and adversely affect any specific promotion,
AOL shall work with 1-800-FLOWERS to provide 1-800-FLOWERS, as its sole remedy,
a comparable promotional placement in the same Tier as the promotion being
replaced. The promotions described on Exhibit A and any comparable promotions
provided herein shall be referred to as the "Promotions." On a periodic basis
[****], the Parties shall review and modify, as applicable, the promotional plan
for the Promotions in a continuing effort to have a current and effective
promotional plan. In addition, in order to expand 1-800-FLOWERS' exposure on the
AOL Network beyond the AOL-Controlled Areas, (i) AOL shall use commercially
reasonable efforts to assist 1-800-FLOWERS in establishing promotional,
marketing, advertising and/or distribution relationships with AOL's Content
providers to permit 1-800-FLOWERS to be the provider to or through such entities
of the Products described on Exhibit D hereto and (ii) the Parties shall work
together in good faith to approach other entities (e.g., those entities in which
AOL has an ownership interest) to promote, market and distribute the Products
set forth on Exhibit D through such entities (the activities in clauses (i) and
(ii) above, collectively, the "Promotional Activities"); PROVIDED, HOWEVER, that
1-800-FLOWERS shall have no obligation to enter into any such contractual
arrangement. With respect to the Promotional Activities that result in a
contractual relationship between 1-800-FLOWERS and any third party, AOL shall be
entitled to receive a negotiated percentage (as agreed upon in good faith by the
Parties) of the gross revenues (as defined in any such contract) and up-front
payments (if any) made pursuant to any such arrangement. 1-800-FLOWERS hereby
acknowledges and agrees that AOL does not guarantee that (x) any of the entities
to be approached under this Section 1.1 will agree to enter into a contractual
arrangement with 1-800-FLOWERS and/or (y) the terms and conditions of any such
contractual arrangement into which any such entity may agree to enter will
resemble in any respect the terms and conditions of this Agreement (including,
without limitation, the promotion and exclusivity provisions hereof).

         1.2.     IMPRESSIONS COMMITMENT.  During the Term, AOL shall deliver
                  [****] Impressions set forth in the respective Carriage Plans
                  to 1-800-FLOWERS through the Promotions (the "Impressions
                  Commitment"); which Impressions shall be commensurate with the
                  [****] goals set forth in Section 1.1. The Parties expressly
                  acknowledge and agree that AOL has not made and will not
                  make any guarantees regarding click-throughs or the ability
                  to reach or exceed any Transaction Revenue goals or
                  thresholds. In the event that, by the end of any Year, AOL
                  does not reach the Annual Impressions Target for such Year as
                  set forth on Exhibit A hereto (a "Shortfall"), (i) such
                  Shortfall shall not be deemed a breach of the Agreement by
                  AOL, but instead shall be added to the Annual Impressions
                  Target for the subsequent Year and (ii) the Impressions
                  Commitment shall be increased (subject to the AOL Setoff
                  Right) by [****] Impressions (the "Shortfall Penalty") for
                  each Year in which any such Shortfall exists. With respect to
                  the Annual Impressions Targets specified on Exhibit A, AOL
                  shall not be obligated to provide Impressions in excess of any
                  Annual Impressions Target in any Year. In the event AOL
                  provides Impressions in excess of any Annual Impressions
                  Target in any Year during the Initial Term (the "Excess
                  Impressions"), AOL shall have the right to credit any such
                  Excess Impressions (the "AOL Setoff Right") against any future
                  Shortfall solely for purposes of determining the applicability
                  of any Shortfall Penalty (e.g., AOL would have the right to
                  credit [****] of Excess Impressions in Year 1 against a
                  Shortfall of [****] in Year 3 such that AOL would not be
                  required to pay any Shortfall Penalty due to such Year 3
                  Shortfall, and the remaining [****] Excess Impressions would
                  be available to credit against any Shortfall of up to [****]
                  Impressions in Year 4 solely for purposes of determining the
                  applicability of any Shortfall Penalty in Year 4); PROVIDED,
                  HOWEVER, that AOL will use commercially reasonable efforts to
                  deliver the Impressions in accordance with the target amounts
                  set forth on Exhibit A hereto.

**** Represents material which has been redacted 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.

                                        2

CONFIDENTIAL

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In the event that 1-800-FLOWERS requests that AOL reduce its promotional
commitments hereunder in any Year of the Term, and as a result, AOL fails to
satisfy the Annual Impressions Target in such Year, then AOL shall not be
responsible for the delivery of such Shortfall, and the Impressions Commitment
shall not be increased by the Shortfall Penalty. Within thirty (30) days
following any Year of the Initial Term (other than the final Year thereof) in
which there is a Shortfall in Impressions, the Parties shall meet to discuss the
means by which AOL will attempt to rectify such Shortfall in the subsequent
Year. In the event there is a shortfall in Impressions as of the end of the
Initial Term (a "Final Shortfall"), AOL shall provide 1-800-FLOWERS (as
1-800-FLOWERS's sole remedy), during the greater of (x) the [****]month period
immediately following the expiration of the Initial Term or (y) the period in
which it would require AOL to deliver the Final Shortfall to 1-800-FLOWERS at a
rate not to exceed [****] per month (collectively, the "Make-Whole Period") and
as 1-800-FLOWERS' sole remedy, with comparable promotional placements for the
same number of Impressions (equal to the Final Shortfall) in the same Tiers on
the applicable AOL Properties (as mutually agreed upon by the Parties); PROVIDED
that AOL shall not deliver to 1-800-FLOWERS more than [****] Impressions of any
such Final Shortfall in any one (1) month of the Make-Whole Period, unless
otherwise agreed upon by the Parties.

         1.3.     CONTENT OF PROMOTIONS. The Promotions for 1-800-FLOWERS shall
                  link only to the Affiliated 1-800-FLOWERSSites and shall
                  promote only the Exclusive Products and any other Products
                  that 1-800-FLOWERS is permitted to offer on the Affiliated
                  1-800-FLOWERS Sites pursuant to the terms of this Agreement
                  [****]. The specific 1-800-FLOWERS Content to be contained
                  within the Promotions (including, without limitation,
                  advertising banners and contextual promotions) (the "Promo
                  Content") shall be determined by 1-800-FLOWERS, subject to
                  AOL's technical limitations, the terms of this Agreement and
                  AOL's then-applicable policies relating to advertising and
                  promotions. 1-800-FLOWERS and AOL shall work together to
                  develop a quarterly online marketing plan (which 1-800-FLOWERS
                  shall submit to AOL in advance of each quarter during the Term
                  for AOL's final review) with respect to the Affiliated
                  1-800-FLOWERS Sites. The Parties shall meet in person or by
                  telephone at least monthly to review operations and
                  performance hereunder, including a review of the Promo Content
                  to ensure that it is designed to maximize performance.
                  1-800-FLOWERS shall consistently update the Promo Content no
                  less than twice per month. Except to the extent expressly
                  described herein (e.g., the Promotions as described on Exhibit
                  A hereto), the specific form, placement, duration and nature
                  of the Promotions shall be as determined by AOL in its
                  reasonable editorial discretion (consistent with the editorial
                  composition of the applicable screens).

2.       AFFILIATED 1-800-FLOWERS SITES.

         2.1.     CUSTOMIZED AFFILIATED 1-800-FLOWERS SITES. 1-800-FLOWERS shall
                  create, at its sole cost and expense, a customized Affiliated
                  1-800-FLOWERS Site for each of the AOL Properties, through
                  which 1-800-FLOWERS can promote, advertise, market and
                  complete transactions regarding the Products set forth on
                  Exhibit D hereto (which interactive sites collectively shall
                  be referred to herein as the "Affiliated 1-800-FLOWERS
                  Sites"), and warrants that it also shall implement, at its own
                  cost and expense, any appropriate infrastructure additions to
                  the Affiliated 1-800-FLOWERS Sites to support the projected
                  traffic growth on such Affiliated 1-800-FLOWERS Sites. Each
                  Affiliated 1-800-FLOWERS Site shall be customized to comply
                  with the co-branding requirements for the relevant AOL
                  Property, as set forth on Exhibit I hereto.

**** Represents material which has been redacted 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.

                                        3

CONFIDENTIAL

<PAGE>

         2.2.     CONTENT. 1-800-FLOWERS shall make available through the
                  Affiliated 1-800-FLOWERS Sites the comprehensive offering of
                  Products and related Content (under "Brands" owned by
                  1-800-FLOWERS that are selected by 1-800-FLOWERS) described on
                  Exhibit D. Except as mutually agreed in writing by the Parties
                  and as otherwise permitted under Section 2.8.2(a)(iii) of this
                  Agreement, the Affiliated 1-800-FLOWERS Sites shall contain
                  only Content that is directly related to the Products listed
                  on Exhibit D and shall not contain any third-party products,
                  services, programming or other Content other than that within
                  the categories set forth on Exhibit D. All sales of Products
                  through the Affiliated 1-800-FLOWERS Sites shall be conducted
                  through a direct sales format; [****] without the prior
                  written consent of AOL. 1-800-FLOWERS shall review, delete,
                  edit, create, update and otherwise manage all Content
                  available on or through the Affiliated 1-800-FLOWERS Sites in
                  accordance with the terms of this Agreement.

         2.3.     PRODUCTION WORK. Except as agreed to in writing by the Parties
                  pursuant to Section 10 of Exhibit F hereto, 1-800-FLOWERS
                  shall be responsible for all production work associated with
                  the Affiliated 1-800-FLOWERS Sites, including all related
                  costs and expenses.

         2.4.     TECHNOLOGY. 1-800-FLOWERS shall use commercially reasonable
                  efforts (with the appropriate support from AOL) to conform its
                  promotion and sale of Products through the Affiliated
                  1-800-FLOWERS Sites to the then-existing technologies
                  identified by AOL which are optimized for the AOL Service
                  (including, without limitation, any "quick checkout" tool
                  which AOL may implement to facilitate purchase of Products by
                  AOL Users through the Affiliated 1-800-FLOWERS Sites). AOL
                  shall be entitled to require reasonable changes to the Content
                  (including, without limitation, the features or functionality)
                  within any linked pages of any Affiliated 1-800-FLOWERS Site
                  to the extent such Content shall, in AOL's good faith
                  judgment, adversely affect any operational aspect of the AOL
                  Network. AOL reserves the right to review and test any
                  Affiliated 1-800-FLOWERS Site from time to time to determine
                  whether the site is compatible with AOL's then-available
                  client and host software and the AOL Network.

         2.5.     PRODUCT OFFERING. During the Term and subject to Section 2.2
                  of this Agreement, 1-800-FLOWERS shall use commercially
                  reasonable efforts to ensure that the Affiliated 1-800-FLOWERS
                  Sites include substantially all of the Products and other
                  Content (including, without limitation, any features, offers,
                  contests, functionality or technology) that are then made
                  available by or on behalf of 1-800-FLOWERS through any
                  Additional 1-800-FLOWERS Channel; PROVIDED, HOWEVER, that (i)
                  such inclusion shall not be required where it is commercially
                  or technically impractical to either Party (i.e., inclusion
                  would cause either Party to incur substantial incremental
                  costs) or where such inclusion is prohibited by the terms of
                  (a) this Agreement or (b) another agreement (in full force and
                  effect as of July 1, 1999) to which 1-800-FLOWERS is a party,
                  (ii) the specific changes in scope, nature and/or offerings
                  required by such inclusion shall be subject to AOL's review
                  and approval, and to the terms of this Agreement, and (iii) in
                  the event that 1-800-FLOWERS makes a special offer on any
                  additional 1-800-FLOWERS Channel, then 1-800-FLOWERS shall use
                  commercially reasonable efforts to offer a comparable Special
                  Offer on the 1-800-FLOWERS Affiliated Sites.

**** Represents material which has been redacted 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.

                                      4
CONFIDENTIAL

<PAGE>

         2.6.     [****]TERMS. During the Term and subject to Section 2.5,
                  1-800-FLOWERS shall ensure that: (i) the [****] for the
                  Merchandise Value of the Products in any Affiliated
                  1-800-FLOWERS Site [****] the [****] for the Merchandise Value
                  of the Products or substantially similar Products offered by
                  or on behalf of 1-800-FLOWERS through any Additional
                  1-800-FLOWERS Channel; and (ii) the terms and conditions
                  related to Products offered on or through the Affiliated
                  1-800-FLOWERS Sites (when taken as a whole) are [****] to the
                  terms and conditions for the Products or substantially similar
                  Products offered by or on behalf of 1-800-FLOWERS on or
                  through any Additional 1-800-FLOWERS Channel.

         2.7.     SPECIAL OFFERS/MEMBER BENEFITS. During the Term, 1-800-FLOWERS
                  shall on a reasonably periodic basis (but in no event less
                  than [****] per quarter), promote throughout the Affiliated
                  1-800-FLOWERS Sites special offers exclusively available to
                  AOL Members and/or AOL Users ("Special Offers"). Each Special
                  Offer made available by 1-800-FLOWERS shall provide a
                  substantial member benefit to AOL Users, either by virtue of a
                  meaningful price discount, product enhancement, unique service
                  benefit or other special feature. 1-800-FLOWERS shall provide
                  AOL with reasonable prior notice of such Special Offers so
                  that AOL can market the availability of such Special Offers in
                  the manner AOL deems appropriate in its editorial discretion.
                  1-800-FLOWERS shall ensure that such Special Offers are [****]
                  when compared with any other such offers made by or on behalf
                  of 1-800-FLOWERS through any Additional 1-800-FLOWERS Channel
                  during the same time the Special Offers are made available on
                  the Affiliated 1-800-FLOWERS Sites; PROVIDED, HOWEVER, that
                  the foregoing obligation shall not apply to a particular
                  Special Offer to the extent that 1-800-FLOWERS cannot make
                  such offer available due to the fact that such offer requires
                  certain support technology from AOL which AOL cannot, or
                  elects not to, provide. 1-800-FLOWERS shall use commercially
                  reasonable efforts to provide an AOL Special Offer (to be
                  mutually agreed upon by the Parties) during each year of the
                  Term to new CompuServe 2000 members.

         2.8      OPERATING STANDARDS; NON-COMPLIANT CONTENT.

                       2.8.1   1-800-FLOWERS TECHNICAL PROBLEM. 1-800-FLOWERS
                  shall ensure that each of the Affiliated 1-800-FLOWERS
                  Sites complies at all times with the standards set forth in
                  Exhibit E hereto. In the event of (i) any 1-800-FLOWERS
                  Technical Problem, AOL shall have the right to block AOL
                  User access to the Affiliated 1-800-FLOWERS Site(s)
                  affected by the 1-800-FLOWERS Technical Problem until such
                  time as 1-800-FLOWERS cures such 1-800-FLOWERS Technical
                  Problem. In the event that 1-800-FLOWERS fails to cure any
                  such 1-800-FLOWERS Technical Problem within five (5)
                  business days, (a) AOL shall have the right (in addition to
                  any other remedies available to AOL hereunder (e.g., any
                  blocking right)) to reduce (on a PRO RATA basis) the Annual
                  Impressions Target for such Year (and for any subsequent
                  Year, in the event that such 1-800-FLOWERS Technical
                  Problem carries over from one Year to the next) until such
                  time as 1-800-FLOWERS cures such 1-800-FLOWERS Technical
                  Problem (and in such event, AOL shall be relieved of the
                  proportionate amount of the Impressions Commitment
                  corresponding to such reduction in Impressions) and (b) any
                  revenue threshold(s) set forth in Section 4 of this
                  Agreement shall each be adjusted proportionately to
                  correspond to such reduction in Impressions during the
                  period of non-compliance (e.g., for each day such
                  1-800-FLOWERS Technical Problem exists beyond such initial
                  five (5) business day period, the Impressions Commitment
                  shall be reduced by 1/365 of the Impressions to be provided
                  by AOL hereunder, and the relevant revenue threshold(s)
                  also shall be reduced by such percentage). In the event
                  that 1-800-FLOWERS fails to cure such 1-800-FLOWERS
                  Technical Problem within thirty (30) days, AOL shall have
                  the right to terminate this Agreement.

**** Represents material which has been redacted 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.

                                       5

CONFIDENTIAL

<PAGE>

Any Dispute regarding the existence of a 1-800-FLOWERS Technical Problem (or any
cure thereof) shall be subject to the Dispute resolution provisions of Section 6
of this Agreement.

         2.8.2    NON-COMPLIANT CONTENT.

         (a) RESTRICTIONS ON CONTENT, SERVICES AND PRODUCTS ON THE AFFILIATED
1-800-FLOWERS SITES. 1-800-FLOWERS shall ensure that each Affiliated
1-800-FLOWERS Site does not in any respect:

                           (i)      promote, advertise or market the Products,
                                    services or Content of (a) any Interactive
                                    Service other than AOL or (b) except as not
                                    prohibited under Section 2.8.2(a)(iv), any
                                    entity reasonably construed to be in
                                    competition with any third party with which
                                    AOL has an exclusive or premier (i.e.,
                                    exclusivity granted by AOL to more than one
                                    third party in a particular category)
                                    relationship;

                            (ii)    distribute the Products, services or Content
                                    of any Interactive Service other than AOL;

                           (iii)    promote, advertise, market, distribute or
                                    otherwise offer any Products, services or
                                    Content other than the Products, services or
                                    Content contained on Exhibits D or J hereto,
                                    except (a) in a manner whereby the
                                    Transaction Revenues generated by the
                                    Products, services and Content other than
                                    that contained on Exhibits D or J hereto
                                    (the "[****] Products") shall not exceed
                                    [****] of the aggregate Transaction Revenues
                                    generated under this Agreement and (b) in
                                    accordance with the terms of Exhibit D
                                    hereto; or

                           (iv)     contain any promotions, advertisements,
                                    marketing or links on the home pages of any
                                    1-800-FLOWERS Affiliated Site in any way
                                    related to any of the [****] Products with
                                    respect to which AOL has entered into an
                                    exclusive or premier arrangement with a
                                    third party prior to the date on which
                                    1-800-FLOWERS begins to offer (on the
                                    relevant Affiliated 1-800-FLOWERS Site(s))
                                    the Products, services or Content (as
                                    applicable) covered by such exclusive or
                                    premier relationship.

         (b) VIOLATION; AOL BLOCKING RIGHT. In the event that (x) AOL shall
             notify 1-800-FLOWERS of a violation of either of clauses (i)
             or (ii) of Section 2.8.2(a), AOL shall have the right to block
             AOL User access immediately to any relevant portion of the
             1-800-FLOWERS Affiliated Site(s) (the "AOL Blocking Right")
             and 1-800-FLOWERS shall have five (5) business days (following
             such notice) to remove such non-compliant Products, services
             or Content (together with the non-compliant Products, services
             or Content set forth in clauses (iii) and (iv) of Section
             2.8.2(a), collectively, the "Non-Compliant Content"). In the
             event that AOL shall notify 1-800-FLOWERS of a violation of
             either of clauses (iii) or (iv) of Section 2.8.2(a) above, AOL
             may exercise its AOL Blocking Right in the event that
             1-800-FLOWERS shall not have removed such Non-Compliant
             Content within five (5) business days following such notice.
             In connection with the exercise by AOL of its AOL Blocking
             Right, AOL shall use commercially reasonable efforts to block
             the minimum portion of any 1-800-FLOWERS Affiliated Site
             necessary to address the violation by 1-800-FLOWERS of the
             provisions of this Section 2.8.2.

**** Represents material which has been redacted 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.

                                       6

CONFIDENTIAL

<PAGE>

                         (c) VIOLATION; RIGHT TO REDUCE ANNUAL IMPRESSIONS
                  TARGET AND IMPRESSIONS COMMITMENT. In the event that
                  1-800-FLOWERS fails to remove any such Non-Compliant Content
                  within five (5) business days, (a) AOL shall have the right
                  (in addition to any blocking right) to reduce the Annual
                  Impressions Target [****] for such Year (and for any
                  subsequent Year, in the event that such Non-Compliant Content
                  carries over from one Year to the next) until such time as
                  1-800-FLOWERS corrects such Non-Compliant Content (and in such
                  event, AOL shall be relieved of the proportionate amount of
                  the Impressions Commitment corresponding to such decrease in
                  promotion) and (b) any revenue threshold(s) set forth in
                  Section 4 of this Agreement shall each be adjusted
                  proportionately to correspond to such decrease in Impressions
                  and other obligations during the period of non-compliance
                  (e.g., for each day beyond the five (5) business day cure
                  period 1-800-FLOWERS fails to cure such Non-Compliant Content,
                  the Impressions Commitment shall be reduced by [****] of the
                  Impressions to be provided by AOL hereunder, and the relevant
                  revenue threshold(s) also shall be reduced by such
                  percentage).

                         (d) VIOLATION; AOL RIGHT TO TERMINATE. In the event
                  that 1-800-FLOWERS fails to cure any such Non-Compliant
                  Content within thirty (30) days, AOL shall have the right to
                  terminate this Agreement.

                         (e) DISPUTES. Any Dispute regarding the existence of
                  Non-Complaint Content (or any cure thereof) shall be subject
                  to the Dispute resolution provisions of Section 6 of this
                  Agreement.

         2.9.     ADVERTISING SALES. Neither Party shall sell promotions,
                  advertisements, links, pointers or similar services or rights
                  through the Affiliated 1-800-FLOWERS Sites ("Advertisements")
                  unless and until the Parties have mutually agreed upon a
                  written advertising program whereby the Parties coordinate to
                  establish advertising inventory space and shall share mutually
                  agreed upon revenues generated from such advertising sales.

         2.10.    TRAFFIC FLOW. 1-800-FLOWERS shall take reasonable efforts to
                  ensure that AOL traffic is either kept within the applicable
                  Affiliated 1-800-FLOWERS Site or channeled back into the AOL
                  Network (with the exception of advertising links sold and
                  implemented pursuant to the Agreement). The Parties shall work
                  together on implementing mutually acceptable links from the
                  Affiliated 1-800-FLOWERS Sites back to the AOL Service.

3.       AOL EXCLUSIVITY OBLIGATIONS.

         3.1      FRESH-CUT FLOWERS EXCLUSIVITY. To the extent provided for in
                  this Section 3.1, 1-800-FLOWERS shall be the exclusive
                  provider of fresh-cut flowers on the AOL Properties. AOL shall
                  not promote, market or advertise the sale by any third-party
                  of (or permit any third party to promote market or advertise
                  the sale of) fresh-cut flowers on or through the
                  AOL-Controlled Areas during the Fresh-Cut Flowers Exclusivity
                  Period nor shall AOL promote, market or advertise the sale by
                  any 1-800-FLOWERS Competitor of (or permit any 1-800-FLOWERS
                  Competitor to promote, market or advertise the sale of) any
                  Plants or Gardening Products on or through the AOL-Controlled
                  Areas during the Fresh Cut Flowers Exclusivity Period. In
                  addition, vis-a-vis the 1-800-FLOWERS Competitors,
                  1-800-FLOWERS shall be the exclusive provider of fresh-cut
                  flowers, Plants and Gardening Products on the AOL Properties.
                  For purposes of this Section 3, the terms "promote", "market"
                  and "advertise" shall include not only their customary
                  meanings, but also any and all promotional linking and
                  pointing.

**** Represents material which has been redacted 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.

                                       7

CONFIDENTIAL

<PAGE>

During the Fresh-Cut Flowers Exclusivity Period, AOL shall use commercially
reasonable efforts to prevent any third party promoted or marketed by AOL (or to
whom AOL sells advertising) on the AOL Properties, as may be permitted
hereunder, from promoting, marketing or advertising fresh-cut flowers on the
home pages of such third parties' affiliated Interactive Sites (if any).

         3.2      EXCEPTIONS. Notwithstanding anything to the contrary in this
                  Section 3 (and without limiting any actions which may be taken
                  by AOL without violation of 1-800-FLOWERS' rights hereunder),
                  no provision of this Agreement shall limit AOL's ability (on
                  or off the AOL Network) to:

                  (i) undertake activities or perform duties pursuant to
                  existing arrangements as of July 1, 1999 with third parties
                  excluding 1-800-Flowers Competitors, that include (as a
                  component thereof) the promotion, marketing or advertising of
                  any Gardening Products;

                  (ii) undertake or perform duties pursuant to any agreements to
                  which AOL becomes a party subsequent to July 1, 1999 as a
                  result of Change of Control, merger (where AOL is the
                  surviving entity) or acquisition, PROVIDED, HOWEVER, that in
                  the context of any agreements to which AOL becomes a party
                  following July 1, 1999, AOL (a) shall use commercially
                  reasonable efforts to provide 1-800-FLOWERS with an
                  opportunity during the applicable Exclusivity Period to bid
                  for the right to sell the Exclusive Products on any new AOL
                  property acquired by AOL and distributed through any AOL
                  Property in connection with any such Change or Control, merger
                  or acquisition and (b) shall not promote, market or advertise
                  the Exclusive Products (or the sale of the Exclusive Products
                  by any third party acquired pursuant to any such Change of
                  Control, merger or acquisition) on the AOL Properties nor
                  permit any third party to promote, market or advertise the
                  Exclusive Products on the AOL-Controlled Areas;

                  (iii) promote, market or sell advertising to any third-party
                  (other than a 1-800-FLOWERS Competitor (except as permitted by
                  Section 3.2(viii) below)), PROVIDED that (a) AOL does not
                  promote, market or advertise the Exclusive Products of any
                  such third party on any of the AOL Properties nor permit any
                  third party to promote, market or advertise the Exclusive
                  Products on the AOL-Controlled Areas and (b) AOL shall use
                  commercially reasonable efforts to ensure that such third
                  parties do not promote, market or advertise the Exclusive
                  Products on the home pages of such third parties' affiliated
                  Interactive Sites;

                  (iv) enter into an arrangement with any third party for the
                  primary purpose of acquiring incremental AOL Users whereby
                  such party is allowed to promote or market products or
                  services (other than on the AOL Properties) solely to the
                  incremental AOL Users that are acquired as a result of such
                  agreement;

                  (v) enter into any arrangement with any Full Service Home
                  Improvement Partner;

                  (vi) create contextual links or editorial commentary (provided
                  that any third parties referenced in such contextual links or
                  editorial commentary shall not have paid for any such
                  references for the purpose of selling their Exclusive
                  Products) relating to content describing the Exclusive
                  Products or any third party marketer of the Exclusive
                  Products;

                  (vii) promote, market or advertise the gardening content of
                  any third party, but excluding any 1-800-FLOWERS Competitor,
                  on the AOL Properties; or

                  (viii) enter into any agreement with any local merchant of
                  fresh-cut flowers on Digital City,

                                       8

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                  PROVIDED that AOL shall not (a) promote, market or advertise
                  any such fresh-cut flowers on any of the other AOL Properties
                  nor (b) promote, market or advertise any such local merchants
                  within the national areas of Digital City; PROVIDED, FURTHER,
                  that AOL shall use commercially reasonable efforts to ensure
                  that such local merchants do not promote, market or advertise
                  or sell fresh-cut flowers on the national areas of Digital
                  Cities (other than the local areas of Digital City) during the
                  Exclusivity Period; PROVIDED, HOWEVER, that 1-800-FLOWERS
                  acknowledges that an occasional, unintentional failure to
                  comply with the foregoing obligation shall not be deemed a
                  breach of this Agreement.

         3.3      Nothing in this Agreement is intended, an any way, to prevent
                  1-800-FLOWERS from selling Plants and Gardening Products, in
                  addition to its other products.

4.       PAYMENTS.

         4.1.     GUARANTEED PAYMENTS. During the Initial Term and while this
                  Agreement is in full force and effect, 1-800-FLOWERS shall pay
                  AOL a non-refundable guaranteed payment of Twenty Two Million
                  One Hundred Twenty Five Thousand Dollars ($22,125,000) as
                  follows:

                  (i)      Seven Million Three Hundred Seventy Five Thousand
                           Dollars (US$7,375,000), to be paid on April 30, 2001;

                  (ii)     Seven Million Three Hundred Seventy Five Thousand
                           Dollars (US$7,375,000), to be paid on April 30, 2002;
                           and

                  (iii)    Seven Million Three Hundred Seventy Five Thousand
                           Dollars (US$7,375,000), to be paid on December 30,
                           2002.

         4.2.     SHARING OF TRANSACTION REVENUES.

                           (i) BASE REVENUE SHARE. If at any time during the
                  Initial Term, the aggregate amount of Transaction Revenues
                  generated during the Initial Term by AOL Purchasers as
                  currently tracked by 1-800-FLOWERS (excluding the Incremental
                  Revenue Share set forth in clause (ii) of this Section 4.2)
                  plus an amount equal to [****] of such Transaction Revenues
                  exceeds [****] (the "Revenue Threshold"), then 1-800-FLOWERS
                  shall pay AOL [****] of the Transaction Revenues (the "Base
                  Revenue Share") so generated during the remainder of the
                  Initial Term in excess of said Revenue Threshold.
                  1-800-FLOWERS shall pay all of the foregoing amounts on a
                  quarterly basis within thirty (30) days following the end of
                  the any such quarter in which the applicable Transaction
                  Revenues above the Revenue Threshold were generated.

                           (ii) INCREMENTAL REVENUE SHARE. In addition to the
                  Base Revenue Share, within thirty (30) days following
                  September 30, 2001, 1-800-FLOWERS shall pay AOL an amount
                  equal to (a) [****] of all Transaction Revenues up to and
                  including [****] generated on the AOL Service and AOL.com
                  during the period of July 1, 2000 through June 30, 2001 AND
                  (b) [****] of all Transaction Revenues generated in excess of
                  [****] on the AOL Service and AOL.com during the above period
                  (collectively, the "Incremental Revenue Share").

**** Represents material which has been redacted 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.

                                       9

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<PAGE>

         4.3.     LATE PAYMENTS; WIRED PAYMENTS. All amounts owed hereunder not
                  paid when due and payable shall bear interest from the date
                  such amounts are due and payable [****] in effect at such
                  time. Unless otherwise agreed upon by the Parties, all
                  payments required hereunder shall be paid in immediately
                  available, non-refundable U.S. funds wired to the "America
                  Online" account, Account Number [****] at The Chase Manhattan
                  Bank, 1 Chase Manhattan Plaza, New York, NY 10081 (ABA:
                  021000021).

         4.4.     AUDITING RIGHTS. 1-800-FLOWERS shall maintain complete, clear
                  and accurate records of all expenses, revenues and fees in
                  connection with the performance of this Agreement. For the
                  sole purpose of ensuring compliance with this Agreement, AOL
                  (or its representative) shall have the right to conduct a
                  reasonable and necessary inspection of portions of the books
                  and records of 1-800-FLOWERS which are relevant to the amounts
                  payable by 1-800-FLOWERS pursuant to this Agreement. Any such
                  audit may be conducted after twenty (20) business days' prior
                  written notice to 1-800-FLOWERS; PROVIDED, HOWEVER, that no
                  such audit shall occur during the months of July or August in
                  any Year, and AOL shall be limited to one (1) such audit per
                  any Year of the Term, unless otherwise agreed upon by the
                  Parties. AOL shall bear the expense of any audit conducted
                  pursuant to this Section 4.4 unless such audit shows an error
                  in AOL's favor amounting to a deficiency to AOL in excess of
                  the greater of (i) [****] of the actual amounts due and
                  payable to AOL hereunder or (ii) [****], in which event
                  1-800-FLOWERS shall bear the reasonable expenses of the audit
                  (not to exceed [****]. 1-800-FLOWERS shall pay AOL the amount
                  of any deficiency discovered by AOL within thirty (30) days
                  after receipt of notice thereof from AOL, unless such amount
                  is contested in good faith by 1-800-FLOWERS, in which case
                  such Dispute shall be subject to the terms of Section 6 of
                  this Agreement. In the event that 1-800-FLOWERS has good-faith
                  grounds to question AOL's tracking and reporting of
                  Impressions, 1-800-FLOWERS shall be entitled to a report
                  issued by a qualified independent auditor describing AOL's
                  methodologies regarding the tracking and reporting of
                  Impressions and certifying AOL's compliance with such
                  methodologies and with AOL's obligations hereunder.

         4.5.     TAXES. 1-800-FLOWERS shall collect and pay, and indemnify and
                  hold AOL harmless from, any sales, use, excise, import or
                  export value added or similar tax or duty not based on AOL's
                  net income, including any penalties and interest, as well as
                  any costs associated with the collection or withholding
                  thereof, including attorneys' fees.

         4.6.     REPORTS. Each Party shall provide the other Party with certain
                  reports (the form and substance of which may be amended from
                  time to time upon the mutual agreement of the Parties)
                  evidencing the reporting Party's compliance with its
                  obligations under this Agreement and detailing certain
                  information, all as set forth below.

                  4.6.1.   SALES REPORTS. Consistent with the reports currently
                           supplied by 1-800-FLOWERS to AOL, 1-800-FLOWERS shall
                           provide AOL with periodic reports, detailing the
                           following activity in each such period (and any other
                           information mutually agreed upon by the Parties or
                           reasonably required for measuring revenue activity by
                           1-800-FLOWERS through the Affiliated 1-800-FLOWERS
                           Sites): Transaction Revenues, chargebacks and credits
                           for returned or cancelled goods or services (and,
                           where possible, an explanation of the type of reason
                           therefor (e.g., bad credit card information, poor
                           customer service, etc.)) and credit card processing
                           fees charged and/or collected by relevant credit card
                           associations or issuing institutions (collectively,
                           the "Sales Reports"). AOL shall be entitled to use
                           the Sales Reports in its internal business
                           operations, subject to the terms of this Agreement.

**** Represents material which has been redacted 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.

                                       10

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                  4.6.2.   USAGE REPORTS. AOL shall provide 1-800-FLOWERS with
                           standard monthly usage information related to the
                           Promotions (e.g. a schedule of the Impressions
                           delivered by AOL at such time) which are similar in
                           substance and form to the reports provided by AOL to
                           other interactive marketing partners similar to
                           1-800-FLOWERS.

                  4.6.3.   PROMOTIONAL REPORTS. Each Party shall provide the
                           other Party with a quarterly report documenting its
                           compliance with any promotional commitments that it
                           has undertaken under this Agreement. In reporting any
                           promotion, the Party should describe the nature of
                           the promotion, its duration and any other relevant
                           information regarding such promotion (including,
                           without limitation, any required information set
                           forth in the description of any such promotion).

                  4.6.4.   FRAUDULENT TRANSACTIONS. To the extent permitted by
                           applicable laws, 1-800-FLOWERS shall provide AOL with
                           a prompt report of any fraudulent order, including
                           the date, screen name or email address and amount
                           associated with such order, promptly following
                           1-800-FLOWERS obtaining knowledge that the order is,
                           in fact, fraudulent.

5.       TERM; RENEWAL; TERMINATION.

         5.1.     TERM. Unless earlier terminated as set forth herein, the
                  initial term of this Agreement shall begin on the Effective
                  Date and end on August 31, 2005 (the "Initial Term").

         5.2.     CONTINUED LINKS. Upon expiration of the Initial Term, AOL may,
                  at its discretion (for a period not to exceed two (2) years),
                  (i) continue to promote one or more "pointers" or links from
                  the AOL Network to (a) an agreed-upon 1-800-FLOWERS Affiliated
                  Site or (b) a 1-800-FLOWERS Interactive Site to be selected by
                  1-800-FLOWERS, and (ii) continue to use 1-800-FLOWERS' trade
                  names, trade marks and service marks (approved for AOL use by
                  1-800-FLOWERS during the Initial Term) solely in connection
                  therewith (collectively, a "Continued Link"). At the end of
                  such two (2) year period (and at the end of each subsequent
                  year thereafter), the Continued Link period shall
                  automatically be extended by one (1) additional year unless
                  either Party elects to terminate such Continued Link period
                  prior to the end of any such year (any such Continued Link
                  period, together with the Initial Term, collectively referred
                  to herein as the "Term"). So long as AOL maintains a Continued
                  Link, (i) 1-800-FLOWERS shall pay AOL [****] of the
                  Transaction Revenues generated during such period and (ii) the
                  obligations of the Parties under Sections 1, 2, 3, 4.1, 4.2,
                  4.6.2, 8 and Exhibits A, C, D, E, F, G, H, I and J shall no
                  longer apply.

         5.3.     TERMINATION FOR BREACH. Except as expressly provided elsewhere
                  in this Agreement, either Party may terminate this Agreement
                  at any time in the event of a material breach of the Agreement
                  by the other Party which remains uncured after thirty (30)
                  days written notice thereof to the other Party (or such
                  shorter period as may be specified elsewhere in this
                  Agreement); PROVIDED, HOWEVER, that the cure period with
                  respect to either Party's failure to make any payment to the
                  other Party required hereunder shall be ten (10) days from the
                  date of receipt of written notice regarding such payment.
                  Notwithstanding the foregoing, in the event of a material
                  breach of a provision that expressly requires action to be
                  completed within an express period shorter than thirty (30)
                  days, either Party may terminate this Agreement if the breach
                  remains uncured after written notice thereof to the other
                  Party.

**** Represents material which has been redacted 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.

                                       11

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         5.4.     TERMINATION FOR BANKRUPTCY/INSOLVENCY. Either Party may
                  terminate this Agreement immediately following written notice
                  to the other Party if the other Party (i) ceases to do
                  business in the normal course, (ii) becomes or is declared
                  insolvent or bankrupt, (iii) is the subject of any proceeding
                  related to its liquidation or insolvency (whether voluntary or
                  involuntary) which is not dismissed within ninety (90)
                  calendar days or (iv) makes an assignment for the benefit of
                  creditors.

         5.5.     TERMINATION ON CHANGE OF CONTROL. In the event of a Change of
                  Control of 1-800-FLOWERS resulting in control of 1-800-FLOWERS
                  by an Interactive Service, AOL may terminate this Agreement by
                  providing thirty (30) days' prior written notice of such
                  intent to terminate.

         5.6.     EFFECT OF TERMINATION BY 1-800-FLOWERS FOR AOL MATERIAL
                  BREACH. In the event of termination of this Agreement by
                  1-800-FLOWERS due to any material breach of this Agreement by
                  AOL during any Year of this Agreement, 1-800-FLOWERS shall not
                  be required to pay AOL any amounts otherwise due to AOL (after
                  any such material breach) during the remainder of any such
                  Year or the remainder of the Term. Furthermore, in such event,
                  1-800-FLOWERS reserves all legal and equitable remedies it may
                  have related to any such material breach by AOL.

6.       MANAGEMENT COMMITTEE/ARBITRATION.

         6.1.     MANAGEMENT COMMITTEE. The Parties shall act in good faith and
                  use commercially reasonable efforts to promptly resolve (and
                  in any event, within ten (10) business days) any claim,
                  dispute, claim, controversy or disagreement between the
                  Parties or any of their respective subsidiaries, affiliates,
                  successors and assigns under or related to this Agreement or
                  any document executed pursuant to this Agreement or any of the
                  transactions contemplated hereby (each, a "Dispute"). If the
                  Parties cannot resolve any such Dispute within such time
                  frame, the Dispute shall be submitted to the Management
                  Committee for resolution. For ten (10) days following
                  submission of the Dispute to the Management Committee, the
                  Management Committee shall have the exclusive right to resolve
                  such Dispute. If the Management Committee is unable to
                  amicably resolve the Dispute during such ten (10) day period,
                  then the Dispute shall be subject to the resolution mechanisms
                  described below. "Management Committee" shall mean a committee
                  of two (2) people, made up of a senior executive from each of
                  the Parties for the purpose of resolving Disputes under this
                  Section 6 and generally overseeing the relationship between
                  the Parties contemplated by this Agreement. Neither Party
                  shall seek, nor shall be entitled to seek, binding outside
                  resolution of the Dispute unless and until the Parties have
                  been unable amicably to resolve the Dispute as set forth in
                  this Section 6.1 and then, only in compliance with the
                  procedures set forth in this Section 6.

         6.2.     ARBITRATION. Except for Disputes relating to issues of
                  proprietary rights, including but not limited to intellectual
                  property and confidentiality, any Dispute not resolved by
                  amicable resolution as set forth in Section 6.1 shall be
                  governed exclusively and finally by arbitration. Such
                  arbitration shall be conducted by the American Arbitration
                  Association ("AAA") in New York, New York, and shall be
                  initiated and conducted in accordance with the Commercial
                  Arbitration Rules ("Commercial Rules") of the AAA, including
                  the AAA Supplementary Procedures for Large Complex Commercial
                  Disputes ("Complex Procedures"), as such rules shall be in
                  effect on the date of delivery of a demand for arbitration
                  ("Demand"), except to the extent that such rules are
                  inconsistent with the provisions set forth herein.
                  Notwithstanding the foregoing, the Parties may agree in good
                  faith that the Complex Procedures shall not apply in order to
                  promote the efficient arbitration of Disputes where the nature
                  of the Dispute, including without limitation the amount in
                  controversy, does not justify the application of such
                  procedures.

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         6.3.     SELECTION OF ARBITRATORS. The arbitration panel shall consist
                  of three (3) arbitrators. Each Party shall name one (1)
                  arbitrator within ten (10) days after the delivery of the
                  Demand, and the third arbitrator shall be selected by the
                  first two arbitrators. If the two arbitrators are unable to
                  select a third arbitrator within ten (10) days, a third
                  neutral arbitrator shall be appointed by the AAA from the
                  panel of commercial arbitrators of any of the AAA Large and
                  Complex Resolution Programs. If a vacancy in the arbitration
                  panel occurs after the hearings have commenced, the remaining
                  arbitrator or arbitrators may not continue with the hearing
                  and determination of the controversy, unless the Parties agree
                  otherwise.

         6.4.     GOVERNING LAW. The Federal Arbitration Act, 9 U.S.C. Secs.
                  1-16, and not state law, shall govern the arbitrability of all
                  Disputes. The arbitrators shall allow such discovery as is
                  appropriate to the purposes of arbitration in accomplishing a
                  fair, speedy and cost-effective resolution of the Disputes.
                  The arbitrators shall reference the Federal Rules of Civil
                  Procedure then in effect in setting the scope and timing of
                  discovery. The Federal Rules of Evidence shall apply IN TOTO.
                  The arbitrators may enter a default decision against any Party
                  who fails to participate in the arbitration proceedings.

         6.5.     ARBITRATION AWARDS. The arbitrators shall have the authority
                  to award compensatory damages only or other equitable relief.
                  Any award by the arbitrators shall be accompanied by a written
                  opinion setting forth the findings of fact and conclusions of
                  law relied upon in reaching the decision. The award rendered
                  by the arbitrators shall be final, binding and non-appealable,
                  and judgment upon such award may be entered by any court of
                  competent jurisdiction. The Parties agree that the existence,
                  conduct and content of any arbitration shall be kept
                  confidential and no Party shall disclose to any person any
                  information about such arbitration, except as may be required
                  by law or by any governmental authority or for financial
                  reporting purposes in each Party's financial statements.

         6.6.     FEES. Each Party shall pay the fees of its own attorneys,
                  expenses of witnesses and all other expenses and costs in
                  connection with the presentation of such Party's case
                  (collectively, "Attorneys' Fees"). The remaining costs of the
                  arbitration, including without limitation, fees of the
                  arbitrators, costs of records or transcripts and
                  administrative fees (collectively, "Arbitration Costs") shall
                  be borne equally by the Parties. Notwithstanding the
                  foregoing, the arbitrators may modify the allocation of
                  Arbitration Costs and award Attorneys' Fees in those cases
                  where fairness dictates a different allocation of Arbitration
                  Costs between the Parties and an award of Attorneys' Fees to
                  the prevailing Party as determined by the arbitrators.

         6.7      NON ARBITRATABLE DISPUTES. Any Dispute that is not subject to
                  final resolution by the Management Committee or to arbitration
                  under this Section 6 or by law (collectively, "Non-Arbitration
                  Claims") shall be brought in a court of competent jurisdiction
                  in the State of New York. Each Party irrevocably consents to
                  the exclusive jurisdiction of the courts of the State of New
                  York and the federal courts situated in New York City in the
                  State of New York, over any and all Non-Arbitration Claims and
                  any and all actions to enforce such claims or to recover
                  damages or other relief in connection with such claims.

7.       PRESS RELEASES. Each Party shall submit to the other Party, for its
         prior written approval, which shall not be unreasonably withheld or
         delayed, any press release or any other public statement ("Press
         Release") regarding the transactions contemplated hereunder.
         Notwithstanding the foregoing, either Party may issue any disclosures
         as required by law without the consent of the other Party and in such
         event, the disclosing Party shall provide at least five (5) business
         days prior written notice of such disclosure.

8.       STANDARD TERMS. The Standard Online Commerce Terms & Conditions set
         forth on Exhibit F attached hereto and Standard Legal Terms &
         Conditions set forth on Exhibit G attached hereto are each hereby made
         a part of this Agreement.

                                       13
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                     [REMAINDER OF PAGE INTENTIONALLY BLANK]

                                       14

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date set forth above.

AMERICA ONLINE, INC.                      800-FLOWERS.COM, INC.

By:  /s/ DAVID COLBURN                    By:  /s/ CHRISTOPHER G. MCCANN
    --------------------------------           --------------------------------
Name:  David Colburn                      Name:  Christopher G. McCann
Title: President, Business Affairs        Title: Senior Vice President

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<PAGE>

                                    EXHIBIT A

                               PLACEMENT/PROMOTION

A.  CARRIAGE PERIOD, FRESH-CUT FLOWERS EXCLUSIVITY PERIOD

<TABLE>
<CAPTION>
                            CARRIAGE AND
                            FRESH-CUT FLOWERS       CARRIAGE AND FRESH-CUT FLOWERS EXCLUSIVITY
AOL PROPERTY                EXCLUSIVITY BEGINS      PERIOD ENDS
------------                -----------------       ------------------------------------------
<S>                         <C>                     <C>
AOL.com                     October 1, 2000         August 31, 2005 (end of Initial Term)*
AOL Service                 October 1, 2000         August 31, 2005 (end of Initial Term)*
CompuServe                  October 1, 2000         October 31, 2004 *
DCI                         October 1, 2000         October 31, 2004 *
ICQ                         October 1, 2000         April 30, 2005 *
Netcenter                   October 1, 2000         March 30, 2005*
</TABLE>

B.  CARRIAGE PLAN

To be agreed upon in writing by the Parties on or before September 8, 2000, or
another date (prior to the Effective Date) mutually agreed upon by the Parties,
and attached hereto.

         NOTES TO CARRIAGE PLAN:

         The Parties acknowledge and agree that the Carriage Plan, in order to
provide the best opportunity to reach the [****] goals (i.e., not
obligations) set forth in Section 1.1 of this Agreement, will include more
Impressions than the Impressions Commitment set forth in that certain amended
and restated Interactive Marketing Agreement between the Parties made and
entered into on September 1, 1999 (which has been terminated).

         The Promotions designated for placement on the AOL Service and AOL.com
shall be placed thereon throughout the Initial Term.

         AOL shall provide 1-800-FLOWERS with the Shopping Channel anchor
tenancies (the "Anchor Tenancies") as provided for under the certain amended and
restated Interactive marketing Agreement between the Parties made and entered
into on September 1, 1999, including, without limitation, Anchor Tenancies in
(i) Flowers, Cards Gifts, (ii) Home Improvement (gardening area), (iii) Gift
Suggestion, (iv) Gifts and (v) Gourmet Gifts). Such Anchor Tenancies shall
entitle 1-800-FLOWERS to placement that is no less prominent and favorable in
size and position on such screen than any other promotion on such

**** Represents material which has been redacted 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.

                                       16

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<PAGE>

screen. In addition, AOL will ensure that (a) the term "Flowers" (or a term
similar thereto, as mutually agreed upon by the Parties) will be a part of
the top-level department category description for a Shopping Channel
department in which 1-800-FLOWERS has a Shopping Channel placement and offers
fresh cut flowers for sale.

C.  KEYWORD SEARCH TERMS AND GO WORD SEARCH TERMS

During the Term, subject to the terms and conditions hereof, 1-800-FLOWERS shall
have the right to use (i) the following Keyword Search Terms and (ii) the
following Go Word Search Terms:

Keyword Search Terms:     [****]

Go Word Search Terms:     [****]

**** Represents material which has been redacted 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.

                                       17

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<PAGE>

                                    EXHIBIT B

                                   DEFINITIONS

The following definitions shall apply to this Agreement:

AAA. "AAA" shall have the meaning set forth in Section 6.2 of this Agreement.

ACTION. "Action" shall have the meaning set forth in Section 9(d) of Exhibit G
to this Agreement.

ADDITIONAL 1-800-FLOWERS CHANNEL. Any other on-line or internet-based
distribution channel (e.g., an Interactive Service other than AOL) through which
1-800-FLOWERS makes available an offering comparable in nature to any Affiliated
1-800-FLOWERS Site.

ADVERTISEMENTS. "Advertisements" shall have the meaning set forth in Section 2.9
of this Agreement.

AFFILIATED 1-800-FLOWERS SITES. "Affiliated 1-800-FLOWERS Sites" shall have the
meaning set forth in Section 2.1 of this Agreement.

ANCHOR TENANCIES. "Anchor Tenancies" shall have the meaning set forth in Exhibit
A to this Agreement.

ANCILLARY GARDENING ITEMS. Hand-held gardening tools, trowels, soil scoops,
shears, pruners, spades, watering cans, hand rakes and hand-held forks;
PROVIDED, HOWEVER, that such term shall not include any gardening-related
machinery (e.g., roto-tillers, weed-whackers, lawn mowers, etc.) or home
improvement products (e.g., power tools, building materials, paint, etc.).

ANNUAL IMPRESSIONS TARGET. Each of the annual Impressions target amounts set
forth in Section B of Exhibit A to this Agreement.

AOL BLOCKING RIGHT. "AOL Blocking Right" shall have the meaning set forth in
Section 2.8.2(b) of this Agreement.

AOL-CONTROLLED AREAS. All areas of the AOL Properties which are owned,
maintained or controlled by AOL.

AOL INTERACTIVE SITE. Any Interactive Site that is managed, maintained, owned or
controlled by AOL or its agents or its affiliates.

AOL LOOK AND FEEL. The elements of graphics, design, organization, presentation,
layout, user interface, navigation and stylistic convention (including the
digital implementations thereof) which are generally associated with Interactive
Sites within the AOL Service or AOL.com.

AOL MEMBER. Any authorized user of the AOL Properties, including any
sub-accounts thereof under an authorized master account.

AOL NETWORK. (i) The AOL Properties and (ii) any other product or service owned,
operated, distributed or authorized to be distributed by or through AOL or its
affiliates worldwide (and including those properties excluded from the
definitions of the AOL Service or AOL.com). It is understood and agreed that the
rights of 1-800-FLOWERS relate only to the AOL Properties and not generally to
the AOL Network.

AOL PROPERTIES. The AOL Service, AOL.com, the CompuServe Service, Netscape
Netcenter, the ICQ Service and Digital City.

                                       18

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<PAGE>

AOL PURCHASER. Any person or entity who enters any Affiliated 1-800-FLOWERS Site
from the AOL Network including, without limitation, from any third party area
therein (to the extent entry from such third party area is traceable through
both Parties' commercially reasonable efforts), and generates Transaction
Revenues (regardless of whether such person or entity provides an e-mail address
during registration or entrance to any such Affiliated 1-800-FLOWERS Site which
includes a domain other than an "AOL.com" domain).

AOL SERVICE. The standard U.S. version of the America Online-Registered
Trademark- brand service (including, the "Shop@AOL" area thereon),
specifically excluding (a) AOL.com or any other AOL Interactive Site, (b) the
international versions of the AOL Service (E.G., AOL Japan), (c) the
CompuServe-Registered Trademark- brand service and any other CompuServe
products or services (d) "Driveway," "ICQ-TM-," "AOL NetFind-TM-," "AOL
Instant Messenger-TM-," "Digital City," "NetMail-TM-," "Electra", "Thrive",
"Real Fans", "Love@AOL", "Entertainment Asylum," "AOL Hometown," "My News" or
any similar product, service or property which may be offered by, through or
with the U.S. version of the America Online-Registered Trademark- brand
service, (e) Netscape Netcenter-TM- and any additional Netscape products or
services, (f) any programming or Content area offered by or through the U.S.
version of the America Online-Registered Trademark- brand service over which
AOL does not exercise complete or substantially complete operational control
(including, without limitation, Content areas controlled by other parties and
member-created Content areas), (g) any yellow pages, white pages, classifieds
or other search, directory or review services or Content offered by or
through the U.S. version of the America Online-Registered Trademark- brand
service, (h) any property, feature, product or service which AOL or its
affiliates may acquire subsequent to July 1, 1999 and (i) any other version
of an America Online service which is materially different from the standard
U.S. version of the America Online brand service, by virtue of its branding,
distribution, functionality, Content or services, including, without
limitation, any co-branded and/or customized version of the service and any
version distributed primarily through any broadband distribution platform or
through any platform or device other than a desktop personal computer.

AOL SETOFF RIGHT. "AOL Setoff Right" shall have the meaning set forth in Section
1.2 of this Agreement.

AOL USER. Any user of the AOL Service, AOL.com, CompuServe, Digital City, ICQ,
Netcenter or the AOL Network.

AOL.COM. AOL's primary Internet-based Interactive Site marketed under the
"AOL.COM-TM-" brand (or any successor or substitute brand for the
"AOL.COM-TM-" brand), including the "Shop@AOL.com" area thereon, but
specifically excluding (a) the AOL Service, (b) any international versions of
AOL.com, (c) "ICQ-TM-," "AOL NetFind-TM-," "AOL Instant Messenger-TM-,"
"NetMail-TM-," "AOL Hometown," "My News" or any similar product or service
offered by or through such site or any other AOL Interactive Site, (d) any
programming or Content area offered by or through such site over which AOL
does not exercise complete or substantially complete operational control
(including, without limitation, Content areas controlled by other parties and
member-created Content areas), (e) Netscape Netcenter-TM- and any
additional Netscape products or services, (f) any programming or Content area
offered by or through the U.S. version of the America Online-Registered
Trademark- brand service which was operated, maintained or controlled by the
former AOL Studios division (e.g., Electra), (g) any yellow pages, white
pages, classifieds or other search, directory or review services or Content
offered by or through such site or any other AOL Interactive Site, (h) any
property, feature, product or service which AOL or its affiliates may acquire
subsequent to July 1, 1999 and (i) any other version of an America Online
Interactive Site which is materially different from AOL's primary
Internet-based Interactive Site marketed under the "AOL.COM-TM-" brand, by
virtue of its branding, distribution, functionality, Content or services,
including, without limitation, any customized and/or co-branded versions and
any version distributed primarily through any broadband distribution platform
or through any platform or device other than a desktop personal computer.

ARBITRATION COSTS. "Arbitration Costs" shall have the meaning set forth in
Section 6.6 of this Agreement.

ATTORNEYS' FEES. "Attorneys' Fees" shall have the meaning set forth in Section
6.6 of this Agreement.

BASE REVENUE SHARE. The revenue sharing arrangement set forth in Section 4.2(i)
of this Agreement.

                                       19

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CHANGE OF CONTROL. The consummation of a reorganization, merger or consolidation
or sale or other disposition of substantially all of the assets of a party or
(b) the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under such
Act) of more than 50% of the combined voting power of the then outstanding
voting securities of such party entitled to vote generally in the election of
directors.

COMMERCIAL RULES. "Commercial Rules" shall have the meaning set forth in Section
6.2 of this Agreement.

COMPLEX PROCEDURES. "Complex Procedures" shall have the meaning set forth in
Section 6.2 of this Agreement.

COMPUSERVE SERVICE. The standard U.S. version of the CompuServe brand service
(including the "Shop@CompuServe" area thereon), specifically excluding (a)
any international versions of such service, (b) Content areas owned,
maintained or controlled by CompuServe affiliates or any similar
"sub-service," (c) any programming or Content area offered by or through the
U.S. version of the CompuServe brand service over which CompuServe does not
exercise complete or substantially complete operational control (e.g.,
third-party Content areas), (d) Netscape Netcenter-TM- and any additional
Netscape products or services, (e) any yellow pages, white pages, classifieds
or other search, directory or review services or Content, (f) any co-branded
or private label branded version of the U.S. version of the CompuServe brand
service, (g) any version of the U.S. version of the CompuServe brand service
which offers Content, distribution, services and/or functionality materially
different from the Content, distribution, services and/or functionality
associated with the standard U.S. version of the CompuServe brand service,
including, without limitation, any version of such service distributed
primarily through any broadband distribution platform or through any platform
or device other than a desktop personal computer and (h) any property,
feature, product or service which CompuServe or its affiliates may acquire
subsequent to July 1, 1999.

CONFIDENTIAL INFORMATION. Any information relating to or disclosed in the course
of the Agreement, which is or should be reasonably understood to be confidential
or proprietary to the disclosing Party, including, but not limited to, the
material terms of this Agreement, information about AOL Members, AOL Users, AOL
Purchasers and 1-800-FLOWERS customers, technical processes and formulas, source
codes, product designs, sales, cost and other unpublished financial information,
product and business plans, projections, and marketing data. "Confidential
Information" shall not include information (a) already lawfully known to or
independently developed by the receiving Party, (b) disclosed in published
materials, (c) generally known to the public, or (d) lawfully obtained from any
third party.

CONTENT. Text, images, video, audio (including, without limitation, music used
in synchronism or timed relation with visual displays) and other data, Products,
advertisements, promotions, links, pointers and software, including any
modifications, upgrades, updates, enhancements and related documentation.

CONTEST. "Contest" shall have the meaning set forth in Section 3 of Exhibit F to
this Agreement.

CONTINUED LINK. "Continued Link" shall have the meaning set forth in Section 5.2
of this Agreement.

CUSTOMERS. "Customers" shall have the meaning set forth in Section 9(a) of
Exhibit F to this Agreement.

CUT-OFF TIME. "Cut-Off Time" shall have the meaning set forth in Section 9(b) of
Exhibit F to this Agreement.

DEMAND. "Demand" shall have the meaning set forth in Section 6.2 of this
Agreement.

DIGITAL CITY. The standard U.S. version of Digital City's local content
offerings marketed under the Digital City-Registered Trademark- brand name
(including the "Shop@Digital City" area thereon), specifically excluding (a)
the AOL Service, AOL.com or any other AOL Interactive Site, (b) any
international versions of such local content offerings, (c) the
CompuServe-Registered Trademark- brand service and any other CompuServe
products or services, (d)

                                       20

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"Driveway," "ICQ-TM-," "AOL NetFind-TM-," "AOL Instant Messenger-TM-,"
"Digital City," "NetMail-TM-," "Electra", "Thrive", "Real Fans",
"Love@AOL", "Entertainment Asylum," "AOL Hometown," "My News" or any similar
product, service or property which may be offered by, through or with the
standard version of Digital City's local content offerings, (e) Netscape
Netcenter-TM- and any additional Netscape products or services, (f) any
programming or Content area offered by or through such local content
offerings over which AOL does not exercise complete or substantially complete
operational control (including, without limitation, Content areas controlled
by other parties and member-created Content areas), (g) any yellow pages,
white pages, classifieds or other search, directory or review services or
Content offered by or through such local content offerings, (h) any property,
feature, product or service which AOL or its affiliates may acquire
subsequent to July 1, 1999, (i) any other version of a Digital City local
content offering which is materially different from the U.S. version of
Digital City's local content offerings marketed under the Digital
City-Registered Trademark- brand name, by virtue of its branding,
distribution, functionality, Content or services, including, without
limitation, any co-branded and/or customized version of the offerings and any
version distributed primarily through any broadband distribution platform or
through any platform or device other than a desktop personal computer, and
(j) Digital City-branded offerings in any local area where such offerings are
not owned or operationally controlled by AOL, Inc. or DCI (e.g., Chicago,
Orlando, South Florida, and Hampton Roads).

DISCLAIMED DAMAGES. "Disclaimed Damages" shall have the meaning set forth in
Section 9(a) of Exhibit G to this Agreement.

DISPUTE. "Dispute" shall have the meaning set forth in Section 6.1 of this
Agreement.

EXCESS IMPRESSIONS. "Excess Impressions" shall have the meaning set forth in
Section 1.2 of this Agreement.

EXCLUSIVE PRODUCTS. Fresh-cut flowers solely during the Fresh-Cut Flowers
Exclusivity Period.

EXCLUSIVITY PERIOD. The Fresh-Cut Flowers Exclusivity Period.

FINAL SHORTFALL. "Final Shortfall" shall have the meaning set forth in Section
1.2 of this Agreement.

FULL SERVICE HOME IMPROVEMENT PARTNER. Any online provider of home improvement
products and services (e.g., lawn mowers, paint supplies, power tools, or other
home appliances), provided that such Full Service Home Improvement Partner also
may sell gardening tools and supplies, fertilizer, seeds, plants, etc.

FRESH-CUT FLOWERS EXCLUSIVITY PERIOD. With respect to fresh-cut flowers to be
offered on or through the Affiliated 1-800-FLOWERS Sites, the dates set forth on
Exhibit A (Section A) hereto, solely to the extent as such dates apply to each
respective AOL Property.

GARDENING AREA. The area on the Shopping Channel (or any successor area thereto)
of the AOL Service that is primarily dedicated to the promotion and sale of
gardening-related Products.

GARDENING PLANT. Any bulbs, live plants, bare-root materials, seeds, trees,
herbs, topiaries and any other living horticultural or gardening-related plants
or shrubs explicitly for use in a garden.

GARDENING PRODUCTS.  Any Gardening Plants or Ancillary Gardening Items.

GIFT BASKET. A collection of Products packaged together with a theme in mind and
sold as a single unit.

GO WORD SEARCH TERMS. The Go Word online search terms made available on the
CompuServe Service for use by CompuServe Service members, combining the
CompuServe Service's Go word online search modifier (i.e., "Go:") with a term or
phrase specifically related to 1-800-FLOWERS (and determined in accordance with
the terms of this Agreement).

                                       21
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ICQ CLIENT. (i) The persistent, desktop-based instant messaging, chat and "buddy
list" client software developed by or for ICQ and distributed by or for ICQ that
enables ICQ Users to send messages, chat, track the online status of other users
and use the ICQ Service, and (ii) any Updates thereto. The ICQ Client shall not
include (a) any discrete applications providing substantially different
services, regardless of any shared use of the ICQ Service backend (e.g.,
presence engine, directory server, etc.), (b) any desktop search application,
ICQ desktop information "ticker," ICQ mail client or ICQ co-browser, (c) any
version of the ICQ Client that is co-branded with an unaffiliated third party,
or (d) plug-ins to other clients (e.g., browser plug-ins).

ICQ SERVICE. The standard English language version of the ICQ brand
communications and messaging service available in the U.S. and internationally
(e.g., to U.S.- and internationally-based ICQ Members), including the "Shop@ICQ"
area thereon, but specifically excluding (a) "ICQ It!" or any similar product,
service or property which may be offered by, through or with the English
language version of the ICQ brand service, (b) any programming or Content area
offered by or through the English language version of the ICQ brand service over
which ICQ does not exercise complete or substantially complete operational
control (including, without limitation, Content areas controlled by other
parties, whether or not co-branded with ICQ, and ICQ user-created Content
areas), (c) any yellow pages, white pages, classifieds or other search,
directory or review services or Content offered by or through the English
language version of the ICQ brand service, (d) any property, feature, product or
service which ICQ or its affiliates may acquire subsequent to July 1, 1999 and
(e) any other version of an ICQ service which is materially different from the
standard English language version of the ICQ brand service, by virtue of its
branding, language (e.g., the Japanese-language version), distribution,
functionality, Content or services, including, without limitation, any
co-branded and/or customized version of the service or any version distributed
primarily through any broadband distribution platform or through any platform or
device other than a desktop personal computer.

IMPRESSION. User exposure to the applicable Promotion, as such exposure may be
reasonably determined and measured by AOL in accordance with its standard
methodologies and protocols.

IMPRESSIONS COMMITMENT. "Impressions Commitment" shall have the meaning set
forth in Section 1.2 of this Agreement.

INCREMENTAL YEAR 1 REVENUE SHARE. "Incremental Year 1 Revenue Share" shall have
the meaning set forth in Section 4.2(ii) of this Agreement.

INCREMENTAL YEAR 2 REVENUE SHARE. "Incremental Year 2 Revenue Share" shall have
the meaning set forth in Section 4.2(iii) of this Agreement.

INDEMNIFIED PARTY. "Indemnified Party" shall have the meaning set forth in
Section 9(d) of Exhibit G to this Agreement.

INDEMNIFYING PARTY. "Indemnifying Party" shall have the meaning set forth in
Section 9(d) of Exhibit G to this Agreement.

INITIAL TERM. "Initial Term" shall have the meaning set forth in Section 5.1 of
this Agreement.

INTERACTIVE SERVICE. An entity offering one or more of the following: (i) online
or Internet connectivity services (e.g., an Internet service provider); (ii) an
interactive site or service featuring a broad selection of aggregated third
party interactive content (or navigation thereto) (e.g., an online service or
search and directory service) and/or marketing a broad selection of products
and/or services across numerous interactive commerce categories (e.g., an online
mall or other leading online commerce site); (iii) a persistent desktop client;
and (iv) communications software capable of serving as the principal means
through which a user creates, sends and receives electronic mail or real time
online messages (whether by telephone, computer or other means), including,
without limitation, greeting cards but excluding virtual bouquets or similar
items.

                                       22

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INTERACTIVE SITE. Any interactive site or area, including, by way of example
and without limitation, (i) an 1-800-FLOWERS site on the World Wide Web
portion of the Internet or (ii) a channel or area delivered through a "push"
product such as the [****] or interactive environment such as [****].

KEYWORD SEARCH TERMS. (i) The Keyword-TM- online search terms made
available on the AOL Service for use by AOL Members, combining AOL's
Keyword-TM- online search modifier with a term or phrase specifically
related to 1-800-FLOWERS (and determined in accordance with the terms of this
Agreement), and (ii) the Go Word Search Terms.

LIABILITIES. "Liabilities" shall have the meaning set forth in Section 9(c) of
Exhibit G to this Agreement.

LICENSED CONTENT. All Content offered through the Affiliated 1-800-FLOWERS
Sites pursuant to this Agreement or otherwise provided to AOL by
1-800-FLOWERS or its agents in connection herewith (e.g., offline or online
promotional Content, Promotions, AOL "slideshows", etc.), including in each
case, any modifications, upgrades, updates, enhancements, and related
documentation.

MAKE-WHOLE PERIOD. "Make-Whole Period" shall have the meaning set forth in
Section 1.2 of this Agreement.

MANAGEMENT COMMITTEE. "Management Committee" shall have the meaning set forth
in Section 6.1 of this Agreement.

MARKS. "Marks" shall have the meaning set forth in Section 3 of Exhibit G to
this Agreement.

MERCHANDISE VALUE. The gross sales price of a Product, less taxes, service
charges, shipping and handling charges, discounts, gift certificates, refunds,
chargebacks, rebates and credit card processing fees.

NETSCAPE NETCENTER. The U.S. version of the Netscape Netcenter internet based
interactive site marketed under the "Netcenter" brand (including the
"Shop@Netcenter" area thereon), specifically excluding (a) any other Netscape or
Netscape Affiliate owned or operated internet based interactive sites, (b) the
international versions of Netcenter or any similar Netscape or Affiliate service
or interactive site; (c) "Netscape AOL Instant Messenger(TM)," "Netscape Custom
Netcenter," Netscape WebMail, or any similar independent product, service or
property which may be offered by, through or by Netscape; (d) any programming or
content area offered by or through the U.S. version of the Netcenter brand
service over which Netscape does not exercise complete or substantially complete
operational control (including, without limitation, Content areas controlled by
other parties), (e) any yellow pages, white pages, classifieds or other search,
directory or review services or Content offered by or through the U.S. version
of the Netcenter brand service, (f) any property, feature, product or service
which Netscape or its Affiliates may acquire subsequent to July 1, 1999 and (g)
any other version of a Netscape service which is materially different from
Netcenter by virtue of its branding, distribution, functionality, Content or
services, including, without limitation, any co-branded and/or customized
version of the service or any version distributed primarily through any
broadband distribution platform or through any platform or device other than a
desktop personal computer.

NEW FUNCTIONALITY. "New Functionality" shall have the meaning set forth in
Section 8.v of Exhibit E to this Agreement.

NON-ARBITRATION CLAIMS. "Non-Arbitration Claims" shall have the meaning set
forth in Section 6.7 of this Agreement.

**** Represents material which has been redacted 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.

                                       23

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NON-COMPLIANT CONTENT. "Non-Compliant Content" shall have the meaning set forth
in Section 2.8.2(b) of this Agreement.

1-800-FLOWERS COMPETITORS. "1-800-FLOWERS Competitors" shall have the meaning
set forth on Exhibit K hereto.

1-800-FLOWERS INTERACTIVE SITE. Any Interactive Site (other than the Affiliated
1-800-FLOWERS Sites) which is managed, maintained, owned or controlled primarily
by 1-800-FLOWERS or its agents.

1-800-FLOWERS LOOK AND FEEL. The elements of graphics, design, organization,
presentation, layout, user interface, navigation and stylistic convention
(including the digital implementations thereof) which are generally associated
with 1-800-FLOWERS Interactive Sites.

1-800-FLOWERS ONLINE GARDENING CHANNEL. The specific area or web site launched
by 1-800-FLOWERS, through which 1-800-FLOWERS shall market and complete
transactions regarding Gardening Products.

1-800-FLOWERS TECHNICAL PROBLEM. "1-800-FLOWERS Technical Problem" shall have
the meaning set forth in Section 4 of Exhibit E to this Agreement.

ORIGINAL IMAS. "Original IMAs" shall refer to (i) that certain amended and
restated Interactive Marketing Agreement between the Parties made and entered
into on September 1, 1999, (ii) that certain Interactive Marketing Agreement
between the Parties dated May 1, 1997 and (iii) that certain additional
Interactive Marketing Agreement dated as of January 1, 1998 between the Parties.

PLANT. A live, flowering plant (e.g., azalea plant, gardenia plant, juniper
bonsai, lavender plant, hibiscus (in a cache pot), chrysanthemum plant,
kalanchoe in a window box and "dish gardens") (but expressly excluding Gardening
Plants, wreaths, bulbs, bare-root materials, dried flowers, seeds, trees, herbs,
shrubs, topiaries and other horticultural or gardening-related plants). Nothing
herein is intended to prevent 1-800-FLOWERS from selling any plant through the
Affiliated 1-800-FLOWERS Sites.

PRESS RELEASE. "Press Release" shall have the meaning set forth in Section 7 of
this Agreement.

PRODUCT. Any product, good or service which 1-800-FLOWERS (or others acting on
its behalf or as distributors) offers, sells, provides, distributes or licenses
to AOL Users directly or indirectly through (i) any Affiliated 1-800-FLOWERS
Site (including through any Interactive Site linked thereto), (ii) any other
electronic means directed at AOL Users (e.g., e-mail offers), or (iii) an
"offline" means (e.g., toll-free number) for receiving orders related to
specific offers within the Affiliated 1-800-FLOWERS Sites requiring purchasers
to reference a specific promotional identifier or tracking code, including,
without limitation, products sold through surcharged downloads (to the extent
expressly permitted hereunder).

PRODUCTION PLAN. "Production Plan" shall have the meaning set forth in Section
10 of Exhibit F to this Agreement.

PROMO CONTENT. "Promo Content" shall have the meaning set forth in Section 1.3
of this Agreement.

PROMOTIONS. "Promotions shall have the meaning set forth in Section 1.1 of this
Agreement.

PROMOTIONAL ACTIVITIES. "Promotional Activities" shall have the meaning set
forth in Section 1.1 of this Agreement.

PROMOTIONAL MATERIALS. "Promotional Materials" shall have the meaning set forth
in Section 1 of Exhibit G to this Agreement.

QUALIFIED INTERACTIVE SERVICE. An entity offering one or more of the following:
(i) online or Internet

                                       24
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connectivity services (e.g., an Internet service provider); (ii) an interactive
site or service featuring a broad selection of aggregated third party
interactive content (or navigation thereto) (e.g., an online service or search
and directory service) and/or marketing a broad selection of products and/or
services across numerous interactive commerce categories (e.g., an online mall
or other leading online commerce site); (iii) a persistent desktop client; and
(iv) communications software capable of serving as the principal means through
which a user creates, sends and receives electronic mail or real time online
messages (whether by telephone, computer or other means).

REVENUE THRESHOLD. "Revenue Threshold" shall have the meaning set forth in
Section 4.2(i) of this Agreement.

SALES REPORTS. "Sales Reports" shall have the meaning set forth in Section 4.6.1
of this Agreement.

SHOPPING CHANNEL. "Shopping Channel" shall mean the areas within the "Shop@AOL,"
Shop@AOL.com," Shop@CompuServe," "Shop@Digital City," "Shop@Netcenter" and
"Shop@ICQ" that are owned, maintained or controlled by the respective AOL
Properties.

SHORTFALL. "Shortfall" shall have the meaning set forth in Section 1.2 of this
Agreement.

SHORTFALL PENALTY. "Shortfall Penalty" shall have the meaning set forth in
Section 1.2 of this Agreement.

SPECIAL OFFERS. "Special Offers" shall have the meaning set forth in Section 2.7
of this Agreement.

TIER. "Tier" shall have the meaning set forth in Exhibit A hereto.

TERM. "Term" shall have the meaning set forth in Section 5.2 of this Agreement.

TRANSACTION REVENUES. Aggregate amounts paid by AOL Purchasers, as currently
tracked, in connection with the sale, licensing, distribution or provision of
any Products which 1-800-FLOWERS sells to AOL Purchasers on or through any
1-800-FLOWERS Affiliated Site, including, in each case, handling, shipping,
Service Charges, and excluding, in each case, (a) amounts collected for sales or
use taxes or duties, (b) credit card processing fees to the extent charged
and/or collected by the credit card issuer and (c) credits and chargebacks for
returned or canceled goods or services, but not excluding cost of goods sold or
any similar cost.

[****] PRODUCTS. "[****] Products" shall have the meaning set forth in Section
2.8.2(a)(iii) of this Agreement.

YEAR. The time period between each of (i) the Effective Date and the first
anniversary thereof; (ii) the first anniversary of the Effective Date and the
second anniversary thereof; (iii) the second anniversary of the Effective Date
and the third anniversary thereof; and (iv) the third anniversary of the
Effective Date and the fourth anniversary thereof.

YEAR 1. October 1, 2000 through September 30, 2001.

**** Represents material which has been redacted 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.

                                       25

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                                    EXHIBIT C

1-800-FLOWERS CROSS-PROMOTION

A.       1-800-FLOWERS shall prominently and regularly promote the Affiliated
         1-800-FLOWERS Sites (making specific mention of their availability
         through the AOL Properties) in (i) approximately [****] of
         1-800-FLOWERS-controlled television, radio or print advertisements that
         are produced after the Effective Date and that specifically mention any
         of 1-800-FLOWERS' online or Internet-based shopping functionality and
         (ii) approximately [****] of any publications, programs, features or
         other forms of media under 1-800-FLOWERS' control (excluding the
         advertisements subject to clause (i)). In this regard, in [****]
         instances when 1-800-FLOWERS makes promotional reference in [****]
         print advertisements to [****] 1-800-FLOWERS Interactive Site (each
         such reference, a "Web Reference"), 1-800-FLOWERS shall include a
         specific reference to the availability of the Affiliated 1-800-FLOWERS
         Sites through AOL and its affiliated interactive properties of at least
         equal prominence to the Web Reference by the use of the Keyword Search
         Term for the AOL Service or otherwise); any listings of the applicable
         "URL(s)" for such Affiliated 1-800-FLOWERS Site(s) shall include a
         listing of the Keyword for the AOL Service of at least equal prominence
         to the Web Reference. AOL acknowledges that an occasional,
         unintentional failure to comply with the foregoing promotional
         commitments shall not be deemed a breach of this Agreement.

B.       1-800-FLOWERS shall ensure that (a) AOL is given the exclusive first
         opportunity to participate in [****] of any online or Internet-related
         marketing and promotional activities, initiated and/or controlled by
         (directly or through an advertising agency) 1-800-FLOWERS, which
         1-800-FLOWERS desires to conduct with any Interactive Service
         subsequent to execution hereof (so long as AOL informs 1-800-FLOWERS of
         its desire to participate in any such activity within five (5) business
         days following receipt of written notice from 1-800-FLOWERS detailing
         the opportunity) and (b) AOL receives substantially more promotion and
         marketing (in value, duration, prominence, etc.) from 1-800-FLOWERS
         than any such other Interactive Service receives from FLOWERS.

C.       1-800-FLOWERS shall include each of the following promotions for the
         Online Area and AOL within each 1-800-FLOWERS Interactive Site during
         the term of the Agreement: (i) a prominent "Try AOL" feature in the
         area where 1-800-FLOWERS mentions its business partners (which is
         currently known as "About 1-800-FLOWERS") where users can obtain
         promotional information about AOL products and services and, at AOL's
         option, download or order AOL's then-current version of client software
         for the America Online(R) brand service and (ii) a link from the
         1-800-FLOWERS Interactive Site to AOL's primary site on the World Wide
         Web.

D.       During the Initial Term, 1-800-FLOWERS shall not promote any Qualified
         Interactive Service (other than AOL) as its preferred Interactive
         Service.

     **** Represents material which has been redacted 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.

                                       26

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                                    EXHIBIT D

                    DESCRIPTION OF PRODUCTS AND OTHER CONTENT

The Products to be offered by 1-800-FLOWERS on the Affiliated 1-800-FLOWERS
Sites shall include:

         1. Fresh-cut flowers, Gardening Products and Plants

         2. Balloons

         3. Gift Baskets (which may include books related to the Products listed
            on this Exhibit D and Exhibit J)

         4. Gourmet foods and candy

         5. Home decor

         6. Books and videos related to fresh-cut flowers, Gardening Products
            and Plants; PROVIDED that such books and videos (excluding those
            books and videos promoted as part of a Gift Basket or promoted as
            part of a theme package (i.e., "Books and Blooms")) shall not be
            promoted, marketed or advertised by or on behalf of 1-800-FLOWERS
            on any home page of any Affiliated 1-800-FLOWERS Site; PROVIDED,
            further, that books shall not constitute more than [****] of the
            annual gross revenues generated by the 1-800-FLOWERS Sites in any
            Year of the Initial Term.

         7. Sentiment expression products and specialty gifts

         8. Products listed on Exhibit J

         For the avoidance of doubt, during the Initial Term, 1-800-FLOWERS also
         shall be permitted to continue to offer on the Affiliated 1-800-FLOWERS
         Sites any Products or services offered by 1-800-FLOWERS on the AOL
         Properties pursuant to the terms of the Original IMAs prior to the
         Effective Date hereof.

**** Represents material which has been redacted 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.

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                                    EXHIBIT E

                                   OPERATIONS

     1.  AFFILIATED 1-800-FLOWERS SITES INFRASTRUCTURE. 1-800-FLOWERS shall be
         responsible for all communications, hosting and connectivity costs and
         expenses associated with the Affiliated 1-800-FLOWERS Sites.
         1-800-FLOWERS shall provide all hardware, software, telecommunications
         lines and other infrastructure necessary to meet traffic demands on the
         Affiliated 1-800-FLOWERS Sites from the AOL Network. 1-800-FLOWERS
         shall design and implement the network between the AOL Service and
         Affiliated 1-800-FLOWERS Sites such that (i) no single component
         failure shall have a materially adverse impact on AOL Members seeking
         to reach the Affiliated 1-800-FLOWERS Sites from the AOL Network and
         (ii) no single line under material control by 1-800-FLOWERS shall run
         at more than 70% average utilization for a 5-minute peak in a daily
         period. In this regard, 1-800-FLOWERS shall provide AOL, upon request,
         with a detailed network diagram regarding the architecture and network
         infrastructure supporting the Affiliated 1-800-FLOWERS Sites. In the
         event that 1-800-FLOWERS elects to create a custom version of any
         Affiliated 1-800-FLOWERS Site in order to comply with the terms of this
         Agreement, 1-800-FLOWERS shall bear responsibility for all aspects of
         the implementation, management and cost of such customized site.

     2.  OPTIMIZATION; SPEED. 1-800-FLOWERS shall use commercially reasonable
         efforts to ensure that: (a) the functionality and features within the
         Affiliated 1-800-FLOWERS Sites are optimized for the client software
         then in use by AOL Members; and (b) each of the Affiliated
         1-800-FLOWERS Sites is designed and populated in a manner that
         minimizes delays when AOL Members attempt to access such site. At a
         minimum, 1-800-FLOWERS shall ensure that each Affiliated 1-800-FLOWERS
         Site's data transfers initiate within fewer than fifteen (15) seconds
         on average. Prior to commercial launch of any material promotions
         described herein, 1-800-FLOWERS shall permit AOL to conduct performance
         and load testing of the Affiliated 1-800-FLOWERS Sites (in person or
         through remote communications), with such commercial launch not to
         commence until such time as AOL is reasonably satisfied with the
         results of any such testing.

   3.    USER INTERFACE. 1-800-FLOWERS shall maintain a graphical user interface
         within each Affiliated 1-800-FLOWERS Site that is competitive in all
         material respects with interfaces of other similar sites based on
         similar form technology. AOL reserves the right to review the user
         interface and site design prior to launch of the Promotions and to
         conduct focus group testing to assess compliance with respect to such
         consultation and with respect to 1-800-FLOWERS' compliance with the
         preceding sentence.

   4.    TECHNICAL PROBLEMS. 1-800-FLOWERS agrees to use commercially reasonable
         efforts to address material technical problems (over which
         1-800-FLOWERS exercises control) affecting use by AOL Members of the
         Affiliated 1-800-FLOWERS Sites (a "1-800-FLOWERS Technical Problem")
         promptly following notice thereof. In the event that 1-800-FLOWERS is
         unable to promptly resolve a 1-800-FLOWERS Technical Problem following
         notice thereof from AOL (including, without limitation, infrastructure
         deficiencies producing user delays), AOL shall have the right to
         regulate the promotions it provides to 1-800-FLOWERS hereunder until
         such time as 1-800-FLOWERS corrects the 1-800-FLOWERS Technical Problem
         at issue.

  5.     MONITORING. 1-800-FLOWERS shall use commercially reasonable efforts to
         ensure that the performance and availability of each Affiliated
         1-800-FLOWERS Site is monitored on a reasonably continuous basis.
         1-800-FLOWERS shall provide AOL with contact information (including
         e-mail, phone, pager and fax information, as applicable, for both
         during and after business hours) for 1-800-FLOWERS' principal business
         and technical representatives, for use in cases when issues or problems
         arise with respect to any Affiliated 1-800-FLOWERS Site.

  6.     TELECOMMUNICATIONS. Where applicable 1-800-FLOWERS shall utilize
         encryption methodology to secure data communications between the
         Parties' data centers. The network between the Parties shall be
         configured such that no single component failure shall significantly
         impact AOL Users. The network shall be sized such that no single line
         over which the 1-800-FLOWERS has material control runs at more than 70%
         average utilization for a 5-minute peak in a daily period.

   7.    SECURITY. 1-800-FLOWERS shall utilize Internet standard encryption
         technologies (e.g., Secure Socket Layer - SSL) to provide a secure
         environment for conducting transactions and/or transferring private
         member information (e.g. credit card numbers, banking/financial
         information, and member address information) to and from any Affiliated
         1-800-FLOWERS Site. 1-800-FLOWERS shall facilitate periodic reviews of
         the Affiliated 1-800-FLOWERS Sites by AOL in order to evaluate the
         security risks of such site. 1-800-FLOWERS shall promptly remedy any

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         security risks or breaches of security as may be identified by AOL's
         Operations Security team.

   8.    TECHNICAL PERFORMANCE.

       i.       1-800-FLOWERS shall design the Affiliated 1-800-FLOWERS Sites to
         support the AOL-client embedded versions of the Microsoft Internet
         Explorer 3.XX and 4.XX browsers (Windows and Macintosh)and the Netscape
         Browser 4.XX and make commercially reasonable efforts to support all
         other AOL browsers listed at: "http://webmaster.info.aol.com."

      ii.       To the extent 1-800-FLOWERS creates customized pages on any
         Affiliated 1-800-FLOWERS Site for AOL Members, 1-800-FLOWERS shall
         develop and employ a methodology to detect AOL Members (e.g. examine
         the HTTP User-Agent field in order to identify the "AOL Member-Agents"
         listed at: "http://webmaster. info.aol.com)."

     iii.       1-800-FLOWERS shall periodically review the technical
         information made available by AOL at http://webmaster.info.aol.com.

      iv. 1-800-FLOWERS shall design its site to support HTTP 1.0 or later
         protocol as defined in RFC 1945 and to adhere to AOL's parameters for
         refreshing or preventing the caching of information in AOL's proxy
         system as outlined in the document provided at the following URL:
         http://webmaster.info.aol.com. 1-800-FLOWERS is responsible for the
         manipulation of these parameters in web-based objects so as to allow
         them to be cached or not cached as outlined in RFC 1945.

       v.       Prior to releasing material, new functionality or features
         through any Affiliated 1-800-FLOWERS Site ("New Functionality"),
         1-800-FLOWERS shall use commercially reasonable efforts to (i) test the
         New Functionality to confirm its compatibility with AOL Service client
         software and (ii) provide AOL with written notice of the New
         Functionality so that AOL can perform tests of the New Functionality to
         confirm its compatibility with the AOL Service client software. Should
         any new material, new functionality or features through any Affiliated
         1-800-FLOWERS Site be released without notification to AOL, AOL shall
         not be responsible for any adverse member experience until such time
         that compatibility tests can be performed and the new material,
         functionality or features qualified for the AOL Service

   9.    AOL INTERNET SERVICES 1-800-FLOWERS SUPPORT. AOL shall provide
         1-800-FLOWERS with access to the standard online resources, standards
         and guidelines documentation, technical phone support, monitoring and
         after-hours assistance that AOL makes generally available to similarly
         situated web-based partners. AOL support shall not, in any case, be
         involved with content creation on behalf of 1-800-FLOWERS or support
         for any technologies, databases, software or other applications which
         are not supported by AOL or are related to any 1-800-FLOWERS area other
         than the Affiliated 1-800-FLOWERS Sites. Support to be provided by AOL
         is contingent on 1-800-FLOWERS providing to AOL demo account
         information (where applicable), a detailed description of the
         respective Affiliated 1-800-FLOWERS Site's software, hardware and
         network architecture and access to the respective Affiliated
         1-800-FLOWERS Site for purposes of such performance and load testing as
         AOL elects to conduct.

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                                    EXHIBIT F

                   STANDARD ONLINE COMMERCE TERMS & CONDITIONS

1.       AOL NETWORK DISTRIBUTION. 1-800-FLOWERS shall not authorize or
         knowingly permit any third party to distribute or promote the Products
         or any 1-800-FLOWERS Interactive Site through the AOL Network absent
         AOL's prior written approval. The Promotions and any other promotions
         or advertisements purchased from or provided by AOL shall link only to
         the Affiliated 1-800-FLOWERS Sites, shall be used by 1-800-FLOWERS
         solely for its own benefit and shall not be resold, traded, exchanged,
         bartered, brokered or otherwise offered to any third party.

2.       PROVISION OF OTHER CONTENT. In the event that AOL notifies
         1-800-FLOWERS that (i) as reasonably determined by AOL, any Content
         within the Affiliated 1-800-FLOWERS Sites violates AOL's then-standard
         Terms of Service (as set forth on the America Online(R)brand service at
         Keyword term "TOS"), the terms of this Agreement or any other standard,
         written AOL policy or (ii) AOL reasonably objects to the inclusion of
         any Content within the Affiliated 1-800-FLOWERS Sites (other than any
         specific items of Content which may be expressly identified in this
         Agreement), then 1-800-FLOWERS shall take commercially reasonable steps
         to block access by AOL Users to such Content using 1-800-FLOWERS'
         then-available technology. In the event that 1-800-FLOWERS cannot,
         through its commercially reasonable efforts, block access by AOL Users
         to the Content in question, then 1-800-FLOWERS shall provide AOL prompt
         written notice of such fact. AOL may then, at its option, restrict
         access from the AOL Network to the Content in question using technology
         available to AOL. 1-800-FLOWERS shall cooperate with AOL's reasonable
         requests to the extent AOL elects to implement any such access
         restrictions.

3.       CONTESTS. 1-800-FLOWERS shall take all steps necessary to ensure that
         any contest, sweepstakes or similar promotion conducted or promoted
         through the Affiliated 1-800-FLOWERS Sites (a "Contest") complies with
         all applicable federal, state and local laws and regulations.
         1-800-FLOWERS shall use commercially reasonable efforts to provide AOL
         of at least thirty (30) days prior written notice of any such Contest.

4.       NAVIGATION. Subject to the prior consent of 1-800-FLOWERS, which
         consent shall not be unreasonably withheld, AOL shall be entitled to
         establish navigational icons, links and pointers connecting the
         Affiliated 1-800-FLOWERS Sites (or portions thereof) with other content
         areas on or outside of the AOL Network. Additionally, in cases where an
         AOL User performs a search for 1-800-FLOWERS through any search or
         navigational tool or mechanism that is accessible or available through
         the AOL Network (e.g., Promotions, Keyword Search Terms, or any other
         promotions or navigational tools), AOL shall have the right to direct
         such AOL User to the applicable Affiliated 1-800-FLOWERS Site, or any
         other 1-800-FLOWERS Interactive Site determined by AOL in its
         reasonable discretion.

5.       DISCLAIMERS. Upon AOL's request, 1-800-FLOWERS agrees to include in a
         prominent area to be agreed upon by the Parties of each Affiliated
         1-800-FLOWERS Site, a product disclaimer to be mutually agreed upon by
         the Parties and indicating that transactions are solely between
         1-800-FLOWERS and AOL Users purchasing Products from 1-800-FLOWERS.

6.       LOOK AND FEEL. 1-800-FLOWERS acknowledges and agrees that AOL shall own
         all right, title and interest in and to the elements of
         graphics, design, organization, presentation, layout, user interface,
         navigation and stylistic convention (including the digital
         implementations thereof) which are generally associated with online
         areas contained within the AOL Network, subject to 1-800-FLOWERS'
         ownership rights in any 1-800-FLOWERS trademarks or copyrighted
         material within the Affiliated 1-800-FLOWERS Sites and the
         1-800-FLOWERS Look and Feel. AOL acknowledges and agrees that
         1-800-FLOWERS shall own all right, title and interest in and to the
         1-800-FLOWERS Look and Feel and the Affiliated 1-800-FLOWERS Site,
         subject to the AOL Look and Feel.

7.       MANAGEMENT OF THE AFFILIATED 1-800-FLOWERS SITES. 1-800-FLOWERS shall
         manage, review, delete, edit, create, update and otherwise manage all
         Content available on or through the Affiliated 1-800-FLOWERS Sites, in
         a timely and professional manner and in accordance with the terms of
         this Agreement. 1-800-FLOWERS shall ensure that each Affiliated
         1-800-FLOWERS Site is current, accurate and well-organized at all
         times. 1-800-FLOWERS warrants that the Products and other Licensed
         Content: (i) shall not infringe on or violate any copyright, trademark,
         U.S. patent or any other third party right, including without
         limitation, any music performance or other music-related rights; (ii)
         shall not violate AOL's then-applicable Terms of Service or any other
         standard, written AOL policy available online or otherwise provided to
         1-800-FLOWERS; and (iii) shall not violate any applicable law or
         regulation, including those relating to contests, sweepstakes or
         similar promotions. Additionally, 1-800-FLOWERS represents and warrants
         that it owns or has a valid license to all rights to any Licensed
         Content used in AOL "slideshow" or other formats embodying elements
         such as graphics, animation and sound, free and clear of all
         encumbrances and without violating the rights of any other person or
         entity. 1-800-FLOWERS also warrants that a reasonable basis exists for
         all Product performance or comparison claims appearing through the
         Affiliated 1-800-FLOWERS Sites. 1-800-FLOWERS shall not in any manner,
         including, without limitation in any Promotion, the Licensed

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         Content or the Materials state or imply that AOL recommends or endorses
         1-800-FLOWERS or 1-800-FLOWERS' Products (e.g., no statements that
         1-800-FLOWERS is an "official" or "preferred" provider of products or
         services for AOL); PROVIDED, HOWEVER, that 1-800-FLOWERS shall have the
         right (provided that 1-800-FLOWERS is in compliance with the terms and
         conditions of this Agreement) upon the prior approval of AOL to state
         that it is the exclusive marketer of the Exclusive Products on the AOL
         Properties (as defined herein). AOL shall have no obligations with
         respect to the Products available on or through the Affiliated
         1-800-FLOWERS Sites, including, but not limited to, any duty to review
         or monitor any such Products.

8.       DUTY TO INFORM. 1-800-FLOWERS shall promptly inform AOL of any
         information related to the Affiliated 1-800-FLOWERS Sites which could
         reasonably lead to a claim, demand, or liability of or against AOL
         and/or its affiliates by any third party.

9.       CUSTOMER SERVICE.

             (a) GENERAL. It is the sole responsibility of 1-800-FLOWERS to
         provide customer service to persons or entities purchasing Products
         through the AOL Network ("Customers"), as further described in Exhibit
         H to this Agreement. 1-800-FLOWERS shall bear full responsibility for
         all customer service, including without limitation, order processing,
         billing, fulfillment, shipment, collection and other customer service
         associated with any Products offered, sold or licensed through the
         Affiliated 1-800-FLOWERS Sites, and AOL shall have no obligations
         whatsoever with respect thereto. 1-800-FLOWERS shall receive all emails
         from Customers via a computer available to 1-800-FLOWERS' customer
         service staff and generally respond to such emails within one business
         day of receipt. 1-800-FLOWERS shall receive all orders electronically
         and generally process all orders within one business day of receipt,
         provided Products ordered are not advance order items. 1-800-FLOWERS
         shall ensure that all orders of Products are received, processed,
         fulfilled and delivered on a timely and professional basis.
         1-800-FLOWERS shall offer AOL Users who purchase Products through such
         Affiliated 1-800-FLOWERS Sites its customary satisfaction guarantee.
         1-800-FLOWERS shall bear all responsibility for compliance with
         federal, state and local laws in the event that Products are out of
         stock or are no longer available at the time an order is received.
         1-800-FLOWERS shall also comply with the requirements of any federal,
         state or local consumer protection or disclosure law. Payment for
         Products shall be collected by 1-800-FLOWERS directly from customers.
         1-800-FLOWERS' order fulfillment operation shall be subject to AOL's
         reasonable review.

             (b) CUT-OFF TIME. In addition to the customer service requirements
         set forth in Section 9(a) above (as the same may be reasonably amended
         by AOL from time to time), 1-800-FLOWERS shall ensure same-day delivery
         for orders received before 12:30 p.m. (the "Cut-Off Time") in the time
         zone in which the order is to be delivered; PROVIDED, HOWEVER, that the
         Cut-Off Time may be expanded or contracted by 1-800-FLOWERS during
         holiday periods due to significant changes in market demand; PROVIDED,
         FURTHER, that 1-800-FLOWERS shall use all reasonable efforts to notify
         AOL before the Cut-Off Time is changed. Notwithstanding the foregoing,
         1-800-FLOWERS hereby acknowledges and agrees that the Cut-Off Time with
         respect to AOL Purchasers shall be no earlier than the cut-off time for
         any other 1-800-FLOWERS partner (except due to specific performance
         failures of the AOL Network (e.g., downtime of e-mail, etc.). If
         same-day service will not be feasible for a particular order,
         1-800-FLOWERS hereby agrees to use its best efforts (by e-mail, phone,
         etc.) to notify the customer that the order will be delivered the next
         day. Next-day delivery shall always be attempted, even during busy
         holiday seasons.

10.      PRODUCTION WORK. In the event that 1-800-FLOWERS requests AOL's
         production assistance in connection with (i) ongoing programming and
         maintenance related to the Affiliated 1-800-FLOWERS Sites, (ii) a
         redesign of or addition to the Affiliated 1-800-FLOWERS Sites (e.g., a
         change to an existing screen format or construction of a new custom
         form), (iii) production to modify work performed by a third party
         provider or (iv) any other type of production work, 1-800-FLOWERS shall
         work with AOL to develop a detailed production plan for the requested
         production assistance (the "Production Plan"). Following receipt of the
         final Production Plan, AOL shall notify 1-800-FLOWERS of (i) AOL's
         availability to perform the requested production work, (ii) the
         proposed fee or fee structure for the requested production and
         maintenance work and (iii) the estimated development schedule for such
         work. To the extent the Parties reach agreement regarding
         implementation of the agreed-upon Production Plan, such agreement shall
         be reflected in a separate work order signed by the Parties. To the
         extent 1-800-FLOWERS elects to retain a third party provider to perform
         any such production work, work produced by such third party provider
         must generally conform to AOL's standards & practices (as provided on
         the America Online brand service at Keyword term "styleguide"). The
         specific production resources which AOL allocates to any production
         work to be performed on behalf of 1-800-FLOWERS shall be as determined
         by AOL in its sole discretion. With respect to any routine production,
         maintenance or related services which AOL reasonably determines are
         necessary for AOL to perform in order to support the proper functioning
         and integration of the Affiliated 1-800-FLOWERS Sites ("Routine
         Services"), 1-800-FLOWERS shall pay the then-standard fees charged by
         AOL for such Routine Services.

11.      OVERHEAD ACCOUNTS. To the extent AOL has granted 1-800-FLOWERS any
         overhead accounts on the AOL Properties, 1-800-FLOWERS shall be
         responsible for the actions taken under or through its overhead
         accounts, which actions are subject to AOL's applicable Terms of
         Service and for any surcharges, including, without limitation, all
         premium charges, transaction charges, and any applicable communication
         surcharges incurred by any overhead Account issued to 1-800-FLOWERS,
         but 1-800-FLOWERS shall not be liable for charges incurred by any
         overhead account relating to AOL's standard monthly usage fees and
         standard hourly charges, which charges AOL shall bear. Upon the
         termination of this Agreement, all overhead accounts, related screen
         names and any associated usage credits or similar rights, shall
         automatically terminate. AOL shall have no liability for loss of any
         data or content related to the proper termination of any overhead
         account.

12.      NAVIGATION TOOLS. In addition to the Keyword Search Terms granted to
         1-800-FLOWERS under the Original IMAs and set

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         forth on Exhibit A hereto, any further Keyword Search Terms to be
         directed to any Affiliated 1-800-FLOWERS Site shall be (i) subject to
         availability for use by 1-800-FLOWERS and (ii) limited to the
         combination of the Keyword(TM)search modifier (i.e., "Keyword:")
         combined with a registered trademark of 1-800-FLOWERS. AOL reserves the
         right to revoke at any time 1-800-FLOWERS' use of any Keyword Search
         Terms which do not incorporate registered trademarks of 1-800-FLOWERS.
         1-800-FLOWERS acknowledges that its utilization of a Keyword Search
         Term shall not create in it, nor shall it represent it has, any right,
         title or interest in or to such Keyword Search Term, other than the
         right, title and interest 1-800-FLOWERS holds in 1-800-FLOWERS'
         registered trademark independent of the Keyword Search Term. Without
         limiting the generality of the foregoing, 1-800-FLOWERS shall not: (a)
         attempt to register or otherwise obtain trademark or copyright
         protection in the Keyword Search Term; or (b) use the Keyword Search
         Term, except for the purposes expressly required or permitted under
         this Agreement. To the extent AOL allows AOL Users to "bookmark" the
         URL or other locator for any Affiliated 1-800-FLOWERS Site, such
         bookmarks shall be subject to AOL's control at all times. Upon the
         termination of this Agreement, 1-800-FLOWERS' rights to any Keyword
         Search Terms and bookmarking shall terminate.

13.      MERCHANT CERTIFICATION PROGRAM. 1-800-FLOWERS shall participate in any
         generally applicable "Certified Merchant" program operated by AOL or
         its authorized agents or contractors. Such program may require merchant
         participants on an ongoing basis to meet certain reasonable, generally
         applicable standards relating to provision of electronic commerce
         through the AOL Network (including, as a minimum, use of 40-bit SSL
         encryption and if requested by AOL, 128-bit encryption) and may also
         require the payment of certain reasonable certification fees to the
         applicable entity operating the program. Each Certified Merchant in
         good standing shall be entitled to place on its affiliated Interactive
         Site an AOL designed and approved button promoting the merchant's
         status as an AOL Certified Merchant.

14.      PROHIBITION OF PROMOTIONAL PROGRAMS. On the Affiliated 1-800-FLOWERS
         Sites, 1-800-FLOWERS shall not offer, provide, implement or otherwise
         make available any promotional programs or plans that are intended to
         provide customers with rewards or benefits in exchange for, or on
         account of, their past or continued loyalty to, or patronage or
         purchase of, the products or services of 1-800-FLOWERS or any third
         party (e.g., a promotional program similar to a "frequent flier"
         program) other than travel-related or 1-800-FLOWERS' proprietary
         flowers-related frequent purchasing programs, unless such promotional
         program or plan is provided exclusively through AOL's "AOL Rewards"
         program, accessible on the AOL Service at Keyword: "AOL Rewards"
         (unless otherwise consented to by AOL, which consent shall not be
         unreasonably withheld).

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                                    EXHIBIT G

                        STANDARD LEGAL TERMS & CONDITIONS

1.       PROMOTIONAL MATERIALS/PRESS RELEASES. Each Party shall submit to the
other Party, for its prior written approval, which shall not be unreasonably
withheld or delayed, any marketing, advertising, or other promotional materials,
related to the Affiliated 1-800-FLOWERS Sites and/or referencing the other Party
and/or its trade names, trademarks, and service marks (the "Promotional
Materials"); PROVIDED, HOWEVER, that either Party's use of screen shots of the
Affiliated 1-800-FLOWERS Sites for promotional purposes shall not require the
approval of the other Party so long as America Online(R) is clearly identified
as the source of such screen shots; PROVIDED, FURTHER, that following the
initial public announcement of the business relationship between the Parties in
accordance with the approval and other requirements contained herein, either
Party's subsequent factual reference to the existence of a business relationship
between the Parties in Promotional Materials, shall not require the approval of
the other Party. Each Party shall solicit and reasonably consider the views of
the other Party in designing and implementing such Promotional Materials. Once
approved, the Promotional Materials may be used by a Party and its affiliates
for the purpose of promoting the Affiliated 1-800-FLOWERS Sites and the content
contained therein and reused for such purpose until such approval is withdrawn
with reasonable prior notice. In the event such approval is withdrawn, existing
inventories of Promotional Materials may be depleted. It is agreed and
understood that the Parties shall work together to prepare a press release to be
issued as soon as reasonably possible following the execution of this Agreement,
and in no event, more than ten (10) business days thereafter (unless otherwise
required by applicable law).

2.       LICENSE. During the Term, 1-800-FLOWERS hereby grants AOL a
non-exclusive worldwide license to market, license, distribute, reproduce,
display, perform, transmit and promote the Licensed Content (or any portion
thereof) through such areas or features of the AOL Network as AOL deems
appropriate solely in accordance with the terms and conditions hereof.
1-800-FLOWERS acknowledges and agrees that the foregoing license permits AOL to
distribute portions of the Licensed Content in synchronism or timed relation
with visual displays prepared by 1-800-FLOWERS or AOL on behalf of 1-800-FLOWERS
at 1-800-FLOWERS' request (e.g., as part of an AOL "slideshow"). Subject to such
license, 1-800-FLOWERS retains all right, title and interest in the Licensed
Content. In addition, AOL Users shall have the right to access and use the
Affiliated 1-800-FLOWERS Sites.

3.       TRADEMARK LICENSE. In designing and implementing the Materials and
subject to the other provisions contained herein, 1-800-FLOWERS shall be
entitled to use the following trade names, trademarks, and service marks of
AOL and CompuServe (respectively): the "America Online(R)" brand service,
"AOL-TM-" service/software, AOL's triangle logo and the "CompuServe"
trademark; and AOL and its affiliates shall be entitled to use the trade
names, trademarks, and service marks of 1-800-FLOWERS for which 1-800-FLOWERS
holds all rights necessary for use in connection with this Agreement (e.g.,
1-800-Flowers, Gift Concierge Service, World's Favorite Florist, Freshness
Care System, Fresh Thoughts, 1-800-FLOWERS.com, Gardenworks, etc.)
(collectively, together with the AOL marks listed above, the "Marks");
provided that each Party: (i) does not create a unitary composite mark
involving a Mark of the other Party without the prior written approval of
such other Party; and (ii) displays symbols and notices clearly and
sufficiently indicating the trademark status and ownership of the other
Party's Marks in accordance with applicable trademark law and practice.

4.       OWNERSHIP OF TRADEMARKS. Each Party acknowledges the ownership right of
the other Party in the Marks of the other Party and agrees that all use of the
other Party's Marks shall inure to the benefit, and be on behalf, of the other
Party. Each Party acknowledges that its utilization of the other Party's Marks
shall not create in it, nor shall it represent it has, any right, title, or
interest in or to such Marks other than the licenses expressly granted herein.
Each Party agrees not to do anything contesting or impairing the trademark
rights of the other Party (including, without limitation, seeking to register
the other Party's Marks as part of a composite mark).

5.       QUALITY STANDARDS. Each Party agrees that the nature and quality of its
products and services supplied in connection with the other Party's Marks shall
conform to quality standards set by the other Party. Each Party agrees to supply
the other Party, upon request, with a reasonable number of samples of any
Materials publicly disseminated by such Party which utilize the other Party's
Marks. Each Party shall comply with all applicable laws, regulations, and
customs and obtain any required government approvals pertaining to use of the
other Party's marks.

6.       INFRINGEMENT PROCEEDINGS. Each Party agrees to promptly notify the
other Party of any unauthorized use of the other Party's Marks of which it has
actual knowledge. Each Party shall have the sole right and discretion to bring
proceedings alleging infringement of its Marks or unfair competition related
thereto; provided, however, that each Party agrees to provide the other Party
with its reasonable cooperation and assistance with respect to any such
infringement proceedings.

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7.       REPRESENTATIONS AND WARRANTIES. Each Party represents and warrants to
the other Party that: (i) such Party has the full corporate right, power and
authority to enter into this Agreement and to perform the acts required of it
hereunder; (ii) the execution of this Agreement by such Party, and the
performance by such Party of its obligations and duties hereunder, do not and
shall not violate any agreement to which such Party is a party or by which it is
otherwise bound; (iii) when executed and delivered by such Party, this Agreement
shall constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms; and (iv) such Party
acknowledges that the other Party makes no representations, warranties or
agreements related to the subject matter hereof that are not expressly provided
for in this Agreement. 1-800-FLOWERS hereby represents and warrants that it
possesses all authorizations, approvals, consents, licenses, permits,
certificates or other rights and permissions necessary to sell the Products.

8.       CONFIDENTIALITY. Each Party acknowledges that Confidential Information
may be disclosed to the other Party during the course of this Agreement. Each
Party agrees that it shall take reasonable steps, at least substantially
equivalent to the steps it takes to protect its own proprietary information,
during the term of this Agreement, and for a period of two (2) years following
expiration or termination of this Agreement, to prevent the duplication or
disclosure of Confidential Information of the other Party, other than by or to
its employees or agents who must have access to such Confidential Information to
perform such Party's obligations hereunder, who shall each agree to comply with
this section. Notwithstanding the foregoing, either Party may issue a press
release or other disclosure containing Confidential Information without the
consent of the other Party, to the extent such disclosure is required by law,
rule, regulation or government or court order. In such event, the disclosing
Party shall provide at least five (5) business days prior written notice of such
proposed disclosure to the other Party. Further, in the event such disclosure is
required of either Party under the laws, rules or regulations of the Securities
and Exchange Commission or any other applicable governing body, such Party shall
(i) redact mutually agreed-upon portions of this Agreement to the fullest extent
permitted under applicable laws, rules and regulations and (ii) submit a request
to such governing body that such portions and other provisions of this Agreement
receive confidential treatment under the laws, rules and regulations of the
Securities and Exchange Commission or otherwise be held in the strictest
confidence to the fullest extent permitted under the laws, , rules or
regulations of any other applicable governing body.

9.       LIMITATION OF LIABILITY; DISCLAIMER; INDEMNIFICATION.

(a) LIABILITY. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY
DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES), ARISING FROM BREACH OF THE AGREEMENT, THE SALE OF PRODUCTS, THE USE
OR INABILITY TO USE THE AOL NETWORK, THE AOL SERVICE, AOL.COM OR THE
AFFILIATED 1-800-FLOWERS SITES, OR ARISING FROM ANY OTHER PROVISION OF THIS
AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED
PROFITS OR LOST BUSINESS (COLLECTIVELY, "DISCLAIMED DAMAGES"); PROVIDED THAT
EACH PARTY SHALL REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT ANY
DISCLAIMED DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE SUBJECT TO
INDEMNIFICATION PURSUANT TO SECTION 9(c). EXCEPT AS PROVIDED IN SECTION 9(c),
(I) LIABILITY ARISING UNDER THIS AGREEMENT SHALL BE LIMITED TO DIRECT,
OBJECTIVELY MEASURABLE DAMAGES, AND (II) THE MAXIMUM LIABILITY OF ONE PARTY
TO THE OTHER PARTY FOR ANY CLAIMS ARISING IN CONNECTION WITH THIS AGREEMENT
SHALL BE THE AGGREGATE AMOUNT OF PAYMENT OBLIGATIONS TO BE PAID TO AOL BY
1-800-FLOWERS HEREUNDER IN THE YEAR IN WHICH THE EVENT GIVING RISE TO THE
LIABILITY OCCURS; PROVIDED THAT EACH PARTY SHALL REMAIN LIABLE FOR THE
AGGREGATE AMOUNT OF ANY PAYMENT OBLIGATIONS OWED TO THE OTHER PARTY PURSUANT
TO THE AGREEMENT.

(b) NO ADDITIONAL WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY SPECIFICALLY
DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING
THE AOL NETWORK, THE AOL SERVICE, AOL.COM OR THE AFFILIATED 1-800-FLOWERS
SITES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR
COURSE OF PERFORMANCE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AOL
SPECIFICALLY DISCLAIMS ANY WARRANTY      REGARDING THE PROFITABILITY OF THE
AFFILIATED 1-800-FLOWERS SITES.

(c) INDEMNITY. Either Party shall defend, indemnify, save and hold harmless
the other Party and the officers, directors, agents, affiliates,
distributors, franchisees and employees of the other Party from any and all
third party claims, demands, liabilities, costs or expenses, including
reasonable attorneys' fees ("Liabilities"), resulting from the indemnifying
Party's material breach of any duty, representation, or warranty of this
Agreement.

(d) CLAIMS. If a Party entitled to indemnification hereunder (the
"Indemnified Party") becomes aware of any matter it believes is
indemnifiable hereunder involving any claim, action, suit,
investigation, arbitration or other proceeding against the Indemnified
Party by any third party (each an "Action"), the Indemnified Party
shall give the other Party (the "Indemnifying Party") prompt written
notice of such Action. Such notice shall (i) provide the basis on which
indemnification is being asserted and (ii) be accompanied by copies of
all relevant pleadings, demands, and other papers related to the Action
and in the possession of the Indemnified Party. The Indemnifying Party
shall have a period of ten (10) days after delivery

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of such notice to respond. If the Indemnifying Party elects to defend the
Action or does not respond within the requisite ten (10) day period, the
Indemnifying Party shall be obligated to defend the Action, at its own
expense, and by counsel reasonably satisfactory to the Indemnified Party. The
Indemnified Party shall cooperate, at the expense of the Indemnifying Party,
with the Indemnifying Party and its counsel in the defense and the
Indemnified Party shall have the right to participate fully, at its own
expense, in the defense of such Action. If the Indemnifying Party responds
within the required ten (10) day period and elects not to defend such Action,
the Indemnified Party shall be free, without prejudice to any of the
Indemnified Party's rights hereunder, to compromise or defend (and control
the defense of) such Action. In such case, the Indemnifying Party shall
cooperate, at its own expense, with the Indemnified Party and its counsel in
the defense against such Action and the Indemnifying Party shall have the
right to participate fully, at its own expense, in the defense of such
Action. Any compromise or settlement of an Action shall require the prior
written consent of both Parties hereunder, such consent not to be
unreasonably withheld or delayed.

10.      ACKNOWLEDGMENT. AOL and 1-800-FLOWERS each acknowledges that the
provisions of this Agreement were negotiated to reflect an informed, voluntary
allocation between them of all risks (both known and unknown) associated with
the transactions contemplated hereunder. The limitations and disclaimers related
to warranties and liability contained in this Agreement are intended to limit
the circumstances and extent of liability. The provisions of this Section 10
shall be enforceable independent of and severable from any other enforceable or
unenforceable provision of this Agreement.

11.      SOLICITATION OF AOL USERS. During the term of the Agreement and for a
one (1) year period following the expiration or termination of this Agreement,
1-800-FLOWERS shall not use the AOL Network (including, without limitation, the
e-mail network contained therein) to solicit AOL Users on behalf of another
Interactive Service. More generally, 1-800-FLOWERS shall not send unsolicited,
commercial e-mail (i.e., "spam") or other online communications through or into
AOL's products or services, absent a Prior Business Relationship. For purposes
of this Agreement, a "Prior Business Relationship" shall mean that the AOL User
to whom commercial e-mail or other online communication is being sent has
voluntarily either (i) engaged in a transaction with 1-800-FLOWERS or (ii)
provided information to 1-800-FLOWERS through a contest, registration, or other
communication, which included reasonably clear notice to the AOL User that the
information provided could result in commercial e-mail or other online
communication being sent to that AOL User by 1-800-FLOWERS or its agents. Any
commercial e-mail or other online communications to AOL Users which are
otherwise permitted hereunder, shall (a) include a prominent and reasonably easy
means to "opt-out" of receiving any future commercial communications from
1-800-FLOWERS, and (b) shall also be subject to AOL's then-standard restrictions
on distribution of bulk e-mail (e.g., related to the time and manner in which
such e-mail can be distributed through or into the AOL product or service in
question).

12.      AOL USER COMMUNICATIONS. During the Term of this Agreement and for a
period of one (1) year thereafter, to the extent that 1-800-FLOWERS is permitted
to communicate with AOL Users under Section 11 of this Exhibit G, in any such
communications to AOL Users on or (specifically targeting AOL Users) off the
Affiliated 1-800-FLOWERS Sites (including, without limitation, e-mail
solicitations), 1-800-FLOWERS shall not encourage AOL Users to use an
Interactive Site other than the Affiliated 1-800-FLOWERS Sites for the purchase
of Products, (ii) using Content other than the Licensed Content; (iii)
bookmarking of Interactive Sites; or (iv) changing the default home page on the
AOL browser. Additionally, with respect to such AOL User communications, in the
event that 1-800-FLOWERS encourages an AOL User to purchase products through
such communications, 1-800-FLOWERS shall ensure that (a) the AOL Network is
promoted as the primary means through which the AOL User can access the
Affiliated 1-800-FLOWERS Sites and (b) any link to any Affiliated 1-800-FLOWERS
Site shall link to a page which indicates to the AOL User that such user is in a
site which is affiliated with the AOL Network.

13.      COLLECTION AND USE OF USER INFORMATION. 1-800-FLOWERS shall ensure that
its collection, use and disclosure of information obtained from AOL Users under
this Agreement and through any Affiliated 1-800-FLOWERS Site ("User
Information") complies with (i) all applicable laws and regulations and (ii)
AOL's standard privacy policies, available on the AOL Service at the keyword
term "Privacy" (or, in the case of the Affiliated 1-800-FLOWERS Sites,
1-800-FLOWERS' standard privacy policies so long as such policies are
prominently published on the site and provide adequate notice, disclosure and
choice to users regarding 1-800-FLOWERS' collection, use and disclosure of user
information). 1-800-FLOWERS shall not disclose User Information collected
hereunder to any third party in a manner that identifies AOL Users as end users
of an AOL product or service or during the Term (and thereafter, to the extent
expressly provided for herein) use Member Information collected under this
Agreement to market another Interactive Service.

14.      EXCUSE. Neither Party shall be liable for, or be considered in breach
of or default under this Agreement on account of, any delay or failure to
perform as required by this Agreement as a result of any causes or conditions
which are beyond such Party's reasonable control and which such Party is unable
to overcome by the exercise of reasonable diligence.

15.      INDEPENDENT CONTRACTORS. The Parties to this Agreement are independent
contractors. Neither Party is an agent, representative or employee of the other
Party. Neither Party shall have any right, power or authority to enter into any
agreement for or on behalf of, or incur any obligation or liability of, or to
otherwise bind, the other Party. This Agreement shall not be interpreted or
construed to create an association, agency, joint venture or partnership between
the Parties or to impose any liability attributable to such a relationship upon
either Party.

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16.      NOTICE. Any notice, approval, request, authorization, direction or
         other communication under this Agreement shall be given in writing and
         shall be deemed to have been delivered and given for all purposes (i)
         on the delivery date if delivered by electronic mail on the AOL Network
         (to screenname "AOLNotice@AOL.com" in the case of AOL) or by confirmed
         facsimile; (ii) on the delivery date if delivered personally to the
         Party to whom the same is directed; (iii) one business day after
         deposit with a commercial overnight carrier, with written verification
         of receipt; or (iv) five business days after the mailing date, whether
         or not actually received, if sent by U.S. mail, return receipt
         requested, postage and charges prepaid, or any other means of rapid
         mail delivery for which a receipt is available. In the case of AOL,
         such notice shall be provided to both the Senior Vice President for
         Business Affairs (fax no. 703-265-1206) and the Deputy General Counsel
         (fax no. 703-265-1105), each at the address of AOL set forth in the
         first paragraph of this Agreement. In the case of 1-800-FLOWERS, except
         as otherwise specified herein, the notice address shall be the address
         for 1-800-FLOWERS set forth in the first paragraph of this Agreement
         (to the attention of Chris McCann and with a copy to Jerry Gallagher,
         Esq.), with the other relevant notice information, including the
         recipient's fax number or AOL e-mail address, to be as reasonably
         identified by AOL.

17.      NO WAIVER. The failure of either Party to insist upon or enforce strict
         performance by the other Party of any provision of this Agreement or to
         exercise any right under this Agreement shall not be construed as a
         waiver or relinquishment to any extent of such Party's right to assert
         or rely upon any such provision or right in that or any other instance;
         rather, the same shall be and remain in full force and effect.

18.      RETURN OF INFORMATION. Upon the expiration or termination of this
         Agreement, each Party shall, upon the written request of the other
         Party, return or destroy (at the option of the Party receiving the
         request) all confidential information, documents, manuals and other
         materials specified the other Party.

19.      SURVIVAL. Section 4 (to the extent any such amounts are due and payable
         pursuant to the terms of this Agreement) and Section 6 of the body of
         the Agreement, and Sections 8, 9, 11, 12, 13, 16, 19, 24, 25 and 26 of
         this Exhibit G, (and any other Sections shall survive the completion,
         expiration, termination or cancellation of this Agreement.

20.      ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
         supersedes any and all prior agreements of the Parties with respect to
         the transactions set forth herein. Neither Party shall be bound by, and
         each Party specifically objects to, any term, condition or other
         provision which is different from or in addition to the provisions of
         this Agreement (whether or not it would materially alter this
         Agreement) and which is proffered by the other Party in any
         correspondence or other document, unless the Party to be bound thereby
         specifically agrees to such provision in writing.

21.      AMENDMENT. No change, amendment or modification of any provision of
         this Agreement shall be valid unless set forth in a written instrument
         signed by the Party subject to enforcement of such amendment, and in
         the case of either Party, by an executive with a title of at least
         Senior Vice President.

22.      FURTHER ASSURANCES. Each Party shall take such action (including, but
         not limited to, the execution, acknowledgment and delivery of
         documents) as may reasonably be requested by any other Party for the
         implementation or continuing performance of this Agreement.

23.      ASSIGNMENT. Except for the assignment transfer or delegation by either
         Party to an affiliate by way of merger, consolidation or sale of all
         (or substantially all) of such party's outstanding voting securities or
         assets, neither Party shall assign this Agreement or any right,
         interest or benefit under this Agreement without the prior written
         consent of the other Party. Subject to the foregoing, this Agreement
         shall be fully binding upon, inure to the benefit of and be enforceable
         by the Parties hereto and their respective successors and assigns.

24.      CONSTRUCTION; SEVERABILITY. In the event that any provision of this
         Agreement conflicts with the law under which this Agreement is to be
         construed or if any such provision is held invalid by a court with
         jurisdiction over the Parties to this Agreement, (i) such provision
         shall be deemed to be restated to reflect as nearly as possible the
         original intentions of the Parties in accordance with applicable law,
         and (ii) the remaining terms, provisions, covenants and restrictions of
         this Agreement shall remain in full force and effect.

25.      REMEDIES. Except where otherwise specified, the rights and remedies
         granted to a Party under this Agreement are cumulative and in addition
         to, and not in lieu of, any other rights or remedies which the Party
         may possess at law or in equity; provided that, in connection with any
         dispute hereunder, Neither Party shall be entitled to offset any
         amounts that it claims to be due and payable from the other Party
         against amounts otherwise payable by the other Party to such Party.

26.      APPLICABLE LAW. Except as otherwise expressly provided herein, this
         Agreement shall be interpreted, construed and enforced in all respects
         in accordance with the laws of the State of New York except for its
         conflicts of laws principles.

27.      EXPORT CONTROLS. Both Parties shall adhere to all applicable laws,
         regulations and rules relating to the export of technical data and
         shall not export or re-export any technical data, any products received
         from the other Party or the direct product of such technical data to
         any proscribed country listed in such applicable laws, regulations and
         rules unless properly authorized.

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28.      HEADINGS. The captions and headings used in this Agreement are inserted
         for convenience only and shall not affect the meaning or interpretation
         of this Agreement.

29.      COUNTERPARTS. This Agreement may be executed in counterparts, each of
         which shall be deemed an original and all of which together shall
         constitute one and the same document.

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                                    EXHIBIT H

                          CUSTOMER SERVICE REQUIREMENTS

         1.   Commercially reasonable best efforts to process orders
              electronically within one (1) hour from receipt (if between 7A.M.
              and 7P.M. EST) and to promptly transmit orders to the receiving
              supplier.

         2.   Deliver all merchandise in professional packaging. All packages
              should arrive undamaged, well packed and neat (barring any
              shipping disasters).

         3.   Make available customer service personnel dedicated to the online
              medium (i.e., people whose primary concern is the online
              customer's orders) and make at least one customer service
              representative available from 9:00 p.m. - midnight E.S.T. during
              the week before each peak holiday period such as Thanksgiving,
              Christmas/Chanukkah, Valentine's Day, Easter, Mother's Day, New
              Years and Secretaries' Week, to answer questions in an "online
              conference room" set up specifically for the relevant
              1-800-FLOWERS store. Online customers shall be given as much
              priority as customers coming through any other sales channel.

         4.   Respond promptly and professionally to questions, comments,
              complaints and other reasonable requests from AOL Members
              regarding the Products, including, at a minimum, best efforts to
              receive and respond to e-mails within twenty-four (24) hours of
              receipt via a computer available to the customer service staff.

         5.   Provide the customer with an order confirmation within twenty-four
              (24) hours of receipt. Order confirmation should include any
              information such order status (temporary back order or out of
              stock situations), and expected delivery times.

         6.   Have the ability to handle volumes in excess of twenty-five
              percent (25%) to fifty percent (50%) of 1-800-FLOWERS' average
              daily order volumes.

         7.   Regularly monitor on-line store to minimize/eliminate the
              promotion of out-of-stock merchandise.

         8.   Ship the displayed product at the price displayed in any
              Affiliated 1-800-FLOWERS Site without substituting.

         9.   Offer all AOL Purchasers a 100% satisfaction guarantee, pursuant
              to which, 1-800-FLOWERS agrees to replace or refund orders upon
              such AOL Purchaser's or AOL's request, in accordance with
              1-800-FLOWERS' standard customer service policy.

         10. Comply with all applicable disclosure laws.

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                                    EXHIBIT I

         CO-BRANDING REQUIREMENTS ON THE 1-800-FLOWERS AFFILIATED SITES

I.       AOL SERVICE. The AOL Service will maintain the current co-branding as
         in effect under the Original IMA (including, without limitation, the
         use of the "Rainman" screens).

II.      AOL.COM. 1-800-FLOWERS shall maintain a version of the principal
         1-800-FLOWERS Interactive Site customized for distribution through
         AOL.com (the "1-800-FLOWERS/AOL.com Site") by (w) developing the
         1-800-FLOWERS/AOL.com Site as a "cul de sac" site containing no links
         outside of the 1-800-FLOWERS/AOL.com Site other than to AOL.com, other
         AOL or third party Content determined by AOL, or advertisements
         permitted under this Agreement, (x) displaying on each page of the
         1-800-FLOWERS/AOL.com Site headers and footers of size and type
         determined by AOL and which contain both AOL.com and 1-800-FLOWERS
         branding, links to AOL.com, a Netfind search box and two (2)
         promotional spaces to be programmed by AOL, (y) programming each page
         of the 1-800-FLOWERS/AOL.com Site with a co-branded domain name (e.g.,
         1800Flowers.aol.com) and (z) matching the look and feel of AOL.com on
         the 1-800-FLOWERS/AOL.com Site. All registration and community-related
         utilities and functionality (including, without limitation, chat,
         message boards, and web page community services such as AOL Hometown)
         shall be managed by AOL. The 1-800-FLOWERS/AOL.com Site shall contain
         Content of substantially the same quality, scope, functionality, terms
         and conditions as the Content on any other 1-800-FLOWERS Interactive
         Site. 1-800-FLOWERS will, in accordance with the Programming Plan, and
         subject to the terms of this Agreement, (1) provide AOL with Content
         for the areas and screens of AOL.com described in the Programming Plan,
         and (2) program and manage the Content on the 1-800-FLOWERS/AOL.com
         Site for distribution through AOL.com. All terms and conditions of this
         Agreement applicable to any 1-800-FLOWERS Interactive Site shall apply
         to the 1-800-FLOWERS/AOL.com Site except as expressly otherwise stated.

III.     COMPUSERVE SERVICE. 1-800-FLOWERS shall maintain a version of the
         principal 1-800-FLOWERS Interactive Site customized for distribution
         through the CompuServe Service (the "1-800-FLOWERS/CIS Site") by (w)
         developing the 1-800-FLOWERS/CIS Site as a "cul de sac" site containing
         no links outside of the 1-800-FLOWERS/CIS Site other than to the
         CompuServe Service, other AOL or third party Content determined by AOL,
         or advertisements permitted under this Agreement, (x) displaying on
         each page of the 1-800-FLOWERS/CIS Site headers and footers of size and
         type determined by AOL or CompuServe and which contain both CIS and
         1-800-FLOWERS branding, links to the CompuServe Service and two (2)
         promotional spaces to be programmed by AOL or CompuServe, (y)
         programming each page of the 1-800-FLOWERS/CIS Site with a co-branded
         domain name (e.g., 1800Flowers.compuserve.com) and (z) matching the
         look and feel of the CompuServe Service on the 1-800-FLOWERS/CIS Site.
         All registration and community-related utilities and functionality
         (including, without limitation, chat, message boards, and web page
         community services) shall be managed by AOL or CompuServe. The
         1-800-FLOWERS/CIS Site shall contain Content of substantially the same
         quality, scope, functionality, terms and conditions as the Content on
         any other 1-800-FLOWERS Interactive Site. 1-800-FLOWERS will, in
         accordance with the Programming Plan, and subject to the terms of this
         Agreement, (1) provide AOL with Content for the areas and screens of
         the CompuServe Service described in the Programming Plan, and (2)
         program and manage the Content on the 1-800-FLOWERS/CIS Site for
         distribution through the CompuServe Service. All terms and conditions
         of this Agreement applicable to any 1-800-FLOWERS Interactive Site
         shall apply to the 1-800-FLOWERS/CIS Site except as expressly otherwise
         stated.

IV.      NETSCAPE NETCENTER. The Service Pages will be co-branded by Netscape
         and 1-800-FLOWERS. The co-branding will be subject to Netscape's
         Guidelines and will include 1-800-FLOWERS' company name and logo.
         Furthermore, 1-800-FLOWERS shall take reasonable efforts to ensure that
         Netscape traffic is generally either kept within the Service Pages or
         channeled back into Netcenter. To the extent that Netscape notifies
         Participant in writing that, in Netscape's reasonable judgment, links
         from the Service Pages cause an excessive amount of

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         user traffic to be diverted outside of such site and Netscape Netcenter
         in a manner that has a detrimental effect on the traffic flow of the
         user audience, then 1-800-FLOWERS shall immediately reduce the number
         of links out of such site(s). In the event that 1-800-FLOWERS cannot or
         does not so limit diverted traffic from such site, Netscape (or AOL, as
         the case may be) reserves the right to take control of the relevant
         Service Pages. For purposes of these co-branding requirements, "Service
         Pages" shall mean all pages of the specific area within the Netscape
         Network which shall be developed, managed or marketed by 1-800-FLOWERS
         pursuant to this Agreement, including but not limited to the Licensed
         Content, any functionality or services, message boards, chat and other
         Netscape Member-supplied content areas contained therein (but excluding
         any site or area outside of Netscape Netcenter that is linked to
         Netscape Netcenter (through a "pointer" or similar link) in accordance
         with the terms and conditions of this Agreement.).

V.       ICQ SERVICE. 1-800-FLOWERS shall maintain a version of the principal
         1-800-FLOWERS Interactive Site customized for distribution through the
         ICQ Service (the "1-800-FLOWERS/ICQ Site") by (w) developing the
         1-800-FLOWERS/ICQ Site as a "cul de sac" site containing no links
         outside of the 1-800-FLOWERS/ICQ Site other than to the ICQ Service,
         other AOL or third party Content determined by AOL, or advertisements
         permitted under this Agreement, (x) displaying on each page of the
         1-800-FLOWERS/ICQ Site headers and footers of size and type determined
         by AOL and which contain both ICQ and 1-800-FLOWERS branding, links to
         the ICQ Service and two (2) promotional spaces to be programmed by AOL,
         (y) programming each page of the 1-800-FLOWERS/ICQ Site with a
         co-branded domain name (e.g., 1800Flowers.icq.com) and (z) matching the
         look and feel of the ICQ Service on the 1-800-FLOWERS/ICQ Site. All
         registration and community-related utilities and functionality
         (including, without limitation, chat, message boards, and web page
         community services) shall be managed by AOL or ICQ. The
         1-800-FLOWERS/ICQ Site shall contain Content of substantially the same
         quality, scope, functionality, terms and conditions as the Content on
         any other 1-800-FLOWERS Interactive Site. 1-800-FLOWERS will, in
         accordance with the Programming Plan, and subject to the terms of this
         Agreement, (1) provide AOL with Content for the areas and screens of
         the ICQ Service described in the Programming Plan, and (2) program and
         manage the Content on the 1-800-FLOWERS/ICQ Site for distribution
         through the ICQ Service. All terms and conditions of this Agreement
         applicable to any 1-800-FLOWERS Interactive Site shall apply to the
         1-800-FLOWERS/ICQ Site except as expressly otherwise stated.

VI.      DIGITAL CITY. 1-800-FLOWERS shall maintain a version of the principal
         1-800-FLOWERS Interactive Site customized for distribution through the
         CompuServe Service (the "1-800-FLOWERS/DCI Site") by (w) developing the
         1-800-FLOWERS/DCI Site as a "cul de sac" site containing no links
         outside of the 1-800-FLOWERS/DCI Site other than to Digital City, other
         AOL or third party Content determined by AOL, or advertisements
         permitted under this Agreement, (x) displaying on each page of the
         1-800-FLOWERS/DCI Site headers and footers of size and type determined
         by AOL and which contain both DCI and 1-800-FLOWERS branding, links to
         Digital City and two (2) promotional spaces to be programmed by AOL,
         (y) programming each page of the 1-800-FLOWERS/DCI Site with a
         co-branded domain name (e.g., 1800Flowers.digitalcity.com) and (z)
         matching the look and feel of Digital City on the 1-800-FLOWERS/DCI
         Site. All registration and community-related utilities and
         functionality (including, without limitation, chat, message boards, and
         web page community services) shall be managed by AOL. The
         1-800-FLOWERS/DCI Site shall contain Content of substantially the same
         quality, scope, functionality, terms and conditions as the Content on
         any other 1-800-FLOWERS Interactive Site. 1-800-FLOWERS will, in
         accordance with the Programming Plan, and subject to the terms of this
         Agreement, (1) provide AOL with Content for the areas and screens of
         Digital City described in the Programming Plan, and (2) program and
         manage the Content on the 1-800-FLOWERS/DCI Site for distribution
         through Digital City. All terms and conditions of this Agreement
         applicable to any 1-800-FLOWERS Interactive Site shall apply to the
         1-800-FLOWERS/DCI Site except as expressly otherwise stated.

                                       40

CONFIDENTIAL
<PAGE>

                                    EXHIBIT J

               CATEGORIES OF GARDENING-RELATED ITEMS TO BE OFFERED
                     ON THE 1-800-FLOWERS AFFILIATED SITES

GARDEN
------

Annuals
Books / Videos related to gardening
Bulbs
Seeds
Composting
Fencing
Edging
Apparel related to gardening
Footwear related to gardening
Lawn Care
Perennials
Vines
Pest Control
Indoor Plants
Roses
Tools
Supplies related to gardening
Trees
Shrubs
Trellises
Arbors
Pottery related to gardening
Vases
Tropical Plants
Water Gardening

OUT DOOR LIVING
---------------
Birds / Nature
Doormats / Rugs
Fireplace
Furniture
Lighting

                                       41

CONFIDENTIAL
<PAGE>

                                    EXHIBIT K

                            1-800-FLOWERS COMPETITORS

-    [****]

-    The above entities also include any of their affiliates whose primary
     business is the sale of fresh-cut flowers. During the Fresh-Cut Flowers
     Exclusivity Period, 1-800-FLOWERS can replace any of the above entities
     with another entity whose primary business is the sale of fresh-cut
     flowers, Plants, or Gardening Plants.

**** Represents material which has been redacted 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.

                                       42

CONFIDENTIAL<PAGE>

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                                                 EXHIBIT 10.13

                          TECHNOLOGY TRANSFER AGREEMENT

         THIS TECHNOLOGY TRANSFER AGREEMENT (the "Agreement") is made and
entered into as of the 22nd day of September, 2000 (the "Effective Date"), by
and between RIGEL PHARMACEUTICALS, INC., a Delaware corporation ("Rigel"), and
QUESTCOR PHARMACEUTICALS, INC., a California corporation ("Questcor").

         WHEREAS, Questcor has developed and owns certain proprietary antiviral
technology comprising HCV IRES and HCV NS5A-PKR and other viral technology and
owns or has licensed certain patent applications and issued patents pertaining
thereto;

         WHEREAS, Rigel desires to pursue the commercial development of certain
applications of such technology; and

         WHEREAS, Rigel desires to obtain, and Questcor is willing to assign to
Rigel, its right, title and interest, on a worldwide basis, in and to such
technology;

         NOW, THEREFORE, Rigel and Questcor hereby agree as follows:

                                  ARTICLE 1

                                 DEFINITIONS

         1.1  "AFFILIATE" means any entity that directly or indirectly Owns,
is Owned by or is under common Ownership, with a party to this Agreement,
where "Owns" or "Ownership" means direct or indirect possession of at least
fifty percent (50%) of the outstanding voting securities of a corporation or
a comparable equity interest in any other type of entity.

         1.2  "CURRENTLY IDENTIFIED COMPOUND(S)" means all compounds
identified as of the Effective Date by Questcor and provided to Rigel as
having potential antiviral activity, together with Homologs and Isomers of
such compounds. "Homolog" means a compound that differs from such Currently
Identified Compound by a -(CH(2))-group. "Isomer" means a compound that has the
same composition as such Currently Identified Compound, but differs in the
positions of aromatic ring substituents, location of double bonds or position
of carbon in alkyl groups, such as propyl and isopropyl, and optical isomers
thereof.

         1.3  "HCV IRES" means Hepatitis C Virus IRES technology.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       1.
<PAGE>

         1.4  "HCV NS5A-PKR" means regulation of Protein Kinase RNA
(PKR)-activated protein by Hepatitis C Virus Non-Structural 5A Protein.

         1.5  "LICENSED PRODUCT(S)" means any product, including without
limitation, compounds, compositions, formulations, any indication therefor,
and any associated methods or processes, developed pursuant to this
Agreement, the manufacture, use, importation or sale of which by Rigel, its
Affiliates or licensees would constitute an infringement of a Valid Claim of
a Questcor Patent or a Washington Patent.

         1.6  "MATERIAL BREACH" means the failure of Rigel to perform the
diligence obligation described in Section 2.4(c), or the failure of Rigel to
perform the research and development obligation described in Section 5.1(b),
or the failure of Rigel to perform any of the payment obligations in Sections
4.1, 4.2, 4.3, 4.4, 4.5 or 6.4, or if Sections 7.2(a) or 7.4 are not true as
of the Effective Date.

         1.7  "NET SALES" means the gross receipts received by Rigel or its
Affiliates for the sale of Licensed Products to Third Parties by Rigel or its
Affiliates, less (a) cash, trade, or quantity discounts actually given, (b)
rebates allowed or granted to governmental agencies or other payors, (c)
credits, returns, and replacements, and (d) taxes, including sales taxes and
duties, incurred by reason of the sale of such Licensed Products but
excluding taxes on income. If Licensed Products are sold in combination with
other products, the price of the Licensed Products for the purpose of
calculating Net Sales shall be deemed to be the then current price at which
the Licensed Products are sold independent of other products, or in the
absence of such independent sales prices, the portion of the sales price of
such combined product which is attributable to the Licensed Product itself.

         1.8  "QUESTCOR MATERIALS" means various reagents, samples and other
tangible materials relating to the HCV IRES, HCV NS5A-PKR and other viral
technologies, which have been, or will be transferred to Rigel, a compilation
of which has previously been provided to Rigel.

         1.9  "QUESTCOR PATENT(S)" means (a) the patents and patent
applications listed on APPENDIX C including all foreign patents and patent
applications, whether now existing or hereafter filed, corresponding to the
patents and patent applications under clause (a); (b) any provisionals,
substitutions, divisionals, reissues, reexaminations, renewals,
continuations, continuations-in-part, substitute applications and inventors'
certificates arising from, or based upon, any of the foregoing patents or
patent applications; and (c) any patents issuing from any of the foregoing
patent applications.

         1.10  "QUESTCOR TECHNOLOGY" means the Currently Identified
Compounds, the Questcor Materials and the modifications, improvements,
know-how, trade secrets, data, information and materials relating to the HCV
IRES, HCV NS5A-PKR and other viral technologies, which have been, or will be
transferred to Rigel, a compilation of which has previously been provided to
Rigel.

         1.11  "SHARES" shall mean the shares of Rigel capital stock to be
issued to Questcor pursuant to Section 4.2, and in the event the shares
initially issued to Questcor are shares of

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       2.
<PAGE>

Rigel Series E Preferred Stock, the term "Shares" shall also refer to any
shares of Rigel Common Stock issued upon conversion thereof, or any other
Rigel securities issued to Questcor in respect of its holdings of Series E
Preferred Stock.

         1.12  "THIRD PARTY" means any entity that is not a party nor an
Affiliate of a party.

         1.13  "VALID CLAIM" means a claim of an issued and unexpired patent,
which claim has not lapsed, been canceled, or become abandoned, and which
claim has not been declared invalid by a court of competent jurisdiction, and
which has not been admitted to be invalid or unenforceable through reissue or
disclaimer.

         1.14  "WASHINGTON LICENSE AGREEMENT" means that certain license
agreement dated as of April 4, 1997, by and between Questcor and the
University of Washington, as amended.

         1.15  "WASHINGTON PATENT(S)" means (a) the patents and patent
applications listed on APPENDIX D licensed by Questcor from the University of
Washington including all foreign patents and patent applications, whether now
existing or hereafter filed, corresponding to the patents and patent
applications under clause (a); (b) any provisionals, substitutions,
divisionals, reissues, reexaminations, renewals, continuations,
continuations-in-part, substitute applications and inventors' certificates
arising from, or based upon, any of the foregoing patents or patent
applications; and (c) any patents issuing from any of the foregoing patent
applications.

                                  ARTICLE 2

                            ASSIGNMENT OF RIGHTS

         2.1  ASSIGNMENT OF PATENT RIGHTS. Questcor hereby sells and assigns
to Rigel all of its right, title and interest in and to the Questcor Patents.
Questcor further agrees to promptly execute, upon each request by Rigel,
assignment and other documents, testify and take other acts at Rigel's
expense and as reasonably requested by Rigel, in order to apply for and
obtain, in Rigel's name and for its benefit, patents, trade secrets and other
intellectual property rights throughout the world related to the Questcor
Patents and to transfer, effect, confirm, perfect, record, preserve, protect
and enforce all rights, title and interests transferred hereunder. Questcor
hereby further sells and assigns to Rigel its rights to enforce the Questcor
Patents for any infringement occurring prior to the Effective Date.

         2.2  ASSIGNMENT OF QUESTCOR TECHNOLOGY. Questcor hereby sells and
assigns to Rigel all of its right, title and interest in and to the Questcor
Technology. Following such assignment, Rigel shall have the right to practice
the Questcor Technology without restriction. Questcor hereby further sells
and assigns to Rigel its rights to enforce any misappropriation of Questcor
Technology occurring prior to the Effective Date.

         2.3  WASHINGTON PATENT RIGHTS.

              (a)  Questcor hereby agrees to assign the Washington License
Agreement to Rigel, and will use its reasonable best efforts to obtain the
consent of the University of

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       3.
<PAGE>

Washington to such assignment, as provided for in Section 20.4 of that
agreement. Rigel agrees to cooperate with Questcor in obtaining such
assignment.

              (b)  If the assignment of the Washington License Agreement to
Rigel, with the consent of the University of Washington, under the same
terms, conditions and obligations as enjoyed by Questcor, is not effected
within ninety (90) days of the Effective Date, without the payment of
consideration to the University by Rigel, then within ninety-five (95) days
of the Effective Date, Questcor shall make available to Rigel an exclusive
sublicense of all of its rights to the Washington License Agreement, without
further consideration. If Questcor fails to offer such an assignment or
sublicense of the Washington License Agreement to Rigel within ninety-five
(95) days of the Effective Date, Rigel may elect to terminate this Agreement
pursuant to Article 9.

         2.4  DILIGENCE.

              (a) Rigel shall use commercially reasonable efforts to enforce,
defend, prosecute, and maintain the Questcor Patents and to enforce the
Questcor Technology.

              (b) In addition to the requirements specified in this
Agreement, Rigel shall promptly proceed with the research, development,
manufacture, and sale of Licensed Products, and the development and other
commercial exploitation of the Questcor Patents and Questcor Technology.

              (c) Within two years of the Effective Date, Rigel shall make a
presentation to at least six (6) Third Parties that are pharmaceutical or
biotechnology companies, and, if appropriate, have follow-up discussions with
those same companies, including not more than three companies that may be
identified by Questcor in writing to Rigel within sixty (60) days of the
Effective Date, regarding opportunities to cooperate or collaborate with
Rigel in the commercial development of Licensed Products, Questcor
Technology, or to license such rights from Rigel. Rigel shall report to the
Joint Program Management Team regarding the results of such presentations to
Third Parties.

              (d) During the two-year period from 2001 through 2002, Rigel
shall make expenditures for research and development of Licensed Products as
specified in Article 5.1(b) herein.

                                ARTICLE 3

                      DELIVERY OF QUESTCOR TECHNOLOGY

         3.1  TECHNOLOGY DELIVERY. Promptly after the Effective Date,
Questcor shall deliver and transfer possession and ownership to Rigel of all
tangible manifestations of the Questcor Patents (as listed in Appendix C) and
the Questcor Technology (as listed in Appendix E), including, without
limitation, samples of the Currently Identified Compounds and the Questcor
Materials in the amounts and in the forms specified in Appendix A and B,
respectively.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       4.
<PAGE>

Questcor shall complete the delivery of the Questcor Technology to Rigel
within sixty (60) days of the Effective Date.

         3.2  COMPLETION OF TECHNOLOGY DELIVERY. Rigel will deem the delivery
of Questcor Technology complete when it has verified receipt of all materials
and information listed in Appendix E, which in no event shall be later than
forty-five (45) days after initial delivery of all of the items listed in
Appendix E. Rigel agrees that in the event that Rigel identifies any
materials or information that are not included in such initial delivery,
Rigel will promptly notify Questcor of such omission. Questcor agrees that in
the event it receives any such notification, it will use its commercially
reasonable efforts to promptly deliver such identified omitted materials or
information to Rigel.

         3.3  AVAILABILITY OF QUESTCOR PERSONNEL. Questcor will make its
appropriate employees reasonably available to provide technical advice and
assistance relating to the transferred technology as set forth in Sections
3.1 and 3.2. Following completion of technology transfer according to Section
3.2, for one year from the Effective Date, Questcor will use its commercially
reasonable efforts to make available its employees to Rigel to provide
technical advice and assistance relating to the operation of transferred
technology. Rigel will pay Questcor $100 per hour of technical advice and
assistance provided by Questcor's employees hereunder. Such employees shall
sign a confidentiality agreement directly with Rigel to cover Rigel
confidential information. Questcor hereby consents to Rigel engaging Questcor
consultants to assist in such technology transfer under arrangements agreed
to directly between Rigel and such consultants.

                               ARTICLE 4

                             CONSIDERATION

         4.1  INITIAL PAYMENT. Upon execution of this Agreement Rigel shall
pay to Questcor as an up-front fee, [ * ], in consideration for the rights to
the Questcor Patents, the Currently Identified Compounds, the Questcor
Technology and the Washington License Agreement. Such payment will be
non-creditable and non-refundable.

         4.2  DELIVERY PAYMENT. Rigel shall issue to Questcor $500,000 in
Rigel equity, in the form of 83,333 shares of Rigel Series E Preferred Stock
(valued for this purpose at $6.00 per share), or, if the outstanding shares
of Rigel Series E Preferred Stock shall have converted into Common Stock
prior to the date that payment is due under this Section 4.2, the shares of
Common Stock issuable upon conversion of 83,333 shares of Rigel Series E
Preferred Stock, upon the earlier of: (i) complete transfer of Questcor
Technology pursuant to Section 3.2, if Questcor has executed either an
assignment or sublicense of the Washington License Agreement according to
Section 2.3(a) or Section 2.3(b), or (ii) execution of either an assignment
or sublicense of the Washington License Agreement according to Section 2.3(a)
or Section 2.3(b), if complete transfer of Questcor Technology pursuant to
Section 3.2 has occurred.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       5.
<PAGE>

         4.3  MILESTONE PAYMENTS. Rigel will pay Questcor the following
amounts within thirty (30) days of the occurrence of the following milestone
events with respect to the first Licensed Product to reach such milestone:

              (a) Licensed Product utilizing a Currently Identified Compound:

<TABLE>
<CAPTION>
                  Milestone                                 Amount
          ---------------------------------------------   ----------
<S>                                                       <C>
          -   Preclinical Selection                       $1,000,000

          -   Start of Phase I clinical trial             $2,000,000

          -   Start of Phase III clinical trial           $2,000,000

          -   NDA Filing                                  $5,000,000

          -   After annual sales exceed $100 Million or   $7,000,000
              cumulative sales exceed $200 Million,
              whichever is first
</TABLE>

As used herein, "Preclinical Selection" means successful completion of
IND-enabling toxicity studies.

              (b) Licensed Products not utilizing any Currently Identified
Compounds:

<TABLE>
<CAPTION>
                  Milestone                                 Amount
          ---------------------------------------------   ----------
<S>                                                       <C>
          -   Start of Phase I clinical trial             $1,000,000

          -   Start of Phase III clinical trial           $1,000,000

          -   NDA Filing                                  $2,500,000

          -   After annual sales exceed $100 Million or   $3,500,000
              cumulative sales exceed $200 Million,
              whichever is first
</TABLE>

Rigel will make a milestone payment only once for each milestone event,
regardless of the number of Licensed Products.

         4.4  ROYALTIES. As additional consideration for the rights to the
Questcor Patents assigned to Rigel pursuant to Article 2 (Assignment), Rigel
will pay to Questcor royalties on Net Sales by Rigel or its Affiliates of
Licensed Products that are covered in whole or in part by a Valid Claim in
the Questcor Patents or the Washington Patents. The royalties will be paid at
the following rates:

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       6.
<PAGE>

              (a) Licensed Product utilizing a Currently Identified Compound:

<TABLE>
<CAPTION>
                  Portion of Annual Net Sales               Royalty
          ---------------------------------------------   -----------
<S>                                                       <C>

          -   On Net Sales less than $100,000,000             4%

          -   On Net Sales $100,000,000 -- $500,000,000       6%

          -   On Net Sales greater than $500,000,000         10%

</TABLE>
              (b) Licensed Products not utilizing a Currently Identified
Compound:

<TABLE>
<CAPTION>
                  Portion of Annual Net Sales               Royalty
          ---------------------------------------------   -----------
<S>                                                       <C>

          -   On Net Sales less than $100,000,000             3%

          -   On Net Sales $100,000,000 -- $500,000,000       5%

          -   On Net Sales greater than $500,000,000          8%

</TABLE>

In the event of a license by Rigel to a non-Affiliate, this Section 4.4 will
not apply to any Licensed Product developed pursuant to such license, and
instead Rigel shall make payments regarding such Licensed Product in
accordance with Section 4.5.

         4.5  LICENSE FEES. In the event that Rigel, or its Affiliates, at
its sole discretion, licenses all or part of the Questcor Patents or
Washington Patents to a Third Party for research, development, and/or
commercialization, Rigel will pay Questcor a portion of the license fees
received by Rigel as follows:

              (a) if the license granted to the Third Party includes the
right to commercialize Currently Identified Compounds, Rigel will pay
Questcor 35% of all upfront and milestone cash payments received by Rigel and
35% of royalties received by Rigel based on Net Sales of Licensed Products
that are covered in whole or in part by a Valid Claim in the Questcor Patents
or the Washington Patents;

              (b) if the license granted to the Third Party includes the
right to practice Questcor Technology which is then covered by a Valid Claim
of a Questcor Patent or a Washington Patent but excludes the right to
commercialize Currently Identified Compounds, Rigel will pay Questcor 25% of
all upfront and milestone cash payments received by Rigel and 25% of
royalties received by Rigel based on Net Sales of Licensed Products that are
covered in whole or in part by a Valid Claim in the Questcor Patents or the
Washington Patents, provided,

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       7.
<PAGE>

however that none of the following events has occurred: (1) Rigel has spent
over $1,000,000 in internal and external research expenses on the Antiviral
Program (as defined in Article 5); or (2) twelve months have passed from the
Effective Date; or (3) Rigel includes in such license intellectual property
developed solely by Rigel subsequent to the Effective Date;

              (c) if the license granted to the Third Party includes the
right to practice Questcor Technology which is then covered by a Valid Claim
of a Questcor Patent or a Washington Patent but excludes the right to
commercialize Currently Identified Compounds, and where any of the events
specified in the proviso of Section 4.5(b) has occurred, Rigel will pay
Questcor 15% of all upfront and milestone cash payments received by Rigel and
15% of royalties received by Rigel based on Net Sales of Licensed Products
that are covered in whole or in part by a Valid Claim in the Questcor Patents
or the Washington Patents; and

              (d) in the event Rigel or its Affiliates license all or part of
the Questcor Patents or the Washington Patents to a Third Party at a time
when one or more applications for a Questcor Patent or a Washington Patent
remains pending, and no payment is due under (a), (b) or (c), then promptly
following the issuance of such patent the parties shall reasonably determine
in good faith whether a payment would have been due under (a), (b) or (c)
above if such patent had issued prior to the granting of such license. If
such a payment would have been due, Rigel shall then promptly make payments
under this Section 4.5 as if such patent had issued prior to the granting of
the license.

         4.6  DATE OF PAYMENT. Payment of the royalties and fees specified in
Sections 4.4 and 4.5 will be made by Rigel or its Affiliates to Questcor
within thirty (30) days after March 31, June 30, September 30 and December 31
of each year during the term of this Agreement, for the Net Sales received by
Rigel during the previous calendar quarter. Each quarterly payment will be
accompanied by a written statement by Rigel detailing Net Sales received by
Rigel for which such royalties and fees are due.

         4.7  RECORDS; DISCREPANCY PAYMENTS. Rigel will keep, and require its
Affiliates and licensees to keep, complete and accurate records of the Net
Sales of Licensed Products, as set forth in this Article. Following
reasonable advance written notice to Rigel, Questcor will have the right, at
its cost and expense, through an independent national firm of certified
public accountants reasonably acceptable to Rigel and bound by obligations of
confidentiality not to disclose Rigel's records, to examine such records once
per calendar year during regular business hours, during the period of time
during which such payments are due and payable hereunder and for two (2)
years thereafter. Notwithstanding the preceding sentence: (i) if such
examination reveals an underpayment by Rigel to Questcor, Rigel will promptly
pay such underpayment amount to Questcor; (ii) if such examination reveals an
underpayment of five percent (5%) or more, Rigel will also pay the costs of
such examination; and (iii) if such examination reveals an overpayment by
Rigel, Questcor will promptly remit such overpayment to Rigel.

         4.8  PAYMENT CURRENCY AND METHOD. Unless otherwise provided for
herein, and subject to foreign exchange regulations then prevailing, all
payments payable under this Agreement will be paid in cash in U.S. dollars.
All payments provided for herein shall be made by check or wire transfer.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       8.
<PAGE>

         4.9  LATE PAYMENTS. In the event of a late payment due hereunder,
the party from whom the payment is due will pay to the other party interest
at the lower of: (a) the highest rate permitted by law; or (b) the prime rate
charged by Citibank, N.A. as stated in The Wall Street Journal, New York
edition, on the date such payment is due (or the immediately preceding
business date if such payment date is not a business day) plus two percent
(2%), in either case on the outstanding balance until such late payment and
such interest accrued thereon is paid in full to the party to whom the
payment is owed. The acceptance by the party to whom the payment is made of
any such late payment will not act as a waiver of any rights such party may
have hereunder due to a breach by the party from whom the payment is due
relating to such late payment.

                                  ARTICLE 5

                           RESEARCH AND DEVELOPMENT

         5.1  RIGEL RESEARCH AND DEVELOPMENT PROGRAM.

              (a) Rigel will assume primary responsibility (directly or
through licensees) for research and development of Licensed Products. Rigel
will commit high-throughput screening, chemistry, virology, and other
discovery research, and preclinical and clinical development resources to
this anti-viral program (the "Antiviral Program") consistent with the
resources it commits to other similar research programs at Rigel. Any efforts
by Rigel licensees directed toward the Antiviral Program shall be treated as
efforts of Rigel under this Section 5.1.

              (b) During the two-year period of calendar years 2001 and 2002,
Rigel will spend, or have executed firm commitments to spend, a total of two
million dollars ($2,000,000) in research and development expenses related to
the Questcor Technology and the development of Licensed Products.

         5.2  JOINT PROGRAM MANAGEMENT TEAM. Questcor and Rigel will each
designate up to three and no less than two representatives to a Joint Program
Management Team that will oversee the activities of the Antiviral Program and
seek to ensure that goals are set appropriately and timelines are met. The
Joint Program Management Team will also oversee Rigel's business development
obligations as set forth in Section 2.4. The Joint Program Management Team
will meet periodically, but at least four times a year, at times to be agreed
upon. In conjunction with each meeting, Rigel will make reports to the Joint
Program Management Team in sufficient detail so as to determine compliance by
Rigel under this Article 5 and Section 2.4. This Section 5.2 shall expire
upon the commencement of the first Phase I clinical trial of a product
arising from the Antiviral Program.

         5.3  ACCESS TO QUESTCOR PERSONNEL. Rigel will have access to certain
Questcor employees and consultants on a consulting basis as specified in
Section 3.3.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       9.
<PAGE>

                               ARTICLE 6

                    PATENT PROSECUTION AND MAINTENANCE

         6.1  PATENT PROSECUTION. Rigel shall have the sole right to
prosecute and maintain patents and applications included in the Questcor
Patents.

         6.2  PATENT MAINTENANCE. Rigel shall have the sole right to maintain
and enforce any issued Questcor Patents at Rigel's own expense.

         6.3  WASHINGTON PATENTS. Subject to the approval of the University
of Washington, Rigel shall have the same rights and obligations to prosecute,
maintain and enforce the Washington Patents as Questcor currently has under
the Washington License Agreement or such other specification of such rights
as Rigel and the University of Washington may agree.

         6.4  REIMBURSEMENT OF PATENT EXPENSES. Rigel will reimburse Questcor
for all of Questcor's expenses associated with preparing, maintaining,
prosecuting, enforcing and defending the Questcor Patents that Questcor
incurred prior to the Effective Date. Rigel will also reimburse Questcor for
the patent expenses paid by Questcor under the Washington License Agreement
that Questcor incurred prior to the effective date of such assignment (or
exclusive sublicense). Rigel will pay Questcor under this section within
thirty (30) days after receiving an itemized accounting of each set of prior
patent expenses. The total amount reimbursed to Questcor under this Section
6.4 shall not exceed $250,000.

                                   ARTICLE 7

                         REPRESENTATIONS AND WARRANTIES

         7.1  QUESTCOR REPRESENTATIONS AND WARRANTIES. Questcor hereby
represents and warrants to Rigel as follows:

              (a) TECHNOLOGY OWNERSHIP. (i) Questcor owns all right, title
and interest in and to the Questcor Patents and Questcor Technology listed on
APPENDICES A, B AND C; (ii) it has not granted any license under the Questcor
Patents and is under no obligation to grant any such license to any Third
Party, (iii) there are no outstanding liens, encumbrances, agreements or
understandings of any kind, either written, oral or implied, regarding the
Questcor Patents or Questcor Technology that are inconsistent or in conflict
with any provision of this Agreement;

              (b) EMPLOYEES AND CONSULTANTS. Each of the Questcor employees
and consultants who contributed to the development of the Questcor Technology
performed such work under a written agreement with Questcor that assigned to
Questcor all of such individual's right, title and interest in and to such
technology;

              (c) PATENT DISCLOSURES. To the best of its knowledge, the
Questcor Patents were filed prior to any publication of the inventions
described therein or other act that would bar the issuance of a patent
thereon; complies as to form with the requirements of a patent

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       10.
<PAGE>

application filed in the United States Patent and Trademark Office; and makes
all necessary disclosures for a patent application;

              (d) INVENTION ASSIGNMENTS. The Questcor Patents properly
identify the inventors of the inventions described therein, and such
inventors have assigned to Questcor all of their right, title and interest in
and to such patent rights;

              (e) WASHINGTON LICENSE AGREEMENT. As of the Effective Date, the
Washington License Agreement is in full force and effect, and there has been
no material breach by either party to the Washington License Agreement; and

              (f) PATENT PROCEEDINGS AND THIRD PARTY CLAIMS. To the best of
its knowledge, no patent application within the Questcor Patents or the
Washington Patents is the subject of any pending interference, opposition,
cancellation or other protest proceeding. Questcor further represents and
warrants that, it has not received and is not aware of any Third Party claims
that the practice of the Patents infringes any proprietary rights of such
Third Party.

         7.2  MUTUAL REPRESENTATIONS AND WARRANTIES.  Each party hereby
represents and warrants:

              (a) DUE AUTHORIZATION. Such party is duly authorized to execute
and deliver this Agreement and to perform its obligations hereunder.

              (b) BINDING AGREEMENT; NO CONFLICT. This Agreement is a legal
and valid obligation binding upon it and enforceable in accordance with its
terms. The execution, delivery and performance of this Agreement by such
party does not conflict with any agreement, instrument or understanding, oral
or written, to which it is a party or by which it may be bound, nor violate
any law or regulation of any court, governmental body or administrative or
other agency having jurisdiction over it.

         7.3  INVESTMENT REPRESENTATIONS.

              (a) Questcor is acquiring the Shares for its own account, and
not as nominee or agent, for investment and not with a view to, or for resale
in connection with, any distribution or public offering thereof within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"). In
this regard:

                       (i) Questcor understands that (i) the Shares have not
been registered under the Securities Act by reason of a specific exemption
therefrom, that such securities must be held by it indefinitely, and that
Questcor must, therefore, bear the economic risk of such investment
indefinitely, unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration; (ii) each certificate
representing the Shares will be endorsed with the following legends:

                                (1) THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       11.
<PAGE>

SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL
IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

                                (2) THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS, INCLUDING RESTRICTIONS
ON TRANSFERABILITY, OF THAT CERTAIN TECHNOLOGY TRANSFER AGREEMENT, DATED
SEPTEMBER 22, 2000. A COPY OF SUCH TECHNOLOGY TRANSFER AGREEMENT WILL BE
FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON
WRITTEN REQUEST TO RIGEL PHARMACEUTICALS, INC. AT ITS PRINCIPAL PLACE OF
BUSINESS.

                                (3) Any legend required to be placed thereon
by Rigel's By-laws (and shown on Exhibit A hereto or as may hereafter be
added to such By-laws with respect to all Common Stock of Rigel) or under
applicable state securities laws;

and (iii) Rigel will instruct any transfer agent not to register the transfer of
the Shares (or any portion thereof) unless the conditions specified in the
foregoing legends are satisfied, until such time as a transfer is made, pursuant
to the terms of this Agreement, and in compliance with Rule 144 or pursuant to a
registration statement or, if the opinion of counsel referred to above is to the
further effect that such legend is not required in order to establish compliance
with any provisions of the Act or of this Agreement.

                       (ii) Questcor has been furnished with such materials
and has been given access to such information relating to Rigel as it has
requested, and Questcor has been afforded the opportunity to ask questions
regarding Rigel and the Shares, all as it has found necessary to make an
informed investment decision.

                       (iii) Questcor is itself a research stage
biotechnology company, and acknowledges that it can bear the economic risk of
its investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the
investment in the Shares.

                       (iv) Questcor is an "accredited investor" as such term
is defined in Rule 501 of the General Rules and Regulations prescribed by the
Securities and Exchange Commission pursuant to the Act, and Questcor was not
formed for the specific purpose of acquiring the Shares.

              (b) STAND OFF; RESTRICTION ON TRANSFER. If so requested by
Rigel or any managing underwriter of Rigel's initial public offering of
securities, Questcor shall not sell or otherwise transfer any of the Shares
or other securities of Rigel during a period of up to 180 days following the
effective date of the registration statement covering such initial public
offering. If

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       12.
<PAGE>

so requested, Questcor shall execute a form of standstill agreement directly
with such managing underwriter, provided that the duration of such agreement
shall not exceed such 180-day period and that each of the officers and
directors of Rigel has executed an equivalent standstill agreement. Questcor
shall not sell, assign or otherwise transfer the Shares to any other person
(other than a sale to the general public under Rule 144 or in an acquisition
or reorganization of Rigel) without the prior consent of Rigel, which shall
not be unreasonably withheld but may be conditioned on the execution by the
transferee of an undertaking as set forth in this Section 7.3(b).

         7.4  RIGEL REPRESENTATION AND COVENANT.

              (a) REPRESENTATION. All corporate action on the part of Rigel,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement has been taken. The Shares which
will be acquired by Questcor hereunder, when issued, sold and delivered in
accordance with the terms hereof for the consideration expressed herein, will
be duly authorized, validly issued, fully paid and nonassessable.

              (b) COVENANT. With a view to making available to Questcor the
benefits of Rule 144 and any other rule or regulation of the Securities and
Exchange Commission that may permit Questcor to sell the Shares to the public
without registration, the Company agrees to make and keep public information
available, as those terms are defined in Rule 144, at all times after ninety
(90) days after the effective date of the first registration statement filed
by Rigel for the offering of its Common Stock to the general public.

         7.5  DISCLAIMER. EXCEPT AS SPECIFIED HEREIN, QUESTCOR EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED
TO THE IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NON-INFRINGEMENT. EXCEPT AS SPECIFIED HEREIN, QUESTCOR DOES NOT
WARRANT OR REPRESENT THE PATENTABILITY, VALIDITY, SCOPE, OR USEFULNESS OF THE
QUESTCOR PATENTS OR QUESTCOR TECHNOLOGY.

                                 ARTICLE 8

                        INDEMNIFICATION AND LIABILITY

         8.1  INDEMNITY. Rigel agrees to indemnify, hold harmless and defend
Questcor against any and all Third Party claims, suits, losses, damages,
costs, fees and expenses (collectively, "Claims") resulting from the
possession, manufacture, use, sale, offer for sale, import or administration
of Licensed Products by Rigel, its Affiliates or its licensees, including,
but not limited to, any claims with respect to death or injury to any person
and damage to any property of any end user of Licensed Products or customer
of such end user, provided, however, that Rigel shall not have any obligation
of indemnification with respect to liability caused in whole or in part by
the intentional wrongdoing or negligence of Questcor.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       13.
<PAGE>

         8.2  PROCEDURE. If Questcor desires to make a claim under Section
8.1, it shall give Rigel prompt notice of such claim and all related
information known to Questcor and shall permit Rigel to control the defense
and settlement of such matter.

         8.3  LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY, ITS
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, LICENSEES OR AFFILIATES BE LIABLE TO
THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY OR
CONSEQUENTIAL DAMAGES, WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT,
WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING
OUT OF THIS AGREEMENT.

                                  ARTICLE 9

                             TERM AND TERMINATION

         9.1  TERM. The term of this Agreement shall commence upon the
Effective Date and shall continue in effect until the last to expire of the
claims of the Questcor Patents or the Washington Patents, unless otherwise
terminated by a Party.

         9.2  TERMINATION AT RIGEL'S OPTION. Upon written notice to Questcor,
Rigel may terminate this Agreement if: (i) the Washington License Agreement
is not assigned or sublicensed in a manner acceptable to Rigel within
ninety-five (95) days of the Effective Date, as set forth in Section 2.3(b);
or (ii) the technology transfer described in Article 3 is not completed
within sixty (60) days of the Effective Date.

         9.3  ROYALTY TERM. Upon the expiration of the Questcor Patents and
the Washington Patents, Rigel will have no further obligation to make any
payment to Questcor under this Agreement in respect of Net Sales, apart from
those payments that are accrued hereunder but unpaid by the date of such
expiration, for which payments Rigel will remain liable.

         9.4  MATERIAL BREACH: NOTICE, ARBITRATION, TERMINATION:

              (a) In addition to its other rights and remedies, either party
(the "Non-Breaching Party") may terminate this Agreement following at least
sixty (60) days (the "Notice Period") prior written notice (the "Notice of
Breach") to the other party (the "Breaching Party") in the event that the
Breaching Party has committed a Material Breach under this Agreement and the
Breaching Party fails to cure such breach within such Notice Period.

              (b) If the Breaching Party, in good faith, disputes the
assertion that a Material Breach has occurred, it shall respond in writing to
the Notice of Breach within thirty (30) days of receipt of the Notice of
Breach. If the Non-Breaching Party still contends a Material Breach has
occurred, the Chief Executive Officers of the parties (or their designees)
shall confer within forty-five (45) days of receipt of the original Notice of
Breach. If the Chief Executive Officers are unable to resolve the dispute,
the Breaching Party may give notice, prior to completion of the 60-day Notice
Period, that it is invoking the Arbitration provision of Section 11.3 below
on the issue of the Material Breach. The Non-Breaching Party's right to
terminate this agreement is suspended during the pendency of the Arbitration
Proceedings.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       14.
<PAGE>

              (c) Upon giving such notice of Arbitration the Breaching Party
shall place into escrow any payments that the Non-Breaching Party has
asserted it is due under the Notice of Breach.

              (d) If the Arbitration rules that no Material Breach has
occurred the funds shall be released from escrow to the Breaching Party, and
the Notice of Breach shall have no force or effect.

              (e) If the ruling of the Arbitration is that a Material Breach
has occurred:

                       (i) the funds (or the appropriate portion of the
funds) held in escrow and due the Non-Breaching Party shall be released to
the Non-Breaching Party, and

                       (ii) The Breaching Party shall pay the reasonable
costs of the Arbitration of the Non-Breaching Party, and

                       (iii) The Breaching Party may either:

                                  (1) accept a termination of the Agreement
if requested by the Non-Breaching Party, or

                                  (2) agree to abide by the ruling of the
Arbitration with respect to the issue of the Material Breach

                       (iv) If the Breaching Party agrees to abide by the
ruling of the Arbitration, the Notice of Breach shall be considered withdrawn
and the Agreement shall continue in effect as interpreted by the Arbitration
ruling, and the Breaching Party shall have no further right to invoke the
Arbitration provision of this Agreement on the issue or issues decided by the
Arbitration.

              (f) If Questcor terminates this Agreement pursuant to a
Material Breach by Rigel, upon request by Questcor, Rigel will assign all
rights in the Questcor Patents, the Washington Patents, and the Questor
Technology back to Questcor.

         9.5  EFFECT OF TERMINATION. Termination of this Agreement under
Section 9.2 or Section 9.4 by reason of Material Breach by Rigel will not
terminate any licenses granted hereunder by Rigel to Third Parties. Questcor
shall accept assignment of such Third Party Licenses from Rigel to Questcor,
or renegotiate such licenses on substantially equivalent economic terms as
were contained in the original Licenses from Rigel. Termination of this
Agreement will not affect any rights or obligations of the parties accrued
prior to the effective date of such termination, including without
limitations obligations with respect to payments accrued hereunder prior to
the effective date of such termination. In the event of Termination under
Section 9.2 or Section 9.4 by reason of Material Breach by Rigel, Rigel will
promptly cease any use of the Questcor Technology and return the Questcor
Technology to Questcor.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       15.
<PAGE>

         9.6  SURVIVING OBLIGATIONS. Article 1 (Definitions), Section 4.7
(Records; Discrepancy Payments), Article 9 (Term and Termination), Article 10
(Confidentiality), and Article 11 (Dispute Resolution) will survive
expiration or termination of this Agreement.

                                 ARTICLE 10

                               CONFIDENTIALITY

         10.1  CONFIDENTIAL INFORMATION. Questcor shall not disclose any of
the Questcor Technology, the Questcor Patent applications or Washington
Patent applications (hereinafter referred to as the "Confidential
Information") to any Third Party without prior the written consent by Rigel
or as permitted by Section 10.2.

         10.2  PERMITTED DISCLOSURES.  Questcor shall not be obligated to
keep confidential any information which:

               (a) is now, or hereafter becomes, through no breach of any
confidentiality obligation on the part of Questcor, generally known or
available;

               (b) is hereafter furnished to Questcor by a Third Party, as a
matter of right and without breach of any confidentiality obligation by such
Third Party;

               (c) is the subject of a written permission to disclose
provided by Rigel;

               (d) is in response to a valid order of a court or other
governmental body of the United States or any political subdivision thereof;
PROVIDED, HOWEVER, that the responding party shall first have given notice to
the other party hereto and shall have made a reasonable effort to obtain a
protective order requiring that the Confidential Information so disclosed be
used only for the purposes for which the order was issued; or

               (e) is otherwise required by law or regulation to be disclosed
(including without limitation disclosures required by regulations promulgated
by the U.S. Securities and Exchange Commission).

         10.3  RIGEL'S OBLIGATIONS. Rigel shall treat the Confidential
Information at the same level of confidentiality as it does its other
confidential information.

                              ARTICLE 11

                        MISCELLANEOUS PROVISIONS

         11.1  COMPLIANCE WITH LAW. Each party agrees to comply with all
applicable federal, state and local law, regulations, and orders, including
such law, regulations and orders relating to the research, development and
commercial exploitation of Licensed Products.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       16.
<PAGE>

         11.2  GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of California, as applied to
contracts executed and performed entirely within the State of California,
without regard to conflicts of laws rules.

         11.3  DISPUTE RESOLUTION. The parties agree that any dispute or
controversy arising out of or relating to any interpretation, construction,
performance, breach, or Material Breach of this Agreement shall be settled by
arbitration to be held in San Francisco, California, in accordance with the
Commercial Rules then in effect of the American Arbitration Association. The
arbitrator may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitrator shall be final, conclusive, and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court of competent jurisdiction. Questcor and
Rigel shall each pay one-half of the costs and expenses of such arbitration
(including the arbitrator's fees), and each shall separately pay its
respective attorneys' fees and expenses.

         11.4  ASSIGNMENT. Except as otherwise provided herein, this
Agreement may not be assigned in part or in whole by any party without the
prior written consent of the other party; PROVIDED, HOWEVER, that either
party may assign this Agreement to any of its Affiliates or to any successor
by merger or sale of substantially all of its business unit to which this
Agreement relates. This Agreement will be binding upon the successors and
permitted assigns of the parties and the name of a party appearing herein
will be deemed to include the names of such party's successors and permitted
assigns to the extent necessary to carry out the intent of this Agreement.
Any assignment which is not in accordance with this Section 11.4 will be void.

         11.5  NOTICES. All notices and other communications hereunder will
be in writing and will be deemed given if delivered personally or by
facsimile transmission (receipt verified), telexed, or sent by express
courier service, to the parties at the following addresses (or at such other
address for a party as will be specified by like notice; provided, that
notices of a change or address will be effective only upon receipt thereof):

                           If to Rigel, addressed to:

                           Rigel Pharmaceuticals, Inc.
                           240 East Grand Avenue
                           South San Francisco, CA 94080

                           With a copy to:

                           Cooley Godward LLP
                           Five Palo Alto Square
                           Palo Alto, CA 94306
                           Attention:  Robert L. Jones, Esq.

                           If to Questcor, addressed to:

                           Questcor Pharmaceuticals, Inc.
                           26118 Research Road
                           Hayward, CA 94545

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       17.
<PAGE>

                           Latham & Watkins
                           135 Commonwealth Drive
                           Menlo Park, CA 94025
                           Attention:  Elizabeth Powers, Esq.

         11.6  AMENDMENT. No amendment, modification or supplement of any
provision of the Agreement will be valid or effective unless made in writing
and signed by an authorized representative of each party.

         11.7  WAIVER. No provision of the Agreement will be waived by any
act, omission or knowledge of a party or its agents or employees except by an
instrument in writing expressly waiving such provision and signed by a duly
authorized officer of the waiving party.

         11.8  SEVERABILITY. Whenever possible, each provision of the
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of the Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of the Agreement.

         11.9  ENTIRE AGREEMENT OF THE PARTIES. This Agreement constitutes
and contains the complete, final and exclusive understanding and agreement of
the parties and cancel and supersede any and all prior negotiations,
correspondence, understandings and agreements, whether oral or written,
between the parties respecting the subject matter thereof.

         11.10 PUBLICITY. Within five (5) days from the Effective Date, the
parties shall issue a joint press release regarding the business relationship
set forth in this Agreement, with at least one executive-level quote from
each party, and such press release shall be approved by advance by both
parties. Rigel shall approve such joint press release unless, in conjunction
with its initial public offering, it receives reasonable advice of counsel
that such press release should not be made at such time. Each party shall
have the right to identify the other party (other by listing such other
party's name and logo) as a business partner in marketing and publicity
materials and on each party's Web site. Except as otherwise specified in this
paragraph, a party shall not use the other party's name or logo except with
the prior consent of such other party.

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the Effective Date.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       18.
<PAGE>

QUESTCOR PHARMACEUTICALS, INC.                  RIGEL PHARMACEUTICALS, INC.

By:  /s/ Charles J. Casamento                   By:  /s/ Raul R. Rodriguez
    -----------------------------                   ----------------------------

Name:  Charles J. Casamento                     Name:  Raul R. Rodriguez
                                                      --------------------------
Title:  Chairman, President & CEO               Title:  Vice President Business
                                                        Development
                                                       -------------------------

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       19.
<PAGE>

                                       APPENDIX A

                                     QUESTCOR PATENTS

U.S. Patent No. 5,738,985

and

METHOD FOR SELECTIVE INACTIVATION OF VIRAL REPLICATION                   CANADA

Owner: RIBOGENE, INC.

         Inventors - MILES, VINCENT J.; MATHEWS, MICHAEL B.; KATZE, MICHAEL G.;
         WITHERELL, GARY W.; WATSON, JULIA C.
    Pat No:                                                     FILED WAIT EXAM
    App No: 2,159,639          APRIL 01, 1994
Basic App: PCT/US94/03623      APRIL 02, 1993
Publication No. 1: WO94/23041  OCTOBER 13, 1994
Priority Date: APRIL 02, 1993
--------------------------------------------------------------------------------

METHOD FOR SELECTIVE INACTIVATION OF VIRAL REPLICATION                    JAPAN

Owner: RIBOGENE, INC.

         Inventors - MILES, VINCENT J.; MATHEWS, MICHAEL B.; KATZE, MICHAEL G.;
         WITHERELL, GARY W.; WATSON, JULIA C.
    Pat No:                                                     FILED WAIT EXAM
    App No: 6-522423           APRIL 01, 1994
Basic App: PCT/US94/03623      APRIL 02, 1993 ()
Publication No. 1: WO94/23041  OCTOBER 13, 1994
Priority Date: APRIL 02, 1993

METHOD FOR SELECTIVE INACTIVATION OF VIRAL REPLICATION                HONG KONG

Owner: RIBOGENE, INC.

         Inventors - MILES, VINCENT J.; MATHEWS, MICHAEL B.; KATZE, MICHAEL G.;
         WITHERELL, GARY W.; WATSON, JULIA C.
    Pat No:                                                     FILED WAIT EXAM
    App No: 94912387.1     SEPTEMBER 24, 1998
Basic App: PCT/US94/03623  APRIL 01, 1994 ()
Priority Date: APRIL 01, 1994

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       E-1.
<PAGE>

METHOD FOR SELECTIVE INACTIVATION OF VIRAL REPLICATION    EUROPEAN PATENT CONV.
                                                               J. A. KEMP & CO.
Owner: RIBOGENE, INC.                                      Agent Ref.: N.68947A

         Inventors - MILES, VINCENT J.; MATHEWS, MICHAEL B.; KATZE, MICHAEL G.;
         WITHERELL, GARY W.; WATSON, JULIA C.
    Pat No:                                                             PENDING
    App No: 94912387.1      APRIL 01, 1994
Basic App: PCT/US94/03623   APRIL 02, 1993 ()
Publication No. 1: 0693126  JANUARY 24, 1996
Priority Date: APRIL 02, 1993
--------------------------------------------------------------------------------

METHOD FOR SELECTIVE INACTIVATION OF VIRAL REPLICATION                      PCT

Owner: RIBOGENE, INC.                                  Agent Ref.: 7960-030-228

         Inventors - MILES, VINCENT J.; MATHEWS, MICHAEL B.; KATZE, MICHAEL G.;
         WITHERELL, GARY W.; WATSON, JULIA C.
    Pat No:                                                           PUBLISHED
    App No: PCT/US94/03623     APRIL 01, 1994
Basic App: PCT/US94/03623      APRIL 02, 1993 ()
Publication No. 1: WO94/23041  OCTOBER 13, 1994
Priority Date: APRIL 02, 1993

                                                               Archive:  13,419

METHOD FOR SELECTIVE INACTIVATION OF VIRAL REPLICATION            UNITED STATES

Owner: RIBOGENE, INC.

         Inventors - MILES, VINCENT J.; MATHEWS, MICHAEL B.; KATZE, MICHAEL G.
    Pat No: 5,738,985  APRIL 14, 1998   Expires: APRIL 14, 2015        PATENTED
    App No: 08/221,816 APRIL 01, 1994

Priority Date: APRIL 02, 1993

                                                               Archive:  14,052
--------------------------------------------------------------------------------

METHOD FOR SELECTIVE INACTIVATION OF VIRAL REPLICATION            UNITED STATES

         Inventors - MILES, VINCENT J.; MATTHEWS, MICHAEL B.; KATZE, MICHAEL G.;
         WITHERELL, GARY W.; WATSON, JULIA C.
    Pat No:                                                             ALLOWED
    App No: 08/925,156     SEPTEMBER 08, 1997
    Continuation of App No 08/221,816 now Pat No 5,738,985

Priority Date: APRIL 01, 1994
--------------------------------------------------------------------------------

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       E-2.
<PAGE>

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY              CANADA
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                     FILED WAIT EXAM
    App No: 2,283,379          MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997
--------------------------------------------------------------------------------

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY           AUSTRALIA
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                             PENDING
    App No: 66840/98           MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997
--------------------------------------------------------------------------------

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY         NEW ZEALAND
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                     FILED WAIT EXAM
    App No: 337703             MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY              MEXICO
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                     FILED WAIT EXAM
    App No: 998116             MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997
--------------------------------------------------------------------------------

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       E-3.
<PAGE>

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY               JAPAN
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                     FILED WAIT EXAM
    App No: 10-538754          MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997
--------------------------------------------------------------------------------

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY              NORWAY
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                     FILED WAIT EXAM
    App No: 19994295           MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT              RUSSIAN FEDERATION
SELECTIVELY INHIBIT HEPATITIS C VIRUS REPLICATION.
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                     FILED WAIT EXAM
    App No: 99120790           MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY             HUNGARY
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                    Expires:     MARCH 05, 2018      FILED WAIT EXAM
    App No: P0001395        MARCH 05, 1998
Basic App: PCT/US98/04226   MARCH 05, 1997 ()

Priority Date: MARCH 05, 1997

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       E-4.
<PAGE>

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY              TURKEY
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                    Expires:     MARCH 05, 2018      FILED WAIT EXAM
    App No: 1999/02561         MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY               CHINA
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                             PENDING
    App No: 98804841.8         MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY      CZECH REPUBLIC
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                     FILED WAIT EXAM
    App No: PV3149-99          MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY              POLAND
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                     FILED WAIT EXAM
    App No: P335721            MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       E-5.
<PAGE>

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY              ISRAEL
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                     FILED WAIT EXAM
    App No: 131730             MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY              TAIWAN
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                     FILED WAIT EXAM
    App No: 87103232        MARCH 05, 1998

Priority Date: MARCH 05, 1997
--------------------------------------------------------------------------------

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY       KOREA (SOUTH)
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                     FILED WAIT EXAM
    App No: 7008068/99         MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT           EUROPEAN PATENT CONV.
SELECTIVELY INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                     FILED WAIT EXAM
    App No: 98908928.9         MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       E-6.
<PAGE>

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY                 PCT
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: RIBOGENE, INC.

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                           COMPLETED
    App No: PCT/US98/04226     MARCH 05, 1998
Basic App: PCT/US98/04226      MARCH 05, 1997 ()
Publication No. 1: WO98/39487  SEPTEMBER 11, 1998
Priority Date: MARCH 05, 1997
--------------------------------------------------------------------------------

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       E-7.
<PAGE>

                                 APPENDIX B

                             WASHINGTON PATENTS

Pending U.S. Patent Application  U.S.S.N. 60/027,982

and

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY        UNITED STATES
INHIBIT HEPATITIS C VIRUS REPLICATION
Owner: UNIVERSITY OF WASHINGTON

         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No: 6,030,785      FEBRUARY 29, 2000                            PATENTED
    App No: 09/035,619     MARCH 05, 1998

Priority Date: MARCH 05, 1997

NOVEL SCREENING METHODS TO IDENTIFY AGENTS THAT SELECTIVELY        UNITED STATES
INHIBIT HEPATITIS C VIRUS REPLICATION
         Inventors -  KATZE, MICHAEL G.; GALE, JR., MICHAEL J.
    Pat No:                                                              PENDING
    App No: 09/514,006      FEBRUARY 25, 2000
    Continuation of App No 09/035,619 now Pat No 6,030,785

Priority Date: MARCH 05, 1998

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       E-1.

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