<PAGE>
As filed with the Securities and Exchange Commission on July 21, 1999
Registration No. 333-80639
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
Amendment No. 2
to
FORM S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------
bamboo.com, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 7379 52-2129710
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification Number)
incorporation or Classification Code
organization) Number)
----------------
124 University Avenue
Palo Alto, CA 94301
(650) 325-6787
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
----------------
LEONARD B. McCURDY
Chairman and Chief Executive Officer
bamboo.com, Inc.
124 University Avenue
Palo Alto, CA 94301
(650) 325-6787
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Please send copies of all communications to:
Mario M. Rosati, Esq. Kenton J. King, Esq.
Issac J. Vaughn, Esq. Gregory C. Smith, Esq.
Wilson Sonsini Goodrich & Rosati, P.C. Skadden, Arps, Slate, Meagher & Flom
650 Page Mill Road LLP
Palo Alto, CA 94304 525 University Avenue, Suite 220
(650) 493-9300 Palo Alto, CA 94301
(650) 470-4500
----------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), please check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Amount Proposed Maximum Proposed Maximum
Title of Each Class of to be Offering Price Aggregate Amount of
Securities to be Registered Registered(1) Per Share Offering Price(2) Registration Fee(3)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, $0.001 par value.. 5,750,000 $12.00 $69,000,000 $19,182
</TABLE>
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(1) Includes 750,000 shares which the Underwriters have the option to purchase
to cover over-allotments, if any.
(2) Estimated solely for the purpose of Rule 457(a).
(3) Of this amount, $15,985 was previously paid.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. +
+Bamboo.com may not sell these securities until the registration statement +
+filed with the Securities and Exchange Commission is effective. This +
+prospectus is not an offer to sell these securities, and it is not soliciting +
+an offer to buy these securities in any state where the offer or sale is not +
+permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION--JULY 21, 1999
PROSPECTUS
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5,000,000 Shares
bamboo.com, Inc.
Common Stock
[LOGO OF BAMBOO.COM]
- --------------------------------------------------------------------------------
bamboo.com is offering 5,000,000 shares of its common stock in an initial
public offering.
bamboo.com provides 360-degree virtual tours of real estate properties on the
Internet.
It is anticipated that the public offering price will be between $10.00 and
$12.00 per share. Application has been made to include the shares for quotation
in the Nasdaq National Market under the symbol "BAMB".
$10 million of the net proceeds from the offering will be used to redeem shares
of Series C redeemable preferred stock owned by VantagePoint Venture Partners
III, LP and VantagePoint Communication Partners, LP, which are affiliated with
James D. Marver, a director of bamboo.com.
<TABLE>
<CAPTION>
Per Share Total
<S> <C> <C>
Initial public offering price.............................. $ $
Underwriting discounts and commissions..................... $ $
Proceeds, before expenses, to bamboo.com................... $ $
</TABLE>
See "Risk Factors" on pages 8 to 16 for factors that should be considered
beforeinvesting in the shares of bamboo.com.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
- --------------------------------------------------------------------------------
The underwriters may purchase up to 470,000 additional shares from us and up to
280,000 additional shares from the selling stockholders at the public offering
price less the underwriting discounts and commissions, solely to cover over-
allotments. Delivery and payment for the shares will be on , 1999.
Prudential Securities
Dain Rauscher Wessels
a division of Dain Rauscher Incorporated
Volpe Brown Whelan & Company
, 1999 E*OFFERING
<PAGE>
There is the old way to search
for a home. And then there's the
bamboo.com 360 degree Virtual Tour.
[LOGO OF BAMBOO.COM APPEARS HERE]
<PAGE>
BAMBOO.COM 360 VIRTUAL TOURS ENABLE HOME SELLERS, HOME BUYERS, AND REAL ESTATE
AGENTS TO HARNESS THE POWER OF THE INTERNET.
NOW, AFTER YOU SEARCH FOR A HOME ONLINE, A VIRTUAL TOUR IS ONLY A CLICK AWAY!
OUR BAMBOO.COM SERVICE PROVIDERS CAN SHOOT VIDEO IN OVER 100 METROPOLITAN
AREAS ACROSS NORTH AMERICA
[PICTURES OF WEB PAGES FEATURING BAMBOO.COM VIRTUAL TOURS]
[PICTURE OF VIDEOGRAPHER]
<PAGE>
HOME BUYER LOOK INSIDE HOMES FOR SALE ON THE INTERNET FROM THE COMFORT OF YOUR
HOME OR OFFICE, 24 HOURS PER DAY, 7 DAYS A WEEK.
HOME SELLER SHOW YOUR HOME TO POTENTIAL BUYERS ON THE INTERNET WITH AN ONLINE
OPEN HOUSE.
REAL ESTATE AGENTS A NEW INTERNET MARKETING TOOL THAT HELPS YOU PROVIDE VALUE TO
BOTH BUYERS AND SELLERS.
EACH OF OUR VIRTUAL TOURS CAN BE VIEWED AS A CONVENIENT STAND-ALONE APPLICATION
AND INSTANTLY DISTRIBUTED ANYWHERE IN THE WORLD BY EMAIL.
[PICTURE OF EMAIL VIRTUAL TOUR]
"WE ACTIVELY ENCOURAGE RE/MAX ASSOCIATES TO STAY ON THE CUTTING EDGE OF
TECHNOLOGY, AND CERTAINLY OFFERING A VIRTUAL TOUR OF REAL ESTATE IS ONE OF THE
MOST EXCITING CONSUMER SERVICES AVAILABLE TODAY. BAMBOO.COM HAS CREATED A
WIN-WIN FOR EVERYONE WITH ITS AFFORDABLE AND TURNKEY VIRTUAL HOME TOURS FOR REAL
ESTATE AGENTS, AND EASY ACCESS FOR THE CONSUMER, WITH NO INTERNET PLUG-INS OR
DOWNLOADS REQUIRED. BY FAR, IT'S THE BEST VIRTUAL TOUR PRODUCT ON THE MARKET
TODAY." DAVE LINIGER, CO-FOUNDER AND CHAIRMAN, RE/MAX INTERNATIONAL, INC.
[LOGOS OF HOMESTORE.COM, REALTOR.COM, HOMEBUILDER.COM, MICROSOFT HOME ADVISOR,
HOMESEEKERS.COM, HOMES.COM, RE/MAX, PRUDENTIAL REAL ESTATE, LOOPNET, GTE
ENTERPRISE SOLUTIONS]
WE RECENTLY ENTERED INTO AGREEMENTS WITH THESE PARTNERS AND HAVE NOT AND MAY NOT
GENERATE SIGNIFICANT REVENUES FROM THESE RELATIONSHIPS.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.................. 4
Risk Factors........................ 8
Forward Looking Statements.......... 16
Use of Proceeds..................... 17
Dividend Policy..................... 17
Capitalization...................... 18
Dilution............................ 19
Selected Consolidated Financial
Data............................... 20
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 21
Business............................ 27
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Management......................... 38
Interests of Management and Others
in Transactions................... 47
Principal Stockholders............. 50
Description of Capital Stock....... 52
Shares Eligible for Future Sale.... 57
Underwriting....................... 58
Legal Matters...................... 60
Experts............................ 60
Available Information.............. 60
Index to Consolidated Financial
Statements........................ F-1
</TABLE>
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You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with different information. We are
not making an offer of these securities in any jurisdiction where the offer or
sale is not permitted. You should not assume that the information contained in
this prospectus is accurate as of any date other than the date on the front
cover of this prospectus.
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3
<PAGE>
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
This summary is not complete and may not contain all of the information that
investors should consider before investing in the common stock of bamboo.com.
Investors should read the entire prospectus carefully.
bamboo.com
We are a provider of 360-degree virtual tours of real estate properties on
the Internet. Bamboo.com virtual tours provide a more complete visual
representation of a property than traditional still photographs, allowing
viewers to easily pan left or right or zoom in for a closer view. We provide a
comprehensive virtual tour service to real estate agents that includes
videotaping the inside and outside of a home or other property, processing the
videotape into a complete virtual tour and distributing the virtual tour. We
distribute our virtual tours to a variety of Web sites, including real estate
destination sites and Internet portals. We also distribute our virtual tours by
email to real estate agents for easy redistribution to their clients and
prospective home buyers. Utilizing our extensive service provider network, we
offer our virtual tour service in over 100 metropolitan areas across the United
States and Canada. Although we have recently experienced growth in our sales,
we have a history of significant losses, and as of June 30, 1999, we had an
accumulated deficit of $19.0 million.
According to the United States Department of Commerce, the market for all
housing and related products and services was in the aggregate over $1 trillion
in 1997, representing 12.4% of the United States gross domestic product and is
one of the largest sectors of the economy. The largest segment of the U.S. real
estate industry is the market for existing home sales. According to the
National Association of Realtors, which is comprised of approximately 720,000
residential and commercial real estate agents, there were approximately 5
million existing home sales in the United States in 1998, representing $625
billion in transaction value. As the real estate industry increasingly
leverages the geographic reach and rich media potential of the Internet, we
believe virtual tours will become a standard method to market real estate, the
way still photographs are a standard method today.
In order to accelerate the adoption and enhance the benefits of our
bamboo.com virtual tours, we have established key relationships with leading
real estate destination Web sites. Our virtual tours are exclusively promoted,
marketed and endorsed by the HomeStore.com, REALTOR.com and HomeBuilder.com Web
sites. Our virtual tours are also promoted, marketed and endorsed exclusively
by HomeSeekers.com, Inc. on the HomeSeekers.com site. We have agreements to
provide our virtual tours to the following real estate destination sites:
. REALTOR.com, the official Web site of the National Association of
Realtors;
. HomeSeekers.com;
. Microsoft HomeAdvisor;
. Homes.com;
. HomeBuilder.com; and
. LoopNet.
These Web sites also provide real estate content to Internet portals. As a
result, our virtual tours can currently be viewed on America Online, @Home
Network, Excite, GO Network/Infoseek, Netscape Netcenter and Yahoo! We have
also established relationships with real estate brokerage firms, multiple
listing services and companies that provide technology to the real estate
industry, including Prudential Real Estate Affiliates, RE/MAX International and
GTE Enterprise Solutions.
4
<PAGE>
Our virtual tours provide significant benefits:
. Benefits to Home Buyers. Our virtual tours provide home buyers with rich
visual information that enables them to efficiently view and screen a
property, at no cost. This saves buyers the time, expense and
inconvenience of scheduling appointments, traveling to and visiting
properties in person.
. Benefits to Home Sellers. Our visually rich virtual tours allow sellers
to take advantage of the multimedia capabilities of the Web, providing
more visual information about their homes and surrounding property to
prospective buyers.
. Benefits to Real Estate Agents. Our virtual tour service provides real
estate agents with an Internet-based marketing tool that allows them to
deliver enhanced visual content of properties to a wide audience, thereby
providing a value-added service to home buyers and home sellers. This
enhanced marketing tool also enables real estate agents to differentiate
themselves to potential home sellers and thereby gain new listings.
. Benefits to Affiliates. Our virtual tours provide real estate destination
sites, Internet portals and multiple listing services with rich visual
content that increases the convenience, usefulness and enjoyment of their
users' visits, thereby promoting increased traffic and repeat usage.
Our objective is to be the leading global provider of online virtual tours to
the real estate industry. We plan to achieve this goal by pursuing the
following key strategies:
. Aggressively grow our virtual tour business;
. Establish bamboo.com as the dominant brand for online virtual tours;
. Develop new key relationships;
. Continue to enhance our virtual tour experience;
. Expand our virtual tour business to other real estate segments;
. Pursue e-commerce opportunities; and
. Pursue international expansion opportunities.
We originally incorporated in Ontario, Canada in 1995. On January 1, 1999 we
reorganized our business as a Delaware corporation. We changed our name from
Jutvision Corporation to bamboo.com, Inc. in April 1999. Our principal
executive offices are located at 124 University Avenue, Palo Alto, California
94301. Our telephone number at this location is 650-325-6787. Our Web site
address is www.bamboo.com. Information contained on our website does not
constitute part of this prospectus. bamboo.com and the bamboo.com logo are
trademarks of bamboo.com, Inc. Each trademark, trade name or service mark of
any other company appearing in this prospectus belongs to its holder.
5
<PAGE>
The Offering
<TABLE>
<S> <C>
Shares offered by bamboo.com........ 5,000,000 shares
Total shares outstanding after this
offering........................... 21,383,650 shares
Use of proceeds .................... For working capital and general corporate
purposes and to redeem the Series C
redeemable preferred stock.
Proposed Nasdaq National Market
symbol............................. BAMB
</TABLE>
The common stock to be outstanding after the offering is based on the shares
outstanding as of June 30, 1999. The shares outstanding include all outstanding
shares of Class B common stock.
The common stock to be outstanding excludes:
. 6,027,386 shares of common stock issuable as of June 30, 1999 upon the
exercise of outstanding stock options issued at a weighted average
exercise price of $0.28 per share under our stock option plan;
. 280,000 shares of common stock issuable upon the exercise of an
outstanding warrant;
. 197,608 shares of common stock reserved for issuance under our stock
option plan; and
. 700,000 shares of common stock reserved for issuance under our employee
stock purchase plan.
Except as otherwise indicated, information in this prospectus assumes the
following:
. The conversion of all outstanding shares of Series A and Series B
preferred stock into shares of common stock upon the consummation of
this offering;
. A 2.8-for-one split of our outstanding common stock to be effected prior
to the consummation of this offering;
. The redemption of all outstanding shares of Series C redeemable
preferred stock upon the consummation of this offering;
. The filing of our amended and restated certificate of incorporation, the
provisions of which are summarized in "Description of Capital Stock;"
and
. No exercise of the underwriters' over-allotment options.
Risk Factors
You should consider the risk factors before investing in bamboo.com's common
stock and the impact from various events which could harm our business.
6
<PAGE>
Summary Consolidated Financial Data
The following table summarizes our consolidated statements of operations for
the years ended December 31, 1997 and 1998 and our unaudited consolidated
statements of operations for the six month periods ended June 30, 1998 and 1999
and our unaudited consolidated balance sheet as of June 30, 1999 on an actual
and pro forma as adjusted basis. See our consolidated financial statements and
related notes included elsewhere in this prospectus.
<TABLE>
<CAPTION>
Six Months Ended
Consolidated Statement of Years ended December 31, June 30,
Operations Data: -------------------------- -------------------------
1997 1998 1998 1999
------------ ------------- ----------- ------------
(unaudited)
<S> <C> <C> <C> <C>
Revenues................ $ 45,553 $ 77,410 $ 39,391 $ 536,074
Cost of revenues........ 15,204 67,710 34,155 449,035
----------- ------------- ----------- ------------
Gross profit............ 30,349 9,700 5,236 87,039
Operating expenses:
Sales and marketing.... 9,672 883,469 417,485 5,768,969
General and
administrative........ 122,034 723,607 406,208 3,002,080
Research and
development........... 41,567 242,917 252,954 296,480
Stock-based
compensation.......... -- -- -- 6,955,478
----------- ------------- ----------- ------------
173,273 1,849,993 1,076,647 16,023,007
----------- ------------- ----------- ------------
Loss from operations.... (142,924) (1,840,293) (1,071,411) (15,935,968)
Interest income......... -- -- -- 42,236
----------- ------------- ----------- ------------
Net loss................ (142,924) (1,840,293) (1,071,411) (15,893,732)
Beneficial conversion
feature of Series B
convertible preferred
stock.................. -- -- -- (1,000,000)
----------- ------------- ----------- ------------
Net loss attributable to
common stockholders.... $ (142,924) $ (1,840,293) $(1,071,411) $(16,893,732)
=========== ============= =========== ============
Net loss per common
share--basic and
diluted................ $ (0.05) $ (0.31) $ (0.22) $ (2.14)
=========== ============= =========== ============
Weighted average common
shares--basic and
diluted................ 2,818,873 5,953,169 4,855,128 7,894,274
=========== ============= =========== ============
</TABLE>
<TABLE>
<CAPTION>
As of June 30, 1999
-----------------------
(unaudited)
Pro Forma
Actual As Adjusted
Consolidated Balance Sheet Data: ----------- -----------
<S> <C> <C>
Cash and cash equivalents.............................. $18,157,878 $57,107,878
Working capital ....................................... 16,064,367 55,014,367
Total assets .......................................... 20,627,506 59,577,506
Debt: Series C redeemable preferred stock ............. 4,452,398 --
Total stockholders' equity ............................ 13,026,626 56,429,024
</TABLE>
The preceding consolidated balance sheet data is shown on a pro forma as
adjusted basis to give effect to:
. Conversion of all outstanding shares of Series A and Series B preferred
stock into shares of common stock upon the consummation of this offering;
. Redemption of all outstanding shares of Series C redeemable preferred
stock upon the consummation of this offering; and
. The sale of shares of common stock by bamboo.com in this offering at an
assumed initial public offering price of $11.00 per share, after
deducting the underwriting discounts and commissions and estimated
offering expenses and application of the net proceeds.
7
<PAGE>
RISK FACTORS
You should carefully consider the following risk factors, in addition to the
other information in this prospectus, before purchasing shares of bamboo.com
common stock. Each of these risk factors could adversely affect our business,
operating results and financial condition as well as adversely affect the value
of an investment in our common stock and could cause you to lose some or all of
your investment. This offering involves a high degree of risk.
Risks Related To Our Business
Our business and prospects are difficult to evaluate because we have a
limited operating history.
Because we were incorporated in 1995 and did not focus our virtual tour
business on the real estate industry until January 1998, we have only a limited
operating history upon which you can evaluate us and our potential. Our
prospects must be considered in light of the risks, expenses and difficulties
frequently encountered by companies in an early stage of development,
including:
. the uncertainty of market acceptance of our virtual tour service and
brand;
. our need to expand our sales, marketing and customer service operations;
. our ability to successfully market and support our virtual tour service;
and
. our dependence on products and services with only limited market
acceptance to date.
As of June 30, 1999, we had an accumulated deficit of $19.0 million. We
expect to continue to incur substantial losses for the foreseeable future and
we cannot assure you that we will achieve significant revenues or profitability
or, if we do, that they can be sustained or increased on a quarterly or annual
basis.
We expect to continue to incur net losses.
We expect to have increasing net losses and negative cash flows for the
foreseeable future. The size of these losses will depend in part on the rate of
growth of our revenues from the sale of our virtual tour service. We intend to
continue to expend financial resources to promote the bamboo.com brand through
marketing and promotion and enhancement of our virtual tours. As a result, we
expect that our operating expenses will increase significantly for the
foreseeable future. Consequently, we may never achieve profitability, and if we
do achieve profitability, we may not sustain or increase profitability on a
quarterly or annual basis in the future.
Fluctuations in our quarterly revenues and operating results may lead to
reduced prices for our stock.
We believe that period-to-period comparisons of our operating results should
not be relied upon as indications of future performance. In future periods our
operating results may fall below the expectations of securities analysts that
cover our common stock and investors, which could significantly harm or depress
the trading price of our common stock. Among the factors that may influence our
operating results are:
. the number of virtual tours we sell, process and deliver;
. the termination of any significant distribution relationship or loss of a
service provider;
. the introduction of new or enhanced imaging products and services by us
or our competitors;
. the rate at which we can recruit, train and integrate employees into our
processing center, call center and field operations;
. the amount and timing of capital expenditures and other costs relating to
the expansion of our processing center, call center and field operations;
. changes in our pricing policy relating to virtual tour service or those
of our competitors;
8
<PAGE>
. economic or other conditions that affect the real estate industry; and
. economic conditions specific to the Internet.
The loss of one or more distributors of our virtual tours or the
termination of their relationship with an Internet portal could seriously
harm our business.
The ability to distribute our virtual tours widely over the Internet is vital
to our business. Our virtual tours can currently be viewed through real estate
destination Web sites such as REALTOR.com, HomeSeekers.com, Homes.com and
LoopNet. These Web sites provide real estate content to Internet portals. As a
result, our virtual tours may also be currently viewed on America Online, @Home
Network, Excite, GO Network/Infoseek, Netscape Netcenter and Yahoo! We do not
have agreements with any Internet portal providing for the distribution of our
virtual tours. If our relationship with a real estate destination site is
terminated, or their relationship with any major Internet portal is terminated,
we would lose access to significant distribution channels and our revenues
could decline.
If online real estate listings or our virtual tours do not achieve
widespread market acceptance, our business will not grow.
Our success will depend in large part on widespread market acceptance of
virtual tours to display properties online. If the online market for virtual
tours develops more slowly than expected, or if our services do not achieve
widespread market acceptance, our business will grow more slowly than expected.
Our future growth, if any, will depend on the following critical factors:
. the growth of the Internet as a tool used in the process of buying and
selling residential real estate;
. our ability to successfully and cost-effectively market our virtual tours
to a sufficiently large number of real estate agents or other real estate
professionals; and
. our ability to consistently deliver high quality virtual tours and fast
and convenient service at competitive prices.
Our revenues will not grow as much as we anticipate if the market for our
services does not continue to develop, our services do not continue to be
adopted or consumers fail to significantly increase their use of the Internet
as a tool in the process of buying and selling homes.
If we cannot successfully grow our operations our business could suffer.
Because each virtual tour requires several steps to create, a sharp rise in
demand for our products and services could exceed our capacity to carry out the
functions necessary to create virtual tours. In particular, we will need to
rapidly expand the capacity of our processing center and our customer service
center to meet significant increases in demand. In addition, we would need to
rapidly engage many new videographers in one or more regions in order for us to
continue to offer our turnkey virtual tour service in a timely manner. As the
volume of orders for our virtual tours increases, we may not be able to hire
and train qualified personnel in a timely manner, and the shortage of such
personnel could cause a backlog in the processing of orders, which could lead
to dilution of our brand and long term harm to our reputation.
We operate in a highly competitive market with low barriers to entry which
could limit our market share and harm our financial performance.
While the market for online virtual tours is relatively new and rapidly
evolving, it is already competitive and characterized by entrants that may
develop online virtual tour services similar to ours. In addition, there are
relatively low barriers to entry to our business. We do not have patents or
other intellectual property that would preclude or inhibit competitors from
entering the online virtual tours market. Moreover, due to the low cost of
entering the online virtual tours market, competition may intensify and
increase in the future. We compete with traditional methods used by real estate
agents to market properties for sale, including classified ads, brochures and
still photos. We may also compete against companies that have developed virtual
tour technology but are not currently focused on the real estate industry. This
competition may limit our ability to become profitable or result in the loss of
market share.
9
<PAGE>
Most of our employees are not subject to noncompetition agreements. In
addition, our business model does not involve the use of a large amount of
proprietary information. As a result, we are subject to the risk that our
employees may leave us and may start competing businesses. The emergence of
these enterprises will further increase the level of competition in our market
and could harm our growth and financial performance.
Our business will suffer if we are unable to establish and maintain brand
recognition for bamboo.com virtual tours.
Establishing and maintaining our brand is critical to attracting and
expanding our customer base of real estate agents, solidifying our business
relationships with traditional real estate companies and strategic partners and
successfully implementing our business strategy. We may be unable to establish
or maintain a brand that will be positively accepted by the market.
Promotion and enhancement of our brand will also depend, in part, on our
success in providing a high-quality customer experience to real estate agents,
home sellers and home buyers. We may not be successful in achieving this goal.
Low or inconsistent quality of products or services may significantly damage
our reputation and offset the efforts we make in promoting and enhancing our
brand and may harm our business. If home buyers, home sellers or real estate
agents do not perceive our existing services to be of high quality or if we
alter or modify our brand image, introduce new services or enter into new
business ventures that are not favorably received, the value of our brand could
be damaged, thereby decreasing the attractiveness of our service to potential
customers.
System failures on Web sites not controlled by us could harm our business.
In some cases, our virtual tours are hosted and maintained on Web servers
controlled by a real estate destination site or a third party on behalf of a
real estate destination site. We have no control over these servers and our
agreements with these destination sites do not provide that Internet access
will be uninterrupted, error free or secure. Any system failure that causes an
interruption in the delivery of our virtual tours on these sites or a decrease
in the responsiveness of service could result in reduced revenues, and could be
harmful to our reputation and brand.
The performance of our bamboo.com service provider network is critical to
our business and reputation.
We depend on a network of independent contractors, the bamboo.com service
providers, to provide the video content for our virtual tours. This network
consists almost entirely of the companies that provide still photos for the
multiple listing services. If our relationship with one or more of these
companies is terminated, we could experience a delay in servicing our virtual
tour customers in the affected regions and our operating results could be
harmed. In addition, if our service providers do not consistently provide high
quality service for the real estate agents or homeowners, our brand will be
diluted and our reputation will suffer, which would result in reduced revenue.
We may not be able to recruit and retain the personnel we need to succeed.
We may be unable to retain our key employees or attract, assimilate or retain
other highly qualified employees in the future. Our future success depends on
our ability to attract, retain and motivate highly skilled employees,
particularly with respect to our direct sales function, our call center and
processing center operations. If we do not succeed in attracting new personnel
or retaining and motivating our current personnel, it may be difficult for us
to manage our business and meet our objectives.
We may not be able to successfully manage the expansion in our employee
base.
Over the last twelve months our employee base has grown significantly and we
expect that the number of our employees will continue to increase in the
future. This growth has placed, and our anticipated future growth
10
<PAGE>
combined with the requirements we will face as a public company will continue
to place, a significant strain on our management systems and resources. To
manage the expected growth of our operations and personnel, we must continue
improving or replacing existing operational, accounting and information
systems, procedures and controls. We also need to rapidly expand, train,
integrate and manage our growing employee base, particularly our technical,
accounting, financial and sales and marketing organizations. If we are unable
to manage growth effectively, our business will suffer.
We are dependent on our key management personnel for our future success.
Our future success depends to a significant extent on the continued service
and coordination of our management team, particularly Leonard McCurdy, our
Chief Executive Officer and Kevin McCurdy, our founder and Executive Vice
President. The departure of any of our officers or key employees could harm our
ability to implement our business plan. In addition, certain members of our
management team, including our Chief Financial Officer, Chief Operating
Officer, Senior Vice President, Business Development and Senior Vice President,
Sales, have joined us within the last six months. These individuals have not
previously worked together and may not be able to work together effectively or
successfully manage our growth.
We may not develop new commercial relationships and our existing
relationships may not result in increased sales of our virtual tours.
In addition to our relationships with real estate destination sites, we
depend on establishing and maintaining commercial relationships with
traditional real estate brokerage companies, multiple listing services and
multiple listing services technology providers. We expect to continue to
encounter competition for these relationships and for other marketing and
endorsement relationships with real estate brokerage companies. We cannot
assure you that we will be able to establish new relationships or maintain
existing relationships. In addition, we cannot assure you that our existing
relationships with real estate companies and multiple listing services
organizations will result in orders of virtual tours. These relationships could
be terminated or fail to generate as many real estate agent customers as we
anticipate, which could cause our revenues to decline.
A failure in the performance of our Web hosting facility systems could harm
our business and reputation.
We depend upon a third party Internet service provider to host and maintain
all of our production servers. As part of our service offering, our Web servers
host our virtual tours for some of the sites where our tours can be viewed. Any
system failure, including network, software or hardware failure, that causes an
interruption in the delivery of our virtual tours or a decrease in
responsiveness of our Web site service could result in reduced revenue, and
could be harmful to our reputation and brand. Our Internet service provider
does not guarantee that our Internet access will be uninterrupted, error free
or secure. Any disruption in the Internet access provided by such provider
could significantly harm our business. In the future, we may experience
interruptions from time to time. Our insurance may not adequately compensate us
for any losses that may occur due to any failures in our system or
interruptions in our service. Our Web servers must be able to accommodate a
high volume of traffic and we may in the future experience slower response
times for a variety of reasons. If we were unable to add additional software
and hardware to accommodate increased demand, this could cause unanticipated
system disruptions and result in slower response times. Real estate agents,
home sellers and home buyers may become dissatisfied by any system failure that
interrupts our ability to provide our virtual tours to them or results in
slower response time.
If we are not successful in enhancing our virtual tours, our results may
suffer.
A component of our strategy is to develop, acquire and utilize new technology
that will continually enhance our virtual tours by providing features such as
high-resolution zooming functionality, larger image sizes, audio and additional
compression techniques. We may not be successful in our efforts to enhance our
virtual tours or develop new products and services which may harm our operating
results.
11
<PAGE>
We may develop and implement strategies enabling us to participate in e-
commerce opportunities by making value-added products and services available
online. We may decide not to engage or we may not be successful in these e-
commerce opportunities. Any new product or service we introduce that is not
favorably received could damage our reputation and the perception of our brand
name.
The location of our call center and processing center outside the United
States could result in delays and increased operating expenses and taxes.
Our call center and processing center are currently located in Toronto,
Canada. There are risks associated with our operations in Canada, including the
following:
. videotapes could be delayed in customs and cause a backlog of processing;
. our overnight courier service could have problems delivering our
videotapes from the United States to Canada in a consistently timely
fashion;
. future government regulations in the United States or Canada could limit
or increase expenses related to cross-border transactions; and
. tarrifs, or currency exchange rates may increase our operating costs.
We are currently studying the extent to which our income may be subject to
Canadian income taxes. Because Canadian income tax rates are generally higher
than U.S. tax rates on corporate income, to the extent our future income is
subject to such Canadian taxes, we may incur higher tax costs than a comparable
company subject only to U.S. taxes.
Certain key personnel may not remain with bamboo.com in the future.
Our success will depend in part on the continued service of key employees,
including our sales and marketing personnel. If we lost the services of one or
more of our key employees who decided to join a competitor or start a company
to compete directly with bamboo.com, this could harm our business. The
employment of all of our key employees is at will.
We may be liable for infringing the intellectual property rights of others.
We may receive in the future, notice of claims of infringement of other
parties proprietary rights. Infringement or other claims could be asserted or
prosecuted against us in the future and it is possible that past or future
assertions or prosecutions could harm our business. Any such claims, with or
without merit, could be time consuming, resulting in costly litigation and
diversion of technical and management personnel, cause delays in the
development and release of new products or services, or require us to develop
non-infringing technology or enter into royalty or licensing arrangements. Such
royalty or licensing arrangements, if required, may not be available on terms
acceptable to us, or at all. For these reasons, infringement claims could harm
our business.
We rely heavily on our intellectual property rights which offer only limited
protection against potential infringers.
Our success will be dependent in part upon our proprietary technology. We
rely primarily on trademarks and trade secrets, as well as confidentiality
agreements and other contractual restrictions with employees and third parties,
to establish and protect our proprietary rights. Despite these precautions, we
cannot be sure that the measures that we undertake will be adequate to protect
our proprietary technology, or that they would preclude competitors from
independently developing products with functionality or features similar to our
virtual tours. We cannot be sure that the precautions we take will prevent
misappropriation or infringement of our technology. It is possible that
litigation may be necessary in the future to enforce our intellectual property
rights, to protect our trade secrets or to determine the validity and scope of
the proprietary rights of others. Litigation could result in substantial costs
and diversion of our resources.
Cyclical economic swings in the real estate market could decrease demand for
our services and products.
Changes in the real estate market may affect demand for our services and
products. The real estate industry traditionally has been subject to cyclical
economic swings which could harm our business. These cyclical
12
<PAGE>
economic swings may be caused by various factors, such as changes in interest
rates, changes in economic conditions and seasonal changes in certain regions.
These cyclical economic swings could hurt our business.
We have risks associated with international expansion.
A part of our long-term strategy is to establish bamboo.com in international
markets. However, the Internet, or our virtual tour services model, may not
become widely accepted in international markets. In addition, we expect that
the success of any additional foreign operations we initiate will be
substantially dependent upon the real estate destination sites that we have
relationships with entering and succeeding in such markets. We may not be
successful in establishing and managing additional international operations.
We may require additional capital in the future which may not be available to
us.
We may need to raise additional funds through public or private debt or
equity financing. Adequate funds may not be available when needed or may not be
available on favorable terms. If we raise additional funds by issuing equity
securities, dilution to existing stockholders may result. If funding is
insufficient at any time in the future, we may be unable to develop or enhance
our products or services, take advantage of business opportunities or respond
to competitive pressures, any of which could harm our business. Our future
capital requirements depend upon many factors, including, but not limited to:
. the rate at which we expand our sales and marketing operations;
. the extent to which we develop and upgrade our technology;
. the occurrence, timing, size and success of acquisitions;
. the rate at which we expand our operations; and
. the response of competitors to our service offerings.
Risks Related To The Internet Industry
Our revenues may not grow if home buyers do not increase their use of the
Internet.
Our future success and revenue growth depends substantially upon continued
growth in the use of the Internet by home buyers. In addition, the purchase of
virtual tours for posting on the Internet in the home buying process
specifically must become widespread. If use of the Internet by home buyers does
not continue to increase, sales of our virtual tours would be negatively
impacted.
Our business will suffer if we fail to adapt to evolving standards and
technologies.
The standards and technologies that make up the Internet will evolve and
change over time. We must adapt our products and services to maintain
compatibility in the future to assure that we can continue to deliver high
quality virtual tours on the Web. Our inability to deliver high quality virtual
tours would lead to a decline in the demand for our products and services.
Breaches of online commerce security could expose us to litigation and harm
our reputation.
As part of our service offering, real estate agents can purchase virtual
tours directly from our Web site using a credit card. Online commerce on our
Web site relies on encryption and authentication technology licensed from third
parties to provide the security and authentication necessary to effect secure
transmission of credit card numbers and other proprietary information. The
misappropriation of credit card numbers or other proprietary personal
information or the purchase of products through the fraudulent use of credit
cards could expose us to a risk of loss or litigation and possible liability
from the vendors of our products or from cardholders themselves. In addition,
our reputation could suffer irreparable harm.
13
<PAGE>
Third party breaches of database security could disrupt our operations and
increase our capital expenditures.
A party who is able to circumvent our security measures could misappropriate
proprietary database information or cause interruptions in our operations. As a
result we may be required to expend significant capital and other resources to
protect against such security breaches or to alleviate problems caused by such
breaches, which could harm our business.
We would lose revenues and incur significant costs if our systems or material
third-party systems are not Year 2000 compliant.
The Year 2000 issue is the potential for system and processing failures of
date-related data and is the result of the computer-controlled systems using
two digits rather than four to define the applicable year. For example,
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices or
engage in similar normal business activities.
We do not have formal contingency plans to address Year 2000 issues. We use
multiple software systems for internal business purposes, including accounting,
email, human resources, sales tracking and customer service. We have not done
any operational testing to confirm that these applications are Year 2000
compliant. We depend on third party providers for Web hosting and payroll
services. We generally do not have any specific contractual rights with third
party providers should their equipment or software fail due to Year 2000
issues. If this third party equipment or software does not operate properly
with regard to Year 2000, we may incur unexpected expenses to remedy any
problems.
We are unable to predict to what extent our business may be affected if our
systems or the systems that operate in conjunction with them experience a
material Year 2000 failure. Known or unknown errors or defects that affect the
operation of our software and systems could result in delay or loss of revenue,
interruption of services, cancellation of customer contracts, diversion of
development resources, damage to our reputation, increased service or warranty
costs, and litigation costs, any of which could harm our business. The worst
case scenario is that the Internet fails and we are unable to deliver our
products and services.
Internet related regulatory and legal uncertainties could harm our business.
There are an increasing number of laws and regulations pertaining to the
Internet. In addition, a number of legislative and regulatory proposals are
under consideration by federal, state, local and foreign governments and
agencies. Laws or regulations may be adopted with respect to the Internet
relating to liability for information retrieved from or transmitted over the
Internet, domain name registration, online content regulation, user privacy,
taxation and quality of products and services. Moreover, the applicability to
the Internet of existing laws governing issues including intellectual property
ownership and infringement, copyright, patent, trademark, trade secret,
obscenity, libel, employment and personal privacy is uncertain and developing.
Risks Related To This Offering
Our existing stockholders will exercise significant control and could make
decisions that adversely affect new investors.
Our directors, executive officers and stockholders holding greater than five
percent (5%) of our outstanding common stock prior to this offering and their
affiliates will, in the aggregate, own approximately 64.5% of the outstanding
shares of our common stock upon the closing of this offering, or 61.3% if the
underwriters exercise their over-allotment option in full. As a result of their
share of ownership, these stockholders will have a significant influence on all
matters requiring stockholder approval, including the election of directors.
This concentration of ownership could delay or prevent another person from
acquiring control or causing a change in control of bamboo.com, which may
affect your ability to resell your shares at a favorable price.
14
<PAGE>
Our shares have never been publicly traded and a market may not develop or be
liquid.
Prior to this offering, there has been no public market for our common stock.
We cannot predict the extent to which a trading market will develop or how
liquid that market might become. The initial public offering price for the
shares will be determined by negotiations between us and the representatives of
the underwriters and may not be indicative of prices that will prevail in the
trading market following this offering.
Our stock price is likely to be volatile and this volatility could affect
your ability to resell your shares at a profit.
The trading price of our common stock is likely to be volatile. The stock
market has experienced significant price and volume fluctuations, and the
market prices of technology company stocks, particularly those of Internet-
related companies, have been highly volatile. As a result, you may not be able
to resell your shares at a price equal to or greater than the initial public
offering price.
The market price of our common stock may fluctuate significantly in response
to factors, some of which are beyond our control, including the following:
. actual or anticipated fluctuations in our operating results;
. changes in market valuations of other technology companies;
. announcements by us or our competitors of significant technical
innovations, contracts, acquisitions, strategic relationships, joint
ventures or capital commitments;
. publication by analysts covering our stock;
. termination of a strategic relationship;
. additions or departures of key personnel; and
. sales of common stock in the future.
Shares eligible for future sale by our existing stockholders may adversely
affect our stock price.
The market price of our common stock could drop due to the sales of a large
number of shares of our common stock or the perception that such sales could
occur. These factors could also make it more difficult to raise funds through
future offerings of common stock.
After this offering, 21,383,650 shares of common stock will be outstanding,
21,853,650 shares if the underwriters' over-allotment option is exercised in
full. The 5,000,000 shares sold in this offering, 5,750,000 shares if the
underwriters' over-allotment option is exercised in full, will be freely
tradable without restrictions under the Securities Act of 1933, except for any
shares of common stock held by our "affiliates," as defined in Rule 144 under
the Securities Act. Our officers, directors and stockholders have entered into
lock-up agreements under which they have agreed not to offer or sell any shares
of common stock for a period of 180 days after the date of this prospectus
without the prior written consent of Prudential Securities, on behalf of the
underwriters. Also, Prudential Securities may, at any time and without notice,
waive the terms of these lock-up agreements specified in the underwriting
agreement. Upon expiration of this lock-up period, the shares owned by these
persons prior to completion of this offering may be sold into the public market
without registration under the Securities Act in compliance with the volume
limitations and other applicable restrictions of Rule 144 under the Securities
Act. After the date of this prospectus, we intend to file one or more
registration statements under the Securities Act to register all shares of
common stock issuable upon the exercise of outstanding stock options or
reserved for issuance under our 1998 Employee, Director and Consultant Stock
Plan, of which 1,780,184 shares will be immediately exercisable upon the
completion of this offering and an additional 1,689,926 shares will be
exercisable within 60 days of June 30, 1999. Those registration statements are
expected to become effective immediately upon filing, and subject to the
vesting requirements and exercise of the related options and the grant of stock
awards as well as the terms of the lock-up agreements, shares covered by those
registrations statements will be eligible for sale in the public markets,
except for any shares held by our "affiliates."
15
<PAGE>
Future sales of common stock by existing stockholders and option holders may
decrease our stock price.
On June 11, 1999, we sold 1,250,830 shares of common stock in connection with
the sale of Series C redeemable preferred stock and during the last six months
we granted options to purchase an aggregate of 6,500,586 shares of common stock
at an average exercise price of $0.28 per share. When these previously issued
shares as well as the shares issuable upon exercise of these options are
eligible to be sold following the expiration of the 180 day lock-up period, or
the market perceives that they may be sold, the market price of our common
stock could drop.
Investors will experience immediate and substantial dilution and may
experience further dilution.
You will incur immediate and substantial dilution of $8.36 per share in the
net tangible book value per share of common stock from the price you paid,
assuming an initial public offering price of $11.00 per share.
Our management will have broad discretion in use of proceeds and it may not
effectively utilize those funds.
Our management will have broad discretion in how we use the net proceeds of
this offering. Investors will be relying on the judgment of our management
regarding the application of the net proceeds of this offering. Our
management's decision regarding use of the net proceeds may not be the most
effective utilization of those funds.
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these
forward-looking statements largely on our current expectations and projections
about future events and financial trends affecting the financial condition of
our business. These forward-looking statements are subject to a number of
risks, uncertainties and assumptions about bamboo.com, including among other
things:
. implementing our business strategy;
. obtaining and expanding market acceptance of the services we offer;
. forecasts of Internet and our market size and growth;
. the continued listing of real estate on the Internet; and
. competition in our market.
In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "potential," "continue," "expects,"
"anticipates," "intends," "plans," "believes," "estimates" and similar
expressions. These statements are based on our current beliefs, expectations
and assumptions and are subject to a number of risks and uncertainties. Actual
results and events may vary significantly from those discussed in the forward-
looking statements.
16
<PAGE>
USE OF PROCEEDS
The net proceeds to bamboo.com from the sale of common stock in this
offering, assuming an initial public offering price of $11.00 per share, are
estimated to be $49,950,000, and $54,758,000 if the underwriters exercise their
over-allotment option in full, after deducting the underwriting discounts and
commissions and estimated offering expenses.
We will use $11.0 million of the net proceeds to redeem all outstanding
shares of Series C redeemable preferred stock. We expect to use the remaining
net proceeds for working capital and general corporate purposes, including
expansion of sales and marketing activities and enhancement of our virtual tour
technology. In addition, we may use a portion of the net proceeds to acquire
complementary products, technologies or businesses; however, we currently have
no commitments or agreements and are not involved in any negotiations to do so.
We intend to invest the net proceeds of this offering in short-term interest-
bearing, investment-grade securities or guaranteed obligations of the U.S.
government pending their use.
We will have significant discretion in the use of the net proceeds of this
offering. Investors will be relying on the judgment of our management regarding
the application of the proceeds of this offering.
DIVIDEND POLICY
We have never declared or paid any dividends on our capital stock. We
currently expect to retain future earnings, if any, for use in the operation
and expansion of our business and do not anticipate declaring or paying any
cash dividends in the near future.
17
<PAGE>
CAPITALIZATION
The following table sets forth as of June 30, 1999:
. Our actual capitalization;
. Our pro forma capitalization after giving effect to the conversion of
outstanding shares of our Series A and Series B preferred stock into
common stock; and
. Our pro forma as adjusted capitalization, gives effect to the sale of the
shares of common stock offered in this offering at the assumed initial
public offering price of $11.00 per share, after deducting the
underwriting discounts and commissions and the estimated offering
expenses and the application of the estimated net proceeds by us from the
offering, including the redemption of all outstanding shares of the
Series C redeemable preferred stock.
<TABLE>
<CAPTION>
As of June 30, 1999
----------------------------------------
(unaudited)
------------
Pro Forma
Actual Pro Forma As Adjusted
------------ ------------ ------------
<S> <C> <C> <C>
Series C redeemable preferred
stock.............................. $ 4,452,398 $ 4,452,398 $ --
------------ ------------ ------------
Stockholder's equity:
Convertible preferred stock:
Series A, $0.001 par value,
500,000 authorized shares
231,250 shares outstanding,
actual, none pro forma and pro
forma as adjusted.............. 231 -- --
Series B, $0.001 par value,
2,324,774 authorized shares,
outstanding: 2,324,774 shares
actual, none pro forma and pro
forma adjusted................. 2,325 -- --
Common stock, $0.001 par value,
28,000,000 authorized shares actual
and pro-forma, 70,000,000
authorized pro-forma as adjusted;
1,805,230 shares outstanding
actual, 8,962,114 shares
outstanding pro forma and
21,383,650 pro forma as
adjusted....................... 1,805 8,962 21,384
Class B common stock:
7,421,536 authorized shares
$0.0001 par value
7,421,536 shares outstanding
actual, pro forma and pro forma
as adjusted.................... 520 520 520
Additional paid in capital......... 40,946,651 40,946,651 90,879,628
Notes receivable from
stockholders...................... (127,556) (127,556) (127,556)
Unearned stock-based compensation.. (8,838,128) (8,838,128) (7,361,540)
Accumulated other comprehensive
income............................ 8,144 8,144 8,144
Deficit accumulated during the
development stage................. (18,967,366) (18,967,366) (26,991,556)
------------ ------------ ------------
Total stockholders' equity ..... $ 13,026,626 $ 13,026,626 56,429,024
------------ ------------ ------------
Total capitalization ........... $ 17,479,024 $ 17,479,024 56,429,024
============ ============ ============
</TABLE>
The shares of common stock outstanding in the actual, pro forma and pro forma
as adjusted columns exclude:
. 6,027,386 shares of common stock issuable as of June 30, 1999 upon the
exercise of outstanding stock options issued at a weighted average
exercise price of $0.28 per share under our stock option plan;
. 280,000 shares of common stock issuable upon the exercise of an
outstanding warrant;
. 197,608 shares of common stock reserved for issuance under our stock
option plan; and
. 700,000 shares of common stock reserved for issuance under our employee
stock purchase plan.
18
<PAGE>
DILUTION
Purchasers of the common stock in this offering will experience immediate and
substantial dilution in the pro forma net tangible book value of their common
stock from the initial public offering price. The pro forma net tangible book
value of our common stock on June 30, 1999 was $13,026,626, or approximately
$0.80 per share. Pro forma net tangible book value per share represents the
amount of our total tangible assets less total liabilities, divided by the
number of shares of common stock outstanding on a pro forma basis after giving
effect to the conversion of all outstanding shares of convertible preferred
stock. Dilution in pro forma net tangible book value per share represents the
difference between the amount per share paid by purchasers of shares of our
common stock in this offering and the net tangible book value per share of our
common stock immediately afterwards. After giving effect to the sale of
5,000,000 shares of common stock by us in this offering at an assumed initial
public offering price of $11.00 and after deducting the underwriting discounts
and commissions and estimated offering expenses, our pro forma net tangible
book value would have been $2.64 per share. This represents an immediate
increase in pro forma net tangible book value of $1.84 per share to existing
stockholders and an immediate and substantial dilution of $8.36 per share to
new investors. The following table illustrates this per share dilution.
<TABLE>
<S> <C> <C>
Assumed initial public offering price......................... $11.00
------
Pro forma net tangible book value as of June 30, 1999........ $0.80
-----
Increase attributable to new investors....................... $1.84
-----
Pro forma net tangible book value after this offering......... $ 2.64
------
Dilution in pro forma net tangible book value to new
investors.................................................... $ 8.36
======
</TABLE>
The following table sets forth, as of June 30, 1999, on the same pro forma
basis, the number of shares of common stock purchased from us by existing
stockholders and by the new investors at the assumed initial public offering
price together with the total price and average price per share paid by each of
these groups, before deducting underwriting discounts and commissions and
offering expenses.
<TABLE>
<CAPTION>
Average
Shares Purchased Total Consideration Price
--------------------- ---------------------- Per
Number Percentage Amount Percentage Share
---------- ---------- ----------- ---------- -------
<S> <C> <C> <C> <C> <C>
Existing stockholders.. 16,383,650 76.62% $21,260,017 27.9% $ 1.30
New investors.......... 5,000,000 23.38% 55,000,000 72.1 11.00
---------- ----- ----------- ----
Total................ 21,383,650 100% $76,260,017 100%
========== ===== =========== ====
</TABLE>
Except as noted above, the foregoing discussions and tables assume no
exercise of any outstanding stock options or warrants. As of June 30, 1999,
there were options outstanding to purchase 6,027,386 shares of common stock at
a weighted average exercise price of $0.28 per share. To the extent that any of
these options are exercised, there will be further dilution to the new
investors.
19
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data should be read in
conjunction with our consolidated financial statements and related notes and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this prospectus. The statement of operations
for each of the years in the three-year period ended December 31, 1998 and the
balance sheet data at December 31, 1997 and 1998, are derived from the
consolidated financial statements of bamboo.com, Inc., that have been audited
by PricewaterhouseCoopers, LLP, independent accountants, included elsewhere in
this prospectus. The balance sheet data at December 31, 1996 is derived from
the audited financial statements of bamboo.com, Inc. that are not included in
this prospectus. The statement of operations data for the six months ended June
30, 1998 and 1999, and the balance sheet data at June 30, 1999, are derived
from our unaudited consolidated financial statements included elsewhere in this
prospectus. In management's opinion, the unaudited financial statements have
been prepared on substantially the same basis as the audited financial
statements and include all adjustments, consisting only of normal recurring
adjustments necessary for a fair presentation of the results of operations for
such periods.
<TABLE>
<CAPTION>
Six Months Ended
Years ended December 31, June 30,
----------------------------------- -------------------------
1996 1997 1998 1998 1999
---------------------- ----------- ----------- ------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Consolidated Statement of
Operations Data:
Revenues................. $ -- $ 45,553 $ 77,410 $ 39,391 $ 536,074
Cost of revenues......... -- 15,204 67,710 34,155 449,035
----------- --------- ----------- ----------- ------------
Gross profit............. -- 30,349 9,700 5,236 87,039
Operating expenses:
Sales and marketing.... 4,784 9,672 883,469 417,485 5,768,969
General and administra-
tive.................. 61,804 122,034 723,607 406,208 3,002,080
Research and develop-
ment.................. 23,829 41,567 242,917 252,954 296,480
Stock-based compensa-
tion.................. -- -- -- -- 6,955,478
----------- --------- ----------- ----------- ------------
90,417 173,273 1,849,993 1,076,647 16,023,007
----------- --------- ----------- ----------- ------------
Loss from operations..... (90,417) (142,924) (1,840,293) (1,071,411) (15,935,968)
Interest income.......... -- -- -- -- 42,236
----------- --------- ----------- ----------- ------------
Net loss................. (90,417) (142,924) (1,840,293) (1,071,411) (15,893,732)
Beneficial conversion
feature of Series B
convertible preferred
stock................... -- -- -- -- (1,000,000)
----------- --------- ----------- ----------- ------------
Net loss attributable to
common stockholders..... (90,417) (142,924) (1,840,293) (1,071,411) (16,893,732)
=========== ========= =========== =========== ============
Net loss per common
share--basic and
diluted................. $ (0.04) $ (0.05) $ (0.31) $ (0.22) $ (2.14)
=========== ========= =========== =========== ============
Weighted average common
shares--basic and
diluted................. 2,284,493 2,818,873 5,953,169 4,855,128 7,894,274
=========== ========= =========== =========== ============
<CAPTION>
As of December 31, As of
----------------------------------- June 30,
1996 1997 1998 1999
--------- ----------- ----------- ------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents............ $130,839 $ 3,955 $430,097 $ 18,157,878
Working capital (deficit)............ 36,680 (86,433) 265,405 16,064,367
Total assets ........................ 150,075 25,369 780,118 20,627,506
Debt: Series C redeemable preferred
stock............................... -- -- -- 4,452,398
Total stockholders' equity (deficit)
.................................... 55,917 (72,170) 517,068 13,026,626
</TABLE>
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the consolidated
financial statements and the notes to those statements included elsewhere in
this prospectus. The following discussion contains forward-looking statements
that reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in these forward-looking statements. Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed below and elsewhere in this prospectus, particularly in
"Risk Factors."
Overview
We are a provider of 360-degree virtual tours of real estate properties on
the Internet. We provide a comprehensive turnkey service to real estate agents
that includes videotaping the inside and outside of the home or other property,
processing the videotape into a complete virtual tour, and distributing the
virtual tour to sites on the Internet. Our virtual tours allow home buyers to
look around a room or specific area of a home or other property as if they were
actually present. Our virtual tours provide enhanced visual content and are
integrated with multiple listing service information by real estate Web sites,
thereby adding significant value to home buyers, home sellers and real estate
agents. Users are able to quickly view our virtual tours over a basic dial up
connection to the Internet using a standard Web browser and without special
plug-in software to download or install. We also distribute our virtual tours
via email in one convenient self-contained executable file.
In November 1995, we incorporated in Ontario, Canada as Visual Dynamics
Software Corporation. From inception through December 1996, we focused on the
development of our proprietary hardware and software technology. We changed our
name to Visdyn Software Corporation in December 1996. During 1997, we continued
our product development efforts and began deriving initial revenues from the
sale of virtual tours, primarily of city locations in Toronto, Canada. During
1998, we began providing a turnkey virtual tour service for the residential
real estate market in Canada. In September 1998, we changed our name to
Jutvision Corporation, moved our headquarters from Toronto to Palo Alto,
California and began implementing a service provider network of videographers
throughout the United States. On January 1, 1999, Jutvision Corporation
reorganized its business as a Delaware corporation and began deriving revenues
from the sale of virtual tours to the real estate industry in the United
States. We changed our name from Jutvision Corporation to bamboo.com, Inc. in
April 1999.
All of our revenues are derived from the sale of our virtual tours. Revenues
are recognized at the time a virtual tour is delivered. We calculate a
provision for returns based on historical experience and make appropriate
reserves at the time revenues are recognized. To date, returns have been
insignificant.
In the existing home resale market we sell our comprehensive virtual tour
service to real estate agents, which includes videotaping the property,
processing the videotape into a virtual tour, distributing the virtual tour to
Web sites on the Internet and delivering it by e-mail to the real estate agent.
Our virtual tours can then be viewed for free by consumers, including home
buyers and home sellers.
We have a limited operating history. As of June 30, 1999 we had an
accumulated deficit of $19.0 million. We have yet to achieve significant
revenues and our ability to generate significant revenues is uncertain.
Therefore, we believe that period-to-period comparisons of our financial
results are not necessarily meaningful and you should not rely upon them as an
indication of our future performance. We have incurred substantial costs to
create, introduce and enhance our virtual tour service infrastructure, to build
brand awareness and to establish our strategic relationships. We expect
operating losses and negative cash flows to continue for the foreseeable future
as we intend to significantly increase our operating expenses to grow our
business. We may also incur additional costs and expenses related to entrance
into new markets, future marketing, branding, acquisition of new businesses or
technology to respond to our rapidly changing industry. These costs could
adversely affect our future financial condition or operating results.
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During the six months ended June 30, 1999 we recorded aggregate unearned
employee stock-based compensation of $15.0 million in connection with the grant
of certain options to employees and directors. This amount is being amortized
over the vesting period, generally two or three years, of the underlying
options. Amortization of the amount during the six months ended June 30, 1999
amounted to $6.6 million. The remaining charge as at June 30, 1999 will be
amortized as follows: $3.5 million for the remainder of 1999; $3.4 million in
2000; $1.2 million in 2001; $280,000 in 2002 and $20,000 in 2003. 1,780,184
shares of common stock subject to options shall become fully vested as a result
of the completion of this public offering and will result in additional
amortization of employee stock-based compensation expense of approximately $1.8
million in the quarter in which this offering is completed.
Additionally, during the six months ended June 30, 1999, we recorded unearned
stock-based compensation for restricted common stock granted to a service
provider of approximately $819,000, which is being amortized over two years as
the Company's option to repurchase lapses ratably. Amortization of the fair
value of this restricted common stock resulted in stock-based compensation of
approximately $308,000 during the six months ended June 30, 1999. Quarterly
amortization associated with the restricted common stock is subject to
significant increase or decrease in future quarters based upon future changes
in the fair value of our common stock. The Company's option to repurchase
lapses upon completion of this public offering if this occurs prior to the end
of the two years.
On June 11, 1999, the Company entered into an agreement to sell 1,100 shares
of its Series C redeemable preferred stock and 1,250,830 shares of its common
stock for total gross proceeds of $11.0 million. The $11.0 million of proceeds
has been allocated to the Series C redeemable preferred stock and the common
stock based on their relative fair values. Accordingly, $4.4 million has been
allocated to the Series C redeemable preferred stock and $6.6 million has been
allocated to the common stock at June 11, 1999.
The shares of the Series C redeemable preferred stock may be redeemed at any
time at the option of the Company by payment of an amount of $10,000 per share
plus any accrued and unpaid dividends. At the option of the holders, we are
required to redeem the stock upon the occurrence of a redemption event. Under
the terms of the Series C redeemable preferred stock agreement, such redemption
would first become available upon completion of an initial public offering by
the Company. Therefore in the quarter in which the initial public offering
becomes effective and the Series C redeemable preferred stock may be redeemed,
an additional interest charge of up to $6.5 million will be expensed to record
the preferred stock to its face value of $11.0 million.
Results of Operations
Six Months Ended June 30, 1999 and 1998
Revenues
Our revenues increased to $536,000 for the six months ended June 30, 1999
from $39,000 for the six months ended June 30, 1998. This increase was
primarily due to the implementation of a direct sales force as well as
execution of expanded marketing programs designed to create awareness of our
product offering.
Cost of Revenues
Cost of revenues consists of our direct expenses associated with the
videotaping, image processing and delivery of the virtual tour. In addition,
cost of revenues include transaction fees paid to distribution partners which
host our virtual tours on their Web sites as well as fees paid to resellers of
our virtual tours. Our cost of revenues increased to $449,000 for the six
months ended June 30, 1999 from $34,000 for the six months ended June 30, 1998
as a result of increased volume as well as expansion of capacity in our
processing center located in Toronto, Canada.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of salaries for marketing,
sales, business development and field operations personnel. Sales and marketing
expenses also include commissions and related benefits for
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sales personnel and consultants, traditional advertising and promotional
expenses, trademark licensing and sponsorship or carriage fees paid to certain
affiliates to facilitate availability of our tours on their Web sites. Our
sales and marketing expenses increased to $5.8 million for the six months ended
June 30, 1999 from $417,000 for the six months ended June 30, 1998. This
increase was primarily a result of the implementation of a direct sales force,
the expansion of our marketing programs, the addition of distribution partners
to which carriage and sponsorship fees were paid, and expenses associated with
the issuance of equity to consultants. We expect our sales and marketing
expenses to increase as we continue to add to our direct sales force and expand
our marketing programs.
General and Administrative Expenses
General and administrative expenses consist primarily of fees for
professional services, general office expenses, salaries and related benefits
for administrative and executive staff, as well as occupancy expenses. General
and administrative expenses increased to $3.0 million for the six months ended
June 30, 1999 from $406,000 for the six months ended June 30, 1998, primarily
due to increased staffing in executive management, finance and administrative
positions necessary to support our expanding operations. In addition, we
incurred expenses associated with the issuance of equity to consultants. We
expect general and administrative expenses to increase as we increase our
staffing levels to support our expanding operations and as a result of becoming
a public company.
Research and Development Expenses
Research and development expenses consist primarily of personnel costs,
contracted product development, and Internet service provider fees. Our
research and development expenses increased to $296,000 for the six months
ended June 30, 1999 from $253,000 for the six months ended June 30, 1998 due to
an increase in staffing for product development. We expect research and
development expenses to increase as we increase our full time staff.
Years Ended December 31, 1998 and 1997
Total revenues increased as we expanded our virtual tour service offering
across Canada. Our cost of revenues increased from the year ended December 31,
1997 as the result of increased volume as well as expanded capacity in our
processing center in Toronto, Canada. We also had an increase in sales and
marketing expenses from the prior year as we expanded sales activity in
additional regions in Canada. General and administrative expenses increased
from the prior year primarily due to increased staffing levels necessary to
support our expanding operations. Our research and development expenses
increased from the prior year due to the use of additional contracted
development support personnel.
Years Ended December 31, 1997 and 1996
We did not begin generating revenues until the introduction of our first
product in the quarter ended March 31, 1997 and therefore did not have revenues
in fiscal year 1996. Our sales and marketing, general and administrative and
research and development expenses all increased from the year ended December
31, 1996 primarily due to increased staffing levels and the use of additional
contracted personnel necessary to support our expanding operations and the
initial launch of our virtual tour product.
Income Taxes
We recorded net losses of $90,000, $143,000 and $1.8 million in 1996, 1997
and 1998, respectively. Accordingly, no provision for income taxes was recorded
in any of these years. The resulting deferred tax asset, representing such net
operating loss carry-forwards, has been reduced in full by a valuation
allowance as it is more likely than not that the deferred tax asset will not be
realized. At December 31, 1998, the Company had accumulated income tax losses
of $1.9 million available in Canada for carry-forward to reduce taxable income
of future years.
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Liquidity and Capital Resources
Since inception, we have financed our operations primarily through the
issuance of equity securities. From inception through December 31, 1998,
financing was provided primarily through periodic private sales of equity which
generated aggregate net proceeds of $1.5 million. On March 12, 1999, we sold
Series B preferred stock generating net cash proceeds of $13.4 million
including the conversion of $1.8 million of convertible promissory notes. On
May 5, 1999, we sold additional shares of Series B preferred stock generating
net proceeds of approximately $1.0 million. In June 1999, we sold 1,100 shares
of Series C redeemable preferred stock and 1,250,830 shares of common stock
generating net proceeds of approximately $11.0 million. We have recently
increased our liquidity to support the implementation of a direct sales force,
increased marketing activity and the expansion of our processing and call
center.
Net cash used in operating activities was $5.6 million for the six months
ended June 30, 1999. This was primarily as a result of the loss for the period,
net of stock based compensation charges and an increase in accounts payable.
Investment in capital assets was $1.2 million, substantially all of which was
used to acquire property and equipment, primarily videography and computer
equipment and software. Financing activities during the first six months
generated $24.4 million in additional capital. The sale of Series B preferred
stock and notes provided $13.4 million and $11.0 million was raised from the
placement of Series C redeemable preferred stock and common stock. As of June
30,1999 we had $18.2 million in cash and cash equivalents.
Net cash used in operating activities was $62,000 in 1996, $124,000 in 1997
and $649,000 in 1998. In 1996 and 1997, our net losses of $90,000 and $143,000,
respectively, were partially offset by depreciation of $12,000 and $11,000
respectively and increases in accounts payable of $16,000 between 1995 and 1996
and increases of $8,000 each in accounts payable and accrued liabilities
between 1996 and 1997, respectively. In 1998, our $1.8 million net loss
included non-cash charges as a result of depreciation, issuance of common stock
and options in exchange for services rendered and warrant commitment of
$32,000, $907,000 and $168,000, respectively. The loss was also partially
offset by net changes in assets and liabilities totaling $84,000. The main
components of this net change were increases in accounts payable, accrued
liabilities and prepaid and other current assets of $127,000, $94,000 and
$83,000, respectively. Investments in capital assets were $30,000, $6,000 and
$219,000 in the years ended December 31, 1996, 1997 and 1998, respectively,
substantially all of which was used to acquire property and equipment. Cash and
cash equivalents were $430,000 at December 31, 1998.
We have $1.9 million available under our existing credit facilities.
As of June 30, 1999 we had lease commitments due over the next three years of
approximately $1.1 million due under the terms of leases for premises in
Toronto, Canada and Palo Alto, California.
As of June 30, 1999 we had no material commitments for capital expenditures.
Through our agreements with a number of our strategic partners, we are
obligated to pay sponsorship, and other marketing and technology access fees of
approximately $15.0 million due over the next four-year period.
We believe existing cash balances, cash equivalents and cash generated from
operations, together with the net proceeds to us from this offering, will be
sufficient to meet our anticipated cash needs for working capital and capital
expenditures for at least the next 18 months. However, the underlying assumed
levels of revenues and expenses may not prove to be accurate. We may seek
additional funding through public or private financing or other arrangements
prior to such time. Adequate funds may not be available when needed or may not
be available on favorable terms. If we raise additional funds by issuing equity
securities, dilution to existing stockholders may result. If funding is
insufficient at any time in the future, we may be unable to develop or enhance
our products or services, take advantage of business opportunities or respond
to competitive pressures, any of which could harm our business.
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<PAGE>
Year 2000 Issue
The Year 2000 issue is the potential for system and processing failures of
date-related data and is the result of the computer-controlled systems using
two digits rather than four to define the applicable year. For example,
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices or
engage in similar normal business activities.
Although we do not have formal contingency plans to address Year 2000 issues,
we are assessing our internal readiness for Year 2000. We use multiple software
systems for internal business purposes, including accounting, email, human
resources, sales tracking and customer service. All of these applications have
been purchased within the preceding 12 months and we have made inquiries
concerning Year 2000 compliance with the vendors of these systems. Each of
these vendors has assured us that its applications are Year 2000 compliant but
we have not done any operational testing to confirm compliance. We depend on
third party providers for Web hosting and payroll services. While we have
received verbal assurance that these third parties are Year 2000 compliant, we
generally do not have any specific contractual rights with third party
providers should their equipment or software fail due to Year 2000 issues. If
this third party equipment or software does not operate properly with regard to
Year 2000, we may incur unexpected expenses to remedy any problems.
We are unable to predict to what extent our business may be affected if our
systems or the systems that operate in conjunction with them experience a
material Year 2000 failure. Known or unknown errors or defects that affect the
operation of our software and systems could result in delay or loss of revenue,
interruption of services, cancellation of distribution contracts, diversion of
development resources, damage to our reputation, increased service or warranty
costs, and litigation costs, any of which could harm our business. The worst
case scenario is that we are unable to deliver our product and services.
Recent Accounting Pronouncements
In March, 1998, the Accounting Standards Executive Committee issued Statement
of Position 98-1 "Accounting for the Costs Computer Software Developed or
Obtained for Internal Use," which provides guidance on accounting for the cost
of computer software developed or obtained for internal use. Statement of
Position 98-1 is effective for financial statements for fiscal years beginning
after December 15, 1998. We are currently evaluating the impact of Statement of
Position 98-1 on our financial statements and related disclosures.
In April 1998, the Accounting Standards Executive Committee issued Statement
of Position 98-5, "Reporting on the Costs of Start-up Activities." This
standard requires companies to expense the costs of start-up activities and
organization costs as incurred. In general, Statement of Position 98-5 is
effective for fiscal years beginning after December 15, 1998. We believe the
adoption of Statement of Position 98-5 will not have a material impact on our
results of operations.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. Statement of Financial Accounting Standards No. 133
establishes new standards of accounting and reporting for derivative
instruments and hedging activities. Statement of Financial Accounting Standards
No. 133 requires that all derivatives be recognized at fair value in the
statement of financial position, and that the corresponding gains or losses be
reported either in the statement of operations or as a component of
comprehensive income, depending on the type of hedging relationship that
exists. Statement of Financial Accounting Standards No. 133 will be effective
for fiscal years beginning after June 15, 1999. We do not currently hold
derivative instruments or engage in hedging activities.
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Quantitative and Qualitative Disclosures About Market Risk
We are exposed to financial market risks, including changes in foreign
currency exchange rates and interest rates. Most of our revenue and capital
spending is transacted in U.S. dollars. However, the expenses and capital
spending of our Canadian subsidiary are transacted in Canadian dollars. Results
of operations from our Canadian subsidiary are not material to the results of
our operations, therefore, we believe that foreign currency exchange rates
should not materially affect our overall financial position, results of
operations or cash flows. Our exposure to market risk for changes in interest
rates relates primarily to our cash and cash equivalent balances and our bank
line of credit. We do not use derivative financial instruments in our
investment portfolio, and our investment portfolio only includes highly liquid
instruments with an original maturity of generally less than three months. We
are subject to fluctuating interest rates that may impact, adversely or
otherwise, our results of operations or cash flows for cash and cash
equivalents and our bank line of credit. The table below presents principal
amounts and related weighted average interest rates for our cash and cash
equivalents balances and debt obligations:
As of December 31, 1998:
<TABLE>
<CAPTION>
Maturing
in 1999
--------
<S> <C>
Assets
Cash and cash equivalents........................................... 430,097
Average interest rates.............................................. 4.5%
Liabilities
Bank line of credit................................................. --
Average interest rates.............................................. 7.75%
</TABLE>
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BUSINESS
Overview
We are a provider of 360-degree virtual tours of real estate properties on
the Internet. Bamboo.com virtual tours provide a more complete visual
representation of a property than traditional still photographs, allowing
viewers to easily pan left or right or zoom in for a closer view. We provide a
comprehensive virtual tour service to real estate agents that includes
videotaping the inside and outside of a home or other property, processing the
videotape into a complete virtual tour and distributing the virtual tour. We
distribute our virtual tours to a variety of Web sites, including real estate
destination sites and Internet portals. We also distribute our virtual tours by
email to real estate agents for easy redistribution to their clients and
prospective home buyers. Utilizing our extensive service provider network, we
offer our virtual tour service in over 100 metropolitan areas across the United
States and Canada. As the real estate industry increasingly leverages the
geographic reach and rich media potential of the Internet, we believe virtual
tours will become a standard method to market real estate, the way still
photographs are a standard method today.
In order to accelerate the adoption and enhance the benefits of our
bamboo.com virtual tours, we have established key relationships with leading
real estate destination Web sites. Our virtual tours are exclusively promoted,
marketed and endorsed by the HomeStore.com, REALTOR.com and HomeBuilder.com Web
sites. Our virtual tours are also promoted, marketed and endorsed exclusively
by HomeSeekers.com, Inc. on the HomeSeekers.com Web site. We have agreements to
provide our virtual tours to the following real estate destination Web sites:
. REALTOR.com, the official Web site of the National Association of
Realtors;
. HomeSeekers.com;
. Microsoft HomeAdvisor;
. Homes.com;
. HomeBuilder.com; and
. LoopNet.
These Web sites also provide real estate content to Internet portals. As a
result, our virtual tours can currently be viewed on America Online, @Home
Network, Excite, GO Network/Infoseek, Netscape Netcenter and Yahoo! We have
also established relationships with real estate brokerage firms, multiple
listing services and companies that provide technology to the real estate
industry, including Prudential Real Estate Affiliates, RE/MAX International and
GTE Enterprise Solutions.
Industry Overview
The Real Estate Industry
According to the United States Department of Commerce, the market for all
housing and related products and services was in the aggregate over $1 trillion
in 1997, representing 12.4% of the United States gross domestic product and is
one of the largest sectors of the economy. The real estate industry in the
United States is large and diverse, consisting of a variety of segments
including:
. existing home sales;
. new home sales;
. apartment rentals;
. commercial property sales and leases; and
. hotels and other hospitality or specialty properties.
The largest segment of the U.S. real estate industry is the market for
existing home sales. According to the National Association of Realtors, which
is comprised of approximately 720,000 residential and commercial real estate
agents, there were approximately 5 million existing home sales in the United
States in 1998, representing
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$625 billion in transaction value. In addition to existing home sales, new U.S.
housing starts totaled over 1.6 million units, and 888,000 new homes
representing $130 billion in transaction value were sold in 1998, according to
the National Association of Home Builders.
The Process of Buying And Selling A Home
Buying or selling a home is the most significant financial transaction most
people undertake in their lifetime. The process is often stressful, complicated
and time-consuming. Consequently, most individuals seeking to buy or sell a
home hire a real estate agent to assist them with the process. To facilitate
the purchase or sale of an existing home, real estate agents generally use a
regional multiple listing service, a proprietary network of property listing
information which traditionally has only been available to real estate agents.
The real estate agent typically pays a fee to access a multiple listing
service, which enables the real estate agent to list properties that are for
sale and view properties that are listed by other agents.
When commencing a search for a home, buyers have traditionally sought
information from newspaper classifieds and multiple listing service printouts
provided by real estate agents. The information for a particular home usually
consists of a brief text description of the property and a small exterior
photograph. This limited information requires buyers to engage in the time-
consuming and often frustrating process of scheduling appointments, traveling
to and visiting a property. This inefficient process also forces home sellers
and real estate agents to spend time showing homes to all visitors, including
those who after physically visiting the home are not interested. The
inconvenience and cost associated with the home buying process are compounded
for home buyers who are relocating.
Convergence of the Internet and the Process of Buying and Selling a Home
The Internet has emerged as a global medium for communication, information
exchange and commerce. According to the International Data Corporation, there
were 69 million Internet users worldwide at the end of 1997 and this number is
anticipated to grow to approximately 320 million users by the end of 2002. As a
result of this explosive growth, businesses will have a tremendous opportunity
to conduct commerce over the Internet. International Data Corporation estimates
that commerce over the Internet will increase to more than $400 billion by
2002.
Recognizing the commercial potential of the Internet, a number of residential
real estate-related Web businesses have been established, including Web sites
that aggregate multiple listing service data from different regions. These real
estate destination sites enable users to quickly access a wide range of real
estate listings to search for a home using specific criteria, including
location, size and price. As a result, these sites are increasingly becoming an
important part of the home buying process for many consumers. Based on a 1999
study by the U.C. Berkeley Fisher Center for Real Estate and Urban Economics,
we believe that a significant portion of existing homes listed for sale in the
United States are listed online and that the number of home buyers using the
Internet to shop for a home is increasing.
The Need For Richer Online Visual Content
While the Internet has improved the process of researching real estate
listings, the information currently available online is typically limited to a
brief text description and a small still photograph of the property. Though the
availability of this information online enhances the efficiency of searching
for a home, it does not utilize the capability of the Web to more fully
visualize the experience of visiting a home. As a result, buyers must still
engage in the time-consuming and often frustrating process of scheduling
appointments, traveling to and visiting homes at an early stage of the home
buying process before they can confirm their interest in a particular property.
The Bamboo.com Solution
We are a provider of 360-degree virtual tours of real estate properties on
the Internet. We believe virtual tours will become a standard method to market
real estate online, the way still photographs are a standard
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method today. Our virtual tours provide enhanced visual content that allows a
buyer to look around a room or specific area of a home or other property as if
they were actually standing inside or outside the property. Our virtual tours
are integrated with property listing information by real estate Web sites and
multiple listing services, thereby providing a complete package of information
and adding significant value to the home buyer, home seller and real estate
agent. Users are able to quickly view our virtual tours over a basic dial-up
connection to the Internet using a standard Web browser, on almost all computer
platforms, and without special plug-in software to download or install. We also
distribute our virtual tours by email to real estate agents in one convenient,
self contained executable file. Real estate agents can easily forward our email
virtual tours to prospective home buyers, home sellers and real estate agents.
Key elements of the bamboo.com solution are:
Affordable, Comprehensive Service. We deliver an affordable comprehensive
service to real estate agents that includes videotaping the inside and outside
of a home or other property, processing the videotape into a complete virtual
tour and distributing our virtual tours to a variety of Web sites. We also
distribute our virtual tours to real estate agents as an attachment to a
standard email message, which they can then forward to home buyers, other real
estate agents and home sellers. For our basic virtual tour service for existing
home sales, real estate agents pay a one time fee of $99.95 per home. The
virtual tour is then accessible free-of-charge on the Internet for the life of
the listing. Utilizing our extensive network of videographers, we currently
offer our virtual tour service in over 100 metropolitan areas across the United
States and Canada.
Extensive Network of Internet Affiliates. Users can access our virtual tours
through major destination sites on the Internet. We have agreements to provide
our virtual tours to the following major real estate destination sites:
. REALTOR.com;
. HomeSeekers.com;
. Microsoft HomeAdvisor;
. Homes.com;
. HomeBuilder.com; and
. LoopNet;.
These Web sites also provide real estate content to Internet portals. As a
result, our virtual tours can currently be viewed on America Online, @Home
Network, Excite, GO Network/Infoseek, Netscape Netcenter and Yahoo!
Benefits to Home Buyers. Our virtual tours provide home buyers with rich
visual information enabling them to view and screen a property, at no cost,
without requiring a visit to the home. This enables buyers to save the time,
expense and inconvenience of scheduling appointments, traveling to and visiting
properties in person. Our virtual tours also add new dimensions to the home
buying process by enabling home buyers to show a potential home to family and
friends and revisit the virtual tour.
Benefits to Home Sellers. Our solution enables home sellers to use the
Internet to provide more visual information about their homes and surrounding
property to prospective buyers. Unlike traditional marketing methods such as
local classified ads and multiple listing service printouts, our visually rich
virtual tours allow sellers to take advantage of the multimedia capabilities of
the Web. In addition, we believe our virtual tours will reduce the amount of
time required by sellers in showing their homes because buyers are able to view
homes before deciding to actually visit the property.
Benefits to Real Estate Agents. Our virtual tours provide real estate agents
with an Internet based tool that allows them to cost-effectively market
properties to a wide audience, thereby providing a value-added service to both
home buyers and home sellers. This enhanced marketing tool also enables real
estate agents to differentiate themselves to potential home sellers and thereby
gain new listings. As home buyers increasingly use the Internet and virtual
tours to screen homes, real estate agents may save time by showing homes to
more qualified buyers. Real estate agents can also more effectively help home
buyers find properties by identifying and emailing to a home buyer our virtual
tours that match a buyer's criteria. Alternatively, real
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estate agents can also store our email virtual tours on their laptop computers
and display these virtual tours directly to their clients.
Benefits to Affiliates. Our virtual tours provide real estate destination
sites, Internet portals and multiple listing services with rich visual content
which helps to increase the convenience, usefulness and enjoyment of their
users' visits. We believe that these benefits promote increased traffic and
repeat usage on our affiliates' Web sites.
The Bamboo.com Strategy
Our objective is to be the leading global provider of online virtual tours to
the real estate industry. We plan to achieve this goal by pursuing the
following key strategies:
Aggressively Grow Our Virtual Tour Business. We intend to establish a
significant market presence for our 360-degree virtual tours by continuing to
provide comprehensive turnkey services at competitive prices to the existing
home sales market. We plan to continue to drive market share of our virtual
tours by utilizing our 60 direct sales professionals to aggressively market our
virtual tours to real estate agents at the local and regional levels. We have
recently expanded our service provider network to include 188 videographers
that provide us with broad national coverage in over 100 metropolitan areas.
Establish Bamboo.com as the Dominant Brand for Online Virtual Tours. We seek
to establish bamboo.com as the leading brand for online virtual tours in all
segments of the real estate industry. To achieve this objective, we intend to
expand our use of mass market and targeted advertising, public relations and
other marketing activities designed to promote bamboo.com as a global brand
among consumers, real estate agents and other real estate professionals.
Develop New Relationships. We have entered into relationships which help us
sell and distribute our virtual tours and promote the bamboo.com brand. These
relationships include agreements with HomeStore.com, REALTOR.com,
HomeSeekers.com, Microsoft HomeAdvisor, Homes.com, HomeBuilder.com, LoopNet,
Prudential Real Estate Affiliates, RE/MAX International and GTE. These
relationships provide us with significant benefits including access to real
estate agents and marketing activities such as banner ads, buttons, logos,
online order pages and direct sales force activities. We intend to enter into
additional agreements with real estate destination sites, real estate brokerage
firms, multiple listing services and technology providers that will provide us
with similar benefits.
Continue to Enhance Our Virtual Tour Experience. We intend to continually
develop, acquire and utilize new technologies that will enhance our virtual
tours. Examples of such technological enhancements include high-resolution
zooming functionality, larger image sizes, audio and additional compression
techniques. We believe such enhancements will benefit our constituents by
providing an even richer, more informative experience. Recently, Intel and
bamboo.com entered into a product development agreement, where Intel will
provide guidance on future product definition, technology enhancements and
optimizations of the bamboo.com virtual tour product for Intel architecture.
Expand Our Virtual Tour Business to Other Real Estate Segments. We intend to
expand into other real estate markets that will benefit from our virtual tour
products and services, such as new home sales, apartment rentals, commercial
property sales and leases, as well as hotels and other hospitality or specialty
properties. We recently entered into an agreement to provide our virtual tours
to LoopNet, a commercial real estate Web site.
Pursue E-Commerce Opportunities. As consumers increasingly use the Internet
to research all aspects of the home buying process, we believe that there will
be more real estate related products and services offered online, creating
e-commerce opportunities. Because home buyers can use our virtual tours
throughout the home buying process, we believe we will be well positioned to
take advantage of these opportunities.
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Pursue International Expansion Opportunities. We believe there will be a
significant opportunity for bamboo.com virtual tours as online real estate
marketplaces develop and mature in international markets. We intend to address
this opportunity by directly marketing our services, developing new
partnerships and expanding our relationships with existing partners as they
grow internationally.
Products and Services
The Virtual Tour
Bamboo.com virtual tours capture 360-degree images of the interior and
exterior of homes or other real estate. Our virtual tours provide more complete
visual representations of multiple rooms and outdoor areas than traditional
still photographs allowing viewers to easily pan left or right or zoom in for a
closer look.
We deliver a comprehensive service to real estate agents that includes
videotaping the inside and outside of a home or other property, processing the
videotape into a complete virtual tour, distributing the virtual tour to sites
on the Internet and delivering it by email. Our basic virtual tour for existing
homes is priced at $99.95, and includes four 360-degree scenes delivered to one
Web site selected by the real estate agent. Each additional scene and each
additional Web site posting costs the real estate agent $20.00. Our service
involves the following six steps:
(1) a real estate agent orders a virtual tour from us by phone, fax, email
or online and selects the Web sites that the tour is to be posted on;
(2) our customer service representative receives this order and dispatches
the request to an independent videographer who is part of the
bamboo.com service provider network;
(3) the videographer contacts the real estate agent to schedule the video
shoot of the property;
(4) once the video has been shot, the captured content is sent via
overnight courier to our processing center in Toronto;
(5) our processing center inspects all scenes included in the video and
converts the video into a virtual tour using our proprietary
technology; and
(6) our processing center then posts the virtual tour on the Web to the
sites selected by the ordering real estate agent. We also deliver the
virtual tour by email to the ordering real estate agent.
Virtual Tours on the Internet
Our Web-based virtual tour product is viewable using a standard Web browser,
without the need for additional software, over a basic dial-up connection to
the Internet. Our virtual tours are available on real estate company Web sites,
individual real estate agent Web sites or on our broad network of affiliates,
which include real estate destination sites, Internet portals and multiple
listing services.
We have developed proprietary software which enables our virtual tours to be
viewed on the Web. The bamboo.com Java applet enables our virtual tours to be
viewed within Web pages. If the users Web browser is unable to view Java
applets, our bamboo.com View-Anywhere system will automatically display still
images in HTML.
Email Virtual Tours
In addition to our Web-based virtual tour, we offer a self contained virtual
tour which can be distributed by email. The email virtual tour offers all of
the features of our Web-based virtual tours and can be customized to include
contact information for the real estate agent representing the seller.
The listing real estate agent receives the email virtual tour from bamboo.com
and is able to widely disseminate the email virtual tour by sending it directly
to potential home buyers, other real estate agents and the
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home seller. The real estate agent can also use the email tour as a promotional
tool by including his or her name and contact information. The buyer's real
estate agent can easily forward email virtual tours received from sellers'
agents to clients, providing a simple and efficient method for potential buyers
to screen numerous homes.
Our email virtual tour can be viewed on computers running Microsoft's Windows
95, Windows 98 or Windows NT operating systems. The manageable file size of our
virtual tour enables a real estate agent or potential buyer to store virtual
tours on a computer and show or view the tours anytime, without the need for an
Internet connection.
Key Relationships
In order to accelerate the adoption of our bamboo.com virtual tours, we have
entered into agreements with real estate destination sites, real estate
brokerage firms and real estate multiple listing services.
Real Estate Destination Sites
We have entered into agreements to provide our virtual tours to the Web sites
listed below. We believe these relationships benefit home buyers, home sellers
and real estate agents by providing broad exposure of homes and other
properties on a variety of real estate destination sites and Internet portals.
<TABLE>
<S> <C> <C> <C>
REALTOR.com HomeSeekers.com LoopNet
HomeBuilder.com Microsoft Homes.com
HomeAdvisor
</TABLE>
RealSelect, a Subsidiary of HomeStore.com. RealSelect operates REALTOR.com
and HomeBuilder.com. REALTOR.com, the official Web site of the National
Association of Realtors, is a leading real estate destination Web site that
enables potential home buyers to browse, free of charge, from a searchable
database of existing home listings. REALTOR.com's listings can also be viewed
on America Online, @Home Network, Excite, GO Network/Infoseek, and Netscape
Netcenter. We have a multi-year agreement with HomeStore.com and RealSelect
through which we are exclusively marketed, promoted and endorsed on the
HomeStore.com, REALTOR.com and HomeBuilder.com Web sites. We are required to
pay RealSelect monthly fees and fees associated with sales of our virtual
tours.
Cedant Corporation. Cedant is planning to introduce a real estate Internet
portal that will include property listings from the Coldwell Banker(R), CENTURY
21(R), ERA(R) real estate brokerage systems. We have entered into a multi-year,
non-exclusive, agreement with Cedant under which bamboo.com virtual tours may
be displayed on such portal. We are required to pay Cedant monthly fees and
fixed fees, at specified times during the term of the agreement.
HomeSeekers.com. HomeSeekers.com is a provider of online residential listing
information. We have a multi-year agreement with HomeSeekers.com through which
we are the exclusive provider of virtual tours on the HomeSeekers.com Web site.
HomeSeekers.com markets, promotes and facilitates sales of our virtual tours on
the HomeSeekers sites, at seminars and tradeshows, on CD-ROM products and
through e-mail and direct marketing. We pay HomeSeekers transaction fees for
sales generated by HomeSeekers as well as for virtual tours posted to the
HomeSeekers Web site.
Microsoft HomeAdvisor. Microsoft HomeAdvisor is a real estate destination
site which aggregates existing home listings. We recently entered into a short
term agreement with Microsoft to provide virtual tours to the HomeAdvisor site.
Under the agreement, we are required to pay Microsoft quarterly sponsorship
fees.
Homes.com. Homes.com is a real estate destination site which aggregates
existing home listings and a variety of other real estate listings such as
apartments. We have a short term agreement with Homes.com to provide our
virtual tours of existing homes on the Homes.com Web site. We are also the
preferred provider of virtual tour images for rental property listings on
Homes.com. We pay Homes.com a quarterly transaction fee on net revenues
collected from sales originated by Homes.com.
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LoopNet. LoopNet is an aggregator of commercial property listings. We have an
agreement with LoopNet to provide virtual tours of commercial properties on the
LoopNet.com Web site. We pay LoopNet monthly sponsorship fees.
Real Estate Brokerage Firms
We have entered into distribution and marketing agreements with major real
estate brokerage firms. These agreements assist in providing our sales force
with access to their agents and enable us to feature our virtual tours on their
brokerage firms' Web sites. Below is a representative list of brokerage firms
that have entered into agreements with us.
<TABLE>
<S> <C>
Prudential Real Estate Affiliates RE/MAX International
</TABLE>
<TABLE>
<S> <C>
Arvida Realty Services Windermere Real Estate
</TABLE>
<TABLE>
<S> <C>
John L. Scott Real Estate Carlson/Better Homes & Gardens Realty
</TABLE>
<TABLE>
<S> <C>
Keller Williams Southwest Region Northside Realty
</TABLE>
<TABLE>
<S> <C>
The Equity Group Realtors Pacific Union
</TABLE>
<TABLE>
<S> <C>
Sudler/Beliard Gordon
</TABLE>
Multiple Listing Service Infrastructure
Multiple listing services aggregate residential real estate listings on a
local or regional basis and are typically controlled by local real estate
boards. These boards are primarily organized as co-operatives whose members
typically are affiliated with local real estate firms. In addition to managing
the listings within a region, multiple listing services also select and control
the software used in uploading, storing and viewing the listings. These
relationships have traditionally allowed multiple listing services to secure
their position as the primary aggregator of all data relating to properties
within their jurisdiction.
We have entered into and continue to enter into agreements directly with
multiple listing services as well as companies that develop technology for the
real estate industry. Through these relationships, we seek to integrate our
virtual tours into the existing MLS infrastructure to benefit us, the multiple
listing services and real estate agents. This integration enables us to
directly market our virtual tour service to real estate agents associated with
these multiple listing services through marketing and promotion agreements. In
addition, these relationships provide significant exposure for our virtual
tours within the multiple listing services intranet systems.
Multiple Listing Service
Multiple Listing Service of .Largest multiple listing service in North
Northern Illinois--MLSNI America
.Average of 72,000 active listings
.27,000 members
Metropolitan Regional .Second largest multiple listing service in
Information Systems Inc.-- North America
MRIS .Average of 54,000 active listings
.22,000 members
Toronto Real Estate Board-- .Third largest multiple listing service in
TREB North America
.Average of 25,000 active listings
.20,000 members
GTE Enterprise Solutions .Full service provider of technology to the
real estate industry
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MLSNI. MLSNI covers the Chicago metropolitan area. We have an agreement with
MLSNI to provide virtual tours to its subscribers. Under the terms of the
agreement, MLSNI agrees to promote and assist in facilitating the sales of our
virtual tours on the MLSNI.com Web site, in its multiple listing services
system and in its marketing collateral.
MRIS. MRIS operates an online real estate network for licensed real estate
agents in the Maryland, Northern and Central Virginia, Washington D.C. and
parts of West Virginia and Pennsylvania. We have a sales and co-marketing
agreement to be the preferred vendor of virtual tours to its subscribers. Under
the terms of the agreement, MRIS is responsible for facilitating the sales of
our virtual tours to its subscribers, and agrees to market and promote our
virtual tours on its Web site, print collateral and through its call center.
TREB. TREB covers the Toronto metropolitan area. We have an agreement with
the TREB through which we provide virtual tours to its subscribers. TREB has
agreed to exclusively market and promote our virtual tours in its online and
print collateral as well as within its multiple listing services system.
GTE Enterprise Solutions. GTE Enterprise Solutions is a full service provider
of technology to the real estate industry. The GTE Enterprise Solutions System
4 is an information database and communications network which integrates
multiple listing services functions. We have an agreement with GTE Enterprise
Solutions through which they market, promote and facilitate the ordering of our
virtual tours on their System 4 MLS software. Also, under the terms of the
agreement, GTE Enterprise Solutions integrates the viewing of our virtual tours
through its System 4 MLS software.
Sales and Marketing
We are engaged in a number of marketing activities to promote the bamboo.com
brand, develop name recognition and visibility and build our customer base.
These marketing activities include targeting real estate agents, home sellers
and home buyers through print and online advertising, trade shows, seminars,
direct mail and product promotions. We sell our virtual tours to real estate
agents through our direct sales force and through our partners.
Direct Sales Organization
Our direct sales force covers the United States and Canada. As of June 30,
1999, we employed 60 field sales personnel, including 7 regional directors and
53 account executives. The direct sales force focuses its efforts on real
estate agents. Below is a representative list of real estate brokerage firms
whose agents have purchased our virtual tours:
Alain Pinel Fred Sands Realtors Prudential Real Estate
Arvida Realty Services Affiliates
John L. Scott Real Estate
Better Homes & Gardens Keller Williams RE/MAX International
Century 21 Koenig & Strey Royal LePage
Coldwell Banker Pacific Union Towne and Country
ERA Realtor
Windermere Real Estate
Our direct sales force is employing the following strategies to market
bamboo.com virtual tours to real estate agents:
. Real Estate Brokerage Workshops. We organize and present sales workshops
at regional and local real estate brokerage offices. Our direct sales
force uses these presentations to educate and inform the real estate
agents about our virtual tours and the Internet to enhance their ability
to win listings and market properties.
. Internet Marketing Advisory Board. We have engaged eleven experienced
real estate agents from different brokerage firms and an Internet
consultant to serve on our Internet Marketing Advisory Board.
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These individuals help promote bamboo.com, provide input on our products
and services and assist in our approach to the market. Upon joining the
Marketing Advisory Board members are granted options to purchase our
common stock in consideration for their services.
. Trade Shows and Conferences. We attend trade shows and conferences across
North America. We believe these forums serve as an excellent selling,
networking and branding opportunity.
Additional Marketing and Sales Channels
In addition to our direct sales force, we also have and continue to develop
relationships with real estate destination sites, real estate brokerage firms
and multiple listing services to provide marketing support in our efforts to
sell directly to real estate agents associated with these companies.
Service Provider Network
Our service provider network consists of contract videographers throughout
the United States and Canada. As of June 30, 1999, we had 188 trained
videographers active in approximately 100 metropolitan areas. The videographers
are responsible for capturing our images using a video camera attached to a
proprietary tripod and turntable system. The videographers are generally
subject to noncompetition agreements.
Technology
We have developed innovative and proprietary technology to support the
creation and delivery of our virtual tours, including a scene image capture
system, processing system and virtual tour viewing technology.
Virtual Tour Scene Capture Device
We developed a microprocessor controlled turntable system that facilitates
the creation of our virtual tours. In conjunction with a standard photographic
tripod and a commercially available video camera, a bamboo.com service provider
uses this system to quickly and easily film 360-degree virtual scenes.
Virtual Tour Video Processing System
We have developed a proprietary software system which converts standard video
into a digital file format. Our processing software takes advantage of the
adaptive exposure and focus mechanisms in the video camera to compress the
dynamic range of the scene while maintaining center-of-field focus. This
results in a single well-exposed image with effective depth-of-field. This
image is then enhanced for clarity and color range using commercially available
image processing tools. Finally, the image is coded for final display with JPEG
compression.
Virtual Tour Viewing Technology
We have developed proprietary software which enables our virtual tours to be
viewed on the Web as well as distributed via email. For Web-based virtual
tours, our View-Anywhere system automatically identifies the user's browser and
selects either a Java or HTML virtual tour depending on the browser's ability
to view Java applets. If the browser cannot view Java applets, the property is
displayed using HTML and still images. Our View-Anywhere technology enables
images to be viewed on almost all computer platforms using a standard Web
browser. Our email virtual tour is based upon our proprietary standalone viewer
platform which was developed using a combination of Windows and Java software.
Our email virtual tour can be viewed on any computer running Microsoft's
Windows 95, Windows 98 or Windows NT operating systems.
Competition
While the market for online virtual tours for real estate is relatively new,
it is already competitive and characterized by entrants that may have or may
develop online virtual tours similar to ours. In addition, there are
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relatively low barriers to entry to our business. Moreover, due to the low cost
of entering the online virtual tours market, competition may intensify and
increase in the future. We currently compete with traditional methods used by
real estate agents to market properties for sale, including classified ads,
brochures and still photos. We may also face competition from companies that
have developed virtual tour technology but are not currently focused on the
real estate industry. This competition may limit our ability to become
profitable or result in the loss of market share. We compete on the basis of
certain factors, including: quality and breadth of service, price, brand
recognition and distribution. We believe that we compete favorably with respect
to each of these factors.
Most of our employees are not subject to noncompetition agreements. In
addition, even though most of our key and technical employees are covered by
proprietary rights agreements, our business model does not involve the use of a
large amount of proprietary information. As a result, we are subject to the
risk that our employees may leave us and may start competing businesses. The
emergence of these enterprises will further increase the level of competition
in our market and could harm our financial performance.
Intellectual Property
We rely on trademarks and trade secrets, as well as confidentiality
agreements and other contractual restrictions with employees and third parties,
to establish and protect our proprietary rights. Despite these precautions, we
cannot be sure that the measures we undertake will be adequate to protect our
proprietary technology, or that they will preclude competitors from
independently developing products with functionality or features similar to our
products. We cannot be sure that the precautions we take will prevent
misappropriation or infringement of our technology. We have filed two patent
applications in the United States with respect to our video image processing
system technology and with respect to virtual tour display technology. However,
it is possible that a patent may not be issued for this application. An issued
patent may not adequately protect our technology from infringement or prevent
others from claiming that our technology infringes that of third parties.
Failure to protect our intellectual property could materially harm our
business. In addition, our competitors may independently develop similar or
superior technology. It is possible that litigation may be necessary in the
future to enforce our intellectual property rights, to protect our trade
secrets or to determine the validity and scope of the proprietary right of
others. Litigation could result in substantial costs and diversion of our
resources and could materially harm our business.
We may receive in the future, notice of claims of infringement of other
parties' proprietary rights. Infringement or other claims could be asserted or
prosecuted against us in the future, and it is possible that past or future
assertions or prosecutions could harm our business. Any such claims, with or
without merit, could be time-consuming, result in costly litigation and
diversion of technical and management personnel, cause delays in the
development and release of our products, or require us to develop non-
infringing technology or enter into royalty or licensing arrangements. Such
royalty or licensing arrangements, if required, may not be available on terms
acceptable to us, or at all. For these reasons, infringement claims could
materially harm our business.
Research and Development
As of July 15, 1999, we had 10 employees engaged in research and development
related to content capture, processing technology and viewer and user
experience enhancements. We expended approximately $242,917, $41,567 and
$23,829 for the years ended December 31, 1998, 1997 and 1996, respectively, on
research and development. We expect to expend resources on research and
development in amounts necessary to continue improvements in content capture
and processing technology and viewer and user enhancements in amounts necessary
to ensure our virtual tour business remains competitive.
Legal Proceedings
Bamboo.com is not a party to any material legal proceedings.
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Employees
As of June 30, 1999, we employed 130 full-time employees in the United States
and 28 full-time employees in Canada, and 48 full time equivalent independent
contractors in our video processing and customer service call center in Canada.
Our employees are not covered by any collective bargaining agreements. We
believe that our employee relations are good. There is significant competition
for employees with the managerial, technical, marketing, sales and other skills
required to operate our business. Our success will depend upon our ability to
attract, retain and motivate employees.
Facilities
We lease office space in Palo Alto, California for our corporate
headquarters. The current lease expires on February 2, 2002. We also lease
office space in Toronto for our video processing and customer service call
center. The current leases expire in May 2000 and February 2002, respectively.
We also lease office space for our sales offices in San Diego, California and
Chicago, Illinois.
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MANAGEMENT
Directors and Executive Officers
The following table sets forth the directors and executive officers of
bamboo.com, their ages and the positions held by them with bamboo.com as of
July 20, 1999:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Leonard B. McCurdy...... 52 Chairman of the Board and Chief Executive Officer
Randall I. Bresee....... 51 Chief Financial Officer
Kevin B. McCurdy........ 25 Founder, Executive Vice President and Director
Andrew P. Laszlo........ 40 Senior Vice President, Business Development
Mark R. Searle.......... 36 Chief Operating Officer
John Assaraf............ 37 Senior Vice President, Sales
Howard Field............ 26 Co-Founder and Vice President
Andrew J. Aicklen....... 46 Vice President and General Manager Canadian Operations
Duncan Fortier.......... 55 Director
Philip Sanderson........ 31 Director
John Moragne............ 42 Director
James D. Marver......... 49 Director
</TABLE>
John Moragne and Philip Sanderson comprise bamboo.com's audit committee. John
Moragne and Duncan Fortier comprise bamboo.com's compensation committee.
Leonard B. McCurdy has served as Chairman and a member of the Board since our
inception. Since January 1999, Mr. McCurdy has served as our Chief Executive
Officer. Since 1991, Mr. McCurdy has served as the President of Lanek Limited,
a private investment holding company. Lanek Limited is a stockholder of
bamboo.com. From 1988 to 1991 Mr. McCurdy served as President and Chief
Executive Officer of ISM Information Systems Management Corporation, a company
that provided large technology solutions. Mr. McCurdy is the father of Kevin B.
McCurdy.
Randall I. Bresee joined bamboo.com as Chief Financial Officer in April 1999.
From January 1997 to April 1999 Mr. Bresee served as Vice President and
Controller for Santa Cruz Operation, Inc., a Unix software provider, and from
May 1996 to January 1997, he served as a Director of Finance and Controller.
From August 1988 to May 1996, Mr. Bresee served as a Director of Finance and
Controller for Silicon Graphics, Inc., a computer manufacturer. Mr. Bresee
holds a B.A. from Humboldt State University.
Kevin B. McCurdy founded bamboo.com in November 1995 and has served as an
executive officer and director since its inception. From September 1991 to June
1995, Mr. McCurdy attended Babson College where he earned a Bachelor of Science
in Business Administration. Mr. McCurdy is the son of Leonard B. McCurdy.
Andrew P. Laszlo joined bamboo.com as Senior Vice President, Business
Development in January 1999. From September 1997 to January 1999, Mr. Laszlo
served as a Business Development Manager at Intel Corporation. From September
1995 to June 1997, Mr. Laszlo attended business school. From December 1989 to
August 1995, Mr. Laszlo practiced corporate law with Cohen, Berke, Bernstein,
Brodie, Kondell & Laszlo, P.A. Mr. Laszlo holds a B.A. in English from Wesleyan
University, a J.D. from George Washington University and an M.B.A. from the
University of California, Berkeley.
Mark R. Searle joined bamboo.com as Chief Operating Officer in January 1999.
From October 1997 to November 1998, Mr. Searle served as the Chief Operating
Officer of Cybergold, Inc., an online incentive marketing company. From
December 1994 to April 1997, Mr. Searle served as the Vice President of
Operations and Chief Operating Officer of Plynetics Express Corporation, a
rapid prototyping company. From August 1994 to December 1994, Mr. Searle served
as a Senior Consultant for Deloitte & Touche, LLP. Mr.
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Searle holds a B.A. in English and Creative Writing from Princeton University
and an M.B.A. from the Harvard Graduate School of Business.
John Assaraf joined bamboo.com as Senior Vice President, Sales in January
1999. From November 1987 to May 1999, Mr. Assaraf served as regional director
and president of RE/MAX of Indiana, a real estate franchising company.
Howard Field is a co-founder of bamboo.com and currently serves as a Vice
President. He also served as a director from February 1996 to February 1998. In
addition, from February 1996 to February 1998, Mr. Field served as our
President and Chief Operating Officer. From September 1991 to June 1995, Mr.
Field attended Babson College where he earned a Bachelor of Science in Business
Administration.
Andrew J. Aicklen joined bamboo.com as Vice President and General Manager,
Canadian Operations in March 1999. From October 1991 to March 1999, Mr. Aicklen
served as President of Information Access Inc., a company he co-founded that
provides software distribution services. From June 1985 to January 1991,
Mr. Aicklen served in various positions with Oracle Corporation, most recently
as a Vice President. Mr. Aicklen holds an M.B.A. from the University of Houston
and a B.A. from the University of Texas at Austin.
Duncan Fortier has served as a director of bamboo.com since March 1999. Mr.
Fortier is the President of Jascan Investments, Inc., an investment holding
company, a position he has held since 1992. Previously he served as Executive
Vice President of ISM Information Systems Management Corporation.
Philip Sanderson has served as a director of bamboo.com since March 1999. Mr.
Sanderson is a Partner with Walden Media, L.L.C., a private equity investment
firm. Mr. Sanderson joined Walden Media, L.L.C. as an associate in July 1997.
From September 1995 to June 1997, Mr. Sanderson attended the Harvard Graduate
School of Business. From April 1993 to August 1995, Mr. Sanderson was an
associate with Robertson Stephens, an investment banking firm. From August 1990
to January 1993, Mr. Sanderson worked in the corporate finance group at Goldman
Sachs & Co., an investment banking firm. Mr. Sanderson holds a B.A. from
Hamilton College and an M.B.A. from the Harvard Graduate School of Business.
John Moragne has served as a director of bamboo.com since March 1999. Since
May 1993, Mr. Moragne has served as Managing Director of Trident Capital, a
private equity investment firm. Mr. Moragne is currently a director of DAOU
Systems, Inc., MapQuest.com, Inc. and Newgen Results Corp. Mr. Moragne holds a
B.A. from Dartmouth College, an M.S. from the Stanford Graduate School of
Applied Earth Sciences and an M.B.A. from the Stanford Graduate School of
Business.
James D. Marver has served as a director of bamboo.com since June 1999. Mr.
Marver has been a Managing Partner at VantagePoint Venture Partners since co-
founding the private equity investment firm in 1996. From 1988 to 1996, Mr.
Marver was Senior Managing Director and Head of the Global Technology Group at
Bear Stearns & Co. Inc., an investment banking firm, as well as Head of the San
Francisco Investment Banking office. Mr. Marver holds a B.A. from Williams
College and a Ph.D. from the University of California, Berkeley.
Board Composition
We currently have authorized seven directors, although the number of
authorized directors will be reduced to five approximately 15 days after the
closing of this offering, as described below. In accordance with the terms of
our Amended and Restated Certificate of Incorporation which will be in effect
upon the closing of this offering, the terms of office of the members of the
Board of Directors will be divided into three classes: Class I, whose term will
expire at the annual meeting of stockholders to be held in 2000, Class II,
whose term will expire at the annual meeting of stockholders to be held in
2001, and Class III, whose term will expire at the annual meeting of
stockholders to be held in 2002. The Class I directors are James Marver, John
Moragne, and Phillip Sanderson, the Class II director is Duncan Fortier and one
vacancy exists and the Class III directors are Kevin B. McCurdy and Leonard B.
McCurdy. In addition, 15 days after we have redeemed all shares of
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Series C redeemable preferred stock, the term of office of James D. Marver
shall expire and the authorized number of Class I directors shall be reduced by
one and the authorized number of Class II directors shall be reduced by one,
eliminating the current vacancy. At each annual meeting, the successors to
directors whose term will then expire will be elected to serve until the third
annual meeting. In addition, our bylaws provide that the authorized number of
directors may be changed by resolution of the Board of Directors. Any
additional directorships resulting from an increase in the number of directors
may be filled by resolution of the Board of Directors and will be distributed
among the three classes so that, as nearly as possible, each class will consist
of one-third of the total number of directors. This classification of the Board
of Directors may have the effect of delaying or preventing changes in our
control or management.
Each officer is elected by, and serves at the discretion of, the Board of
Directors. Each of our officers and directors, other than nonemployee
directors, devotes full time to the affairs of bamboo.com. Our nonemployee
directors devote such time to our affairs as is necessary to discharge their
duties. There are no close family relationships among any of the directors,
officers or key employees of bamboo.com other than the father-son relationship
between Leonard B. McCurdy and Kevin B. McCurdy.
Board Committees
The Audit Committee of the Board of Directors reviews the internal accounting
procedures of bamboo.com and consults with and reviews the services provided by
our independent accountants. The Audit Committee currently consists of John
Moragne and Philip Sanderson.
The Compensation Committee of the Board of Directors reviews and recommends
to the Board the compensation and benefits of all executive officers of
bamboo.com, administers bamboo.com's stock option plan and establishes and
reviews general policies relating to compensation and benefits of employees of
bamboo.com. The Compensation Committee currently consists of John Moragne and
Duncan Fortier. Except as set forth in "Interests of Management and Others in
Transactions," no interlocking relationships exist between our Board of
Directors or Compensation Committee and the board of directors or compensation
committee of any other company, nor has any interlocking relationship existed
in the past.
Director Compensation
Our directors do not currently receive cash compensation from bamboo.com for
their service as members of the Board of Directors, although they are
reimbursed for certain expenses in connection with attendance at Board and
Committee meetings. We do not provide additional compensation for committee
participation or special assignments of the Board of Directors. From time to
time, our directors have received and may continue to receive grants of options
to purchase shares of bamboo.com's common stock pursuant to the 1998 Employee,
Director and Consultant Stock Plan.
40
<PAGE>
Executive Compensation
The following table sets forth the total compensation received for services
rendered to bamboo.com during the fiscal year ended December 31, 1998 by our
Chief Executive Officer and other executive officers who received salary, bonus
and restricted stock for such fiscal year in excess of $100,000 and key
executive personnel for the fiscal year ended December 31, 1998 and key
executive personnel as of June 30, 1999 (the "Named Executive Officers"). The
titles listed below are the titles of the Named Executive Officers as of
June 30, 1999. In the table below, Other Annual Compensation for all of the
Named Executive Officers is composed entirely of options granted to the Named
Executive Officers that had exercise prices at the time of issuance below the
then current fair market value of the shares to be acquired upon exercise.
Leonard McCurdy will be compensated at an annual base salary of $150,000 during
the fiscal year ending on December 31, 1999. Kevin McCurdy will be compensated
at an annual base salary of $136,000 during the fiscal year ending on December
31, 1999. Mr. Bresee joined bamboo.com in April 1999 as its Chief Financial
Officer and will be compensated at an annual base salary of $135,000 during the
fiscal year ending on December 31, 1999. Mr. Laszlo joined bamboo.com in
January 1999 as its Senior Vice President, Business Development and will be
compensated at an annual base salary of $132,000 during the fiscal year ending
on December 31, 1999. Mr. Searle joined bamboo.com in January 1999 as its Chief
Operating Officer and will be compensated at an annual base salary of $120,000
during the fiscal year ending on December 31, 1999.
<TABLE>
<CAPTION>
Long-Term
Compensation Awards
---------------------
Annual Compensation Restricted Securities
---------------------------------- Stock Underlying
Name and Principal Bonus Other Annual Options
Position Salary($)(1) ($) Compensation($) Awards ($) (#)
- ------------------ ------------ ----- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Leonard B. McCurdy(2)
Chairman of the Board
and
Chief Executive
Officer................ $10,109 $-- $137,643 $34,758 560,000
Kevin B. McCurdy,
Executive Vice
President.............. 20,962 -- 102,340 34,758 420,000
Howard Field, Vice
President.............. 25,368 -- 96,978 34,758 392,000
Randall I. Bresee, Chief
Financial Officer...... -- -- -- -- --
Andrew P. Laszlo, Senior
Vice President,
Business Development... -- -- -- -- --
Mark R. Searle, Chief
Operating Officer...... -- -- -- -- --
</TABLE>
- --------
(1) Leonard McCurdy, Kevin McCurdy and Howard Field received $10,109, $20,962
and $25,308, respectively, for fees for services rendered to us for fiscal
year ended December 31, 1998.
(2) These options and stock were granted to Lanek Limited, an entity affiliated
with Leonard McCurdy.
41
<PAGE>
Option Grants in Last Fiscal Year and the Six Months Ended June 30, 1999
The following table sets forth grants of stock options to each of the Named
Executive Officers during the year ended December 31, 1998. All of the stock
options listed below were fully vested and exercisable on the date of grant and
were exercised during 1998. bamboo.com has never granted any stock appreciation
rights. The potential realizable value is calculated by assuming that the
initial public offering price appreciates at the indicated rate for the entire
term of the option and that the option is exercised at the exercise price on
the last day at the appreciated price. The 5% and 10% assumed annual rates of
stock price appreciation are mandated by the rules of the Securities and
Exchange Commission and do not represent our estimate or projection of future
common stock prices.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------
Number of Percent of Potential Realizable Value at
Securities Total Options Assumed Annual Rates of Stock
Underlying Granted to Exercise or Price Appreciation for Option Term
Options Employees in Base Price Expiration ----------------------------------
Name Granted Fiscal Year(1) ($/Sh) Date 0% 5% 10%
---- ---------- -------------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Leonard B. McCurdy(2)... 560,000 29.94% $0.002 02/12/08 $6,158,880 $10,032,871 $15,976,334
Kevin B. McCurdy........ 280,000 14.97% 0.002 02/12/08 3,079,440 5,016,435 7,988,167
140,000 7.48% 0.002 05/31/08 1,539,720 2,508,218 3,994,083
Howard Field............ 280,000 14.97% 0.002 02/12/08 3,079,440 5,016,435 7,988,167
112,000 5.99% 0.002 05/31/08 1,231,776 2,006,574 3,195,267
Randall I. Bresee....... -- -- -- --
Andrew P. Laszlo........ -- -- -- --
Mark R. Searle.......... -- -- -- --
</TABLE>
- --------
(1) In 1998, we granted options to purchase an aggregate of 1,870,680 shares of
common stock.
(2) These options were granted to Lanek Limited, an entity affiliated with
Leonard McCurdy.
The following table sets forth option grants to the Named Executive Officers
for the time period of January 1, 1999 to June 30, 1999.
<TABLE>
<CAPTION>
Individual Grants
--------------------------------
Number of
Securities
Underlying Exercise
Options Prices Expiration
Name Granted ($/sh) Date
---- ---------- -------- ----------
<S> <C> <C> <C>
Leonard B. McCurdy............................. 42,000(1) $0.18 1/1/09
336,000(2) $0.18 2/2/09
Kevin B. McCurdy............................... 42,000(1) $0.18 1/1/09
268,800(2) $0.18 2/2/09
Howard Field................................... 51,445(1) $0.18 1/1/09
168,000(2) $0.18 2/2/09
Randall I. Bresee.............................. 210,000(3) $0.27 4/6/09
Andrew P. Laszlo............................... 301,000(1) $0.18 1/1/09
336,000(2) $0.18 2/2/09
28,000(1) $0.27 4/6/09
Mark R. Searle................................. 112,000(3) $0.18 2/2/09
56,000(3) $0.27 4/6/09
</TABLE>
- --------
(1) These options were fully exercisable on the date of grant.
(2) These options become fully exercisable upon the completion of this
offering.
(3) 25% of the shares subject to these options become exercisable upon the
completion of this offering.
42
<PAGE>
Option Exercises During the Last Fiscal Year
The following table provides summary information concerning option exercises
for the fiscal year ended December 31, 1998 by each of the Named Executive
Officers. The Named Executive Officers did not hold any options as of December
31, 1998.
<TABLE>
<CAPTION>
Shares
Acquired Value
Name On Exercise (#) Realized ($)
---- --------------- ------------
<S> <C> <C>
Leonard B. McCurdy(1)............................. 560,000 $137,643
Kevin B. McCurdy.................................. 420,000 102,340
Howard Field...................................... 392,000 96,978
Randall I. Bresee................................. -- --
Andrew P. Laszlo.................................. -- --
Mark R. Searle.................................... -- --
</TABLE>
- --------
(1) These options were granted to Lanek Limited, an entity affiliated with
Leonard McCurdy.
Stock Plans
Amended and Restated 1998 Employee, Director and Consultant Stock Plan
The Board of Directors adopted the 1998 Employee, Director and Consultant
Stock Plan (the "1998 Plan") in December 1998 and the stockholders approved the
1998 Plan in December 1998. In connection with this offering, the Board of
Directors approved the amendment and restatement of the 1998 Plan in July 1999
and the stockholders approved the amendment and restatement in July 1999. The
1998 Plan provides for the grant to employees of incentive stock options within
the meaning of Section 422 of the Internal Revenue Code and for the grant to
employees, directors and consultants of nonstatutory stock options and stock
purchase rights.
Number of Shares of Common Stock Available under the 1998 Plan
As of June 30, 1999, a total of 6,779,394 shares of common stock were
reserved for issuance pursuant to the 1998 Plan, of which options to acquire
6,027,386 shares were issued and outstanding as of that date. As part of the
1999 amendment and restatement of the 1998 Plan, the Board of Directors and the
stockholders subsequently approved an increase of 1,400,000 shares for issuance
under the 1998 Plan, and for annual increases in the number of shares available
for issuance under the 1998 Plan, on the first day of each new fiscal year of
bamboo.com beginning with fiscal 2000, equal to the lesser of 5% of the
outstanding shares of common stock on the first day of the fiscal year, 2
million shares or such lesser amount as the Board of Directors may determine.
Administration of the 1998 Plan
The Board of Directors or a committee of the Board (as applicable, the
"administrator") administers the 1998 Plan. In the case of options intended to
qualify as "performance-based compensation" within the meaning of Section
162(m) of the Internal Revenue Code, the committee will consist of two or more
"outside directors" within the meaning of Section 162(m) of the Internal
Revenue Code. The administrator has the power to determine the terms of the
options or stock purchase rights granted, including the exercise price, the
number of shares subject to each option or stock purchase right, the
exercisability of the options and the form of consideration payable upon
exercise.
Options
The administrator determines the exercise price of nonstatutory stock options
granted under the 1998 Plan, but with respect to nonstatutory stock options
intended to qualify as "performance-based compensation" within the meaning of
Section 162(m) of the Internal Revenue Code, the exercise price must be equal
to at
43
<PAGE>
least the fair market value of the common stock on the date of grant. With
respect to any participant who owns stock possessing more than 10% of the
voting power of all classes of our outstanding capital stock, the exercise
price of any incentive stock option granted must equal at least 110% of the
fair market value on the grant date and the term of any incentive stock option
may not exceed five years. The term of all other options granted under the 1998
Plan may not exceed ten years.
After termination of an optionee's status as an employee, director or
consultant of bamboo.com, an optionee generally must exercise an option granted
under the 1998 Plan within the time period set forth in the optionee's option
agreement, or in the absence of a specified time within 3 months or within 12
months after the optionee's termination by death or disability, but in no event
later than the expiration of the option's ten year term.
Stock Purchase Rights
The administrator determines the exercise price of stock purchase rights
granted under the 1998 Plan. Unless the administrator determines otherwise, the
restricted stock purchase agreement entered into in connection with the
exercise of the stock purchase right shall grant us a repurchase option that
bamboo.com may exercise upon the voluntary or involuntary termination of the
purchaser's service with bamboo.com for any reason, including death or
disability. The purchase price for share repurchases pursuant to restricted
stock purchase agreements shall be the original price paid by the purchaser and
may be paid by cancellation of any indebtedness of the purchaser to bamboo.com.
Any repurchase option shall lapse at the rate that the administrator
determines.
Transferability of Options and Stock Purchase Rights
An optionee generally may not transfer options and stock purchase rights
granted under the 1998 Plan, and only the optionee may exercise an option or
stock purchase right during his or her lifetime.
Adjustments upon Merger or Asset Sale
The 1998 Plan provides that in the event of a merger of bamboo.com with or
into another corporation or a sale of substantially all of our assets, the
successor corporation shall assume or substitute each option or stock purchase
right. If the outstanding options or stock purchase rights are not assumed or
substituted, the administrator shall provide notice to the optionee that he or
she has the right to exercise the option or stock purchase right as to all of
the shares subject to the option or stock purchase right, including shares
which would not otherwise be exercisable, for a period of fifteen days from the
date of the notice. The option or stock purchase right will terminate upon the
expiration of the fifteen-day period. In addition, options granted under the
1998 Plan may provide, and past grants have provided, for additional vesting in
the event of a change of control of bamboo.com.
Amendment and Termination of the 1998 Plan
Unless terminated sooner, the 1998 Plan will terminate automatically in 2008.
In addition, the administrator has the authority to amend, suspend or terminate
the 1998 Plan, provided that no such action may affect any share of common
stock previously issued and sold or any option previously granted under the
1998 Plan.
1999 Employee Stock Purchase Plan
The Board of Directors adopted the 1999 Employee Stock Purchase Plan in June
1999, and the stockholders approved the Purchase Plan in July 1999.
Number of Shares of Common Stock Available under the Purchase Plan
A total of 700,000 shares of common stock has been reserved for issuance
under the Purchase Plan. In addition, the Purchase Plan provides for annual
increases in the number of shares available for issuance under
44
<PAGE>
the Purchase Plan on the first day of each fiscal year, beginning with fiscal
2000, equal to the lesser of 2.5% of the outstanding shares of common stock on
the first day of the fiscal year, 700,000 shares or such lesser amount as may
be determined by the board.
Administration of the Purchase Plan
The Board of Directors or a committee appointed by the board administers the
Purchase Plan. The Board or its committee has full and exclusive authority to
interpret the terms of the Purchase Plan and determine eligibility.
Eligibility to Participate
Employees are eligible to participate if they are customarily employed by
bamboo.com or our subsidiary for at least 20 hours per week over five months in
any calendar year. However, an employee may not be granted an option to
purchase stock under the Purchase Plan if such an employee:
. immediately after grant owns stock possessing 5% or more of the total
combined voting power or value of all classes of the capital stock of
bamboo.com, or
. whose rights to purchase stock under all employee stock purchase plans of
bamboo.com accrues at a rate which exceeds $25,000 worth of stock for
each calendar year.
Offering Periods and Contributions
The Purchase Plan, which is intended to qualify under Section 423 of the
Code, contains consecutive, overlapping 24 month offering periods. Each
offering period includes four 6 month purchase periods. The offering periods
generally start on the first trading day on or after May 1 and November 1 of
each year, except for the first such offering period which will commence on the
first trading day on or after the effective date of this offering and will end
on the last trading day on or before April 30, 2001.
The Purchase Plan permits participants to purchase common stock through
payroll deductions of up to 15% of the participant's "compensation."
Compensation is defined as the participant's base straight time gross earnings
and commissions but excludes payments for overtime, shift premium payments,
incentive compensation, incentive payments, bonuses and other compensation. The
maximum number of shares a participant may purchase during a single offering
period is 10,000 shares.
Purchase of Shares
Amounts deducted and accumulated by the participant are used to purchase
shares of common stock at the end of each offering period. The price of the
stock purchased under the Purchase Plan is 85% of the lower of the fair market
value of the common stock at the beginning of the offering period or the end of
the applicable purchase period. In the event the fair market value at the end
of a purchase period is less than the fair market value of the Common Stock at
the beginning of the offering period, participants will be withdrawn from the
current offering period and will automatically be re-enrolled in a new offering
period. Participants may end their participation at any time during an offering
period, and they will be paid their payroll deductions to date. Participation
ends automatically upon termination of employment with bamboo.com.
Transferability of Rights
A participant may not transfer rights granted under the Purchase Plan other
than by will, the laws of descent and distribution or as may be otherwise
provided under the Purchase Plan.
Adjustments upon Merger or Asset Sale
The Purchase Plan provides that, in the event of a merger of bamboo.com with
or into another corporation or a sale of substantially all of our assets, the
successor corporation may assume or substitute for each
45
<PAGE>
outstanding right to purchase shares of Common Stock under the Purchase Plan.
If the successor corporation refuses to assume or substitute for the
outstanding options, the offering period then in progress will be shortened,
and a new exercise date will be set.
Amendment and Termination of the Purchase Plan
The 1999 Purchase Plan will terminate in 2009. However, the Board of
Directors has the authority to amend or terminate the Purchase Plan, except
that, subject to certain exceptions described in the Purchase Plan, no such
action may adversely affect any outstanding rights to purchase stock under the
Purchase Plan.
Employment Agreements and Change of Control Arrangements
We have entered into employment agreements with Leonard McCurdy, Kevin
McCurdy, Howard Field, and Andrew Laszlo. These agreements have initial two-
year terms, and thereafter are automatically renewed on a yearly basis, absent
notification by either party to the contrary. These agreements also provide
that Leonard McCurdy, Kevin McCurdy, Mr. Field, and Mr. Laszlo each would be
granted an option to purchase shares of our Common Stock at an exercise price
of $0.18, vesting monthly over 24 months, in the following amounts: 336,000
shares, 268,800 shares, 168,000 shares and 336,000 shares, respectively. These
agreements provide that these options shall become fully vested upon a change
of control or the completion of this offering. These agreements provide that in
the event the executive is constructively or actually terminated without cause,
the executive shall be entitled to six monthly severance payments equal to one-
twelfth the executive's annual base salary as of the date of termination. At
the time of each monthly severance payment, Mr. Laszlo will also be entitled to
one-twelfth of the bonus compensation paid to him in the preceeding fiscal
year. In the event of such a termination, Leonard McCurdy and Mr. Laszlo shall
also be reimbursed up to $1500 per month and Kevin McCurdy and Mr. Field shall
also be reimbursed up to $750 per month for premium payments for group health
coverage for up to 12 months. A full acceleration of option vesting also shall
follow the constructive or actual termination of an executive without cause. If
the executive is terminated within 2 years of a change in control, the
executive is entitled to a lump sum payment within 10 days of such termination,
instead of monthly severance payments. These agreements provide that in the
event any payment or benefit by us to the executive is determined to be subject
to the golden parachute excise tax rules, the executive shall be entitled to
reimbursement by us in an amount sufficient to pay the excise tax and any
applicable federal and state income taxes on such reimbursement. The
executive's right to receive the benefits set forth above will immediately
terminate if the executive competes with us during the 12 months following
termination of employment or upon breach of any confidentiality agreement with
us.
In accordance with the terms of their option agreements under our 1998 Plan,
whether or not the options are assumed or substituted in a merger, acquisition
or asset sale, each Named Executive Officer's outstanding options, subject to
vesting, shall vest and become exercisable as to 50% of the unvested shares at
the time of such merger, acquisition or sale of assets.
46
<PAGE>
INTERESTS OF MANAGEMENT AND OTHERS IN TRANSACTIONS
Since January 1, 1998, some of our directors, executive officers and
affiliates have entered into transactions with us as follows:
<TABLE>
<CAPTION>
Price
Date of per
Name Purchase Type of Security Security Number of Securities(1)
- ------------------------ --------- ------------------------ -------- -----------------------
<S> <C> <C> <C> <C>
Jane McCurdy(2)......... 3/31/1998 Common Stock $ 0.25(10) 2,800
Kristy McCurdy(2)....... 3/31/1998 Common Stock $ 0.25(10) 2,800
4/8/1998 Common Stock $ 0.25(10) 15,400
Howard Field............ 3/31/1998 Common Stock $ 0.25(10) 168,000
4/8/1998 Common Stock $ 0.25(10) 15,400
6/28/1998 Common Stock units(6) $ 0.24(10) 35,000
Lanek Limited........... 3/31/1998 Common Stock $ 0.25(10) 361,200
6/28/1998 Common Stock units(6) $ 0.24(10) 70,000
Lisa Field(3)........... 3/31/1998 Common Stock $ 0.25(10) 5,600
Peter Field(3).......... 3/31/1998 Common Stock $ 0.25(10) 5,600
Carol Smith Slavens(3).. 3/31/1998 Common Stock $ 0.25(10) 8,400
12/8/1998 Series A Preferred Stock $ 1.43 35,000
Paul Slavens(3)......... 3/31/1998 Common Stock $ 0.25(10) 5,600
Mark Stephenson(4)...... 2/12/1998 Option to purchase -- 280,000
Common Stock
5/31/1998 Option to purchase -- 112,000
Common Stock
Vestmark Limited........ 6/28/1998 Common Stock units(6) $ 0.24(10) 35,000
4/8/1998 Common Stock $ 0.25(10) 70,000
5/22/1998 Common Stock (5) 285,600
1/1/1999 Option to purchase -- 7,700
Common Stock
Duncan Fortier.......... 4/21/1998 Common Stock $ 0.25(10) 42,000
2/2/1999 Option to purchase -- 33,600
Common Stock
4/6/1999 Option to purchase -- 50,400
Common Stock
Jascan Investments,
Inc.(7)................. 4/21/1998 Common Stock $ 0.25(10) 70,000
6/28/1998 Common Stock units(6) $ 0.24(10) 140,000
Walden Media and
Information Technology 2/18/1999 Convertible $850,000 $850,000 principal;
Fund, L.P.(8)........... subordinated 10% interest per
promissory note year; convertible
into Series B
preferred stock
3/12/1999 Series B Preferred Stock $ 2.074 1,374,204
5/5/1999 Series B Preferred Stock $ 2.074 482,177
Walden Japan Partners,
L.P. (8)................ 3/12/1999 Series B Preferred Stock $ 2.074 96,435
</TABLE>
47
<PAGE>
<TABLE>
<CAPTION>
Date of Price per
Name Purchase Type of Security Security Number of Securities
- ------------------------ --------- ------------------------ --------- --------------------
<S> <C> <C> <C> <C>
Walden EDB Partners,
L.P.(7)................ 3/12/1999 Series B Preferred Stock $2.074 96,435
Information Associates-
II, L.P.(8)............ 3/12/1999 Series B Preferred Stock $2.074 2,277,996
IA-II Affiliates Fund,
L.L.C.(8).............. 3/12/1999 Series B Preferred Stock $2.074 132,888
Intel Corporation....... 3/12/1999 Series B Preferred Stock $2.074 1,205,440
</TABLE>
- --------
(1) The number of shares of Series A and Series B preferred stock shown in the
table are adjusted to reflect the number of shares of common stock into
which the preferred stock will convert upon the consummation of the
offering.
(2) A relative of Leonard and Kevin McCurdy.
(3) A relative of Howard Field.
(4) Mr. Stephenson is an affiliate of Vestmark Limited and these options have
been exercised prior to this offering.
(5) These shares were issued as compensation for prior services performed by
Mr. Stephenson.
(6) Each unit consisted of one share of common stock and a warrant to purchase
one share of common stock at an exercise price of C$0.36.
(7) An entity affiliated with Duncan Fortier.
(8) An affiliate of Philip Sanderson.
(9) An affiliate of John Moragne.
(10) Each of these transactions were at C$0.36 which has been translated to US
dollars using the exchange rate in effect at the date of the transaction.
Each of the individuals listed above have entered into lockup agreements
pursuant to which they have agreed not to offer or sell any shares of common
stock or securities convertible into or exchangeable or exercisable for shares
of common stock for a period of 180 days from the date of this prospectus
without the prior written consent of Prudential Securities, on behalf of the
underwriters. Prudential Securities may, at any time and without notice, waive
the terms of these lockup agreements.
On February 2, 1999, we made a secured loan in the amount of $53,750 to Mr.
Laszlo for the purchase of 301,000 shares of our common stock pursuant to the
stock option grant made to Mr. Laszlo on December 30, 1999. The loan accrues
interest at six percent (6%) per annum and is secured by a full recourse
promissory note, the 301,000 shares of our common stock and all proceeds of
such shares.
On March 12, 1999, the Company entered into a strategic alliance agreement
with Intel Corporation, a greater than five percent (5%) stock holder.
On June 1, 1999, we made a secured loan in the amount of $20,000 to Mr.
Laszlo for the purchase of an aggregate of 98,000 shares of our common stock
pursuant to stock option grants made to Mr. Laszlo in February 1999 and April
1999. The loan accrues interest at the rate of six percent (6%) per annum and
is secured by the 98,000 shares of our common stock and all proceeds of such
shares.
On January 1, 1999 we entered into employment agreements, which contain
severance provisions, with Leonard B. McCurdy, Kevin B. McCurdy, Howard Field
and Andrew P. Laszlo. These agreements are more fully described in
"Management--Employment Agreements and Change of Control Agreements."
On June 11, 1999, we issued VantagePoint Venture Partners III, L.P. and
VantagePoint Communication Partners, L.P., affiliates of our director James
Marver and together a greater than five percent (5%) stockholder, 758,078 and
379,042 shares of common stock, respectively, and 667 and 333 shares of Series
C redeemable preferred stock for an aggregate purchase price of $6,666,667 and
$3,333,333, respectively.
We have entered into indemnification agreements with our officers and
directors containing provisions that require us, among other things, to
indemnify our officers and directors against certain liabilities that may arise
by reason of their status or service as officers or directors (other than
liabilities arising from willful misconduct of a culpable nature) and to
advance their expenses incurred as a result of any proceeding against them as
to which they could be indemnified. See "Limitation of Liability and
Indemnification Matters."
48
<PAGE>
These individuals have entered into lock-up agreements pursuant to which we
and they have agreed not to offer or sell any shares of common stock or
securities convertible into or exchangeable or exercisable for shares of common
stock for a period of 180 days from the date of this prospectus without the
prior written consent of Prudential Securities, on behalf of the underwriters.
Prudential Securities may, at any time and without notice, waive the terms of
these lockup agreements.
49
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to beneficial
ownership of our common stock, as of June 30, 1999 and as adjusted to reflect
the sale of common stock offered by us pursuant to this offering and the
conversion of all currently outstanding shares of convertible preferred stock
into shares of common stock. The following table lists:
. each person known by us to beneficially own more than 5% of the common
stock;
. each director;
. each Named Executive Officer; and
. all directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting or investment power with
respect to the securities. The address for each listed director and officer is
c/o bamboo.com, Inc., 124 University Avenue, Palo Alto, California 94304.
Except as indicated by footnote, and subject to applicable community property
laws, the persons named in the table have sole voting and investment power with
respect to all shares of common stock shown as beneficially owned by them. The
number of shares of common stock outstanding used in calculating the percentage
for each listed person includes the shares of common stock underlying options
or warrants that are exercisable within 60 days of June 30, 1999, but excludes
shares of common stock underlying options held by any other persons. Percentage
of beneficial ownership prior to the offering is based on 16,383,650 shares of
common stock outstanding as of June 30, 1999 after giving effect to the
conversion of our currently outstanding Series A and Series B preferred stock.
Percentage of beneficial ownership after the offering is based on 21,383,650
shares outstanding after the offering and 1,780,184 shares subject to options
that become exercisable immediately upon the completion of the offering. Kevin
B. McCurdy, Howard Field, Vestmark Limited and Andrew P. Laszlo have granted
the Underwriters an option to purchase up to an aggregate of 280,000 shares to
cover over-allotments. If the Underwriters exercise the over-allotment options
in full, each of Mr. McCurdy, Mr. Field, Vestmark Limited and Mr. Laszlo shall
sell up to 140,000, 70,000, 42,000 and 28,000 shares, respectively. If such
over-allotment option is exercised in full, Mr. McCurdy's, Mr. Field's,
Vestmark Limited's and Mr. Laszlo's percentage of beneficial ownership of our
common stock after the offering will be 5.87%, 7.46%, 3.33% and 2.66%,
respectively.
<TABLE>
<CAPTION>
Percentage of Shares
Beneficially Owned
Shares ------------------------
Beneficially Prior to After
Name of Beneficial Owner Owned Offering Offering
- ------------------------ ------------ ---------- ----------
<S> <C> <C> <C>
Funds affiliated with Trident
Capital
John Moragne (1)............... 2,410,884 (2) 14.72% 10.41%
2480 Sand Hill Road
Menlo Park, CA 94025
Funds affiliated with Walden
Media and Information
Technology Fund, L.P.
Philip Sanderson(3)............ 2,049,251 (4) 12.51% 8.85%
750 Battery Street, 7th Floor
San Francisco, CA 94025
Funds affiliated with
VantagePoint Venture Partners
III L.P.
James P. Marver(5)............. 1,137,120 (6) 6.94% 4.91%
101 Bayhill Drive, Suite 100
San Bruno, CA 94066
Intel Corporation............... 1,205,440 7.36% 5.20%
2200 Mission College Blvd.
Santa Clara, CA 95052
Lanek Limited
Leonard B. McCurdy............. 2,125,200 (7) 12.97% 10.14%
Kevin B. McCurdy................ 1,363,600 (8) 8.32% 6.66%
Howard Field.................... 1,741,245 (9) 10.63% 8.00%
Vestmark Limited................ 825,300(10) 5.04% 3.62%
Duncan Fortier.................. 456,400(11) 2.79% 2.15%
Randall I. Bresee............... 0 * 0.23%(12)
Andrew P. Laszlo................ 441,000(13) 2.69% 2.87%
Mark R. Searle.................. 0 * 0.18%(14)
All directors and executive
officers as a group
(14 persons)................... 14,004,876(15) 85.48% 64.51%
</TABLE>
- --------
* Represents beneficial ownership of less than one percent of the common
stock.
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<PAGE>
(1) Mr. Moragne, a director of bamboo.com is a member of Trident Capital
Management-II, L.L.C., the general partner of Information Associates-II,
L.P. Mr. Moragne is also a member of IA-II Affiliates Fund, L.L.C. Mr.
Moragne disclaims beneficial ownership of the shares held by Information
Associates-II, L.P. and IA-II Affiliates Fund, L.L.C., except to the
extent of his pecuniary interest therein.
(2) Represents 2,277,996 shares held by Information Associates-II, L.P. and
132,888 shares held by IA-II Affiliates Fund L.L.C.
(3) Mr. Sanderson, a director of bamboo.com, is a partner of Walden Media,
L.L.C., the General Partner of Walden Media and Information Technology
Fund, L.P. and an affiliate of Walden Japan Partners, L.P., and Walden EDB
Partners, L.P. and disclaims beneficial ownership of the shares held by
Walden Media and Information Technology Fund, L.P., Walden Japan Partners,
L.P., and Walden EDB Partners, L.P. except to the extent of his
proportionate ownership interest therein.
(4) Represents 1,856,381 shares held by Walden Media and Information
Technology Fund, L.P., 96,435 shares held by Walden Japan Partners, L.P.,
and 96,435 shares held by Walden EDB Partners, L.P.
(5) Mr. Marver, a director of bamboo.com is a Managing Partner of VantagePoint
Venture Partners, an entity affiliated with VantagePoint Venture Partners
III, LP and VantagePoint Communications Partners, LP and disclaims
beneficial ownership of the shares held by VantagePoint Venture Partners
III, LP and VantagePoint Communications Partners, LP except to the extent
of his proportionate ownership interest therein.
(6) Represents 758,078 shares held by VantagePoint Venture Partners III, LP
and 379,042 shares held by VantagePoint Communications Partners, LP.
(7) Represents 1,971,200 shares held by Lanek Limited, a five percent
stockholder and affiliate of Leonard McCurdy, Chairman of our Board of
Directors and our Chief Executive, and 154,000 shares of common stock
beneficially owned as a result of options held by Leonard McCurdy and
Lanek Limited exercisable within 60 days of June 30, 1999 and includes
after the offering 224,000 shares that become exercisable upon the
completion of this offering.
(8) Includes 131,600 shares of common stock beneficially owned as a result of
options exercisable within 60 days of June 30, 1999 and includes after the
offering 179,200 shares that become exercisable upon the completion of
this offering.
(9) Includes 107,445 shares of common stock beneficially owned as a result of
options exercisable within 60 days of June 30, 1999 and includes after the
offering 112,000 shares that become exercisable upon the completion of
this offering.
(10) Includes 7,700 shares of common stock beneficially owned as a result of
options exercisable within 60 days of June 30, 1999 and includes after the
offering 12,600 shares held by Mark Stephenson, an affiliate of Vestmark
Limited, that become exercisable upon the completion of this offering.
(11) Includes 350,000 shares held by Jascan Investments Corporation, an entity
affiliated with Mr. Fortier and 64,400 shares of common stock beneficially
owned as a result of options exercisable within 60 days of June 30, 1999
and includes after the offering 42,000 shares that become exercisable upon
the completion of this offering.
(12) Includes after the offering 52,500 shares of common stock that become
exercisable upon the completion of this offering.
(13) Includes 42,000 shares of common stock beneficially owned as a result of
options exercisable within 60 days of June 30, 1999 and includes after the
offering 224,000 shares that become exercisable upon the completion of
this offering.
(14) Includes after the offering 42,000 shares of common stock that become
exercisable upon the completion of this offering.
(15) Includes options to purchase shares of our common stock issued to Mr.
Assaraf of which up to 154,000 are exercisable within 60 days of this
prospectus. Also includes options to purchase shares of our common stock
issued to Mr. Aicklen of which 95,436 are exercisable within 60 days of
this prospectus. Includes after the offering options to purchase shares of
our common stock issued to Mr. Assaraf of which 16,800 are exercisable
upon completion of this offering and options to purchase shares of our
common stock issued to Mr. Aicklen of which 33,600 are exercisable upon
completion of this offering.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
General
Bamboo.com's amended and restated certificate of incorporation, which will
become effective upon the closing of this offering, authorizes the issuance of
up to 70,000,000 shares of common stock, par value $0.001 per share, 7,421,536
shares of Class B common stock, par value $0.0001 per share and 5,001,100
shares of preferred stock, par value $0.001 per share, 1,100 shares of which
shall be designated Series C redeemable preferred stock and 5,000,000 shares of
which the rights and preferences of which may be established from time to time
by the Board of Directors. This description is only a summary. You should refer
to the amended and restated certificate of incorporation and bylaws which have
been filed with the Securities and Exchange Commission as exhibits to our
registration statement, of which this prospectus forms a part. As of June 30,
1999, 9,226,768 shares of common stock were outstanding and 2,556,024 shares of
preferred stock convertible into 7,156,882 shares of common stock upon the
completion of this offering were issued and outstanding. As of June 30, 1999,
we had 74 stockholders.
Common Stock
Each holder of common stock is entitled to one vote for each share on all
matters to be voted upon by the stockholders and there are no cumulative voting
rights. Subject to preferences to which holders of Preferred Stock issued after
the sale of the common stock offered hereby may be entitled, holders of common
stock are entitled to receive ratably such dividends, if any, as may be
declared from time to time by the Board of Directors out of funds legally
available therefor. Please see "Dividend Policy". In the event of a
liquidation, dissolution or winding up of bamboo.com, holders of common stock
would be entitled to share in bamboo.com's assets remaining after the payment
of liabilities and the satisfaction of any liquidation preference granted the
holders of any then outstanding shares of Preferred Stock. Holders of common
stock have no preemptive or conversion rights or other subscription rights and
there are no redemption or sinking fund provisions applicable to the common
stock. All outstanding shares of common stock are, and the shares of common
stock offered by bamboo.com in this offering, when issued and paid for, will
be, fully paid and nonassessable. The rights, preferences and privileges of the
holders of common stock are subject to, and may be adversely affected by the
rights of the holders of shares of any series of Preferred Stock, which
bamboo.com may designate in the future.
We have outstanding a warrant to purchase an aggregate of 280,000 shares of
our common stock at an aggregate exercise price of $400,000, which warrant
shall expire December 31, 1999. The shares issuable upon the exercise of this
warrant will be "restricted securities" under the Securities Act of 1933 but
are entitled to the registration rights described below.
Class B Common Stock
Each holder of Class B common stock is entitled to one vote for each share on
all matters to be voted upon by the stockholders and, except as required by
law, shall have voting rights and powers equal to the voting rights and powers
of their common stock. There are no cumulative voting rights. Holders of Class
B common stock are not entitled to dividends and are not entitled to receive
any assets of the corporation upon the dissolution or liquidation of
bamboo.com. Under the terms of our pairing agreement with our Canadian
subsidiary, bamboo.com Canada, holders of Class B common stock must also hold
an equal number of shares of Series C preferred stock of bamboo.com Canada,
Inc., our subsidiary. These holders may elect at any time and for no cost to
convert their bamboo.com Canada Series C preferred stock into shares of our
common stock. Upon such a conversion, we are required to redeem such holders'
shares of our Class B common stock for a redemption price of $0.0001 per share.
Preferred Stock
Upon the closing of this offering, the Board of Directors will be authorized,
without stockholder approval, from time to time to issue up to an aggregate of
5,000,000 shares of preferred stock, $0.001 par value per
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<PAGE>
share, in one or more series, each of such series to have such rights and
preferences, including voting rights, dividend rights, conversion rights,
redemption privileges and liquidation preferences, as shall be determined by
the Board of Directors. The rights of the holders of common stock will be
subject to, and may be adversely affected by, the rights of holders of any
preferred stock that may be issued in the future. Issuance of preferred stock,
while providing desirable flexibility in connection with possible acquisitions
and other corporate purposes, could either have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
attempting to acquire a majority of the outstanding stock of bamboo.com.
Bamboo.com has no present plans to issue any shares of preferred stock.
Registration Rights
Pursuant to the terms of the Investor Rights Agreement and upon the
consummation of this offering, the holders of 7,760,202 shares of the
outstanding common stock or their permitted transferees are entitled to certain
rights with respect to the registration of such shares under the Securities
Act. The holders of at least 60% of the registrable securities may require us,
subject to certain limitations, to file a registration statement covering at
least 30% of the registrable securities or any lesser amount of shares if the
aggregate gross offering price of at least $10 million. We are not required to
effect (i) more than two such registrations pursuant to such demand
registration rights; (ii) a registration within 60 days following the
determination by our Board of Directors to file a registration statement; (iii)
a registration during the period in which any other registration statement has
been filed or has been declared effective within the prior six months; or (iv)
a registration for a period not to exceed 90 days, if the Board of Directors of
bamboo.com has made a good faith determination that such registration would be
seriously detrimental to bamboo.com or to its stockholders. Furthermore,
pursuant to the terms of the Investor Rights Agreement, the holders of the
registrable securities are entitled to certain piggyback registration rights in
connection with any registration by us of our securities for its own account or
the account of other security holders. In the event that we propose to register
any shares of common stock under the Securities Act, the holders of such
piggyback registration rights are entitled to receive notice of such
registration and are entitled to include their shares therein.
At any time after we become eligible to file a registration statement on Form
S-3, holders of $1,000,000 of registrable securities may require us to file
registration statements on Form S-3 under the Securities Act with respect to
their shares of common stock. We are not required to effect more than one such
registration in any 12 month period.
Each of the foregoing registration rights is subject to conditions and
limitations, including the right of the underwriters in any underwritten
offering to limit the number of shares of registrable securities to be included
in such registration. The registration rights with respect to any holder
thereof terminate upon the earlier of 5 years from the effective date of this
offering or when the shares held by such holder may be sold under Rule 144
during any 90 day period. We are required to bear all of the expenses of all
such registrations, except underwriting discounts and commissions. Registration
of any of the registrable securities would result in such shares becoming
freely tradable without restriction under the Securities Act immediately upon
effectiveness of such registration. The Investor Rights Agreement also contains
a commitment of bamboo.com to indemnify the holders of registration rights,
subject to limitations.
Holders of the shares of common stock issuable upon exercise of the warrant
described above are entitled to piggyback registration rights.
Effect of Selected Provisions of the Certificate of Incorporation and Bylaws,
and the Delaware Antitakeover Statute
Provisions of our amended and restated certificate of incorporation and
bylaws may have the effect of making it more difficult for a third party to
acquire, or of discouraging a third party from attempting to acquire, control
of bamboo.com. Such provisions could limit the price that investors might be
willing to pay in the future for shares of our common stock. These provisions
allow us to issue preferred stock without any vote or further action by the
stockholders and eliminate the right of stockholders to act by written consent
without a
53
<PAGE>
meeting. These provisions may make it more difficult for stockholders to take
certain corporate actions and could have the effect of delaying or preventing a
change in control of bamboo.com.
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. Subject to certain exceptions, Section 203 of Delaware law
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the interested stockholder attained such status with the
approval of the board of directors or unless the business combination is
approved in a prescribed manner. A "business combination" includes mergers,
asset sales and other transactions resulting in a financial benefit to the
interested stockholder. Subject to certain exceptions, an "interested
stockholder" is a person who, together with affiliates and associates, owns, or
within three years did own fifteen percent or more of a corporation's voting
stock. This statute could prohibit or delay the accomplishments of mergers or
other takeover or change in control attempts with respect to bamboo.com and,
accordingly, may discourage attempts to acquire us.
Our amended and restated certificate of incorporation provides that, upon the
closing of this offering, the Board of Directors will be divided into three
classes of directors with each class serving a staggered three-year term. The
classification system of electing directors may tend to discourage a third
party from making a tender offer or otherwise attempting to obtain control of
us and may maintain the incumbency of the Board of Directors, as the
classification of the Board of Directors generally increases the difficulty of
replacing a majority of the directors. Our amended and restated certificate of
incorporation eliminates the right of stockholders to act by written consent
without a meeting and our bylaws eliminate the right of stockholders to call
special meetings of stockholders. The amended and restated certificate of
incorporation does not provide for cumulative voting in the election of
directors. These and other provisions may have the effect of deferring hostile
takeovers or delaying changes in control or management of bamboo.com. The
amendment of any of these provisions would require approval by the Board of
Directors and holders of at least 66 2/3% of the outstanding common stock.
Board of Directors Vacancies
Our bylaws authorize the board of directors to fill vacant directorships or
increase the size of the Board of Directors. This may deter a stockholder from
removing incumbent directors and simultaneously gaining control of the Board of
Directors by filling the vacancies created by such removal with its own
nominees.
Classified Board
Effective upon the closing of this offering, our board will be classified
into three classes of directors. Please see "Management--Board Composition" for
more information regarding the classified board.
Stockholder Action; Special Meeting of Stockholders
Our certificate of incorporation provides that stockholders may act only at
duly called annual or special meetings of stockholders, not by written consent.
Our bylaws further provide that special meetings of our stockholders may be
called only by the President, Chief Executive Officer or Chairman of the Board
of Directors or a majority of the board of directors.
Advance Notice Requirements for Stockholder Proposals and Director Nominations
Our bylaws provide that stockholders seeking to bring business before our
annual meeting of stockholders, or to nominate candidates for election as
directors at our annual meeting of stockholders, must provide timely notice
thereof in writing. To be timely, a stockholder's notice must be delivered to,
or mailed and received at, our principal executive offices not less than 120
days prior to the first anniversary of the date of notice of
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<PAGE>
annual meeting provided with respect to the previous year's annual meeting of
stockholders' provided, that if no annual meeting of stockholders was held in
the previous year or the date of the annual meeting of stockholders has been
changed to be more than 30 calendar days earlier than such anniversary, notice
by the stockholder, to be timely, must be received before the solicitation is
made. The bylaws also specify requirements as to the form and content of a
stockholder's notice. These provisions may discourage stockholders from
bringing matters before our annual meeting of stockholders or from making
nominations for directors at our annual meeting of stockholders.
Authorized But Unissued Shares
Our authorized but unissued shares of common stock and preferred stock are
available for future issuance without stockholder approval, subject to
limitations imposed by the Nasdaq National Market. These additional shares may
be utilized for a variety of corporate purposes, including future public
offerings to raise additional capital, corporate acquisitions and employee
benefit plans. The existence of authorized but unissued and unreserved common
stock and preferred stock could render more difficult or discourage an attempt
to obtain control of us by means of a tender offer, merger or otherwise.
Limitation of Liability and Indemnification Matters
The certificate eliminates the personal liability of directors to the fullest
extent permitted by Delaware law. In addition, the certificate provides that we
may fully indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding
by reason of the fact that such person is or was one of our directors or
officers or is or was serving at our request as a director of or officer of
another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, against expenses including attorney's fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding. Delaware law
provides that the indemnification permitted thereunder shall not be deemed
exclusive of any other rights to which the directors and officers may be
entitled under our bylaws, any agreement, a vote of stockholders or otherwise.
Section 145 of the Delaware General Corporation Law empowers a corporation to
indemnify its directors and officers and to purchase insurance with respect to
liability arising out of their capacity or status as directors and officers,
provided that this provision shall not eliminate or limit the liability of a
director for the following:
. any breach of the director's duty of loyalty to us or our stockholders;
. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
. unlawful payments of dividends or unlawful stock purchases or
redemptions; or
. any transaction from which the director derived an improper personal
benefit.
Our Bylaws provide that we shall indemnify our directors, officers, employees
and other agents to the fullest extent permitted by law.
We believe that indemnification provisions under our bylaws covers at least
negligence and gross negligence on the part of indemnified parties. Our bylaws
also permit us to secure insurance on behalf of any officer, director, employee
or other agent for any liability arising out of his or her actions in such
capacity, regardless of whether the bylaws permit such indemnification. We have
also entered into individual agreements to indemnify our directors and
executive officers. We believe that these provisions and agreements are
55
<PAGE>
necessary to attract and retain qualified directors and executive officers. Our
bylaws also permit us to secure insurance on behalf of any officer, director,
employee or other agent for any liability arising out of his or her actions,
regardless of whether Delaware law would permit indemnification. We have
applied for liability insurance for our officers and directors.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Norwest Bank
Minnesota, National Association.
56
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no public market for our common stock.
The market price of our common stock could drop due to sales of a large number
of shares of our common stock or the perception that such sales could occur.
These factors could also make it more difficult to raise funds through future
offerings of common stock.
After this offering, 21,383,650 shares of common stock will be outstanding,
21,853,650 shares if the underwriters exercise their over-allotment options in
full. Of these shares, the 5,000,000 shares sold in this offering, 5,750,000
shares if the underwriters over-allotment options are exercised in full, will
be freely tradable without restriction under the Securities Act except for any
shares purchased by "affiliates" of bamboo.com as defined in Rule 144 under the
Securities Act. The remaining 16,383,650 shares are "restricted securities"
within the meaning of Rule 144 under the Securities Act. The restricted
securities generally may not be sold unless they are registered under the
Securities Act or are sold pursuant to an exemption from registration, such as
the exemption provided by Rule 144 under the Securities Act.
Our officers, directors and stockholders holding 16,266,738 shares of common
stock have entered into lock-up agreements under which they have agreed not to
offer or sell any shares of common stock for a period of 180 days after the
date of this prospectus without the prior written consent of Prudential
Securities, on behalf of the underwriters. See "Underwriting." Prudential
Securities may, at any time and without notice, waive any of the terms of these
lock-up agreements specified in the underwriting agreement. Following the lock-
up period, these shares will not be eligible for sale in the public market
without registration under the Securities Act unless such sales meet the
applicable conditions and restrictions of Rule 144 as described below.
In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, any person (or persons whose shares are
aggregated), including an affiliate, who has beneficially owned shares for a
period of at least one year is entitled to sell, within any three-month period,
a number of shares that does not exceed the greater of:
. 1% of the then-outstanding shares of common stock, and
. the average weekly trading volume in the common stock during the four
calendar weeks immediately preceding the date on which the notice of such
sale on Form 144 is filed with the Securities and Exchange Commission.
Sales under Rule 144 are also subject to provisions, relating to notice and
manner of sale and the availability of current public information about us. In
addition, a person (or persons whose shares are aggregated) who has not been an
affiliate of us at any time during the 90 days immediately preceding a sale,
and who has beneficially owned the shares for at least two years, would be
entitled to sell such shares under Rule 144(k) without regard to the volume
limitation and other conditions described above. The above summary of Rule 144
is not intended to be a complete description.
In addition, our employees, directors, officers, advisors or consultants who
were issued shares pursuant to a written compensatory plan or contract may be
entitled to rely on the resale provisions of Rule 701, which permits
nonaffiliates to sell their Rule 701 shares without having to comply with the
public information, holding period, volume limitation or notice provisions of
Rule 144, and permits affiliates to sell their Rule 701 shares without having
to comply with Rule 144's holding period restrictions, in each case commencing
90 days after the date of this prospectus.
As soon as practicable following the closing of this offering, we intend to
file a registration statement under the Securities Act to register 8,179,394
shares of common stock issuable upon the exercise of outstanding stock options
or reserved for issuance under our stock option plan and our stock purchase
plan, of which 1,780,184 shares subject to options under our stock option plan
will be immediately exercisable and an additional 1,689,926 shares subject to
options under our stock option plan will be exercisable within 60 days of June
30, 1999. After the effective date of such registration statement, these shares
will be available for sale in the open market subject to the lock-up agreements
described above and, for our affiliates, to the conditions and restrictions of
Rule 144.
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<PAGE>
UNDERWRITING
We and the selling stockholders have entered into an underwriting agreement
with the underwriters named below, for whom Prudential Securities Incorporated,
Dain Rauscher Wessels, a division of Dain Rauscher Incorporated, Volpe Brown
Whelan & Company, LLC and E*OFFERING Corp. are acting as representatives. We,
and the selling stockholders if the over-allotment options are exercised, are
obligated to sell, and the underwriters are obligated to purchase, all of the
shares offered on the cover page of this prospectus, if any are purchased.
Subject to certain conditions of the underwriting agreement, each underwriter
has severally agreed to purchase the shares indicated opposite its name:
<TABLE>
<CAPTION>
Number
Underwriters of Shares
------------ ---------
<S> <C>
Prudential Securities Incorporated....................................
Dain Rauscher Wessels.................................................
Volpe Brown Whelan & Company, LLC.....................................
E*OFFERING Corp.......................................................
---------
Total............................................................... 5,000,000
=========
</TABLE>
The underwriters may sell more shares than the total number of shares offered
on the cover page of this prospectus and they have, for a period of 30 days
from the date of this prospectus, over-allotment options to purchase up to
470,000 additional shares from us and up to 280,000 additional shares from the
selling stockholders. If any additional shares are purchased, the underwriters
will severally purchase the shares in the same proportion as per the table
above.
The representatives of the underwriters have advised us that the shares will
be offered to the public at the offering price indicated on the cover page of
this prospectus. The underwriters may allow to selected dealers a concession
not in excess of $ per share and such dealers may reallow a concession not in
excess of $ per share to certain other dealers. After the shares are released
for sale to the public, the representatives may change the offering price and
the concessions. The representatives have informed us that the underwriters do
not intend to sell shares to any investor who has granted them discretionary
authority.
We and the selling stockholders have agreed to pay to the underwriters the
following fees, assuming both no exercise and full exercise of the
underwriters' over-allotment options to purchase additional shares:
<TABLE>
<CAPTION>
Total Fees
---------------------------------------------
Fee Without Exercise of Full Exercise
Per Share Over-Allotment Options Over-Allotment Options
--------- ---------------------- ----------------------
<S> <C> <C> <C>
Fees paid by us......... $ $ $
Fees paid by selling
stockholders........... $ $ $
</TABLE>
In addition, we estimate that we will spend approximately $1.2 million in
expenses, including expenses for the selling stockholders, for this offering.
We and the selling stockholders have agreed to indemnify the underwriters
against certain liabilities, including liabilities under the Securities Act, or
contribute to payments that the underwriters may be required to make in respect
of these liabilities.
We, our officers and directors, and stockholders of bamboo.com, have entered
into lockup agreements pursuant to which we and they have agreed not to offer
or sell any shares of common stock or securities convertible into or
exchangeable or exercisable for shares of common stock for a period of 180 days
from the date of this prospectus without the prior written consent of
Prudential Securities, on behalf of the underwriters.
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Prudential Securities may, at any time and without notice, waive the terms of
these lockup agreements specified in the underwriting agreement.
Prior to this offering, there has been no public market for our common stock.
The public offering price, negotiated between us and the representatives, is
based upon various factors such as our financial and operating history and
condition, our prospects, the prospects for the industry we are in and
prevailing market conditions.
Prudential Securities, on behalf of the underwriters, may engage in the
following activities in accordance with applicable securities rules:
. Over-allotments involving sales in excess of the offering size, creating
a short position. Prudential Securities may elect to reduce this short
position by exercising some or all of the over-allotment options.
. Stabilizing and short covering; stabilizing bids to purchase the shares
are permitted if they do not exceed a specified maximum price. After the
distribution of shares has been completed, short covering purchases in
the open market may also reduce the short position. These activities may
cause the price of the shares to be higher than would otherwise exist in
the open market.
. Penalty bids permitting the representatives to reclaim concessions from a
syndicate member for the shares purchased in the stabilizing or short
covering transactions.
Such activities, which may be commenced and discontinued at any time, may be
effected on the Nasdaq National Market, in the over-the-counter market or
otherwise.
Each underwriter has represented that it has complied and will comply with
all applicable laws and regulations in connection with the offer, sale or
delivery of the shares and related offering materials in the United Kingdom,
including:
. the Public Offers of Securities Regulations 1995,
. the Financial Services Act 1986, and
. the Financial Services Act 1986, (Investment Advertisements) (Exemptions)
Order 1996 (as amended).
Prudential Securities and other underwriters have, from time to time,
performed various investment banking and financial advisory services on a fee
for services basis for bamboo.com. In March 1999, an entity affiliated with
Dain Rauscher Wessels, a division of Dain Rauscher Incorporated, invested in
our private placement purchasing an aggregate of 86,102 shares of our Series B
preferred stock, on a pre-split basis, on the same terms and conditions as the
other investors in the private placement, including price per share.
We have asked the underwriters to reserve shares for sale at the same
offering price directly to our officers, directors, employees and other
business associates, including affiliates of real estate destination sites,
real estate brokerage firms, multiple listing services and outside consultants.
The number of shares available for sale to the general public in the offering
will be reduced to the extent such persons purchase the reserved shares.
E*OFFERING Corp. is making a prospectus in electronic format available on its
Internet Web site. Other than the prospectus in electronic format, the
information on such Web site is not part of this prospectus or the registration
statement of which the prospectus forms a part and has not been approved and/or
endorsed by bamboo.com or any underwriter in such capacity and should not be
relied on by prospective investors.
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LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for
bamboo.com by Wilson Sonsini Goodrich & Rosati, P.C., Palo Alto, California.
Certain legal matters will be passed upon for the underwriters by Skadden,
Arps, Slate, Meagher & Flom LLP, Palo Alto, California. As of the date of this
prospectus, WS Investment Company 98B, WS Investment Company 99A, Mario Rosati
a member of Wilson Sonsini Goodrich & Rosati, P.C., and individuals and
entities affiliated with Wilson Sonsini Goodrich & Rosati, P.C., beneficially
own an aggregate of 179,508 shares of bamboo.com's common stock.
EXPERTS
The consolidated balance sheets of bamboo.com, Inc. as of December 31, 1997
and 1998 and the consolidated statements of operations, stockholders' equity
(deficit) and cash flows for each of the three years in the period ended
December 31, 1998 have been included herein in reliance on the report of
PricewaterhouseCoopers LLP, our independent accountants, which report is given
on the authority of that firm as experts in accounting and auditing.
AVAILABLE INFORMATION
We have filed with the Securities and Exchange Commission, a Registration
Statement on Form S-1 including the exhibits and schedules thereto under the
Securities Act with respect to the shares to be sold in this offering. This
prospectus does not contain all the information set forth in the Registration
Statement. For further information with respect to bamboo.com and the shares to
be sold in this offering, reference is made to the Registration Statement.
Statements contained in this prospectus as to the contents of any contract,
agreement or other document referred to, are not necessarily complete, and in
each instance reference is made to the copy of such contract, agreement or
other document filed as an exhibit to the Registration Statement, each
statement being qualified in all respects by a more complete description of the
matter involved, and each such statement shall be deemed incorporated by such
reference.
You may read and copy all or any portion of the Registration Statement or any
reports, statements or other information we file at the Commission's public
reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.C.,
Washington, D.C. 20549 and at the regional offices of the Commission located at
Seven World Trade Center, 13th Floor, New York, New York 10048 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. You can request copies of
these documents upon payment of a duplicating fee, by writing to the
Commission. Please call the Commission at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. Our filings,
including the Registration Statement will also be available to you on the
Commission's Internet site (http://www.sec.gov).
Bamboo.com intends to send to its stockholders annual reports containing
audited consolidated financial statements and quarterly reports containing
unaudited Consolidated Financial Statements for the first three quarters of
each fiscal year.
60
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants.......................................... F-2
Consolidated Balance Sheets................................................ F-3
Consolidated Statements of Operations and Comprehensive Loss............... F-4
Consolidated Statements of Stockholders' Equity (Deficit).................. F-5
Consolidated Statements of Cash Flows...................................... F-6
Notes to Consolidated Financial Statements................................. F-7
</TABLE>
F-1
<PAGE>
Report of Independent Accountants
March 12, 1999, except for Note 14,
which is as of July 16, 1999
To The Board of Directors and Stockholders of
bamboo.com, Inc. (formerly Jutvision Corporation)
(a development stage company)
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of stockholders' equity (deficit) and of
cash flows present fairly, in all material respects, the financial position of
bamboo.com, Inc. (formerly Jutvision Corporation) (a development stage company)
and its subsidiary at December 31, 1997 and 1998 and the results of its
operations and its cash flows for the years ended December 31, 1996, 1997, and
1998 and the period from November 2, 1995 (date of inception) to December 31,
1998, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
San Jose, California
To the Board of Directors and Stockholders of
bamboo.com Inc. (formerly Jutvision Corporation)
(a development stage company)
The accompanying financial statements included herein reflect the approval by
the Company's stockholders of the Company's 2.8-for-1 stock split of the
Company's common and Class B common stock as described in Note 13. The above
opinion is in the form that will be signed by PricewaterhouseCoopers LLP upon
the effectiveness of such event assuming that from March 12, 1999 to the
effective date of such event, no other events shall have occurred that would
affect the accompanying consolidated financial statements.
PricewaterhouseCoopers LLP
San Jose, California
July 19, 1999
F-2
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, Pro Forma
---------------------- June 30, June 30, 1999
1997 1998 1999 (See Note 11)
--------- ----------- ------------ -------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents.............. $ 3,955 $ 430,097 $ 18,157,878
Accounts receivable, net
of allowance for doubtful
accounts of zero in 1997,
$1,304 in 1998 and $2,046
in 1999 (unaudited)...... 7,151 19,379 97,652
Prepaid expenses and other
current assets........... -- 78,979 495,599
--------- ----------- ------------
Total current assets..... 11,106 528,455 18,751,129
Property, plant and
equipment................. 14,263 211,663 1,692,926
Other assets............... -- 40,000 183,451
--------- ----------- ------------
Total assets............. $ 25,369 $ 780,118 $ 20,627,506
========= =========== ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Accounts payable.......... $ 11,777 $ 133,446 $ 944,260
Accrued liabilities....... 24,206 122,104 1,005,800
Deferred revenue.......... -- -- 558,570
Notes payable to
stockholders............. 61,556 7,500 --
Current portion of
obligations under capital
lease.................... 178,132
--------- ----------- ------------
Total current
liabilities............. 97,539 263,050 2,686,762
Obligations under capital
lease, net of current
portion.................. -- -- 461,720
Series C mandatorily
redeemable preferred
stock.................... -- -- 4,452,398
--------- ----------- ------------
Total liabilities........ -- -- 7,600,880
--------- ----------- ------------
Commitments (Notes 7 and
10)
Stockholders' equity
(deficit):
Preferred stock: $0.001 par
value
Series A Convertible:
500,000 authorized
shares.................... -- 231 231 --
Issued and outstanding:
zero in 1997, 231,250
shares in 1998 and 1999
(unaudited) and zero pro
forma (unaudited)
(Liquidation value:
$925,000)................
Series B Convertible:
2,152,574 authorized
shares....................
Issued and outstanding:
zero in 1997 and 1998,
2,324,780 in 1999
(unaudited) and zero pro
forma (unaudited)
(Liquidation value:
$13,500,000)............. -- -- 2,325 --
Common stock:
$0.001 par value..........
10,000,000 authorized
shares...................
Issued and outstanding:
zero in 1997 and 1998,
1,805,230 in 1999
(unaudited) and 8,962,102
pro forma (unaudited).... -- -- 1,805 $ 8,962
Class B common stock:
$0.0001 par value
7,421,536 authorized
shares;..................
Issued and outstanding:
7,996,070 shares in 1997,
7,421,536 shares in 1998,
1999 (unaudited) and pro
forma (unaudited)........ 62 520 520 520
Additional paid in
capital................... 160,842 2,652,982 40,946,651 40,942,050
Notes receivable from
stockholders.............. -- (53,806) (127,556) (127,556)
Unearned stock-based
compensation.............. -- -- (8,838,128) (8,838,128)
Accumulated other
comprehensive income
(loss).................... 267 (9,225) 8,144 8,144
Deficit accumulated during
the development stage..... (233,341) (2,073,634) (18,967,366) (18,967,366)
--------- ----------- ------------ ------------
Total stockholders'
equity (deficit)........ (72,170) 517,068 13,026,626 $ 13,026,626
--------- ----------- ------------ ============
Total liabilities and
stockholders' equity
(deficit)............... $ 25,369 $ 780,118 $ 20,627,506
========= =========== ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
From
November 2,
1995 (date
of From
inception) Six Months Ended November 2,
Years ended December 31, to June 30, 1995 (date of
--------------------------------- December 31, ------------------------- inception) to
1996 1997 1998 1998 1998 1999 June 30, 1999
--------- --------- ----------- ------------ ----------- ------------ -------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $ -- $ 45,553 $ 77,410 $ 122,963 $ 39,391 $ 536,074 $ 659,037
Cost of revenues........ -- 15,204 67,710 82,914 34,155 449,035 531,949
--------- --------- ----------- ----------- ----------- ------------ ------------
Gross profit............ -- 30,349 9,700 40,049 5,236 87,039 127,088
Operating expenses:
Sales and marketing.... 4,784 9,672 883,469 897,925 417,485 5,768,969 6,666,894
General and
administrative........ 61,804 122,034 723,607 907,445 406,208 3,002,080 3,909,525
Research and
development........... 23,829 41,567 242,917 308,313 252,954 296,480 604,793
Stock-based
compensation.......... -- -- -- -- -- 6,955,478 6,955,478
--------- --------- ----------- ----------- ----------- ------------ ------------
Total.................. 90,417 173,273 1,849,993 2,113,683 1,076,647 16,023,007 18,136,690
--------- --------- ----------- ----------- ----------- ------------ ------------
Loss from operations.... (90,417) (142,924) (1,840,293) (2,073,634) (1,071,411) (15,935,968) (18,009,602)
Interest income (net)... -- -- -- -- -- 42,236 42,236
--------- --------- ----------- ----------- ----------- ------------ ------------
Net loss................ (90,417) (142,924) (1,840,293) (2,073,634) (1,071,411) (15,893,732) (17,967,366)
Beneficial conversion
feature of Series B
convertible preferred
stock.................. -- -- -- -- -- (1,000,000) (1,000,000)
--------- --------- ----------- ----------- ----------- ------------ ------------
Net loss attributable to
common stockholders.... $ (90,417) $(142,924) $(1,840,293) $(2,073,634) $(1,071,411) $(16,893,732) $(18,967,366)
========= ========= =========== =========== =========== ============ ============
Net loss per common
share--basic and
diluted................ $(0.04) $(0.05) $(0.31) $(0.57) $(0.22) $(2.14) $(4.52)
========= ========= =========== =========== =========== ============ ============
Weighted average common
shares--basic and
diluted................ 2,284,493 2,818,873 5,953,169 3,610,420 4,855,128 7,894,274 4,198,414
========= ========= =========== =========== =========== ============ ============
Pro forma net loss per
common share--basic and
diluted (unaudited).... $(0.30) $(0.57) $(1.84) $(4.30)
=========== =========== ============ ============
Pro forma weighted
average common shares--
basic and
diluted (unaudited).... 6,049,884 3,640,984 9,181,327 4,398,391
=========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Class B Notes Accumulated
Preferred Stock Common Stock Common Stock Additional Receivable Unearned Other
---------------- ---------------- ---------------- Paid In from Stock-Based Comprehensive
Number Amount Number Amount Number Amount Capital Stockholders Compensation Income (Loss)
--------- ------ --------- ------ --------- ------ ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Common stock
issued to
founder in
November 1995... -- $ -- -- $ -- 2,240,000 $ 1 $ -- $ -- $ -- $ --
Common stock
issued for cash
in December 1996
at C$0.36 per
share
(US$0.26)....... -- -- -- -- 560,000 56 147,240 -- -- --
Net loss........ -- -- -- -- -- -- -- -- -- --
Other
comprehensive
loss............ -- -- -- -- -- -- -- -- -- (963)
--------- ------ --------- ------ --------- ---- ----------- --------- ------------ -------
Balance --
December 31,
1996............ -- -- -- -- 2,800,000 57 147,240 -- -- (963)
Common stock
issued for cash
in July 1997 at
C$0.42 per share
(US$0.30)....... -- -- -- -- 45,025 5 13,602 -- -- --
Net loss........ -- -- -- -- -- -- -- -- -- --
Other
comprehensive
income.......... -- -- -- -- -- -- -- -- -- 1,230
--------- ------ --------- ------ --------- ---- ----------- --------- ------------ -------
Balance --
December 31,
1997............ -- -- -- -- 2,845,025 62 160,842 -- -- 267
Common stock
issued through
March to
September 1998
at fair value of
C$0.36 (US$0.24)
to C$1.07
(US$0.71)....... -- -- -- -- 1,342,231 134 431,689 -- -- --
Common stock
issued for
services through
February to May
1998 at fair
value of C$0.36
(US$0.25) to
C$0.50
(US$0.36)....... -- -- -- -- 1,027,600 103 325,397 -- -- --
Issuance of
options to
purchase common
stock for
services at fair
value of US$0.27
to US$0.36 per
share in
February to May
1998............ -- -- -- -- -- -- 536,419 -- -- --
Common stock
issued upon
exercise of
options at $0.01
per share in
September 1998.. -- -- -- -- 1,870,680 187 4,443 -- -- --
Warrants for
common stock
issued in June
1998............ -- -- -- -- -- -- 23,311 -- -- --
Issuance of
warrant for
common stock for
services........ -- -- -- -- -- -- 168,401 -- -- --
Common stock
issued upon
exercise of
options in
December 1998... -- -- -- -- 336,000 34 77,711 (77,745) -- --
Settlement of
note receivable
as offset to
note payable.... -- -- -- -- -- -- -- 23,939 -- --
Issuance of
Series A
convertible
preferred stock
in October and
December 1998 at
fair value of
$4.00 per
share........... 231,250 231 -- -- -- -- 924,769 -- -- --
Net loss........ -- -- -- -- -- -- -- -- -- --
Other
comprehensive
loss............ -- -- -- -- -- -- -- -- -- (9,492)
--------- ------ --------- ------ --------- ---- ----------- --------- ------------ -------
Balance --
December 31,
1998............ 231,250 231 -- -- 7,421,536 520 2,652,982 (53,806) -- (9,225)
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of
Series B
preferred stock
at $5.807 per
share for cash
in March 1999
and May 1999... 2,013,279 2,011 -- -- -- -- 11,594,881 -- -- --
Dividend
relative to
beneficial
conversion
feature related
to issuance of
Series B
preferred stock
in May 1999..... -- -- -- -- -- -- 1,000,000 -- -- --
Issuance of
Series B
preferred stock
at $5.807 per
share on
conversion of
notes payable
and settlement
of interest
payable in
March 1999..... 311,495 314 -- -- -- -- 1,808,538 -- -- --
Common stock
options granted
for services in
January through
June 1999....... -- -- -- -- -- -- 1,412,455 -- -- --
Unearned
employee stock-
based
compensation.... -- -- -- -- -- -- 14,974,311 -- (14,974,311) --
Amortization of
employee stock-
based
compensation.... -- -- -- -- -- -- -- -- 6,647,842 --
Restricted
Common stock
issued to
service provider
in January
1999............ -- -- 120,400 120 -- -- 819,175 -- (819,295) --
Amortization of
stock based
compensation for
service
provider........ -- -- -- -- -- -- -- -- 307,636 --
Common stock
issued on
exercise of
stock options in
February, April
and June 1999... -- -- 434,000 434 -- -- 79,566 (73,750) -- --
Issuance of
common stock
with Series C
mandatorily
redeemable
preferred stock
in June 1999.... 1,250,830 1,251 6,604,743 -- -- --
Net loss........ -- -- -- -- -- -- -- -- -- --
Other
comprehensive
income.......... -- -- -- -- -- -- -- -- 17,369
--------- ------ --------- ------ --------- ---- ----------- --------- ------------ -------
Balance -- June
30, 1999
(unaudited)..... 2,556,024 $2,556 1,805,230 $1,805 7,421,536 $520 $40,946,651 $(127,556) $ (8,838,128) $ 8,144
========= ====== ========= ====== ========= ==== =========== ========= ============ =======
<CAPTION>
Deficit
Accumulated
During the
Development
Stage Total
------------- -------------
<S> <C> <C>
Common stock
issued to
founder in
November 1995... $ -- $ 1
Common stock
issued for cash
in December 1996
at C$0.36 per
share
(US$0.26)....... -- 147,296
Net loss........ (90,417) (90,417)
Other
comprehensive
loss............ -- (963)
------------- -------------
Balance --
December 31,
1996............ (90,417) 55,917
Common stock
issued for cash
in July 1997 at
C$0.42 per share
(US$0.30)....... -- 13,607
Net loss........ (142,924) (142,924)
Other
comprehensive
income.......... -- 1,230
------------- -------------
Balance --
December 31,
1997............ (233,341) (72,170)
Common stock
issued through
March to
September 1998
at fair value of
C$0.36 (US$0.24)
to C$1.07
(US$0.71)....... -- 431,823
Common stock
issued for
services through
February to May
1998 at fair
value of C$0.36
(US$0.25) to
C$0.50
(US$0.36)....... -- 325,500
Issuance of
options to
purchase common
stock for
services at fair
value of US$0.27
to US$0.36 per
share in
February to May
1998............ -- 536,419
Common stock
issued upon
exercise of
options at $0.01
per share in
September 1998.. -- 4,630
Warrants for
common stock
issued in June
1998............ -- 23,311
Issuance of
warrant for
common stock for
services........ -- 168,401
Common stock
issued upon
exercise of
options in
December 1998... -- --
Settlement of
note receivable
as offset to
note payable.... -- 23,939
Issuance of
Series A
convertible
preferred stock
in October and
December 1998 at
fair value of
$4.00 per
share........... -- 925,000
Net loss........ (1,840,293) (1,840,293)
Other
comprehensive
loss............ -- (9,492)
------------- -------------
Balance --
December 31,
1998............ (2,073,634) 517,068
<CAPTION>
<S> <C> <C>
Issuance of
Series B
preferred stock
at $5.807 per
share for cash
in March 1999
and May 1999... -- 11,596,892
Dividend
relative to
beneficial
conversion
feature related
to issuance of
Series B
preferred stock
in May 1999..... (1,000,000) --
Issuance of
Series B
preferred stock
at $5.807 per
share on
conversion of
notes payable
and settlement
of interest
payable in
March 1999..... -- 1,808,852
Common stock
options granted
for services in
January through
June 1999....... -- 1,412,455
Unearned
employee stock-
based
compensation.... -- --
Amortization of
employee stock-
based
compensation.... -- 6,647,842
Restricted
Common stock
issued to
service provider
in January
1999............ -- --
Amortization of
stock based
compensation for
service
provider........ -- 307,636
Common stock
issued on
exercise of
stock options in
February, April
and June 1999... -- 6,250
Issuance of
common stock
with Series C
mandatorily
redeemable
preferred stock
in June 1999.... -- 6,605,994
Net loss........ (15,893,732) (15,893,732)
Other
comprehensive
income.......... -- 17,369
------------- -------------
Balance -- June
30, 1999
(unaudited)..... $(18,967,366) $ 13,026,626
============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
From From
November 2, November 2,
1995 (date of Six Months Ended 1995 (date of
Years ended December 31, inception) to June 30, inception) to
-------------------------------- December 31, ------------------------- June 30,
1996 1997 1998 1998 1998 1999 1999
-------- --------- ----------- ------------- ----------- ------------ -------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating activities:
Net loss.............. $(90,417) $(142,924) $(1,840,293) $(2,073,634) $(1,071,411) $(15,893,732) $(17,967,366)
Items not affecting
cash:
Depreciation and
amortization......... 11,914 10,763 32,045 54,722 3,945 223,837 278,559
Allowance for doubtful
accounts............. -- -- -- -- -- 2,046 2,046
Accretion of dividend
on Series C
mandatorily
redeemable preferred
stock................ -- -- -- -- -- 81,298 81,298
Issuance of common
stock in exchange for
services............. -- -- 370,404 370,404 370,404 -- 370,404
Issuance of Series B
convertible preferred
stock in settlement
of interest payable.. -- -- -- -- -- 8,852 8,852
Issuance of warrant
for common stock for
services............. -- -- 168,401 168,401 -- -- 168,401
Issuance of options
for common stock for
services............. -- -- 536,419 536,419 536,419 1,412,455 1,948,874
Stock-based
compensation......... -- -- -- -- -- 6,955,478 6,955,478
Changes in assets and
liabilities:
Accounts receivable,
net................. -- (7,384) (13,139) (20,523) (16,480) (78,911) (99,434)
Prepaid expenses and
other current
assets.............. -- -- (82,982) (82,982) (2,447) (418,935) (501,917)
Other assets......... -- -- (40,000) (40,000) -- (143,451) (183,451)
Accounts payable..... 16,160 7,957 126,612 150,729 (335) 814,764 965,493
Accrued liabilities.. -- 8,046 93,946 101,992 -- 899,029 1,001,021
Deferred revenue..... -- -- -- -- -- 558,570 558,570
-------- --------- ----------- ----------- ----------- ------------ ------------
Net cash used in
operating
activities......... (62,343) (123,542) (648,587) (834,472) (179,905) (5,578,700) (6,413,172)
-------- --------- ----------- ----------- ----------- ------------ ------------
Investing activities:
Purchase of capital
assets............... (30,430) (6,458) (219,068) (255,956) (26,818) (1,241,657) (1,497,613)
-------- --------- ----------- ----------- ----------- ------------ ------------
Net cash used in
investing
activities......... (30,430) (6,458) (219,068) (255,956) (26,818) (1,241,657) (1,497,613)
-------- --------- ----------- ----------- ----------- ------------ ------------
Financing activities:
Notes payable to
stockholders......... 77,278 (13,702) (26,828) 36,748 (26,294) (7,655) 29,093
Proceeds from issuance
of convertible notes
payable.............. -- -- -- -- -- 1,800,000 1,800,000
Proceeds from issuance
of common stock, net
of issuance costs.... 147,297 13,607 386,919 547,823 248,111 6,605,994 7,153,817
Proceeds from exercise
of common stock
options.............. -- -- 4,630 4,630 -- 6,250 10,880
Proceeds from issuance
of Series A
convertible preferred
stock, net of
issuance costs....... -- -- 925,000 925,000 -- -- 925,000
Proceeds from issuance
of Series B
convertible preferred
stock, net of
issuance costs....... -- -- -- -- -- 11,596,982 11,596,982
Proceeds from issuance
of Series C
mandatorily
redeemable preferred
stock................ -- -- -- -- -- 4,371,100 4,371,100
Proceeds on capital
lease obligation..... -- -- -- -- -- 204,947 204,947
Repayments of capital
lease obligation..... -- -- -- -- -- (28,538) (28,538)
Proceeds from issuance
of warrants.......... -- -- 23,311 23,311 23,311 -- 23,311
-------- --------- ----------- ----------- ----------- ------------ ------------
Net cash provided by
financing
activities......... 224,575 (95) 1,313,032 1,537,512 245,128 24,549,080 26,086,592
-------- --------- ----------- ----------- ----------- ------------ ------------
Effect of exchange rate
changes on cash....... (963) 3,211 (19,235) (16,987) 2,735 (942) (17,929)
-------- --------- ----------- ----------- ----------- ------------ ------------
Increase (decrease) in
cash during the
period................ 130,839 (126,884) 426,142 430,097 41,140 17,727,781 18,157,878
Cash and cash
equivalents, Beginning
of period............. -- 130,839 3,955 -- 3,955 430,097 --
-------- --------- ----------- ----------- ----------- ------------ ------------
Cash and cash
equivalents, End of
period................ $130,839 $ 3,955 $ 430,097 $ 430,097 $ 45,095 $ 18,157,878 $ 18,157,878
======== ========= =========== =========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
NOTE 1--NATURE OF OPERATIONS AND BASIS OF PRESENTATION:
Bamboo.com Inc. (the "Company" or "bamboo Delaware") was incorporated on
March 26, 1998 as Jutvision Corporation under the laws of the state of
Delaware. The Company has a wholly owned subsidiary bamboo.com Canada Inc.
("bamboo Canada"), a company incorporated on December 23, 1998 under the laws
of the province of Ontario, Canada as Jutvision Canada Inc. The Company and its
subsidiary generate revenue from virtual tours of real estate properties on the
Internet. Tours are produced by videotaping the inside and outside of the home
or other property, processing the videotape into a complete virtual tour, and
distributing the virtual tour to sites on the Internet. The virtual tours
provide enhanced visual content and are integrated with multiple listing
services by real estate destination Web sites. The Company's markets are the
United States and Canada.
The business of the Company was previously operated as Jutvision Corporation,
a company incorporated on November 2, 1995 under the laws of the Province of
Ontario, Canada.
On January 1, 1999, each Board of Directors authorized a corporate
reorganization (see Note 2). Through a series of share exchange agreements,
bamboo Delaware, emerged as the parent company of bamboo Canada and Jutvision
Corporation was merged with bamboo Canada. Prior to the reorganization,
bamboo.com did not have any operations, assets or liabilities.
Under the terms of the reorganization, there was no change in ownership and,
therefore, Jutvision Corporation, has been treated as a predecessor business
and its results presented as the historic results of the Company. The
predecessor business's financial statements presented herein include the
results of operations and cash flows for the periods ended December 31, 1996,
1997, 1998 and the period from November 2, 1995 (date of inception) to December
31, 1998 and the balance sheets as of December 31, 1997 and 1998.
NOTE 2--REORGANIZATION:
Each Board of Directors approved a reorganization of Jutvision Corporation,
bamboo Canada and bamboo Delaware effective January 1, 1999 through the
following share exchange arrangements:
a) Exchange of common stockholdings
The common stockholders of Jutvision Corporation agreed to exchange the
outstanding 7,421,536 common shares on a one-for-one basis for Series B
convertible preferred shares of bamboo Canada. In addition, holders of the
outstanding common stock of Jutvision Corporation also agreed to purchase on a
pro-rata basis 7,421,536 Class B common shares of bamboo Delaware on a one-for-
one basis for $0.0001 per share.
Under the charters of the respective companies and under a Conversion and
Pairing Agreement, between bamboo Delaware and bamboo Canada, the holders of
the Series B convertible preferred stock of bamboo Canada may exchange their
shares at any time on a one-for-one basis for common stock of bamboo Delaware,
and the shares of the Series B will be redeemed at par value of $0.0001 per
share. Common stock and Class B common stock of bamboo Delaware have identical
rights and privileges with regard to voting. The Series B convertible preferred
stock has voting privileges only where a separate class vote is required by
law. The Series B convertible preferred stock may not be transferred without
either a two-thirds vote of the existing common stockholder of bamboo Canada or
approval of the Board of Directors of bamboo Canada.
The Series B convertible preferred stock of bamboo Canada will automatically
convert into common stock of bamboo Delaware if:
. the net proceeds of an initial public offering of bamboo Delaware common
stock exceeds $15,000,000; or,
F-7
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
.there is written election by not less than two-thirds majority of the
Series B holders; or
.there is a liquidation, dissolution or winding-up of bamboo Canada.
Due to the terms of the Conversion and Pairing Agreement, the equity interest
of the Series B convertible preferred shareholders of bamboo Canada is
inseparable from and substantively represents an equivalent equity interest in
bamboo Delaware. Accordingly, these shares are presented as equity in the
parent company in the consolidated financial statements. (See also note 13.)
b) Exchange of preferred stockholdings
In connection with the reorganization, holders of the 231,250 outstanding
Series A convertible preferred shares of Jutvision Corporation agreed to
exchange their shares on a one-for-one basis for Series A convertible preferred
stock of bamboo Delaware.
On December 23, 1998, 500,000 shares of the undesignated preferred stock in
bamboo Delaware were designated as Series A convertible preferred stock, having
the same rights and characteristics as the Series A convertible preferred
shares of Jutvision Corporation.
NOTE 3--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of consolidation
These consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary. All significant intercompany balances and
transactions have been eliminated.
Foreign currency translation
The functional currency of the Company's subsidiary and Jutvision
Corporation is the Canadian dollar. Accordingly, assets and liabilities are
translated at exchange rates in effect at the balance sheet date. Revenue and
expenses are translated at the average rates of exchange during the year.
Translation gains and losses are recorded in accumulated other comprehensive
income (loss).
In Jutvision Corporation's financial statements, monetary assets and
liabilities denominated in foreign currencies were translated into the
functional currency, Canadian dollars, at the exchange rate prevailing at the
balance sheet date. Non-monetary assets and liabilities and transactions were
translated at exchange rates prevailing at the respective transaction dates.
Exchange gains and losses were included in the statement of operations and
comprehensive income (loss).
Unaudited interim results
The accompanying interim financial statements as of June 30, 1999, and for
the six months ended June 30, 1998 and 1999 are unaudited. The unaudited
interim financial statements have been prepared on the same basis as the annual
financial statements and, in the opinion of management, reflect all
adjustments, which include only normal recurring adjustments, necessary to
present fairly in all material respects the Company's consolidated financial
position, results of operations and its cash flows as of June 30, 1999 and for
the six months ended June 30, 1998 and 1999. The financial data and other
information disclosed in these notes to financial statements related to these
periods are unaudited. The results for the six months ended June 30, 1999 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1999.
F-8
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
Use of estimates in the preparation of financial statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
Cash and cash equivalents
The Company considers all highly liquid investments with an original or
remaining maturities of three months or less at the date of purchase to be cash
equivalents.
Financial instruments
The carrying amounts of certain of the Company's financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable, and
notes payable to stockholders approximate fair value due to their short-term
maturities.
Certain risks and concentrations
The Company's financial instruments that are exposed to concentration of
credit risk consist primarily of cash and cash equivalents and accounts
receivable. The Company maintains its accounts for cash and cash equivalents
with one major bank in the United States and one major bank in Canada. Deposits
in these banks may exceed the amount of insurance provided on such deposits.
The Company has not experienced any losses on its deposits of its cash and cash
equivalents.
The Company's revenue is derived entirely from virtual tour services. The
Company performs ongoing credit evaluations of its customers' financial
condition and generally requires no collateral. Four customers accounted for
41%, 28%, 19% and 12% of total accounts receivable as of December 31, 1997. Two
customers accounted for 58% and 13% of total accounts receivable as of December
31, 1998. At June 30, 1999 (unaudited) 4 customers accounted for 33%, 24%, 20%
and 12% of total accounts receivable. Revenues from a single customer
represented 25%, 77% and 9% (unaudited) of total revenue for the years ended
December 31, 1997 and 1998 and the six months ended June 30, 1999 (unaudited).
100%, 100% and 10% (unaudited) of revenues were earned from customers located
in Canada with accounts receivable balances denominated in Canadian dollars in
the years ended December 31, 1997 and 1998, and the six months ended June 30,
1999 (unaudited).
The Company does not list real estate on its own web site and is therefore
dependent upon distribution agreements with real estate destination sites. If
any of these agreements were terminated its revenue and results of operations
could be adversely affected.
Property, plant and equipment
Property, plant and equipment are recorded at cost and depreciated on a
straight line basis over the estimated lives of the assets ranging between two
and five years. Leasehold improvements are amortized over the term of the lease
or the estimated useful lives, whichever is shorter.
Depreciation and amortization expense for the periods ended 1996, 1997, 1998
and from November 2, 1995 (date of inception) to December 31, 1998, was
$11,914, $10,763, $32,045 and $54,722, respectively.
F-9
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
Accounting for long-lived assets
The Company reviews property, plant and other long-lived assets for
impairment whenever events or changes in circumstances indicate that the
carrying amounts of an asset may not be recoverable. Recoverability is measured
by comparison of its carrying amount to future net cash flows the assets are
expected to generate. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the projected discounted future cash flows arising
from the asset.
Revenue recognition
The Company generates revenue from services provided to real estate agents
that includes videotaping a home or other property, processing the videotape
into a complete virtual tour and distributing the virtual tour to sites on the
internet. Revenue from the sale of tours is recognized at the time a virtual
tour is posted to the Web site selected by the real estate agent, provided
there are no remaining significant obligations and collection of the resulting
receivable is probable. The Company calculates a return provision based on
historical experience and makes appropriate reserves at the time revenue is
recognized.
Stock-based compensation
The Company has adopted the disclosure provisions of Financial Accounting
Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS")
No. 123, "Accounting for Stock-based Compensation." The Company has elected to
continue accounting for stock-based compensation issued to employees using
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees," and, accordingly, pro forma disclosures required under
SFAS No. 123 have been presented. Stock and other equity instruments issued to
non-employees have been accounted for in accordance with SFAS No. 123 and
valued using the Black-Scholes model.
Income taxes
The Company accounts for its income taxes in accordance with the liability
method. Under this method, deferred tax assets and liabilities are determined
based on differences between the financial reporting and income tax bases of
assets and liabilities and are measured using the enacted tax rates and laws.
Valuation allowances are established, when necessary, to reduce deferred tax
assets to the amounts expected to be realized.
Research and development costs
Research and development costs are charged to operations as incurred.
Net loss per common share
Basic net loss per common share is computed by dividing the net loss
available to common stockholders for the period by the weighted average number
of common shares outstanding during the period. Diluted net loss per common
share is computed by dividing the net loss for the period by the weighted
average number of common and common equivalent shares outstanding during the
period. Common equivalent shares, composed of common shares issuable upon the
exercise of stock options and warrants and upon conversion of Series A and
Series B convertible preferred stock, are included in the diluted net loss per
share computation to the extent
F-10
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
such shares are dilutive. A reconciliation of the numerator and denominator
used in the calculation of basic and diluted net loss per common share follows:
<TABLE>
<CAPTION>
From From
November 2, November 2,
1995 (date of Six Months Ended 1995 (date of
Years ended December 31, inception) to June 30, inception) to
----------------------------------- December 31, ------------------------- June 30,
1996 1997 1998 1998 1998 1999 1999
---------- ---------- ----------- ------------- ----------- ------------ -------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Numerator
Net loss attributable
to common
stockholders.......... $ (90,417) $ (142,924) $(1,840,293) $(2,073,634) $(1,071,411) $(16,893,732) $(18,967,366)
========== ========== =========== =========== =========== ============ ============
Denominator
Weighted average common
shares -- basic and
diluted............... 2,284,493 2,818,873 5,953,169 3,610,420 4,855,128 7,966,179 4,200,127
Weighted average common
shares subject to
repurchase............ -- -- -- -- -- (71,905) (1,713)
---------- ---------- ----------- ----------- ----------- ------------ ------------
Denominator for basic
and diluted
calculation........... 2,284,493 2,818,873 5,953,169 3,610,420 4,855,128 7,894,274 4,198,414
---------- ---------- ----------- ----------- ----------- ------------ ------------
Net loss per common
share -- basic and
diluted............... $ (0.04) $ (0.05) $ (0.31) $ (0.57) $ (0.22) $ (2.14) $ (4.52)
========== ========== =========== =========== =========== ============ ============
The following table summarizes common stock equivalents that are not included
in the diluted net income per share calculation of the denominator above
because to do so would be antidilutive for the periods indicated:
<CAPTION>
From From
November 2, November 2,
1995 (date of Six Months Ended 1995 (date of
Years ended December 31, inception) to June 30, inception) to
----------------------------------- December 31, ------------------------- June 30,
1996 1997 1998 1998 1998 1999 1999
---------- ---------- ----------- ------------- ----------- ------------ -------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Weighted average effect
of common stock
equivalents:
Series A convertible
preferred stock....... -- -- 96,715 30,564 -- 647,500 113,746
Series B convertible
preferred stock....... -- -- -- -- -- 639,553 86,231
Options to purchase
common stock.......... -- -- -- -- 365,556 4,589,980 529,411
Warrants to purchase
common stock.......... -- -- -- -- -- 180,548 --
Common stock subject to
repurchase............ -- -- -- -- -- 71,905 1,713
---------- ---------- ----------- ----------- ----------- ------------ ------------
-- -- 96,715 30,564 365,556 6,129,486 731,101
========== ========== =========== =========== =========== ============ ============
</TABLE>
Comprehensive income (loss)
Effective January 1, 1998, the Company adopted the provisions of SFAS No.
130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards for
reporting comprehensive income (loss) and its components in financial
statements. Comprehensive income (loss), as defined, includes all changes in
equity during a period from non-owner sources.
F-11
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
The components of comprehensive income (loss) are as follows:
<TABLE>
<CAPTION>
From From
November 2, November 2,
1995 (date of Six Months Ended 1995 (date of
Years ended December 31, inception) to June 30, inception) to
------------------------ December 31, ------------------------- June 30,
1996 1997 1998 1998 1998 1999 1999
--------- ---------- ------------ ------------- ----------- ------------ -------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net loss............... $(90,417) $(142,924) $(1,840,293) $(2,073,634) $(1,071,411) $(15,893,732) $(17,967,366)
Foreign currency
translation
adjustment............ (963) 1,230 (9,492) (9,225) 773 17,369 8,144
--------- ---------- ------------ ------------ ----------- ------------ ------------
Comprehensive loss..... $(91,380) $(141,694) $(1,849,785) $(2,082,859) $(1,070,638) $(15,876,363) $(17,959,222)
========= ========== ============ ============ =========== ============ ============
</TABLE>
Recent accounting pronouncements
In March 1998, the Accounting Standards Executive Committee ("AcSEC") issued
Statement of Position ("SOP") No. 98-1, "Software for Internal Use," which
provides guidance on accounting for the cost of computer software developed or
obtained for internal use. SOP No. 98-1 is effective for financial statements
for fiscal years beginning after December 15, 1998. The Company does not expect
that the adoption of SOP No. 98-1 will have a material impact on its financial
statements.
In April 1998, AcSEC issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities." This SOP provides guidance on the financial reporting of start-up
costs and organization costs. It requires the costs of start-up activities and
organization costs to be expensed as incurred. The SOP is effective for
financial statements for fiscal years beginning after December 15, 1998. The
Company does not expect that the adoption of SOP No. 98-5 will have a material
impact on its financial statements.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, or SFAS 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS 133 establishes new standards of
accounting and reporting for derivative instruments and hedging activities.
SFAS 133 requires that all derivatives be recognized at fair value in the
statement of financial position, and that the corresponding gains or losses be
reported either in the statement of operations or as a component of
comprehensive income, depending on the type of hedging relationship that
exists. SFAS 133 will be effective for fiscal years beginning after June 15,
1999. The Company does not currently hold derivative instruments or engage in
hedging activities.
NOTE 4--BALANCE SHEET ACCOUNTS:
Property, Plant and Equipment:
<TABLE>
<CAPTION>
1997 1998
-------- --------
<S> <C> <C>
Service provider equipment............................... $ -- $197,441
Computer equipment....................................... 32,287 44,672
Office equipment......................................... 4,653 11,108
Leasehold improvements................................... -- 4,100
-------- --------
36,940 257,321
Less: Depreciation and amortization...................... (22,677) (45,658)
-------- --------
$ 14,263 $211,663
======== ========
</TABLE>
F-12
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
Accrued Liabilities:
<TABLE>
<CAPTION>
1997 1998
------- --------
<S> <C> <C>
Accrued liabilities--trade................................. $ 4,614 $ 82,104
Accrued marketing costs.................................... 19,592 --
Accrued salaries and benefits.............................. -- 40,000
------- --------
$24,206 $122,104
======= ========
</TABLE>
NOTE 5--CONVERTIBLE SUBORDINATED PROMISSORY NOTES PAYABLE:
On February 2, 1999, the Company issued convertible subordinated promissory
notes payable in exchange for cash of $1,800,000. These notes payable bore
interest at a rate of 10% per annum. The principal and accrued interest were
convertible into a subsequent equity issuance totaling more than $2,000,000. On
March 12, 1999, the entire principal balance of $1,800,000 plus accrued
interest of $8,850 was converted into 311,495 shares of Series B convertible
preferred stock of the Company.
NOTE 6--PREFERRED STOCK:
Under the Company's Certificate of Incorporation, as amended, the Company's
preferred stock is issuable in series and the Company's Board of Directors,
subject to stockholder approval, is authorized to determine the rights,
preferences and privileges of each series. The Company has authorized 2,652,574
shares of convertible preferred stock, of which 500,000 is designated Series A
convertible preferred stock ("Series A") and 2,152,574 is designated Series B
convertible preferred stock ("Series B").
On March 12, 1999, the Company issued 2,152,574 shares of Series B preferred
stock, having a par value of $0.001 per share, at $5.807 per share for total
cash proceeds of $10,686,011 and for conversion of notes payable and settlement
of accrued interest of $1,808,850.
The terms of Series A and Series B are as follows:
Dividends
The holders of Series A and Series B are entitled to dividends of $0.32 and
$0.4646, respectively, per share per annum, as and when declared by the Board
of Directors.
Voting rights
Each share of Series A and Series B entitles a holder to the number of votes
per share equal to the number of shares of common stock (including fractions of
a share) into which each share of Series A and Series B is convertible.
Liquidation
Upon any liquidation, dissolution or winding up of the Company, the holders
of the Series A and Series B shall rank in parity with each other and will be
entitled to receive, in equal preference, before any distribution or payment is
made to the holders of common stock, a sum equal to all declared and unpaid
dividends, in addition to an amount per share of $4.00 and $5.807,
respectively. In addition, Series B holders are entitled to participate pro
rata based on the number of shares of common stock into which the Series B
convert, along with the holders of the common stock in any surplus assets
remaining after payment of the liquidation preferences. If such liquidation
F-13
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
occurs prior to December 31, 1999, this amount is limited to $8.7105 per
Series B share. In the event such liquidation occurs after December 31, 1999,
this amount is limited to $14.5175 per Series B share.
Conversion
Each share of Series A and Series B is convertible into the number of shares
of common stock determined by dividing $4.00 and $5.807, respectively, by the
conversion price at the time in effect for each such share of convertible
preferred stock. The conversion price for Series A and Series B is $1.43 and
$2.07, respectively, per share. Conversion can be requested at any time at the
option of the holder.
The convertible preferred stock would automatically convert into common stock
at the conversion price relevant at that time, if the Company closes a firm
commitment underwritten public offering of shares of common stock in which the
aggregate price received for such shares by the Company (net of underwriting
discounts, commissions and expenses) was at least $10.0 million or $4.15 per
share, or upon the written election of not less than two-thirds vote of the
then outstanding Series A and B.
NOTE 7--COMMON STOCK:
Common Stock
The Company's Certificate of Incorporation authorizes the Company to issue
10,000,000 common shares with $0.001 par value. Each common share entitles the
holder to one vote. The holders of the shares of common stock are also entitled
to receive dividends whenever funds are legally available and when declared by
the Board of Directors, subject to the prior rights of holders of all classes
of stock at the time outstanding having priority rights as to dividends.
On September 15, 1998, the Company authorized a 1,000:1 common stock split.
The effect of this stock split has been retroactively reflected throughout the
financial statements.
Class B Common Stock
As part of the reorganization on January 1, 1999, (Note 2) the Company
authorized and issued 7,421,536 Class B common shares with a par value of
$0.0001 per share. Each common share entitles the holder to one vote.
Common share units
On June 28, 1998, the Company issued 120,000 common share units for total
proceeds of $76,404, net of share issuance costs. Each unit consisted of 2.8
common shares and a warrant to purchase 2.8 common shares. The fair value of
the warrants was established at $23,311 using the Black-Scholes method with the
following assumptions, no annual dividend, volatility of 100%, risk free
interest rate of 5.35% and term of one year. Based on the fair value of the
underlying instruments within the common share unit, $53,093 of the total
proceeds was allocated to common shares and the balance of $23,311 was
allocated to the warrants to purchase common shares. Each warrant entitled the
holder to purchase 2.8 common share at approximately $0.23 per share on or
before June 28, 1999. On December 8, 1998, the warrants were exercised to
purchase 336,000 common shares for net proceeds of $77,745.
On December 31, 1998, promissory notes pertaining to this warrant conversion
were outstanding in the amount of $53,806. The promissory notes are non-
interest bearing until June 28, 1999, after which interest
F-14
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
accrues at the prime rate charged from time to time by the Royal Bank of
Canada, compounded semi-annually, and have no repayment terms.
Issued for services rendered
At various times throughout the year ended December 31, 1998, 1,027,600
common shares were issued to certain individuals, for services rendered. The
fair market value of the stock issued of $325,500 was charged to results of
operations and comprehensive loss.
Stock option plan
1998 Employee, Director and Consultant Stock Option Plan
During 1998, the Company authorized an Employee, Director and Consultant
Stock Option Plan for a total of 2,380,000 common shares. This plan became
effective on January 1, 1999 once the Company was reorganized. During 1999, an
additional 4,399,394 common shares were authorized under the Plan. Each option
under the incentive plan allows for the purchase of common stock of the Company
and expires not later than five or ten years from the date of grant, depending
on the ownership of the option participants. The vesting terms of the stock
options will be determined on each grant date and are generally two or three
years; however, the amount of options that can be exercised per participant in
any calendar year will be restricted to an aggregate fair market value of
$100,000 of the underlying common stock.
Activity under the Plan is set forth below (unaudited):
<TABLE>
<CAPTION>
Average
Weighted
Available Options Price Per Exercise
for Grant Outstanding Share Price Amount
---------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C>
Balance, January 1,
1999................... -- -- $ -- $ -- $ --
Options authorized...... 6,779,394
Options granted......... (6,500,586) 6,500,586 $0.18-3.57 $0.27 1,764,632
Options exercised....... -- (434,000) $ 0.18 $0.18 (80,000)
Options canceled........ 39,200 (39,200) $0.27-0.54 $0.33 (12,750)
Stock purchase rights
granted................ (120,400) 120,400 $ 0.18 $0.18 21,500
Stock purchase rights
exercised.............. -- (120,400) $ 0.18 $0.18 (21,500)
---------- --------- ---------- ----- ----------
Balances, June 30,
1999................... 197,608 6,027,386 $0.18-3.57 $0.28 $1,671,882
========== ========= ========== ===== ==========
</TABLE>
The options outstanding and currently exercisable by exercise price at June
30, 1999 are as follows (unaudited):
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
--------------------------------- --------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Number Contractual Exercise Number Exercise
Exercise Price Outstanding Life (Years) Price Outstanding Price
-------------- ----------- ------------ -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$0.18................ 4,173,786 9.8 $0.18 1,006,636 $0.18
$0.27................ 1,201,900 9.9 0.27 94,752 0.27
$0.36................ 67,200 9.8 0.36 -- 0.36
$0.54................ 472,500 9.9 0.54 26,600 0.54
$3.57................ 112,000 10.0 3.57 -- 3.57
--------- ---------
6,027,386 1,127,988
========= =========
</TABLE>
F-15
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
Pro forma stock compensation
The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123") for option grants to employees. Had compensation
cost been determined based on the fair value at the grant date for the awards
in 1999 consistent with the provisions of SFAS No. 123, the Company's net loss
for 1999 would have been as follows
<TABLE>
<CAPTION>
Six months
ended June 30,
1999
--------------
<S> <C>
Net loss attributable to common stockholders--as reported
(unaudited)............................................... $(16,893,732)
Net loss attributable to common stockholders--pro forma
(unaudited)............................................... $(17,046,502)
Net loss per common share--basic and diluted as reported
(unaudited)............................................... $ (2.14)
Net loss per common share--basic and diluted pro forma
(unaudited)............................................... $ (2.16)
</TABLE>
Such pro forma disclosures may not be representative of future compensation
cost because options vest over several years and additional grants are made
each year.
Option agreements
On February 12, 1998, the Company issued 1,400,000 stock options to non-
employees, and on May 31, 1998, the Company issued an additional 470,680 stock
options to non-employees, in exchange for management services. The stock
options allowed the holder to purchase one common share for $0.01 per share,
expired ten years from the date of grant and vested immediately. As of December
31, 1998, all of the options had been exercised resulting in cash proceeds of
$4,630.
The fair value of each stock option granted to non-employees was estimated on
the date the non-employee earned the option using the Black-Scholes option-
pricing model with the following assumptions: no annual dividend, expected
volatility of 55%, risk-free interest rate of 5.36%; and expected life of ten
years. The weighted average fair value of stock options earned in 1998 was
$0.29. The resulting values have been charged to the statement of operations
and comprehensive loss in the period that services were rendered. The fair
value of the stock options charged to the statement of operations and
comprehensive loss in 1998 was $536,419.
Restricted stock agreements
In February 1999, the Company issued from the plan 120,400 shares of its
common stock on exercise of stock purchase rights granted in exchange for
services under restricted purchase agreements. At June 30, 1999, 95,317
(unaudited) common shares are subject to repurchase under these agreements at
the option of the Company. The repurchase provision expires upon involuntary
termination of the purchaser's services, an initial public offering of the
common stock of the Company, or merger or reorganization of the Company.
Warrants and commitments
Pursuant to a marketing and distribution agreement entered into on November
11, 1998, the Company agreed to issue a stock purchase warrant once the Company
was reorganized. The warrant allows the holder to purchase 280,000 shares of
common stock at $1.43 per share and expires on December 31, 1999. The warrant
has been recorded at its fair value of $168,401 with the costs charged to the
statement of operations and comprehensive income (loss) in the year ended
December 31, 1998. The fair value of the warrant was estimated using the Black-
Scholes option-pricing model. The following assumptions were used in the model:
no annual dividend, expected volatility of 55%, risk-free interest rate of
5.35%; and an expected life of 1.2 years.
F-16
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
Stock-based compensation (unaudited)
In connection with certain stock option grants to employees during the six
months ended June 30, 1999, the Company recorded unearned stock-based
compensation totalling $15.0 million, which is being amortized over the vesting
periods of the related options which is generally two to three years.
Amortization of this stock-based compensation recognized during the six months
ended June 30, 1999 totalled approximately $6.6 million. The total unearned
stock-based compensation recorded to date will be amortized as follows: $3.5
million for the remainder of 1999; $3.4 million in 2000; $1.2 million in 2001;
$280,000 in 2002 and $20,000 in 2003. 1,780,184 shares of common stock subject
to options will vest immediately in the quarter in which this initial public
offering is completed resulting in additional amortization of employee stock-
based compensation expense of approximately $1.8 million in the quarter in
which this offering is completed.
Additionally, the Company recorded unearned stock-based compensation for
restricted common stock granted to a service provider of approximately
$819,000, which is being amortized over two years. Amortization of the fair
value of this restricted common stock resulted in stock-based compensation of
approximately $308,000 during the six months ended June 30, 1999. Quarterly
amortization associated with the restricted common stock is subject to
significant increase or decrease in future quarters based upon future changes
in the fair value of the Company's common stock. The Company's option to
repurchase lapses upon completion of this public offering if this occurs prior
to the end of the two years.
NOTE 8--INCOME TAXES:
The principal items accounting for the difference between income taxes
computed at the Canadian statutory rate and the provision for income taxes are
as follows:
<TABLE>
<CAPTION>
December 31,
---------------------
1996 1997 1998
----- ----- -----
<S> <C> <C> <C>
Canadian statutory
rate................... 44.5% 44.5% 44.5%
Amounts not deductible
for tax purposes....... (0.6)% (0.5)% --
Operating losses not
benefited.............. (43.9)% (44.0)% (44.5)%
----- ----- -----
-- -- --
===== ===== =====
</TABLE>
At December 31, 1998, Jutvision Corporation had accumulated income tax losses
of $1,944,259 available in Canada for carry-forward to reduce taxable income of
future years, the benefit of which has not been recorded in these financial
statements. The income tax losses expire as follows:
<TABLE>
<S> <C>
2002.............................................................. $ 82,787
2003.............................................................. 137,272
2004.............................................................. 1,724,200
----------
$1,944,259
==========
</TABLE>
For Canadian federal and Ontario provincial tax purposes, Jutvision
Corporation's net operating loss carryforwards are subject to certain
limitations on utilization in the event of changes in ownership.
F-17
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
Deferred tax assets are summarized as follows:
<TABLE>
<CAPTION>
1997 1998
--------- ---------
<S> <C> <C>
Non-capital losses..................................... $ 97,926 $ 865,185
Share issue costs...................................... -- 2,464
Property, plant and equipment.......................... 4,724 5,322
--------- ---------
102,650 872,971
Valuation allowance.................................... (102,650) (872,971)
--------- ---------
$ -- $ --
========= =========
</TABLE>
The Company has recorded a full valuation allowance against its deferred tax
assets because it believes it is more likely than not that sufficient taxable
income will not be realized during the carryforward period to utilize the
deferred tax asset. The valuation allowance increased by $770,321 during 1998.
Realization of the future tax benefits related to the deferred tax assets is
dependent upon many factors, including bamboo Canada's ability to generate
taxable income in Canada within the loss carryforward periods.
NOTE 9--SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
<TABLE>
<CAPTION>
From From
November 2, November 2,
1995 (date of Six Months Ended 1995 (date of
Years ended December 31, inception) to June 30, inception) to
-------------------------- December 31, ----------------------- June 30,
1996 1997 1998 1998 1998 1999 1999
-------- -------- -------- ------------- ----------- ----------- -------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Supplemental disclosures
cash flow information:
Unearned stock based
compensation related
to stock options
grants................ $ -- $ -- $ -- $ -- $ -- $6,757,240 $6,757,240
======== ======== ======== ======== ======== ========== ==========
Property Plant and
Equipment acquired
under capital leases.. 463,443 463,443
======== ======== ======== ======== ======== ========== ==========
Conversion of notes
payable to Series B
convertible preferred
stock................. $ -- $ -- $ -- $ -- $ -- $1,800,000 $1,800,000
======== ======== ======== ======== ======== ========== ==========
Issuance of Series B
convertible preferred
stock in settlement of
interest.............. $ -- $ -- $ -- $ -- $ -- $ 8,850 $ 8,850
======== ======== ======== ======== ======== ========== ==========
Exercise of common
stock options and
warrants in exchange
for note receivable... $ -- $ -- $ 77,745 $ 77,745 $ -- $ 73,750 $ 131,495
-------- -------- -------- -------- -------- ---------- ----------
Stock options issued
for prepaid rent
expense............... $ -- $ -- $ -- $ -- $ -- $ 19,629 $ 19,629
======== ======== ======== ======== ======== ========== ==========
Interest paid.......... $ -- $ -- $ -- $ -- $ -- $ 9,906 $ 9,906
======== ======== ======== ======== ======== ========== ==========
Note receivable settled
as offset of note
payable............... $ -- $ -- $ 23,939 $ 23,939 $ -- $ -- $ 23,939
======== ======== ======== ======== ======== ========== ==========
Common stock issued
below fair value...... $ -- $ -- $ 44,904 $ 44,904 $ 44,904 $ -- $ 44,904
======== ======== ======== ======== ======== ========== ==========
Issuance of common
stock for services.... $ -- $ -- $325,500 $325,500 $325,500 $ 175,742 $ 546,146
======== ======== ======== ======== ======== ========== ==========
Issuance of warrant for
common stock for
services.............. $ -- $ -- $168,401 $168,401 $ -- $ -- $ 168,401
======== ======== ======== ======== ======== ========== ==========
Issuance of options for
common stock for
services.............. $ -- $ -- $536,419 $536,419 $536,419 $ 742,203 $1,278,622
======== ======== ======== ======== ======== ========== ==========
</TABLE>
F-18
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
NOTE 10--COMMITMENTS:
The Company is obligated under leases for the rental of facilities, computer
equipment and office equipment. Minimum future rental payments under the
Company's current leases in effect as at December 31, 1998 are as follows:
<TABLE>
<S> <C>
1999................................................................ $470,000
2000................................................................ 391,000
2001................................................................ 377,000
2002................................................................ 61,000
</TABLE>
Total rent expense was $733, $8,005, $39,245 and $47,983 in the years ended
1996, 1997, 1998 and for the period from November 2, 1995 date of incorporation
to December 31, 1998 respectively.
Marketing and Distribution Agreements
The Company has entered into marketing and distribution agreements with
certain real estate destination Web sites to maintain certain promotional and
linkage rights, and technology access in exchange for total minimum payments of
$14,063,375 payable over three years. A total of $6,906,250 of the payments are
noncancelable. The Company records the expenses as incurred. Under the terms of
the agreements (as amended), the following minimum non-cancelable and total
future payments are due beginning in April 1999:
<TABLE>
<CAPTION>
Non Cancelable Total
-------------- -----------
<S> <C> <C>
Year ended December 31, 1999..................... $2,250,000 $ 2,382,000
Year ended December 31, 2000..................... 4,656,250 4,722,250
Year ended December 31, 2001..................... -- 5,437,188
Year ended December 31, 2002..................... -- 1,521,437
---------- -----------
$6,906,250 $14,063,375
========== ===========
</TABLE>
NOTE 11--RELATED PARTY TRANSACTIONS:
The Company purchased capital equipment of $10,500 in 1996 and $3,500 in 1997
from a stockholder.
Notes payable to stockholders are non-interest bearing if repaid in total, on
or before June 30, 1999. If the notes are unpaid after June 30, 1999, interest
will accrue at the prime rate charged from time to time by the Royal Bank of
Canada, compounded semi-annually.
NOTE 12--UNAUDITED PRO FORMA NET LOSS PER COMMON SHARE AND PRO FORMA
STOCKHOLDERS' EQUITY (DEFICIT):
Upon the closing of the Company's initial public offering, all outstanding
convertible preferred stock will be converted automatically into common stock.
The pro forma effect of this conversion has been presented as a separate column
in the Company's balance sheet, assuming the conversion had occurred as of June
30, 1999.
Pro forma basic and diluted net loss per common share have been computed as
described in Note 3 and also give effect to common equivalent shares from
preferred stock that will automatically convert upon the closing of the
Company's initial public offering (using the as-if-converted method) for 1998
and the six months ended June 30, 1999.
F-19
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
A reconciliation of the numerator and denominator used in the calculation of
pro forma basic and fully diluted net loss per common share follows:
<TABLE>
<CAPTION>
Cumulative Cumulative
from from
November 2, Six November 2,
Year 1995 (date of months 1995 (date of
ended inception) to ended inception) to
December 31, December 31, June 30, June 30,
1998 1998 1999 1999
------------ ------------- ------------ -------------
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net loss attributable to
common stockholders.... $(1,840,293) $(2,073,634) $(15,715,815) $(17,789,449)
=========== =========== ============ ============
Shares used in computing
basic and diluted net
loss per share......... 5,953,169 3,610,420 7,894,274 4,198,414
Adjusted to reflect the
effect of the assumed
conversion of all
convertible preferred
stock from the date of
issuance............... 96,715 30,564 1,287,053 199,977
----------- ----------- ------------ ------------
Weighted average shares
used in computing pro
forma basic and diluted
net loss per share..... 6,049,884 3,640,984 9,181,327 4,398,391
=========== =========== ============ ============
Pro forma basic and
diluted net loss per
share.................. $ (0.30) $ (0.57) $ (1.71) $ (4.04)
=========== =========== ============ ============
</TABLE>
NOTE 13--GEOGRAPHIC INFORMATION:
The Company has adopted the Financial Accounting Standards Board's Statements
of Financial Accounting Standards No. 131, or SFAS 131, "Disclosures about
Segments of an Enterprise and Related Information," effective for fiscal years
beginning after December 31, 1997. SFAS 131 supersedes Statement of Financial
Accounting Standards No. 14 of SFAS 14, "Financial Reporting for Segments of a
Business Enterprise." SFAS 131 changes current practice under SFAS 14 by
establishing a new framework on which to base segment reporting and also
requires interim reporting of segment information.
Management uses one measurement of profitability for its business. The
Company markets its products and related services to customers in the United
States and Canada.
Revenue and long-lived asset information by geographic area are as follows:
<TABLE>
<CAPTION>
Long Lived
Revenues Assets
-------- ----------
<S> <C> <C>
1998
Canada................................................. $77,410 $ 49,427
United States.......................................... -- 162,236
------- --------
$77,410 $211,663
======= ========
1997
Canada................................................. $45,553 $ 14,263
United States.......................................... -- --
------- --------
$45,553 $ 14,263
======= ========
</TABLE>
F-20
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
NOTE 14--SUBSEQUENT EVENTS:
Distribution Agreements
On March 16, 1999 and July 15, 1999, the Company entered into two separate
distribution agreements with real estate destination Web sites to maintain
certain promotional and linkage rights. At June 30, 1999, the additional
minimum future payments required under these agreements are as follows:
<TABLE>
<S> <C>
Year ended December 31, 1999....................................... $360,000
Year ended December 31, 2000....................................... 555,000
--------
$915,000
========
</TABLE>
In addition under the terms of the distribution agreement entered into on
July 15, 1999, the Company is subject to making additional payments totaling
$1,375,000 which are contingent upon the party achieving certain milestones.
Line of Credit
On April 16, 1999, the Company obtained up to $1.0 million in short term
financing. No advances have been drawn from this line of credit.
Capital lease obligations
On March 24, 1999, the Company entered into a master capital lease agreement
to obtain up to $1,500,000 in capital lease financing for purchases of video
equipment, office furniture and other equipment including computer hardware and
software made subsequent to January 1, 1999. The available lease line expires
on December 31, 1999. On April 14, 1999 and May 6, 1999, the Company committed
$204,947 and $425,747, respectively in property, plant and equipment to capital
lease under a sale and leaseback provision of the master capital lease
agreement. At June 30, 1998, property, plant and equipment totaling $612,770
were subject to capital lease obligations.
At June 30, 1999, the future minimum payments under these and other capital
lease agreements are as follows:
<TABLE>
<S> <C>
1999............................................................... $262,895
2000............................................................... 263,962
2001............................................................... 276,641
--------
Minimum lease payments............................................. 803,498
Less amount representing interest.................................. 163,646
--------
Principal amount of minimum lease payments......................... 639,852
Less current portion............................................... 178,132
--------
461,720
========
</TABLE>
Name change
On April 23, 1999, Jutvision Canada, Inc. changed its name to bamboo.com
Canada, Inc. and Jutvision Corporation changed its name to bamboo.com, Inc.
F-21
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
Private Placements
On May 5, 1999, the Company issued an additional 172,206 Series B preferred
shares with a par value of $0.001 for $5.807 per share for total cash proceeds
of $1,000,000. In connection with this issuance, the Company has recorded a
charge of $1 million representing a beneficial conversion feature limited to
the proceeds received.
On June 7, 1999, bamboo Canada amended its articles of incorporation and the
Conversion and Pairing Agreement to reflect the creation of Series C
convertible preferred shares ("Series C shares"). Effective June 11, 1999, the
outstanding Series B convertible preferred shares were converted to Series C
convertible preferred shares. The Series C shares have substantially all of the
same rights and preferences as the Series B convertible preferred shares,
except that the Series C shares do not automatically convert in the event that
the parent company, bamboo.com, completes an initial public offering of its
stock. Under the amended conversion and pairing agreement, the Series C shares
are exchangeable on a one for one basis for common stock of the parent company,
bamboo.com, and the shares of the Series C will be redeemed at par value of
$0.0001 per share.
On June 11, 1999, the Company entered into an agreement to sell 1,100 shares
of its Series C redeemable preferred stock and 1,250,830 shares of its common
stock for total gross proceeds of $11.0 million.
Dividends
The holders of Series C redeemable preferred stock are entitled to receive
cumulative dividends out of any assets legally available and prior and in
preference to any other securities, of $500 per share accruing annually from
June 30, 2000.
Voting rights
The Series C redeemable preferred stockholders are entitled to elect one
director to the board of directors, which currently consists of six directors
in total.
Redemption
The shares of the Series C redeemable preferred stock may be redeemed at any
time at the option of the Company by payment of an amount of $10,000 per share
plus any accrued and unpaid dividends. At the option of the holders, the
Company is required to redeem the stock in a single instalment after the
occurrence of a redemption event. A redemption event being defined as the
earliest to occur of (a) the sale of the Company's common stock in an
underwritten public offering with aggregate proceeds in excess of $10 million;
(b) a change in control; or (c) June 8, 2004.
Liquidation
The holders of the Series C redeemable preferred stock shall be entitled to
receive prior and in preference to any other distribution, dividend or
redemption payments of any assets of the company their payment of the
redemption price.
The $11.0 million of proceeds from issuance has been allocated to the Series
C redeemable preferred stock and the common based on their relative fair
values. Accordingly, $4.4 million has been allocated to the Series C redeemable
preferred stock and $6.6 million has been allocated to the common stock at June
11, 1999.
F-22
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of June 30, 1999 and/or for the periods ended June 30, 1998 and
1999 is unaudited
The relative fair values are $8.0 million for the Series C redeemable preferred
stock and $12.1 million for the common stock. The corresponding discount of
$6.6 million recognized on the Series C redeemable preferred stock will be
amortized using the effective interest rate to the statement of operations as
an interest charge over the five-year period to June 8, 2004. In the six month
period ended June 30, 1999 the Company recognized $81,000 of the discount as an
interest charge.
Under the terms of the Series C redeemable preferred stock agreement, such
redemption would first become available upon completion of an Initial Public
Offering, ("IPO") by the Company. Therefore in the quarter in which the IPO
becomes effective the Series C redeemable preferred stock may be redeemed and
an additional interest charge of up to $6.5 million will be recorded to accrete
the preferred stock to its face value of $11.0 million.
In addition, on June 9, 1999 Company adopted the 1999 Employee Stock Purchase
Plan under which 700,000 shares have been reserved for issuance.
Initial Public Offering
On June 9, 1999, the Company approved the issuance and sale in an
underwritten public offering of the Company's common stock.
F-23
<PAGE>
OUR SERVICE MAKES IT SIMPLE
[DIAGRAM THAT DETAILS THE SIX STEPS OF OUR FULL SERVICE PROCESS]
STEP 1. REAL ESTATE AGENT DECIDES TO USE BAMBOO.COM 360 VIRTUAL TOUR TO MARKET A
PROPERTY.
STEP 2. REAL ESTATE AGENT CONTACTS BAMBOO.COM CALL CENTER.
STEP 3. BAMBOO.COM SERVICE PROVIDER IS SENT TO PROPERTY
STEP 4. BAMBOO.COM SERVICE PROVIDER SHOOTS VIDEO OF PROPERTY
STEP 5. VIDEO IS PROCESSED BY BAMBOO.COM
STEP 6. 360 VIRTUAL TOUR IS POSTED TO THE WEB AND EMAILED TO THE REAL ESTATE
AGENT.
<PAGE>
- --------------------------------------------------------------------------------
Until , 1999, all dealers effecting transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the obligation of dealers to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
- --------------------------------------------------------------------------------
[Bamboo.com Logo]
Prudential Securities
Dain Rauscher Wessels
a division of Dain Rauscher Incorporated
Volpe Brown Whelan & Company
E*OFFERING
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, other than the
underwriting discounts, payable by the Registrant in connection with the sale
of the securities being registered. All amounts are estimates except the SEC
registration fee, the NASD filing fee and the Nasdaq/NMS listing fee.
<TABLE>
<S> <C>
SEC Registration Fee............................................. $ 19,182
NASD Filing Fee.................................................. 7,786
Nasdaq National Market Listing Fee............................... 63,725
Printing Costs................................................... 350,000
Legal Fees and Expenses.......................................... 350,000
Accounting Fees and Expenses..................................... 275,000
Blue Sky Fees and Expenses....................................... 15,000
Transfer Agent and Registrar Fees................................ 25,000
Miscellaneous.................................................... 94,307
----------
Total.......................................................... $1,200,000
==========
</TABLE>
Item 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933. Article VII of our current
Certificate of Incorporation (Exhibit 3.1 hereto) and Article VI of our current
Bylaws (Exhibit 3.3 hereto) provide for indemnification of our directors,
officers, employees and other agents to the maximum extent permitted by
Delaware law. In addition, we have entered into Indemnification Agreements
(Exhibit 10.1 hereto) with our officers and directors. The Underwriting
Agreement (Exhibit 1.1) also provides for cross-indemnification among
bamboo.com and the Underwriters with respect to certain matters, including
matters arising under the Securities Act.
Item 15. RECENT SALES OF UNREGISTERED SECURITIES.
Since our incorporation in November 1995, we have sold and issued the
following securities:
1. On November 2, 1995 we issued 2,240,000 shares of common stock to two
founders: Kevin McCurdy and Lanek Limited, an entity controlled by Len
McCurdy for an aggregate consideration of C$10.00.
2. On December 12, 1996 we issued 112,000 shares of common stock to one
U.S. investor, IBT Ventures and a total of 448,000 shares of common
stock to twelve non-U.S. investors: Peter Field, Lloyd Hope, Jane
McCurdy, Kristy McCurdy, Carol Slavens, Michael Slavens, Nolan
Bederman, Sam Bederman, Lisa Field, Paul Slavens, Invescorp Limited,
and Global Technologies for an aggregate consideration C$200,000.00.
3. On July 31, 1997 we issued 45,024 shares of common stock to six non-
U.S. investors: Lisa Field, Peter Field, Carol Slavens, Michael
Slavens, Paul Slavens, Alevai Developments Limited for an aggregate
consideration of C$18,759.89.
4. On February 12, 1998 we issued 420,000 shares of common stock to three
officers: Leonard McCurdy, Kevin McCurdy, Howard Field for an aggregate
consideration of C$150,000, paid for by services rendered and options
to purchase 1,400,000 shares of common stock at an exercise price
of $.01.
II-1
<PAGE>
5. On March 31, 1998 we issued a total of 616,000 shares of common stock
to fourteen non-U.S. investors: Nolan Bederman, Howard Field, Lisa
Field, Peter Field, Lloyd Hope, Jane McCurdy, Kristy McCurdy, Carol
Slavens, Michael Slavens, Paul Slavens, Lanek Limited, Invescorp
Limited, and Alevai Developments Limited for an aggregate consideration
of C$220,000.
6. On April 8, 1998 we issued a total of 100,800 shares of common stock to
one officer and two non- U.S. investors: Howard Field, Vestmark Limited
and Kristy McCurdy, respectively, for an aggregate consideration of
C$36,000.
7. On April 13, 1998 we issued 112,000 shares of common stock to one
employee, Justin Holmes, for an aggregate consideration of C$40,000.
8. On April 21, 1998 we issued a total of 112,000 shares of common stock
to one officer and one investor: Duncan Fortier and Jascan Investment
Corp., respectively, for an aggregate consideration of C$40,000.
9. On May 22, 1998 we issued a total of 495,600 shares of common stock to
two investors: Pierre G. Lesperance and Mark Stephenson for an
aggregate consideration of C$177,000.
10. On June 28, 1998 we issued 120,000 units for 2.8 shares of common stock
and one warrant to purchase an additional 2.8 shares of common stock to
six investors: Roy Dalton, Jascan Investments Inc., Lanek Limited,
Vince Oddy, Vestmark Limited, and Howard Fieldwhich were exercised for
an aggregate consideration of C$120,000.
11. On September 28, 1998 we issued a total of 37,432 shares of common
stock to three investors: Donna Goldstein, Roseco Incorporated, and
421272 Ontario Limited for an aggregate consideration of C$40,104.
12. On September 30, 1998 we issued 393,000 shares of common stock to one
investor, Matthew Kunzweiler for an aggregate consideration of
C$150,000.
13. On October 20, 1998 we issued a total of 416,500 shares of Series A
preferred stock to eleven investors: Braden L. Berg, Jerome Gotkin,
Peter E. Jaffe, John P. Kelleher, Elizabeth Kunkel, Peter S. Lawrence,
Tamar Kagan Levine, Lewis S. Kunkel, Jr. And Louise R. Kunkel, Barbara
F. Reily, Salomon Smith Barney-Custodian for the Sep IRA of Marc S.
Levine, and V.R. Investments, LP at an aggregate consideration of
$595,000.
14. On November 11, 1998 we issued a warrant to purchase 280,000 shares of
common stock to one investor, RealSelect, Inc. for an exercise price of
$1.43 per share.
15. On December 8, 1998 we issued a total of 70,000 shares of Series A
preferred stock to three U.S. Investors: Mario M. Rosati, W.S.
Investment Company, 98B, and Matthew Kunzweiler and a total of 161,000
shares of Series A preferred stock to seven investors: Acheson Family
Trust, Paula Oprica Aicklen, Charmaine Doyle, Michael J. Hemmer, Carol
Smith Slavens and Darin Vest at an aggregate consideration of
C$330,000.
16. On January 1, 1999 we issued a total of 7,421,536 shares of Class B
redeemable common stock to twenty-eight shareholders: 421272 Ontario
Limited, Alevai Developments Limited, Nolan Bederman, Sam Bederman, Roy
Dalton, Howard Field, Lisa Field, Peter Field, Duncan Fortier, Global
Technology Investments Ltd., Donna Goldstein, Justin Holmes, Lloyd
Hope, IBT Ventures, Jascan Investments Inc., Matthew Kunzweiler, Lanek
Limited, Pierre G. Lesperance, Jane McCurdy, Kristy McCurdy, Kevin B.
McCurdy, Vince Oddy, Cameron Roach, Roseco Incorporated, Carol Smith
Slavens, Michael Slavens, Paul Slavens, and Vestmark Limited as part of
the amalgamation and reorganization of our business as a Delaware
corporation.
17. On February 25, 1999 we issued a total of 120,400 shares of common
stock to two investors: Mario M. Rosati and WS Investment Company, 99A
for an aggregate consideration of $21,500.
II-2
<PAGE>
18. On March 12, 1999 we issued a total of 6,027,194 shares of Series B
preferred stock to eighteen investors: Comstock Net Services, Inc.,
Dain Rauscher Wessels Investors LLC, DigaComm (JVN), L.L.C., Jerome
Gotkin, Melody Kean Haller, Information Associates-II, L.P., IA-II
Affiliates Fund, L.L.C., Intel Corporation, JVC Associates Partnership,
Bill Kunzweiler, Peter S. Lawrence, Michael A. Berke-Trustee of the JV
#1 Trust, Silicon Valley Bancshares, Michael Stefonick, Walden Media
and Information Technology Fund, L.P., Walden EDB Partners, L.P.,
Walden Japan Partners, L.P., and WS Investment Company, 99A for an
aggregate consideration of $12,499,962.37.
19. On May 5, 1999 the Company issued 482,177 shares of Series B preferred
stock to one investor, Walden Media and Information Technology Fund,
L.P. for a total purchase price of $1,000,000.24.
20. On June 11, 1999 the Company entered into an agreement to sell 1,100
shares of its Series C redeemable preferred stock and 1,250,830 shares
of its common stock to five investors: GCW&F Investment Partners, HKL
I, LLC, Jason Strober, VantagePoint Venture Partners III, LP, and
VantagePoint Communications Partners, LP for an aggregate consideration
of $11,000,000.
21. Since our incorporation, we have issued options and stock purchase
rights to purchase an aggregate of 6,620,986 shares of our common stock
under the 1998 Employee Director and Consultant Stock Plan to
employees, directors, and consultants with exercise prices ranging from
$0.1786 to $3.5714.
The issuances of securities described in Items 1-12 were sold Canadian
dollars and are denominated above in Canadian dollars. "C$" means Canadian
dollars.
The issuances of securities described in Items 1, 3-6, 8-11 were sold to
persons who were neither nationals nor residents of the United States and no
facilities or instrumentalities of U.S. interstate commerce were used in
connection with any offer or sale thereof.
The number of shares of Series A and Series B preferred stock described in
Items 13, 15, 18 and 19 are adjusted to reflect the number of shares of common
stock into which the preferred stock will convert upon the consummation of the
offering.
The issuance of the other above securities were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of such
Securities Act as transactions by an issuer not involving any public offering.
In addition, the issuances described in Item 20 were deemed exempt from
registration under the Securities Act in reliance upon Rule 701 promulgated
under the Securities Act. The recipients of securities in each such transaction
represented their intentions to acquire the securities for investment only and
not with a view to or for sale in connection with any distribution thereof and
appropriate legends were affixed to the share certificates and warrants issued
in such transactions. All recipients had adequate access, through their
relationships with us, to information about us.
Item 16. EXHIBITS.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.**
3.1 Certificate of Incorporation of Registrant as currently in effect.*
3.2 Form of Certificate of Incorporation of Registrant to be filed
immediately following the closing of the offering made under this
Registration Statement.
3.3 Articles of Amalgamation of Jutvision Canada, Inc. (bamboo.com) dated
January 1, 1999.*
3.4 Articles of Amendment of Jutvision Canada, Inc. (bamboo.com) dated
April 23, 1999.*
3.5 Articles of Amendment of bamboo.com Canada, Inc. dated June 7, 1999.*
3.6 Amended and Restated Conversion and Pairing Agreement with bamboo.com
Canada, Inc. dated as of June 7, 1999.*
3.7 Bylaws of Registrant as currently in effect.*
3.8 Form of Bylaws of Registrant to be adopted immediately following the
closing of the offering made under this Registration Statement.
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
3.9 Series C Redeemable Preferred Stock Purchase Agreement dated as of
June 11, 1999.*
4.1 Specimen Common Stock Certificate.**
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
9.1 Share Contribution, Subscription, Right of First Refusal and Voting
Agreement Dated Jan. 1, 1999.*
10.1 Form of Indemnification Agreement between the Registrant and each of
its directors and officers.*
10.2 1998 Employee, Director and Consultant Stock Plan and the form
agreement thereunder, as currently in effect.*
10.3 Amended and Restated 1998 Employee, Director and Consultant Stock Plan
and the Form Agreement thereunder to be adopted immediately upon the
effectiveness of the Registration Statement (which supersedes the
Amended and Restated 1998 Employee, Director and Consultant Stock Plan
originally filed on June 14).
10.4 1999 Employee Stock Purchase Plan and Form of Agreements thereunder
(which supersedes the 1999 Employee Stock Purchase Plan and form of
agreements thereunder originally filed on June 14).
10.5 Investors' Rights Agreement dated as of March 12, 1999 among
bamboo.com and certain investors.*
10.6 Joint Services Agreement with RealSelect, Inc. dated as of Nov. 11,
1998, as amended June 11, 1999.+*
10.7 Distribution Agreement with Microsoft Corporation dated as of March
16, 1999.+*
10.8 Distribution Agreement with HomeSeekers.com, Inc. dated as of Nov. 20,
1998.+*
10.9 Distribution Agreement with Homes.com, a division of PCL Media
Limited, dated as of May 10, 1999.+*
10.10 Form of Distribution Agreement with multiple listing services.*
10.11 Form of bamboo.com Approved Web Pro Agreement.*
10.12 Form of Distribution and Co-marketing Agreement with real estate
brokerage companies.*
10.13 Line of Credit with Silicon Valley Bank dated April 16, 1999.*
10.14 Master lease agreement with Silicon Valley Bank dated March 24, 1999.*
10.15 Sublease with Pete's Brewing Company dated November 2, 1998.*
10.16 Sublease with Pete's Brewing Company dated December 1, 1998.*
10.17 Sublease with Information Access Inc. dated Nov. 15, 1998, and
amendment dated Feb. 22, 1999.*
10.18 Service Provider Agreement with TBI Imaging dated Nov. 23, 1998 (also
form of).+*
10.19 Employment Agreement with Leonard B. McCurdy.*
10.20 Employment Agreement with Kevin B. McCurdy.*
10.21 Employment Agreement with Andrew P. Laszlo.*
10.22 Employment Agreement with Howard D. Field.*
10.23 Amended and Restated Employment Agreement with Mark R. Searle dated
June 1, 1999 (which supersedes the Employment Agreement with Mark R.
Searle originally filed on June 14, 1999).
10.24 Employment Agreement with Randall I. Bresee.*
10.25 Employment Agreement with Andrew J. Aicklen.*
10.26 Sublease with Transmode Consultants Inc./Traxis Inc. dated May 27,
1999.*
10.27 Distribution and Co-Marketing Agreement with The Equity Group dated
May 5, 1999.
10.28 Distribution and Co-Marketing Agreement with Northside Realty dated
June 3, 1999.+
10.29 Distribution and Co-Marketing Agreement with Carlson Real Estate dated
May 19, 1999.+
10.30 Sales and Co-Marketing Agreement with Metropolitan Regional
Information Systems, Inc. dated June 9, 1999.+
10.31 Distribution and Co-Marketing Agreement with Sudler/Beliard Gordon
dated May 28, 1999.+
</TABLE>
II-4
<PAGE>
<TABLE>
<C> <S>
10.32 Distribution and Co-Marketing Agreement with Keller Williams Southwest
Region dated May 25, 1999.
10.33 Distribution and Co-Marketing Agreement with Pacific Union Real Estate
Group, Inc. dated June 9, 1999.+
10.34 Services Agreement with The Prudential Real Estate Affiliates, Inc.
dated June 8, 1999.+
10.35 Non-Exclusive Distribution Agreement with Multiple Listing Service of
Northern Illinois dated May 26, 1999.+
10.36 Distribution and Co-Marketing Agreement with Keller Williams Fox &
Associates dated June 10, 1999.+
10.37 Distribution Agreement with Toronto Real Estate Board dated April 14,
1999.+
10.38 Distribution and Co-Marketing Agreement with John L. Scott, Inc. dated
April 7, 1999.+
10.39 Distribution Agreement with Windermere Real Estate Services Company
dated March 17, 1999.+
10.40 Distribution Agreement with St. Joe Real Estate Services, Inc., d/b/a
Arvida Realty Services dated March 5, 1999.+
10.41 Distribution Agreement with GTE Enterprise Solutions dated January 12,
1999 as amended January 19, 1999.+
10.42 Agreement with Loop Ventures, Inc. dated Nov. 6, 1998.+
10.43 Access Agreement with Cendant Corporation dated July 15, 1999.**
10.44 RE/MAX Approved Supplier License Agreement with RE/MAX International,
Inc. dated April 5, 1999.+
21.1 Subsidiaries of Registrant.*
23.1 Consents of Accountants.
23.2 Consents of Attorneys.*
24.1 Power of Attorney (see page II-5).*
27.1 Financial Data Schedule.*
</TABLE>
- --------
*Previously Filed
**To be filed by amendment
+Confidential Treatment Requested
(b)Financial Statement Schedules
Schedule II--Valuation and Qualifying Accounts
Other schedules are omitted because they are not applicable, or because the
information is included in the Financial Statements or the Notes thereto.
Item 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-5
<PAGE>
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 2 to the Registration Statement on Form S-1
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Palo Alto, State of California on July 21, 1999.
/s/ Randall I. Bresee
By: _________________________________
Randall I. Bresee
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Leonard B. McCurdy Chief Executive Officer, July 21, 1999
______________________________________ Chairman and Director
Leonard B. McCurdy
* Kevin B. McCurdy Executive Vice President July 21, 1999
______________________________________ and Director
Kevin B. McCurdy
/s/ Randall I. Bresee Chief Financial Officer July 21, 1999
______________________________________
Randall I. Bresee
* Duncan Fortier Director July 21, 1999
______________________________________
Duncan Fortier
* John Moragne Director July 21, 1999
______________________________________
John Moragne
* Philip Sanderson Director July 21, 1999
______________________________________
Philip Sanderson
* James Marver Director July 21, 1999
______________________________________
James Marver
*By: /s/ Randall I. Bresee
______________________________________
Randall I. Bresee
(Attorney-In-Fact)
</TABLE>
II-7
<PAGE>
Report of Independent Accountants on Financial Statement Schedule
To the board of Directors and Stockholders of bamboo.com Inc. (a development
stage company) (formerly Jutvision Corporation):
Our audits of the consolidated financial statements referred to in our report
dated March 12, 1999, except for Note 14, which is as of July 21, 1999,
appearing on page F-2 of this Form S-1 also included an audit of the financial
statement schedule listed under item 16(b) of this Form S-1. In our opinion,
this financial statement schedule presents fairly, in all material respects,
the information set forth therein when read in conjunction with the related
consolidated financial statements.
PricewaterhouseCoopers LLP
San Jose, California
July 21, 1999
S-1
<PAGE>
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Additions
Charged
Balance at to Cost Balance at
Beginning and Ending of
of Period Expenses Deductions Period
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Year End December 31, 1996
Allowance for doubtful accounts..... $ -- $ -- $-- $ --
Year End December 31, 1997
Allowance for doubtful accounts..... $ -- $ -- $-- $ --
Year End December 31, 1998
Allowance for doubtful accounts..... $ -- $1,304 $-- $1,304
Six months ended June 30, 1999
Allowance for doubtful accounts..... $1,304 $ 742 $-- $2,046
</TABLE>
S-2
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.**
3.1 Certificate of Incorporation of Registrant as currently in effect.*
3.2 Form of Certificate of Incorporation of Registrant to be filed
immediately following the closing of the offering made under this
Registration Statement.
3.3 Articles of Amalgamation of Jutvision Canada, Inc. (bamboo.com) dated
January 1, 1999.*
3.4 Articles of Amendment of Jutvision Canada, Inc. (bamboo.com) dated
April 23, 1999.*
3.5 Articles of Amendment of bamboo.com Canada, Inc. dated June 7, 1999.*
3.6 Amended and Restated Conversion and Pairing Agreement with bamboo.com
Canada, Inc. dated as of June 7, 1999.*
3.7 Bylaws of Registrant as currently in effect.*
3.8 Form of Bylaws of Registrant to be adopted immediately following the
closing of the offering made under this Registration Statement.
3.9 Series C Redeemable Preferred Stock Purchase Agreement dated as of
June 11, 1999.*
4.1 Specimen Common Stock Certificate.**
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
9.1 Share Contribution, Subscription, Right of First Refusal and Voting
Agreement Dated Jan. 1, 1999.*
10.1 Form of Indemnification Agreement between the Registrant and each of
its directors and officers.*
10.2 1998 Employee, Director and Consultant Stock Plan and the form
agreement thereunder, as currently in effect.*
10.3 Amended and Restated 1998 Employee, Director and Consultant Stock Plan
and the Form Agreement thereunder to be adopted immediately upon the
effectiveness of the Registration Statement (which supersedes the
Amended and Restated 1998 Employee, Director and Consultant Stock Plan
originally filed on June 14).
10.4 1999 Employee Stock Purchase Plan and Form of Agreements thereunder
(which supersedes the 1999 Employee Stock Purchase Plan and form of
agreements thereunder originally filed on June 14).
10.5 Investors' Rights Agreement dated as of March 12, 1999 among
bamboo.com and certain investors.*
10.6 Joint Services Agreement with RealSelect, Inc. dated as of Nov. 11,
1998, as amended June 11, 1999.+*
10.7 Distribution Agreement with Microsoft Corporation dated as of March
16, 1999.+*
10.8 Distribution Agreement with HomeSeekers.com, Inc. dated as of Nov. 20,
1998.+*
10.9 Distribution Agreement with Homes.com, a division of PCL Media
Limited, dated as of May 10, 1999.+*
10.10 Form of Distribution Agreement with multiple listing services.*
10.11 Form of bamboo.com Approved Web Pro Agreement.*
10.12 Form of Distribution and Co-marketing Agreement with real estate
brokerage companies.*
10.13 Line of Credit with Silicon Valley Bank dated April 16, 1999.*
10.14 Master lease agreement with Silicon Valley Bank dated March 24, 1999.*
10.15 Sublease with Pete's Brewing Company dated November 2, 1998.*
10.16 Sublease with Pete's Brewing Company dated December 1, 1998.*
10.17 Sublease with Information Access Inc. dated Nov. 15, 1998, and
amendment dated Feb. 22, 1999.*
10.18 Service Provider Agreement with TBI Imaging dated Nov. 23, 1998 (also
form of).+*
</TABLE>
<PAGE>
<TABLE>
<C> <S>
10.19 Employment Agreement with Leonard B. McCurdy.*
10.20 Employment Agreement with Kevin B. McCurdy.*
10.21 Employment Agreement with Andrew P. Laszlo.*
10.22 Employment Agreement with Howard D. Field.*
10.23 Amended and Restated Employment Agreement with Mark R. Searle dated
June 1, 1999 (which supersedes the Employment Agreement with Mark R.
Searle originally filed on June 14, 1999).
10.24 Employment Agreement with Randall I. Bresee.*
10.25 Employment Agreement with Andrew J. Aicklen.*
10.26 Sublease with Transmode Consultants Inc./Traxis Inc. dated May 27,
1999.*
10.27 Distribution and Co-Marketing Agreement with The Equity Group dated
May 5, 1999.
10.28 Distribution and Co-Marketing Agreement with Northside Realty dated
June 3, 1999.+
10.29 Distribution and Co-Marketing Agreement with Carlson Real Estate dated
May 19, 1999.+
10.30 Sales and Co-Marketing Agreement with Metropolitan Regional
Information Systems, Inc. dated June 9, 1999.+
10.31 Distribution and Co-Marketing Agreement with Sudler/Beliard Gordon
dated May 28, 1999.+
10.32 Distribution and Co-Marketing Agreement with Keller Williams Southwest
Region dated May 25, 1999.
10.33 Distribution and Co-Marketing Agreement with Pacific Union Real Estate
Group, Inc. dated June 9, 1999.+
10.34 Services Agreement with The Prudential Real Estate Affiliates, Inc.
dated June 8, 1999.+
10.35 Non-Exclusive Distribution Agreement with Multiple Listing Service of
Northern Illinois dated May 26, 1999.+
10.36 Distribution and Co-Marketing Agreement with Keller Williams Fox &
Associates dated June 10, 1999.+
10.37 Distribution Agreement with Toronto Real Estate Board dated April 14,
1999.+
10.38 Distribution and Co-Marketing Agreement with John L. Scott, Inc. dated
April 7, 1999.+
10.39 Distribution Agreement with Windermere Real Estate Services Company
dated March 17, 1999.+
10.40 Distribution Agreement with St. Joe Real Estate Services, Inc., d/b/a
Arvida Realty Services dated March 5, 1999.+
10.41 Distribution Agreement with GTE Enterprise Solutions dated January 12,
1999 as amended January 19, 1999.+
10.42 Agreement with Loop Ventures, Inc. dated Nov. 6, 1998.+
10.43 Access Agreement with Cendant Corporation dated July 15, 1999.**
10.44 RE/MAX Approved Supplier License Agreement with RE/MAX International,
Inc. dated April 5, 1999.+
21.1 Subsidiaries of Registrant.*
23.1 Consents of Accountants.
23.2 Consents of Attorneys.*
24.1 Power of Attorney (see page II-5).*
27.1 Financial Data Schedule.*
</TABLE>
- --------
*Previously Filed
**To be filed by amendment
+Confidential Treatment Requested
(b)Financial Statement Schedules
Schedule II--Valuation and Qualifying Accounts
Other schedules are omitted because they are not applicable, or because the
information is included in the Financial Statements or the Notes thereto.
<PAGE>
EXHIBIT 3.2
RESTATED CERTIFICATE OF INCORPORATION
OF
BAMBOO.COM, INC.
Bamboo.com, Inc., a corporation organized and existing under the laws
of the State of Delaware (the "Corporation"), hereby certifies as follows:
A. The name of the Corporation is bamboo.com, Inc. The Corporation
was originally incorporated under the name Jutvision Corporation, and the
original Certificate of Incorporation was filed with the Secretary of State of
the State of Delaware on March 26, 1998.
B. Pursuant to Sections 242 and 245 of the General Corporation Law of
the State of Delaware, this Restated Certificate of Incorporation restates and
amends the provisions of the Certificate of Incorporation of the Corporation.
C. The text of the Certificate of Incorporation is hereby amended and
restated in its entirety to read as follows:
ARTICLE I
The name of this Corporation is bamboo.com, Inc.
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is 1013 Centre Road, City of Wilmington, County of New Castle,
Delaware. The name of its registered agent at such address is Corporation
Service Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of Delaware.
ARTICLE IV
The Corporation is authorized to issue three classes of stock to be
designated, respectively, "Common Stock," "Class B Common Stock" and "Preferred
Stock." The total number of Shares that the Corporation is authorized to issue
is 82,422,636. The total number of shares of Common Stock that the Corporation
is authorized to issue is 70,000,000, with a par value of $0.001 per share. The
total number of shares of Class B Common Stock that the Corporation is
authorized to issue is 7,421,536, with a par value of $0.0001 per share. The
total number of shares of Preferred Stock that
<PAGE>
the Corporation is authorized to issue is 5,001,100 with a par value of $0.001
per share, 1,100 of which are designated "Series C Redeemable Preferred Stock."
The Preferred Stock may be issued from time to time in one or more series
pursuant to a resolution or resolutions providing for such issue duly adopted by
the board of directors (authority to do so being hereby expressly vested in the
board). The board of directors is further authorized to determine or alter the
rights, preferences, privileges and restrictions granted to or imposed upon any
wholly unissued series of Preferred Stock and to fix the number of shares of any
series of Preferred Stock and the designation of any such series of Preferred
Stock. The board of directors, within the limits and restrictions stated in any
resolution or resolutions of the board of directors originally fixing the number
of shares constituting any series, may increase or decrease (but not below the
number of shares in any such series then outstanding) the number of shares of
any series subsequent to the issue of shares of that series.
The authority of the board of directors with respect to each such class or
series shall include, without limitation of the foregoing, the right to
determine and fix:
(a) the distinctive designation of such class or series and the number
of shares to constitute such class or series;
(b) the rate at which dividends on the shares of such class or series
shall be declared and paid, or set aside for payment, whether dividends at the
rate so determined shall be cumulative or accruing, and whether the shares of
such class or series shall be entitled to any participating or other dividends
in addition to dividends at the rate so determined, and if so, on what terms;
(c) the right or obligation, if any, of the corporation to redeem
shares of the particular class or series of Preferred Stock and, if redeemable,
the price, terms and manner of such redemption;
(d) the special and relative rights and preferences, if any, and the
amount or amounts per share, which the shares of such class or series of
Preferred Stock shall be entitled to receive upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation;
(e) the terms and conditions, if any, upon which shares of such class
or series shall be convertible into, or exchangeable for, shares of capital
stock of any other class or series, including the price or prices or the rate or
rates of conversion or exchange and the terms of adjustment, if any;
(f) the obligation, if any, of the Corporation to retire, redeem or
purchase shares of such class or series pursuant to a sinking fund or fund of a
similar nature or otherwise, and the terms and conditions of such obligation;
(g) voting rights, if any, on the issuance of additional shares of
such class or series or any shares of any other class or series of Preferred
Stock;
-2-
<PAGE>
(h) limitations, if any, on the issuance of additional shares of such
class or series or any shares of any other class or series of Preferred Stock;
and
(i) such other preferences, powers, qualifications, special or
relative rights and privileges thereof as the board of directors of the
Corporation, acting in accordance with this Restated Certificate of
Incorporation, may deem advisable and are not inconsistent with law and the
provisions of this Restated Certificate of Incorporation.
ARTICLE V
The special rights of the Class B Common Stock and the holders thereof are
as follows:
1. General. The voting, dividend and liquidation rights of the holders
-------
of the Class B Common Stock are subject to and qualified by the rights of the
holders of the Preferred Stock of any series as may be designated by the Board
of Directors upon any issuance of the Preferred Stock of any series. Except as
otherwise required by the General Corporation Law or as otherwise provided in
this Certificate of Incorporation, each share of Common Stock and Class B Common
Stock shall have identical rights, preferences, privileges and restrictions,
including rights in liquidation. Each provision of this Article V shall be
severable and an adverse determination as to any such provision shall in no way
affect the validity of any other provision.
2. Voting. The holders of the Class B Common Stock are entitled to one
------
vote for each share held at all meetings of stockholders. With respect to all
matters upon which stockholders are entitled to vote, the holders of the
outstanding shares of Common Stock and Class B Common Stock shall vote together
without regard to class.
The number of authorized shares of Common Stock and Class B Common Stock
may be increased or decreased (but not below the number of shares thereof then
outstanding, including shares issuable upon conversion of shares of Preferred
Stock then outstanding, and upon exercise of options and warrants then
outstanding) by the affirmative vote of the holders of a majority of the stock
of the Corporation entitled to vote, irrespective of the provisions of Section
242(b)(2) of the General Corporation Law of Delaware.
3. Dividends. No dividends shall be paid on the Class B Common Stock.
---------
4. Liquidation. The Class B Common Stock shall not be entitled to
-----------
receive any assets of the corporation upon the dissolution or liquidation of the
Corporation.
5. Mandatory Redemption of Class B Common Stock. Upon the issuance of
--------------------------------------------
any shares of Common Stock to a holder of Class B Common Stock in connection
with the conversion (a "Conversion Event") by such holder of any Series C
Convertible Preferred Shares, no par value per share, of bamboo.com Canada,
Inc., an Ontario Corporation ("bamboo.com Canada") ("bamboo.com Canada Series C
Preferred"), such holder's shares of Class B Common Stock shall be automatically
redeemed, out of funds legally available therefor, by the Corporation for par
value. The number of
-3-
<PAGE>
shares of Class B Common Stock redeemed shall be equal to that number of shares
of Common Stock issued to the holder upon the Conversion Event. Upon a
Conversion Event, the Class B Common Stock held by the stockholder participating
in the Conversion Event shall only represent the right to receive par value for
each Class B Common Stock share from the Corporation and all others rights of
the Class B Common Stock shall be automatically extinguished. Such redemption
shall be deemed to have been made immediately prior to the close of business on
the date of such surrender of the shares of Class B Common Stock to be redeemed.
Further, upon a Conversion Event, the Corporation shall have no obligation to
issue shares of Common Stock to any holder converting bamboo.com Canada Series C
Preferred shares until said holder surrenders (or constructively surrenders, as
the case may be, if the certificate or certificates for such shares are being
held for such holder by bamboo.com Canada, or if bamboo.com Canada has not yet
issued and delivered such certificate or certificates to the holder) the
certificates, duly endorsed, at the office of the Corporation or of any transfer
agent for the equal number shares of Class B Common Stock for redemption by the
Corporation or such holder provides the Corporation with a lost certificate
affidavit, in a form acceptable to the Corporation. Nothing in this Section 5
shall require the redemption of a holder's Class B Common Stock upon the
issuance of Common Stock to such holder separate from a Conversion Event.
6. Transfer of Stock Pairing.
-------------------------
(a) Until the limitations on transfer set forth in the Amended and
Restated Conversion and Pairing Agreement (the "Conversion and Pairing
Agreement"), dated as of June 7, 1999, by and between the Corporation and
bamboo.com Canada, as amended from time to time in accordance with the
provisions thereof, shall be terminated:
(i) Shares of Class B Common Stock that are paired pursuant to
the Conversion and Pairing Agreement with the bamboo.com Canada Series C
Preferred shall not be transferable, and shall not be transferred on the stock
transfer books of the Corporation, unless a simultaneous transfer of the paired
bamboo.com Canada Series C Preferred share is made by the same transferor to the
same transferee. Any purported transfer of Class B Common Stock in violation of
this Section 6 shall be void ab initio, and the intended transferee shall
-- ------
acquire no rights in such shares of Class B Common Stock.
(ii) A copy of the Conversion and Pairing Agreement shall be
made available to the stockholders upon request, without charge.
(b) Nothing in this Section 6 shall prohibit the redemption of the
Class B Common Stock, as provided for by Section 5 hereof, upon the conversion
of the bamboo.com Canada Series C Preferred into Common Stock.
ARTICLE VI
The relative rights, preferences, privileges and restrictions granted to or
imposed upon the Series C Redeemable Preferred Stock are as set forth below.
-4-
<PAGE>
1. Dividend Provisions. Holders of Series C Redeemable Preferred Stock
-------------------
shall be entitled to receive cumulative dividends, out of any assets legally
available therefore, prior and in preference to any declaration or payment of
any dividend (payable other than in Common Stock or other securities and rights
convertible into or entitling a holder thereof to receive, directly or
indirectly, additional shares of Common Stock of this corporation) on the Class
B Common and Common Stock of this corporation at the rate of $500.00 per share,
per annum, accruing annually from June 30, 2000. Dividends on the holder of
Series C Redeemable Preferred Stock shall not accrue prior to June 30, 2000.
2. Redemption Rights.
(a) Redemption at the Corporation's Option. The Corporation may
--------------------------------------
redeem the Series C Redeemable Preferred Stock at any time. The Corporation
shall effect such redemption by paying cash for each share of Series C
Redeemable Preferred Stock to be redeemed in a sum equal to $10,000.00 plus all
accrued and unpaid dividends, if any, on such share of Series C Redeemable
Preferred Stock as provided for in Section 1 above (the "Series C Redemption
Price"). At least fifteen (15) but no more than thirty (30) days prior to the
date the corporation intends to redeem Series C Redeemable Preferred Stock, a
written notice will be mailed, postage prepaid, to each holder of Series C
Redeemable Preferred Stock to be redeemed, at the holder's address last shown on
the records of the Corporation, notifying such holder of the redemption to be
effected, specifying the number of shares to be redeemed from such holder,
specifying the date of redemption and the Series C Redemption Price and calling
upon such holder to surrender to the Corporation, at the offices of the
Corporation or any additional locations that the Corporation shall designate,
its certificate or certificates representing the share or shares to be redeemed.
On or prior to the date specified in the notice of redemption, each holder of
the Series C Redeemable Preferred Stock to be redeemed shall surrender its
certificate or certificates representing such share or shares to the corporation
at the offices of the Corporation or any locations as the Corporation shall
designate, and thereupon the Series C Redemption Price of such share or shares
shall be payable to the order of the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered
certificate shall be canceled. In the event less than all the shares represented
by any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares. If, on or prior to the date of redemption
hereunder, the funds necessary for such redemption shall have been set aside by
the Corporation and deposited with a bank or trust company, for the benefit of
the holders of the Series C Redeemable Preferred Stock, whose shares are to be
redeemed, then from after the close of business on the date of the redemption as
specified in the notice discussed in this Section 2, all rights of the holders
to such shares as the holders of Series C Redeemable Preferred Stock of the
Corporation (except the right to receive the Redemption Price without interest
upon surrender of its certificate or certificates) shall cease with respect to
such shares, and such shares shall not thereafter be transferred on the books of
the Corporation or be deemed to be outstanding for any purpose.
(b) Redemption at the Holders' Option. The holders of the outstanding
----------------------------------
shares of Series C Redeemable Preferred Stock may require the Corporation, to
the extent it may lawfully do so, to redeem the Series C Redeemable Preferred
Stock in a single installment any time after a
-5-
<PAGE>
"Redemption Event" (as defined below). The Corporation shall effect such
redemption by paying cash for each share of Series C Redeemable Preferred Stock
to be redeemed in an amount equal to the Series C Redemption Price. "Redemption
Event" means the earliest to occur of: (i) the sale of the Corporation's Common
Stock in a firm commitment underwritten public offering pursuant to a
registration statement under the Securities Action of 1933, as amended, the
public offering price of which was not less than Ten Million Dollars
($10,000,000.00) in the aggregate, (ii) a Change in Control, and (iii) June 8,
2004. On the date of the Redemption Event, subject to the prompt surrender of a
certificate or certificates by the holders of Series C Redeemable Preferred
Stock representing such share or shares to be redeemed by the Corporation, the
Corporation shall immediately pay to the order of the entity or person whose
name appears on such certificate or certificates as the owner thereof the
Redemption Price and the certificate or certificates shall be canceled. If, on
or prior to the date of redemption hereunder, the funds necessary for such
redemption shall have been set aside by the Corporation and deposited with a
bank or trust company, for the benefit of the holders of the Series C Redeemable
Preferred Stock, whose shares are being redeemed, then from after the close of
business on the date of the redemption as specified in the notice discussed in
this Section 2, all rights of the holders to such shares as the holders of
Series C Redeemable Preferred Stock of the Corporation (except the right to
receive the Redemption Price without interest upon surrender of their
certificate or certificates) shall cease with respect to such shares, and such
shares shall not thereafter be transferred on the books of the Corporation or be
deemed to be outstanding for any purpose.
(c) Definition of Change of Control. A "Change of Control" means a
-------------------------------
sale of all or substantially all of the assets of this Corporation or a merger,
consolidation or reorganization of the Corporation with or into another
corporation through one or a series of related transactions in which the
stockholders of this Corporation immediately prior to the transaction possess
less than 50% of the voting power of the surviving entity (or its parent)
immediately after the transaction.
(d) Trust Fund. On or prior to the date that shares of Series C
----------
Redeemable Preferred Stock are to be redeemed, the Corporation may deposit the
Redemption Price with a bank or trust company as a trust fund for the benefit of
the holder of the shares designated for redemption.
(e) Insufficient Funds. If the funds of the Corporation legally
------------------
available for redemption of the shares of Series C Redeemable Preferred Stock
are insufficient to redeem all of the shares of Series C Redeemable Preferred
Stock to be redeemed on such date, those funds which are legally available will
be used to redeem the maximum possible amount of such outstanding shares from
the holders thereof in proportion to their relative ownership of all shares of
Series C Redeemable Preferred Stock then outstanding. Any remainder of the
shares not redeemed shall remain outstanding and entitled to all the rights and
preferences provided herein. At any time thereafter when additional funds of
the Corporation are legally available for the redemption of the shares of Series
C Redeemable Preferred Stock such funds will immediately be used to redeem the
balance of the shares which have not been redeemed.
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<PAGE>
(f) Redemption Priority and Preference. The holders of the Series C
----------------------------------
Redeemable Preferred Stock shall be entitled to receive payment of the
Redemption Price, prior and in preference to any other distribution, dividend or
redemption payments of any assets of the Corporation.
ARTICLE VII
The Corporation reserves the right to amend, alter, change, or repeal any
provision contained in this Restated Certificate of Incorporation, in the manner
now or hereafter prescribed by statute (as modified by the provisions of ARTICLE
XII), and all rights conferred upon the stockholders herein are granted subject
to this right.
ARTICLE VIII
The Corporation is to have perpetual existence.
ARTICLE IX
1. Limitation of Liability. To the fullest extent permitted by the
-----------------------
General Corporation Law of the State of Delaware as the same exists or as may
hereafter be amended, a director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director.
2. Indemnification. The Corporation may indemnify to the fullest extent
---------------
permitted by law any person made or threatened to be made a party to an action
or proceeding, whether criminal, civil, administrative or investigative, by
reason of the fact that such person or his or her testator or intestate is or
was a director, officer or employee of the Corporation, or any predecessor of
the Corporation, or serves or served at any other enterprise as a director,
officer or employee at the request of the Corporation or any predecessor to the
Corporation.
3. Amendments. Neither any amendment nor repeal of this Article IX, nor
----------
the adoption of any provision of the Corporation's Certificate of Incorporation
inconsistent with this Article IX, shall eliminate or reduce the effect of this
Article IX, in respect of any matter occurring, or any action or proceeding
accruing or arising or that, but for this Article IX, would accrue or arise,
prior to such amendment, repeal, or adoption of an inconsistent provision.
ARTICLE X
Holders of stock of any class or series of the Corporation shall not be
entitled to cumulate their votes for the election of directors or any other
matter submitted to a vote of the stockholders, unless such cumulative voting is
required pursuant to Sections 2115 or 301.5 of the California General
Corporation Law, in which event each such holder shall be entitled to as many
votes as shall equal the number of votes which (except for this provision as to
cumulative voting) such holder
-7-
<PAGE>
would be entitled to cast for the election of directors with respect to his
shares of stock multiplied by the number of directors to be elected by him, and
the holder may cast all of such votes for a single director or may distribute
them among the number of directors to be voted for, or for any two or more of
them as such holder may see fit, so long as the name of the candidate for
director shall have been placed in nomination prior to the voting and the
stockholder, or any other holder of the same class or series of stock, has given
notice at the meeting prior to the voting of the intention to cumulate votes.
1. Number of Directors.
-------------------
(a) The number of directors which constitutes the whole Board of
Directors of the Corporation shall be designated in the Restated Bylaws of the
corporation and may be changed by resolution of the Board. The directors shall
be divided into three approximately equal classes with the term of office of the
first class (Class I) to expire at the annual meeting of stockholders held in
2000; the term of office of the second class (Class II) to expire at the annual
meeting of stockholders held in 2001; the term of office of the third class
(Class III) to expire at the annual meeting of stockholders held in 2002; and
thereafter for each such term to expire at each third succeeding annual meeting
of stockholders after such election.
(b) Notwithstanding the foregoing, so long as at least one share of
Series C Redeemable Preferred Stock remains outstanding: (i) the authorized
number of directors shall be seven (7), (ii) Class I, Class II and Class III
shall consist of three (3) directors, two (2) directors and two (2) directors,
respectively, and (iii) the holder or holders of the Series C Redeemable
Preferred Stock shall be entitled to elect one (1) of the Class I directors of
the Corporation (the "Series C Director") at the annual meeting of stockholders
held in 2000, and thereafter at each third succeeding annual meeting of
stockholders after such election. In the event of a redemption of the Series C
Redeemable Preferred Stock by the Corporation, then effective 15 days after such
redemption: (i) the authorized number of Class I directors shall be reduced by
one, (ii) the term of office of the Series C Director shall expire, (iii) the
authorized number of Class II directors shall be reduced by one, (iv) in the
event no Class II vacancy exists at such time, the term of office of the Class
II director who most recently joined the board of directors shall expire and (v)
the provisions of Section 1(a) of ARTICLE X of this Restated Certificate of
Incorporation shall apply thereafter.
(c) The Series C Director may be removed during the aforesaid term of
office, either for or without cause, by, and only by, the affirmative vote of
the holders of a majority of the shares of Series C Redeemable Preferred Stock,
given at a special meeting of such stockholders duly called or by an action by
written consent for that purpose.
2. Election of Directors. Elections of directors need not be by written
---------------------
ballot unless the Restated Bylaws of the corporation shall so provide.
ARTICLE XI
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<PAGE>
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to make, alter, amend or repeal
the Restated Bylaws of the Corporation.
ARTICLE XII
No action shall be taken by the stockholders of the Corporation except at
an annual or special meeting of the stockholders called in accordance with the
Restated Bylaws and no action shall be taken by the stockholders by written
consent (except, so long as any shares of Series C Redeemable Preferred Stock
are outstanding, as provided in Section 1(c) of ARTICLE X of this Restated
Certificate of Incorporation). The affirmative vote of sixty-six and two-thirds
percent (66 2/3%) of the then outstanding voting securities of the Corporation,
voting together as a single class, shall be required for the amendment, repeal
or modification of the provisions of ARTICLE X, ARTICLE XI, ARTICLE XII or
ARTICLE XIII of this Restated Certificate of Incorporation or Sections 2.3
(Special Meeting), 2.4 (Notice of Stockholders' Meeting), 2.5 (Advanced Notice
of Stockholder Nominees and Stockholder Business), 2.10 (Voting), or 2.12
(Stockholder Action by Written Consent Without a Meeting), of the Corporation's
Restated Bylaws.
ARTICLE XIII
Meetings of stockholders may be held within or without the State of
Delaware, as the Restated Bylaws may provide. The books of the Corporation may
be kept (subject to any provision contained in the statutes) outside of the
State of Delaware at such place or places as may be designated from time to time
by the Board of Directors or in the Restated Bylaws of the Corporation.
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<PAGE>
IN WITNESS WHEREOF, bamboo.com, Inc. has caused this certificate to be
signed by Leonard B. McCurdy, its Chairman and Chief Executive Officer, this
_________ day of ____________, 1999.
___________________________________________
Leonard B. McCurdy, Chairman and Chief
Executive Officer
<PAGE>
EXHIBIT 3.8
RESTATED BYLAWS
OF
BAMBOO.COM, INC.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I CORPORATE OFFICES................................................. 1
1.1 REGISTERED OFFICE................................................ 1
1.2 OTHER OFFICES.................................................... 1
ARTICLE II MEETINGS OF STOCKHOLDERS......................................... 1
2.1 PLACE OF MEETINGS................................................ 1
2.2 ANNUAL MEETING................................................... 1
2.3 SPECIAL MEETING.................................................. 2
2.4 NOTICE OF STOCKHOLDERS' MEETINGS................................. 2
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS.. 2
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE..................... 3
2.7 QUORUM........................................................... 3
2.8 ADJOURNED MEETING; NOTICE........................................ 4
2.9 CONDUCT OF BUSINESS.............................................. 4
2.10 VOTING........................................................... 4
2.11 WAIVER OF NOTICE................................................. 5
2.12 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.......... 5
2.13 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS...... 5
2.14 PROXIES.......................................................... 6
2.15 LIST OF STOCKHOLDERS ENTITLED TO VOTE............................ 6
ARTICLE III DIRECTORS....................................................... 7
3.1 POWERS........................................................... 7
3.2 NUMBER OF DIRECTORS.............................................. 7
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS.......... 7
3.4 RESIGNATION AND VACANCIES........................................ 7
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE......................... 8
3.6 REGULAR MEETINGS................................................. 9
3.7 SPECIAL MEETINGS; NOTICE......................................... 9
3.8 QUORUM........................................................... 9
3.9 WAIVER OF NOTICE................................................. 9
3.10 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING................ 10
3.11 FEES AND COMPENSATION OF DIRECTORS............................... 10
3.12 APPROVAL OF LOANS TO OFFICERS.................................... 10
3.13 REMOVAL OF DIRECTORS............................................. 10
ARTICLE IV COMMITTEES....................................................... 11
4.1 COMMITTEES OF DIRECTORS.......................................... 11
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
4.2 COMMITTEE MINUTES............................................... 11
4.3 MEETINGS AND ACTION OF COMMITTEES............................... 11
ARTICLE V OFFICERS......................................................... 12
5.1 OFFICERS........................................................ 12
5.2 APPOINTMENT OF OFFICERS......................................... 12
5.3 SUBORDINATE OFFICERS............................................ 12
5.4 REMOVAL AND RESIGNATION OF OFFICERS; FILLING VACANCIES.......... 12
5.5 CHAIRMAN OF THE BOARD........................................... 12
5.6 CHIEF EXECUTIVE OFFICER......................................... 13
5.7 PRESIDENT....................................................... 13
5.8 VICE PRESIDENTS................................................. 13
5.9 SECRETARY....................................................... 13
5.10 CHIEF FINANCIAL OFFICER......................................... 14
5.11 ASSISTANT SECRETARY............................................. 14
5.12 ASSISTANT TREASURER............................................. 14
5.13 REPRESENTATION OF SHARES OF OTHER CORPORATIONS.................. 14
5.14 AUTHORITY AND DUTIES OF OFFICERS................................ 15
ARTICLE VI INDEMNITY....................................................... 15
6.1 THIRD PARTY ACTIONS............................................. 15
6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION................... 15
6.3 SUCCESSFUL DEFENSE.............................................. 16
6.4 DETERMINATION OF CONDUCT........................................ 16
6.5 PAYMENT OF EXPENSES IN ADVANCE.................................. 16
6.6 INDEMNITY NOT EXCLUSIVE......................................... 17
6.7 INSURANCE INDEMNIFICATION....................................... 17
6.8 THE CORPORATION................................................. 17
6.9 EMPLOYEE BENEFIT PLANS.......................................... 17
6.10 CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES..... 18
ARTICLE VII RECORDS AND REPORTS............................................ 18
7.1 MAINTENANCE AND INSPECTION OF RECORDS........................... 18
7.2 INSPECTION BY DIRECTORS......................................... 18
7.3 ANNUAL STATEMENT TO STOCKHOLDERS................................ 19
ARTICLE VIII GENERAL MATTERS............................................... 19
8.1 CHECKS.......................................................... 19
8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS................ 19
8.3 STOCK CERTIFICATES; PARTLY PAID SHARES.......................... 19
8.4 SPECIAL DESIGNATION ON CERTIFICATES............................. 20
8.5 LOST CERTIFICATES............................................... 20
8.6 CONSTRUCTION; DEFINITIONS....................................... 20
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
8.7 DIVIDENDS..................................................... 21
8.8 FISCAL YEAR................................................... 21
8.9 SEAL.......................................................... 21
8.10 TRANSFER OF STOCK............................................. 21
8.11 STOCK TRANSFER AGREEMENTS..................................... 21
8.12 REGISTERED STOCKHOLDERS....................................... 21
ARTICLE IX AMENDMENTS.................................................... 22
</TABLE>
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<PAGE>
RESTATED BYLAWS
OF
BAMBOO.COM, INC.
ARTICLE I
CORPORATE OFFICES
-----------------
1.1 REGISTERED OFFICE
-----------------
The registered office of the corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware. The name of the registered
agent of the corporation at such location is Corporation Service Company.
1.2 OTHER OFFICES
-------------
The board of directors may at any time establish other offices at any place
or places where the corporation is qualified to do business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
------------------------
2.1 PLACE OF MEETINGS
-----------------
Meetings of stockholders shall be held at any place, either within or
without the State of Delaware, as may be designated by the board of directors or
in the manner provided in these bylaws. In the absence of any such designation,
stockholders' meetings shall be held at the registered office of the corporation
in the State of Delaware.
2.2 ANNUAL MEETING
--------------
The annual meeting of stockholders shall be held each year on a date and at
a time designated by the board of directors. In the absence of such
designation, the annual meeting of stockholders shall be held on the second
Tuesday of May of each year at 10:00 a.m. However, if such day falls on a legal
holiday, then the meeting shall be held at the same time and place on the next
succeeding
<PAGE>
business day. At the meeting, directors shall be elected and any other proper
business may be transacted.
2.3 SPECIAL MEETING
---------------
A special meeting of the stockholders may be called at any time by the
board of directors, or by the chairman of the board, or by the chief executive
officer, or by the president.
If a special meeting is called by any person or persons other than the
board of directors, the request shall be in writing, specifying the time of such
meeting and the general nature of the business proposed to be transacted, and
shall be delivered personally or sent by registered mail or by telegraphic or
other facsimile transmission to the chairman of the board, the president or the
secretary of the corporation. No business may be transacted at such special
meeting otherwise than specified in such notice. The officer receiving the
request shall cause notice to be promptly given to the stockholders entitled to
vote, in accordance with the provisions of Sections 2.4 and 2.5 of this Article
II, that a meeting will be held at the time requested by the person or persons
calling the meeting, not less than ten (10) nor more than sixty (60) days after
the receipt of the request. Nothing contained in this paragraph of this Section
2.3 shall be construed as limiting, fixing, or affecting the time when a meeting
of stockholders called by action of the board of directors may be held.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
--------------------------------
All notices of meetings with stockholders shall be in writing and shall be
sent or otherwise given in accordance with Section 2.6 of these bylaws not less
than ten (10) nor more than sixty (60) days before the date of the meeting to
each stockholder entitled to vote at such meeting. The notice shall specify the
place, date, and hour of the meeting, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called.
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS
---------------------------------------------------------------
Subject to the rights of holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation,
(i) nominations for the election of directors, and
(ii) business proposed to be brought before any stockholder meeting
may be made by the board of directors or proxy committee appointed by the board
of directors or by any stockholder entitled to vote in the election of directors
generally if such nomination or business proposed is otherwise proper business
before such meeting. However, any such stockholder may nominate one or more
persons for election as directors at a meeting or propose business to be brought
before a meeting, or both, only if such stockholder has given timely notice in
proper written form of their intent to make such nomination or nominations or to
propose such business. To be timely, such stockholder's notice must be
delivered to or mailed and received at the principal
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<PAGE>
executive offices of the corporation not less than one hundred twenty (120)
calendar days in advance of the first anniversary date of mailing of the
corporation's proxy statement released to stockholders in connection with the
previous year's annual meeting of stockholders; provided, however, that in the
event that no annual meeting was held in the previous year or the date of the
annual meeting has been changed by more than thirty (30) days from the date
contemplated at the time of the previous year's proxy statement, notice by the
stockholder to be timely must be so received a reasonable time before the
solicitation is made. To be in proper form, a stockholder's notice to the
secretary shall set forth:
(a) the name and address of the stockholder who intends to make
the nominations or propose the business and, as the case may be, of the
person or persons to be nominated or of the business to be proposed;
(b) a representation that the stockholder is a holder of record
of stock of the corporation entitled to vote at such meeting and, if
applicable, intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice;
(c) if applicable, a description of all arrangements or
understandings between the stockholder and each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder;
(d) such other information regarding each nominee or each matter
of business to be proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had the nominee been nominated, or
intended to be nominated, or the matter been proposed, or intended to be
proposed by the board of directors; and
(e) if applicable, the consent of each nominee to serve as
director of the corporation if so elected.
The chairman of the meeting shall refuse to acknowledge the nomination of
any person or the proposal of any business not made in compliance with the
foregoing procedure.
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
--------------------------------------------
Written notice of any meeting of stockholders, if mailed, is given when
deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the records of the corporation. An
affidavit of the secretary or an assistant secretary or of the transfer agent of
the corporation that the notice has been given shall, in the absence of fraud,
be prima facie evidence of the facts stated therein.
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<PAGE>
2.7 QUORUM
------
The holders of a majority of the stock issued and outstanding and entitled
to vote thereat, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders for the transaction of business
except as otherwise provided by statute or by the certificate of incorporation.
If, however, such quorum is not present or represented at any meeting of the
stockholders, then either (i) the Chairman of the meeting or (ii) the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum is present or
represented. At such adjourned meeting at which a quorum is present or
represented, any business may be transacted that might have been transacted at
the meeting as originally noticed.
2.8 ADJOURNED MEETING; NOTICE
-------------------------
When a meeting is adjourned to another time or place, unless these bylaws
otherwise require, notice need not be given of the adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business that
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
2.9 CONDUCT OF BUSINESS
-------------------
The chairman of any meeting of stockholders shall determine the order of
business and the procedure at the meeting, including such regulation of the
manner of voting and the conduct of business.
2.10 VOTING
------
The stockholders entitled to vote at any meeting of stockholders shall be
determined in accordance with the provisions of Section 2.13 of these bylaws,
subject to the provisions of Sections 217 and 218 of the Delaware General
Corporation Law (relating to voting rights of fiduciaries, pledgors and joint
owners of stock and to voting trusts and other voting agreements).
Except as may be otherwise provided in the certificate of incorporation,
each stockholder shall be entitled to one vote for each share of capital stock
held by such stockholder.
Notwithstanding the foregoing, if the stockholders of the corporation are
entitled, pursuant to Sections 2115 and 301.5 of the California Corporations
Code, to cumulate their votes in the election of directors, each such
stockholder shall be entitled to cumulate votes (i.e., cast for any candidate a
number of votes greater than the number of votes that such stockholder normally
is entitled to cast) only if the candidates' names have been properly placed in
nomination (in accordance with these restated Bylaws) prior to commencement of
the voting, and the stockholder requesting cumulative voting has given notice
prior to commencement of the voting of the stockholder's intention to
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<PAGE>
cumulate votes. If cumulative voting is properly requested, each holder of
stock, or of any class or classes or of a series or series thereof, who elects
to cumulate votes shall be entitled to as many votes as equals the number of
votes that (absent this provision as to cumulative voting) he or she would be
entitled to cast for the election of directors with respect to his or her shares
of stock multiplied by the number of directors to be elected by him, and he or
she may cast all of such votes for single director or may distribute them among
the number to be voted for, or for any two or more of them, as he or she may see
fit.
2.11 WAIVER OF NOTICE
----------------
Whenever notice is required to be given under any provision of the Delaware
General Corporation Law or of the certificate of incorporation or these bylaws,
a written waiver, signed by the person entitled to notice, whether before or
after the time stated therein, shall be deemed equivalent to notice. Attendance
of a person at a meeting shall constitute a waiver of notice of such meeting,
except when the person attends a meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders, directors, or members of a committee of directors need be
specified in any written waiver of notice unless so required by the certificate
of incorporation or these bylaws.
2.12 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
-------------------------------------------------------
Unless otherwise provided in the certificate of incorporation, any action
required to be taken at any annual or special meeting of stockholders of a
corporation, or any action that may be taken at any annual or special meeting of
such stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted.
Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing. If the action which is consented to is such as
would have required the filing of a certificate under any section of the
Delaware General Corporation Law if such action had been voted on by
stockholders at a meeting thereof, then the certificate filed under such section
shall state, in lieu of any statement required by such section concerning any
vote of stockholders, that written notice and written consent have been given as
provided in Section 228 of the Delaware General Corporation Law.
2.13 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS
-----------------------------------------------------------
In order that the corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change,
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conversion or exchange of stock or for the purpose of any other lawful action,
the board of directors may fix, in advance, a record date, which shall not be
more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action.
If the board of directors does not so fix a record date:
(i) The record date for determining stockholders entitled to notice
of or to vote at a meeting of stockholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held.
(ii) The record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the board of directors is necessary, shall be the first date on which a
signed written consent is delivered to the corporation.
(iii) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.
2.14 PROXIES
-------
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for such stockholder by a written
proxy, signed by such stockholder and filed with the secretary of the
corporation, but no such proxy shall be voted or acted upon after three (3)
years from its date, unless the proxy provides for a longer period. A proxy
shall be deemed signed if such stockholder's name is placed on the proxy by any
reasonable means including, but not limited to, by facsimile signature, manual
signature, typewriting, telegraphic transmission or otherwise, by such
stockholder or such stockholder's attorney-in-fact. The revocability of a proxy
that states on its face that it is irrevocable shall be governed by the
provisions of Section 212(e) of the Delaware General Corporation Law.
2.15 LIST OF STOCKHOLDERS ENTITLED TO VOTE
-------------------------------------
The officer who has charge of the stock ledger of a corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at
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the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present. Such list shall presumptively
determine the identity of the stockholders entitled to vote at the meeting and
the number of shares held by each of them.
ARTICLE III
DIRECTORS
---------
3.1 POWERS
------
Subject to the provisions of the Delaware General Corporation Law and any
limitations in the certificate of incorporation or these bylaws relating to
action required to be approved by the stockholders or by the outstanding shares,
the business and affairs of the corporation shall be managed and all corporate
powers shall be exercised by or under the direction of the board of directors.
3.2 NUMBER OF DIRECTORS
-------------------
Except as otherwise provided in the certificate of incorporation, the board
of directors shall consist of five (5) members. The number of directors may be
changed by an amendment to this bylaw, duly adopted by the board of directors or
by the stockholders, or by a duly adopted amendment to the certificate of
incorporation. Except as otherwise provided in the certificate of
incorporation, upon the closing of the first sale of the corporation's common
stock pursuant to a firmly underwritten registered public offering (the "IPO"),
the directors shall be divided into three classes, with the term of office of
the first class, which class shall initially consist of two directors, to expire
at the first annual meeting of stockholders held after the IPO; the term of
office of the second class, which shall initially consist of one director, to
expire at the second annual meeting of stockholders held after the IPO; the term
of office of the third class, which class shall initially consist of two
directors, to expire at the third annual meeting of stockholders held after the
IPO; and thereafter for each such term to expire at each third succeeding annual
meeting of stockholders held after such election.
No reduction of the authorized number of directors shall have the effect of
removing any director before that director's term of office expires.
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
-------------------------------------------------------
Except as provided in Section 3.4 of these bylaws, directors shall be
elected at each annual meeting of stockholders to hold office until the next
annual meeting. Directors need not be stockholders unless so required by the
certificate of incorporation or these bylaws, wherein other qualifications for
directors may be prescribed. Each director, including a director elected to
fill a vacancy, shall hold office until his successor is elected and qualified
or until his earlier resignation or removal.
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Elections of directors need not be by written ballot.
3.4 RESIGNATION AND VACANCIES
-------------------------
Any director may resign at any time upon written notice to the attention of
the Secretary of the corporation. When one or more directors shall resign from
the board of directors, effective at a future date, a majority of the directors
then in office, including those who have so resigned, shall have power to fill
such vacancy or vacancies, the vote thereon to take effect when such resignation
or resignations shall become effective, and each director so chosen shall hold
office as provided in this section in the filling of other vacancies.
Unless otherwise provided in the certificate of incorporation or these
bylaws:
(i) Vacancies and newly created directorships resulting from any
increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.
(ii) Whenever the holders of any class or classes of stock or series
thereof are entitled to elect one or more directors by the certificate of
incorporation, vacancies and newly created directorships of such class or
classes or series may be filled by a majority of the directors elected by such
class or classes or series thereof then in office, or by a sole remaining
director so elected.
If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of the certificate of incorporation or these bylaws, or may apply
to the Court of Chancery for a decree summarily ordering an election as provided
in Section 211 of the Delaware General Corporation Law.
If, at the time of filling any vacancy or any newly created directorship,
the directors then in office constitute less than a majority of the whole board
(as constituted immediately prior to any such increase), then the Court of
Chancery may, upon application of any stockholder or stockholders holding at
least ten (10) percent of the total number of the shares at the time outstanding
having the right to vote for such directors, summarily order an election to be
held to fill any such vacancies or newly created directorships, or to replace
the directors chosen by the directors then in office as aforesaid, which
election shall be governed by the provisions of Section 211 of the Delaware
General Corporation Law as far as applicable.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
----------------------------------------
The board of directors of the corporation may hold meetings, both regular
and special, either within or outside the State of Delaware.
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Unless otherwise restricted by the certificate of incorporation or these
bylaws, members of the board of directors, or any committee designated by the
board of directors, may participate in a meeting of such board of directors, or
committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and such participation in a meeting pursuant to this section shall constitute
presence in person at the meeting.
3.6 REGULAR MEETINGS
----------------
Regular meetings of the board of directors may be held without notice at
such time and at such place as shall from time to time be determined by the
board.
3.7 SPECIAL MEETINGS; NOTICE
------------------------
Special meetings of the board of directors for any purpose or purposes may
be called at any time by the chairman of the board, the president, any vice
president, the secretary or any two (2) directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at that director's address
as it is shown on the records of the corporation. If the notice is mailed, it
shall be deposited in the United States mail at least four (4) days before the
time of the holding of the meeting. If the notice is delivered personally or by
telephone or by telegram, it shall be delivered personally or by telephone or to
the telegraph company at least forty-eight (48) hours before the time of the
holding of the meeting. Any oral notice given personally or by telephone may be
communicated either to the director or to a person at the office of the director
who the person giving the notice has reason to believe will promptly communicate
it to the director. The notice need not specify the purpose or the place of the
meeting, if the meeting is to be held at the principal executive office of the
corporation.
3.8 QUORUM
------
At all meetings of the board of directors, a majority of the authorized
number of directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the board of directors, except as may be
otherwise specifically provided by statute, the certificate of incorporation, or
these bylaws. If a quorum is not present at any meeting of the board of
directors, then the directors present thereat may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
is present.
A meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the required quorum for that meeting.
3.9 WAIVER OF NOTICE
----------------
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<PAGE>
Whenever notice is required to be given under any provision of the Delaware
General Corporation Law, the certificate of incorporation, or these bylaws, a
written waiver thereof, signed by the person entitled to notice, whether before
or after the time stated therein, shall be deemed equivalent to notice.
Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting, except when such person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
directors, or members of a committee of directors, need be specified in any
written waiver of notice unless so required by the certificate of incorporation
or these bylaws.
3.10 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
-------------------------------------------------
Unless otherwise restricted by the certificate of incorporation or these
bylaws, any action required or permitted to be taken at any meeting of the board
of directors, or of any committee thereof may be taken without a meeting if all
members of the board or committee, as the case may be, consent thereto in
writing and the writing or writings are filed with the minutes of proceedings of
the board or committee.
3.11 FEES AND COMPENSATION OF DIRECTORS
----------------------------------
Unless otherwise restricted by the certificate of incorporation or these
bylaws, the board of directors shall have the authority to fix the compensation
of directors.
3.12 APPROVAL OF LOANS TO OFFICERS
-----------------------------
The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or of its
subsidiary, including any officer or employee who is a director of the
corporation or its subsidiary, whenever, in the judgment of the directors, such
loan, guaranty or assistance may reasonably be expected to benefit the
corporation. The loan, guaranty or other assistance may be with or without
interest and may be unsecured, or secured in such manner as the board of
directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing contained in this section shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
3.13 REMOVAL OF DIRECTORS
--------------------
Unless otherwise restricted by statute, by the certificate of incorporation
or by these bylaws, any director or the entire board of directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors; provided, however, that, so long
as stockholders of the corporation are entitled to cumulative voting, if less
than the entire board is to be removed, no director may be removed without cause
if the votes cast against his removal would be sufficient to elect such director
if then cumulatively voted at an election of the entire board of directors or,
if there be classes of directors, at an election of the class of directors of
which such director is a part.
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No reduction of the authorized number of directors shall have the effect of
removing any director prior to the expiration of such director's term of office.
ARTICLE IV
COMMITTEES
----------
4.1 COMMITTEES OF DIRECTORS
-----------------------
The board of directors may, by resolution passed by a majority of the whole
board, designate one or more committees, with each committee to consist of one
or more of the directors of the corporation. The board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not such
member or members constitute a quorum, may unanimously appoint another member of
the board of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, or in the bylaws of the corporation, shall
have and may exercise all the powers and authority of the board of directors in
the management of the business and affairs of the corporation, and may authorize
the seal of the corporation to be affixed to all papers that may require it; but
no such committee shall have the power or authority (i) approving or adopting
or recommending to the stockholders, any action or matter expressly required by
the Delaware General Corporation Law to be submitted to stockholders for
approval or (ii) adopting, amending, or repealing any bylaws of the corporation;
and, unless the board resolution establishing the committee, the bylaws or the
certificate of incorporation expressly so provide, no such committee shall have
the power or authority to declare a dividend, to authorize the issuance of
stock, or to adopt a certificate of ownership and merger pursuant to Section 253
of the Delaware General Corporation Law.
4.2 COMMITTEE MINUTES
-----------------
Each committee shall keep regular minutes of its meetings and report the
same to the board of directors when required.
4.3 MEETINGS AND ACTION OF COMMITTEES
---------------------------------
Meetings and actions of committees shall be governed by, and held and taken
in accordance with, the provisions of Article III of these bylaws, Section 3.5
(place of meetings and meetings by telephone), Section 3.6 (regular meetings),
Section 3.7 (special meetings and notice), Section 3.8 (quorum), Section 3.9
(waiver of notice), and Section 3.10 (action without a meeting), with such
changes in the context of those bylaws as are necessary to substitute the
committee and its members for the board of directors and its members; provided,
however, that the time of regular meetings of committees may be determined
either by resolution of the board of
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directors or by resolution of the committee, that special meetings of committees
may also be called by resolution of the board of directors and that notice of
special meetings of committees shall also be given to all alternate members, who
shall have the right to attend all meetings of the committee. The board of
directors may adopt rules for the government of any committee not inconsistent
with the provisions of these bylaws.
ARTICLE V
OFFICERS
--------
5.1 OFFICERS
--------
The officers of the corporation shall be a president, a secretary, and a
chief financial officer. The corporation may also have, at the discretion of
the board of directors, a chairman of the board, one or more vice presidents,
one or more assistant vice presidents, one or more assistant secretaries, one or
more assistant treasurers, and any such other officers as may be appointed in
accordance with the provisions of Section 5.3 of these bylaws. Any number of
offices may be held by the same person.
5.2 APPOINTMENT OF OFFICERS
-----------------------
The officers of the corporation, except such officers as may be appointed
in accordance with the provisions of Sections 5.3 or 5.5 of these bylaws, shall
be appointed by the board of directors, subject to the rights, if any, of an
officer under any contract of employment.
5.3 SUBORDINATE OFFICERS
--------------------
The board of directors may appoint, or empower the president to appoint,
such other officers and agents as the business of the corporation may require,
each of whom shall hold office for such period, have such authority, and perform
such duties as are provided in these bylaws or as the board of directors may
from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS; FILLING VACANCIES
------------------------------------------------------
Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by an
affirmative vote of the majority of the board of directors at any regular or
special meeting of the board or, except in the case of an officer chosen by the
board of directors, by any officer upon whom such power of removal may be
conferred by the board of directors.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.
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Any vacancy occurring in any office of the corporation shall be filled by
the board of directors.
5.5 CHAIRMAN OF THE BOARD
---------------------
The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise and perform
such other powers and duties as may from time to time be assigned to the
chairman of the board by the board of directors or as may be prescribed by these
bylaws. If there is no president and no one has been appointed chief executive
officer, then the chairman of the board shall also be the chief executive
officer of the corporation and shall have the powers and duties prescribed in
Section 5.6 of these bylaws.
5.6 CHIEF EXECUTIVE OFFICER
-----------------------
The board of directors shall select a chief executive officer of the
corporation who shall be subject to the control of the board of directors and
have general supervision, direction and control of the business and the officers
of the corporation. The chief executive officer shall preside at all meetings of
the stockholders and, in the absence or nonexistence of a chairman of the board,
at all meetings of the board of directors.
5.7 PRESIDENT
---------
The president shall have the general powers and duties of management
usually vested in the office of president of a corporation and shall have such
other powers and duties as may be prescribed by the board of directors or these
bylaws. In addition and subject to such supervisory powers, if any, as may be
given by the board of directors to the chairman of the board, if no one has been
appointed chief executive officer, the president shall be the chief executive
officer of the corporation and shall, subject to the control of the board of
directors, have the powers and duties described in Section 5.6.
5.8 VICE PRESIDENTS
---------------
In the absence or disability of the president, the vice presidents, if any,
in order of their rank as fixed by the board of directors or, if not ranked, a
vice president designated by the board of directors, shall perform all the
duties of the president and when so acting shall have all the powers of, and be
subject to all the restrictions upon, the president. The vice presidents shall
have such other powers and perform such other duties as from time to time may be
prescribed for them respectively by the board of directors, these bylaws, the
president or the chairman of the board.
5.9 SECRETARY
---------
The secretary shall keep or cause to be kept, at the principal executive
office of the corporation or such other place as the board of directors may
direct, a book of minutes of all meetings and actions of directors, committees
of directors, and stockholders. The minutes shall show the time and place of
each meeting, whether regular or special (and, if special, how authorized
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and the notice given), the names of those present at directors' meetings or
committee meetings, the number of shares present or represented at stockholders'
meetings, and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal executive
office of the corporation or at the office of the corporation's transfer agent
or registrar, as determined by resolution of the board of directors, a share
register, or a duplicate share register, showing the names of all stockholders
and their addresses, the number and classes of shares held by each, the number
and date of certificates evidencing such shares, and the number and date of
cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all meetings of
the stockholders and of the board of directors required to be given by law or by
these bylaws. The secretary shall keep the seal of the corporation, if one be
adopted, in safe custody and shall have such other powers and perform such other
duties as may be prescribed by the board of directors or by these bylaws.
5.10 CHIEF FINANCIAL OFFICER
-----------------------
The chief financial officer shall keep and maintain, or cause to be kept
and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital
retained earnings, and shares. The books of account shall at all reasonable
times be open to inspection by any director.
The chief financial officer shall deposit all moneys and other valuables in
the name and to the credit of the corporation with such depositories as may be
designated by the board of directors. The chief financial officer shall
disburse the funds of the corporation as may be ordered by the board of
directors, shall render to the president and directors, whenever they request
it, an account of all his transactions as chief financial officer and of the
financial condition of the corporation, and shall have other powers and perform
such other duties as may be prescribed by the board of directors or these
bylaws.
The chief financial officer shall be the treasurer of the corporation.
5.11 ASSISTANT SECRETARY
-------------------
The assistant secretary, or, if there is more than one, the assistant
secretaries in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as may be
prescribed by the board of directors or these bylaws.
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5.12 ASSISTANT TREASURER
-------------------
The assistant treasurer, or, if there is more than one, the assistant
treasurers, in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election),
shall, in the absence of the chief financial officer or in the event of his or
her inability or refusal to act, perform the duties and exercise the powers of
the chief financial officer and shall perform such other duties and have such
other powers as may be prescribed by the board of directors or these bylaws.
5.13 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
----------------------------------------------
The chairman of the board, the president, any vice president, the chief
financial officer, the secretary or assistant secretary of this corporation, or
any other person authorized by the board of directors or the president or a vice
president, is authorized to vote, represent, and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority granted
herein may be exercised either by such person directly or by any other person
authorized to do so by proxy or power of attorney duly executed by such person
having the authority.
5.14 AUTHORITY AND DUTIES OF OFFICERS
--------------------------------
In addition to the foregoing authority and duties, all officers of the
corporation shall respectively have such authority and perform such duties in
the management of the business of the corporation as may be designated from time
to time by the board of directors or the stockholders.
ARTICLE VI
INDEMNITY
---------
6.1 THIRD PARTY ACTIONS
-------------------
The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement (if such settlement is approved
in advance by the corporation, which approval shall not be unreasonably
withheld) actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to
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believe such person's conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
----
contendere or its equivalent, shall not, of itself, create a presumption that
- ----------
the person did not act in good faith and in a manner which the person reasonably
believed to be in or not opposed to the best interest of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that the person's conduct was unlawful.
6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION
---------------------------------------------
The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person is or was a director, officer, employee or
agent of corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys'
fees) and amounts paid in settlement (if such settlement is approved in advance
by the corporation, which approval shall not be unreasonably withheld) actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if such person acted in good faith and in
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Delaware Court of
Chancery or such other court shall deem proper. Notwithstanding any other
provision of this Article VI, no person shall be indemnified hereunder for any
expenses or amounts paid in settlement with respect to any action to recover
short-swing profits under Section 16(b) of the Securities Exchange Act of 1934,
as amended.
6.3 SUCCESSFUL DEFENSE
------------------
To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 6.1 and 6.2, or in defense of
any claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.
6.4 DETERMINATION OF CONDUCT
------------------------
Any indemnification under Sections 6.1 and 6.2 (unless ordered by a court)
shall be made by the corporation only as authorized in the specific case upon a
determination that the indemnification of the director, officer, employee or
agent is proper in the circumstances because such person has met the applicable
standard of conduct set forth in Sections 6.1 and 6.2. Such determination shall
be made (1) by the Board of Directors or the Executive Committee by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding or (2) or if such quorum is not obtainable or, even if
obtainable, a quorum of disinterested directors so directs, by
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independent legal counsel in a written opinion, or (3) by the stockholders.
Notwithstanding the foregoing, a director, officer, employee or agent of the
Corporation shall be entitled to contest any determination that the director,
officer, employee or agent has not met the applicable standard of conduct set
forth in Sections 6.1 and 6.2 by petitioning a court of competent jurisdiction.
6.5 PAYMENT OF EXPENSES IN ADVANCE
------------------------------
Expenses incurred in defending a civil or criminal action, suit or
proceeding, by an individual who may be entitled to indemnification pursuant to
Section 6.1 or 6.2, shall be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of the director, officer, employee or agent to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the corporation as authorized in this Article VI.
6.6 INDEMNITY NOT EXCLUSIVE
-----------------------
The indemnification and advancement of expenses provided by or granted
pursuant to the other sections of this Article VI shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office.
6.7 INSURANCE INDEMNIFICATION
-------------------------
The corporation shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against such
person and incurred by such person in any such capacity or arising out of such
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under the provisions of this
Article VI.
6.8 THE CORPORATION
---------------
For purposes of this Article VI, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under and subject to the provisions of this Article VI (including,
without limitation the provisions of Section 6.4) with respect to the resulting
or surviving corporation as such person would have with respect to such
constituent corporation if its separate existence had continued.
-17-
<PAGE>
6.9 EMPLOYEE BENEFIT PLANS
----------------------
For purposes of this Article VI, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this Article
VI.
6.10 CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES
-----------------------------------------------------------
The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article VI shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
ARTICLE VII
RECORDS AND REPORTS
-------------------
7.1 MAINTENANCE AND INSPECTION OF RECORDS
-------------------------------------
The corporation shall, either at its principal executive officer or at such
place or places as designated by the board of directors, keep a record of its
stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these bylaws as amended to date,
accounting books, and other records.
Any stockholder of record, in person or by attorney or other agent, shall,
upon written demand under oath stating the purpose thereof, have the right
during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the attorney or other agent so to act on
behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in Delaware or at its principal place of
business.
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<PAGE>
The officer who has charge of the stock ledger of the corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, showing the address of each stockholder and the number of
shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
7.2 INSPECTION BY DIRECTORS
-----------------------
Any director shall have the right to examine the corporation's stock
ledger, a list of its stockholders, and its other books and records for a
purpose reasonably related to his position as a director. The Court of Chancery
is hereby vested with the exclusive jurisdiction to determine whether a director
is entitled to the inspection sought. The Court may summarily order the
corporation to permit the director to inspect any and all books and records, the
stock ledger, and the stock list and to make copies or extracts therefrom. The
Court may, in its discretion, prescribe any limitations or conditions with
reference to the inspection, or award such other and further relief as the Court
may deem just and proper.
7.3 ANNUAL STATEMENT TO STOCKHOLDERS
--------------------------------
The board of directors shall present at each annual meeting, and at any
special meeting of the stockholders when called for by vote of the stockholders,
a full and clear statement of the business and condition of the corporation.
ARTICLE VIII
GENERAL MATTERS
---------------
8.1 CHECKS
------
From time to time, the board of directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.
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<PAGE>
8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
------------------------------------------------
The board of directors, except as otherwise provided in these bylaws, may
authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the board of directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
8.3 STOCK CERTIFICATES; PARTLY PAID SHARES
--------------------------------------
The shares of the corporation shall be represented by certificates,
provided that the board of directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply
to shares represented by a certificate until such certificate is surrendered to
the corporation. Notwithstanding the adoption of such a resolution by the board
of directors, every holder of stock represented by certificates and upon request
every holder of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the corporation by the chairman or vice-chairman of
the board of directors, or the president or vice-president, and by the chief
financial officer or an assistant treasurer, or the secretary or an assistant
secretary of such corporation representing the number of shares registered in
certificate form. Any or all of the signatures on the certificate may be a
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate has ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if such person were
such officer, transfer agent or registrar at the date of issue.
The corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock certificate issued to represent
any such partly paid shares, upon the books and records of the corporation in
the case of uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend on fully paid shares, the corporation shall
declare a dividend upon partly paid shares of the same class, but only upon the
basis of the percentage of the consideration actually paid thereon.
8.4 SPECIAL DESIGNATION ON CERTIFICATES
-----------------------------------
If the corporation is authorized to issue more than one class of stock or
more than one series of any class, then the powers, the designations, the
preferences, and the relative, participating, optional or other special rights
of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the corporation shall issue to represent
such class or series of stock
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<PAGE>
a statement that the corporation will furnish without charge to each stockholder
who so requests the powers, the designations, the preferences, and the relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.
8.5 LOST CERTIFICATES
-----------------
Except as provided in this Section 8.5, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and canceled at the same time. The corporation
may issue a new certificate of stock or uncertificated shares in the place of
any certificate theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the corporation may require the owner of the lost, stolen or
destroyed certificate, or his legal representative, to give the corporation a
bond sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate or uncertificated shares.
8.6 CONSTRUCTION; DEFINITIONS
-------------------------
Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the Delaware General Corporation Law shall
govern the construction of these bylaws. Without limiting the generality of
this provision, the singular number includes the plural, the plural number
includes the singular, and the term "person" includes both a corporation and a
natural person.
8.7 DIVIDENDS
---------
The directors of the corporation, subject to any restrictions contained in
(i) the Delaware General Corporation Law or (ii) the certificate of
incorporation, may declare and pay dividends upon the shares of its capital
stock. Dividends may be paid in cash, in property, or in shares of the
corporation's capital stock.
The directors of the corporation may set apart out of any of the funds of
the corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve. Such purposes shall include but not be
limited to equalizing dividends, repairing or maintaining any property of the
corporation, and meeting contingencies.
8.8 FISCAL YEAR
-----------
The fiscal year of the corporation shall be fixed by resolution of the
board of directors and may be changed by the board of directors.
8.9 SEAL
----
The corporation may adopt a corporate seal, which shall be adopted and
which may be altered by the board of directors, and may use the same by causing
it or a facsimile thereof to be impressed or affixed or in any other manner
reproduced.
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<PAGE>
8.10 TRANSFER OF STOCK
-----------------
Upon surrender to the corporation or the transfer agent of the corporation
of a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignation or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate, and record the transaction in its books.
8.11 STOCK TRANSFER AGREEMENTS
-------------------------
The corporation shall have power to enter into and perform any agreement
with any number of stockholders of any one or more classes of stock of the
corporation to restrict the transfer of shares of stock of the corporation of
any one or more classes owned by such stockholders in any manner not prohibited
by the Delaware General Corporation Law.
8.12 REGISTERED STOCKHOLDERS
-----------------------
The corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends and
to vote as such owner, shall be entitled to hold liable for calls and
assessments the person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of another person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE IX
AMENDMENTS
----------
The bylaws of the corporation may be adopted, amended or repealed by the
stockholders entitled to vote; provided, however, that the corporation may, in
its certificate of incorporation, confer the power to adopt, amend or repeal
bylaws upon the directors. The fact that such power has been so conferred upon
the directors shall not divest the stockholders of the power, nor limit their
power to adopt, amend or repeal bylaws.
-22-
<PAGE>
CERTIFICATE OF ADOPTION OF
RESTATED BYLAWS
OF
BAMBOO.COM, INC.
-
Certificate by Secretary
------------------------
The undersigned hereby certifies that he is the duly elected, qualified,
and acting Secretary of bamboo.com, Inc. and that the foregoing Restated Bylaws,
comprising twenty-two (22) pages, were adopted as the Restated Bylaws of the
corporation on __________, 1999 by the board of directors of the corporation.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and affixed
the corporate seal this ____ day of _________ 1999.
_____________________________________
Mario M. Rosati, Secretary
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<PAGE>
Exhibit 5.1
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
TELEPHONE 650-493-9300 FACSIMILE 650-493-6811
WWW.WSGR.COM
July 21, 1999
124 University Avenue
Palo Alto, CA 94301
Re: REGISTRATION STATEMENT ON FORM S-1
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-1 (File No. 333-
80639) filed with the Securities and Exchange Commission on June 14, 1999 (as
such may be amended or supplemented, the "REGISTRATION STATEMENT"), in
connection with the registration under the Securities Act of 1933, as amended,
of shares of Common Stock of bamboo.com, Inc. (the "SHARES"). The Shares are to
be sold to the underwriters as described in such Registration Statement for the
sale to the public or issued to the representatives of the underwriters. As your
counsel in connection with this transaction, we have examined the proceedings
proposed to be taken in connection with said sale and issuance of the Shares.
It is our opinion that, upon approval by the pricing committee duly
authorized by the Company's Board of Directors, the Shares, when issued and sold
in the manner referred to in the Registration Statement, will be legally and
validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement, including the prospectus constituting a part hereof, and
any amendment thereto.
Very truly yours,
/s/ Wilson Sonsini Goodrich & Rosati
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
<PAGE>
EXHIBIT 10.3
BAMBOO.COM, INC.
AMENDED AND RESTATED 1998 EMPLOYEE, DIRECTOR AND CONSULTANT
STOCK PLAN
1. Purposes of the Plan. The purposes of this Amended and Restated 1998
--------------------
Employee, Director and Consultant Stock Plan are:
. to attract and retain the best available personnel for positions
of substantial responsibility,
. to provide additional incentive to Employees, Directors and
Consultants, and
. to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of its Committees as shall
-------------
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
---------------
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
-----
(d) "Code" means the Internal Revenue Code of 1986, as amended.
----
(e) "Committee" means a committee of Directors appointed by the Board
---------
in accordance with Section 4 of the Plan.
(f) "Common Stock" means the common stock of the Company.
------------
(g) "Company" means bamboo.com, Inc., a Delaware corporation.
-------
(h) "Consultant" means any person, including an advisor, engaged by
----------
the Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
--------
<PAGE>
(j) "Disability" means total and permanent disability as defined in
----------
Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(m) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as
----------------------
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(o) "Nonstatutory Stock Option" means an Option not intended to
-------------------------
qualify as an Incentive Stock Option.
(p) "Notice of Grant" means a written or electronic notice evidencing
---------------
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.
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<PAGE>
(q) "Officer" means a person who is an officer of the Company within
-------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(r) "Option" means a stock option granted pursuant to the Plan.
------
(s) "Option Agreement" means an agreement between the Company and an
----------------
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.
(t) "Option Exchange Program" means a program whereby outstanding
-----------------------
Options are surrendered in exchange for Options with a lower exercise price.
(u) "Optioned Stock" means the Common Stock subject to an Option or
--------------
Stock Purchase Right.
(v) "Optionee" means the holder of an outstanding Option or Stock
--------
Purchase Right granted under the Plan.
(w) "Parent" means a "parent corporation," whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(x) "Plan" means this Amended and Restated 1998 Employee, Director
----
and Consultant Stock Plan.
(y) "Restricted Stock" means shares of Common Stock acquired pursuant
----------------
to a grant of Stock Purchase Rights under Section 11 of the Plan.
(z) "Restricted Stock Purchase Agreement" means a written agreement
-----------------------------------
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.
(aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
----------
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(bb) "Section 16(b) " means Section 16(b) of the Exchange Act.
-------------
(cc) "Service Provider" means an Employee, Director or Consultant.
----------------
(dd) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 13 of the Plan.
(ee) "Stock Purchase Right" means the right to purchase Common Stock
--------------------
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
(ff) "Subsidiary" means a "subsidiary corporation", whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
-3-
<PAGE>
3. Stock Subject to the Plan. Subject to the provisions of Section 13 of
-------------------------
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 2,921,212 Shares, plus an annual increase to be added on the
first day of the Company's fiscal year beginning in 2000 equal to the lesser of
(i) 500,000 shares, (ii) 5% of the outstanding shares on such date or (iii) a
lesser amount determined by the Board. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
--------
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.
4. Administration of the Plan.
--------------------------
(a) Procedure.
---------
(i) Multiple Administrative Bodies. The Plan may be
------------------------------
administered by different Committees with respect to different groups of Service
Providers.
(ii) Section 162(m). To the extent that the Administrator
--------------
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify
----------
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.
(iv) Other Administration. Other than as provided above, the
--------------------
Plan shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;
(iii) to determine the number of shares of Common Stock to be
covered by each Option and Stock Purchase Right granted hereunder;
-4-
<PAGE>
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Options or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Option or Stock Purchase Right or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;
(vi) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase Right was granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(x) to modify or amend each Option or Stock Purchase Right
(subject to Section 15(c) of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;
(xi) to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The Fair Market
Value of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined. All elections by an Optionee
to have Shares withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or advisable;
(xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;
(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
----------------------------------
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.
-5-
<PAGE>
5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may
-----------
be granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
6. Limitations.
-----------
(a) Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options:
(i) No Service Provider shall be granted, in any fiscal year of
the Company, Options to purchase more than 500,000 Shares.
(ii) In connection with his or her initial service, a Service
Provider may be granted Options to purchase up to an additional 500,000 Shares
which shall not count against the limit set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 13.
(iv) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall
------------
become effective upon its adoption by the Board. It shall continue in effect
for a term of ten (10) years unless terminated earlier under Section 15 of the
Plan.
8. Term of Option. The term of each Option shall be stated in the Option
--------------
Agreement. In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock
-6-
<PAGE>
Option shall be five (5) years from the date of grant or such shorter term as
may be provided in the Option Agreement.
9. Option Exercise Price and Consideration.
---------------------------------------
(a) Exercise Price. The per share exercise price for the Shares to be
--------------
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price of less than 100% of the Fair Market Value per Share
on the date of grant pursuant to a merger or other corporate transaction.
(b) Waiting Period and Exercise Dates. At the time an Option is
---------------------------------
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before the
Option may be exercised.
(c) Form of Consideration. The Administrator shall determine the
---------------------
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and
-7-
<PAGE>
(B) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be exercised;
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 13 of the Plan.
Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
-------------------------------------------------
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence
of a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the
-8-
<PAGE>
Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
----------------------
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider,
-----------------
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or
administrator of the Optionee's estate or, if none, by the person(s) entitled to
exercise the Option under the Optionee's will or the laws of descent or
distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy
-----------------
out for a payment in cash or Shares an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
11. Stock Purchase Rights.
---------------------
(a) Rights to Purchase. Stock Purchase Rights may be issued either
------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically, by means of a Notice of Grant, of the
terms, conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid, and
the time within which the offeree must accept such offer. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.
-9-
<PAGE>
(b) Repurchase Option. Unless the Administrator determines otherwise,
-----------------
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.
(c) Other Provisions. The Restricted Stock Purchase Agreement shall
----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
-----------------------
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.
12. Non-Transferability of Options and Stock Purchase Rights. Unless
--------------------------------------------------------
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.
13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
------------------------------------------------------------------
Asset Sale.
- ----------
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
-10-
<PAGE>
(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company
--------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
14. Date of Grant. The date of grant of an Option or Stock Purchase Right
-------------
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall
be provided to each Optionee within a reasonable time after the date of such
grant.
-11-
<PAGE>
15. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain shareholder
--------------------
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
16. Conditions Upon Issuance of Shares.
----------------------------------
(a) Legal Compliance. Shares shall not be issued pursuant to the
----------------
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an
--------------------------
Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.
17. Inability to Obtain Authority. The inability of the Company to obtain
-----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
18. Reservation of Shares. The Company, during the term of this Plan,
---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
19. Shareholder Approval. The Plan shall be subject to approval by the
--------------------
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.
-12-
<PAGE>
BAMBOO.COM, INC.
AMENDED AND RESTATED 1998
EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
----------------------------
[Optionee's Name and Address]
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
Grant Number ____________________________________
Date of Grant ____________________________________
Vesting Commencement Date ____________________________________
Exercise Price per Share $___________________________________
Total Number of Shares Granted ____________________________________
Total Exercise Price $___________________________________
Type of Option: ___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/Expiration Date:
Vesting Schedule:
----------------
This Option may be exercised, in whole or in part, in accordance with the
following schedule:
25% of the Shares subject to the Option shall vest twelve months after the
Vesting Commencement Date, and 1/48 of the Shares subject to the Option shall
vest each month thereafter, subject to the Optionee continuing to be a Service
Provider on such dates.
<PAGE>
Termination Period:
------------------
This Option may be exercised for sixty (60) days after Optionee ceases to
be a Service Provider. Upon the death or Disability of the Optionee, this
Option may be exercised for one (1) year after Optionee ceases to be a Service
Provider. In no event shall this Option be exercised later than the
Term/Expiration Date as provided above.
II. AGREEMENT
---------
A. Grant of Option.
------------------
The Plan Administrator of the Company hereby grants to the Optionee
named in the Notice of Grant attached as Part I of this Agreement (the
"Optionee") an option (the "Option") to purchase the number of Shares, as set
forth in the Notice of Grant, at the exercise price per share set forth in the
Notice of Grant (the "Exercise Price"), subject to the terms and conditions of
the Plan, which is incorporated herein by reference. Subject to Section 15(c)
of the Plan, in the event of a conflict between the terms and conditions of the
Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").
B. Exercise of Option.
-------------------
(a) Right to Exercise. This Option is exercisable during its term in
-----------------
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of an
------------------
exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to the Treasurer of the Company. The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as to all
Exercised Shares. This Option shall be deemed to be exercised upon receipt by
the Company of such fully executed Exercise Notice accompanied by such aggregate
Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.
C. Method of Payment.
------------------
Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:
-2-
<PAGE>
1. cash; or
2. check or
3. consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan; or
4. surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.
D. Non-Transferability of Option.
------------------------------
This Option may not be transferred in any manner otherwise than by
will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by the Optionee. The terms of the Plan and this
Option Agreement shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
E. Term of Option.
---------------
This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with
the Plan and the terms of this Option Agreement.
F. Tax Consequences.
-----------------
Some of the federal tax consequences relating to this Option, as of
the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.
G. Exercising the Option.
----------------------
1. Nonstatutory Stock Option. The Optionee may incur regular
-------------------------
federal income tax liability upon exercise of a NSO. The Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over their aggregate Exercise Price. If the
Optionee is an Employee or a former Employee, the Company will be required to
withhold from his or her compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
2. Incentive Stock Option. If this Option qualifies as an ISO, the
----------------------
Optionee will have no regular federal income tax liability upon its exercise,
although the excess, if any, of the Fair Market Value of the Exercised Shares on
the date of exercise over their aggregate Exercise Price will be treated as an
adjustment to alternative minimum taxable income for federal tax purposes and
may subject the Optionee to alternative minimum tax in the year of exercise. In
the event that the
-3-
<PAGE>
Optionee ceases to be an Employee but remains a Service Provider, any Incentive
Stock Option of the Optionee that remains unexercised shall cease to qualify as
an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory
Stock Option on the date three (3) months and one (1) day following such change
of status.
3. Disposition of Shares.
---------------------
(a) NSO. If the Optionee holds NSO Shares for at least one
---
year, any gain realized on disposition of the Shares will be treated as long-
term capital gain for federal income tax purposes.
(b) ISO. If the Optionee holds ISO Shares for at least one year
---
after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the Fair Market Value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (B) the difference between the sale price of
such Shares and the aggregate Exercise Price. Any additional gain will be taxed
as capital gain, short-term or long-term depending on the period that the ISO
Shares were held.
(c) Notice of Disqualifying Disposition of ISO Shares. If the
-------------------------------------------------
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately notify the Company
in writing of such disposition. The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.
H. Entire Agreement; Governing Law.
--------------------------------
The Plan is incorporated herein by reference. The Plan and this
Option Agreement constitute the entire agreement of the parties with respect to
the subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and Optionee. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.
I. NO GUARANTEE OF CONTINUED SERVICE.
----------------------------------
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT
TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE
PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS
OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING
PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH
-4-
<PAGE>
OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS
A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
OPTIONEE: bamboo.com, Inc.
___________________________ ____________________________
Signature By
___________________________ ____________________________
Print Name Title
___________________________
Residence Address
___________________________
-5-
<PAGE>
EXHIBIT A
---------
bamboo.com, Inc.
AMENDED AND RESTATED 1998
EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN
EXERCISE NOTICE
bamboo.com, Inc.
124 University Avenue
Palo Alto, CA 94301
Attention: Treasurer
1. Exercise of Option. Effective as of today, ________________, _____,
------------------
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of bamboo.com, Inc. (the "Company") under and
pursuant to the Amended and Restated 1998 Employee, Director and Consultant
Stock Plan (the "Plan") and the Stock Option Agreement dated, _____ (the "Option
Agreement"). The purchase price for the Shares shall be $_____, as required by
the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
-------------------
full purchase price for the Shares.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
----------------------------
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the
---------------------
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 13 of the
Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
----------------
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
<PAGE>
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
-------------------------------
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.
Submitted by: Accepted by:
PURCHASER: bamboo.com, Inc.
_______________________________ _____________________________
Signature By
_______________________________ _____________________________
Print Name Its
Address: Address:
- ------- -------
_______________________________ bamboo.com, Inc.
124 University Avenue
_______________________________ Palo Alto, CA 94301
_____________________________
Date Received
-2-
<PAGE>
EXHIBIT 10.4
BAMBOO.COM, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1999 Employee Stock
Purchase Plan of bamboo.com, Inc.
1. Purpose. The purpose of the Plan is to provide employees of the
-------
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the
intention of the Company to have the Plan qualify as an "Employee Stock Purchase
Plan" under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. Definitions.
-----------
(a) "Board" shall mean the Board of Directors of the Company.
-----
(b) "Code" shall mean the Internal Revenue Code of 1986, as
----
amended.
(c) "Common Stock" shall mean the common stock of the Company.
------------
(d) "Company" shall mean bamboo.com, Inc. and any Designated
-------
Subsidiary of the Company.
(e) "Compensation" shall mean all base straight time gross earnings
------------
and commissions, but exclusive of payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses and other compensation.
(f) "Designated Subsidiary" shall mean any Subsidiary that has been
---------------------
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan.
(g) "Employee" shall mean any individual who is an Employee of the
--------
Company for tax purposes whose customary employment with the Company is at least
twenty (20) hours per week and more than five (5) months in any calendar year.
For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.
(h) "Enrollment Date" shall mean the first Trading Day of each
---------------
Offering Period.
(i) "Exercise Date" shall mean the last Trading Day of each Purchase
Period.
(j) "Fair Market Value" shall mean, as of any date, the value of
-----------------
Common Stock determined as follows:
<PAGE>
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the date of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock prior
to the date of determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board; or
(iv) For purposes of the Enrollment Date of the first Offering
Period under the Plan, the Fair Market Value shall be the initial price to the
public as set forth in the final prospectus included within the registration
statement in Form S-1 filed with the Securities and Exchange Commission for the
initial public offering of the Company's Common Stock (the "Registration
Statement").
(k) "Offering Periods" shall mean the periods of approximately twenty-
----------------
four (24) months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after May 1 and November 1
of each year and terminating on the last Trading Day in the periods ending
twenty-four months later; provided, however, that the first Offering Period
under the Plan shall commence with the first Trading Day on or after the date on
which the Securities and Exchange Commission declares the Company's Registration
Statement effective and end on the last Trading Day on or before April 30, 2001.
The duration and timing of Offering Periods may be changed pursuant to Section 4
of this Plan.
(l) "Plan" shall mean this 1999 Employee Stock Purchase Plan.
----
(m) "Purchase Period" shall mean the approximately six month period
---------------
commencing after one Exercise Date and ending with the next Exercise Date,
except that the first Purchase Period of any Offering Period shall commence on
the Enrollment Date and end with the next Exercise Date; provided, however, that
the first Purchase Period under the Plan shall commence with the first Trading
Day on or after the date on which the Securities and Exchange Commission
declares the Company's Registration Statement effective and end on the last
Trading Day on or before April 30, 2000.
(n) "Purchase Price" shall mean 85% of the Fair Market Value of a
--------------
share of Common Stock on the Enrollment Date or on the Exercise Date, whichever
is lower; provided however, that the Purchase Price may be adjusted by the Board
pursuant to Section 20.
(o) "Reserves" shall mean the number of shares of Common Stock covered
--------
by each option under the Plan which have not yet been exercised and the number
of shares of Common Stock which have been authorized for issuance under the Plan
but not yet placed under option.
-2-
<PAGE>
(p) "Subsidiary" shall mean a corporation, domestic or foreign, of
----------
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
(q) "Trading Day" shall mean a day on which national stock exchanges
-----------
and the Nasdaq System are open for trading.
3. Eligibility.
-----------
(a) Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the time such option
is granted) for each calendar year in which such option is outstanding at any
time.
4. Offering Periods. The Plan shall be implemented by consecutive,
----------------
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after May 1 and November 1 each year, or on such other date as
the Board shall determine, and continuing thereafter until terminated in
accordance with Section 20 hereof; provided, however, that the first Offering
Period under the Plan shall commence with the first Trading Day on or after the
date on which the Securities and Exchange Commission declares the Company's
Registration Statement effective and ending on the last Trading Day on or before
April 30, 2001. The Board shall have the power to change the duration of
Offering Periods (including the commencement dates thereof) with respect to
future offerings without shareholder approval if such change is announced at
least five (5) days prior to the scheduled beginning of the first Offering
Period to be affected thereafter.
5. Participation.
-------------
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office prior
to the applicable Enrollment Date.
(b) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.
-3-
<PAGE>
6. Payroll Deductions.
------------------
(a) At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each pay day during the
Offering Period in an amount not exceeding 15% of the Compensation which he or
she receives on each pay day during the Offering Period.
(b) All payroll deductions made for a participant shall be credited to
his or her account under the Plan and shall be withheld in whole percentages
only. A participant may not make any additional payments into such account.
(c) A participant may discontinue his or her participation in the Plan
as provided in Section 10 hereof, or may increase or decrease the rate of his or
her payroll deductions during the Offering Period by completing or filing with
the Company a new subscription agreement authorizing a change in payroll
deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to zero percent (0%) at any time during a
Purchase Period. Payroll deductions shall recommence at the rate provided in
such participant's subscription agreement at the beginning of the first Purchase
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each Offering Period,
---------------
each eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than
10,000 shares of the Company's Common Stock (subject to any adjustment pursuant
to Section 19), and provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof. The Board may, for future
Offering Periods, increase or decrease, in its absolute discretion, the maximum
number of shares of
-4-
<PAGE>
the Company's Common Stock an Employee may purchase during each Purchase Period
of such Offering Period. Exercise of the option shall occur as provided in
Section 8 hereof, unless the participant has withdrawn pursuant to Section 10
hereof. The option shall expire on the last day of the Offering Period.
8. Exercise of Option.
------------------
(a) Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.
(b) If the Board determines that, on a given Exercise Date, the number
of shares with respect to which options are to be exercised may exceed (i) the
number of shares of Common Stock that were available for sale under the Plan on
the Enrollment Date of the applicable Offering Period, or (ii) the number of
shares available for sale under the Plan on such Exercise Date, the Board may in
its sole discretion (x) provide that the Company shall make a pro rata
allocation of the shares of Common Stock available for purchase on such
Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall
be practicable and as it shall determine in its sole discretion to be equitable
among all participants exercising options to purchase Common Stock on such
Exercise Date, and continue all Offering Periods then in effect, or (y) provide
that the Company shall make a pro rata allocation of the shares available for
purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform
a manner as shall be practicable and as it shall determine in its sole
discretion to be equitable among all participants exercising options to purchase
Common Stock on such Exercise Date, and terminate any or all Offering Periods
then in effect pursuant to Section 20 hereof. The Company may make pro rata
allocation of the shares available on the Enrollment Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares for issuance under the Plan by the Company's
shareholders subsequent to such Enrollment Date.
9. Delivery. As promptly as practicable after each Exercise Date on
--------
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.
10. Withdrawal.
----------
(a) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company in
the form of Exhibit B to this Plan. All of the participant's payroll deductions
credited to his or her account shall be paid to such participant
-5-
<PAGE>
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period shall be automatically terminated, and no further payroll
deductions for the purchase of shares shall be made for such Offering Period. If
a participant withdraws from an Offering Period, payroll deductions shall not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.
(b) A participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.
11. Termination of Employment.
-------------------------
Upon a participant's ceasing to be an Employee, for any reason, he or
she shall be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participant's account during the Offering Period but
not yet used to exercise the option shall be returned to such participant or, in
the case of his or her death, to the person or persons entitled thereto under
Section 15 hereof, and such participant's option shall be automatically
terminated. The preceding sentence notwithstanding, a participant who receives
payment in lieu of notice of termination of employment shall be treated as
continuing to be an Employee for the participant's customary number of hours per
week of employment during the period in which the participant is subject to such
payment in lieu of notice.
12. Interest. No interest shall accrue on the payroll deductions of a
--------
participant in the Plan.
13. Stock.
-----
(a) Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of shares of the
Company's Common Stock which shall be made available for sale under the Plan
shall be 250,000 shares, plus an annual increase to be added on the first day of
the Company's fiscal year beginning in 2000 equal to the lesser of (i) 250,000
shares, (ii) 2.5% of the outstanding shares on such date or (iii) a lesser
amount determined by the Board.
(b) The participant shall have no interest or voting right in shares
covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the participant and
his or her spouse.
14. Administration. The Plan shall be administered by the Board or a
--------------
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision
and determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.
-6-
<PAGE>
15. Designation of Beneficiary.
--------------------------
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to an Exercise Date
on which the option is exercised but prior to delivery to such participant of
such shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to exercise of the
option. If a participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and
in the absence of a beneficiary validly designated under the Plan who is living
at the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
16. Transferability. Neither payroll deductions credited to a
---------------
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.
17. Use of Funds. All payroll deductions received or held by the Company
------------
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts shall be maintained for each participant
-------
in the Plan. Statements of account shall be given to participating Employees at
least annually, which statements shall set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.
19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
---------------------------------------------------------------------
Merger or Asset Sale.
- ---------------------
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the Reserves, the maximum number of shares each
participant may purchase each Purchase Period (pursuant to Section 7), as well
as the price per share and the number of shares of Common Stock covered by each
option under the Plan which has not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of
-7-
<PAGE>
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.
(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.
(c) Merger or Asset Sale. In the event of a proposed sale of all or
--------------------
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, any Purchase Periods
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date") and any Offering Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.
20. Amendment or Termination.
------------------------
(a) The Board of Directors of the Company may at any time and for any
reason terminate or amend the Plan. Except as provided in Section 19 hereof, no
such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Offering Period or the Plan
is in the best interests of the Company and its shareholders. Except as
provided in Section 19 and this Section 20 hereof, no amendment may make any
change in any option theretofore granted which adversely affects the rights of
any participant. To the extent necessary to comply with Section 423 of the Code
(or any successor rule or provision or any other applicable law, regulation or
stock exchange rule), the Company shall obtain shareholder approval in such a
manner and to such a degree as required.
(b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount
-8-
<PAGE>
withheld during an Offering Period, establish the exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a participant in order to
adjust for delays or mistakes in the Company's processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied toward
the purchase of Common Stock for each participant properly correspond with
amounts withheld from the participant's Compensation, and establish such other
limitations or procedures as the Board (or its committee) determines in its sole
discretion advisable which are consistent with the Plan.
(c) In the event the Board determines that the ongoing operation of
the Plan may result in unfavorable financial accounting consequences, the Board
may, in its discretion and, to the extent necessary or desirable, modify or
amend the Plan to reduce or eliminate such accounting consequence including, but
not limited to:
(i) altering the Purchase Price for any Offering Period
including an Offering Period underway at the time of the change in Purchase
Price;
(ii) shortening any Offering Period so that Offering Period ends
on a new Exercise Date, including an Offering Period underway at the time of the
Board action; and
(iii) allocating shares.
Such modifications or amendments shall not require stockholder
approval or the consent of any Plan participants.
21. Notices. All notices or other communications by a participant to
-------
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued
----------------------------------
with respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
23. Term of Plan. The Plan shall become effective upon the earlier
------------
to occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 20 hereof.
-9-
<PAGE>
24. Automatic Transfer to Low Price Offering Period. To the extent
-----------------------------------------------
permitted by any applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.
-10-
<PAGE>
EXHIBIT A
---------
bamboo.com, Inc.
1999 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. ____________________ hereby elects to participate in the bamboo.com, Inc.
1999 Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") and
subscribes to purchase shares of the Company's Common Stock in accordance
with this Subscription Agreement and the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount of
____% of my Compensation on each payday (from 0 to _____%) during the
Offering Period in accordance with the Employee Stock Purchase Plan.
(Please note that no fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions will be used to automatically exercise my
option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I
understand that my participation in the Employee Stock Purchase Plan is in
all respects subject to the terms of the Plan. I understand that my
ability to exercise the option under this Subscription Agreement is subject
to shareholder approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and Spouse only).
6. I understand that if I dispose of any shares received by me pursuant to the
Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares) or one year after the
Exercise Date, I will be treated for federal income tax purposes as having
received ordinary income at the time of such disposition in an amount equal
to the excess of the fair market value of the shares at the time such
shares were purchased by me over the price which I paid for the shares. I
-
hereby agree to notify the Company in writing within 30 days after the date
---------------------------------------------------------------------------
of any disposition of my shares and I will make adequate provision for
----------------------------------------------------------------------
Federal, state or other tax withholding obligations, if any, which arise
------------------------------------------------------------------------
upon the
--------
<PAGE>
disposition of the Common Stock. The Company may, but will not be
-------------------------------
obligated to, withhold from my compensation the amount necessary to meet
any applicable withholding obligation including any withholding necessary
to make available to the Company any tax deductions or benefits
attributable to sale or early disposition of Common Stock by me. If I
dispose of such shares at any time after the expiration of the 2-year and
1-year holding periods, I understand that I will be treated for federal
income tax purposes as having received income only at the time of such
disposition, and that such income will be taxed as ordinary income only to
the extent of an amount equal to the lesser of (1) the excess of the fair
market value of the shares at the time of such disposition over the
purchase price which I paid for the shares, or (2) 15% of the fair market
value of the shares on the first day of the Offering Period. The remainder
of the gain, if any, recognized on such disposition will be taxed as
capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent upon
my eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan:
NAME: (Please print)_____________________________________________________
(First) (Middle) (Last)
_________________________ _____________________________________________
Relationship
_____________________________________________
(Address)
-2-
<PAGE>
Employee's Social
Security Number: ____________________________________
Employee's Address: ____________________________________
____________________________________
____________________________________
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated:_________________________ ______________________________________________
Signature of Employee
______________________________________________
Spouse's Signature (If beneficiary other than
spouse)
-3-
<PAGE>
EXHIBIT B
---------
bamboo.com, Inc.
1999 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the bamboo.com, Inc.
1999 Employee Stock Purchase Plan which began on ____________, ______ (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically terminated. The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.
Name and Address of Participant:
________________________________
________________________________
________________________________
Signature:
________________________________
Date:____________________________
<PAGE>
EXHIBIT 10.23
[LETTERHEAD OF BAMBOO.COM APPEARS HERE]
June 1, 1999
Mark Searle
bamboo.com, Inc.
124 University Avenue
Palo Alto, California 94301
Re: Amended and Restated Employment Agreement
-----------------------------------------
Dear Mark:
This letter agreement (the "Letter Agreement") is entered into as of
January 25, 1999 (the "Effective Date"), by and between bamboo.com, Inc., a
Delaware corporation (the "Company"), and Mark Searle, an individual
("Employee").
1. Employment and Duties. Commencing on January 25, 1999 Employee will
---------------------
serve as Chief Operating Officer of the Company.
2. At-Will Employment. Employee's employment with the Company is for no
------------------
specified period and constitutes at-will employment. As a result, Employee is
free to resign at any time, for any reason or for no reason. Similarly, the
Company is free to conclude its employment relationship with Employee at any
time, with or without cause.
3. Salary. For all services to be rendered by Employee pursuant to this
------
Letter Agreement, the Company agrees to pay Employee during Employee's period of
employment a salary at an annual rate of $120,000 (the "Salary"). The Salary
shall be paid in periodic installments in accordance with the Company's regular
payroll practices. The Company agrees to review the Salary annually and to make
increases, if any, as the Company may approve in its sole discretion.
4. Stock Options.
-------------
(a) Option. The Company shall grant Employee an option to purchase
------
40,000 shares of the Company's common stock, and a second option to purchase
20,000 shares of the Company's common stock, each with an exercise price equal
to the fair market value of the Company's common stock per share (collectively,
the "Option").
(b) Option Provisions. The Option shall be granted under the Stock
-----------------
Option Plan and shall be subject to the terms and conditions (including vesting)
of the Stock Option Plan and
<PAGE>
Mark Searle
June 1, 1999
Page 2
Employee's option agreement. The Stock Option Plan may be modified from time to
time by the Company's Board of Directors. Notwithstanding the foregoing, the
Company's Board of Directors may, in its discretion, grant the Option outside of
the Stock Option Plan, and any such Options shall include such other terms as
the Board of Directors may specify.
5. Other Benefits. During the Employment Period, Employee shall be
--------------
entitled to participate in all other employee benefit plans, programs,
insurances, and perquisites of the Company accorded to other employees of the
Company at Employee's same or similar level of seniority. The Company may modify
the benefits it offers to its employees from time to time as it deems necessary.
6. Vacations and Holidays. Employee shall be entitled to the amount of
----------------------
paid vacation and Company holidays accorded to employees of the Company at
Employee's same or similar level of seniority in accordance with the Company's
policies in effect from time to time; provided, however, that such amount of
paid vacation shall in no event be less than two (2) weeks annually.
7. Termination Benefits. In the event Employee's employment terminates,
--------------------
then Employee shall be entitled to receive severance and other benefits, if any,
in accordance with Employee's option agreements and the Company's written
policies, if any, in effect from time to time for employees of the Company at
Employee's same or similar level of seniority. In addition, upon termination
without "Cause", as that term is defined in Employee's option agreements,
Employee will receive "severance" pay equal to 20% of Employee's annual salary.
8. Confidential Information. Employee will be expected to sign and comply
------------------------
with the Company's Employment, Confidential Information, Invention Assignment
and Arbitration Agreement, which requires, among other provisions, the
assignment of patent rights to any invention made during Employee's employment
at the Company and nondisclosure of proprietary information.
9. Miscellaneous. This Letter Agreement, and any written plan or agreement
-------------
referred to herein, represent the entire agreement and understanding between the
parties as to the subject matter hereof and supersede all prior or
contemporaneous agreements, whether written or oral. No waiver, alteration, or
modification of any of the provisions of this Letter Agreement shall be binding
unless in writing and signed by duly authorized representatives of the parties
hereto. Failure or delay on the part of either party hereto to enforce any
right, power, or privilege hereunder shall not be deemed to constitute a waiver
thereof. Additionally, a waiver by either party or a breach of any promise
hereof by the other party shall not operate as or be construed to constitute a
waiver of any subsequent waiver by such other party. Whenever possible, each
provision of this Letter Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Letter
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Letter Agreement will be reformed, construed and enforced in such
jursdiction as if such invalid, illegal or unenforceable provision had never
been
<PAGE>
Mark Searle
June 1, 1999
Page 3
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein. This Letter Agreement shall be
governed by and construed in accordance with the internal substantive laws, and
not the choice of law rules, of the State of California.
Kindly confirmed your agreement with, and acceptance of, all of the
foregoing by signing this Letter Agreement where indicated below.
Very truly yours,
BAMBOO.COM, INC.
By: /s/ Leonard McCurdy
---------------------------------------
Name: Leonard McCurdy
-------------------------------------
Title: Chairman & Chief Executive Officer
------------------------------------
UNDERSTOOD AND AGREED:
REVIEWED BY LEGAL
Mark Searle
AHF 6/2/99
-------- ---------
/s/ Mark Searle
- --------------------------
Signature
<PAGE>
EXHIBIT 10.27
DISTRIBUTION & CO-MARKETING AGREEMENT
THIS DISTRIBUTION & CO-MARKETING AGREEMENT (the "Agreement") is entered
into as May 5, 1999 (the "Effective Date"), between BAMBOO.COM CORPORATION, a
Delaware corporation with an office located at 124 University Avenue, Palo Alto,
CA 94301 ("bamboo.com"), and The Equity Group, an Oregon corporation with an
office located at 7125 SW Hampton Portland, OR ("Company"). bamboo.com and
Company, in consideration of the mutual promises and covenants contained herein,
and other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, agree as follows (additional terms and conditions and
definitions of certain capitalized terms appear on the reverse side of this
agreement):
1. bamboo.com Service. bamboo.com will be responsible for receiving orders and
------------------
invoicing and collecting revenues for sales of Productions Services. bamboo.com
will capture images at designated sites through its Service Provider Network and
process captured images to create bamboo.com Images. bamboo.com will host
bamboo.com Images on its servers and will provide to Company a URL link and
identifying listing information for each bamboo.com Image purchased by Company
for the purpose of integrating the link into listings on the Company Site.
Company will permit linking of the Company Site to bamboo.com Images, and the
parties will use best efforts to work together to expeditiously implement, and
maintain throughout the term of this Agreement, a system whereby Company will be
capable of linking the Company Site to bamboo.com Images.
2. Exclusivity. bamboo.com will be the exclusive provider of Virtual Tours
-----------
Images for the Company Site. Company will not directly or indirectly promote
itself, or act as a provider of Virtual Tour Images, nor will it promote,
display ads for or use the services of any third party acting in such capacity.
In addition, Company will not permit any Virtual Tour Images of any third party
to be posted to, linked to or otherwise made accessible through the Company
Site. Notwithstanding the preceding sentence, Company will not be restricted
from accommodating alternative Virtual Tour Images already posted or linked to
the Company Sites or from allowing Company customers that use a provider of
Virtual Tours Images other than bamboo.com to link to the Company Site.
3. Marketing and Promotion.
------------------------
bamboo.com agrees to:
. Provide a dedicated account manager and commercially reasonable technical
support during normal business hours to help Company link the Company Site
to the bamboo.com Images produced on behalf of Sales Agents;
. Promote Company as a partner on the bamboo.com Web site;
. Include Company in marketing material and press releases, as bamboo.com
deems appropriate;
. Provide co-branded marketing materials to Sales Agents that explains
bamboo.com Tours to customers, including CD ROM demo disks;
. Offer a special bulk purchase price and a special promotional offer at
office presentations made by bamboo.com representatives to Sales Agents
during the first sixty (60) days of this agreement; and
. Hold periodic training seminars for Sale Agents focusing on the benefits of
using the Internet in real estate and methods of integrating bamboo.com
Tours into the Sale Agents' marketing strategy.
Company agrees to:
. Ensure that a HTML button and the corresponding URL provided by bamboo.com
will be located on an individual Company listing page within 24 hours from
receiving the URL link from bamboo.com;
. Include an electronic order form on the Company Site that allows Sales
Agents to submit orders to bamboo.com via the Internet;
. Maintain a gallery of bamboo.com Images on the Company Site;
. When appropriate, include a bamboo.com Mark and a brief, suitable reference
to the availability of the Production Services in the Company's print
advertising in magazines, flyers, newsletters and general mailings
distributed to clients and potential clients; collaborate with bamboo.com to
develop email and direct marketing material generated from time to time to
highlight the availability and features of the Production Services; and
distribute marketing materials created by bamboo.com at seminars,
presentations, training sessions and follow-up meetings sponsored by
Company; and
. Ensure bamboo.com account executives have access to Sales Agents during
office meetings within the first 60 days of this agreement.
4. Term. This Agreement will commence on the Effective Date and continue for
----
twelve (12) months, and will be automatically renewed for successive twelve
(12) month periods unless either party notifies the other in writing not
less than ninety (90) days prior to the end of the then-current term of its
intention to terminate this Agreement as of the end of such term. Upon
termination or expiration, each party will cease all use of marks and other
intellectual property of the other party.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
BAMBOO.COM THE EQUITY GROUP
By: /s/ Andy Laszlo, SVP By: Mary J. King
--------------------------- -----------------------
Andy Laszlo, SVP Marketing Manager
<PAGE>
ADDITIONAL TERMS AND CONDITIONS
1. Definitions
-----------
"Company Site" means the collection of HTML documents residing on servers
operated by or for Company or its affiliate, including without limitation
Company's intranet and extranet, and accessible on or after the Effective Date
by Sales Agents or the public via the Internet at the following URL
http://www.equitygroup.com or any other web site address adopted by Company.
- --------------------------
"Confidential Information" means any trade secrets, confidential data or other
confidential information oral or written relating to or used in the business of
the other party (the "Disclosing Party"), that a party may obtain from the
Disclosing Party during the term of this Agreement (the "Confidential
Information").
"bamboo.com Image" means an electronic image of a Property produced by or on
behalf of bamboo.com.
"bamboo.com Technology" means software and hardware, including the bamboo.com
for Java Software, used to capture, process and view bamboo.com Images.
"bamboo.com Tour" means the combined Production Services supplied by bamboo.com
with respect to a single Property.
"Production Services" means the services provided by or on behalf of bamboo.com
in producing bamboo.com Images.
"Sales Agent" means any sales agent, sales representative or broker of the
Company.
"Service Provider Network" means the network of individuals throughout the
Territory with whom bamboo.com has entered into agreements to capture images at
designated sites on bamboo.com's behalf.
"Virtual Tour Images" means 360, three-dimensional, virtual reality, virtual
tour, virtual walkthrough or other similar images, or production services for
such images.
2. Confidentiality
---------------
Except as expressly provided herein, neither party will use the Confidential
Information of the other party without such other party's prior written consent.
Each party agrees to treat the other party's Confidential Information with the
same degree of care as it maintains its own information of a similar nature.
Each party will use at least the same procedures and degree of care which it
uses to protect the confidentiality of its own Confidential Information of like
importance, and in no event less than reasonable care. The terms of this
Agreement will constitute Confidential Information, except to the extent that
bamboo.com discloses such information in good faith to a legitimate potential,
or actual, strategic investor, investment banker, venture capital firm or
consultant.
3. Bamboo.com Technology
---------------------
(a) All bamboo.com Technology, including without limitation the bamboo.com for
Java Software and all bamboo.com Images, whether or not produced for Sales
Agents and whether or not posted to or linked to the Company Site, are, and at
all times will remain, the exclusive property of bamboo.com, and no provision of
this Agreement implies any transfer to Company of any ownership interest in any
bamboo.com Technology. Company will not reproduce, distribute, modify, edit, or
prepare derivative works from the bamboo.com Images without the prior written
permission of bamboo.com.
(b) bamboo.com hereby grants to Company a nonexclusive, worldwide, royalty-
free, nontransferable license to include on the Company Site links to bamboo.com
Images on bamboo.com's servers solely for the purposes contemplated in this
Agreement.
4. Trademarks
----------
(a) bamboo.com owns and at all times will continue to own the trademarks,
service marks and/or trade names bamboo.com, the bamboo.com logo, BAMBOO,
BAMBOO.COM and the bamboo.com logo, as well as any name or mark bamboo.com may
subsequently adopt as a trade name or to designate the Production Services
(collectively, the "bamboo.com Marks"), and Company will not take any actions
inconsistent with bamboo.com's ownership rights. Company owns and at all times
will continue to own the trademarks, service marks and/or trade names
customarily used by Company during the term of this Agreement (the "Company
Marks"), and bamboo.com will not take any actions inconsistent with Company'
ownership rights. Each party's use of the other party's marks will not create in
the using party any right, title or interest therein or thereto, and all such
use will inure to the exclusive benefit of other party.
(b) Subject to the restrictions set forth herein, bamboo.com hereby grants
Company a nonexclusive, worldwide, royalty-free, fully paid up, nontransferable
right to use the bamboo.com Marks, during the term of this Agreement, with
bamboo.com's prior written approval, which bamboo.com will not unreasonably
withhold or delay, solely in connection with promotion and marketing of the
Production Services. Subject to the restrictions set forth herein, Company
hereby grants bamboo.com a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Company Marks, during the term of this
Agreement, solely in connection with promotion and marketing of the Production
Services. At the reasonable request of either party, the other party will
provide assistance with the protection and maintenance of the marks of the
requesting party. Each party may only use the marks of the other party as
expressly permitted herein and agrees to use the marks of the other party in a
manner commensurate with the style, appearance and quality of the other party's
services and/or products bearing such marks.
5. Limitation on Grant of Rights
-----------------------------
Except as expressly provided herein, neither party receives any other right or
license to the technology or intellectual property of the other party.
6. Termination
-----------
(a) Upon termination or expiration, (i) Company and bamboo.com will cease all
use of marks of the other party and (ii) Company will cease all use of the
bamboo.com Images and bamboo.com for Java Software and will purge all bamboo.com
for Java Software and bamboo.com Images from its servers.
(b) This Agreement will terminate in the event a party breaches any material
term, condition or representation of this Agreement or materially fails to
perform any of its material obligations or undertakings hereunder, and fails to
remedy such default within sixty (60) days after being notified by the non-
breaching party of such breach or failure; provided, however, that the non-
breaching party will not unreasonably withhold or delay its consent to extend
the cure period if the breaching party has commenced cure during the sixty-day
notice period and pursues cure of the breach in good faith.
(c) The provisions of Sections 2, 3(a), 4(a), 5, 6(a), 6(c), 7 and 8 of these
Additional Terms and Conditions will survive the expiration or termination of
this Agreement for any reason. All other rights and obligations of the parties
will cease upon expiration or termination of this Agreement.
7. No Warranties; Limitations of Liability
---------------------------------------
BAMBOO.COMVISlON MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO
THE ANY GOODS OR SERVICES PROVIDED BY THIS AGREEMENT. EXCEPT WITH RESPECT TO A
BREACH BY EITHER PARTY OF ITS OBLIGATIONS DESCRIBED IN SECTION 2.3 ON THE
REVERSE SIDE OF THIS AGREEMENT OR SECTION 7 OF THESE ADDITIONAL TERMS AND
CONDITIONS, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST
PROFITS OR ANY FORM OF INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES
OF ANY CHARACTER FROM ANY CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS
AGREEMENT WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR
OTHERWISE, AND WHETHER OR NOT THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE.
8. Miscellaneous
-------------
Any notice required or permitted by this Agreement will be deemed given if sent
by registered mail, postage prepaid, addressed to the other party at the address
set forth within this Agreement. Delivery will be deemed effective three (3)
days after deposit with postal authorities. Nonperformance of either party will
be excused to the extent that performance is rendered impossible by storm,
lockout or other labor trouble, riot, war, rebellion, strike, fire, flood,
accident or other act of God, governmental acts, orders or restrictions, or any
other reason where failure to perform is beyond the control and not caused by
the gross negligence or willful misconduct of the non-performing party. The
relationship of bamboo.com and Company established by this Agreement is that of
independent contractors. This Agreement will be governed by and construed under
the laws of the State of California without reference to conflict of laws
principles. This Agreement, together with all exhibit and attachments hereto,
sets forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, will be effective unless in writing signed by the party to
be charged, and the waiver of any breach or default will not constitute a waiver
of any other right hereunder or any subsequent breach or default. Neither party
may assign this Agreement, or assign or delegate any right or obligation
hereunder, without the prior written consent of the other party; provided,
however, that either party may assign this Agreement or assign or delegate its
rights and obligations under this Agreement to a successor to all or
substantially all of its business or assets relating to this Agreement whether
by sale, merger, operation of law or otherwise. Company will not issue any press
release regarding the subject matter of this Agreement without the prior written
approval of bamboo.com. This Agreement may be executed by exchange of signature
pages by facsimile and/or in any number of counterparts, each of which shall be
an original as against any party whose signature appears thereon and all of
which together shall constitute one and the same instrument.
<PAGE>
EXHIBIT 10.28
EXECUTION DRAFT
DISTRIBUTION & CO-MARKETING AGREEMENT
-------------------------------------
THIS DISTRIBUTION & CO-MARKETING AGREEMENT (the "Agreement") is entered
into as of June 2, 1999 (the "Effective Date"), between BAMBOO.COM, INC., a
Delaware corporation with an office located at 124 University Avenue, Palo Alto,
CA 94301 ("bamboo.com"), and NORTHSIDE REALTY, a Georgia corporation with an
office located at 6065 Roswell Rd., Atlanta, GA 30328 ("Company").
Bamboo.com and Company, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, agree as follows (definitions appear
in Additional Terms and Conditions):
1. In-Office Presentation Offer. Bamboo.com will make the following [*]
----------------------------
available to Company's sales Agents through a bamboo.com account
representative during in-office presentations, and such [*] will only be
available on the day of such presentations and one Offer per customer. The
Offer will be available [*] Sales Agents must [*] "Basic Package" means four
scenes captured at a designated property placed on
http://www.northsiderealty.com. [*]
2. Bamboo.com Service. Bamboo.com will be responsible for receiving orders and
-------------------
invoicing and collecting revenues for sales of Production Services. Bamboo.com
will capture images at designated sites through its Service Provider Network and
process captured images to create Bamboo.com Images. Company will permit linking
of the Company Site to Bamboo.com Images, and the parties will use best efforts
to work together to implement this system within fourteen (14) days of the
Effective Date and maintain the system throughout the Term of this Agreement.
Additionally, Company will use commercially reasonable efforts to link each such
Bamboo.com Image to the appropriate listings on the Company Sites by the end of
the business day following the day bamboo.com makes such Bamboo.com Image
available on the bamboo.com server.
3. Exclusivity. Bamboo.com will be the exclusive provider of Virtual Tours
-----------
Images for the Company Site. Company will not directly or indirectly promote
itself, or act, as a provider of Virtual Tour Images, nor will it promote,
display ads for or use the services of any third party acting in such capacity.
In addition, Company will not permit any Virtual Tour Images of any third party
w be posted to, linked to or otherwise made accessible through the Company Site.
4. Marketing and Promotion.
-----------------------
Bamboo.com agrees to:
. Include Company, including use of its logo, as a partner on bamboo.com's
website and in marketing material, as bamboo.com deems appropriate;
. Participate in Company press release regarding use of bamboo.com Tours,
subject to bamboo.com's approval;
. Provide listing presentation kits, subject to Company approval, to agents
purchasing virtual tours as part of the above Offer;
. Educate each Company office on the benefits of using the Internet in real
estate and methods of integrating Bamboo.com Tours into the Sales Agents'
marketing strategy;
. Provide custom order forms for Sales Agents;
. Discuss other joint marketing opportunities, including collaboration on email
and direct marketing material from time to time.
Company agrees to:
. Hold an in-office presentation by a bamboo.com representative with each
Company office within the first ninety (90) days of the Effective Date.
. Company will send out a communication from a Company executive, including a
statement encouraging them to use bamboo.com's Production Services, to each
Sales Agent within the first thirty (30) days following the Effective Date.
Additionally, Company agrees to issue a press release regarding its use of
the bamboo.com Tours;
. Include an electronic order form and a description of the bamboo.com
Production Services on the Company Site that allows Sales Agents to submit
orders to bamboo.com via the Intranet. Maintain a gallery of Bamboo.com
Images on the Company Site;
. Include description demonstration of the bamboo.com Production Services, and
marketing materials in a Company sponsored training and seminar for Sales
Agents;
. When appropriate, include a Bamboo.com Mark and a brief, suitable reference
to the availability of the Production Services in the Company's print
advertising in magazines, flyers, newspapers and general mailings distributed
to clients and potential clients.
5. Term. This Agreement will commence on the Effective Date and continue for
----
twelve (12) months, and will be automatically renewed for successive twelve (12)
month periods unless either party notifies the other in writing not less than
ninety (90) days prior to the end of the then-current term of its intention to
terminate this Agreement as of the end of such term. Upon termination or
expiration, each party will cease all use of marks and other intellectual
property of the other party. Either party may terminate this agreement without
cause upon a 180 day written notice to terminate.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
BAMBOO.COM,INC. NORTHSIDE REALTY
By: /s/ Andrew P. Loszlo By: /s/ Terry B. Morris
_______________________________ ________________________________
Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>
<TABLE>
<S> <C>
Name/Title: Andy Laszlo, Sr. VP Business Development Name/Title: Terry B. Morris, President
----------------------------------------- ----------------------------
</TABLE>
<PAGE>
ADDITIONAL TERMS AND CONDITIONS
1. Definitions.
-----------
"Bamboo.com Image" means an electronic Image of a property produced by or on
behalf of bamboo.com.
"Bamboo.com Technology" means all Bamboo.com Images and software and hardware,
and including the Bamboo.com for Java Software, used to capture, process and
view Bamboo.com Images.
"Bamboo.com Tour" means the combined Production Services supplied by bamboo.com
with respect to a single Property.
"Company Sites" means the collection of HTML documents residing on servers
operated by error Company or its affiliates, including without limitation
Company's intranet, extranet and public website.
"Confidential Information" means any trade secrets, confidential data or other
confidential information, oral or written, totaling to or used in the business
of the other party (the "Disclosing Party"), that a party may obtain from the
Disclosing Party during the Term (the "Confidential Information").
"Production Services means the service provided by or on behalf of bamboo.com in
producing Bamboo.com Images.
"Sales Agent means any sales agent, sales representative or broker of the
Company.
"Service Provider Network" means the network of individuals throughout the
Company territory of operations with whom bamboo.com has entered into agreements
to capture images at designated sites on bamboo.com's behalf.
"Term" means the initial Term of this Agreement and the Renewal Terms, if any,
as set in forth in Section 4 on the first page of this Agreement.
"Virtual Tour Images" means 360 degree, three-dimensional, virtual reality,
virtual tour, virtual walkthrough or other similar images, or production
services for such images.
2. Confidential
------------
Each party agrees to treat the other party's Confidential Information with the
same degree of care as it maintains its own information of a similar nature.
Each party will use at least the same procedures and degree of care which it
uses to protect the confidentiality of its own Confidential Information of film
importance, and In no event less than reasonable care. The terms of this
Agreement will constitute Confidential Information, except to the extent that
bamboo.com discloses such information in good faith to a legitimate potential,
or actual, strategic investor, investment banker, venture capital firm or
consultant, or as required by status, regulation or other law.
3. Bamboo.com Technology
---------------------
3.1 Bamboo.com Technology will remain, the exclusive property of bamboo.com,
and no provision of this Agreement implies any transfer to Company of any
ownership interest in any Bamboo.com Technology.
3.2 Bamboo.com hereby grants to Company a nonexclusive, worldwide, royalty-
free nontransferable license to include links to the Bamboo.com images on
the Company Sites and Hosted Sites solely for the purposes contemplated
in this Agreement. Company will not distribute, modify edit, or prepare
derivative works from the Bamboo.com Images without the prior written
permission of bamboo.com. The foregoing license does to include any right
to grant or authorize sublicenses.
4. Trademarks.
----------
4.1 Bamboo.com owns and at all times will continue to own the trademarks,
service marks and/or trade names BAMBOO.COM and the bamboo.com logo, as well as
any name or mark bamboo.com may subsequently adopt as a trade name or to
designate the Production Services (collectively, the "Bamboo.com Marks), and
Company will not take any actions inconsistent with bamboo.com's ownership
rights. Company owns and at all times will continue to own the trademarks,
service marks and/or trade names customarily used by Company during the Term
(the "Company Marks"), and bamboo.com will not take any actions inconsistent
with Company ownership rights. Each party's use of the other party's marks will
not create in the using party any right, title or interest therein or thereto,
and all such use will inure to the exclusive benefit of other party.
4.2 Subject to the restrictions set forth herein, bamboo.com hereby grants
Company a nonexclusive, worldwide, royal, fully paid up, nontransferable right
to use the Bamboo.com Marks, during the Term, with bamboo.com's prior written
approval, which bamboo.com will not unreasonably withhold or delay, solely in
connection with promotion and marketing of the Production Services and/or
Company financing. Subject to the restrictions set forth herein, Company hereby
grants financing. Subject to the restrictions set forth herein, bamboo.com a
nonexclusive, worldwide, royalty-free, fully paid up, nontransferable right to
use the Company Marks, during the Term, solely in connection with promotion and
marketing of the Production Services and/or bamboo.com financing. At the
reasonable request of either party, the other party will provide assistance with
the protection and maintenance of the marks of the requesting party. Each party
may only use the marks of the other party as expressly permitted herein and
agree, to use the marks of the other party in a manner commensurate with the
style, appearance and quality of the other party's services and/or products
bearing such marks.
5. Limitation on Grant of Rights
-----------------------------
Except as expressly provided herein, neither party receives any other right or
license to the technology or intellectual property of the other party.
6. Termination
-----------
6.1 Upon termination or expiration, (i) Company and bamboo.com will cease all
use of marks of the other party and (ii) Company will cease all uses of the
Bamboo.com images and Bamboo.com for Java Software and will purge all Bamboo.com
for Java Software and Bamboo.com images from its servers.
6.2 This Agreement will terminate in the event a party breaches any material
term, condition or representation of this Agreement or materially fails to
perform any of its material obligations or undertakings hereunder, and fails to
remedy such default within sixty (60) days after being notified by the non-
breaching party of such breach or failure; provided, however, that the non-
breaching party will not unreasonably withhold or delay its consent to extend
the cure period if the breaching party has commenced cure during the sixty-day
notice period and pursues cure of the breach in good faith.
6.3 The provisions of Sections 2, 3.1, 4.1, 5, 5.1, 6.3, 7 and 8 of these
Additional Terms and Conditions will survive the expiration or termination of
this Agreement for any reason. All other rights and obligations of the parties
will cease upon expiration or termination of this Agreement.
7. No Warranties: Limitation of Liability
--------------------------------------
BAMBOO.COM MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABlLITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO
THE ANY GOODS OR SERVICES PROVIDED BY THIS AGREEMENT. EXCEPT WITH RESPECT TO A
BREACH BY EITHER PARTY OF ITS OBLIGATIONS DESCRIBED IN SECTION 3 ON THE FIRST
PAGE OF THIS AGREEMENT OR SECTION 2 OF THESE ADDITIONAL TERMS AND CONDITIONS, IN
NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY FORM
OF INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER FROM
ANY CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS AGREEMENT WHETHER BASED ON
BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR
NOT THE OTHER PARTY HAS BEEN ADVISED OF THE LIABILITY OF SUCH DAMAGE.
8 Miscellaneous
-------------
Any notice required or permitted by this Agreement will be deemed given if sent
by registered mail, postage prepaid, addressed to the other party at the address
set forth within this Agreement. Delivery will be deemed effective three (3)
days after deposit with postal authorities. Nonperformance of either party will
be excused to the extent that performance is rendered impossible by storm,
blackout or other labor trouble, riot, war, rebellion, strike, fire, flood,
accident or other act of God, governmental acts, orders or restrictions, or any
other reason where failure to perform is beyond the control and not caused by
the gross negligence or willful misconduct of the non-performing party. The
relationship of bamboo.com and Company established by this Agreement is that of
independent contractors. This Agreement will be governed by and construed under
the laws of the State of California without reference to conflict of laws
principles. This Agreement together with all exhibit and attachments hereto,
sets forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification for amendment to this Agreement nor any waiver of any rights under
this Agreement, will be effective unless in writing signed by the party to be
charged, and the waiver of any breach of default will not constitute a waiver of
any other right hereunder or any subsequent breach or default. Neither party may
assign this Agreement or assign or delegate its rights and obligations under
this Agreement to a successor to all or substantially all of its business or
assets relating to this Agreement whether by sale, merger, operation of law or
otherwise. Company will not issue any press release regarding the subject matter
of this Agreement without the prior written approval of bamboo.com. This
Agreement may be executed by exchange of signature pages by facsimile an/or in
any number of counterparts, each of which shall be an original as against any
party whose signature appears thereon and all of which together shall constitute
one and the same instrument.
<PAGE>
EXHIBIT 10.29
EXECUTION DRAFT
DISTRIBUTION & CO-MARKETING AGREEMENT
-------------------------------------
THIS DISTRIBUTION & CO-MARKETING AGREEMENT (the "Agreement") is entered
into as of May 19, 1999 (the "Effective Date"), between bamboo.com, Inc., a
Delaware corporation with an office located at 124 University Avenue, Palo Alto,
CA 94301 ("bamboo.com"), and Carlson Real Estate, a Massachusettes corporation
with an office located at 18 Commerce Way, Woburn, MA 01801 ("Company").
Bamboo.com and Company, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, agree as follows (definitions appear
in Additional Terms and Conditions):
1. [*] Carlson Real Estate will [*] In return, bamboo.com will [*] The
tours shall be used for current inventory. Carlson will make best efforts
to use these tours by the [*] Bamboo.com will provide an invoice to
Carlson Real Estate [*] Carlson will [*]
2. Bamboo.com Service. Bamboo.com will be responsible for receiving orders and
------------------
invoicing and collecting revenues for sales of Production Services.
Bamboo.com will capture images at designated sites through its Service
Provider Network and process captured images to create Bamboo.com Images.
Company will permit linking of the Company Site to Bamboo.com Images, and
the parties will use best efforts to work together to expeditiously
implement, and maintain, a system whereby Company will be capable of
linking the Company Site to Bamboo.com Images.
3. Exclusivity. Bamboo.com will be the exclusive provider of Virtual Tours
-----------
Images for the Company Site. Company will not directly or indirectly
promote itself, or act, as a provider of Virtual Tour Images, nor will it
promote, display ads for or use the services of any third party acting in
such capacity. In addition, Company will not permit any Virtual Tour Images
of any third party to be posted to, linked to or otherwise made accessible
through the Company Site.
4. Marketing and Promotion.
-----------------------
Bamboo.com agrees to:
. Include Company in marketing material, as bamboo.com deems appropriate
and as a partner on bamboo.com's website
. Provide co-branded marketing materials to Sales Agents that explains
Bamboo.com Tours to customers;
. Hold periodic training seminars for Sales Agents focusing on the
benefits of using the Internet in real estate and methods of integrating
Bamboo.com Tours into the Sales Agents' marketing strategy.
Company agrees to:
. Hold an in-office presentation by a bamboo.com representative with each
Company office within the first ninety (90) days of the Effective Date.
Company will send out a communication from a Company executive,
including a statement encouraging them to use bamboo.com's Production
Services, to each Sales Agent within the first thirty (30) days
following the Effective Date.
. Ensure that an HTML button and the corresponding URL provided by
bamboo.com will be located on an individual Company listing page
containing a Bamboo.com Image within 24 hours from receiving the URL
link from bamboo.com;
. Maintain a gallery of Bamboo.com Images on the Company Site;
. When appropriate, include a Bamboo.com Mark and a brief, suitable
reference to the availability of the Production Services in the
Company's advertising, flyers, newsletters and general mailings
distributed to clients and potential clients; collaborate with
bamboo.com to develop email and direct marketing material generated from
time to time to highlight the availability and features of the
Production Services to Sales Agents; and distribute marketing materials
created by bamboo.com at seminars, presentations, training sessions and
follow-up meetings sponsored by Company;
5. Future: Within the first thirty (30) days following the Effective Date,
------
Bamboo.com and Company agree to negotiate in good faith a longer-term
volume purchase by Company of bamboo.com Production Services for delivery
in 1999.
6. Term. This Agreement will commence on the Effective Date and continue for
----
twelve (12) months, and will be automatically renewed for successive twelve
(12) month periods unless either party notifies the other in writing not
less than ninety (90) days prior to the end of the then-current term of its
intention to terminate this Agreement as of the end of such term. Upon
termination or expiration, each party will cease all use of marks and other
intellectual property of the other party.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
BAMBOO.COM,INC CARLSON REAL ESTATE
By: /s/ Andrew P. Laszlo By: /s/ [SIGNATURE ILLEGIBLE]
------------------------------------ -----------------------------
Name/Title: Andrew P. Laszlo Name/Title:
--------------------------- ---------------------
SVP Business & Development Director of Marketing
--------------------------- ----------------------
Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>
ADDITIONAL TERMS AND CONDITIONS
1. Definitions
-----------
"Company Site" means the collection of HTML documents residing on servers
operated by or for Company or its affiliate, including without limitation
Company's intranet and extranet, and accessible on or after the Effective Date
by Sales Agents or the public via the Internet.
"Confidential Information" means any trade secrets, confidential data or other
confidential information oral or written relating to or used in the business of
the other party (the "Disclosing Party"), that a party may obtain from the
Disclosing Party during the term of this Agreement.
"Bamboo.com Image" means an electronic image of a Property produced by or on
behalf of bamboo.com.
"Bamboo.com Technology" means software and hardware, including the Bamboo.com
for Java Software, used to capture, process and view Bamboo.com Images.
"Basic Package" is defined as four panoramic images of a property linked to one
website.
"Bamboo.com Tour" means the combined Production Services supplied by bamboo.com
with respect to a single Property.
"Production Services" means the services provided by or on behalf of bamboo.com
in producing Bamboo.com Images.
"Sales Agent" means any sales agent, sales representative or broker of the
Company.
"Service Provider Network" means the network of individuals throughout the
Company's territory of operation with whom bamboo.com has entered into
agreements to capture images at designated sites on bamboo.com's behalf.
"Virtual Tour Images" means 360 degrees, three-dimensional, virtual reality,
virtual tour, virtual walkthrough or other similar images, or production
services for such images.
2. Confidentiality
---------------
Each party agrees to treat the other party's Confidential Information with the
same degree of care as it maintains its own information of a similar nature.
Each party will use at least the same procedures and degree of care which it
uses to protect the confidentiality of its own Confidential Information of like
importance, and in no event less than reasonable care. The terms of this
Agreement will constitute Confidential Information, except to the extent that
bamboo.com discloses such information in good faith to a legitimate potential,
or actual, strategic investor, investment banker, venture capital firm or
consultant, or as required by statute, regulation or other law.
3. Bamboo.com Technology
---------------------
(a) All Bamboo.com Technology, including without limitation the Bamboo.com for
Java Software and all Bamboo.com Images, whether or not produced for Sales
Agents and whether or not posted to or linked to the Company Site, are, and at
all times will remain, the exclusive property of bamboo.com, and no provision of
this Agreement implies any transfer to Company of any ownership interest in any
Bamboo.com Technology. Company will not reproduce, distribute, modify, edit, or
prepare derivative works from the Bamboo.com Images without the prior written
permission of bamboo.com.
(b) Bamboo.com hereby grants to Company a nonexclusive, worldwide, royalty-free,
nontransferable license to include on the Company Site links to Bamboo.com
Images on bamboo.com's servers solely for the purposes contemplated in this
Agreement.
4. Trademarks
----------
(a) Bamboo.com owns and at all times will continue to own the trademarks,
service marks and/or trade names BAMBOO.COM and the bamboo.com logo, as well as
any name or mark bamboo.com may subsequently adopt as a trade name or to
designate the Production Services (collectively, the "Bamboo.com Marks"), and
Company will not take any actions inconsistent with bamboo.com's ownership
rights. Company owns and at all times will continue to own the trademarks,
service marks and/or trade names customarily used by Company during the term of
this Agreement (the "Company Marks"), and bamboo.com will not take any actions
inconsistent with Company' ownership rights. Each party's use of the other
party's marks will not create in the using party any right, title or interest
therein or thereto, and all such use will inure to the exclusive benefit of
other party.
(b) Subject to the restrictions set forth herein, bamboo.com hereby grants
Company a nonexclusive, worldwide, royalty-free, fully paid up, nontransferable
right to use the Bamboo.com Marks, during the term of this Agreement, with
bamboo.com's prior written approval, which bamboo.com will not unreasonably
withhold or delay, solely in connection with Company's promotion and marketing
of the Production Services and financing. Subject to the restrictions set forth
herein, Company hereby grants bamboo.com a nonexclusive, worldwide, royalty-
free, fully paid up, nontransferable right to use the Company Marks, during the
term of this Agreement, solely in connection with bamboo.com's promotion and
marketing of the Production Services and financing. At the reasonable request of
either party, the other party will provide assistance with the protection and
maintenance of the marks of the requesting party. Each party may only use the
marks of the other party as expressly permitted herein and agrees to use the
marks of the other party in a manner commensurate with the style, appearance and
quality of the other party's services and/or products bearing such marks.
5. Limitation on Grant of Rights
-----------------------------
Except as expressly provided herein, neither party receives any other right or
license to the technology or intellectual property of the other party.
6. Termination
-----------
(a) Upon termination or expiration, (i) Company and bamboo.com will cease all
use of marks of the other party and (ii) Company will cease all use of the
Bamboo.com Images and Bamboo.com for Java Software and will purge all Bamboo.com
for Java Software and Bamboo.com Images from its servers.
(b) This Agreement will terminate in the event a party breaches any material
term, condition or representation of this Agreement or materially fails to
perform any of its material obligations or undertakings hereunder, and fails to
remedy such default within sixty (60) days after being notified by the non-
breaching party of such breach or failure; provided, however, that the non-
breaching party will not unreasonably withhold or delay its consent to extend
the cure period if the breaching party has commenced cure during the sixty-day
notice period and pursues cure of the breach in good faith.
(c) The provisions of Sections 2, 3(a), 4(a), 5, 6(a), 6(c), 7 and 8 of these
Additional Terms and Conditions will survive the expiration or termination of
this Agreement for any reason. All other rights and obligations of the parties
will cease upon expiration or termination of this Agreement.
7. No Warranties; Limitation of Liability
--------------------------------------
BAMBOO.COM MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO
THE ANY GOODS OR SERVICES PROVIDED BY THIS AGREEMENT. EXCEPT WITH RESPECT TO A
BREACH BY EITHER PARTY OF ITS OBLIGATIONS DESCRIBED IN SECTION 3 ON THE FIRST
PAGE OF THIS AGREEMENT OR SECTION 2 OF THESE ADDITIONAL TERMS AND CONDITIONS, IN
NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY FORM
OF INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER FROM
ANY CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS AGREEMENT WHETHER BASED ON
BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR
NOT THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
8. Miscellaneous
-------------
Any notice required or permitted by this Agreement will be deemed given if sent
by registered mail, postage prepaid, addressed to the other party at the address
set forth within this Agreement. Delivery will be deemed effective three (3)
days after deposit with postal authorities. Nonperformance of either party will
be excused to the extent that performance is rendered impossible by storm,
lockout or other labor trouble, riot, war, rebellion, strike, fire, flood,
accident or other act of God, governmental acts, orders or restrictions, or any
other reason where failure to perform is beyond the control and not caused by
the gross negligence or willful misconduct of the non-performing party. The
relationship of bamboo.com and Company established by this Agreement is that of
independent contractors. This Agreement will be governed by and construed under
the laws of the State of California without reference to conflict of laws
principles. This Agreement, together with all exhibit and attachments hereto,
sets forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, will be effective unless in writing signed by the party to
be charged, and the waiver of any breach or default will not constitute a waiver
of any other right hereunder or any subsequent breach or default. Neither party
may assign this Agreement, or assign or delegate any right or obligation
hereunder, without the prior written consent of the other party; provided,
however, that either party may assign this Agreement or assign or delegate its
rights and obligations under this Agreement to a successor to all or
substantially all of its business or assets relating to this Agreement whether
by sale, merger, operation of law or otherwise. Company will not issue any press
release regarding the subject matter of this Agreement without the prior written
approval of bamboo.com. This Agreement may be executed by exchange of signature
pages by facsimile and/or in any number of counterparts, each of which shall be
an original as against any party whose signature appears thereon and all of
which together shall constitute one and the same instrument.
-2-
<PAGE>
EXHIBIT 10.30
June 9, 1999
SALES AND CO-MARKETING AGREEMENT
--------------------------------
THIS SALES AND CO-MARKETING AGREEMENT (the "Agreement') is entered into as
of June 9, 1999 (the "Effective Date"), between bamboo.com, Inc., a Delaware
corporation with an office at 124 University Avenue, Palo Alto, CA 94301
("bamboo.com"), and Metropolitan Regional Information Systems, Inc., a Delaware
corporation with an office at 9420 Key West Avenue, Suite 200, Rockville, MD
20850 ("Company").
Bamboo.com uses the Bamboo.com Technology and provides the Production
Services. Company operates the MRIS System and the Company Site. Bamboo.com
desires to provide the Bamboo.com Technology and Production Services to Company
and the MRIS Subscribers. In consideration of the mutual promises and covenants
contained-herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
-----------
1.1 "Administrative Fees" means (a) any penalty or cancellation fees
-------------------
bamboo.com charges for missed or rescheduled image capture appointments; (b) any
processing fees bamboo.com charges for modification or substitution of
Bamboo.com Images; (c) any renewal or extension fees bamboo.com charges for
extending expiring postings of Bamboo.com Images; and (d) other similar charges
and fees.
1.2 "Bamboo.com Image" means an electronic Virtual Tour Image of a
----------------
Property produced by or on behalf of bamboo.com.
1.3 "Bamboo.com Know-How" means all trade secrets, know-how and show-how
-------------------
bamboo.com provides to Company as an agent pursuant to Section 2.1, including,
without limitation, all proprietary oral and written information bamboo.com
provides to Company with respect to methods and processes for [*]
1.4 "Bamboo.com Server" means the dedicated server owned and operated by
------ ----------
bamboo.com to host Bamboo.com Images on behalf of Company, MRIS Subscribers and
their affiliates.
1.5 "Bamboo.com Technology" means software and hardware, including the
------ --------------
Bamboo.com for Java Software and Equipment, used to capture, process and view
Bamboo.com Images.
1.6 "Basic Package" means four scenes captured in a designated Property
-------------
and converted into a corresponding number of Bamboo.com Images, The Basic
Package service includes posting or linking, to the extent bamboo.com has the
right to do so, [*]
1.7 "Brokerage Site." means the collection of HTML documents residing on
--------------
servers operated by or for a brokerage, of which the MRIS Subscriber is a
member, or its affiliate and accessible on or after the Effective Date by MRIS
Subscribers or the public via the Internet.
1.8 "Broker Franchise Site" means the collection of HTML documents
---------------------
residing on servers operated by or for a broker franchise, of which the MRIS
Subscriber is a member, or its affiliate and accessible on or after the
Effective Date by MRIS Subscribers or the public via the internet.
1.9 "Company Originated Order" means any order for Production Services
------------------------
from an MRIS Subscriber originated through [*] Company's call center, the
Company Site or the MRIS System.
1.10 "Company Site" means the collection of HTML documents residing on
------------
servers operated by or for Company or its affiliates and accessible on or after
the Effective Date by MRIS Subscribers or the public via the Internet, including
those currently accessible at the following URLs: http://www.mris.com,
http://www.homesdatabase.com and http://mris.com.
1.11 "Confidential Information" means any trade secrets, confidential
------------------------
data or other confidential information oral or written relating to or used in
the business of the other party (the "Disclosing Party"), that a party may
obtain from the Disclosing Party during the Term (the "Confidential
Information"). The Bamboo.com Technology and the Bamboo.com Know-How, without
limitation, will constitute Confidential Information. In addition, the terms of
this Agreement will constitute Confidential Information, except to the extent
that such information is disclosed in good faith to a legitimate potential, or
actual, strategic investor, investment banker, venture capital firm, or
consultant, or as required by statute, regulation or other law.
1.12 "MRIS Subscriber" means a real estate broker, real estate agent or
---------------
any other similar entity or individual that is a subscriber of the Company and
has access to the MRIS System.
1.13 "MRIS Subscriber Site" means the collection Of HTML documents
--------------------
residing on servers operated by Or for an MRIS Subscriber or its affiliate and
accessible on or after the Effective Date by MRIS Subscribers or the public via
the Internet
1.14 "MRIS System" means the collection of data residing on servers
-----------
operated by or for Company or its affiliates and accessible by MRIS Subscribers
and, to the extent Company makes such collection generally available, by the
public via the Intemet or proprietary network. The MRIS System includes the
password protected user interface, including any future versions Of such
interface, that MRIS Subscribers access via the Intemet or otherwise to obtain
listings and other information in the MRIS System.
1.15 [*] means four scenes captured in a designated Property and converted
into a corresponding number of Bamboo.com Images. The [*] service includes
posting or linking, to the extent bamboo.com has the right to do so, [*]. [*]
1.16 "Production Services" means the services provided by or on behalf of
-------------------
bamboo.com hereunder in producing the Bamboo.com Images.
1.17 "Property" means any piece of residential real estate within the
--------
Territory, including without limitation new homes, offered for sale, and resale
homes.
1.18 "Service Provider Network" means the network of individuals
------------------------
throughout the Territory with whom bamboo.com has entered into agreements to
capture Virtual Tour Images at designated Properties.
1.19 [*] means any order from an MRIS Subscriber for Production Services
originated through [*].
1.20 "Term" means the Initial Term of this Agreement and the Renewal
----
Terms, if any, as set forth in Section 6.1
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
1.21 "Territory" means Company's area of coverage in [*],
---------
1.22 "Upgrade Package" means an addition to a Basic Package [*]
---------------
consisting of one additional scene captured at the same designated Property of
the Basic Package [*], converted into one additional Bamboo.com Image for the
scene and posted or linked in a manner consistent with the Basic Package [*].
1.23 "Virtual Tour Images" means 360 degrees, three-dimensional, virtual
-------------------
reality, virtual tour, virtual walkthrough or other similar images, or
technology or production services for such images.
2. PROVISION OF PRODUCTION SERVICES; PREFERRED VENDOR STATUS
---------------------------------------------------------
2.1 Sales and Billing. Bamboo.com hereby appoints Company, and Company
-----------------
agrees, to act as Bamboo.com's non-exclusive agent within the Territory for
[*]. Accordingly, except as provided in Section 2.3, Company will be
responsible, at Company's expense, for all such [*] during the Term.
(a) [*]. Company will maintain and operate at Company's expense [*]
---
to [*] for Production Services from MRIS Subscribers. At all times during the
Term, Company's [*] will meet or exceed the performance, product presentation
and customer service criteria set forth in Exhibit A attached hereto. As
reasonably determined by bamboo.com, bamboo.com will provide initial training
and information to [*], as well as such additional training and information as
[*] may require from time to time during the Term. In addition, bamboo.com will
make members of bamboo.com's [*] available by telephone, during the regular
business hours Of 9 am to 6 pm EST Monday through Saturday and 9 am to 5 pm EST
Sunday, or as the parties may subsequently agree, to provide [*] in the form of
information and guidance solely to [*] regarding the Production Services.
Company and [*] will only offer and sell Production Services to MRIS
Subscribers, and in packages [*] in effect from time to time during the Term;
provided, however, that, in the event that bamboo.com permits third-party sales
agents (i.e., bamboo.com strategic partners) to [*] at which Production Services
[*], then, taking into account the quality, quantity, time period and geographic
region of such offer, bamboo.com will permit Company to effect [*] to MRIS
Subscribers. As of the Effective Date, Company and the [*] may only offer the
following service packages [*] Basic Package [*], Upgrade Package [*] and [*].
2.2 Image Capturing. Processing and Linking/Posting. Bamboo.com will be
--------------- ------------------------------
responsible for capturing images at designated Properties through its Service
Provider Network and processing captured images to create Bamboo.com Images.
Bamboo.com will then, as provided in the order for Production Services and
solely to the extent bamboo.com has the right to do so, (i) collaborate with
Company to establish links from the MRIS System, the Company Site, the relevant
Brokerage Site, the Broker Franchise Site and the MRIS Subscriber Site to the
Bamboo.com Images residing on servers at bamboo.com's facilities and (ii) [*]
Notwithstanding the foregoing, in the event that bamboo.com fails to meet or
exceed the standards set forth in Exhibit B attached hereto as calculated for
any two calendar months within a three-month period during the Term, thereafter,
in lieu of clause (i) above, bamboo.com will post Bamboo.com Images to the
Bamboo.com Server, and Company will permit posting of Bamboo.com Images to the
Bamboo.com Server and will be responsible for creating links from the MRIS
System, Company Site, Brokerage Sites, Broker Franchise Sites and MRIS Member
Sites to such posted Bamboo.com images. The parties will use best efforts to
work together to expeditiously implement, and maintain throughout the Term, a
system whereby Company will be capable of establishing links from the Bamboo.com
Images as provided herein or, if required pursuant to the preceding sentence,
bamboo.com will be capable of posting Bamboo.com Images to the Bamboo.com
Server. Links from servers located at bamboo.com's facilities or postings on the
Bamboo.com Server, as the case may be, will remain active as long as the
Property remains on the market, up to a maximum of [*] unless the ordering
MRIS Subscriber requests an extension. Without the prior written permission of
Company, bamboo.com will not display, on the HTML page surrounding any linked
Bamboo.com Image produced on behalf of an MRIS Subscriber, any advertisements
that link to the Web site of any third party. Bamboo.com will use commercially
reasonable efforts during the Term to maintain and enhance the Bamboo.com
Technology to remain competitive in the real estate virtual tour market. In
addition, during the Term, as reasonably determined by bamboo.com, bamboo.com
will provide second-level technical support to Company during regular business
hours with respect to the Bamboo.com Server and orders placed by MRIS
Subscribers.
(a) Bamboo.com Server. Bamboo.com will only be obligated to provide
------ ----------
the Bamboo.com Server pursuant to Section 2.2. The Bamboo.com Server, if
required pursuant to Section 2.2, will be located in a secure site at Company's
offices that is mutually acceptable to the parties. The Bamboo.com Server and
all Bamboo.com Technology and Bamboo.com Images residing on the Bamboo.com
Server are, and at all times throughout the Term will remain, the exclusive
property of Bamboo.com. Bamboo.com alone will operate and maintain the
Bamboo.com Server, and Company will provide Bamboo.com's representatives with
reasonable access to perform such services; provided, however, that, if
bamboo.com so requests during the Term, the Company will provide reasonable
assistance with respect to the Bamboo.com Server, including, without limitation,
performance of backups, reboots and reconfigurations. During the Term, Company
will be responsible for any damage to or loss of the Bamboo.com Server, or data
residing on the Bamboo.com Server, as long as the Bamboo.com Server is located
at Company's site, provided that the damage or loss is not attributable to
Bamboo.com. Bamboo.com will use commercially reasonable efforts to eliminate
Bamboo.com Server downtime within its control, subject to scheduled outages and
maintenance.
2.3 [*]. Notwithstanding Section 2.1, with
---
respect to all [*], bamboo.com will be responsible for receiving orders,
capturing images at designated sites through the Service Provider Network, and
invoicing and collecting revenues. Bamboo.com will automatically post or link
to the appropriate servers, as provided in Section 2.2, all Bamboo.com Images
generated through [*], except in those cases in which (a)
the MRIS Subscriber objects to the posting and/or (b) the [*] objects to the
posting.
2.4 Preferred Vendor. Bamboo.com will be the preferred vendor of Virtual
----------------
Tour Images for the MRIS System and Company Site. Except as specifically
provided below, Company will not directly or indirectly promote itself, or act,
as a provider of Virtual Tour Images, nor will it promote or use the services of
any third party acting in such capacity. In addition, Company will not permit
any Virtual Tour Images or related technology or services of any third party to
be posted to, linked to or otherwise made accessible through the MRIS System Or
Company Site. Notwithstanding the foregoing, Company will not be restricted from
accommodating any third-party Virtual Tour Images already posted on or linked to
the Company Site and/or MRIS System prior to the Term or from posting or linking
of third-party Virtual Tour Images to the Company Site and/or MRIS System for
those MRIS Subscribers that insist on alternative virtual
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>
tour solutions, during the Term.
3. MARKETING AND PROMOTION
-----------------------
3.1 Company Obligations Company agrees to market, promote and facilitate
-------------------
orders of the Production Services as follows:
(a) MRIS System and Company Site. Company agrees to prominently market
----------------------------
and promote the Production Services on the Company Site and, to the extent
within Company's control, in the MRIS System. Such marketing and promotion will
include, without limitation:
(i) prominent inclusion on the "home page" of the Company Site
and on each page of the Company Site and MRIS System displaying a Bamboo.com
Image, of a bamboo.com logo that, when clicked on, links directly to a page
providing information about the Production Services and an electronic order form
permitting MRIS Customers to submit Orders for Production Services to
bamboo.com;
(ii) inclusion, on each listing search results page on the
Company Site displaying listings for which Bamboo.com Images are available, of a
bamboo.com logo that, when clicked on, links directly to such Bamboo.com image;
and
(iii) best efforts to include, within the Company Site a gallery
of Bamboo.com Images for listings from MRIS Subscribers.
In the event the MRIS System becomes capable of displaying a mechanism (in the
form of a button, logo or other link) for ordering bamboo.com Production
Services by means of [*] during the Term, Company shall not permit the display
of such ordering mechanism by means of the [*] within the MRIS System unless,
and until such time as, [*] and [*] enter into [*].
(b) Email; Direct Marketing; Print Advertising. To the extent Company
------------------------------------------
creates and distributes email, direct marketing and print advertising promoting
the Company Site and MRIS System, including without limitation advertising in
magazines, flyers, brochures, newsletters and general mailings, Company will
include, at it's discretion, from time to time, in such advertising a bamboo.com
logo and a brief, suitable reference, approved by bamboo.com, regarding the
availability of the Production Services.
(c) Seminars and Trade Shows. As appropriate, Company will invite
------------------------
bamboo.com to participate and distribute information about the Production
Services at trade shows, conventions and training seminars that Company hosts or
attends during the Term.
(d) Joint Press Release. Company will participate with bamboo.com in
-------------------
issuing a joint press release regarding the relationship established through
this Agreement. Each party shall agree on the form and content of such press
release and will furnish its written acceptance of, or comments on, the proposed
announcement within 48 hours of receipt of such proposed announcement; otherwise
such proposed announcement will be deemed approved. Any other press announcement
by either party regarding the subject matter of this Agreement will be subject
to the other party's approval, which shall not be withheld or delayed
unreasonably.
(e) Advertisements of Competitors, Without the prior approval of
------------------------------
bamboo.com, Company will not display any advertisements of any competitor of
bamboo.com anywhere within the MRIS System or the Company Site during the Term.
For the purposes of this section, "competitor of bamboo.com" means any provider
of Virtual Tour Images, including, but not limited to, [*].
3.2 Obligations of Bamboo.com. Bamboo.com will use commercially reasonable
--------------------- ---
efforts to market and promote the fact that the Production Services are
available through Company.
3.3 Additional Obligations. Bamboo.com and Company will, from time to
----------------------
time, use reasonable efforts to cooperate in joint marketing efforts. Each party
will assign a project manager to act as the primary liaison with respect to the
relationship.
4. PAYMENTS
--------
4.1 Transaction Fees. During the Term, the parties will make payments
----------------
based on sales of Production Services ("Transaction Fees") as follows:
(a) Except as provided in Section 4.1(b), with respect to [*] (i)
Company will [*] of [*] from the sale of [*] (solely based on the portion of
the [*] price equal to the [*]; (ii) Company will [*] from the sale of [*]
(solely based on the portion of the [*] in excess of the [*] (if any )); and
(iii) Company will [*] for each [*] so ordered and [*] so ordered. For
example, if an order for one Basic Package and one Upgrade Package is placed
through [*], based on bamboo.com's [*], respectively, in effect as of the
Effective Date, Company will [*], As a further example, if an order for one
[*] is placed through Company's [*], based on bamboo.com's [*] in effect as of
the Effective Date, Company will [*] In order to permit Company to pay for the
costs of Company's [*] during the Term, notwithstanding anything to the
contrary herein, in no event will Company [*] for each [*], regardless of any
promotional pricing that bamboo.com implements during the Term.
(b) With respect to orders [*] for Basic Packages, Upgrade Packages
and [*] originated through [*] in the Territory or through tradeshows,
seminars or conferences in the Territory [*], Company will [*], from such
orders (the [*]) and [*] for each Basic Package and [*] so ordered; provided,
however, that the [*] will only apply to [*] from MRIS Subscribers, and
payments for any subsequent orders will be made in accordance with Section
4.1(a). For the purposes of the preceding sentence, (a) [*] means an order for
one Basic Package, [*] or Upgrade Package to be captured within sixty (60)
days after the entry of such order into the Company [*] and (b) First-Time-
Order status will be determined on a person-by-person basis in the event that
a MRIS Subscriber is an entity comprising several individuals. Subject to the
[*] and except as provided in Section 4.1(c), all orders from MRIS Subscribers
[*] in the Territory or through tradeshows, seminars or conferences in the
Territory not hosted by Company will constitute [*], and bamboo.com will
forward all such orders to Company's [*].
(c) With respect to all [*], bamboo.com will pay Company the [*]
sold or [*], solely based on the portion of the [*] in excess of the [*] and
price (if any).
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>
(d) Company will not [*] any (i) Administrative Fees bamboo.com
charges with respect to goods or Services of bamboo.com other than the
Production Services sold to MRIS Subscribers hereunder, subject to the
following sentence; (ii) payments with respect to Production Services,
bamboo.com Images or other goods and services of bamboo.com sold or licensed
to third parties other than as expressly provided for in this Agreement or
(iii) except as provided in the final sentence of Section 4.1(a), payments
with respect to any Production Services the parties mutually agree bamboo.com
may distribute to MRIS Subscribers on a promotional basis free of charge.
Company will [*] of Administrative Fees bamboo.com charges with respect to
Production Services sold to MRIS Subscribers hereunder.
The following table summarizes the payments to be made pursuant to this Section
4.1:
[*]
4.2 Payment of Fees. The parties will issues all payments due with respect
---------------
to each order pursuant to Section 4.1 net thirty (30) days from the [*] in
which such order was received. With each [*] payment, the paying party will
provide a report stating the number of Basic Packages, Upgrade Packages and
[*] sold in accordance with Section 4.1 during [*] and providing a payment
calculation.
5. PROPRIETARY RIGHTS
-------------------------------
5.1 Bamboo.com for Java Software.
-------------------------------
(a) Bamboo.com hereby grants to Company a nonexclusive, worldwide,
royalty-free license to use the Bamboo.com for Java Software during the Term, in
object code only, to display Bamboo.com Images on the Company Site and the MRIS
System. "Use" means storing, loading, installing, executing, transmitting or
displaying the Bamboo.com for Java Software. Company may not modify the
Bamboo.com for Java Software or disable any licensing or control features of the
Bamboo.com for Java Software.
(b) The Bamboo.com for Java Software is owned and copyrighted by
bamboo.com. The license set forth in this Section 5.1 confers no title to, nor
ownership in, the Bamboo.com for Java Software and is not a sale of any rights
in the Bamboo.com for Java Software.
(c) Company may only make copies of the Bamboo.com for Java Software
for archival purposes or when copying is an essential step in the authorized use
of the Bamboo.com for Java Software. Company must reproduce all copyright
notices in the original Bamboo.com for Java Software on all copies or
adaptations. Company may only transfer class files when they are called on by a
"requesting" server in the normal course of Java Applet execution. Company may
not distribute the Bamboo.com for Java Class files. Any transfer or copying of
the Bamboo.com for Java Software by Company other than as expressly provided
herein constitutes a material breach of this Agreement.
(d) Company may only use the Bamboo.com for Java Software to read .jut
files, a file format proprietary to bamboo.com, or such successor file format as
bamboo.com may implement.
(e) Company may not tamper with or alter in any way the image
displayed when loading each bamboo.com Image ("Bamboo.com Splash Screen") and
Company shall not hinder the Bamboo.com Splash Screen from being fully visible
upon loading of each Bamboo.com Image. Company will not obstruct in any way the
Bamboo.com Splash Screen and/or screen logo with any other images, frames,
tables or any other HTML or JavaScipt code.
(f) Company will not disassemble or decompile the Bamboo.com for Java
Software including single Bamboo.com Java Class files under any circumstances.
The disassembly or decryption by Company of any Bamboo.com Java Class file
constitutes a material breach of this Agreement.
(g) Company will not export or re-export the Bamboo.com for Java
Software or any copy or adaptation in violation of any applicable laws or
regulations.
(h) The Bamboo.com for Java Software and accompanying documentation
are deemed to be "commercial computer software" and "commercial computer
software documentation", respectively, pursuant to DFAR Section 227.7202 and FAR
12.212(b), as applicable. Any use, modification, reproduction, release,
performance, display or disclosure of the Bamboo.com for Java Software and/or
the accompanying documentation by the U.S. Government or any of its agencies
shall be governed solely by the terms of this Agreement and shall be prohibited
except to the extent expressly permitted by the terms of this Agreement. Any
technical data provided that is not covered by the above provisions is deemed to
be "technical data-commercial items" pursuant to DFAR Section 227.7015(a). Any
use, modification, reproduction, release, performance, display or disclosure of
such technical data shall be governed by the terms of DFAR Section 227.7015(b).
5.2 Bamboo.com Technology; Bamboo.com Know-How.
------------------------------------------
(a) All Bamboo.com Technology, Bamboo.com Know-How and Bamboo.com
Images, whether or not produced for Company customers and whether or not posted
to or linked to the Company Site, the MRIS System, a Brokerage Site, a Broker
Franchise Site or an MRIS Subscriber Site, are, and at all times will remain,
the exclusive intellectual property of bamboo.com, and no provision of this
Agreement implies any transfer to Company of any ownership interest in any
Bamboo.com Technology, Bamboo.com Know-How or Bamboo.com Images; provided,
however, that, with respect to any Bamboo.com Image produced for an MRIS
Subscriber hereunder and linked to the MRIS System, [*]
(b) Bamboo.com hereby grants to Company a nonexclusive, worldwide,
royalty-free, nontransferable license to display, perform and reproduce
Bamboo.com Images solely for the purposes contemplated in this Agreement as
follows: (i) on the Company Site and the MRIS System during the Term and (ii)
following termination or expiration of this Agreement, on the Company Site and
MRIS System until one (1) year after the date of such termination or
expiration. Company will not distribute, modify,
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>
edit, or prepare derivative works from the Bamboo.com Images without the prior
written permission of bamboo.com. The foregoing license does not include any
right to grant or authorize sublicenses.
(c) Bamboo.com hereby grants to Company a limited, royalty-free,
nontransferable, nonexclusive license to use the Bamboo.com Know-How during the
Term solely for the purposes contemplated in Section 2.1 of this Agreement. The
foregoing license does not include any right to grant or authorize sublicenses.
5.3 Trademarks.
----------
(a) Bamboo.com owns and at all times will continue to own the
trademarks, service marks and/or trade names BAMBOO.COM and the bamboo.com logo,
as well as any name or mark bamboo.com may subsequently adopt as a trade name or
to designate the Production Services (collectively, the "Bamboo.com Marks"), and
Company will not take any actions inconsistent with bamboo.com's ownership
rights. Company owns and at all times will continue to own the trademarks,
service marks and/or trade names customarily used by Company during the Term
(the "Company Marks"), and bamboo.com will not take any actions inconsistent
with Company ownership rights. Each party's use of the other party's marks will
not create in the using party any right, title or interest therein or thereto,
and all such use will inure to the exclusive benefit of other party.
(b) Subject to the restrictions set forth herein, bamboo.com hereby
grants Company a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Bamboo.com Marks, during the Term, with
bamboo.com's prior written approval, which bamboo.com will not unreasonably
withhold or delay, solely in connection with Company's operation of the call
center, promotion and marketing of the Production Services and/or financing.
Subject to the restrictions set forth herein, Company hereby grants bamboo.com a
nonexclusive, worldwide, royalty-free, fully paid up, nontransferable right to
use the Company Marks, during the Term, solely in connection with bamboo.com's
promotion and marketing of the Production Services and/or financing. At the
reasonable request of either party, the other party will provide assistance with
the protection and maintenance of the marks of the requesting party. Each party
may only use the marks of the other party as expressly permitted herein and
agrees to use the marks of the other party in a manner commensurate with the
style, appearance and quality of the other party's services and/or products
bearing such marks. Bamboo.com may sublicense the rights granted in this Section
5.3(b) to members of the Service Provider Network, but may not authorize such
members to grant further sublicenses.
5.4 Limitation on Grant of Rights. Except as expressly provided herein,
-----------------------------
neither party receives any other right or license to the technology or
intellectual property of the other party.
6. TERM AND TERMINATION
--------------------
6.1 Term. Unless earlier terminated as set forth below, this Agreement
----
will become effective upon the Effective Date and continue for a period of
eighteen (18) months. Thereafter, this Agreement will be automatically renewed
for successive one (1) year periods unless either party notifies the other in
writing not less than ninety (90) days prior to the end of the then-current term
of its intention to terminate this Agreement as of the end of such term.
6.2 Termination for Breach. This Agreement will terminate in the event a
----------------------
party materially breaches any material term, condition or representation of this
Agreement or materially fails to perform any of its material obligations or
undertakings hereunder, and fails to remedy such default within sixty (60) days
after being notified by the non-breaching party Of such breach or failure;
provided, however, that the non-breaching party will not unreasonably withhold
or delay its consent to extend the cure period if the breaching, party has
commenced cure during the sixty-day notice period and pursues cure of the breach
in good faith.
6.3 Survival of Certain Terms. The provisions of Sections 5.1(b), 5.1(e)-
-------------------------
(h), 5.2(a), 5.3(a), 5.4, 6.3, 7, 8, 9 and 10 will survive the expiration or
termination of this Agreement for any reason. All other rights and obligations
of the parties will cease upon expiration or termination of this Agreement. Upon
expiration or termination, except as provided in Section 5.2(b), (i) Company and
bamboo.com will cease all use of marks of the Other party, (ii) Company will
cease all use of the Bamboo.com Images, Bamboo.com Know-How and Bamboo.com
Technology, and (iii) Company will return the Bamboo.com Server to bamboo.com.
7. CONFIDENTIALITY
---------------
Each party agrees to treat the other party's Confidential Information with
the same degree of care as it maintains its own information of a similar nature.
Each party will use at least the same procedures and degree of care which it
uses to protect the confidentiality of its own confidential information of like
importance, and in no event less than reasonable care.
8. REPRESENTATIONS AND WARRANTIES
------------------------------
Each party represents and warrants to the other that (i) it is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation; (ii) it has full right, power and
authority to enter into this Agreement and to perform all of its obligation
hereunder; (iii) this Agreement constitutes its valid and binding obligation,
enforceable against it in accordance with its terms; and (iv) its execution,
delivery and performance of this Agreement will not result in a breach of any
material agreement or understanding to which it is a party or by which it or any
of its material properties may be bound. THE WARRANTIES PROVIDED BY THE PARTIES
HEREIN ARE THE ONLY WARRANTIES PROVIDED HEREIN AND ARE IN LIEU OF ALL OTHER
WARRANTIES BY THE PARTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SUBJECT
MATTER OF THIS AGREEMENT.
9. LIMITATION OF LIABILITY
-----------------------
EXCEPT WITH RESPECT TO A BREACH BY EITHER PARTY OF ITS OBLIGATIONS
DESCRIBED IN SECTION 2.4, 7 OR 10.2, IN NO EVENT WILL EITHER PARTY BE LIABLE TO
THE OTHER FOR LOST PROFITS OR ANY FORM OF INDIRECT, SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES OF ANY CHARACTER FROM ANY CAUSES OF ACTION OF ANY KIND
WITH RESPECT TO THIS AGREEMENT WHETHER BASED ON BREACH OF CONTRACT, TORT
(INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR NOT THE OTHER PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
10. GENERAL PROVISIONS
------------------
10.1 Notices. Any notice required or permitted by this Agreement will be
-------
deemed given if sent to the other party at the address set forth at the top of
this Agreement by (a) registered mail, postage prepaid or (b) prepaid overnight
courier. Delivery will be deemed effective three (3) days after deposit with
postal authorities for registered mail, and one (1) day after deposit with an
overnight courier.
10.2 Scope of Authority. Company's sole authority as an agent of
------------------
bamboo.com will be to [*], and Company shall have no power or authority,
expressed or implied, to make any other commitment or incur any other
obligations on behalf of bamboo.com, including without limitation issuing any
warranty regarding the Production Services. Except to the limited extent
expressed in Section 2.1, the relationship of bamboo.com and Company
established by this Agreement is that of independent contractors. Company
shall indemnify, defend and hold harmless bamboo.com from and against any and
all claims, suits, damages and expenses (including without limitation
reasonable attorneys' fees) arising out of (a) any action of Company outside
of the scope of authority granted in Section 2.1 (b) the performance by
Company's
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
[*]; and (c) any material breach by members of Company's [*] of
this Agreement or the standards set forth in Exhibit A. Bamboo.com shall
indemnify, defend and hold harmless Company from and against any and all claims,
suits, damages and expenses (including without limitation reasonable attorneys'
fees) arising out of (a) any infringement of a third party's copyrights,
patents, trademarks or trade secrets caused by Company's use of the Bamboo.com
Technology, Bamboo.com Images or Bamboo.com Marks as permitted in this Agreement
or (b) any material breach of this Agreement by members of the Service Provider
Network. During the Term, and for a period of two (2) years following any
expiration or termination of this Agreement, Company shall not solicit or hire
any employee of bamboo.com to work for Company to provide Virtual Tour Images.
10.3 Miscellaneous. Nonperformance of either party will be excused to the
-------------
extent that performance is rendered impossible by storm, lockout or other labor
trouble, riot, war, rebellion, strike, fire, flood, accident or other act of
God, governmental acts, orders or restrictions, or any other mason where failure
to perform is beyond the control and not caused by the negligence or willful
misconduct of the non-performing party. Section 5 of this Agreement will be
governed by and construed under the laws of the State of California without
reference to conflict of laws principles; all other sections of this Agreement
will be governed by and construed under the laws of the State of Maryland
without reference to conflict of laws principles. This Agreement, together with
all exhibit and attachments hereto, sets forth the entire agreement and
understanding of the parties relating to the subject matter herein and merges
all prior discussions between them. No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing signed by the party to be charged, and the waiver of any
breach or default will not constitute a waiver of any other right hereunder or
any subsequent breach or default. Neither party may assign this Agreement, or
assign or delegate any right or obligation hereunder, without the prior written
consent of the other party; provided, however, that either party may assign this
Agreement or assign or delegate its rights and obligations under this Agreement
to a successor to all or substantially all of its business or assets relating to
this Agreement whether by sale, merger, operation of law or otherwise. This
Agreement may be executed by exchange of signature pages by facsimile and/or in
any number of counterparts, each of which shall be an original as against any
party whose signature appears thereon and all of which together shall constitute
one and the same instrument,
10.4 Arbitration. Any dispute or claim arising out of or in relation to
-----------
this Agreement, or the interpretation, making, performance, breach or
termination thereof, shall be finally and exclusively settled by binding
arbitration under the commercial arbitration rules (the "Rules") of the American
Arbitration Association ("AAA"). Within twenty (20) days of giving or receiving
of notice of arbitration, bamboo.com on the one hand and Company on the other
hand shall appoint one independent arbitrator, and within twenty (20) days
thereafter, the two arbitrators shall appoint a third arbitrator. If the two
cannot agree upon a third arbitrator, the AAA shall appoint a third. The
arbitration hearing shall be commenced within sixty (60) days of the third
arbitrator's appointment. The arbitral proceedings and all pleadings and written
evidence shall be in the English language. Any written evidence originally in a
language other than English shall be submitted in English translation
accompanied by the original or a true copy thereof. Judgment on the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. Notwithstanding the foregoing, before, during or after arbitration, any
party may apply to any court for a temporary restraining order, preliminary
injunction or other equitable relief where such relief is necessary to protect
its interests pending completion of the arbitration proceedings or to implement
or enforce any arbitration ruling in any court having proper jurisdiction
located in the district in which the alleged action of the other party occurred.
The prevailing party (plaintiff or defendant, as the case may be) shall be
entitled to recover, in addition to any other relief awarded, its reasonable
costs and expenses, including without limitation attorneys' and expert witness
fees, incurred in the proceeding.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
BAMBOO.COM, INC. METROPOLITAN REGIONAL INFORMATION SYSTEMS,
INC.
By: /s/ Howard Field By: /s/ Dale L. Ross
___________________________ ___________________________
Name: Howard Field Name: Dale L. Ross
__________________________ _________________________
Title: Vice President Title: President and
________________________ Chief Executive Officer
_________________________
Date: June 9, 1999 Date: June 9, 1999
___________________________ _________________________
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
EXHIBIT A
---------
[*]
1. To the extent bamboo.com deems necessary in its reasonable discretion,
bamboo.com may request that members of Company's [*] attend mandatory training
sessions conducted by bamboo.com. Company will provide bamboo.com with access to
[*] for training purposes. Prior to taking any calls, each [*] must be properly
trained by bamboo.com or such Company representative as bamboo.com shall
designate.
2. [*] will only receive orders for Production Services with respect to
listings from MRIS Subscribers for Property located within the Territory or
otherwise authorized in writing by bamboo.com, which authorization bamboo.com
will not unreasonably withhold or delay, for inclusion in the MRIS System.
With respect to all [*] not meeting the foregoing criteria [*], the [*] will
implement a system with bamboo.com whereby [*] will immediately forward to the
bamboo.com [*]. Bamboo.com will have the right to pursue in its discretion any
leads from through its own [*] and to expand bamboo.com's service provider
network appropriately. No orders resulting from Misdirected Calls will
constitute [*].
3. The [*] will make commercially reasonable efforts to [*].
4. Each party will designate an individual representative that will be the
dedicated liaison for the [*] (the "Representatives"). In addition to any other
meetings scheduled from time to time, the Representative from each party will
meet quarterly for reviews.
5. [*] shall use it's best efforts to maintain a [*] for information being
entered into the bamboo.com online order forms. Bamboo.com, in its discretion,
may generate a report with an information error rate and deliver it to Company
once per month. When bamboo.com places a request for an outbound call to a
client to fix an erroneous entry by the [*] will use commercially reasonable
efforts to make the outbound call within one hour or less on the average and
report via email the completion of [*] to the bamboo.com dedicated contact for
the [*]. The parties will work together to build a call-back and issue-
resolution schedule for any and all erroneous or special orders placed through
the [*].
6. Parties will mutually agree on reasonable guidelines for issuing "make-goods"
and re-shoots. The Representatives will report to each other on the number and
nature of such issuances on a monthly basis.
7. [*] will operate and [*], at a minimum, during the
following hours: [*] and [*].
8. Company will use commercially reasonable efforts to cause [*] for
bamboo.com orders [*], calculated on a monthly basis, and will have an [*],
calculated on a monthly basis. [*] will implement a system for recording the
number of [*] verses orders placed daily, and will maintain such additional
statistics on [*] and customer service as bamboo.com shall reasonably request
from time to time during the Term.
9. Company agrees to take such additional steps to ensure the proper and
efficient operation of [*] as bamboo.com, in bamboo.com's reasonable
discretion, may request from time to time during the Term.
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>
EXHIBIT B
---------
[*]
Bamboo.com will use commercially reasonable efforts to ensure [*] Bamboo.com
Images produced under the Agreement [*] meet the following performance
criteria during the Term:
[*]:
- ---
[*] in the aggregate, will [*] The [*] is to be measured by the total number
of minutes during a calendar month in which the [*] are available divided by
the total number of minutes during the calendar month. For purposes of the [*]
is calculated from the time bamboo.com detects or otherwise becomes aware of
an incidence of a [*] and ending when the [*], regardless of where the [*].
[*]:
- ---
Measured as an average for each calendar month, [*], in the aggregate, will
[*] in the U.S. in under [*].
[*]:
- ---
Bamboo.com will notify Company immediately upon discovery in the event any [*]
experiences continuous, [*]; provided, however, that bamboo.com will have no
obligation to provide such notification with respect to [*] caused by [*]
outside of bamboo.com's reasonable control.
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>
EXHIBIT 10.31
DISTRIBUTION & CO-MARKETING AGREEMENT
-------------------------------------
THIS DISTRIBUTION & CO-MARKETING AGREEMENT (the "Agreement") is entered
into as of May 28, 1999 (the "Effective Date"). Between bamboo.com, Inc., a
Delaware corporation with an office located at 124 University, Avenue, Palo
Alto, CA 94301 ("bamboo.com"), and Sudler/Beliard Gordon, an Illinois
corporation with an office located at 875 North Michigan Avenue, Chicago, IL
60611 ("Company").
Bamboo.com and Company, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, agree as follows (definitions appear
in Additional Terms and Conditions):
1. [*] Company will [*]. In return, bamboo.com will [*]. The tours shall be used
for current inventory. Company will use [*] Bamboo.com will provide an
invoice to Company by May 28, 1999. Company will [*] to bamboo.com of [*].
2. Bamboo.com Service. Bamboo.com will be responsible for receiving and
------------------
invoicing and collecting revenues for sales of Production Services.
Bamboo.com will capture images at designated sites through its Service
Provider Network and process captured images to create Bamboo.com Images.
Company will permit linking of the Company Sites to Bamboo.com Images, and
the parties will use best efforts to work together to implement this system
within fourteen (14) days of the Effective Date, and maintain the system
throughout the term of this Agreement. Additionally, Company will use
commercially reasonable efforts to link each such Bamboo.com Image to the
appropriate listings on the Company Sites by the end of the business day
following the day bamboo.com makes such Bamboo.com Image available on the
bamboo.com server.
3. Exclusivity. Bamboo.com will be the exclusive provider of Virtual Tours
-----------
Images for the Company Site. Company will not directly or indirectly promote
itself, or act, as a provider of Virtual Tour Images, nor will it promote,
display ads for or use the services of any third party acting in such
capacity. In addition, Company will not permit any Virtual Tour Image of any
third party to be posted to, linked to or otherwise made accessible through
the Company Site.
4. Marketing and Promotion.
------------------------
Bamboo.com agrees to:
. Include Company, including use of its logo, as a partner on bamboo.com's
Website and in marketing material, as bamboo.com deems appropriate;
. Provide fifty (50) listing presentation kits;
. Educate each Company office on the benefits of using the Intemet in real
estate and methods of integrating Bamboo.com Tours into the Sales
. Agents' marketing strategy;
. Provide custom order terms for Sales Agents;
. Discuss other joint marketing opportunities, including collaboration on
email and direct marketing material from time to time.
Company agrees to:
. Hold an in-office presentation by a bamboo.com representative with each
Company office within the first thirty (30) days of the Effective Date.
Company will send out a communication from a Company executive, including
a statement encouraging them to use bamboo.com's Production Services, to
each Sales Agent within the first fourteen (14) days following the
Effective Date.;
. Include an electronic order form and a description of the bamboo.com
Production Services on the Company Sites that allows Sales Agents to
submit orders to bamboo.com. Maintain a gallery of Bamboo.com Images on
the Company Site;
. Include description demonstration of the bamboo.com Production Services,
and marketing materials in Company sponsored training and seminars for
Sales Agents;
. When appropriate, include a Bamboo.com Mark and a brief, suitable
reference to the availability of the Production Services in the Company's
print advertising in magazines, flyers, newspapers and general mailings
distributed to clients and potential clients.
5. Term. This Agreement will commence on the Effective Date and continue for
----
twelve (12) months, and will be automatically renewed for successive twelve
(12) month periods unless either party notifies the other in writing not less
than ninety (90) days prior to the end of the then-current term of its
intention to terminate this Agreement as of the end of such term. Upon
termination or expiration, each party will cease all use of marks and other
intellectual property of the other party.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
BAMBOO.COM, INC. SUDLER/BELLARD GORDON
By: /s/ Andrew P. Laszlo By: [SIGNATURE ILLEGIBLE]
----------------------------------- ---------------------------------
Name/Title: Andrew P. Laszlo Name/Title: Executive Vice President
--------------------------- -------------------------
SVP Business Development
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *****. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
<PAGE>
EXECUTION DRAFT
ADDITIONAL TERMS AND CONDITIONS
1. Definitions
-----------
"Basic Package" means four scenes captured at a designated property and placed
on one website.
"Bamboo.com Image" means an electronic Image of a property produced by or on
behalf of bamboo.com.
"Bamboo.com Technology" means all Bamboo.com Images and software and hardware,
and including the Bamboo.com for Java Software, used to capture, process and
view Bamboo.com Images.
"Bamboo.com Tour" means the combined Production Services supplied by bamboo.com
with respect to a single Property.
"Company Sites" means the collection of HTML documents residing on servers
operated by or for Company or its affiliate, including without limitation
Company's intranet, extranet and public website.
"Confidential Information" means any trade secrets, confidential data or other
confidential information, oral or written, relating to or used in the business
of the other party (the "Disclosing Party"), that a party may obtain from the
Disclosing Party during the Term (the "Confidential Information").
"Production Services" means the services provided by or on behalf of bamboo.com
in producing Bamboo.com Images.
"Sales Agent" means any sales agent, sales representative or broker of the
Company.
"Service Provider Network" means the network of individuals throughout the
Company's territory of operation with whom bamboo.com has entered into
agreements to capture images at designated sites on bamboo.com's behalf.
"Term" means the Initial Term of this Agreement and the Renewal Terms, if any,
as set in forth in Section 4 on the first page of this Agreement.
"Virtual Tour Images" means 360, three-dimensional, virtual reality, virtual
tour, virtual walkthrough or other similar images, or production services for
such images.
2. Confidentiality
---------------
Each party agrees to treat the other party's Confidential Information with the
same degree of care as it maintains its own information of a similar nature.
Each party will use at least the same procedures and degree of care which it
uses to protect the confidentiality of its own Confidential Information of like
importance, and in no event less than reasonable care. The terms of this
Agreement will constitute Confidential Information, except to the extent that
bamboo.com discloses such information in good faith to a legitimate potential,
or actual, strategic investor, investment banker, venture capital firm or
consultant, or as required by statute, regulation or other law.
3. Bamboo.com Technology
---------------------
3.1 Bamboo.com Technology will remain, the exclusive property of bamboo.com,
and no provision of this Agreement implies any transfer to Company of any
ownership interest in any Bamboo.com Technology.
3.2 Bamboo.com hereby grants to Company a nonexclusive, worldwide, royalty-
free, nontransferable license to include links to the Bamboo.com Images on the
Company Sites and Hosted Sites solely for the purposes contemplated in this
Agreement. Company will not distribute, modify, edit, or prepare derivative
works from the Bamboo.com Images without the prior written permission of
bamboo.com. The foregoing license does not include any right to grant or
authorize sublicenses.
4. Trademarks
----------
4.1 Bamboo.com owns and at all times will continue to own the trademarks,
service marks and/or trade names BAMBOO.COM and the bamboo.com logo, as well
as any name or mark bamboo.com may subsequently adopt as a trade name or to
designate the Production Services (collectively, the "Bamboo.com Marks"), and
Company will not take any actions inconsistent with bamboo.com's ownership
rights. Company owns and at all times will continue to own the trademarks,
service marks and/or trade names customarily used by Company during the Term
(the "Company Marks"), and bamboo.com will not take any actions inconsistent
with Company' ownership rights. Each party's use of the other party's marks
will not create in the using party any right, title or interest therein or
thereto, and all such use will inure to the exclusive benefit of other party.
4.2 Subject to the restrictions set forth herein, bamboo.com hereby grants
Company a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Bamboo.com Marks, during the Term, with
bamboo.com's prior written approval, which bamboo.com will not unreasonably
withhold or delay, solely in connection with promotion and marketing of the
Production Services and/or Company financing. Subject to the restrictions set
forth herein, Company hereby grants financing. Subject to the restrictions set
forth herein, bamboo.com a nonexclusive, worldwide, royalty-free, fully paid
up, nontransferable right to use the Company Marks, during the Term, solely in
connection with promotion and marketing of the Production Services and/or
bamboo.com financing. At the reasonable request of either party, the other
party will provide assistance with the protection and maintenance of the marks
of the requesting party. Each party may only use the marks of the other party
as expressly permitted herein and agrees to use the marks of the other party
in a manner commensurate with the style, appearance and quality of the other
party's services and/or products bearing such marks.
5. Limitation on Grant of Rights
-----------------------------
Except as expressly provided herein, neither party receives any other right or
license to the technology or intellectual property of the other party.
6. Termination
-----------
6.1 Upon termination or expiration, (i) Company and bamboo.com will cease all
use of marks of the other party and (ii) Company will cease all use of the
Bamboo.com Images and Bamboo.com for Java Software and will purge all
Bamboo.com for Java Software and Bamboo.com Images from its servers.
6.2 This Agreement will terminate in the event a party breaches any material
term, condition or representation of this Agreement or materially fails to
perform any of its material obligations or undertakings hereunder, and fails
to remedy such default within sixty (60) days after being notified by the non-
breaching party of such breach or failure; provided, however, that the non-
breaching party will not unreasonably withhold or delay its consent to extend
the cure period if the breaching party has commenced cure during the sixty-day
notice period and pursues cure of the breach in good faith.
6.3 The provisions of Sections 2, 3.1, 4.1, 5, 6.1, 6.3, 7 and 8 of these
Additional Terms and Conditions will survive the expiration or termination of
this Agreement for any reason. All other rights and obligations of the parties
will cease upon expiration or termination of this Agreement.
7. No Warranties; Limitation of Liability
--------------------------------------
BAMBOO.COM MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO
THE ANY GOODS OR SERVICES PROVIDED BY THIS AGREEMENT. EXCEPT WITH RESPECT TO A
BREACH BY EITHER PARTY OF ITS OBLIGATIONS DESCRIBED IN SECTION 3 ON THE FIRST
PAGE OF THIS AGREEMENT OR SECTION 2 OF THESE ADDITIONAL TERMS AND CONDITIONS, IN
NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY FORM
OF INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER FROM
ANY CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS AGREEMENT WHETHER BASED ON
BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR
NOT THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
8. Miscellaneous
-------------
Any notice required or permitted by this Agreement will be deemed given if sent
by registered mail, postage prepaid, addressed to the other party at the address
set forth within this Agreement. Delivery will be deemed effective three (3)
days after deposit with postal authorities. Nonperformance of either party will
be excused to the extent that performance is rendered impossible by storm,
lockout or other labor trouble, riot, war, rebellion, strike, fire, flood,
accident or other act of God, governmental acts, orders or restrictions, or any
other reason where failure to perform is beyond the control and not caused by
the gross negligence or willful misconduct of the non-performing party. The
relationship of bamboo.com and Company established by this Agreement is that of
independent contractors. This Agreement will be governed by and construed under
the laws of the State of California without reference to conflict of laws
principles. This Agreement, together with all exhibit and attachments hereto,
sets forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, will be effective unless in writing signed by the party to
be charged, and the waiver of any breach or default will not constitute a waiver
of any other right hereunder or any subsequent breach or default. Neither party
may assign this Agreement, or assign or delegate any right or obligation
hereunder, without the prior written consent of the other party; provided,
however, that either party may assign this Agreement or assign or delegate its
rights and obligations under this Agreement to a successor to all or
substantially all of its business or assets relating to this Agreement whether
by sale, merger, operation of law or otherwise. Company will not issue any
press release regarding the subject matter of this Agreement without the prior
written approval of bamboo.com. This Agreement may be executed by exchange of
signature pages by facsimile and/or in any number of counterparts, each of which
shall be an original as against any party whose signature appears thereon and
all of which together shall constitute one and the same instrument.
<PAGE>
EXHIBIT 10.32
May 17, 1999
DISTRIBUTION & CO-MARKETING AGREEMENT
-------------------------------------
THIS DISTRIBUTION & CO-MARKETING AGREEMENT (the "Agreement") is entered
into as of May 25, 1999 (the "Effective Date"), between bamboo.com, Inc., a
Delaware corporation with an office located at 124 University Avenue, Palo Alto,
CA 94301 ("bamboo.com"), and Keller Williams Southwest Region, a Nevada Corp.
with an office located at 7373 N. Scottsdale Rd E-100, Scottsdale, AZ 85260
("Company"). Bamboo.com and Company, in consideration of the mutual promises and
covenants contained herein, and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, agree as follows
(definitions of certain capitalized terms and additional terms and conditions
appear on the reverse side of this Agreement).
1. Bamboo.com Service. Bamboo.com will be responsible for receiving orders and
------------------
invoicing and collecting revenues for sales of Production Services. Bamboo.com
will capture images at designated sites through its Service Provider Network and
process captured images to create Bamboo.com Images. Bamboo.com will host
Bamboo.com Images on its servers and will provide to Company a URL link and
identifying listing information for each Bamboo.com Image purchased by Company
for the purpose of integrating the link into listings on the Company Site.
Company will permit linking of the Company Site to Bamboo.com Images, and the
parties will use best efforts to work together to expeditiously implement, and
maintain throughout the term of this Agreement, a system whereby Company will be
capable of linking the Company Site to Bamboo.com Images. "Company Site" to be
defined as KWSW Region, Inc. or Keller Williams Realty Southwest Region--Company
Site, not Keller Williams National, KW.com or Kellerwilliams.com.
---
2. Exclusivity. Bamboo.com will be the exclusive provider of Virtual Tours
-----------
Images for the Company Site. Company will not directly or indirectly promote
itself, or act, as a provider of Virtual Tour Images, nor will it promote,
display ads for or use the services of any third party acting in such capacity.
In addition, Company will not permit any Virtual Tour Images of any third party
to be posted to, linked to or otherwise made accessible through the Company
Site.
3. Marketing and Promotion.
-----------------------
Bamboo.com agrees to:
. Provide commercially reasonable technical support during normal business
hours to help Company link the Company Site to the Bamboo.com Images
produced on behalf of Sales Agents;
. Promote Company as a partner on bamboo.com's Web site;--Listing
Flipchart;--Floppy disk;
. Include Company in marketing material and press releases, as Bamboo.com
deems appropriate;
. Provide marketing to Sales Agents who purchase Bamboo.com Tours, including
CD ROM demo disks;
. Offer a special promotional offer at office presentations made by
bamboo.com account executives to Sales Agents during the first sixty (45)
days of this agreement; and
. Hold periodic training seminars for Sales Agents focusing on the benefits
of using the Internet in real estate and methods of integrating Bamboo.com
Tours into the Sales Agents' marketing strategy.
Company agrees to:
. Ensure that an HTML button and the corresponding URL provided by bamboo.com
will be located on an individual Company listing page within 24 hours from
receiving the URL link from bamboo.com;
. Include an electronic order form on the Company Site that allows Sales
Agents to submit orders to bamboo.com via the Internet;
. Maintain a gallery of Bamboo.com Images on the Company Site;
. When appropriate, include a Bamboo.com Mark and a brief, suitable reference
to the availability of the Production Services in the Company's print
advertising in magazines, flyers, newsletters and general mailings
distributed to clients and potential clients; collaborate with bamboo.com
to develop email and direct marketing material generated from time to time
to highlight the availability and features of the Production Services; and
distribute marketing materials created by bamboo.com at seminars,
presentations, training sessions and follow-up meetings sponsored by
Company; and
. Ensure bamboo.com account executives have access to all Sales Agents
through in-office presentations within the first 45 days of this agreement.
4. Term. This Agreement will commence on the Effective Date and continue for
----
eighteen (18) months, and will be automatically renewed for successive twelve
(12) month periods unless either party notifies the other in writing not less
than ninety (90) days prior to the end of the then-current term of its intention
to terminate this Agreement as of the end of such term. Upon termination or
expiration, each party will cease all use of marks and other intellectual
property of the other party.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
BAMBOO.COM, INC. KELLER WILLIAM SOUTHWEST REGION
By: /s/ Howard Field By: /s/ [SIGNATURE ILLEGIBLE]
-------------------------- ---------------------------
Name/Title: Vice President Name/Title: [SIGNATURE ILLEGIBLE]
Howard Field ---------------------------
REGIONAL DIRECTOR
-----------------
<PAGE>
ADDITIONAL TERMS AND CONDITIONS
1. Definitions
-----------
"Company Site" means the collection of HTML documents residing on servers
operated by or for Company or its affiliate, including without limitation
Company's intranet and extranet, and accessible on or after the Effective Date
by Sales Agents or the public via the internet.
"Confidential Information" means any trade secrets, confidential data or other
confidential information oral or written relating to or used in the business of
the other party (the "Disclosing Party"), that a party may obtain from the
Disclosing Party during the term of this Agreement.
"Bamboo.com Image" means an electronic image of a Property produced by or on
behalf of bamboo.com.
"Bamboo.com Technology" means software and hardware, including the bamboo.com
for Java Software, used to capture, process and view Bamboo.com Images.
"Bamboo.com Tour" means the combined Production Services supplied by bamboo.com
with respect to a single Property.
"Production Services" means the services provided by or on behalf of bamboo.com
in producing Bamboo.com Images.
"Sales Agent" means any sales agent, sales representative or broker of the
Company.
"Service Provider Network" means the Network of individuals throughout the
Company's territory of operation with whom bamboo.com has entered into
agreements to capture Images at designated sites on bamboo.com's behalf.
"Virtual Tour Images" means 360 degrees, three-dimensional, virtual reality,
virtual tour, virtual walkthrough or other similar Images, or production
services for such Images.
2. Confidentiality
---------------
Each party agrees to treat the other party's Confidential Information with the
same degree of care as it maintains its own Information of a similar nature.
Each party will use at least the same procedures and degree of care which it
uses to protect the confidentiality of its own Confidential Information of like
importance, and in no event less than reasonable care. The terms of this
Agreement will constitute Confidential Information, except to the extent that
bamboo.com discloses such information in good faith to a legitimate potential,
actual, strategic investor, Investment banker, venture capital firm or
consultant, or as required by statute, regulation or other law.
3. Bamboo.com Technology
---------------------
(a) All Bamboo.com technology, including without limitation the Bamboo.com for
Java Software and all Bamboo.com Images, whether or not produced for Sales
Agents and whether or not posted to or linked to the Company Site, are and at
all times will remain, the exclusive property or bamboo.com, and no provision of
this Agreement implies any transfer to Company of any ownership Interest in any
Bamboo.com Technology, Company will not reproduce, distribute, modify, edit, or
prepare derivative works from the Bamboo.com Images without the prior written
permission of bamboo.com.
(b) Bamboo.com hereby grants to Company a nonexclusive, worldwide,
royalty-free, nontransferable license to include on the Company Site links to
bamboo.com Images on bamboo.com's servers for the purposes contemplated in this
Agreement.
4. Trademarks
----------
(a) Bamboo.com owns and at all times will continue to own the trademarks,
service marks and/or trade name BAMBOO.COM and the bamboo.com logo, as well as
any name or mark bamboo.com may subsequently adopt as a trade name or to
designate the Production services (collectively, the "Bamboo.com Marks"), and
Company will not take any actions inconsistent with bamboo.com's ownership
rights. Company owns and at times will continue to own the trademarks, service
marks and/or trade names customarily used by Company during the term of this
Agreement (the "Company Marks"), and bamboo.com will not take any actions
inconsistent with Company- ownership rights. Each party's use of the other
party's marks will not create in the using party any right, title or interest
(therein or thereto, and all such use will Inure to the exclusive benefit of
other party.
(b) Subject to the restrictions set forth herein, bamboo.com hereby grants
Company a nonexclusive, worldwide, royalty-free, fully paid up, nontransferable
right to use the-bamboo.com Marks, during the term of this Agreement, with
bamboo.com's prior written approval, which bamboo.com will not unreasonably
withhold or delay, solely in connection with Company's promotion and marketing
of the Production Services and financing. Subject to the restrictions set forth
herein, Company hereby grants bamboo.com a nonexclusive, worldwide, royalty-
free, fully paid up, nontransferable right to use the Company Marks, during the
term of this Agreement, solely in connection with bamboo.com's promotion and
marketing of the Production Services and financing. At the reasonable request of
either party, the other party will provide assistance with the protection and
maintenance of the marks of the requesting party. Each party may only use the
marks of the other party as expressly permitted herein and agrees to use
the marks of the other party in a manner commensurate with the style, appearance
and quality of the other party's services and/or products bearing such marks.
5. Limitation on Grant of Rights
-----------------------------
Except as expressly provided herein, neither party receives any other right or
license to the technology or intellectual property of the other party.
6. Termination
-----------
(a) Upon termination or expiration, (i) Company and bamboo.com will cease all
use of marks of the other party and (ii) Company will cease all use of the
Bamboo.com Images and Bamboo.com for Java Software and will purge all Bamboo.com
for Java Software and Bamboo.com Images from its servers.
(b) This Agreement will terminate in the event a party breaches any material
term, condition or representation of this Agreement or materially fails to
perform any of its material obligations or undertakings hereunder, and fails to
remedy such default within sixty (60) days after being notified by the
non-breaching party of such breach or failure: provided, however, that the
non-beaching party will not unreasonably withhold or delay its consent to extend
the cure period if the breaching party has commenced cure during the sixty-day
notice period and pursues cure of the breach in good faith.
(c) The provisions of Sections 2, 3(a), 4(a), 5, 6(a), 6(c), 7 and 8 of these
Additional Terms and Conditions will survive the expiration or termination of
this Agreement for any reason. All other rights and obligations of the parties
will cease upon expiration or termination of this Agreement.
7. No Warranties; Limitation of Liability
--------------------------------------
BAMBOO.COM MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO
THE ANY GOODS OR SERVICES PROVIDED BY THIS AGREEMENT. EXCEPT WITH RESPECT TO A
BREACH BY EITHER PARTY OF ITS OBLIGATIONS DESCRIBED IN SECTION 2 ON THE FIRST
PAGE OF THIS AGREEMENT OR SECTION 2 OF THESE ADDITIONAL TERMS AND CONDITIONS, IN
NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY FORM
OF INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER FROM
ANY CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS AGREEMENT WHETHER BASED ON
BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR
NOT THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
8. Miscellaneous
-------------
Any notice required or permitted by this Agreement will be deemed given if sent
by registered mail, postage prepaid, addressed to the other party at the address
set forth within this Agreement. Delivery will be deemed effective three (3)
days after deposit with postal authorities. Nonperformance of either party will
be excused to the extent that performance is rendered Impossible by storm,
lockout or other labor trouble, riot, war, rebellion, strike, fire, flood,
accident or other act of God, governmental acts, orders or restrictions, or any
other reason where failure to perform is beyond the control and not caused by
the gross negligence or willful misconduct of the non-performing party. The
relationship of bamboo.com and Company established by this Agreement is that of
independent contractors. This Agreement will be governed by and construed under
the laws of the State of California without reference to conflict of laws
principles. This Agreement, together with all exhibit and attachments hereto,
sets forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, will be effective unless in writing signed by the party to
be charged, and the waiver of any breach or default will not constitute a waiver
of any right hereunder or any subsequent breach or default. Neither party may
assign this Agreement, or assign or delegate any right or obligation hereunder,
without the prior written consent of the other party; provided, however, that
either party may assign this Agreement or assign or delegate its rights and
obligations under this Agreement to a successor to all or substantially all of
its business or assets relating to this agreement whether by sale, merger,
operation of law or otherwise. Company will not issue any press release
regarding the subject matter of this Agreement without the prior written
approval of bamboo.com. This Agreement may be executed by exchange of signature
pages by facsimile and/or in any number of counterparts, each of which shall be
an original as against any party whose signature appears thereon and all of
which together shall constitute one and the same instrument.
-2-
<PAGE>
EXHIBIT 10.33
DISTRIBUTION & CO-MARKETING AGREEMENT
-------------------------------------
THIS DISTRIBUTION & CO-MARKETING AGREEMENT (the "Agreement") is entered into as
of June 9, 1999 (the "Effective Date"), between bamboo.com, Inc., a Delaware
corporation with an office located at 124 University Avenue, Palo Alto, CA 94301
("bamboo.com"), and Pacific Union Real Estate Group, Inc., a California
corporation with its main office located at 3727 Buchanan St., San Francisco,
CA. ("Company").
Bamboo.com and Company, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, agree as follows (definitions of
certain capitalized terms and additional terms and conditions appear on the
reverse side of this Agreement):
1. Bamboo.com Service. Bamboo.com will be responsible for receiving orders and
------------------
invoicing and collecting revenues for sales of Production Services. Bamboo.com
will capture images at designated sites through its Service Provider Network and
process captured images to create Bamboo.com Images. Bamboo.com will host
Bamboo.com Images on its servers and will provide to Company a URL link and
identifying listing information for each Bamboo.com Image purchased by Company
for the purpose of integrating the link into listings on the Company Site.
Company will permit linking of the Company Site to Bamboo.com Images, and the
parties will use best efforts to work together to expeditiously implement, and
maintain throughout the term of this Agreement, a system whereby Company will be
capable of linking the Company Site to Bamboo.com Images.
2. Preferred Provider. Bamboo.com will be the preferred provider of Virtual
------------------
Tours Images for the Company Site. Company will not directly or indirectly
promote itself, or act, as a provider of Virtual Tour Images, nor will it
promote, display ads for or use the services of any third party acting in such
capacity. In addition, Company will not permit any Virtual Tour Images of any
third party to be posted to, linked to or otherwise made accessible through the
Company Site. Notwithstanding the preceding sentence, Company will not be
restricted from accommodating alternative Virtual Tour Images already posted or
linked to the Company Sites or from allowing Company customers that use a
provider of Virtual Tours Images other than bamboo.com to link to the Company
Site.
3. Community Tours. Bamboo.com agrees to capture and process [*]. Company will
---------------
provide bamboo.com a list of the images, the distance between the locations, and
precise directions regarding the location from where the image should be taken.
In addition, Company will send a representative with the bamboo.com service
provider to oversee the shooting at each specific location. Company will pay
[*] in a community and [*] of that initial location.
4. Marketing and Promotion.
-----------------------
Bamboo.com agrees to:
. Provide commercially reasonable technical support during normal business
hours to help Company link the Company Site to the Bamboo.com Images produced
on behalf of Sales Agents;
. Promote Company as a partner on bamboo.com's Web site;
. Include Company in marketing material and press releases, as bamboo.com deems
appropriate;
. Provide co-branded marketing materials to Sales Agents who purchase
Bamboo.com Tours that explains Bamboo.com Tours to customers, including CD
ROM demo disks;
. Offer a special bulk purchase price and a special promotional offer at office
presentations made by bamboo.com representatives to Sales Agents during the
first sixty (60) days of this agreement; and
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *****. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
<PAGE>
. Hold periodic training seminars for Sales Agents focusing on the benefits of
using the Internet in real estate and methods of integrating Bamboo.com Tours
into the Sales Agents' marketing strategy.
Company agrees to:
. Ensure that an HTML button and the corresponding URL provided by bamboo.com
will be located on an individual Company listing page within 24 hours from
receiving the URL link from bamboo.com;
. Include an electronic order form on the Company Site that allows Sales Agents
to submit orders to bamboo.com via the Interact;
. Maintain a gallery of Bamboo.com Images on the Company Site;
. When appropriate, include a Bamboo.com Mark and a brief, suitable reference
to the availability of the Production Services in the Company's print
advertising in magazines, flyers, newsletters and general mailings
distributed to clients and potential clients; collaborate with bamboo.com to
develop email and direct marketing material generated from time to time to
highlight the availability and features of the Production Services; and
distribute marketing materials created by bamboo.com at seminars,
presentations, training sessions and follow-up meetings sponsored by Company;
and
. Ensure bamboo.com sales representatives have access to Sales Agents within
the first 60 days of this agreement.
5. Term. This Agreement will commence on the Effective Date and continue for
----
twelve (12) months, and will be automatically renewed for successive one (1)
month periods unless either party notifies the other in writing not less than
thirty (30) days prior to the end of the then-current term of its intention to
terminate this Agreement as of the end of such term. Upon termination or
expiration, each party will cease all use of marks and other intellectual
property of the other party.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
BAMBOO.COM, INC. PACIFIC UNION REAL ESTATE GROUP, LTD.
By: /s/ Andrew P. Laszlo By: /s/ Karl W. Sopke/President
------------------------------ -------------------------------
Name/Title: Andrew P. Laszlo Name/Title: Karl W. Sopke/President
---------------------- -----------------------
SVP Bus. & Development
-2-
<PAGE>
ADDITIONAL TERMS AND CONDITIONS
1. Definitions
-----------
"Company Site" means the collection of HTML documents residing on servers
operated by or for Company or its affiliate, including without limitation
Company's intranet and extranet, and accessible on or after the Effective Date
by Sales Agents or the public via the Internet.
"Confidential Information" means any trade secrets, confidential data or other
confidential information oral or written relating to or used in the business of
the other party (the "Disclosing Party"), that a party may obtain from the
Disclosing Party during the term of this Agreement.
"Bamboo.com Image" means an electronic image of a Property produced by or on
behalf of bamboo.com.
"Bamboo.com Technology" means software and hardware, including the Bamboo.com
for Java Software, used to capture, process and view Bamboo.com Images.
"Bamboo.com Tour" means the combined Production Services supplied by bamboo.com
with respect to a single Property.
"Production Services" means the services provided by or on behalf of bamboo.com
in producing Bamboo.com Images.
"Sales Agent" means any sales agent, sales representative or broker of the
Company.
"Service Provider Network" means the network of individuals throughout the
Company's territory of operation with whom bamboo.com has entered into
agreements to capture images at designated sites on bamboo.com's behalf.
"Virtual Tour Images" means 360 degrees, three-dimensional, virtual reality,
virtual tour, virtual walkthrough or other similar images, or production
services for such images.
2. Confidentiality
---------------
Each party agrees to treat the other party's Confidential Information with the
same degree of care as it maintains its own information of a similar nature.
Each party will use at least the same procedures and degree of care which it
uses to protect the confidentiality of its own Confidential Information of like
importance, and in no event less than reasonable care. The terms of this
Agreement will constitute Confidential Information, except to the extent that
bamboo.com discloses such information in good faith to a legitimate potential,
or actual, strategic investor, investment banker, venture capital firm or
consultant, or as required by statute, regulation or other law.
3. Bamboo.com Technology
---------------------
(a) All Bamboo.com Technology, including without limitation the Bamboo.com for
Java Software and all Bamboo.com Images, whether or not produced for Sales
Agents and whether or not posted to or linked to the Company Site, are, and at
all times will remain, the exclusive property of bamboo.com, and no provision of
this Agreement implies any transfer to Company of any ownership interest in any
Bamboo.com Technology. Company will not reproduce, distribute, modify, edit, or
prepare derivative works from the Bamboo.com Images without the prior written
permission of bamboo.com.
(b) Bamboo.com hereby grants to Company a nonexclusive, worldwide, royalty-free,
nontransferable license to include on the Company Site links to Bamboo.com
Images on bamboo.com's servers solely for the purposes contemplated in this
Agreement.
4. Trademarks
----------
(a) Bamboo.com owns and at all times will continue to own the trademarks,
service marks and/or trade names BAMBOO.COM and the bamboo.com logo, as well as
any name or mark bamboo.com may subsequently adopt as a trade name or to
designate the Production Services (collectively, the "Bamboo.com Marks"), and
Company will not take any actions inconsistent with bamboo.com's ownership
rights. Company owns and at all times will continue to own the trademarks,
service marks and/or trade names customarily used by Company during the term of
this Agreement (the "Company Marks"), and bamboo.com will not take any actions
inconsistent with Company' ownership rights. Each party's use of the other
party's marks will not create in the using party any right, title or interest
therein or thereto, and all such use will inure to the exclusive benefit of
other party.
(b) Subject to the restrictions set forth herein, bamboo.com hereby grants
Company a nonexclusive, worldwide, royalty-free, fully paid up, nontransferable
right to use the Bamboo.com Marks, during the term of this Agreement, with
bamboo.com's prior written approval, which bamboo.com will not unreasonably
withhold or delay, solely in connection with Company's promotion and marketing
of the Production Services and financing. Subject to the restrictions set forth
herein, Company hereby grants bamboo.com a nonexclusive, worldwide, royalty-
free, fully paid up, nontransferable right to use the Company Marks, during the
term of this Agreement, solely in connection with bamboo.com's promotion and
marketing of the Production Services and financing. At the reasonable request of
either party, the other party will provide assistance with the protection and
maintenance of the marks of the requesting party. Each party may only use the
marks of the other party as expressly permitted herein and agrees to use the
marks of the other party in a manner commensurate with the style, appearance and
quality of the other party's services and/or products bearing such marks.
5. Limitation on Grant of Rights
-----------------------------
Except as expressly provided herein, neither party receives any other right or
license to the technology or intellectual property of the other party.
6. Termination
-----------
(a) Upon termination or expiration, (i) Company and bamboo.com will cease all
use of marks of the other party and (ii) Company will cease all use of the
Bamboo.com Images and Bamboo.com for Java Software and will purge all Bamboo.com
for Java Software and Bamboo.com Images from its servers.
(b) This Agreement will terminate in the event a party breaches any material
term, condition or representation of this Agreement
-3-
<PAGE>
or materially fails to perform any of its material obligations or undertakings
hereunder, and fails to remedy such default within sixty (60) days after being
notified by the non-breaching party of such breach or failure, provided,
however, that the non-breaching party will not unreasonably withhold or delay
its consent to extend the cure period if the breaching party has commenced cure
during the sixty-day notice period and pursues cure of the breach in good faith.
(c) The provisions of Sections 2, 3(a), 4(a), 5, 6(a), 6(c), 7 and 8 of these
Additional Terms and Conditions will survive the expiration or termination of
this Agreement for any reason. All other rights and obligations of the parties
will cease upon expiration or termination of this Agreement.
7. No Warranties; Limitation of Liability
--------------------------------------
BAMBOO.COM MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO
THE ANY GOODS OR SERVICES PROVIDED BY THIS AGREEMENT. EXCEPT WITH RESPECT TO A
BREACH BY EITHER PARTY OF ITS OBLIGATIONS DESCRIBED IN SECTION 2 ON THE FIRST
PAGE OF THIS AGREEMENT OR SECTION 2 OF THESE ADDITIONAL TERMS AND CONDITIONS, IN
NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY FORM
OF INDIRECT SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER FROM
ANY CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS AGREEMENT WHETHER BASED ON
BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR
NOT THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
8. Miscellaneous
-------------
Any notice required or permitted by this Agreement will be deemed given if sent
by registered mail, postage prepaid, addressed to the other party at the address
set forth within this Agreement. Delivery will be deemed effective three (3)
days after deposit with postal authorities. Nonperformance of either party will
be excused to the extent that performance is rendered impossible by storm,
lockout or other labor trouble, riot, war, rebellion, strike, fire, flood,
accident or other act of God, governmental acts. orders or restrictions, or any
other reason where failure to perform is beyond the control and not caused by
the gross negligence of willful misconduct of the non-performing party. The
relationship of bamboo.com and Company established by this Agreement is that of
independent contractors. This Agreement will be governed by and construed under
the laws of the State of California without reference to conflict of laws
principles. This Agreement, together with all exhibit and attachments hereto,
sets forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, will be effective unless in writing signed by the party to
be charged, and the waiver of any breach or default will not constitute a waiver
of any other right hereunder or any subsequent breach or default. Neither party
may assign this Agreement, or assign or delegate any right or obligation
hereunder, without the prior written consent of the other party; provided,
however, that either party may assign this Agreement or assign or delegate its
rights and obligations under this Agreement to a successor to all or
substantially all of its business or assets relating to this Agreement whether
by sale, merger, operation of law or otherwise. Company will not issue any press
release regarding the subject matter of this Agreement without the prior written
approval of bamboo.com. This Agreement may be executed by exchange of signature
pages by facsimile and/or in any number of counterparts, each of which shall be
an original as against any party whose signature appears thereon and all of
which together shall constitute one and the same instrument.
-4-
<PAGE>
EXHIBIT 10.34
SERVICES AGREEMENT
------------------
This Services Agreement ("Agreement") made as of this 8th day of June,
1999 ("Effective Date") by and between The Prudential Real Estate Affiliates,
Inc. ("Prudential"), 3333 Michelson Drive, Suite 1000, Irvine, California 92612,
a Delaware corporation, and bamboo.com, Inc. ("Vendor"), 124 University Avenue,
Palo Alto, California 94301 organized and existing under the laws of the State
of Delaware.
WHEREAS, Prudential is an internationally recognized franchisor of real
estate brokerage services with franchisees located throughout the United States
and Canada, and
WHEREAS, Vendor provides services to the residential real estate brokerage
industry involving the creation of "virtual tours," involving-the use of 360
degrees imaging for internet property listings (the "Services").
NOW THEREFORE, in consideration of the promises hereinafter set forth,
Vendor and Prudential acknowledge and agree as follows:
Section 1. Definitions
-----------
(a) "Internet Sites" means repository of data and other information in
electronic form residing on one or more servers that cart be accessed via
the World Wide Web.
(b) [*] of Prudential (i) for which Prudential [*] as is represented by this
Agreement, including, but not limited to, [*] of any and all [*], and (ii)
to which Prudential [*], including but not limited to such [*] (as
specifically described in Section 10(i)), for any [*] receives from such
vendor.
(c) "Prudential Affiliates" means Prudential's franchisees, and such
franchisee's employees and independent contractors.
(d) "Prudential Listing Site" means that certain Internet Site to be hosted by
Prudential and currently located at http://www.prudential.com, or at
whatever location it may be for the Term of this Agreement.
(e) [*] means that certain Internet Site currently located at [*] or whatever
location that may be for the Term of this Agreement, and any additional
Internet Sites of Vendor relating to existing residential real estate.
(f) "Term" means the term of the Agreement set forth in Section 6.
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *****. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
<PAGE>
Section 2. Vendor Responsibilities
-----------------------
(a) Vendor will be responsible for fulfilling all sales of virtual tour
services to Prudential's members and agents. Vendor will maintain a network
of service providers covering the United States and Canada to capture
images of real estate and will process images to create 360 degrees virtual
tours. Following processing, when the Prudential member or agent has
purchased and requested posting of their bamboo.com tour to [*] bamboo.com
will post virtual tours to [*] and, if necessary, will work with Prudential
to ensure the proper display of the virtual tours on the Prudential Listing
Site [*] Prudential or the Affiliates provided that [*] does not [*]
Vendor will use commercially reasonable efforts to negotiate [*]
(b) Vendor will use commercially reasonable efforts to make a member of its
videographer service provider network available to capture virtual tour
images of a property [*]. In addition, Vendor will use commercially
reasonable efforts to process and post each virtual tour image [*].
(c) Vendor will maintain a toll-free support telephone line which Prudential
Affiliates and other customers of Vendor may call with support questions.
The hours of operation for the support telephone line will be, [*]
Eastern time. Vendor agrees to use commercially reasonable efforts to
respond to all support-related phone calls, at [*].
(d) Vendor will participate in marketing activities to the Prudential
Affiliates as described in this Agreement. To the extent that Vendor's
participation in any marketing and promotional activities involves payment
of reasonable fees to Prudential, Vendor will pay such fees (which shall
not include transaction fees) commensurate with its level of participation.
(e) In the event of a termination of this Agreement, Vendor will permit any
agreement it enters into with a Prudential Affiliate after the Effective
Date of this Agreement to be terminated at the Prudential Affiliate's
option (the "Affiliate Option") upon the earlier to occur of the next
anniversary date of the effective date of such agreement between Vendor and
the Prudential Affiliate or the expiration of sixty (60) days from the
termination of this Agreement. In any event, concurrent with any action by
Prudential to inform Prudential Affiliates of termination under this
section, Prudential shall notify Vendor in writing of such intent and the
actual wording of such action.
Section 3. Prudential Responsibilities
---------------------------
(a) Except as otherwise set forth in this Agreement and subject to this Section
3(a), Prudential shall not during the Term of this Agreement [*] for the
[*] that are the [*] contemplated to be provided by Vendor under this
Agreement (i.e., for use in the residential estate
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
marketplace)[*]. In addition, Prudential shall use commercially
reasonable efforts to [*] Vendor [*] for Services to Prudential
Affiliates. Prudential will not, except as otherwise provided herein,
permit [*] in connection with residential real estate listings, of [*] to
be linked to, posted to or otherwise made available through the PREA
Center or the Prudential Listing Site, except to the extent that [*]
Notwithstanding the foregoing, Vendor acknowledges and agrees that the
Prudential Affiliates are not under the direct control of Prudential and
that Prudential cannot ensure that such Prudential Affiliates will
utilize Vendor's Services in any way. Prudential will not be restricted
from accommodating those Affiliates that utilize alternative virtual tour
solutions to the extent not restricted under Prudential's [*] Prudential
will not, however, promote [*]
(b) For purposes of this Agreement, [*] shall permit Vendor to market, at
Vendor's expense, its Services through certain of Prudential's various
communications channels including "RockTalk," and fax broadcasts. Vendor
shall participate in a [*] per year (including "Cybercafes"), at the [*]
[*] level and an [*] events per year at a level to be determined by
Vendor and at Vendor's expense, including a full Vendor booth and Vendor-
supplied marketing team to promote Prudential's and Vendor's relationship
and to demonstrate Vendor's Services to Prudential Affiliates. Where
Prudential provides speaking opportunities at regional events to vendors,
Prudential will provide speaking opportunities to Vendor commensurate
with Vendor's level of sponsorship. Vendor will, during the term of this
Agreement, be the [*] at the Prudential annual business conference and
Prudential regional events involving the Affiliates. An exhibitor of
virtual tour services for the commercial market at such events will be
[*] and will be [*] virtual tour services for residential properties at
such event. Breach by the commercial exhibitor will result in [*] future
similar events.
(c) Within the first 30 days following the execution of the Agreement, Vendor
will be introduced to all Prudential member offices located within
Vendor's established service areas by [*] encouraging them to schedule
office presentations by Vendor. Additionally, within 30 days following
Vendor's expansion into new service areas, Vendor will be introduced to
all Prudential Affiliates located in these new areas [*] encouraging them
to schedule office presentations by Vendor. [*]
(d) Prudential will include [*] mention (commensurate with other [*]
providers) of Vendor's virtual tour services in new materials prepared
for its [*].
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>
(e) Vendor will operate a booth at Prudential's annual conventions (at the
highest level available [*] and will be given priority in selecting the
location of the booth in accordance with its participation status on a
first come, first served basis. Prudential will also provide Vendor with
a speaking opportunity at the annual conventions commensurate with the
level of sponsorship.
(f) Prudential will promote Vendor's virtual tour services on Prudential's PREA
Center as follows: Vendor will have the right to be in the supply catalogue
with the option to sponsor a banner ad provided that Vendor will be
responsible for the fees for same.
(g) The Prudential Listing Site, including Vendor's 360 degrees images and
related technology, will not include brand identifiers for Vendor that (a)
[*] and (b) Vendor may have a brand identifier [*] that it provides as part
of the virtual tour in the form used by Vendor today subject to such
material modifications as are approved by Prudential, which approval shall
not be unreasonably withheld.
(h) Prudential will explore the option of including on the Prudential Listing
Site a Prudential-branded [*] produced for Prudential's Affiliates and
agents subject to design and construction costs.
(i) Within the first 30 days following the execution of the Agreement,
Prudential will (subject to certain restrictions imposed by agreements with
certain franchisees) supply to Vendor, Prudential's current list of
franchisees for Vendor's use in marketing and promoting Vendor's virtual
tour services. Thereafter, upon request, Prudential will supply to Vendor
an updated list of franchisees no more than once each quarter during the
term. This, and other information exchanged under the Agreement, will be
subject to a confidentiality agreement.
(j) Subject to the terms of this Agreement and subject to Prudential's
approval, Prudential will grant Vendor a limited right to use Prudential's
name, marks and logos in Vendor's marketing, promotional and financing
materials. Prudential shall approve the reasonable use of its name, marks
and logo in connection with a description of the relationship created by
this Agreement in a prospectus prepared in connection with [*]
Section 6. Term
----
The term of this Agreement will commence upon its execution and shall
continue until the later to occur of (a) the termination of either the current
agreement between Vendor and [*] or the current agreement between Prudential and
[*] or (b) the expiration of [*] from the date of this Agreement (provided
that, if either [*] relationship is
****** Certain information on this page has been omitted and filed separately
with the Securities Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>
terminated, Prudential receives acceptable service at no additional cost),
unless sooner terminated by reason of material breach under terms of this
Agreement. Vendor may terminate this Agreement if Vendor is [*] and Prudential
is assured of continued service, in accordance with this Agreement, at no
additional cost. Prudential may terminate this Agreement if [*] of Prudential.
Section 7. Termination for Breach
----------------------
This Agreement will terminate in the event a party breaches any material
term, condition or representation of this Agreement or materially fails to
perform any of its material obligations or undertakings hereunder, and fails to
remedy such default within sixty (60) days after being notified by the non-
breaching party of such breach or failure; provided, however, that the non-
breaching party will not unreasonably withhold or delay its consent to extend
the cure period if the breaching party has commenced cure during the sixty-day
notice period and diligently pursues cure of the breach.
Section 8. Confidential Information and Trade Secrets
------------------------------------------
(a) Both parties acknowledge that each may be provided with information about,
and or brought into close contact with each others confidential and
proprietary information or confidential information of third parties with
which the parties conduct business. The confidential information of both
parties and any such third parties is collectively "Confidential
Information". In recognition of the foregoing, both parties covenant and
agree:
(i) that each party will keep and maintain all Confidential
Information in strict confidence, using such degree of care as
is appropriate to avoid unauthorized use or disclosure and, in
any event, no less care than it take with its own Confidential
Information;
(ii) that each party will not, directly or indirectly, disclose any
Confidential Information to anyone outside of their
organization, except with the other party's prior written
consent;
(iii) that each party will not make use of any Confidential
Information for its own purposes or the benefit of anyone or
any other entity other than the other party;
(iv) that (1) on termination of discussions with each other or, (2),
upon completion of this Agreement, or (3) at any time either
party may so request, the other party will deliver promptly to
the other, or, at either party's option, will destroy all
memoranda, notes, records, reports, media and other documents
and materials (and all copies thereof) regarding or including
any Confidential Information which it may then possess or have
under its control; and
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
(v) that each party will take no action with respect to the
Confidential Information that is inconsistent with its
confidential and proprietary nature.
(b) Each party shall be permitted to disclose the Confidential Information only
as follows: (a) to its employees and agents ("Employees") having a need to
know such information in connection with the performance of this Agreement.
Both parties shall instruct all such Employees as to their obligations
under this Agreement, and shall obtain from such Employees their written
acknowledgment and agreement to be bound by the terms and conditions of
this Agreement prior to their being given access to the Confidential
Information. Both parties shall be responsible for all their Employees'
compliance with the terms of this Agreement; (b) if disclosure is required
by law; however, either party notify the other in writing in advance of
such disclosure, and provide such party with copies of any related
information so that it may take appropriate action to protect the
Confidential Information.
(c) For purposes of this Agreement, Confidential Information shall include all
business information of both parties, including the following:
(i) information relating to planned or existing computer systems and
systems architecture, including computer hardware, computer
software, source code, object code, documentation, methods of
processing and operational methods;
(ii) policyholder data, customer data or lists, sales, profits,
organizational restructuring, and new business initiatives and
financial information;
(iii) information that describes Prudential insurance and financial
products, including actuarial calculations, product designs,
real estate relocation services and how such products are
administered and managed;
(iv) information that describes product strategies, tax
interpretations, tax positions and treatment of any item; and
(v) information of third parties with which either party conducts
business.
(d) Notwithstanding the foregoing, Confidential Information shall not include
information that (i) is or becomes generally known to the public not as a
result of a disclosure by the receiving party, (ii) is rightfully in the
possession of the receiving party prior to disclosure by other party, or
(iii) is received by the receiving party in good faith and without
restriction from a third party, not under confidentiality obligation to the
other party, and having the right to make such disclosure. The parties
acknowledge that the disclosure of Confidential Information may cause
irreparable injury to the non-disclosing party and damages, which may be
difficult to ascertain. Therefore, the aggrieved party shall, upon a
disclosure or threatened disclosure of any Confidential Information, be
entitled to seek injunctive relief, including, but not limited to, a
preliminary injunction and an order of seizure and impoundment under
Section 503 of the Copyright Act upon an ex parte application by the
--------
<PAGE>
aggrieved party to protect and recover the Confidential Information and the
disclosing party shall not object to the entry of an injunction or other
equitable relief against it on the basis of an adequate remedy at law, lack
of irreparable harm or any other reason. Without limitation of the
foregoing, the disclosing party shall advise the other party immediately in
the event that it learns or has reason to believe that any person or
entity which has had access to Confidential Information has violated or
intends to violate the terms of this Agreement.
Section 9. Intellectual Property
---------------------
(a) Nothing contained in this Agreement shall be construed as conferring from
either party to the other any right to use, or to refer to in any
advertising, publicity, promotion, marketing or other activities, any name,
trade name, trade or service mark, or any other designation of either party
or any of any of its affiliates, subsidiaries or organizations controlled
by, or under common control with, it or them, including, but not limited
to, any contraction, abbreviation or simulation thereof (collectively,
"Intellectual Property Rights"), unless either party receives the prior
written consent of the other. Both parties agree that they will not use the
Intellectual Property Rights, in any marketing materials or advertisements
for the Services or cause to have issued any circular, pamphlet, brochure
or other publication using the Intellectual Property Rights without the
prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed. Both parties further agree that upon
termination of this Agreement, each shall immediately cease and discontinue
all use of the Intellectual Property Rights. In no event may either party
or any affiliated or associated person or entity utilize the Intellectual
Property Rights in connection with any products or Services other than
described in this Agreement. Both parties further acknowledge and agree
that this Agreement does not create or grant any rights in each other to
use any intellectual property rights owned or controlled by any Prudential
Affiliate.
(b) Vendor acknowledges and agrees that if Prudential requests that Vendor
perform any services or develop any work product, including, but not
limited to, all materials, products, forms, electronic forms converted,
from various defined format, reports, computer programs (source and object
code), documentation, deliverables and inventions developed or prepared by
Vendor and funded by Prudential, (the "Work Product"), the parties must
execute a Statement of Work issued under this Agreement and such Statement
of Work must indicate the ownership rights of Prudential and Vendor in the
Work Product, as well as the prices, delivery date, acceptance criteria,
and all particulars of the assignment and project.
(c) All "Vendor Technology," as that term is defined below, whether or not
produced for Prudential Affiliates and whether or not linked to the PREA
Center and/or the Prudential Listing Site, are, and at all times will
remain, the exclusive property of Vendor, and no provision of this
Agreement implies any transfer to Prudential or Prudential Affiliates of
any ownership interest in any Vendor Technology.
Vendor hereby grants to Prudential a nonexclusive, worldwide, royalty-free,
nontransferable license to include on the PREA Center and/or the Prudential
Listing Site links to Vendor's virtual tour images on Vendor's servers solely
for the purposes contemplated in this Agreement. The foregoing license does
not include any right to grant or authorize
<PAGE>
sublicenses. As used herein, "Vendor Technology" shall mean virtual tour
images and software and hardware used to capture, process and view the
virtual tour images.
Section 10. Covenants and Warranties
------------------------
Vendor hereby warrants and represents that:
(a) None of the Services, any information or data provided by Vendor, nor any
portion thereof contain language or material which is obscene, libelous,
slanderous or defamatory and will not infringe upon or give violate any
patent, copyright, trade secret or other property right of any other party;
(b) Vendor has all necessary rights required to provide the Services, any
information or data provided by Vendor under this Agreement. Vendor shall
pass through and assign, and hereby passes through and assigns to
Prudential to the extent some may be assigned, all warranties and
indemnification provided to Vendor by the manufacturer(s) of such third
party materials, including the right to enforce such warranties and
indemnification directly against said manufacturers;
(c) The Services were not developed by utilizing any information which may be
considered confidential information of, or proprietary to, any prior
employer or any other person or entity;
(d) Services shall be performed in a workmanlike manner;
(e) It has all consents, permissions or licenses necessary to perform the
Services hereunder;
(f) That the Services provided under this Agreement shall provide "fault free
performance" in the processing of date and date related data (including,
but not limited to calculating, comparing and sequencing) by all hardware
and software products, individually and in combination, from the date
hereof and that the advent of the year 2000 shall not adversely affect
performance of the Services. "Fault free performance" shall include the
manipulation of data when dates are in the 20/th/ and 21/st/ centuries and
shall be transparent to the user.
(g) All written information provided to Prudential about Vendor, the principal
owners of Vendor or the finances of any such persons or entities, was or
will be at the time delivered, true, accurate and complete in all material
respects, and such information contained no misrepresentation of a material
fact, and does not omit any material fact necessary to make the information
disclosed not misleading under the circumstances in which it is disclosed.
(h) Vendor will comply with all applicable local, state and federal laws and
regulations governing this Agreement and the provision of the Services to
Prudential.
<PAGE>
(i) During the Term, and any renewal therof, Vendor's [*] Services offered to
[*] shall be [*] for similar Services to [*] after the Effective Date
taking into consideration the quality and quantity of the Services
purchased and the time of purchase and region where the purchaser is
located. Vendor further represents and warrants that during the Term,
Vendor shall provide to Prudential and Prudential Affiliates Private Label
Access to the most then-currently available technology or content offerings
at the same time such Services are offered by Vendor to any other similar
entity.
(j) Both parties will assign project managers to oversee this Agreement. Vendor
and Prudential agree to meet semi-annually with each other at a mutually
agreed upon location to discuss and resolve any service issues or other
concerns which the Prudential and or the Prudential Affiliates may have. In
addition, Vendor will use commercially reasonable efforts to respond to all
Prudential Affiliates' complaints within [*] from receipt and to resolve
such complaint as soon as it is commercially reasonable.
Prudential hereby warrants and represents that:
(a) All written information provided to Vendor about Prudential, the principal
owners of Prudential or, to the best of Prudential's knowledge, Prudential
Affiliates, or the finances of any such persons or entities, was or will be
at the time delivered, true, accurate and complete in all material
respects, and such information contained no misrepresentation of a material
fact, and does not omit any material fact necessary to make the information
disclosed not misleading under the circumstances in which it is disclosed;
(b) Prudential will comply with all applicable local, state and federal laws
and regulations governing this Agreement and the provision of any
information or data to Vendor.
(c) During the Term, and any renewal thereof, Prudential's [*] services or
access to Prudential or Prudential Affiliates offered to Vendor shall be
[*] for similar services and access offered to [*] or otherwise [*] after
the Effective Date. Prudential further represents and warrants that during
the Term, Prudential shall provide to Vendor the most then-currently
available information or data, if any, at the same time such are offered to
other such vendors.
The parties acknowledge and agree that, notwithstanding anything to
the contrary set forth in this Agreement, the limitations on a party's liability
set forth in Section 14 shall not serve to limit: (i) Vendor's liability arising
from Vendor's breach of warranties set forth in Sections 10(a), 10(b) or 10(c);
or (ii) a party's liability for any claim, action or loss, arising out of or
relating to personal injury or property damage caused by the act or omission of
such party and such party's personnel.
Section 11. Assignment
----------
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
Except as set forth in this Agreement, neither party may assign this
Agreement, in whole or in part, without the other party's prior written
consent, except that no such consent will be required in connection with a
merger, reorganization, acquisition, consolidation, or sale of all, or
substantially all, of such party's assets, or if either party assigns this
agreement to its parent organization or wholly owned subsidiary. Any attempt to
assign this Agreement other than as permitted herein will be null and void. This
Agreement will inure to the benefit of and bind the parties' respective
successors and permitted assigns. Notwithstanding the foregoing, either party
may terminate this Agreement if the other party assigns this Agreement to one of
its competitors.
Section 12. Independent Contractor
----------------------
(a) Neither Vendor nor any of its agents nor any of their respective employees
who perform work in connection with the provision of Services shall for any
purpose including (but not limited to) federal or state tax purposes be
considered an employee or agent of Prudential or any of its affiliates or
subsidiaries. No such person shall be entitled to participate in
Prudential's employee insurance and retirement programs. Vendor (or, in the
case of persons employed by any agent, such agent) shall treat any such
person as its employee for all purposes, including (but not limited to) the
payment of federal, state and local employment and social security taxes
and shall deduct from such person's salaries all applicable taxes, charges
for benefits and any and all other deductions and withholdings which are
required by law.
(b) In addition to all other requirements herein, Vendor shall have full
responsibility for the actions and omissions of all personnel employed by
Vendor or any agent who are involved in performing Services and for any
Losses (as defined in Section 15) arising therefrom.
Section 13. Prohibition of Conflict of Interest
-----------------------------------
During the Term of this Agreement, neither party shall engage in activities
which, in the reasonable judgment of the other, are violative of the spirit of
this Agreement.
Section 14. Limitation of Remedies
----------------------
EXCEPT TO THE EXTENT REQUIRED BY LAW OR AS OTHERWISE PROVIDED IN THIS
AGREEMENT, EACH PARTY AGREES THAT THE OTHER PARTY SHALL NOT BE LIABLE FOR ANY
LOST PROFITS, LOST SAVINGS OR OTHER SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES,
EVEN IF A PARTY HAS BEEN ADVISED BY THE OTHER PARTY OF OR COULD HAVE FORESEEN
THE POSSIBILITY OF SUCH DAMAGES. EXCEPT TO THE EXTENT REQUIRED BY LAW OR AS
OTHERWISE PROVIDED IN THIS AGREEMENT, THE AGGREGATE LIABILITY OF EITHER PARTY
UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LIABILITY FOR DAMAGES
RESULTING FROM EITHER PARTY'S NEGLIGENCE AND/OR INTENTIONAL, WILLFUL OR WRONGFUL
CONDUCT, SHALL NOT EXCEED [*]
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
Section 15. Indemnification
---------------
Subject to Section 14, Both parties agree to indemnify each other (and
their affiliates, and their respective directors, officers and other employees,
and all other persons and entities acting on behalf of or under the control of
any of them) against, and hold each other (and them) harmless from Losses that,
may be sustained by the other (or them) by reason of any misrepresentation, or
negligent or wrongful acts or omissions, or incorrect warranty, or any breach of
any representation or warranty, covenant, agreement, obligation or undertaking
in this Agreement by either party or its directors, officers, employees or other
representatives, or by any person or entity acting on behalf of or under control
of either party. The term "Losses" shall include but not be limited to costs,
claims, damages, legal fees (including, but not limited to, reasonable fees and
disbursements of counsel incurred by either party in any action or proceeding
between each other or between either party and any third party), liabilities,
penalties and expenses. The indemnifying party shall have the right to control
the defense or settlement of any claim, suit or demand made by a third party,
provided that any settlement by indemnifying party which obligates an
indemnified party to a payment obligation thereunder will be void. The
indemnified party shall notify the indemnifying party within a reasonable time
of, and provide reasonable cooperation, at the indemnifying party's expense,
in connection with the defense of, any claims, suits or demand is for which the
indemnifying party is responsible under this Section.
Section 16. Equal Employment Opportunity; Compliance
----------------------------------------
The following clauses shall apply if required by applicable law with
respect to the performance of this Agreement and if this Agreement is not
otherwise exempt under federal law or applicable regulations:
(a) Vendor represents that it is an equal opportunity employer, as described in
Section 202 of Executive Order 11246, dated September 24, 1976, as amended,
and, as such, agrees to comply with the provisions of said Executive Order
and its implementing regulations during the performance of this Agreement;
and
(b) Vendor agrees to comply with the affirmative action requirements of Part 60-
741.4 Title 41, Code of Federal Regulations, with respect to handicapped
workers during the performance of this Agreement; and
(c) Vendor agrees to comply with the affirmative action requirements of Part
60-240.4, Title 41, Code of Federal Regulations, with respect to Disabled
Veterans and Veterans of the Vietnam Era during the performance of this
Agreement; and
(d) Vendor agrees to comply with the provisions of Executive Order 11625 and its
implementing regulations with respect to the utilization of minority
business enterprises during the performance of this Agreement.
Section 17. Communications
--------------
<PAGE>
All notices requests, demands and other communications under this Agreement
shall be in writing and shall be delivered personally or by certified mail and
be deemed to have been duly given: (a) on the date of service if served
personally on the party hereto to whom notice is to be given; (b) on the day
after delivery if by certified mail. All notices and other written
communications under this Agreement shall be addressed as follows:
If to Vendor
bamboo.com
124 University Avenue
Palo Alto, California 94301
Attention: Hunter Farrell
If to Prudential:
The Prudential Real Estate Affiliates, Inc.
3333 Michelson Drive
Suite 1000
Irvine, California 92612
Attention: Michael Wasenius
The Prudential Real Estate Affiliates, Inc.
200 Summit Lake Drive
Valhalla, New York 10595
Attention: Michael Wasenius
Any party hereto may change its address for the purpose of this Section by
giving the other party written notice of its new address in the manner set forth
above.
Section 18. Survival
--------
Both parties' representations, warranties, confidentiality and obligations
set forth in this Agreement shall survive the expiration, termination or
rescission of this Agreement and continue in full force and effect.
Section 19. Section Headings
----------------
The headings of the sections of this Agreement are inserted for convenient
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
Section 20. Publicity
---------
Both parties agree not to disclose to any third party the terms or
conditions of this Agreement, without the prior express written consent of the
other. Notwithstanding the preceding
<PAGE>
sentence, the parties agree to release a press announcement within 30 days of
the Effective Date describing the Preferred Status of the Vendor under this
agreement (subject to [*] if any).
Section 21. Applicable Law and Forum
------------------------
This Agreement shall be governed by the laws of the State of New York
without regard to conflicts of laws. Vendor and Prudential hereby agree on
behalf of themselves and any person claiming by or through them that the sole
jurisdiction and venue for any litigation arising from or relating to this
Agreement shall be an appropriate federal or state court located in Orange
County, California.
Section 22. Entire Agreement
----------------
This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties. In the event of a conflict between the
terms of this Agreement and those appearing on the face or reverse of any
document provided by Vendor, the terms and conditions of this Agreement shall
prevail, except as expressly provided in this Agreement. In the event of a
conflict between the terms of this Agreement and the letter of intent, the terms
and conditions of this Agreement shall prevail, except as expressly provided in
this Agreement.
Section 23. Severability
------------
If any provision of this Agreement shall be declared null, void or
unenforceable in whole or in part by any court, arbitrator or governmental
agency, said provision shall survive to the extent it is not so declared and all
the other provisions of this Agreement shall remain in full force and effect
unless, in each case, such declaration shall serve to deprive any of the parties
hereto of the fundamental benefits of this Agreement.
Section 24. Amendments
----------
No amendment or modifications to this Agreement shall be valid or
enforceable unless in writing executed by the authorized representatives of
Prudential and Vendor.
Section 25. Waiver
------
No term or provision hereof shall be deemed waived and no breach hereof
shall be deemed consented to, unless such waiver or consent, as the case may be,
is express and in writing signed by the party claimed to have waived or
consented. No such waiver shall constitute a waiver of any other term or
provision hereof, and no such consent shall constitute a consent to any other
breach hereof.
Section 26. Insurance
---------
****** Certain information on this page has been omitted and filed separately
with the Securities Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
Vendor shall obtain from a company or companies acceptable to Prudential
and maintain in force during the Term of this Agreement and for not less than
two (2) years thereafter, the following insurance coverage in at least the
amounts indicated:
- - Worker's Compensation - Statutory
- - Employer's Liability - Not less than $250,000
- - Comprehensive General Liability - Not less than $1,000,000.
Where applicable, the above policy shall name Prudential as an additional
insured. Vendor shall, upon request, provide Prudential with a certificate or
Certificates of Insurance evidencing that the above-noted insurance requirements
have been satisfied and specifying the Prudential shall receive a 30-day advance
notice of any reduction in coverage.
Section 27. Attorneys' Fees
---------------
Notwithstanding any limitation herein, in any litigation between the
parties hereto arising out of or with respect to this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees (including, but
not limited to, allocated costs of in-house staff counsel) and court costs.
Section 28. Force Majeure
-------------
Nonperformance of either party will be excused to the extent that performance is
rendered impossible by storm, lockout or other labor trouble, riot, war,
rebellion, strike, fire, flood, accident or other act of God, governmental acts,
orders or restrictions, or any other reason where failure to perform is beyond
the control and not caused by the gross negligence or willful misconduct of the
non-performing party.
Section 29. Counterparts; Facsimile Signatures
----------------------------------
This Agreement may be executed by exchange of signature pages by facsimile
and/or in any number of counterparts, each of which shall be an original as
against any party whose signature appears thereon and all of which together
shall constitute one and the same instrument.
Section 30. [*]
Before the close of [*] project managers for the parties will make reasonable
efforts to create a written plan, which will if created, would be [*] this
Agreement, aimed both at: (a) developing and implementing ways to feature and
promote bamboo.com's virtual tour services [*] and (b) enhancing and supporting
Prudential's [*] Such possibilities include virtual tours of [*] The plan shall
be subject to the mutual agreement of the parties.
****** Certain information on this page has been omitted and filed separately
with the Securities Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
Section 31. Disclaimer
----------
THE WARRANTIES PROVIDED BY THE PARTIES HEREIN ARE THE ONLY WARRANTIES PROVIDED
BY THE PARTIES WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT. SUCH
WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES BY THE PARTIES, EXPRESS OR
IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized representatives as of the day and
year above written.
THE PRUDENTIAL REAL ESTATE bamboo.com, Inc.
AFFILIATES, INC.
By: /s/ Lyle Fuller By: /s/ Andrew P. Laszlo
----------------------------- ---------------------------
Name: Lyle Fuller Name: Andrew P. Laszlo
--------------------------- -------------------------
Title: Vice President, eBusiness Title: SVP, Business Development
-------------------------- -------------------------
Date: June 16, 1999 Date: 6/17/99
-------------------------- -------------------------
<PAGE>
EXHIBIT 10.35
- May 26, 1999
NON-EXCLUSIVE DISTRIBUTION AGREEMENT
------------------------------------
THIS NON-EXCLUSIVE DISTRIBUTION AGREEMENT (the "Agreement") is entered into
as of May _____, 1999 (the "Effective Date"), between bamboo.com, Inc., a
Delaware corporation ("bamboo.com") with an office located at 124 University
Avenue, Palo Alto, CA 94301, and the Multiple Listing Service of Northern
Illinois, an Illinois corporation, with an office located at 2443 Warrenville
Road, Suite 510, Lisle, IL 60532 ("Company").
Bamboo.com uses the Bamboo.com Technology and provides the Production Services.
Company operates the Company Site and the Company Database. Bamboo.com desires
to be the provider of virtual tour technology and production services for the
Company Site and the Company Database. In consideration of the mutual promises
and covenants contained herein, and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties agree as
follows:
1. DEFINITIONS
-----------
1.1 "Basic Package" means up to four scenes captured in a designated
-------------
Property, converted into a corresponding number of Bamboo.com Images and linked
to the Company Site and/or the Company Database.
1.2 "Company Database" means the collection of data and documents residing
----------------
on servers operated by or for Company and accessible on or after the Effective
Date by Company Members and, to the extent Company makes such collection
generally available, to Company Members and the public via the Internet.
1.3 "Company Member" means a real estate agent or broker that has the
--------------
right to access the Company Database.
1.4 "Company Originated Order" means any order received by bamboo.com for
------------------------
a Basic Package or Upgrade Package placed by a Company Member via (i) [*]
1.5 "Company Site" means the collection of HTML documents residing on
------------
servers operated by or for Company or its affiliate and accessible on or after
the Effective Date by Company Members via the Internet.
1.6 "Confidential Information" means any trade secrets, confidential data
------------------------
or other confidential information oral or written relating to or used in the
business of the other party (the "Disclosing Party"), that a party may obtain
from the Disclosing Party during the term of this Agreement (the "Confidential
Information"). The terms of this Agreement will constitute Confidential
Information, except to the extent that such information is disclosed in good
faith to a legitimate potential, or actual, strategic investor, investment
banker, venture capital firm, or consultant.
1.7 "Bamboo.com Image" means an electronic image of a Property produced by
----------------
or on behalf of bamboo.com.
1.8 "Bamboo.com Technology" means the Bamboo.com Images and software and
---------------------
hardware used to capture, process and view Bamboo.com Images.
1.9 "Net Revenues" means the gross amount received by bamboo.com for sales
------------
of the Basic Packages and Upgrade Packages [*] (i) refunds, discounts,
promotions, credits and allowances, (ii) packaging, fees and freight, (iii)
sales taxes and other governmental charges, and (iv) reasonable provisions for
doubtful collections determined in accordance with GAAP.
1.10 "Production Services" means the services provided by or on behalf of
-------------------
bamboo.com in preparing the Basic Packages and Upgrade Packages.
1.11 "Property" means any piece of residential real estate within the
--------
Territory, including without limitation new homes,
offered for sale or resale that reside on the Company Site and the Company
Database.
1.12 "Service Provider Network" means the network of videographers
------------------------
throughout the Territory with whom bamboo.com has entered into agreements to
capture images at designated sites on bamboo.com's behalf.
1.13 "Term" means the Initial Term of this Agreement and the Renewal
----
Terms, if any, as set forth in Section 6.
1.14 "Territory" means the service districts of Company.
---------
1.15 "Transaction Fee" means the [*] bamboo.com will pay to Company during
---------------
the Term based on sales of [*] (as defined below) as provided in Section 4.1.
1.16 "Upgrade Package" means an addition to a Basic Package consisting of
---------------
one additional scene captured at the same designated Property of the Basic
Package, converted into one additional Bamboo.com Image for the scene captured
and linked to the Company Site and the Company Database.
1.17 "Virtual Tour Images" means 360 degrees three-dimensional, virtual
-------------------
reality, virtual tour, virtual walkthrough or other similar images, or
production services for such images.
2. PROVISION OF PRODUCTION SERVICES
--------------------------------
2.1 Sales and Billing. Bamboo.com will be responsible for receiving and
-----------------
fulfilling orders for Basic Packages and Upgrade Packages. Bamboo.com will
assume all costs and responsibility for invoicing and collecting revenues for
all sales of Basic Packages and Upgrade Packages, provided, however, that
bamboo.com will not have any obligation pursuant to Section 4.1 to remit
Transaction Fees based on uncollected revenues.
2.2 Image Capturing. Processing and Linking. The parties will work
---------------------------------------
together to implement a system whereby bamboo.com will be capable of displaying
Bamboo.com Images on the Company Site and the Company Database, whether such
Bamboo.com Images are produced from Company Originated Orders or orders through
bamboo.com's other sales channels. The parties will also work together on file
naming formats and scripts that will attach the Bamboo.com Images to the
appropriate listings on the Company Site and the Company Database. Company will
have [*] the current operator of the Company Database, incorporate an order
checkbox on the Company Database listing input screen that will facilitate the
request for Production Services by Company Members. Bamboo.com will have sole
responsibility for, and will bear all costs associated with, capturing images at
designated sites through its Service Provider Network and processing captured
images to create Bamboo.com Images. Bamboo.com will assist Company in linking
the Company Site and the Company Database to Bamboo.com Images. Company will
permit such linking and will work with bamboo.com to establish and maintain
links on the Company Site and the Company Database throughout the Term.
Bamboo.com will use commercially reasonable efforts to process and link each
Bamboo.com Image on behalf of Company Members [*] after capture of the images,
in each case to the extent bamboo.com has the right to do so, provided that such
linking is not delayed by factors attributable to Company.
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
2.3 [*] As of the Effective Date, in addition to any other [*] bamboo.com
---
will offer the following packages of Production Services to Company Members
hereunder:
(a) [*] For [*] Company Customers may purchase a Basic Package that
---
includes posting or linking to [*] of the following: [*] (once implemented) or
the Company Member's own Web site [*]
(b) [*] For [*] Company Customers may purchase a Basic Package that
---
includes posting or linking to [*] (once implemented), the [*] the Company Site
and the Company Database [*]
Bamboo.com will determine whether linking or posting is appropriate for all such
orders based on its agreements and other factors within its discretion. Linking
or posting to [*] is subject to bamboo.com's right to engage in such posting or
linking, and bamboo.com will negotiate with Company regarding [*] set forth in
Section 2.3(b) if one or more [*] becomes unavailable.
Bamboo.com will automatically link appropriate Bamboo.com Images to the Company
Site and Company Database that [*] whenever the [*] are made by Company Members,
except in those cases where: (a) the Company Member objects to the linking
and/or (b) the [*] of such Bamboo.com Images objects to the linking.
Notwithstanding anything to the contrary in this Agreement, bamboo.com will not
[*] Company with respect to any [*]
2.4 Company Database. The parties understand and agree that,
----------------
notwithstanding anything to the contrary herein, all obligations of the parties
with respect to linking the Bamboo.com Images to the Company Database or
enabling viewing of the Bamboo.com Images through the Company Database will be
undertaken only to the extent that necessary programming is performed by the
third parties operating the Company Database. Company will seek to have such
third parties, currently [*] perform such programming on behalf of Company.
2.5 [*] During the Term, in the event that bamboo.com [*] to provide the
---
Production Services to [*] this Agreement [*]. Notwithstanding the preceding
sentence, during the Term nothing herein shall prevent [*] of bamboo.com from
offering and/or selling the Production Services [*] and nothing herein shall
prevent bamboo.com from offering and/or selling the Production Services to [*]
provided, however, that bamboo.com will not offer the [*]
3. MARKETING AND PROMOTION
-----------------------
3.1 Company Obligations. Company agrees to market, promote and facilitate
-------------------
sales of the Production Services as follows
(a) Company Site and Company Database. Company agrees to prominently
---------------------------------
market and promote the Production Services on the Company Site and the Company
Database. Such marketing and promotion will include, without limitation:
(i) on the "home" or introductory page of the Company
Site and the Company Database, or the page that is first accessed when a Company
Member accesses the Company Site or a Company Member logs onto the Company
Database, prominent display of the bamboo.com logo, located above the fold
(i.e., visible to an end user without scrolling or navigation on a 640 by 480
pixel page), that, when clicked on, links directly to an HTML page located at a
URL supplied by bamboo.com that will permit Company Members to order Production
Services; and
(ii) on the listing input screen of the Company Database,
inclusion of a prominent bamboo.com logo and checkbox permitting Company Members
to order Production Services; and
(iii) on each page of the Company Site and the Company
Database displaying Bamboo.com Images, inclusion of a prominent bamboo.com logo
that when clicked on, links directly to an HTML page located at a URL supplied
by bamboo.com that will permit Company Members to order Production Services; and
(iv) with each listing displayed on the Company Site and
the Company Database for which a Bamboo.com Image is available, inclusion of a
prominent bamboo.com button that, when clicked on, links directly to the
corresponding Bamboo.com Image on the Company Site and the Company Database.
Without the prior approval of bamboo.com, Company will not display any
advertisements of any competitor of bamboo.com (i) on any ordering page for the
Production Services or any page that contains a Bamboo.com Image and is located
on the Company Site and/or the Company Database or (ii) on the "home" or
introductory page of the Company Site and the Company Database, or the page that
is first accessed when a Company Member accesses the Company Site or a Company
Member logs onto the Company Database.
(b) Print Advertising. Company will include in Company's quarterly
-----------------
newsletters sent to Company Members a bamboo.com logo and a brief, suitable
reference to the availability of the Production Services.
(c) Seminars. To the extent Company deems appropriate, Company will
--------
invite bamboo.com to speak and promote its Production Services at quarterly
seminars and training sessions Company conducts for Company Members during the
Term. To the extent Company deems appropriate, Company or its sales
representatives will make available to Company Members at such seminars and
training sessions subscription forms and marketing materials created by
bamboo.com that promote the Production Services.
(d) Joint Press Release. Company will participate with bamboo.com in
-------------------
issuing (i) a joint press release on or around the Effective Date regarding the
relationship established through this Agreement and (ii) a joint press release
on or around the date the service is launched. Each party shall agree on the
form and content of such press release and will furnish its written acceptance
of, or comments on, the proposed announcement within 48 hours of receiving a
draft of the press release from the other party for approval; otherwise such
proposed announcement will be deemed approved. Any other press announcement by
either party regarding the subject matter of 'this Agreement will be subject to
the other party's approval, which shall not be withheld or delayed unreasonably;
provided, however, that, in no event will Company make any press release or
other public announcement that refers to any [*] including without limitation
[*]
(e) Cooperation. Company shall cooperate with bamboo.com in the
-----------
performance of bamboo.com's obligations under this Agreement.
(f) Prominence of Marketing. In any marketing or promotional materials
-----------------------
Company generates, including without limitation on the Company Site or the
Company Database, that refer to Virtual Tour Images or any third party producer
of Virtual Tour Images, Company shall include an equally prominent reference,
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
-2-
<PAGE>
in size and placement, to bamboo.com and the Production Services. Any reference
to bamboo.com that Company includes within any marketing or promotional
materials pursuant to this Section 3.1, including without limitation on the
Company Site or the Company Database will be at least as prominent in size and
placement as any reference Company includes in such materials to any third party
producer of Virtual Tour Images. Company agrees to place bamboo.com order entry
links ahead of any order entry links to other third party provider of virtual
tour images.
(g) Disclosure of [*]. Anytime that Company advertises
-----------------
or promotes the prices of the Production Services, or the prices of the goods or
services of any third party producer of Virtual Tour Image in connection with
information about bamboo.com or the Production Services, Company must clearly
indicate that it is [*] (as defined below) with respect to each Basic Package
sold to a Company Member. The parties will work together to develop the precise
mutually acceptable language regarding the [*] that Company will display.
3.2 Additional Obligations. Bamboo.com and Company will, from time to
----------------------
time, use reasonable efforts to cooperate in joint marketing efforts for the
Production Services on such terms and conditions as are mutually agreed. Each
party will assign a project manager to act as the primary liaison with respect
to the relationship provided for hereunder, and all discussions between the
parties with respect to the respective performance of obligations hereunder will
be conducted by these project managers or their designees.
4. FEES
----
4.1 Transaction Fees. During the Term, bamboo.com will pay [*] to
----------------
Company as follows:
(a) With respect to [*] fulfilled by bamboo.com during the Term
through which Bamboo.com Images are linked to a Company Site or the Company
Database, bamboo.com will pay to Company for each [*] collected from sales of
[*] so sold during the quarter. The parties agree that, with respect to each [*]
purchased by a Company Member during the Term, Company will remit to such
Company Member, out of the Transaction Fees it receives for such purchase, [*]
of the Transaction Fees paid to Company with respect to such purchase.
Bamboo.com will administer [*] on behalf of Company, provided that Company will
assist bamboo.com in such administration as reasonably requested.
(b) No Transaction Fees will be due hereunder (i) with respect to
Production Services sold to third parties other than as expressly set forth
above and (ii) with respect to any Production Services bamboo.com distributes on
a promotional basis free of charge or at a discounted price.
4.2 Invoices; Reports; Payment of Fees. Calculation of [*] will
----------------------------------
commence immediately for the calendar quarter in which the Effective Date
occurs. Bamboo.com will make all payments of Transaction Fees net thirty (30)
days from the end of [*]. With each [*] payment, bamboo.com will provide a
report stating the number of Bamboo.com Tours sold in accordance with Section
4.1(a) during the [*] and providing a calculation of the Transaction Fees
payable.
5. PROPRIETARY RIGHTS
------------------
5.1 Bamboo.com Technology.
---------------------
(a) All Bamboo.com Technology, whether or not produced for
Company Members and whether or not linked to the Company Site or the Company
Database, are, and at all times will remain, the exclusive property of
bamboo.com, and no provision of this Agreement implies any transfer to Company
or Company Members of any ownership interest in any Bamboo.com Technology.
(b) Bamboo.com hereby grants to Company a nonexclusive,
worldwide, royalty-free, nontransferable license to include on the Company Site
and the Company Database links in Bamboo.com Images on bamboo.com's servers
solely for the purposes contemplated in this Agreement. The foregoing license
does not include any right to grant or authorize sublicenses.
5.2 Trademarks.
----------
(a) Bamboo.com owns and at all times will continue to own the
trademarks, service marks and/or trade names BAMBOO.COM and the bamboo.com
logo,, as well as any name or mark bamboo.com may subsequently adopt as a trade
name or to designate the Production Services (collectively, the "Bamboo.com
Marks"), and Company will not take any actions inconsistent with bamboo.com's
ownership rights. Company owns and at all times will continue to own the
trademarks, service marks and/or trade names customarily used by Company during
the Term (the "Company Marks"), and bamboo.com will not take any actions
inconsistent with Company' ownership rights. Each party's use of the other
party's marks will not create in the using party any right, title or interest
therein or thereto, and all such use will inure to the exclusive benefit of
other party.
(b) Subject to the restrictions set forth herein, bamboo.com
hereby grants Company a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Bamboo.com Marks, during the Term, with
bamboo.com's prior written approval, which bamboo.com will not unreasonably
withhold or delay, solely in connection with (i) the filing by Company of a
registration statement as part of a public offering of Company's securities and
(ii) promotion and marketing of the Production Services as provided in Section
3. Subject to the restrictions set forth herein, Company hereby grants
bamboo.com a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Company Marks, during the Term, solely in
connection with (i) promotion and marketing of the Production Services and (ii)
the filing by bamboo.com of a registration statement as part of a public
offering of bamboo.com's securities. At the reasonable request of either party,
the other party will provide assistance with the protection and maintenance of
the marks of the requesting party. Each party may only use the marks of the
other party as expressly permitted herein and agrees to use the marks of the
other party in a manner commensurate with the style, appearance and quality of
the other party's services and/or products bearing such marks.
5.3 Limitation on Grant of Rights. Except as expressly provided herein,
-----------------------------
neither party receives any other right or license to the technology or
intellectual property of the other party.
6. TERM AND TERMINATION
--------------------
6.1 Term. Unless earlier terminated as set forth below, this Agreement
----
will become effective upon the Effective Date and terminate on October 31, 2000
(the "Initial Term"). Thereafter, this Agreement will be automatically renewed
for successive one (1) year periods (each such period a "Renewal Term") unless
either party notifies the other in writing not less than ninety (90) days prior
to the end of the then-current term of its intention to terminate this Agreement
as of the end of such term. Upon termination, (i) Company and bamboo.com will
cease all use of marks of the other party and (ii) Company will cease all use of
the Bamboo.com Technology and will purge all such Bamboo.com Technology from its
servers, systems and products.
6.2 Termination for Breach. This Agreement will terminate in the
----------------------
event aparty breaches any material term, condition or representation of this
Agreement or materially fails to perform any of its material obligations or
undertakings hereunder, and fails to remedy such default within sixty (60) days
after being notified by the non-breaching party of such breach or failure;
provided, however, that the non-breaching party will not unreasonably withhold
or delay its consent to extend the cure period if the breaching party has
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-3-
<PAGE>
commenced cure during the sixty-day notice period and pursues cure of the breach
in good faith.
6.3 Survival of Certain Terms. The provisions of Sections 5.1(a), 5 2(a),
-------------------------
5 3, 6.1, 6.3, 7, 8, 9 and 10 will survive the expiration or termination of this
Agreement for any reason. All other rights and obligations of the parties will
cease upon expiration or termination of this Agreement.
7. CONFIDENTIALITY
---------------
Except as expressly provided in this Agreement, neither party will use or
disclose the Confidential Information of the other party without prior written
permission of such other party. Each party agrees to treat the other party's
Confidential Information with the same degree of care as it maintains its own
information of a similar nature. Each party will use at least the same
procedures and degree of care which it uses to protect the confidentiality of
its own Confidential Information of like importance, and in no event less than
reasonable care.
8. REPRESENTATIONS AND WARRANTIES
------------------------------
Each party represents and warrants to the other that (i) it is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation; (ii) it has full right, power and
authority to enter into this Agreement and to perform all of its obligation
hereunder; (iii) this Agreement constitutes its valid and binding obligation,
enforceable against it in accordance with its terms; and (iv)its execution,
delivery and performance of this Agreement will not result in a breach of any
material agreement or understanding to which it is a party or by which it or any
of its material properties may be bound. EXCEPT AS PROVIDED IN SECTION 10.3, THE
WARRANTIES PROVIDED BY THE PARTIES HEREIN ARE THE ONLY WARRANTIES PROVIDED
HEREIN AND ARE IN LIEU OF ALL OTHER WARRANTIES BY THE PARTIES, EXPRESS OR
IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT.
9. LIMITATION OF LIABILITY
-----------------------
EXCEPT WITH RESPECT TO A BREACH BY EITHER PARTY OF ITS OBLIGATIONS
DESCRIBED IN SECTION 7, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR
LOST PROFITS OR ANY FORM OF INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES OF ANY CHARACTER FROM ANY CAUSES OF ACTION OF ANY KIND WITH RESPECT TO
THIS AGREEMENT WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE),
OR OTHERWISE, AND WHETHER OR NOT THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE.
10. GENERAL PROVISIONS
------------------
10.1 Notices. Any notice required or permitted by this Agreement
-------
will bedeemed given if sent by registered mail, postage prepaid, addressed to
the other party at the address set forth at the top of this Agreement. Delivery
will be deemed effective three (3) days after deposit with postal authorities.
10.2 Miscellaneous. Nonperformance of either party will be excused
-------------
to the extent that performance is rendered impossible by storm, lockout or other
labor trouble, riot, war, rebellion, strike, fire, flood, accident or other act
of God, governmental acts, orders or restrictions, or any other reason where
failure to perform is beyond the control and not caused by the gross negligence
or willful misconduct of the non-performing party. The relationship of
bamboo.com and Company established by this Agreement is that of independent
contractors. This Agreement will be governed by and construed under the laws of
the State of California without reference to conflict of laws principles. This
Agreement, together with all exhibit and attachments hereto, sets forth the
entire agreement and understanding of the parties relating to the subject matter
herein and merges all prior discussions between them. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
will be effective unless in writing signed by the party to be charged, and the
waiver of any breach or default will not constitute a waiver of any other right
hereunder or any subsequent breach or default Neither party may assign this
Agreement, or assign or delegate any right or obligation hereunder, without the
prior written consent of the other party; provided, however, that either party
may assign this Agreement or assign or delegate its rights and obligations under
this Agreement to a successor to all or substantially all of its business or
assets relating to this Agreement whether by sale, merger, operation of law or
otherwise. This Agreement may be executed by exchange of signature pages by
facsimile and/or in any number of counterparts, each of which shall be an
original as against any party whose signature appears thereon and all of which
together shall constitute one and the same instrument.
10.3 Representations and Warranties.
------------------------------
(a) Bamboo.com represents and warrants to Company that, to the
best of bamboo.com's knowledge:
(i) the "Bamboo.com Technology" or "Bamboo.com
Images" do not and will not contain any content, materials, advertising or
services that infringe on or violate any applicable law or regulation or any
proprietary right of any third party;
(ii) it has all necessary rights to grant the rights
to Company as set forth in this Agreement;
(iii) the grant by bamboo.com of such rights to
Company does not and will not infringe on, or violate any, proprietary right of
any third party;
(iv) it has the power and authority to enter into
and perform its obligations under this Agreement; and
(v) to the best of its knowledge, it currently has
no restrictions that would impair its ability to perform its obligations under
this Agreement.
(b) Company represents and warrants to bamboo.com that, to the best
of Company's knowledge:
(i) the Company Site, Company Database, Company
Marks and any advertising materials produced by Company pursuant to Section 3.1
do not and will not contain any content, materials, advertising or services that
infringe on or violate any applicable law or regulation or any proprietary right
of any third party;
(ii) the grant by Company of any rights to
bamboo.com hereunder does not and will not infringe on, or violate any,
proprietary right of any third party;
(iii) it has the power and authority to enter into
and perform its obligations under this Agreement; and
(iv) to the best of its knowledge, it currently has
no restrictions that would impair its ability to perform its obligations under
this Agreement.
10.4 Indemnification.
---------------
(a) Bamboo.com Indemnification. Bamboo.com shall indemnify
--------------------------
and hold Company, its officers, directors, agents and employees, harmless from
any and all losses, costs, settlements, fees, including reasonable attorneys'
fees at all levels (payable as incurred), or liability arising out of any claim
by a third party seeking remedies at law or equity as a result of conduct by
bamboo.com that constitutes a breach of any warranty, representation or covenant
given by bamboo.com in this Agreement, including, but not limited to, any claim
for infringement of a third
-4-
<PAGE>
party's intellectual property rights, except for infringement claims based upon
works or data created or supplied by Company.
(b) Company Indemnification. Company shall indemnify and hold
-----------------------
bamboo.com, its officers, directors, agents and employees harmless from any and
all losses, costs, settlements, fees, including reasonable attorneys' fees at
all levels (payable as incurred), or liability arising out of any claim by a
third party seeking remedies at law or equity as a result of conduct by Company
that constitutes a breach of any warranty, representation or covenant given by
Company in this Agreement, including, but not limited to, any claim for
infringement of a third party's intellectual property rights, except for
infringement claims based upon any works or data created or supplied by
bamboo.com.
(c) Procedures In The Event Of An Indemnification Claim. !n the event
---------------------------------------------------
of any claim for indemnification, the indemnified party shall give prompt
written notice of such claim to the indemnifying party and selection of defense
counsel. The indemnifying party shall be entitled to defend and settle such
claim, at its expense and using counsel mutually selected by the indemnified and
indemnifying party, provided that any settlement does not subtract from any
rights granted to the indemnified party under this Agreement. The indemnified
party shall cooperate with the indemnifying party in the defense of any claim
subject to this Section.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
BAMBOO.COM, INC. MULTIPLE LISTING SERVICE OF NORTHERN
ILLINOIS
By: /s/ Howard Field By: /s/ [SIGNATURE ILLEGIBLE]
-------------------------------- --------------------------------
Title: Vice President Title: CEO
----------------------------- ----------------------------
Date: 5/26/99 Date: 5/26/99
----------------------------- ----------------------------
-5-
<PAGE>
EXHIBIT 10.36
EXECUTION DRAFT
DISTRIBUTION & CO-MARKETING AGREEMENT
-------------------------------------
THIS DISTRIBUTION & CO-MARKETING AGREEMENT (the "Agreement") is entered
into as of June 10, 1999 (the "Effective Date"), between bamboo.com, Inc., a
Delaware corporation with an office located at 124 University Avenue, Palo
Alto, CA 94301 ("bamboo.com"), and Keller Williams Fox & Associates, an Illinois
corporation with an office located at 4601 N. Western Ave., Chicago, IL 60625
("Company").
Bamboo.com and Company, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, agree as follows (definitions appear
in Additional Terms and Conditions):
1. [*] Company will [*]. In return, bamboo.com will provide [*]. Company will
use [*] by [*] Bamboo.com will provide an invoice to Company by May 28,
1999. Company will remit payment to bamboo.com of [*].
2. Bamboo.com Service. Bamboo.com will be responsible for receiving orders and
------------------
invoicing and collecting revenues for sales of Production Services.
Bamboo.com will capture images at designated sites through its Service
Provider Network and process captured images to create Bamboo.com Images.
Company will permit linking of the Company Sites to Bamboo.com Images, and
the parties will used best efforts to work together to implement this
system within fourteen (14) days of the Effective Date, and maintain the
system throughout the term of this Agreement. Additionally, Company will
use commercially reasonable efforts to link each such Bamboo.com Image to
the appropriate listings on the Company Sites by the end of the business
day following the day bamboo.com makes such Bamboo.com Image available on
the bamboo.com server.
3. Exclusivity. Bamboo.com will be the exclusive provider of Virtual Tours
-----------
Images for the Company Site. Company will not directly or indirectly
promote itself, or act, as a provider of Virtual Tour Images, nor will it
promote, display ads for or use the services of any third party acting in
such capacity. In addition, Company will not permit any Virtual Tour Images
of any third party to be posted to, linked to or otherwise made accessible
through the Company Site.
4. Marketing and Promotion.
-----------------------
Bamboo.com agrees to:
. Include Company, including use of its logo, as a partner on
bamboo.com's website and in marketing material, as bamboo.com deems
appropriate.
. Provide fifty (50) listing presentation kits;
. Educate each Company office on the benefits of using the Internet in
real estate and methods of integrating Bamboo.com Tours into the Sales
Agents' marketing strategy:
. Provide custom order forms for Sales Agents;
. Discuss other joint marketing opportunities, including collaboration
on email and direct marketing material from time to time.
Company agrees to:
. Hold on in-office presentation by a bamboo.com representative with
each Company office within the first thirty (30) days of the Effective
Date. Company will send out a communication from a Company executive,
including a statement, encouraging them to use bamboo.com's Production
Services, to each Sales Agent within the first fourteen (14) days
following the Effective Date.;
. Include an electronic order form and a description of the bamboo.com
Production Services on the Company Sites that allows Sales Agents to
submit orders to bamboo.com. Maintain a gallery of Bamboo.com Images
on the Company Site;
. Include description, demonstration of the bamboo.com Production
Services and marketing materials in Company sponsored training and
seminars for Sales Agents;
. When appropriate, include a Bamboo.com Mark and a brief suitable
reference to the availability of the Production Services in the
Company's print advertising in magazines, flyers, newspapers and
general mailings distribution to clients and potential clients.
5. Term. This Agreement will commence on the Effective Date and continue for
----
twelve (12) months, and will be automatically renewed for successive twelve
(12) month periods unless either party notifies the other in writing not
less than ninety (90) days prior to the end of the then-current term of its
intention to terminate this Agreement as of the end of such term. Upon
termination or expiration, each party will cease all use of marks and other
intellectual property of the other party.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
BAMBOO.COM, INC. KELLER WILLIAMS FOX & ASSOCIATES
By: /s/ Andrew P. Loszlo By: /s/ [SIGNATURE ILLEGIBLE]
---------------------------------- ---------------------------------
Name/Title: SUP Bus. Dev. Name/Title: [SIGNATURE ILLEGIBLE]
-------------------------- -------------------------
Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>
ADDITIONAL TERMS AND CONDITIONS
1. Definitions
-----------
"Basic Package" means four scenes captured at a designated property and placed
on one website.
"Bamboo.com Image" means an electronic image of a property produced by or on
behalf of bamboo.com.
"Bamboo.com Technology" means all Bamboo.com images and software and hardware,
and including the Bamboo.com for Java Software, used to capture, process and
view Bamboo.com Images.
"Bamboo.com Tour means the combined Production Services supplied by bamboo.com
with respect to a single Property.
"Company sites means the collection of HTML documents residing on servers
operated by or for Company or its affiliates ,including without limitation
Company's Intranet, extranet and public rebate.
"Confidential Information" means any trade secrets, confidential data or other
confidential information, and or written, relating to or used in the business of
the other party (the "Disclosing Party"), that a party may obtain from the
Disclosing Party during the Term (the "Confidential Information").
"Production Services" means the services provided by or on behalf of
bamboo.com in producing Bamboo.com images.
"Sales Agent" means any sales agent, sales representative or broker of the
Company.
"Service Provider Network" means the network of Individuals throughout the
Company's territory of operation with whom bamboo.com has endorse into
agreements to capture Images at designated sites on bamboo.com's behalf.
"Term" means the initial Term of this Agreement and the Renewal Terms, if any,
as set in forth in Section 4 on the first page of this Agreement.
"Virtual Tour Images" means 360 degrees, three-dimensional, virtual reality,
virtual tour, virtual walkthrough or other similar images, or production
services for such images.
2. Confidentiality
---------------
Each party agrees to treat the other party's Confidential Informational with the
same degree of care as it maintains its own information of a similar nature.
Each party will use at least the same procedures and degrees of care which it
uses to protect the confidentiality of its own Confidential Information of like
importance, and in no event less than reasonable care. The terms of this
Agreement will constitute Confidential Information, except to the extent that
bamboo.com discloses such information in good faith to a legitimate potential,
or actual, strategic Investor, Investment Banker, venture capital firm or
consultant, or as required by statute, regulation or other law.
3. Bamboo.com Technology
---------------------
3.1 Bamboo.com Technology will remain, the exclusive property of bamboo.com,
and no provision of this Agreement implies any transfer to Company of any
ownership interest in any Bamboo.com Technology.
3.2 Bamboo.com hereby grants to Company a nonexclusive, worldwide, royalty-
free, nontransferable license to include links to the Bamboo.com Images on
the Company Sites and Hosted Sites solely for the purposes comtemplated in
this Agreement. Company will not distribute, modify, edit, or prepare
derivative works from the Bamboo.com Images without the prior written
permission of bamboo.com. The foregoing license does not include any right
to grant or authorize sublicenses.
4. Trademarks
----------
4.1. Bamboo.com own and at all times will continue to own the trademarks,
service marks and/or trade names BAMBOO.COM and the bamboo.com logo, as
well as any name or mark bamboo.com may subsequently adopt as a trade name
or to designate the Production Services (collectively, the "Bamboo.com
Marks"), and Company will not take any actions inconsistent with
bamboo.com's ownership rights. Company owns and at all times will continue
to own the trademarks, service marks and/or trade names customarily used by
Company during the Term (the "Company Marks"), and bamboo.com will not take
any actions inconsistent with Company's ownership rights. Each party's use
of the other party's marks will not create in the using party any right,
title or interest therein or thereto, and all such use will inure to the
exclusive benefit of other party.
4.2 Subject to the restrictions set forth herein, bamboo.com hereby grants
Company a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Bamboo.com Marks, during the Term, with
bamboo.com's prior written approval, which bamboo.com will not unreasonably
withhold or delay, solely in connection with promotion and marketing of the
Production Services and/or Company financing. Subject to the restrictions
set forth herein, Company hereby grants financing. Subject to the
restrictions set forth herein, bamboo.com a nonexclusive, worldwide,
royalty-free, fully paid up, nontransferable right to use the Company
Marks, during the Term, solely in connection with promotion and marketing
of the Production Services and/or bamboo.com financing. At the reasonable
request of either party, the other party will provide assistance with the
protection and maintenance of the marks of the requesting party. Each party
may only use the marks of the other party as expressly permitted herein and
agrees to use the marks of the other party in a manner commensurate with
the style, appearance and quality of the other party's services and/or
products bearing such marks.
5. Limitation on Grant of Rights.
-----------------------------
Except as expressly provided herein, neither party receives any other right or
license to the technology or intellectual property of the other party.
6. Termination
-----------
6.1 Upon termination or expiration, (i) Company and bamboo.com will cease all
use of marks of the other party and (ii) Company will cease all use of the
Bamboo.com Images and Bamboo.com for Java Software and will purge all
Bamboo.com for Java Software and Bamboo.com Images from its servers.
6.2 This Agreement will terminate in the event a party breaches any material
term, condition or representaion of this Agreement or materially fails to
perform any of its material obligations or undertakings hereunder, and
fails to remedy such default within sixty (60) days after being notified by
the non-breaching party of such breach or failure; provided, however,
that the non-breaching party will not unreasonably withhold or delay its
consent to extend the cure period if the breaching party has commenced cure
during the sixty-day notice period and pursues cure of the breach in good
faith.
6.3 The provisions of Sections 2, 3.1, 4.1, 5, 6.1, 6.3, 7 and 8 of these
Additional Terms and Conditions will survive the expiration or termination
of this Agreement for any reason. All other rights and obligations of the
parties will cease upon expiration or termination of this Agreement.
7. No Warranties: Limitation of Liability
--------------------------------------
BAMBOO.COM MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO
THE ANY GOODS OR SERVICES PROVIDED BY THIS AGREEMENT. EXCEPT WITH RESPECT TO A
BREACH BY EITHER PARTY OF ITS OBLIGATIONS DESCRIBED IN SECTION 3 ON THE FIRST
PAGE OF THIS AGREEMENT OR SECTION 2 OF THESE ADDITIONAL TERMS AND CONDITIONS. IN
NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY FORM
OF INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER FROM
ANY CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS AGREEMENT WHETHER BASED ON
BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR
NOT THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
8. Miscellaneous
-------------
Any notice required or permitted by this Agreement will be deemed given if sent
by registered mail, postage prepaid, addressed to the other party at the address
set forth within this Agreement. Delivery will be deemed effective three (3)
days after deposit with postal authorities. Nonperformance of either party, will
be excused to the extent that performance is rendered impossible by storm,
lockout or other labor trouble, riot, war, rebellion, strike, fire, flood,
accident or other act of God, governmental acts, orders or restrictions, or any
other reason where failure to perform is beyond the control and not caused by
the gross negligence or willful misconduct of the non-performing party. The
relationship of bamboo.com and Company established by this Agreement is that of
independent contractors. This Agreement will be governed by and construed under
the laws of the State of California without reference to conflict of laws
principles. This Agreement, together with all exhibit and attachments hereto,
sets forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, will be effective unless in writing signed by the party to
be charged, and the waiver of any breach or default will not constitute a waiver
of any other right hereunder or any subsequent breach or default. Neither party
may assign this Agreement, or assign or delegate any right or obligation
hereunder, without the prior written consent of the other party,
provided, however, that either party may assign this Agreement or assign or
delegate the rights and obligations under this Agreement to a successor to all
or substantially all of its business or assets relating to this Agreement
whether by sale, merger, operation of law or otherwise. Company will not issue
any press release regarding the subject matter of this Agreement without the
prior written approval of bamboo.com. This Agreement may be executed by exchange
of signature pages by facsimile and/or in any number of counterparts, each of
which shall be an original as against any party whose signature appears thereon
and all of which together shall constitute one and the same instrument.
-2-
<PAGE>
EXHIBIT 10.37
EXECUTION COPY- April 14, 1999
DISTRIBUTION AGREEMENT
----------------------
THIS DISTRIBUTION AGREEMENT (the "Agreement") is entered into as of April
14, 1999 (the "Effective Date"), between Jutvision Corporation, a Delaware
corporation ("Jutvision") with an office located at 124 University Avenue, Palo
Alto, CA 94301, and the Toronto Real Estate Board, a corporation governed under
the laws of the Province of Ontario, with an office located at 1400 Don Mills
Road, Don Mills, Ontario, M3B 3N1 ("TREB").
Jutvision uses the Jutvision Technology and provides the Production Services.
TREB operates the TREB Database. Jutvision desires to be the exclusive provider
of virtual tour technology and production services for the TREB Database. In
consideration of the mutual promises and covenants contained herein, and other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties agree as follows:
1. DEFINITIONS
-----------
1.1 "Basic Package" means up to four scenes captured in a designated
-------------
Property, converted into a corresponding number of Jutvision Images and posted
to the TREB Database.
1.2 "Jutvision Image" means an electronic image of a Property produced by
---------------
or on behalf of Jutvision.
1.3 "Jutvision Technology" means software and hardware used to capture,
--------------------
process and view Jutvision Images.
1.4 "Listing Search Results Screen" means the data that is retrieved from
-----------------------------
a set of search criteria by a TREB Member during a listing search.
1.5 "Net Revenues" means the gross amount received by Jutvision from TREB
------------
Members for sales of the Basic Packages and Upgrade Packages, [*] (i) refunds,
discounts, credits and allowances, (ii) packaging, handling fees, freight, and
sales taxes and other governmental charges, and (iii) reasonable provisions for
doubtful collections determined in accordance with GAAP.
1.6 "Production Services" means the services provided by or on behalf of
-------------------
Jutvision in preparing the Basic Packages and Upgrade Packages.
1.7 "Property" means any piece of residential real estate and commercial
--------
real estate within the Territory. Including without limitation new homes,
offered for sale or resale that reside on the TREB Database.
1.8 "Service Provider Network" means the network of videographers
------------------------
throughout the Territory with whom Jutvision has entered into agreements to
capture images at designated sites on Jutvision's behalf.
1.9 "Term" means the Initial Term of this Agreement and the Renewal
----
Terms, if any, as set forth in Section 6.
1.10 "Territory" means all Toronto Real Estate Board Districts.
---------
1.11 "Transaction Fee" means the [*] Jutvision will pay to TREB
---------------
during the Term based on [*] as provided in Section 4.1.
1.12 "TREB Database" means the collection of data and documents residing
-------------
on servers operated by or for TREB and accessible on or after the Effective Date
by TREB Members via the TREBNet System, to the extent TREB makes such collection
generally available, to TREB Members and the public via the Internet.
1.13 "TREB Member" means a real estate agent or Broker that has the right
-----------
to access the TREB Database.
1.14 "TREBNet System" means TREB's browser that TREB Members use to access
--------------
listings and other information in the TREB Database, as well as to contact, and
submit orders to, third parties for certain products and services, including the
Productions Services as specifically provided in Section 2.2.
1.15 "TREB Originated Order" means any order received by Jutvision for a
---------------------
Basic Package or Upgrade [*]
1.16 "Upgrade Package" means an addition to a Basic Package consisting of
---------------
one additional scene captured at the same designated Property of the Basic
Package, converted into one additional Jutvision Image for the scene captured
and posted to the TREB Database.
2. PROVISION OF PRODUCTION SERVICES; EXCLUSIVITY
---------------------------------------------
2.1 Sales and Billing. Jutvision will be responsible for receiving and
-----------------
fulfilling orders for Basic Packages and Upgrade Packages. Jutvision will assume
all costs and responsibility for invoicing and collecting revenues for all sales
of Basic Packages and Upgrade Packages, provided, however, that Jutvision does
not assume the risk of collection.
2.2 Image Capturing, Processing and Posting. The parties will work
---------------------------------------
together to implement a system whereby Jutvision will be capable of displaying
Jutvision Images on the TREBNet System. The parties will also work together on
file naming formats and scripts that will attach the Jutvision Images to the
appropriate listings on the TREB Database. Jutvision and TREB agree to set [*]
as the target date ("Initial Ordering Date") on which TREB will incorporate an
order button on the TREBNet Listing Input Screen which will facilitate the
request for Production Services by TREB Members. The parties understand and
agree that TREB's failure to begin linking and displaying Jutvision Images on
the TREBNet Listing Search Results Screen by [*] Jutvision will have sole
responsibility for, and will bear all costs associated with, capturing images at
designated sites through its Service Provider Network, processing captured
images to create Jutvision Images and providing Jutvision Images to the TREB
Database for display on the TREBNet System. TREB will permit such postings and
will work with Jutvision to maintain the ability of the TREB Database to receive
such postings throughout the Term. Jutvision will use commercially reasonable
efforts to process and post each Jutvision Image on behalf of all TREB Members
[*] after capture of the images, in each case to the extent Jutvision has the
right to do so, provided that such posting is not delayed by factors
attributable to TREB.
2.3 Exclusivity During the Term. TREB will not directly or indirectly (i)
promote or market itself or any third party, on the TREBNet System or elsewhere,
as a provider of 360 degrees three-dimensional, virtual reality, virtual tour,
virtual walkthrough or other similar images ("Virtual Tour Images"), or
technology or production services for such Virtual Tour Images; (ii) provide the
services of capturing or processing Virtual Tour Images; (iii) use the services
of, or enter into any arrangement under which services will be provided by, any
third party with respect to capturing or processing Virtual Tour Images; (iv)
permit any Virtual Tour Images (other than those supplied by Jutvision) or any
site or identity of a third party providing of Virtual Tour Images, or
technology or services therefor, to be posted to, linked to or otherwise made
accessible through the TREB Database; or (v) take any other action inconsistent
with the parties' understanding
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designed as *****. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
<PAGE>
hereunder that Jutvision will act as the exclusive provider of Virtual Tour
Images, and Production Services therefor.
2.4 Support. Jutvision will establish and maintain a "mailto" link on the
-------
TREBNet System that TREB Members may use to send support-related e-mail messages
to Jutvision. Jutvision will also establish and maintain a toll-free support
telephone line that TREB Members may call with support questions. The hours of
operation for the support telephone line and for monitoring and responding to
support-related e-mail messages will be [*]
3. MARKETING AND PROMOTION
-----------------------
3.1 TREB Obligations. TREB agrees to market, promote and facilitate sales
----------------
of the Production Services as follows:
(a) TREBNet System. TREB agrees to prominently market and promote the
--------------
Production Services on the TREBNet System. Such marketing and promotion will
include, without limitation:
(i) on the "home" or introductory page of the
TREBNet System, or the page that is first accessed when the TREB Member logs
onto the TREBNet System (the "Home Page"), prominent display of the Jutvision
logo, located above the fold (i.e., visible to an end user without scrolling or
navigation on a 640 by 480 pixel page), that, when clicked on, links directly to
an HTML page located at a URL supplied by Jutvision; provided, however, that the
size of such Jutvision logo will be consistent with the size of logos of third
parties displayed on the Home Page and with the look and feel of the Home Page
(ii) on each page of the TREBNet System displaying
Jutvision Images, inclusion of a prominent Jutvision logo that, when clicked on,
links directly to an HTML page located at a URL supplied by Jutvision that will
permit TREB Members to order Production Services; provided, however, that the
size of such Jutvision logo will be consistent with the size of Iogos of third
parties displayed on such display page and with the look and feel of such
display page; and
(iii) with each listing displayed on the TREBNet
System for which a Jutvision Image is available, inclusion of a prominent
Jutvision button that, when clicked on, links directly to the corresponding
Jutvision Image on the TREB Database; provided, however, that the size of such
Jutvision logo will be consistent with the size of Iogos of third parties
displayed on such listing page and with the look and feel of such listing page.
Without the prior approval of Jutvision, TREB will not display any
advertisements of any competitor of Jutvision on any page that contains a
Jutvision Image and is located on the TREB Database or TREBNet System.
(b) All Versions. All versions of the TREBNet System that TREB
------------
distributes or makes available to TREB Members during the Term will contain a
button that, when clicked on, links directly to a Jutvision server and that
permits TREB Members to electronically submit orders for Production Services to
Jutvision via the Interne( or a dosed proprietary system. Such button will be at
least as prominent in size, usage and placement as buttons or links for any
other products or services of third parties appearing in the TREBNet System.
(c) Print Advertising. To the extent TREB creates and distributes
print advertising in magazines, flyers, newsletters, and general mailings, TREB
will include, from time to time, in such advertising a Jutvision logo and a
brief, suitable reference to the availability of the Production Services.
(d) Email and Direct Marketing. TREB agrees to include in email and
--------------------------
direct marketing that it generates from time to time a section, reasonably
satisfactory to Jutvision, highlighting the availability and features of the
Production Services. In addition, TREB will permit Jutvision to post email
messages, written by Jutvision and containing marketing information regarding
the Production Services, through servers controlled by TREB to the extent that
TREB distributes an email newsletter.
(e) Seminars. TREB will invite Jutvision to speak and promote its
--------
Production Services at appropriate seminars and training sessions TREB conducts
for TREB Members during the Term. TREB will have the opportunity to review
seminar content prior to the seminar date. TREB or its sales representatives
will distribute to TREB Members at seminars and training sessions subscription
forms and marketing materials created by Jutvision that promote the Production
Services..
(f) TREB shall cooperate with Jutvision in the performance of
Jutvision's obligations under this Agreement.
3.2 Additional Obligations. Jutvision and TREB will, from time to time,
----------------------
use reasonable efforts to cooperate in joint marketing efforts for the
Production Services on such terms and conditions as are mutually agreed. Each
party will assign a project manager to act as the primary liaison with respect
to the relationship provided for hereunder, and all discussions between the
parties with respect to the respective performance of obligations hereunder will
be conducted by these project managers or their designees.
4. FEES
----
4.1 Transaction Fees. During the Term, Jutvision will pay [*] to TREB as
----------------
follows:
(a) With respect to [*] by TREB Members ("TREB Originated Orders"),
Jutvision will pay to TREB for [*] collected from sales of Basic Packages and
Upgrade Packages so sold during the quarter.
(b) If the display of Jutvision Images, with their corresponding
listing, is not available on the TREBNet System by [*] then, notwithstanding
Section 4.1(a), Jutvision will pay TREB [*] collected from sales of Basic
Packages and Upgrade Packages from that date until Jutvision Images are viewable
on the TREBNet System.
(c) No Transaction Fees will be due hereunder (i) with respect to
Production Services or Jutvision Images sold to third parties other than as
expressly set forth above and (ii) with respect to Production Services sold by
third parties and posted to the TREB Database, or (iii) with respect to any
Production Services Jutvision distributes free of charge on a promotional basis.
4.2 Payment of Fees. Calculation of [*] will commence immediately for the
---------------
[*] in which the Initial Ordering Date occurs. Jutvision will make all payments
of Transaction Fees net thirty (30) days from the end of [*]
4.3 Inspection of Records. TREB will have the right, at its own expense
---------------------
and not more than once in any twelve (12) month period, to authorize an
independent auditor reasonably acceptable to both parties to inspect those
accounting records of Jutvision necessary to verify the accuracy of fees paid or
invoiced by Jutvision under the terms of this Agreement, provided that such
independent auditor has executed a confidentiality agreement with respect to
such records that is reasonably acceptable to Jutvision. Such inspections will
take place during Jutvision's normal business hours, upon not less than twenty
(20) days' prior written notice to Jutvision and on a date mutually agreed upon
by the parties.
5. PROPRIETARY RIGHTS
------------------
5.1 Software.
--------
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-2-
<PAGE>
(a) Jutvision hereby grants to TREB a nonexclusive, worldwide,
royalty-free license to use the Jutvision for Jave software (the "Software")
during the Term, in object code only, to display Jutvision Images on pages
retrieved from the TREBnet System. "Use" means storing, loading, installing,
executing or displaying the Software. TREB may not modify the Software or
disable any licensing or control features of the Software.
(b) The Software is owned and copyrighted by Jutvision. The
license set forth in this Section 5.1 confers no title to, nor ownership in, the
Software and is not a sale of any rights in the Software.
(c) TREB may only make copies or adaptations of the Software for
archival purposes or when copying or adaptation is an essential step in the
authorized use of the Software. TREB must reproduce all copyright notices in the
original Software on all copies or adaptations. TREB may only transfer class
files when they are called on by a "requesting" server in the normal course of
Java Applet execution. TREB may not distribute the Jutvision for Java Class
files. Any transfer or copying of the Software by TREB other than as expressly
provided herein constitutes a material breach of this Agreement.
(d) TREB may only use the Software to read .jut files, a file
format proprietary to Jutvision.
(e) TREB may not tamper with or alter in any way the image
displayed when loading each Jutvision Image ("Jutvision Splash Screen") and TREB
shall not hinder the Jutvision Splash Screen from being fully visible upon
loading of each Jutvision Image. TREB will not obstruct in any way the Jutvision
Splash Screen and/or screen logo with any other images, frames, tables or any
other HTML or JavaScript code.
(f) TREB will not disassemble or decompile the Software
including single Jutvision Java Class files under any circumstances. The
disassembly or decryption by TREB of any Jutvision Java Class file constitutes a
material breach of this Agreement.
(g) TREB will not export, or re-export the Software or any copy
or adaptation in violation of any applicable laws or regulations.
(h) The Software and any accompanying documentation have been
developed entirely at private expense. In so far as the United States government
or any agency thereof may acquire any rights under this Agreement, the Software
and any accompanying documentation are delivered and licensed as "commercial
computer software" as defined in DFARS 252.227-7013 (Oct 1988), DFARS 252.211-
7015 (May 1991) or DFARS 252.227-7014 (Jun 1995), as a "commercial item" as
defined in FAR 2.101 (a), or as "Restricted computer software" as defined in FAR
52.227-19 (Jun 1987)(or any equivalent or superseding agency regulation or
contract clause), whichever is applicable. The United States government or
agency thereof shall have only those rights provided for such Software and any
accompanying documentation by the applicable FAR or DFARS clause consistent with
this Agreement between TREB and Jutvision.
5.2 Jutvision Images.
----------------
(a) All Jutvision Images, whether or not produced for TREB
Customers and whether or not posted to the TREB Database, are, and at all times
will remain, the exclusive property of Jutvision, and no provision of this
Agreement implies any transfer to TREB of any ownership interest in any
Jutvision Image; provided, however, that, with respect to any Jutvision
Image produced for a TREB Member and posted to the TREB Database [*]
(b) Jutvision hereby grants to TREB a nonexclusive, worldwide,
royalty-free, nontransferable license to display, perform and reproduce
Jutvision Images the TREB Database solely for the purposes contemplated in this
Agreement. TREB will not distribute, modify, edit, or prepare derivative works
from the Jutvision Images without the prior written permission of Jutvision. The
foregoing license does not include any right to grant or authorize sublicenses.
5.3 Trademarks.
----------
(a) Jutvision Marks.
----------------
(i) Jutvision owns and at all times will
continue to own the trademarks, service marks and/or trade names JUTVISION and
the Jutvision logo, BAMBOO.COM and the bamboo.com logo, as well as any name or
designate the Production Services (collectively, the "Jutvision Marks"). TREB
will not take any actions inconsistent with Jutvision's ownership rights.
(ii) Subject to the restrictions set forth
herein, Jutvision hereby grants TREB a nonexclusive, worldwide, royalty-free,
fully paid up, nontransferable right to use the Jutvision Marks, during the
Term, subject to the prior approval of Jutvision solely in connection with
promotion and marketing of the Production Services as provided in Section 3.
TREB's use of the Jutvision Marks will not create in TREB any right, title or
interest therein or thereto. All use by TREB of the Jutvision Marks will inure
to the exclusive benefit of Jutvision. At Jutvision's reasonable request, TREB
will assist Jutvision with the protection and maintenance of the Jutvision
Marks. TREB may only use the Jutvision Marks as expressly permitted herein. TREB
agrees to use the Jutvision Marks in a manner commensurate with the style,
appearance and quality of Jutvision's services and/or products bearing such
marks.
(b) TREB Marks.
----------
(i) TREB owns and at all times will continue to
own the trademarks, service marks and/or trade names customarily used by TREB
during the Term (the "TREB Marks"). Jutvision will not take any actions
inconsistent with TREB's ownership rights.
(ii) Subject to the restrictions set forth
herein, TREB hereby grants Jutvision a nonexclusive, worldwide, royalty-free,
fully paid up, nontransferable right to use the TREB Marks, during the Term,
solely in connection with promotion and marketing of the Production Services.
Jutvision's use of the TREB Marks will not create in Jutvision any right, title
or interest therein or thereto. All use by Jutvision of the TREB Marks will
inure to the exclusive benefit of TREB. At TREB's reasonable request Jutvision
will assist TREB with the protection and maintenance of the TREB Marks.
Jutvision may only use the TREB Marks as expressly permitted herein. Jutvision
agrees to use the TREB Marks in a manner commensurate with the style, appearance
and quality of TREB's services and/or products bearing such marks.
5.4 Limitation on Grant of Rights. Except as expressly provided herein,
-----------------------------
neither party receives any other right or license to the technology or
intellectual property of the other party.
6. TERM AND TERMINATION
--------------------
6.1 Term. Unless earlier terminated as set forth below, this Agreement
----
will become effective upon the Effective Date and continue for a period of two
(2) years (the "Initial Term"). Thereafter. this Agreement will be automatically
renewed for successive one (1) year periods (each such period a "Renewal Term")
unless either party notifies the other in writing not less than ninety (90) days
prior to the end of the then-current term of its intention to terminate this
Agreement as of the end of such term.
6.2 Termination for Breach. This Agreement will terminate in the event a
----------------------
party materially breaches any material term, condition or representation of this
Agreement or materially fails to perform any of its material obligations or
undertakings hereunder, and fails to remedy such default within sixty (60) days
after being notified by the non-breaching party of such breach or failure;
provided, however, that the non-breaching party will not unreasonably withhold
or delay its consent to extend the cure period if the breaching party has
commenced cure during the sixty-day notice period and pursues cure of the breach
in good faith.
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *****. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-3-
<PAGE>
6.3 Effects of Termination. Upon, expiration or termination of this
----------------------
Agreement:
(a) Jutvision will cease all use of the TREB
Marks;
(b) Commensurate with the quality of services provided prior to such
expiration or termination, Jutvision will continue to provide Production
Services and support to third parties who purchased such Production Services
prior to such expiration or termination;
(c) TREB will cease all use of the Jutvision Marks, the Jutvision
Technology and the Jutvision Images and shall purge all Jutvision Technology and
Jutvision Images from its servers; provided, however, that, following any
expiration or termination, the licenses granted above under Sections 5.1 and 5.2
shall [*] with respect to Jutvision for Java and Jutvision Images provided to
TREB hereunder prior to expiration or termination, to the extent that such
Jutvision Images accompany listings on the TREB Database and such Jutvision for
Java is necessary to display such Jutvision Images.
(d) Each party will promptly destroy or return any Confidential
Information of the other party in its possession.
6.4 Survival of Certain Terms. The provisions of Sections 5.1(b), 5.1(e)-
-------------------------
(h), 5.2(a), 5.3(a)(i), 5.3(b)(i), 5.4, 6.3, 6.4, 7, 8, 9, 10 and 11 will
survive the expiration or termination of this Agreement for any reason. All
other rights and obligations of the parties will cease upon expiration or
termination of this Agreement.
7. CONFIDENTIALITY
---------------
7.1 Definition. "Confidential Information" means any trade secrets,
----------
confidential data or other confidential information relating to or used in the
business of the other party (the "Disclosing Party"), that a party (the
'Receiving Party') may obtain from the Disclosing Party during the Term (the
"confidential Information"), except as herein provided, and that is marked
"Confidential," "Proprietary" or in a similar manner to indicate its
confidential nature. Confidential Information may also include oral information
disclosed pursuant to this Agreement, provided that such information is
designated as confidential at the time of disclosure and confirmed in writing as
confidential within thirty (30) days after its oral disclosure, which is marked
in a manner to indicate its confidential nature and delivered to the Receiving
Party. The terms of this Agreement and the existence of this Agreement will
constitute Confidential Information, except to the extent that Jutvision
discloses such information in good faith to a legitimate potential, or actual,
strategic investor, investment banker, venture capital firm or consultant.
7.2 General. Subject to Section 11.2, each party agrees to treat the other
-------
party's Confidential Information with the same degree of care as it maintains
its own information of a similar nature. Without limiting the foregoing, subject
to Section 11.2, each party will use at least the same procedures and degree of
care which it uses to protect the confidentiality of its own confidential
information of like importance, and in no event less than reasonable care.
7.3 Exceptions. The foregoing restrictions will not apply to information
----------
that (i)is known to the Receiving Party at the time of disclosure by the
disclosing party; (ii)is or becomes publicly known through no wrongful act of
the Receiving Party; (iii) is rightfully received from a third party without
restriction; (iv)is independently developed by the Receiving Party;, (v)has been
approved for release by written authorization of the Disclosing Party; (vi) is
not marked or similarly designated as confidential, and is provided for a
purpose or in a manner that reasonably contemplate, or would naturally be
understood to contemplate, disclosure or use by others; and (vii) is disclosed
pursuant to a valid order of any governmental authority provided that the party
intending to make disclosure in such circumstances has given the other party
prompt notice prior to making such disclosure so that such party may seek a
protective order or other appropriate remedy prior to such disclosure.
8. REPRESENTATIONS AND WARRANTIES
------------------------------
8.1 Each party represents and warrants to the other that:
(a) it is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation set forth above and
is duly qualified and authorized to do business as a foreign corporation in good
standing in all jurisdictions in which the nature of its assets or business
requires such qualification;
(b) it has full right, power and authority to enter into this
Agreement and to perform all of its obligation hereunder;
(c) its execution, delivery and performance of this Agreement have
been duly and properly authorized by all necessary actions and this Agreement
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms; and
(d) its execution, delivery and performance of this Agreement will
not, with or without the giving of notice or passage of time, or both, conflict
with, or result in a default or loss of rights under, any provision of its
certificate of incorporation or by-laws or any other material agreement or
understanding to which it is a party or by which it or any of its material
properties may be bound.
8.2 Disclaimer. THE WARRANTIES PROVIDED BY THE PARTIES HEREIN ARE THE ONLY
----------
WARRANTIES PROVIDED BY THE PARTIES WITH RESPECT TO THE SUBJECT MATTER OF THIS
AGREEMENT. SUCH WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES BY THE PARTIES,
EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT.
9. INDEMNIFICATION
---------------
9.1 Each party (the "Indemnifying Party") will indemnify, defend and hold
harmless the other party and its officers, directors, agents, employees,
successors and permitted assigns (hereinafter collectively the "Indemnified
Party") from and against any and all losses, claims, suits, proceedings,
liabilities, expenses (including reasonable attorneys' fees and expenses),
causes of action, damages and costs (collectively "Claims") arising out of or in
connection with the breach, potential breach or inaccuracy of, or failure to
comply with, any of the representations and warranties contained in Section 8 on
the part of the indemnifying Party.
9.2 Any Indemnified Party entitled to indemnification under this Section
will give prompt notice to the indemnifying Party of any Claim with respect to
which it seeks indemnification, but the failure to so notify the Indemnifying
Party shall not relieve the Indemnifying Party of any liability except to the
extent that it is actually prejudiced by such delay. The Indemnifying Party
shall assume, at its sole cost and expense, the defense of such Claim with
counsel reasonably satisfactory to the Indemnified Party. The Indemnifying Party
will not be subject to any liability for any settlement made without its
consent. The Indemnifying Party shall not, without consent of the Indemnified
Party, effect any settlement or discharge or consent to the entry of any
judgment, unless such settler or judgment includes as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
general release from all liability in respect of such claim or litigation.
10. LIMITATION OF LIABILITY
-----------------------
EXCEPT WITH RESPECT TO EACH PARTY'S INDEMNIFICATION OBLIGATIONS SET FORTH
IN SECTION 9 OR A BREACH BY EITHER PARTY OF ITS OBLIGATIONS DESCRIBED IN SECTION
2.3 OR 7, IN NO EVENT WILL EITHER PARTY BE LIABLE TO OTHER FOR LOST PROFITS OR
ANY FORM OF INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY
CHARACTER FROM ANY CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS AGREEMENT
WHETHER BASED ON BREACH OF CONTRACT,
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-4-
<PAGE>
TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR NOT THE OTHER PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
11. GENERAL PROVISIONS
------------------
11.1 Independent Contractors. The relationship of Jutvision and TREB
-----------------------
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement will be construed to (i) give either party the power
to direct and control the day-to-day activities of the other, (ii)constitute the
parties as partners, joint venturers, co-owners or otherwise as participants in
a joint undertaking, or (iii)allow either party to create or assume any
obligation on behalf of the other for any purpose whatsoever. All financial and
other obligations associated with a party's business are the sole responsibility
of that party.
11.2 Press Plans. The parties agree to participate in a joint press
-----------
announcement regarding the relationship entered into hereunder that will take
place on a mutually agreed upon date. The parties shall agree to the form and
content of the joint press release. Either party may issue its own press
releases, subject to the other party's prior approval, not to be unreasonably
withheld, of the content within the release. Each party will furnish its written
acceptance of or objection to any proposed announcement within forty-eight (48)
hours; otherwise such proposed announcement will be deemed approved. Any other
press announcement by either party regarding the subject matter of this
Agreement will be subject to the other party's approval, which shall not be
withheld or delayed unreasonably.
11.3 Entire Agreement. This Agreement sets forth the entire
----------------
agreement and understanding of the parties relating to the subject matter herein
and merges all prior discussions between them. No modification of or amendment
to this Agreement, nor any waver of any rights under this Agreement, will be
effective unless in writing signed by the party to be charged.
11.4 Notices. Any notice required or permitted by this Agreement
-------
will be deemed given if sent by registered mail, postage prepaid, addressed to
the other party at the address set forth above or at such other address for
which such party gives notice hereunder. Delivery will be deemed effective three
(3) days after deposit with postal authorities.
11.5 Force Majeure. Nonperformance of either party will be excused
-------------
to the extent that performance is rendered impossible by storm, lockout or other
labor trouble, riot, war, rebellion, strike, fire, flood, accident or other act
of God, governmental acts, orders or restrictions, or any other reason where
failure to perform is beyond the control and not caused by the gross negligence
or willful misconduct of the non-performing party
11.6 Non-Assignability and Binding Effect. Except as expressly
------------------------------------
provided herein, this Agreement may not be assigned or transferred, or may any
right or obligation hereunder be assigned or delegated, to a third party by
either party without the prior written consent of the other party hereto.
Notwithstanding the foregoing, either party may assign this Agreement or assign
or delegate its rights and obligations under this Agreement to a successor to
all or substantially all of its business or assets relating to this Agreement
whether by sale, merger, operation of law or otherwise. Subject to the
foregoing, this Agreement will be binding upon and inure to the benefit of the
parties hereto, their successors and assigns.
11.7 Modification; Waiver. No modification of or amendment to this
--------------------
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing signed by the party to be charged, and the waiver of any
breach or default will not constitute a waiver of any other right hereunder or
any subsequent breach or default.
11.8 Headings. The headings to the sections and subsections of this
--------
Agreement are included merely for convenience of reference and will not affect
the meaning of the language included therein.
11.9 Severability. In the event that it is determined by a court of
------------
competent jurisdiction as part of a final nonappealable ruling, government
action or binding arbitration, that any provision of this Agreement (or part
thereof) is invalid, illegal, or otherwise unenforceable, such provision will be
enforced as nearly as possible in accordance with the stated intention of the
parties, while the remainder of this Agreement will remain in full force and
effect and bind the parties according to its terms. To the extent any provision
(or part thereof) cannot be enforced in accordance with the stated intentions of
the parties, such provision (or part thereof) will be deemed not to be a part of
this Agreement.
11.10 Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed by exchange of signature pages by facsimile and/or in any number of
counterparts, each of which shall be an original as against any party whose
signature appears thereon and all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
JUTVISION CORPORATION TORONTO REAL ESTATE BOARD
By: /s/ Howard Field By: /s/ Don Kottick
---------------------------------- ----------------------------------
Title: Howard Field, Vice President Title: Don Kottick, Vice President,
------------------------------- -------------------------------
Technology and Business
-------------------------------
Developments
-------------------------------
Date: 4/14/99 Date: April 16, 1999
-------------------------------- --------------------------------
-5-
<PAGE>
EXHIBIT 10.38
Execution Draft
DISTRIBUTION & CO-MARKETING AGREEMENT
-------------------------------------
THIS DISTRIBUTION & CO-MARKETING AGREEMENT (the "Agreement") is entered
into as of April 7, 1999 (the "Effective Date"), between Jutvision
Corporation, a Delaware corporation win an office located at 124 University
Avenue #202, Palo Alto, CA 94301 ("Jutvision"), John L. Scott Inc., a
Washington corporation with an office located at 3380 146th Pl. SE, Suite 450,
Bellevue, WA 98007 ("Company").
Jutvision uses the Jutvision Technology and provides the Production
Services. Company operates the Company Site. Jutvision desires to provide
virtual tour technology and Production Services for the Company Site. In
consideration of the mutual promises and covenants contained herein, and other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties agree as follows:
1. DEFINITIONS
-----------
1.1 "Basic Package" means up to four scenes captured in a designated
-------------
Property and converted into a corresponding number of Jutvision Images to which
the Company Site links.
1.2 "Company Site" means the collection of HTML documents residing on
------------
servers operated by or for Company or its affiliate, including without
limitation Company's intranet and extranet, and accessible on or after the
Effective Date by Sales Agents or the public via the Internet at the following
URL: http://www.johnlscott.com.
1.3 "Confidential Information" means any trade secrets, confidential data
------------------------
or other confidential information oral or written relating to or used in the
business of the other party (the "Disclosing Party"), that a party may obtain
from the Disclosing Party during the Term (the "Confidential Information"). The
terms of this Agreement will constitute Confidential Information, except to the
extent that Jutvision discloses such information in good faith to a legitimate
potential, or actual, strategic investor, investment banker, venture capital
firm or consultant.
1.4 "Jutvision Image" means an electronic image of a Property produced by
---------------
or on behalf of Jutvision.
1.5 "Jutvision Technology" means software and hardware, including the
--------------------
Jutvision for Java Software, used to capture, process and view Jutvision Images.
1.6 "Jutvision Tour" means the combined Production Services supplied by
--------------
Jutvision with respect to a single Property.
1.7 "Listing Toolkits" means the co-branded printed marketing toolkits,
----------------
including a CD ROM disk with a virtual tour demonstration, that Jutvision
supplies to Sales Agents.
1.8 "Production Services" means the services provided by or on behalf of
-------------------
Jutvision in producing Jutvision Images.
1.9 "Property" means any piece of residential or commercial real estate
--------
within the Territory, including without limitation new homes, offered for sale
or resale.
1.10 "Sales Agent" means any sales agent, sales representative or broker of
-----------
the Company.
1.11 "Service Provider Network" means the network of individuals throughout
------------------------
the Territory with whom Jutvision has entered into agreements to capture images
at designated sites on Jutvision's behalf.
1.12 "Term" means the Initial Term of this Agreement and the Renewal Terms,
----
if any, as set forth in Section 5.
1.13 "Territory" means the United States and its possessions.
---------
1.14 "Virtual Tour Images" means 360 degrees three dimensional, virtual
-------------------
reality, virtual tour, virtual walkthrough or other similar or production
services for such Images.
2. PROVISION OF PRODUCTION SERVICES; EXCLUSIVITY
---------------------------------------------
2.1 Image Capturing, Processing and Linking. Jutvision will have sole
---------------------------------------
responsibility for, and will bear all costs associated with, capturing Images at
designated sites through its Service Provider Network and processing captured
images to create Jutvision Images. Jutvision will host Jutvision Images on its
servers and will provide to Company a URL link and identifying listing
information for each Jutvision Image purchased by Company for the purpose of
integrating the link into listings on the Company Site. Company will permit
linking of the Company Site to Jutvision Images, and the parties will use best
efforts to work together to expeditiously implement, and maintain throughout the
Term, a system whereby Company will be capable of linking the Company Site to
Jutvision Images. The Jutvision Images shall remain accessible to the Company
Site until [ * ]. The Company may continue to access the Jutvision Images on the
Jutvision Server it the [ * ] of the listing, provided that Jutvision does not
incur any administrative burden as a result of [ * ].
2.2 Performance Standards. Jutvision will use commercially reasonable
---------------------
efforts to have a member of its Service Provider Network available to capture
Jutvision Images [ * ] Jutvision has received an order from a Sales Agent.
Jutvision will use commercially reasonable efforts to process and provide to
Company a link for each Jutvision Image produced on behalf of Sales Agents [ * ]
after capture of such Jutvision Image, provided that such posting is not delayed
by factors attributable to Company or Sales Agent.
2.3 [ * ]. During the term of this Agreement, Jutvision will offer Sales
-----
Agents [ * ], on all orders for Production Services placed pursuant to this
Agreement., [ * ] excluding any special [ * ] for promotional, discount, bulk,
high-volume or other similar sales.
2.4 Exclusivity. Jutvision will be the exclusive provider of Virtual Tours
-----------
Images for the Company Site. Company will not directly or indirectly promote
itself, or act, as a provider of Virtual Tour Images, nor will it promote,
advertise or use the services of any third party acting in such capacity, This
provision does not prohibit Company's agents that use a provider of Virtual Tour
Images other than Jutvision to link to the Company Site. Nor does this provision
limit Company from posting Images submitted by agents who continue to use the
Company's current Virtual Tour product, specifically QuickTime VR. In the event
[ * ] Production Services to Company in the entire geographic territory where
Company provides service (including the same or better technical features and
functionalities) [ * ] for a period of at least 30 days, Company shall provide
Jutvision written notice and, if Jutvision does not match the price within 30
days, Company may enter into [ * ]to the Production Services without being in
breach of this Agreement.
3. MARKETING AND PROMOTION
-----------------------
3.1 Jutvision Obligation. Jutvision will include Company in Jutvision's
--------------------
marketing launch campaign in April 1999. As part of the launch, Jutvision will;
(a) Promote the Company as a partner on the Jutvision Web site;
(b) Include Company in marketing material and press releases, as
Jutvision deems appropriate;
(c) Offer a special promotional at office presentations made by
Jutvision representatives to Sales Agents during the period
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *****. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
<PAGE>
commencing on the Effective Date and continuing for sixty (60) days, including
one free Listing ToolKit and three free web site postings or three free scenes
when a Sales Agent purchases three Basic Packages;
(d) Train Company's agents, as Jutvision deems reasonable,
regarding the benefits of using the Internet in real estate and methods of
integrating virtual tours into the agent's marketing strategy.
3.2 Company Obligations. Company agrees to take the following steps to
-------------------
market, promote and facilitate orders of the Production Services:
(a) Include electronic order forms (created by Jutvision)
permitting Sales Agents to submit orders for Production Services to Jutvision
via the Internet;
(b) Ensure that an HTML button and the corresponding URL
provided by Jutvision will be located on an individual listing page within 24
hours from receiving the URL link from Jutvision;
(c) Maintain a gallery of virtual Tour Images;
(d) As the Company deems appropriate, Company shall; (i) include
a Jutvision Mark and a brief, suitable reference to the availability of the
Production Services in the Company's print advertising in magazines, flyers,
newsletters and general mailings distributed to clients and potential clients;
(ii) collaborate with Jutvision to develop small and direct marketing material
generated from lime to time to highlight the availability and features of the
Production Services; (iii) distribute marketing materials created by Jutvision
at seminars, presentations, training sessions and follow-up meetings sponsored
by Company regarding Internet marketing and/or Listing Tools: and (iv)include
Jutvision at trade shows and conventions Company attends or hosts;
(e) Agree to allow Jutvision to promote the relationship
established under this Agreement, including, but not limited to, inclusion in
Jutvision press releases; and
(f) Facilitate presentations by Jutvision representatives to
Sales agents and office managers, including allowing access to the Company
offices in the Seattle and Portland Metros during the period commencing on the
Effective Date and continuing for sixty (60) days and sponsoring follow-up
meetings as Jutvision and Company deem necessary.
4. PROPRIETARY RIGHTS
------------------
4.1 Jutvision Technology.
--------------------
(a) All Jutvision Technology, including without limitation the
Software and all Jutvision Images, whether or not produced for Sales Agents and
whether or not posted to or linked to the Company Site, are, and at all times
will remain, the exclusive property of Jutvision, and no provision of this
Agreement Implies any transfer to Company of any ownership interest in any
Jutvision Technology. Company will not reproduce, distribute, modify, edit, or
prepare derivative works from the Jutvision Images without the prior written
permission of Jutvision.
(b) Jutvision hereby grants to Company a nonexclusive,
worldwide, royalty-free, nontransferable license to include on the Company Site
links to Jutvision Images on Jutvision's servers solely for the purposes
contemplated in this Agreement.
4.2 Trademarks.
----------
(a) Jutvision owns and at all times will continue to own the
trademarks, service marks and/or trade names JUTVISION and the Jutvision logo,
as well as any name or mark Jutvision may subsequently adopt as a trade name or
to designate the Production Services (collectively, the "Jutvision Marks"), and
Company will not take any actions inconsistent with Jutvision's ownership
rights. Company owns and at all times will continue to own the trademarks,
service marks and/or trade names customarily used by Company during the Term
(the "Company Marks"), and ,Jutvision will not take any actions inconsistent
with the Company' ownership rights. Each party's use of the other party's marks
will not create in the using party any right, title or interest therein or
thereto, and all such use will inure to the exclusive benefit of other party.
(b) Subject to the restrictions set forth herein, Jutvision
hereby grants Company a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Jutvision Marks, during the Term, with
Jutvision's prior written approval, which Jutvision will not unreasonably
withhold or delay, solely in connection with promotion and marketing of the
Production Services as provided in Section 3. Subject to the restrictions set
forth herein, Company hereby grants Jutvision a nonexclusive, worldwide,
royally-free, fully paid up, nontransferable right to use the Company Marks,
during the Term, solely in connection with promotion and marketing of the
Production Services. At the reasonable request of either party, the other party
will provide assistance with the protection and maintenance of the marks of the
requesting party. Each party may only use the marks of the other party as
expressly permitted herein and agrees to use the marks of the other party in a
manner commensurate with the style, appearance and quality of the other party's
services and/or products bearing such marks.
4.3 Limitation on Grant of Rights. Except as expressly provided herein,
-----------------------------
neither party receives any either right or license to the technology or
intellectual property of the other party.
5. TERM AND TERMINATION
--------------------
5.1 Term. Unless earlier terminated as set, forth below, this Agreement
----
will become effective upon the Effective Dale and continue until December 31,
1999 (the "Initial Term"). Thereafter, this Agreement will be automatically
renewed for successive six (6) month periods (each such period a "Renewal Term")
unless either party notifies the other in writing not less than thirty (30) days
prior to the end of the then-current term of its Intention to terminate this
Agreement as of the end of such term. Upon termination or expiration, Company
and Jutvision will cease all use of marks of the other party.
5.2 Termination for Breach. This Agreement will terminate in the event a
----------------------
party breaches any material term, condition or representation of this Agreement
or materially fails to perform any of its material obligations or undertakings
hereunder, and falls to remedy such default within sixty (60) days after being
notified by the non-breaching party of such breach or failure; provided,
however, that the non-breaching party will not unreasonably withhold or delay
its consent to extend the cure period if the breaching party has commenced cure
during the sixty-day notice period and pursues cure of the breach in good faith.
5.3 Survival of Certain Terms. The provisions of Sections 4.1(a), 4.2(a),
-------------------------
4,3, 5.1, 5.3, 6, 7, 8, and 9 will survive the expiration or termination of this
Agreement for any reason. All other rights and obligations of the parties will
cease upon expiration or termination of this Agreement.
6. CONFIDENTIALITY
---------------
Each party agrees to treat the other party's Confidential Information with
the same degree of care as it maintains its own information of a similar nature.
Each party will use all least the same procedures and degree of care which it
uses to protect the confidentiality of its own Confidential Information of like
Importance, and in no event less than reasonable care.
7. REPRESENTATIONS AND WARRANTIES
------------------------------
Each party represents and warrants to the other that (i) it is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation; (ii) it has full right, power and authority to
enter into this Agreement and to perform all of its obligation hereunder; (iii)
this Agreement constitutes its valid and binding obligation, enforceable against
it in accordance with its terms; and (iv) its execution, delivery and
performance of this Agreement will not result in a breach of any material
agreement or understanding to which it is a party or by which it or any of its
material properties may be bound. THE WARRANTIES PROVIDED BY THE PARTIES HEREIN
ARE THE ONLY WARRANTIES PROVIDED HEREIN AND ARE IN LIEU OF ALL OTHER WARRANTIES
BY THE PARTIES, EXPRESS OR, IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SUBJECT
MATTER OF THIS AGREEMENT.
8. LIMITATION OF LIABILITY
-----------------------
EXCEPT WITH RESPECT TO A BREACH BY EITHER PARTY OF ITS OBLIGATIONS
DESCRIBED IN SECTION 2.3 OR 6, IN NO
-2-
<PAGE>
EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY FORM OF
INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER FROM
ANY CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS AGREEMENT WHETHER BASED ON
BREACH OF CONTRACT, TORT INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR NOT
THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
9. GENERAL PROVISIONS
------------------
9.1 Notices, Any notice required or permitted by this Agreement will be
-------
deemed given it sent by registered mail, postage prepaid, addressed to the other
party at the address set forth at the top of this Agreement.. Delivery will be
deemed effective three (3) days after deposit with postal authorities.
9.2 Miscellaneous. Nonperformance of either party will be excused to the
-------------
extent that performance is rendered impossible by storm, lockout or other labor
trouble, riot, war, rebellion, strike, fire, flood, accident or other act of
God, governmental acts, orders or restrictions, or any other reason where
failure to perform is beyond the control and not caused by the gross negligence
or willful misconduct of the non-performing party. The relationship of Jutvision
and Company established by this Agreement i5 that of independent contractors,
This Agreement will be governed by and construed under the laws of the State of
California without reference to conflict of laws principles. This Agreement,
together with all exhibit, and attachments hereto, sets forth the entire
agreement and understanding of the parties relating to the subject matter herein
and merges all prior discussions between them. No modification of or amendment,
to this Agreement, nor any waiver of any rights under this Agreement, will be
effective unless in writing signed by the party to be charged, and the waiver of
any breach or default will not constitute a waiver of any other right hereunder
or any subsequent breach or default. Neither party may assign this Agreement, or
assign or delegate any right or obligation hereunder, without the prior written
consent of the other party; provided, however, that either party may assign this
Agreement or assign or delegate its rights and obligations under this Agreement
to a successor to all or substantially all of its business or assets relating to
this Agreement whether by sale, merger, operation of law or otherwise. This
Agreement may be executed by exchange of signature pages by facsimile and/or in
any number of counterparts, each of which shall be an original as against any
party whose signature appears thereon and all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
JUTVISION CORPORATION JOHN L. SCOTT REAL ESTATE, INC.
By:_________________________________ By: /s/ Laura Reymore
------------------------------------
Name:_______________________________ Name: Laura Reymore
----------------------------------
Title:______________________________ Title: VP Marketing & Training
---------------------------------
Date:_______________________________ Date: April 7, 1999
----------------------------------
-3-
<PAGE>
EXECUTION DRAFT
EXHIBIT 10.39
DISTRIBUTION AGREEMENT
----------------------
THIS DISTRIBUTION AGREEMENT (the "Agreement") is entered into as of March
17, 1999 (the "Effective Date"), between Jutvision Corporation, a Delaware
corporation with an office located at 124 University Avenue #202, Palo Alto, CA
94301 ("Jutvision"), and Windermere Real Estate Services Company, a Washington
corporation with an office located at 5424 Sand Point Way N.E. Seattle, WA 98105
("Company").
Jutvision uses the Jutvision Technology and provides the Production
Services. Company operates the Company Sites. Jutvision desires to provide
virtual tour technology and Production Services for the Company Sites. In
consideration of the mutual promises and covenants contained herein, and other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties agree as follows:
1. DEFINITIONS
------------
1.1 "Company Originated Order" means any order received by Jutvision
------------------------
for Production Services placed by a Sales Agent via [*]
1.2 "Company Site" means the collection of HTML documents residing on
------------
servers operated by or for Company or its affiliate, including without
limitation Company's Intranet and accessible on or after the Effective Date by
Sales Agents.
1.3 "Confidential Information" means any trade secrets, confidential
------------------------
data or other confidential information oral or written relating to or used in
the business of the other party (the "Disclosing Party"), that a party may
obtain from the Disclosing Party during the term of this Agreement (the
"Confidential Information"). The terms of this Agreement will constitute
Confidential Information, except to the extent that such information is
disclosed in good faith to a legitimate potential, or actual, strategic
investor, investment banker, venture capital firm, or consultant.
1.4 "Jutvision Image" means an electronic image of a Property
---------------
produced by or on behalf of Jutvision.
1.5 "Jutvision Technology" means software and hardware, including the
--------------------
Jutvision for Java Software, used to capture, process and view Jutvision Images.
1.6 "Jutvision Tour" means the combined Production Services supplied by
--------------
Jutvision with respect to a single Property.
1.7 "Production Services" means the services provided by or on behalf of
-------------------
Jutvision in producing Jutvision Images.
1.8 means any piece of residential, commercial, new construction or resort
real estate within the Territory, including without limitation new homes,
offered for sale or resale.
1.9 "Sales Agent" means any sales agent, sales representative or broker of
-----------
Company.
1.10 "Service Provider Network means the network of individuals throughout
------------------------
the Territory with whom Jutvision has entered into agreements to capture images
at designated sites on Jutvision's behalf.
1.11 "Territory" means the area within the United States and Canada in
---------
which Company has Sales Agents.
1.12 "Virtual Tour Images" means 360 degrees, three-dimensional, virtual
-------------------
reality, virtual tour, virtual walkthrough or other similar Images, or
production for such images.
2. PROVISION OF PRODUCTION SERVICES; EXCLUSIVITY
---------------------------------------------
2.1 Sales and Billing. Jutvision will be responsible for receiving and
-----------------
fulfilling orders and invoicing and collecting revenues for all sales of
Production Services. Company will be responsible for, and shall work with
Jutvision regarding, providing a mechanism for Sales Agents to order Production
Services at the same time listings are created on the Company Sites.
2.2 Image Capturing, Processing and Posting.
----------------------------------------
(a) Jutvision will have sole responsibility for, and will bear
all costs associated with, capturing images at designated sites through its
Service Provider Network and processing captured images to create Jutvision
Images. Company will permit posting of Jutvision Images to the Company Sites,
and the parties will use best efforts to work together to expeditiously
implement, and maintain throughout the term of this Agreement, a system whereby
Jutvision will be capable of posting Jutvision Images to the Company Sites.
Company will be responsible for maintaining quality Jutvision Images posted to
the Company Sites.
(b) Jutvision will use commercially reasonable efforts to have a
member of its Service Provider Network available to capture Jutvision Images [*]
after Jutvision has received an order from a Sales Agent in the [*]: 30 miles by
road east and west of [*] from the Canadian border to Olympia including Kitsap
Peninsula; [*] within a 30 mile radius; [*] within a 30 mile radius; [*]
within a 30 mile radius; [*] within a 30 mile radius; [*] within a 30 mile
radius; [*] within a 30 mile radius; and [*] within a 30 mile radius ("Core
Service Areas"). Notwithstanding any other provisions of this Agreement, in
the event that within any of the Core Service Areas a Jutvision Service
Provider member [*] after order receipt, [*] due to no fault of Company or
Sales Agents, then, [*] Company may [*] to the Production Services in such
Core Service Area without being in breach of this Agreement in cities outside
the Core Service Areas in Washington and Oregon, Jutvision will use
commercially reasonable efforts to have a member of its Service Provider
Network available [*] when a community has at least four (4) orders for
Jutvision Production Services to be captured at one time.
(c) Jutvision will use commercially reasonable efforts to
process and post each Jutvision Image on behalf of Sales Agents [*] after
capture of such Jutvision Image, provided that such posting is not delayed by
factors attributable to Company or Sales Agents. Notwithstanding any other
provisions of this Agreement, in the event that within a given city, [*] the
Jutvision images are posted to the Company Sites [*] due to no fault of Company
or Sales Agents, then, [*] Company may [*] to the Production Services in that
city without being in breach of this Agreement.
2.3 Exclusivity. [*] Jutvision will be the exclusive provider of Virtual
-----------
Tour Images for the company Sites in those territories where Jutvision offers
services. Company will not directly or indirectly promote itself or act as a
provider of Virtual Tour Images, nor will it promote or use the services of any
third party acting in such capacity, in territories where Jutvision is the
exclusive provider of Virtual Tour Images for the Company. In addition, Company
will not permit any Virtual Tour Images, or related services or technology, of
any third party to be posted to, linked to or made accessible through the
Company Sites in territories where Jutvision is the exclusive provider of
Virtual Tour Images for the Company. Jutvision is an approved vendor of Company
for the term of this Agreement.
2.4 Service Provider Network. Jutvision will implement the Service
------------------------
Provider Network in each of the following Core Service Areas by [*]; 30 miles by
road east and west of [*] within a 30 mile radius,
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
[*] within a 30 mile radius. By [*] Jutvision will implement the Service
Provider Network in the remaining Core service Areas and will provide service
(as defined in Section 2.2(b)) to cities outside the Core Service Areas.
Jutvision will continue discussions with Windermere to develop an appropriate
solution for [*] in the event Jutvision fails to implement the Service Provider
Network in the Territory in accordance with the schedule set forth above,
Company may [*] until such time as Jutvision expands the Service Provider
Network into such areas. Upon Jutvision's implementation of the Service Provider
Network in such area, Company shall commence using Jutvision's Production
Services as soon as practicable.
2.5 Performance of service Providers. Company reserves the right to notify
--------------------------------
Jutvision in writing of unacceptable performance by a member of the Service
Provider Network. Company's notice will state with specificity the basis for
such notice. Jutvision will have [*] days from the date of receipt of such
notice to investigate and correct the performance problem, if possible. In the
event that after such [*] Jutvision has not corrected such problem to Company's
reasonable satisfaction, Jutvision shall substitute another Service Provider
Network member within [*]. For the purposes of this Section 2.5, "unacceptable
performance" means (i) inappropriate or unprofessional attire or (ii) illegal,
potentially illegal or patently offensive behavior.
3. MARKETING AND PROMOTION
-----------------------
3.1 Company Obligations. Company agrees to market, promote and
-------------------
facilitate orders of the Production Services as follows:
(a) Company Sites. Company agrees to market and promote the
-------------
Production Services on the Company Sites. Such marketing and promotion will
include, without limitation:
(i) inclusion of one or more electronic order forms
on the Company Sites permitting Sales Agents to submit orders for Production
Services to Jutvision via the Internet and Intranet; and
(ii) where deemed appropriate by Company, inclusion of
text promoting Jutvision as an approved vendor and a display of the Jutvision
logo on the Intranet, located above the fold (i.e., visible to an end user
without scrolling or navigation on a 640 by 480 pixel page), that, when clicked
on, links directly to an HTML page containing an electronic order form
permitting Sales Agents to submit orders for Production Services to Jutvision
via the Internet and Intranet.
(b) Print Advertising. To the extent Company creates and
-----------------
distributes print advertising promoting the Company Sites, including without
limitation print advertising in magazines, flyers and newsletters, Company will
include in such advertising, as Company reasonably deems appropriate from time
to time, a Jutvision logo and a brief, suitable reference to the availability of
the Production Services.
(c) Seminars and Trade Shows. Company, at its discretion and as
------------------------
it deems appropriate, will (i) invite Jutvision to speak and promote its
Production Services at seminars and training sessions Company conducts for Sales
Agents during the term of this Agreement and (ii) make booth space and
sponsorships available to Jutvision for purchase at trade shows, or conventions,
or other Company events that Company hosts or attends if such shows or
conventions are for approved vendors of Company generally or focus on Internet
marketing.
(d) Joint press Release. Company will participate with Jutvision
-------------------
in expeditiously issuing a joint press release regarding the relationship
established through this Agreement. Each party shall agree on the form and
content of such press release and will furnish its written acceptance of, or
comments on, the proposed announcement within 48 hours; otherwise such proposed
announcement will be deemed approved. Any other press announcement by either
party regarding the subject matter of this Agreement will be subject to the
other party's approval, which shall not be withheld or delayed unreasonably.
(e) Advertisements of Competitors. In territories where
-----------------------------
Jutvision is the exclusive provider of Virtual Tour images, Company will not
display any advertisements of any competitor of Jutvision anywhere within the
Company Sites during the term of this Agreement without the prior approval of
Jutvision. For the purposes of this Section 3.1(e), "competitor of Jutvision"
means any provider of Virtual Tour Images, including, but not limited to, [*]
3.2 Additional Obligations. Subject to Windmere's prior approval,
----------------------
which Windermere will not unreasonably withhold or delay, Jutvision may promote
the relationship established under this Agreement on Jutvision's Web site and in
its marketing materials. Jutvision and Company will, from time to time, use
reasonable efforts to cooperate in joint marketing efforts. Each party will
assign a project manager to act as the primary liaison with respect to the
relationship.
4. [*]
---
4.1 If during the term of this Agreement, Jutvision [*] for Company
Originated Orders consisting of four panoramic scenes posted to the Company Site
("Basic Package"), then Company, upon written notice to Jutvision, will have 30
days [*] for the remainder of the term. In the event Company elects to [*]
Jutvision will have no obligation thereafter to [*] pursuant to Section 4.2.
During the term, Jutvision agrees that the amount [*] will not be greater than
the [*] of the same quality and quantity and in the same time period and
geographic region.
4.2 [*] Except as provided in Section 4.1, during the term of this
---
Agreement, Jutvision will [*] to Company [*] as follows:
(a) With respect to all Company Originated Orders fulfilled by
Jutvision during the term of this Agreement through which Jutvision Images are
posted to a Company Site, Jutvision will [*] during the quarter, provided,
however, that Jutvision will have no obligation to [*] during the twelve (12)
month period commencing on the Effective Date or during any subsequent twelve
(12) month period during the term of this Agreement
(b) [*] (i) with respect to Production Services or Jutvision
Tours sold to third parties other than as expressly set forth above and (ii)
with respect to any Production Services Jutvision distributes free of charge on
a promotional basis.
4.3 [*]. [*] will commence immediately for [*] in which the Effective
Date occurs. Jutvision will [*] from the end of each [*]. With each [*]
Jutvision will provide a report stating the number of Jutvision Tours sold in
accordance with Sections 4.2(a) during the [*] and providing a [*]
5. PROPRIETARY RIGHTS
------------------
5.1 Jutvision for Java Software.
---------------------------
(a) Jutvision hereby grants to Company a nonexclusive,
worldwide, royalty-free license to use the Jutvision for Java Software, in
object code only, to display on the Company Sites, including Company's Intranet
Jutvision Images licensed in Section 5.2. "Use" means storing, loading,
installing, executing or displaying the Jutvision for Java Software. Company may
not modify the Jutvision for Java Software or disable any licensing or control
features of the Jutvision for Java Software.
(b) The Jutvision for Java Software is owned and copyrighted by
Jutvision. The license set forth in this Section 5.1 confers no title to, nor
ownership in, the Jutvision for Java Software and is not a sale of any rights in
the Jutvision for Java Software.
(c) Company may only make copies or adaptations of the Jutvision
for Java Software for archival purposes or when copying or adaptation is an
essential step in the authorized use of the Jutvision for Java Software. Company
must reproduce all copyright notices in the original Jutvision for Java Software
on all copies or adaptations. Company may only
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE>
transfer class files when they are called on by a "requesting" server in the
normal course of Java Applet execution. Company may not distribute the Jutvision
for Java Class files. Any transfer or copying of the Jutvision for Java Software
by Company other than as expressly provided herein constitutes a material breach
of this Agreement.
(d) Company may only use the Jutvision for Java Software to read
.jut files, a file format proprietary to Jutvision.
(e) Company may not tamper with or alter in any way the image
displayed when loading each Jutvision Image ("Jutvision Splash Screen") and
Company shall not hinder the Jutvision Splash Screen from being fully visible
upon loading of each Jutvision Image. Company will not obstruct in any way the
Jutvision Splash Screen and/or screen logo with any other images, frames, tables
or any other HTML or JavaScript code.
(f) Company will not disassemble or decompile the Jutvision for
Java Software including single Jutvision Java Class files under any
circumstances. The disassembly or decryption by Company of any Jutvision Java
Class file constitutes a material breach of this Agreement.
(g) Company will not export or re-export the Jutvision for Java
Software or any copy or adaptation in violation of any applicable laws or
regulations.
(h) The Jutvision for Java Software and any accompanying
documentation have been developed entirely at private expense. They are
delivered and licensed as "commercial computer software" as defined in DFARS
252.227-7013 (Oct 1988), DFARS 252.211-7015 (May 1991) or DFARS 252.227-7014
(Jun 1995), as a "commercial item" as defined in FAR 2.101(a), or as "Restricted
computer software" as defined in FAR 52.227-19 (Jun 1987) (or any equivalent
existing or superseding agency regulation or contract clause), whichever is
applicable. Company has only those rights provided for such Jutvision for Java
Software and any accompanying documentation by the applicable FAR or DFARS
clause or agreement between Company and Jutvision.
5.2 Jutvision Images.
----------------
(a) All Jutvision Images, whether or not produced for Company
customers and whether or not posted to or linked to the Company Sites, are, and
at all times will remain, the exclusive property of Jutvision, and no provision
of this Agreement implies any transfer to Company of any ownership interest in
any Jutvision Image.
(b) Jutvision hereby grants to Company a nonexclusive,
worldwide, royalty-free, nontransferable license to display, perform and
reproduce on the Company Sites, including Company's intranet, each Jutvision
Image that is posted to the Company Sites during the term of this Agreement or
for which payment has been received, solely for the purposes contemplated in
this Agreement. Company will not distribute, modify, edit, or prepare derivative
works from the Jutvision Images without the prior written permission of
Jutvision. The foregoing license does not include any right to grant or
authorize sublicenses.
5.3 Trademarks.
----------
(a) Jutvision owns and at all times will continue to own the
trademarks, service marks and/or trade names JUTVISION and the Jutvision logo,
as well as any name or mark Jutvision may subsequently adopt as a trade name or
to designate the Production Services (collectively, the "Jutvision Marks"), and
Company will not take any actions inconsistent with Jutvision's ownership
rights. Company owns and at all times will continue to own the trademarks,
service marks and/or trade names customarily used by Company during the term of
this Agreement (the "Company Marks"), and Jutvision will not take any actions
inconsistent with Company ownership rights.
(b) Subject to the restrictions set forth herein, Jutvision
hereby grants Company a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Jutvision Marks, during the term of this
Agreement, in each ease only upon Jutvision's prior written consent, solely in
connection with promotion and marketing of the Production Services as provided
in Section 3. Upon Company's prior written consent, and solely In connection
with promotion and marketing of the Production Services as provided in Section
3, Company may grant to Jutvision a non-exclusive, worldwide, royalty-free,
fully paid up, non-transferable right to use the Company marks. Any use of the
other party's marks must be commensurate with the style, appearance, and quality
of such party's services and/or products bearing such marks. Each party's use of
the other party's marks will not create in the using party any right, title, or
interest therein or thereto, and all such use will inure to the exclusive
benefit of the other party. Any use of the other party's marks except as
provided herein is strictly prohibited and constitutes a material breach of this
Agreement.
5.4 Unlimited on Grant of Rights. Except as expressly provided herein,
----------------------------
neither party receives any other right or license to the technology or
intellectual property of the other party.
6. TERM AND TERMINATION
--------------------
6.1 Term. Unless earlier terminated as set forth below, this Agreement
----
will become effective upon the Effective Date and continue for a period of
twenty-four (24) months. Thereafter, this Agreement will be automatically
renewed for successive one (1) year periods unless either party notifies the
other in writing not less than ninety (90) days prior to the end of the then
current term of its intention to terminate this Agreement as of the end of such
term.
6.2 Termination for Breach. This Agreement will terminate in the event a
----------------------
party breaches any material term, condition or representation of this Agreement
or fails to perform any of its material obligations or undertakings hereunder,
and falls to remedy such default forty-five (45) days after being notified by
the non-breaching party of such breach or failure.
6.3 Survival of Certain Term. The provisions of Sections 5.1(13), 5.1(e)-
------------------------
(h), 5.2(a), 5.3, 5.4, 6.3, 7, 8, 9 and 10 will survive the expiration or
termination of this Agreement for any reason. Sections 5.1(a), 5.1(c)-(d) and
5.2(b) will survive the expiration or termination of this Agreement; provided,
however, that (i) following such expiration or termination, the licenses granted
therein will be limited to [*] (ii) such sections will immediately terminate,
together with the licenses set forth therein, in the event Company violates any
of the restrictions set forth in Sections 5.1 or 5.2 at any time; and (iii) upon
any such termination, Company will cease all use of the Jutvision images and
Jutvision for Java Software and will purge all Jutvision for Java Software and
Jutvision Images from its servers. All other rights and obligations of the
parties will cease upon expiration or termination of this Agreement. Upon
termination or expiration of this Agreement, Company and Jutvision will cease
all use of marks of the other party.
7. CONFIDENTIALITY
---------------
Each party agrees to treat the other party's Confidential Information with the
same degree of care as it maintains its own information of a similar nature.
Each party will use at least the same procedures and degree of care which it
uses to protect the confidentiality of its own Confidential Information of like
importance, and in no event less than reasonable care.
8. REPRESENTATION AND WARRANTIES
-----------------------------
Each party represents and warrants to the other that (i) it is a
corporation duly organized, validly existing and in good standing under the laws
of its Jurisdiction of incorporation; (ii) it has full right, power and
authority to enter into this Agreement and to perform all of its obligation
hereunder; (iii) this Agreement constitutes its valid and binding obligation,
enforceable against it in accordance with its terms; and (iv) its execution,
delivery and performance of this Agreement will not result in a breach of any
material agreement or understanding to which it is a party or by which it or any
of its material properties may be bound. THE WARRANTIES PROVIDED BY THE PARTIES
HEREIN ARE THE ONLY WARRANTIES PROVIDED HEREIN AND ARE IN LIEU OF ALL OTHER
WARRANTIES BY THE PARTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SUBJECT
MATTER OF THIS AGREEMENT.
9. LIMITATION OF LIABILITY
-----------------------
EXCEPT WITH RESPECT TO A BREACH BY EITHER PARTY OF ITS OBLIGATIONS
DESCRIBED IN SECTION 2.3 OR 7, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE
OTHER FOR LOST PROFITS OR ANY FORM OF INDIRECT, SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES OF ANY CHARACTER FROM ANY CAUSES OF ACTION OF ANY KIND
WITH RESPECT TO THIS
<PAGE>
AGREEMENT WHETHER BASED ON BREACH OF CONTRACT, TORT INCLUDING NEGLIGENCE), OR
OTHERWISE, AND WHETHER OR NOT THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE.
10. GENERAL PROVISIONS
------------------
10.1 Any notice required or permitted by this Agreement will be deemed
given if sent by registered mail, postage prepaid, addressed to the other party
at the address set forth at the top of this Agreement Delivery will be deemed
effective three (3) days after deposit with postal authorities.
10.2 Miscellaneous. Nonperformance of either party will be excused to the
-------------
extent that performance is rendered impossible by storm, lookout or other labor
trouble, riot, war, rebellion, strike, fire, flood, accident or other act of
God, government agency, orders or restrictions, or any other reason where
failure to perform is beyond the control and not caused by the gross negligence
or willful misconduct of the non-performing party. The relationship of Jutvision
and Company established by this Agreement is that of independent contractors.
This Agreement will be governed by and construed under the laws of the State of
California without reference to conflict of laws principles. This Agreement,
together with all exhibit and attachments hereto, sets forth the entire
agreement and understanding of the parties relating to the subject matter herein
and merges all prior discussions between them. No modification of, or amendment
to this Agreement, nor any waiver of any rights under this Agreement, will be
effective unless in writing signed by the party to the charged, and the waiver
of any breach or default will not constitute a waver of any other right
hereunder or any subsequent breach or default. Neither party may assign this
Agreement, or assign or delegate any right or obligation hereunder, without the
prior written consent of the other party; provided, however, that either party
may assign this Agreement or assign or delegate its rights and obligations under
this Agreement to a successor to all or substantially all of its business or
assets relating to this Agreement whether by sale, merger, operation of law or
otherwise. This Agreement may be executed by exchange of signature pages by
facsimile and/or in any number of counterparts, each of which shall be an
original as against any party whose signature appears thereon and all of which
together shall constitute one and the same instrument
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
JUTVISION CORPORATION WINDERMERE REAL ESTATE SERVICES COMPANY
BY:______________________________ By:______________________________
Name: Howard Field Name: Geoffrey P. Wood
--------------------------- ---------------------------
Title: Vice President Title: President
-------------------------- --------------------------
Date: 3-22-99 Date: 3-18-99
-------------------------- --------------------------
<PAGE>
EXHIBIT 10.40
DISTRIBUTION AGREEMENT
----------------------
THIS DISTRIBUTION AGREEMENT (the "Agreement") is entered into as of March
5, 1999 (the "Effective Date"), between Jutvision Corporation, a Delaware
corporation ("Jutvision"), and St. Joe Real Estate Services, Inc., d/b/a Arvida
Realty Services, a Florida corporation ("Company").
BACKGROUND
A. Jutvision uses the Jutvision Technology. (as defined below) and
provides the Production Services (as defined below).
B. Company operates the Company Site (as defined below).
C. Jutvision desires to provide virtual tour technology and production
services for the Company Site.
IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS CONTAINED HEREIN, AND
OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND ADEQUACY OF WHICH IS
HEREBY ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS
-----------
1.1 "Basic Package" means up to four scenes captured in a designated
-------------
Property, converted into a corresponding number of Jutvision Images and posted
to the Company Site.
1.2 "Company Marks" means the trademarks, service marks and/or trade names
-------------
"St. Joe" and/or "Arvida" and/or the St. Joe logo.
1.3 "Company Site" means the collection of HTML documents residing on
------------
servers operated by or for Company or its affiliate and accessible on or after
the Effective Date by Sales Agents.
1.4 "Confidential Information" means any trade secrets, confidential data
------------------------
or other confidential information relating to or used in the business of the
other party (the "Disclosing Party"), that a party (the "Receiving Party") may
obtain from the Disclosing Party during the Term (the "Confidential
Information"), except as herein provided, and that is marked "Confidential,"
"Proprietary" or in a similar manner to indicate its confidential nature.
Confidential Information may also include oral information disclosed pursuant to
this Agreement, provided that such information is designated as confidential at
the time of disclosure and confirmed in writing as confidential within thirty
(30) days after its oral disclosure, which is marked in a manner to indicate its
confidential nature and delivered to the Receiving Party. The terms of this
Agreement and the existence of this Agreement will constitute Confidential
Information.
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *****. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
<PAGE>
1.5 "Initial Posting Date" means the date on which Jutvision commences
--------------------
providing Production Services and Company begins receiving postings of Jutvision
Images under this Agreement. Company will provide Jutvision with written notice
of the Initial Posting Date, which Jutvision will promptly confirm in a reply
written notice sent to Company.
1.6 "Jutvision Image" means an electronic image of a Property produced by
---------------
or on behalf of Jutvision.
1.7 "Jutvision Marks" means the trademarks, service marks and/or trade
---------------
names JUTVISION and the Jutvision logo.
1.8 "Jutvision Technology" means software and hardware, including the
--------------------
Software, used to capture, process and view Jutvision Images.
1.9 "Production Services" means the virtual tour services provided by or
-------------------
on behalf of Jutvision in preparing the Basic Packages and Upgrade Packages.
1.10 "Property" means any piece of residential real estate within the
--------
Territory, including without limitation new homes, offered for sale or resale.
1.11 "Sales Agent" means any sales agent, sales representative or broker of
-----------
Company.
1.12 "Service Provider Network" means the network of members throughout the
------------------------
Territory with whom Jutvision has entered into agreements to capture images at
designated sites on Jutvision's behalf.
1.13 "Software" means the Jutvision for Java Software.
--------
1.14 "Term" means the Initial Term of this Agreement and the Renewal Terms,
----
if any, as set forth in Section 5.
1.15 "Territory" means the United States and its possessions.
---------
1.16 "Upgrade Package" means an addition to a Basic Package consisting of
---------------
one additional scene captured at the same designated Property of the Basic
Package, converted into one additional Jutvision Image for the scene captured.
2. PROVISION OF PRODUCTION SERVICES;
---------------------------------
2.1 Sales and Billing. Jutvision will be responsible for receiving and
-----------------
fulfilling orders for Basic Packages and Upgrade Packages. Jutvision will assume
all costs and responsibility for invoicing and collecting revenues for all sales
of Basic Packages and Upgrade Packages; provided, however, that Jutvision does
not assume the risk of collection. Jutvision will develop and implement a
customized electronic order form permitting Sales Agents to submit orders for
Production Services to Jutvision via the Internet. Sales Agents may purchase
Basic Packages and Upgrade Packages as required.
2
<PAGE>
2.2 Image Capturing, Processing and Posting. Jutvision will have sole
---------------------------------------
responsibility for, and will bear all costs associated with, capturing images at
designated sites through its Service Provider Network, processing captured
images to create Jutvision Images and posting Jutvision Images to the Company
Site. Company will permit such postings, and the parties will use best efforts
to work together (i) to expeditiously implement a system whereby Jut-vision will
be capable of posting Jutvision Images to Company Site and (ii) to maintain
Jutvision's ability to post Jutvision Images to Company Site throughout the
Term. The parties will also use best efforts to expeditiously establish file
naming formats and scripts that will connect the Jutvision Images to the
appropriate listings on the Company Site, including a method to indicate the
originating Sales Agent. Jutvision will use commercially reasonable efforts to
make a member of its Service Provider Network available to capture Jutvision
Images of a Property [*] of receiving an order for Production Services from a
Sales Agent. In addition, Jutvision will use commercially reasonable efforts to
process and post each Jutvision Image on behalf of all Sales Agents [*] after
capture of such Jutvision Image, in each case to the extent Jutvision has the
right to do so, provided that such posting is not delayed by factors
attributable to Company or Sales Agents.
3. MARKETING AND PROMOTION
-----------------------
3.1 Company Obligations. Company agrees to market, promote and
-------------------
facilitate sales of the Production Services as follows:
(a) Company Site. Company agrees to market and promote the Production
------------
Services on the Company Site. Such marketing and promotion will include, without
limitation:
(i) inclusion of one or more electronic order forms on the
Company Site for "Members Only" permitting Sales Agents to submit orders for
Production Services to Jutvision via the Interact, or alternatively, at
Company's election, Company will provide a link on the Company Site for "Members
Only" to an electronic order form on a server operated by Jutvision;
(ii) all subject to Company's ongoing approval, on a
prominent page within the Company Site, either on Company's consumer Web site or
"Members Only" site, or both, as determined by Company, and, on each page of the
Company Site displaying Jutvision Images, inclusion of a Jutvision logo, that,
when clicked on, links directly to an HTML page containing an electronic order
form permitting Sales Agents to submit orders for Production Services to
Jutvision via the Internet;
(iii) inclusion on the Company Site, either on Company's
consumer Web site or "Members Only" site, or both, as determined by Company, of
a gallery of Jutvision Images produced by Jutvision on behalf of Sales Agents
and selected by Company in its reasonable judgment; provided that the page
containing such gallery will include a Jutvision logo, that, when clicked on,
links directly to an HTML page containing an electronic order form permitting
Sales Agents to submit orders for Production Services to Jutvision via the
Internet.
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
3
<PAGE>
Without the prior approval of Jutvision, Company will not display any
advertisements of any competitor of Jutvision on any HTML page that contains a
Jutvision Image and is located on the Company Site.
(b) Communications with Sales Agents. To the extent Company creates
--------------------------------
and distributes printed or electronic communications to Sales Agents, including
without limitation email messages and print advertising in flyers, newsletters
and general mailings, Company, in collaboration with Jutvision, but subject to
Company's ongoing approval, will include in such advertising a Jutvision logo
and a brief, suitable reference to the availability of the Production Services.
Company may, but shall not be required to, supply Jutvision from time to time
with Company's list of Sales Agents and to permit Jutvision to use such list
solely and for no other purpose than to promote Jutvision and the Production
Services; a breach of this provision shall entitle Company to seek immediate
injunctive relief and damages.
(c) Seminars; Trade Shows; Conventions. Company may, but shall not be
----------------------------------
required to, invite Jutvision to speak at seminars Company conducts for Sales
Agents during the Term. Company or its sales representatives may, but shall not
be required to, distribute to Sales Agents at seminars, tradeshows and
conventions marketing materials created by Jutvision that promote the Production
Services. In addition, Company may, but shall not be required to, afford
Jutvision an opportunity to participate, in a booth or by means of a scheduled
demonstration, in trade shows or conventions Company attends or hosts during the
Term. Company may, but shall not be required to, explain to Sales Agents the
value and benefit to the customer of the Production Services and provide Sales
Agents with demonstrations of the Production Services.
(d) Company Offices. Company will use best efforts to permit
---------------
Jutvision, at each of Company's offices, to make presentations regarding the
Production Services and to train Sales Agents how to promote the Production
Services. Jutvision will remain available to provide such training during the
Term, and the parties will determine a suitable schedule for such presentations
and training.
(e) Preferred Vendor. To the extent Company establishes during the
----------------
Term a "preferred vendor" program offering vendor participants promotional
advantages and opportunities, Company will offer Jutvision an opportunity to
participate in such preferred vendor program on terms consistent with those
offered to other vendors of Company.
(f) Cooperation. Company shall cooperate with Jutvision in the
-----------
performance of Jutvision's obligations under this Agreement.
3.2 Jutvision Obligations.
---------------------
(a) Listing Tools. Jutvision agrees to develop valuable tools,
-------------
including, without limitation, flip charts, software and/or CD ROM products,
specifically designed to help Sales Agents market themselves and obtain listings
from, and enhance customer relationships with, property sellers ("Listing
Tools"). Jutvision will supply such Listing Tools, [*] to those Sales Agents who
order in excess of a minimum quantity of virtual tour Production Services, such
quantities to be determined by Jutvision. In addition, Jutvision will supply
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
4
<PAGE>
Company with the Listing Tools, [*]. Subject to the mutual agreement of
Jutvision and the Company, the Listing Tools furnished to the Company and the
Sales Agents shall include the Company's branding elements, with the aim of
promoting the Company as a leading real estate brokerage firm, providing to its
customers leading-edge Internet and technology services supporting the sale of
residential properties.
(b) Cooperation. Jutvision and Company will, from time to time, use
-----------
reasonable efforts to cooperate in joint marketing efforts for the Production
Services on such terms and conditions as are mutually agreed. Each party will
assign a project manager to act as the primary liaison with respect to the
relationship provided for hereunder, and all discussions between the parties
with respect to the respective performance of obligations hereunder will be
conducted by these project managers or their designees.
4. PROPRIETARY RIGHTS
------------------
4.1 Software.
--------
(a) Jutvision hereby grants to Company a nonexclusive, worldwide,
royalty-free license to use the Software during the Term, in object code only,
to display Jutvision Images on the Company Site. "Use" means storing, loading,
installing, executing or displaying the Software. Company may not modify the
Software or disable any licensing or control features of the Software.
(b) The Software is owned and copyrighted by Jutvision. The license
set forth in this Section 4.1 confers no title to, nor ownership in, the
Software and is not a sale of any rights in the Software.
(c) Company may only make copies or adaptations of the Software are
for archival purposes or when copying or adaptation is an essential step in the
authorized use of the Software. Company must reproduce all copyright notices in
the original Software on all copies or adaptations. Company may only transfer
class files when they are called on by a "requesting" server in the normal
course of Java Applet execution. Company may not distribute the Jutvision for
Java Class files. Any transfer or copying of the Software by Company other than
as expressly provided herein constitutes a material breach of this Agreement.
(d) Company may only use the Software to read .jut files, a file
format proprietary to Jutvision.
(e) Company may not tamper with or alter in any way the image
displayed when loading each Jutvision Image and Company shall not hinder the
Jutvision Splash Screen from being fully visible upon loading of each Jutvision
Image.
(f) Company will not disassemble or decompile the Software including
single Jutvision Java Class files under any circumstances. The disassembly or
decryption by Company of any Jutvision Java Class file constitutes a material
breach of this Agreement.
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
5
<PAGE>
(g) Company will not export or re-export the Software or any copy or
adaptation in violation of any applicable laws or regulations.
(h) The Software and any accompanying documentation have been
developed entirely at private expense. They are delivered and licensed as
"commercial computer software" as defined in DFARS 252.227-7013 (Oct 1988),
DFARS 252.211-7015 (May 1991)or DFARS 252.227-7014 (Jun 1995), as a "commercial
item" as defined in FAR 2.101 (a), or as "Restricted computer software" as
defined in FAR 52.227-19 (Jun 1987)(or any equivalent agency regulation or
contract clause), whichever is applicable. Company has only those rights
provided for such Software and any accompanying documentation by the applicable
FAR or DFARS clause or agreement between Company and Jutvision.
4.2 Jutvision Images. Jutvision hereby grants to Company a nonexclusive,
----------------
worldwide, royalty-free, nontransferable license to display, perform, reproduce
and distribute or otherwise use in any legal fashion, as the Company and/or the
Sales Agent may deem appropriate in their sole discretion. The foregoing license
does not include any right to grant or authorize sublicenses, and Jutvision owns
all Jutvision Images.
4.3 Trademarks.
----------
(a) Jutvision Marks.
---------------
(i) Jutvision owns and at all times will continue to own
the Jutvision Marks. Company will not take any actions inconsistent with
Jutvision's ownership rights.
(ii) Subject to the restrictions set forth herein, Jutvision
hereby grants Company a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Jutvision Marks, during the Term, with
Jutvision's approval, which Jutvision will not unreasonably withhold or delay,
solely in connection with promotion and marketing of the Production Services as
provided in Section 3. Company' use of the Jutvision Marks will not create in
Company any right, title or interest therein or thereto. All use by Company of
the Jutvision Marks will inure to the exclusive benefit of Jutvision. At
Jutvision's reasonable request, Company will assist Jutvision with the
protection and maintenance of the Jutvision Marks. Company may only use the
Jutvision Marks as expressly permitted herein. Company agrees to use the
Jutvision Marks in a manner commensurate with the style, appearance and quality
of Jutvision's services and/or products bearing such marks.
(b) Company Marks.
-------------
(i) Company owns and at all times will continue to own the
Company Marks. Jutvision will not take any actions inconsistent with Company'
ownership rights.
(ii) Subject to the restrictions set forth herein, Company
hereby grants Jutvision a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Company Marks, during the Term, with the prior
written approval of Company and
6
<PAGE>
Company's counsel, which Company and its counsel will not unreasonably withhold
or delay, solely in connection with promotion and marketing of the Production
Services to Company sales agents. Jutvision's use of the Company Marks will not
create in Jutvision ally right, title or interest therein or thereto. All use by
Jutvision of the Company Marks will inure to the exclusive benefit of Company.
At Company' reasonable request, Jutvision will assist Company with the
protection and maintenance of the Company Marks. Jutvision may only use the
Company Marks as expressly permitted herein. Jutvision agrees to use the Company
Marks in a manner commensurate with the style, appearance and quality of
Company' services and/or products bearing such marks.
4.4 Limitation on Grant of Rights. Except as expressly provided herein,
-----------------------------
neither party receives any other right or license to the technology or
intellectual property of the other party.
5. TERM AND TERMINATION
--------------------
5.1 Term. Unless earlier terminated as set forth below, this Agreement
----
will become effective upon the Effective Date and continue for a period of one
(1) year measured from the Initial Posting Date (the "Initial Term")..
5.2 Termination for Insolvency. If voluntary or involuntary proceedings by
--------------------------
or against a party are instituted in bankruptcy under any insolvency law, or a
receiver or custodian is appointed for such party, or proceedings are instituted
by or against such party for corporate reorganization, dissolution, liquidation
or winding-up of such party, which proceedings, if involuntary, shall not have
been dismissed within sixty (60) days after the date of filing, or if such party
makes an assignment for the benefit of creditors, or substantially all of the
assets of such party are seized or attached and not released within sixty (.60)
days thereafter, the other party may immediately terminate this Agreement
effective upon notice of such termination.
5.3 Termination for Breach. This Agreement will terminate in the event a
----------------------
party materially breaches any material term, condition or representation of this
Agreement or materially fails to perform any of its material obligations or
undertakings hereunder, and fails to remedy such default within sixty (60) days
after being notified by the non-breaching party of such breach or failure;
provided, however, that the non-breaching party will not unreasonably withhold
or delay its consent to extend the cure period if the breaching party has
commenced cure during the sixty-day notice period and pursues cure of the breach
in good faith.
5.4 Effects of Termination. Upon expiration or termination of this
----------------------
Agreement:
(a) Jutvision will cease all use of the Company Marks;
(b) Commensurate with the quality of services provided prior to such
expiration or termination, Jutvision will continue to provide Production
Services and support to third parties who purchased such Production Services
prior to such expiration or termination;
(c) Company will cease all use of the Jutvision Marks, the Jutvision
Technology and the Jutvision Images and shall purge all Jutvision Technology and
Jutvision Images from its servers; provided, however, that, following any
expiration or termination, the
7
<PAGE>
licenses granted above under Sections 4.1 and 4.2 shall [*] with respect to the
Software and Jutvision Images provided to Company hereunder prior to expiration
or termination, to the extent that such Jutvision Images accompany listings on
the Company Site and such Software is necessary to display such Jutvision
Images.
(d) Each party will promptly destroy or return any Confidential
Information of the other party in its possession.
5.5 Survival of Certain Terms. The provisions of Sections 4.1 (b), 4.1
-------------------------
(e), 4.1 (f), 4.1(g), 4.1(h), 4.2(a), 4.3(a)(i), 4.3(b)(i), 4.4, 5.3, 5.4, 6, 7,
8, 9, 10.1, 10.2, 10.3, 10.4, 10.5, 10.7, 10.8, 10.9, 10.10 and 10.11 will
survive the expiration or termination of this Agreement for any reason. All
other rights and obligations of the parties will cease upon expiration or
termination of this Agreement.
6. CONFIDENTIALITY
---------------
6.1 General. Subject to Section 10.2, each party agrees to treat the
-------
other party's Confidential Information with the same degree of care as it
maintains its own information of a similar nature. Without limiting the
foregoing, subject to Section 10.2, each party will use at least the same
procedures and degree of care which it uses to protect the confidentiality of
its own confidential information of like importance, and in no event less than
reasonable care.
6.2 Exceptions. The foregoing restrictions will not apply to information
----------
that (i) is known to the Receiving Party at the time of disclosure by the
disclosing party; (ii) is or becomes publicly known through no wrongful act of
the Receiving Party, (iii) solely to the extent of such disclosure, is disclosed
in good faith by the Disclosing Party to a legitimate potential, or actual,
strategic investor, investment banker, venture capital firm, or consultant; (iv)
is rightfully received from a third party without restriction; (v) is
independently developed by the Receiving Party; (vi) has been approved for
release by written authorization of the Disclosing Party, (vii) is not marked or
similarly designated as confidential, and is provided for a purpose or in a
manner that reasonably contemplate, or would naturally be understood to
contemplate, disclosure or use by others; and (viii) is disclosed pursuant to a
valid order of any governmental authority provided that the party intending to
make disclosure in such circumstances has given the other party prompt notice
prior to making such disclosure so that such party may seek a protective order
or other appropriate remedy prior to such disclosure.
7. REPRESENTATIONS AND WARRANTIES
------------------------------
7.1 Each party represents and warrants to the other that:
(a) it is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation set forth above and
is duly qualified and authorized to do business as a foreign corporation in good
standing in all jurisdictions in which the nature of its assets or business
requires such qualification;
(b) it has full right, power and authority to enter into this
Agreement and to perform all of its obligation hereunder;
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8
<PAGE>
(c) its execution, delivery and performance of this Agreement have
been duly and properly authorized by all necessary actions and this Agreement
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms; and
(d) its execution, delivery and performance of this Agreement will
not, with or without the giving of notice or passage of time, or both, conflict
with, or result in a default or loss of rights under, any provision of its
certificate of incorporation or by-laws or any other material agreement or
understanding to which it is a party or by which it or any of its material
properties may be bound.
7.2 Disclaimer. THE WARRANTIES PROVIDED BY THE PARTIES HEREIN ARE THE
----------
ONLY WARRANTIES PROVIDED BY THE PARTIES WITH RESPECT TO THE SUBJECT MATTER OF
THIS AGREEMENT. SUCH WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES BY THE
PARTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SUBJECT MATTER OF THIS
AGREEMENT.
8. INDEMNIFICATION
---------------
8.1 Each party (the "Indemnifying Party") will indemnify, defend and hold
harmless the other party and its officers, directors, agents, employees,
successors and permitted assigns (hereinafter collectively the "Indemnified
Party") from and against any and all losses, claims, suits, proceedings,
liabilities, expenses (including reasonable attorneys' fees and expenses),
causes of action, damages and costs (collectively "Claims") arising out of or in
connection with the breach, potential breach or inaccuracy of, or failure to
comply with, any of the representations and warranties contained in Section 7 on
the part of the indemnifying Party.
8.2 Any Indemnified Party entitled to indemnification under this Section
will give prompt notice to the indemnifying Party of any Claim with respect to
which it seeks indemnification, but the failure to so notify the Indemnifying
Party shall not relieve the Indemnifying Party of any liability except to the
extent that it is actually prejudiced by such delay. The Indemnifying Party
shall assume, at its sole cost and expense, the defense of such Claim with
counsel reasonably satisfactory to the Indemnified Party. The Indemnifying Party
will not be subject to any liability for any settlement made without its
consent. The Indemnifying Party shall not, without consent of the Indemnified
Party, effect any settlement or discharge or consent to the entry of any
judgment, unless such settlement or judgment includes as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
general release from all liability in respect of such claim or litigation.
9. LIMITATION OF LIABILITY
-----------------------
EXCEPT WITH RESPECT TO EACH PARTY'S INDEMNIFICATION OBLIGATIONS SET FORTH
IN SECTION 8 OR A BREACH BY EITHER PARTY OF ITS OBLIGATIONS DESCRIBED IN SECTION
6, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY
FORM OF INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER
FROM ANY
9
<PAGE>
CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS AGREEMENT WHETHER BASED ON
BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR
NOT THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
10. GENERAL PROVISIONS
------------------
10.1 Independent Contractors. The relationship of Jutvision and Company
-----------------------
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement will be construed to (i) give either party the power
to direct and control the day-to-day activities of the other, (ii) constitute
the parties as partners, joint venturers, co-owners or otherwise as participants
in a joint undertaking, or (iii) allow either party to create or assume any
obligation on behalf of the other for any purpose whatsoever. All financial and
other obligations associated with a party's business are the sole responsibility
of that party.
10.2 Press Plans. The parties may agree to participate in a joint press
-----------
announcement regarding the relationship entered into hereunder that will take
place on a mutually agreed upon date. The parties shall agree to the form and
content of the joint press release. Either party may issue its own press
release, subject to the other party's prior approval, not to be unreasonably
withheld. Each party will furnish its written acceptance of or objection to any
proposed announcement within forty-eight (48) hours; provided, however, that a
failure to respond within such forty-eight-hour period will be deemed an
acceptance of such announcement.
10.3 Governing Law. This Agreement will be governed by and construed under
-------------
the laws of the State of Florida without reference to conflict of laws
principles.
10.4 Entire Agreement. This Agreement, together with all exhibit and
----------------
attachments hereto, sets forth the entire agreement and understanding of the
parties relating to the subject matter herein and merges all prior discussions
between them. No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, will be effective unless in writing signed
by the party to be charged.
10.5 Notices. Any notice required or permitted by this Agreement will be
-------
deemed given if sent by registered mail, postage prepaid, addressed to the other
party at the address set forth below or at such other address for which such
party gives notice hereunder. Delivery will be deemed effective three (3) days
after deposit with postal authorities.
If to Company: Jill Fisher Powers, Esquire
Arvida Realty Services
193 53 U.S. Highway 19 North, Suite 100
Clearwater, Florida 33764
with a copy to: Linda Burger, Executive Vice-President
Arvida Realty Services
193 53 U.S. Highway 19 North, Suite 100
10
<PAGE>
Clearwater, Florida 33764
If to Jutvision: Andrew Laszlo
Senior Vice President of Business Development
Jutvision Corporation
124 University Avenue
Third Floor
Palo Alto, CA 94301
Tel: 650-325-6787 ext. 25
Fax: 650-325-9337
with a copy to: A. Hunter Farrell, Esq.
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Tel: 650-493-9300
Fax: 650-493-6811
10.6 Force Majeure. Nonperformance of either party will be excused to the
-------------
extent that performance is rendered impossible by storm, lockout or other labor
trouble, riot, war, rebellion, strike, fire, flood, accident or other act of
God, governmental acts, orders or restrictions, or any other reason where
failure to perform is beyond the control and not caused by the gross negligence
or willful misconduct of the non-performing party.
10.7 Non-Assignability and Binding Effect. Except as expressly provided
------------------------------------
herein, this Agreement may not be assigned or transferred, or may any right or
obligation hereunder be assigned or delegated, to a third party by either party
without the prior written consent of the other party hereto. Notwithstanding the
foregoing, either party may assign this Agreement or assign or delegate its
rights and obligations under this Agreement to a successor to all or
substantially all of its business or assets relating to this Agreement whether
by sale, merger, operation of law or otherwise. Subject to the foregoing, this
Agreement will be binding upon and inure to the benefit of the parties hereto,
their successors and assigns.
10.8 Modification; Waiver. No modification of or amendment to this
--------------------
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing signed by the party to be charged, and the waiver of any
breach or default will not constitute a waiver of any other right hereunder or
any subsequent breach or default.
10.9 Headings. The headings to the sections and subsections of this
--------
Agreement are included merely for convenience of reference and will not affect
the meaning o(Pounds) the language included therein.
10.10 Severability. In the event that it is determined by a court of
------------
competent jurisdiction as part of a final nonappealable ruling, government
action or binding arbitration, that any provision of this Agreement (or part
thereof) is invalid, illegal, or otherwise unenforceable, such
11
<PAGE>
provision will be enforced as nearly as possible in accordance with the stated
intention of the parties, while the remainder of this Agreement will remain in
full force and effect and bind the parties according to its terms. To the extent
any provision (or part thereof) cannot be enforced in accordance with the stated
intentions of the parties, such provision (or part thereof) will be deemed not
to be a part of this Agreement.
10.11 Counterparts; Facsimile Signatures. This Agreement may be executed by
----------------------------------
exchange of signature pages by facsimile and/or in any number of counterparts,
each of which shall be an original as against any party whose signature appears
thereon and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
JUTVISION CORPORATION ST. JOE REAL ESTATE SERVICES, INC.
d/b/a ARVIDA REALTY SERVICES
By: /s/ Andrew P. Laszlo By: /s/ Jill Fisher Powers
---------------------------- ------------------------------
Name: Andrew P. Laszlo Name: Jill Fisher Powers
-------------------------- -----------------------------
Title: SVP, Business Development Title: Executive Vice-President
------------------------- ----------------------------
Date: March 5, 1999 Date: March 25, 1999
-------------------------- -----------------------------
12
<PAGE>
EXHIBIT 10.41
DISTRIBUTION AGREEMENT
----------------------
THIS DISTRIBUTION AGREEMENT (the "Agreement") is entered into as of January
12. 1999 (the "Effective Date"), between Jutvision Corporation, a Delaware
corporation ("Jutvision"), and GTE Enterprise Solutions, a division of GTE
Enterprise Initiatives Incorporated, a Delaware corporation ("GTE").
BACKGROUND
A. Jutvision uses the Jutvision Technology (as defined below) and
provides the Production Services (as defined below).
B. GTE operates the GTE Database (as defined below).
C. Jutvision desires to provide virtual tour technology and production
services for the GTE Database.
IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS CONTAINED HEREIN AND
OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND ADEQUACY OF WHICH IS
HEREBY ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS
-----------
1.1 "Agreement" means this Agreement and all exhibits attached hereto.
---------
1.2 "Annual Period" means the twelve (12) month period commencing on
-------------
January 1, 1999 and each consecutive twelve (12) month period thereafter during
the Initial Term.
1.3 "Basic Package" means up to tour scenes captured in a designated
-------------
Property, convened into a corresponding number of Jutvision Images and posted to
the GTE Database.
1.4 "Broker" means any realtor, real estate broker, real estate agent or
------
any other agent or representative acting in a similar capacity, whether an
individual or some other type of entity, representing a seller of a Property,
who is a member of a GTE Customer.
1.5 "GTE Customer" means a Multiple Listing Service ("MLS") association or
------------
board or a corporation which licenses the System 4 Product from GTE.
1.6 "GTE Database" means the collection of data and documents residing on
------------
servers operated by or for GTE or its affiliates or a GTE Customer and
accessible on or after the Effective Date by Brokers via the System 4 Product
and, to the extent GTE makes such collection generally available, by Brokers and
the public via the Internet.
1.7 "GTE Originated Order" means any order received by Jutvision for a
------------------
Basic Package or Upgrade Package placed by a Broker [*]
1.8 "Initial Posting Date" means date on which Jutvision will commence
--------------------
providing Production Services and GTE will begin receiving postings of Jutvision
Images under this Agreement, as further provided in Section 2.2.
Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>
1.9 "Jutvision Image" means an electronic Virtual Tour Image of a
---------------
Property produced by or on behalf of Jutvision.
1.10 "Jutvision Technology" means software and hardware, including the
--------------------
Software, used to capture: process and view Jutvision Images.
1.11 "Listing Overview Screen" means the screen within the System 4
-----------------------
Product displaying the results of a search of listings in the GTE Database.
1.12 "Net Revenues" means the gross amount received by Jutvision from
------------
Brokers for sales of the Basic Packages and Upgrade Packages [*] (i) refunds,
discounts, credits and allowances, (ii) packaging, handling fees, freight, and
sales taxes and other governmental charges, and (iii) reasonable provisions for
doubtful collections determined in accordance with GAAP.
1.13 "Production Services" means the services provided by or on behalf of
-------------------
Jutvision in preparing the Basic Packages and Upgrade Packages.
1.14 "Property" means any piece of residential, commercial or unimproved
--------
real estate within the Territory., including without limitation new homes,
offered for sale or resale.
1.15 "Service Provider Network" means the network of members throughout
------------------------
the Territory with whom Jutvision has entered into agreements to capture images
at designated sites on Jutvision's behalf.
1.16 "Software" means the Jutvision for Java Software.
--------
1.17 "System 4 Product" means GTE's System 4 browser and System 4
----------------
workstation, including without limitation all future upgrades and versions of
such browser and workstation, whether or not marketed by GTE under a different
name, that Brokers use to access listings and other information in the GTE
Database, as well as to contact, and submit orders to, third parties for certain
products and services, including the Production Services, as specifically set
forth in Exhibit A.
1.18 "Term" means the Initial Term of this Agreement and the Renewal
----
Terms, if any, as set forth in Section 6.
1.19 "Territory" United States and its possessions.
---------
1.20 "Transaction Fee" means [*] Jutvision will pay to GTE during the Term
---------------
based on sales of Basic Packages and Upgrade Packages as provided in Section
4.1.
1.21 "Upgrade Package" means an addition to a Basic Package consisting of
---------------
one additional scene captured at the same designated Property of the Basic
Package, converted into one additional Jutvision Image for the seen captured and
posted to the GTE Database.
1.22 "Virtual Tour Images" means 360 images through which a user can
-------------------
navigate with pointing device, or technology or production services for such
images.
2. PROVISION OF PRODUCTION SERVICES; EXCLUSIVITY
---------------------------------------------
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-2-
<PAGE>
2.1 Sales and Billing. Jutvision will be responsible for receiving and
-----------------
fulfilling orders for Basic Packages and Upgrade Packages. Jutvision will assume
all costs and responsibility for invoicing and collecting revenues for all sales
of Basic Packages and Upgrade Packages.
2.2 Linage Capturing, Processing and Posting. The parties will work
----------------------------------------
together to implement a system whereby Jutvision will be capable of posting
Jutvision Images to the GTE Database. The parties will also work together on
file naming formats and scripts that will attach the Jutvision Images to the
appropriate listings on the GTE Database, including a method to indicate the
originating GTE Customer. Jutvision and GTE agree to set [*] as a target for the
Initial Posting Date. However, in no event will the Initial Posting Date occur
later than [*]. If, despite the parties' reasonable commercial efforts, the
Initial Posting Date occurs after [*], then, notwithstanding [*], Transaction
Fees on all [*] (as defined below) will be calculated solely in accordance with
[*] for the [*] period commencing on the Initial Posting Date and will not be
calculated in accordance with [*] for such period. The parties understand and
agree that (i) Jutvision will not attempt to post any Jutvision Images to the
GTE Database prior to the Initial Posting Date and (ii) no penalty or breach of
the terms of this Agreement will result from GTE's failure to begin receiving
postings of Jutvision Images on the initial Posting Date. GTE will provide
Jutvision with written notice of the actual Initial Posting Date, which
Jutvision will promptly confirm in a reply written notice sent to GTE. Jutvision
will have sole responsibility for, and will bear all costs associated with,
capturing images at designated sites through its Service Provider Network,
processing captured images to create Jutvision Images and posting Jutvision
Images to the GTE Database. GTE will permit such postings and will work with
Jutvision to maintain the ability of the GTE Database to receive such postings
throughout the Term. Jutvision will use commercially reasonable efforts to
process and post each Jutvision Image on behalf of all Brokers within [*] after
capture of the images, in each case to the extent Jutvision has the right to do
so, provided that such posting is not delayed by factors attributable to GTE or
Brokers. In addition, Jutvision will use commercially reasonable efforts to make
a member of its Service Provider Network available to capture Jutvision Images
of a Property [*] of receiving an order for Production Services from Broker.
2.3 Exclusivity.
-----------
(a) Subject to Section 2.3(b), during the Term, GTE will not
directly or directly (i) promote or market itself or any third party, on the
System 4 Product or in association therewith, as a provider of Virtual Tour
Images for Property; (ii) provide the services of capturing or processing
Virtual Tour Images for Property; (iii) use the services of; or enter into any
arrangement under which services will be provided by, any third party with
respect to capturing or processing Virtual Tour Images for Property; or (iv)
permit any Virtual Tour Images for Property (other than those supplied by
Jutvision) or any site or identity of a third party provider of Virtual Tour
Images for Property, or technology or services therefor, to be posted to, linked
to or otherwise made accessible through the GTE Database.
(b) At any time after the Initial Posting Date during the Term,
GTE may, [*] upon thirty (30) days' prior written notice to Jutvision, thereby
[*]; provided, however, that, if GTE makes such an election, as of the effective
date [*] and throughout the remainder of the Term, notwithstanding Section [*]
to the contrary, [*] (as defined below) will be calculated solely in accordance
with [*] and will not be calculated in accordance with [*] none of the
restrictions set forth in [*] will continue to apply.
[*]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
-3-
<PAGE>
(c) Nothing in this Agreement is intended or shall be construed
to limit the ability of any GTE Customer directly or indirectly to (i) promote
or market itself or any third party, on the System 4 Product or elsewhere, as a
provider of Virtual Tour Images; (ii) provide the services of capturing or
processing Virtual Tour Images; (iii) use the services of, or enter into any
arrangement under which services will be provided by, any third party with
respect to capturing or processing Virtual Tour Images; or (iv) permit any
Virtual Tour Images or any site or identity of a third party provider of Virtual
Tour Images, or technology or services therefor, to be posted to, linked to or
otherwise made accessible through the GTE Database. Such actions for GTE
Customers shall not be deemed to be actions of GTE for purposes of Sections 2.3
(a) or (b).
(d) The following restrictions will govern display of any
advertisements of any competitor of Jutvision within the System 4 Product or on
pages retrieved via the System 4 Product:
(i) As long as [*] pursuant to this Section 2.3,
GTE will not display any advertisements of any competitor of Jutvision anywhere
within the System 4 Product or on pages retrieved via the System 4 Product
without the prior approval of Jutvision; provided, however, that, if a GTE.
Customer has entered into an agreement with one or more competitors of Jutvision
to provide Virtual Tour Images for Property listings of such GTE Customer, GTE
may display advertisements of such competitor(s), but no other competitor(s) of
Jutvision, within the System 4 Product licensed to such GTE Customer or on pages
retrieved via the System 4 Product licensed to such GTE Customer; provided,
further, that, notwithstanding the foregoing, in no event may GTE display any
advertisements of any competitor of Jutvision on any page retrieved via the
System a Product that contains a Jutvision Image.
For the purposes of this Section 2.3(d), competitors of Jutvision include,
without limitation, [*].
2.4 Support. Jutvision will establish and maintain a "mailto" link on the
-------
System 4 Product that Brokers may use to send support-related e-mail messages to
Jutvision. Jutvision will also establish and maintain a toll-free support
telephone line Brokers may call with support questions. The hours of operation
for the support telephone line and for monitoring and responding to support-
related e-mail messages will be business days (excluding bank holidays) from
[*]. From time to time, if the GTE Customer is receiving GTE help desk services
related to the System 4 Product, GTE may respond to questions arising from such
GTE Customer. If GTE, GTE Customer or Broker detects any bug or material error
in the Jutvision Technology, GTE, GTE Customer or Broker may contact Jutvision
technical staff for emergency support. Jutvision will respond to GTE's, GTE
Customer's or Broker's emergency support request [*] and Jutvision will use
commercially reasonable efforts to corrupt such bug or material error promptly.
3. MARKETING AND PROMOTION
-----------------------
3.1 Obligations. GTE represents that each GTE Database is proprietary to
-----------
an applicable GTE. Customer. Jutvision understands and agrees that, prior to
Jutvision or GTE offering any Production Services to Brokers that are members of
an), GTE Customer, GTE must obtain the prior approval of such GTE Customer. GTE
agrees to use commercially reasonable efforts to obtain such prior approval.
Subject to the foregoing, GTE agrees to market, promote and facilitate sales of
the Production Services as provided in Exhibit A attached hereto.
3.2 Additional Obligations. The parties shall undertake the following
----------------------
additional obligations:
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-4-
<PAGE>
(a) Jutvision and GTE will, from time to time, use reasonable
efforts to cooperate in joint marketing efforts for the Production Services on
such terms and conditions as are mutually agreed. Each party will assign a
project manager to act as the primary liaison with respect to the relationship
provided for hereunder, and all discussions between the parties with respect to
the respective performance of obligations hereunder will be conducted by these
project managers or their designers.
(b) The parties will cooperate with each other in the
performance of their obligations under this Agreement.
4. FEES
----
4.1 [*]. During the Term, Jutvision will pay [*] to GTE as follows:
---
(a) With respect to [*] fulfilled by Jutvision during [*] for
Jutvision Images posted to the GTE Database (the "Annual Initial Orders"),
Jutvision will pay to GTE for [*]
(i) the [*] so sold for which Jutvision has
received payment [*] collected from sales of Basic Packages so sold during [*]
and
(ii) the [*] so sold for which Jutvision has
received payment [*] collected from sales of Upgrade Packages so sold during [*]
provided, however, that, in the event that GTE the facilitates [*] on or before
[*] on the [*] for each and every listing of a Property that has a corresponding
Jutvision Image [*] thereby replacing the current [*] for as long as GTE
maintains [*] Jutvision will pay to GTE for each [*] with respect to [*]
(iii) the [*] so sold for which Jutvision has
received payment [*] collected from sales of Basic Packages so sold during the
[*] and
(iv) the [*] so sold for which Jutvision has
received payment [*] collected from sales of Upgrade Packages so sold during [*]
and
(v) provided, further, that such [*] will apply
[*] collected from sales on [*] made prior to the date of such [*], and
Jutvision shall make a payment to GTE to adjust for such [*]
(b) With respect to all [*] fulfilled by Jutvision during the
Term for Jutvision Images posted to the GTE Database, Jutvision will pay to GTE
for each [*] (i) the [*] so sold for which Jutvision has received payment [*]
collected from sales of Basic Packages so sold [*] and (ii) the [*] so sold for
which
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-5-
<PAGE>
Jutvision has received payment [*] collected from sales of Upgrade Packages so
sold [*]
(c) With respect to all sales of Production Services by
Jutvision, for Jutvision Images posted to the GTE Database, that [*] Jutvision
will pay to GTE for each [*] (i) the [*] so sold for which Jutvision has
received payment [*] collected from sales of Basic Packages so sold [*] and (ii)
the [*] so sold for which Jutvision has received payment [*] collected from
sales of Upgrade Packages so sold during [*]
(d) No Transaction Fees will be due hereunder (i) with respect
to Production Services or Jutvision Images sold to third parties other than as
expressly set forth above and (ii) with respect to any Production Services
Jutvision distributes free of charge on a promotional basis.
(e) Jutvision represents that it is not Jutvision's practice to
[*] and agrees that, during the Term, if Jutvision enters into [*] containing
any [*] Jutvision's ability to [*] on [*] than those offered to [*] as the case
may be, [*] then Jutvision will [*] to include the [*] herein provided the
Transaction Fees payable to GTE shall not decrease.
(f) As of the Effective Date, excluding any applicable taxes,
Jutvision will [*] and [*]. During the period commencing on the Effective Date
and extending until January 1, 2000, Jutvision may not [*] by more than [*]
provided, however, that Jutvision may [*] thereafter in its sole discretion.
4.2 Invoices; Reports; Payment of Fees. Calculation of [*]
---------------------------------
will commence immediately for the calendar month in which the Initial Posting
Date occurs. Jutvision will make all payments of Transaction Fees net thirty
(30) days from the end of [*]. With each [*] payment, Jutvision will provide a
report stating the number of Basic Packages and Upgrade Packages sold in
accordance with Sections 4.1 (a) and 4.1 (b) and 4.1 (c) [*] and providing a
calculation of the Transaction Fees payable. This report will also contain data
notifying GTE of the GTE Customer originating the listings corresponding to the
Production Services sold during the relevant [*]
4.3 Inspection of Records. GTE will have the right, at its own expense and
---------------------
not more than once in any twelve (12) month period, to authorize an independent
auditor reasonably acceptable to both parties to inspect those accounting
records of Jutvision necessary to verify the accuracy of fees paid or invoiced
by Jutvision under the terms of this Agreement, provided that such independent
auditor has executed a confidentiality agreement with respect to such records
that is reasonably acceptable to Jutvision. Such inspections will take place
during Jutvision's normal business hours, upon not less than twenty (20) days'
prior written to Jutvision and on a date mutually agreed upon by the parties, hi
the event such auditors find an underpayment in Transaction Fees paid to GTE of
more than five (5%) of the total Transaction Fees due and payable to GTE for the
period at issue, Jutvision shall pay such shortfall to GTE immediately and shall
reimburse GTE for the cost of such audit.
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-6-
<PAGE>
5. PROPRIETARY RIGHTS
------------------
5.1 Software.
--------
(a) Jutvision hereby grants to GTE a nonexclusive, worldwide,
royalty-free license to use the Software during the Term, in object code only,
to display Jutvision Images on pages retrieved from the GTE Database via the
System 4 Product. "Use" means storing, loading, installing, executing or
displaying the Software. GTE may not modify the Software or disable any
licensing or control features of the Software.
(b) The Software is owned and copyrighted by Jutvision. The
license set forth in this Section 5.1 confers no title to, nor ownership in, the
Software and is not a sale of any rights in the Software.
(c) GTE may only make copies or adaptations of the Software for
archival purposes or when copying or adaptation is an essential step in the
authorized use of the Software. GTE must reproduce all copyright notices in the
original Software on all copies or adaptations. GTE may only transfer class
files when they are called on by a "requesting" server in the normal course of
Java Applet execution. GTE may not distribute the Jutvision for Java Class
files. Any transfer or copying of the Software by GTE other than as expressly
provided herein constitutes a material breach of this Agreement.
(d) GTE may only use the Software to read .jut files, a file
format proprietary to Jutvision.
(e) GTE may not tamper with or alter in any way the image
displayed when loading each Jutvision Image ("Jutvision Splash Screen") and GTE
shall not hinder the Jutvision Splash Screen from being fully visible upon
loading of each Jutvision Image. GTE will not obstruct in any way the Jutvision
Splash Screen and/or screen logo with any other images, frames, tables or any
other HTML or JavaScript code.
(f) GTE will not disassemble or decompile the Software including
single Jutvision Java Class files under any circumstances. The disassembly or
decryption by GTE of any Jutvision Java Class file constitutes a material breach
of this Agreement.
(g) GTE will not export, or re-export the Software or any copy
or adaptation in violation of any applicable laws or regulations.
(h) The Software and any accompanying documentation have been
developed entirely at private expense. In so far as the United States government
or any agency thereof may acquire any rights under this Agreement, the Software
and any accompanying documentation are delivered and licensed as "commercial
computer software" as defined in DFARS 252.227-7013 (Oct 1988), DFARS 252.211-
70t5 (May 1991) or DFARS 252.227-7014 (Jun 1995), as a "commercial item" as
defined in FAR 2.101 (a), or as "Restricted computer software" as defined in FAR
52.227-19 (Jun 1987)(or any equivalent agency regulation or contract clause),
whichever is applicable. The United States government or agency thereof shall
have only those rights provided for such Software and any accompanying
documentation by the applicable FAR or DFARS clause consistent with this
Agreement between GTE and Jutvision.
5.2 Jutvision Images.
----------------
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<PAGE>
(a) All Jutvision Images, whether or not produced for GTE
Customers and whether or not posted to the GTE Database or displayed via the
System 4 Product, are, and at all times will remain, the exclusive property of
Jutvision, and no provision of this Agreement implies any transfer to GTE of any
ownership interest in any Jutvision Image.
(b) Jutvision hereby grants to GTE a nonexclusive, worldwide,
royalty-free, nontransferable license to display, perform and reproduce
Jutvision Images on pages retrieved from the GTE Database via the System 4
Product solely for the purposes contemplated in this Agreement. GTE will not
distribute, modify, edit, or prepare derivative works from the Jutvision Images
without the prior written permission of Jutvision. The foregoing license does
not include any right to grant or authorize sublicenses.
5.3 Trademarks.
----------
(a) Jutvision Marks.
----------------
(i) Jutvision owns and at all times will
continue to own the trademarks, service marks and/or trade names JUTVISION and
the Jutvision logo (the "Jutvision Marks"). GTE will not take any actions
inconsistent with Jutvision's ownership rights.
(ii) Subject to the restrictions set forth
herein, Jutvision hereby grants GTE a nonexclusive, worldwide, royalty-free,
fully paid up, nontransferable right to use the Jutvision Marks, during the Term
of this Agreement, with Jutvision's prior written approval, which Jutvision will
not unreasonably withhold or delay, solely in connection with promotion and
marketing of. the Production Services as provided in Section 3 and Exhibit A
attached hereto. GTE's use of the Jutvision Marks will not create in GTE any
right, title or interest therein or thereto. All use by GTE of the Jutvision
Marks will inure to the exclusive benefit of Jutvision. At Jutvision's
reasonable request and at Jutvision's sole expense, GTE will assist Jutvision
with the protection and maintenance of the Jutvision Marks. GTE may only use the
Jutvision Marks as expressly permitted herein. GTE agrees to use the Jutvision
Marks in a manner commensurate with the style, appearance and quality of
Jutvision's services and/or products bearing such marks.
(b) GTE Marks.
---------
(i) GTE owns and at all times wilt continue to
own the trademarks, service marks and/or trade names GTE, the GTE logo and the
System 4 logo (the "GTE Marks"). Jutvision will not take any actions
inconsistent with GTE's ownership rights.
(ii) Subject to the restrictions set forth
herein, GTE hereby grants Jutvision a nonexclusive, worldwide, royalty-free,
fully paid up, nontransferable right to use the GTE Marks, during the Term of
this Agreement, with GTE's prior written approval, which GTE will not
unreasonably withhold or delay (i) on a case-by-case basis on Jutvision's Web
site provided that any such use will link to a GTE-specified URL and (ii) in
Jutvision's marketing material. Jutvision's use of the GTE Marks will not create
in Jutvision any right, title or interest therein or thereto. All use by
Jutvision of the GTE Marks will inure to the exclusive benefit of GTE. At GTE's
reasonable request and at GTE's sole expense, Jutvision will assist GTE with the
protection and maintenance of the GTE Marks. Jutvision may only use the GTE
Marks as expressly permitted herein. Jutvision agrees to use the GTE Marks in a
manner commensurate with the style, appearance and quality of GTE's services
and/or products bearing such marks.
-8-
<PAGE>
5.4 Limitation on Grant of Rights. Except as expressly provided herein,
-----------------------------
neither party receives any other right or license to the technology or
intellectual property of the other party.
6. TERM AND TERMINATION
--------------------
6.1 Term. Unless earlier terminated as set forth below, this Agreement
----
will become effective upon the Effective Date and continue for a period of two
(2) years measured from the Initial Posting Date (the "Initial Term").
Thereafter. this Agreement will be automatically renewed for successive one (1)
year periods (each such period a "Renewal Term") unless either party notifies
the other in writing not less than ninety (90) days prior to the end of the
then-current term of its intention to terminate this Agreement as of the end of
such term.
6.2 Termination. This Agreement will terminate, without notice, (i) upon
-----------
the institution by or against either party of insolvency, receivership or
bankruptcy proceedings or any other proceedings for the settlement of the
party's debts; (ii) upon either party's making an assignment of substantially
all of its assets for the benefit of creditors; (iii) upon either party's
dissolution or cessation of business; or (iv) in the event a party materially
breaches any material term, condition or representation of this Agreement or
materially fails to perform any of its material obligations or undertakings
hereunder, and fails to remedy such default within thirty (30) days after being
notified by the non-breaching party of such breach Or failure; provided,
however, that the non-breaching party will not unreasonably withhold or delay
its consent to emend the cure period if the breaching party has commenced cure
during the thirty-day notice period and pursues cure of the breach in good
faith.
6.3 Effects of Termination. Upon expiration or termination of this
----------------------
Agreement:
(a) Jutvision will cease all use of the GTE Marks:
(b) Commensurate with the quality of services provided prior to
such expiration or termination, Jutvision will continue to provide Production
Services and support to third parties who purchased such Production Services
prior to such expiration or termination;
(c) GTE will cease all use of the Jutvision Marks. the Jutvision
Technology and the Jutvision Images and shall purge all Jutvision Technology and
Jutvision Images from its servers; provided, however, that, following any
expiration or termination, the licenses granted above under Sections 5.1 mid
5.2, with respect to the Software and Jutvision Images provided to GTE hereunder
prior to expiration for termination, and to the extent that such Jutvision
Images accompany listings on the GTE Database and the Software is necessary to
display such Jutvision Images, shall survive until the end of [*] providing for
the display of such Jutvision Images.
(d) Each party will promptly destroy or return any Confidential
Information of the other party in its possession.
6.4 Survival of Certain Terms. The provisions of Sections 5.1(B), 5.1(e),
-------------------------
5.1(0, 5.1(g), 5. 1(h), 5.2(a), 5.3(a)(i), 5.3(b)(i), 5.4, 6.3, 6.4, 7, 8, 9,
10, 11.1, 11.2, 11.3, 11.4, 11.5, 11.7, 11.8, 11.9, 11.10, 11.11 and 11.12 will
survive the expiration or termination of this Agreement for any reason. All
other rights and obligations of the parties will cease upon expiration or
termination of this Agreement.
7. CONFIDENTIALITY
---------------
-9-
<PAGE>
7.1 Definition. "Confidential Information" means any trade secrets,
----------
confidential data or other confidential information relating to or used in the
business of the other party (the "Disclosing Party"), that a party (the
"Receiving Party") may obtain from the Disclosing Party during the Term (the
"Confidential Information"), except as herein provided, and that is marked
"Confidential," "Proprietary" or in a similar manner to indicate its
confidential nature. Confidential Information may also include oral information
disclosed pursuant to this Agreement, provided that such information is
designated as confidential at the time of disclosure and confirmed in writing as
confidential within thirty (30) days after its oral disclosure, which is marked
in a manner to indicate its confidential nature and delivered to the Receiving
Party. The terms of this Agreement and the existence of this Agreement will
constitute Confidential Information.
7.2 General. The Receiving Party shall hold the Disclosing Party's
-------
Confidential Information in confidence, shall use it only for the purposes of
this Agreement, shall not disclose it to any third parties (other than wholly
owned affiliates owned directly or indirectly by a common parent of the
Receiving Party which affiliates shall be bound to the same obligation of non-
disclosure to third parties as the Receiving Party) without the written consent
of the Disclosing Party and shall treat the Disclosing Party's Confidential
Information with the same degree of care as the Receiving Party maintains its
own information of a similar nature. Without limiting the foregoing, the
Receiving Party will use at least the same procedures and degree of care which
it uses to protect the confidentiality of its own confidential information of
like importance, and in no event less than reasonable care.
7.3 Exceptions. The foregoing restrictions will not apply to information
----------
that (i) is known to the Receiving Party at the time of disclosure by the
Disclosing Party; (ii) is or becomes publicly known through no wrongful act of
the Receiving Party; (iii) is rightfully received from a third party without
restriction; (v) is independently developed by the Receiving Party; (v) has been
approved for release by written authorization of the Disclosing Party; (vi) is
not marked or similarly designated as confidential, and is provided for a
purpose or in a manner that reasonably contemplate, or would naturally be
understood to contemplate, disclosure or use by others; and (vii) is disclosed
pursuant to a valid order of any governmental authority, provided that the
Receiving Party in such circumstances has given the Disclosing Party prompt
notice prior to making such disclosure so that the Disclosing Party may seek a
protective order or other appropriate remedy prior to such disclosure.
7.4 The parties acknowledge and agree that any breach of this Section may
result in irreparable harm to the non-breaching party for which there may be no
adequate remedy at law for, any such breach. The non-breaching party, will be
entitled to seek injunctive or other equitable relief from a court of competent
jurisdiction to prevent unauthorized or unlawful disclosure.
8. REPRESENTATIONS AND WARRANTIES
------------------------------
8.1 Each party represents and warrants to the other that:
(a) it is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation set forth
above and is duly qualified and authorized to do business as a foreign
corporation in good standing in all jurisdictions in which the nature of its
assets or business requires such qualification;
(b) it has full right, power and authority to enter into this
Agreement and to perform all of its obligation hereunder;
-10-
<PAGE>
(c) its execution, delivery, and performance of this Agreement
have been duly and properly authorized by all necessary actions and this
Agreement constitutes its valid and binding obligation, enforceable against it
in accordance with its terms; and
(d) its execution, delivery and performance of this Agreement
will not, with or without the giving of notice or passage of time, or both,
conflict with, or result in a default or loss of rights under, any provision of
its certificate of incorporation or by-laws or any other material agreement or
understanding to which it is a party or by which it or any of its material
properties may be bound.
8.2 Jutvision represents and warrants to GTE that Jutvision owns the
Software and the Jutvision Marks and, to the best of its knowledge, the Software
and the Jutvision Marks (i) do not infringe on any copyright, trademark or other
proprietary right of any third party; (ii) do not in any way violate or infringe
on any party's privacy right, right of publicity or any other right of any
person or entity, and (iii) do not contain any material that is unlawful,
hateful, obscene libelous, threatening or defamatory. If a proceeding based on a
claim that the Software constitutes an infringement, misappropriation, or
violation of any intellectual property of a third party is brought against GTE,
Jutvision shall, at its expense, indemnify, defend or settle the claim and shall
pay all damages, costs and expenses awarded against GTE, and all reasonable
legal fees and expenses, subject to the following:
(a) the Software must have been used within the scope of this
Agreement;
(b) GTE must have given Jutvision prompt written notice of the
claim;
(c) GTE must give Jutvision complete authority, information and
cooperation reasonably necessary to defend the claim;
(d) GTE must not settle or compromise the claim without
Jutvision's written consent unless Jutvision refuses in writing to defend or
fails to defend such claim after notice thereof;
(e) the claim must not:
(i) be based on GTE's:
(1) use of art altered version of the
Software if such alterations were done by persons other than Jutvision, its
agents or contractors;
(2) use of the Software in combination,
operation, or use with any programs or equipment not supplied by Jutvision, if
such infringement, misappropriation or violation would have been avoided by the
combination, operation, or use of the Software with items supplied or specified
by Jutvision; or,
(ii) be based solely on GTE's use of other
software.
8.3 GTE represents and warrants to Jutvision that GTE owns the GTE Marks.
8.4 Disclaimer. THE WARRANTIES PROVIDED BY THE PARTIES HEREIN ARE THE ONLY
----------
WARRANTIES PROVIDED BY THE PARTIES WITH RESPECT TO THE SUBJECT MATTER OF THIS
AGREEMENT. SUCH WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES BY THE PARTIES,
EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
-11-
<PAGE>
WARRANTY OF MERCHANTABILITY OK FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO
THE SUBJECT MATTER OF THIS AGREEMENT.
9. INDEMNIFICATION.
---------------
9.1 Each party (the "Indemnifying Party") will indemnify, defend and
hold harmless the other party and its officers, directors, agents, employees,
successors and permitted assigns (hereinafter collectively the "Indemnified
Party") from and against any and all losses, claims, suits, proceedings,
liabilities, expenses (including reasonable attorneys' fees and expenses),
causes of action, damages and costs (collectively "Claims") arising out of or in
connection with the breach, potential breach or inaccuracy of, or failure to
comply with, any of the representations and warranties contained in Section 8 on
the part of the Indemnifying Party
9.2 Jutvision will defend GTE and its officers, directors, agents,
employees, successors and permitted assigns against any and all Claims arising
out of or in connection with any personal injuries or harm to personal property
to the extent resulting from the negligence or willful misconduct of any member
of Jutvision or Jutvision's Service Provider Network.
9.3 Jutvision will defend GTE and its officers, directors, agents,
employees, Successors and permitted assigns against any and all Claims
instituted by Brokers arising out of or in connection with any personal injuries
or harm to personal property to the extent resulting from the negligence or
willful misconduct of Jutvision or Jutvision's Service Provider Network.
9.4 Any Indemnified Party entitled to indemnification under this Section
will give prompt notice to the indemnifying Party of any Claim with respect to
Which it seeks indemnification, but the failure to so notify the Indemnifying
Party shall not relieve the Indemnifying Parry of any liability, except to the
extent that it is actually prejudiced by. such delay. The Indemnifying Party.
shall assume, at its sole cost and expense, the defense of such Claim with
counsel reasonably satisfactory to the Indemnified Party. The Indemnifying Party
will not be subject to any liability for any settlement made without its
consent. The Indemnifying Party shall not, without consent of the Indemnified
Party, effect any settlement or discharge or consent to the entry of any
judgment, unless such settlement or judgment includes as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified Party of a
general release from all liability in respect of such claim or litigation.
10. LIMITATION OF LIABILITY
-----------------------
EXCEPT WITH RESPECT TO A BREACH BY EITHER PARTY OF ITS OBLIGATIONS
DESCRIBED IN SECTION 7 THROUGH NEGLIGENCE, WILFUL OR INTENTIONAL CONDUCT, IN NO
EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY FORM OF
INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER FROM
ANY CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS AGREEMENT WHETHER BASED ON
BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, AND. WHETHER OR
NOT THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
11. GENERAL PROVISIONS
------------------
11.1 Independent Contractors. The relationship of Jutvision and GTE
-----------------------
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement will be construed
-12-
<PAGE>
to (i) give either party the power to direct and control the day-to-day
activities of the other, (ii) constitute the parties as partners, joint
venturers, co-owners or otherwise as participants in a joint undertaking, or
(iii) allow either party to create or assume any obligation on behalf of the
other for any purpose whatsoever. All financial and other obligations associated
with a party's business are the sole responsibility of that party.
11.2 Press Plans.
-----------
(a) The parties agree to participate in a joint press announcement
regarding the relationship entered into hereunder that will take place on a
mutually agreed upon date, The parties shall agree to the form and content of
the joint press release. Either party may issue its own press release, subject
to the other party's prior approval, not to be unreasonably withheld, of the
content within the release.
(b) Provided that the effective date is no later than [*] Jutvision
agrees [*] any agreement with [*] until the later of the following events
occurs: (i) [*] or (ii) the date on which, in Jutvision's sole opinion, [*]
demonstrate to Jutvision [*] for orders of Productions Services.
11.3 Governing Law; Arbitration. This Agreement will be governed by and
--------------------------
construed under the laws of the State of California without reference to
conflict of laws principles. Any dispute or claim arising out of or in relation
to this Agreement, or the interpretation, making, performance, breach or
termination thereof, shall be finally and exclusively settled by binding
arbitration under the commercial arbitration rules (the "Rules") of the American
Arbitration Association ("AAA"). Within twenty (20) clays of giving or receiving
of notice of arbitration. Jutvision on the one hand and GTE on the other hand
shall appoint one independent arbitrator, and within twenty (20) days
thereafter, the two arbitrators shall appoint a third arbitrator. If the two
cannot agree upon a third arbitrator, the AAA shall appoint a third. The
arbitration hearing shall be commenced within sixty (60) days of the third
arbitrator's appointment. The arbitral proceedings and all pleadings and written
evidence shall be in the English language. Any written evidence originally in a
language other than English shall be submitted in English translation
accompanied by the original or a true copy thereof. Judgment on the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. Notwithstanding the foregoing, before, during or after arbitration, any
party may apply to any court for a temporary restraining order, preliminary
injunction or other equitable relief where such relief is necessary to protect
its interests pending completion of the arbitration proceedings or to implement
or enforce any arbitration ruling in any court having proper jurisdiction
located in the district in which the alleged action of the other party occurred.
The prevailing party (plaintiff or defendant, as the case may be) shall be
entitled to recover, in addition to any other relief awarded, its reasonable
costs and expenses, including without limitation attorneys' and expert witness
fees, incurred in the proceeding.
11.4 Entire Agreement. This Agreement sets forth the entire agreement and
----------------
understanding of the parties relating to the subject matter herein and merges
all prior discussions between them. No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing signed by the party to be charged.
11.5 Notices. Any notice required or permitted by this Agreement will be
-------
deemed given if sent by registered mail, postage prepaid, addressed to the other
party at the address set forth below or at
-13-
<PAGE>
such other address for which such party gives notices hereunder. Delivery will
be deemed effective three (3) days after deposit with postal authorities.
If to GTE: Vice President and General Manager
GTE Enterprise Solutions
600 Hidden Ridge
Irving, TX 75038
Tel: 972-507-1701
Fax: 972-507-1703
If to Jutvision: Chief Executive Officer
Jutvision Corporation
124 University Avenue
Suite 202
Palo Alto, CA 94301
Tel: 650-325-6787
Fax: 650-325-9337
with a copy to: A. Hunter Farrell, Esq.
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Tel: 650-493-9300
Fax: 650-493-6811
11.6 Force Majeure. Nonperformance of either party will be excused to the
-------------
extent that performance is rendered impossible by storm, lockout or other labor
trouble, riot, war, rebellion, strike, fire, flood, accident or other act of
God, governmental acts, orders or restrictions, or any other reason where
failure to perform is beyond the control and not caused by the gross negligence
or willful misconduct of the non-performing party.
11.7 Non-Assignability and Binding Effect. Except as expressly provided
------------------------------------
herein, this Agreement may not be assigned or transferred, or may any right or
obligation hereunder be assigned or delegated, to a third party by either party
without the prior written consent of the other party hereto. Notwithstanding the
foregoing, either party may assign this Agreement or assign or delegate its
rights and obligations under this Agreement to a successor to all or
substantially all of its business or assets relating to this Agreement whether
by sale, merger, operation of law or otherwise. Subject to the foregoing, this
Agreement will be binding upon and inure to the benefit of the parties hereto,
their successors and assigns.
11.8 Modification; Waiver. No modification of or amendment to this
--------------------
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing signed by the party to be charged, and the waiver of any
breach or default will not constitute a waiver of any other right hereunder or
any subsequent breach or default.
11.9 Headings. The headings to the sections and subsections of this
--------
Agreement are included merely for convenience of reference and will not affect
the meaning of the language included therein.
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<PAGE>
11.10 Severability. In the event that it is determined by a court of
------------
competent jurisdiction as part of a final nonappealable ruling, government
action or binding arbitration, that any provision of this Agreement (or part
thereof) is invalid, illegal, or otherwise unenforceable, such provision will be
enforced as nearly as possible in accordance with the stated intention of the
parties, while the remainder of this Agreement will remain in full force and
effect and bind the parties according to its terms. To the extent any provision
(or part thereof) cannot be enforced in accordance with the stated intentions of
the parties, such provision (or part thereof will be deemed not to be a part of
this Agreement.
11.11 Counterparts; Facsimile Signatures. This Agreement may be executed
----------------------------------
by exchange of signature pages by facsimile and/or in any number of
--
counterparts, each of which shall be an original as against any party whose
signature appears thereon and all of which together shall constitute one and the
same instrument.
11.12 Legal Counsel. Each party acknowledges that it has legal counsel who
-------------
has reviewed this Agreement, has advised such party during any negotiations
pertaining to this Agreement, and has explained such party's rights and
obligations under this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
JUTVISION CORPORATION GTE ENTERPRISE SOLUTIONS,
a division of GTE Enterprise
Initiatives Incorporated
By: /s/ Howard Field By: /s/ Daniel Jensen
---------------------- -------------------------
Howard Field Daniel Jensen
Vice President Vice President and General Manager
-15-
<PAGE>
EXHIBIT A
---------
Marketing and Promotions
GTE agrees to use commercially reasonable efforts to market to GTE Customers the
Jutvision Production Services.
For GTE Customers who provide GTE with written permission to offer their
subscriber or member Brokers the Production Services, GTE and Jutvision will
market and promote the Production Services to Brokers as follows:
Order Origination
System 4 Workstation: For GTE Customers who use the System 4 Workstation:
- --------------------
The System 4 Workstation main menu lists the key program functions including the
"Web" function (also labelled "Home" in some versions). When the user clicks on
the "Web" button, a Web Browser Module, capable of rendering HTML, is loaded.
The first displayed HTML page lists key information and e-commerce links. On
this page, viewable without scrolling on an 800 x 600 pixel display, is a button
(or link), which will include a Jutvision logo (Jutvision Eyeflash icon) and
shall be labelled "Order Virtual Tour" (the "Order Button"). From time to time,
and upon the mutual agreement of GTE and Jutvision, the text on the Order Button
may be changed. Additionally, GTE, at its solo discretion, shall have the right
to [*] provided that it has [*] the Agreement [*] in accordance with the terms
of [*] of the Agreement. At GTE's sole discretion, GTE also may include graphics
or animations on the Order Button, provided that they do not promote or
otherwise reference any, third-party Virtual Tour providers for so long as the
initial [*]. Until such time as GTE provides the System 4 Web Based Listing
Input Link (described below), the Order Button will be a minimum 4096 pixels in
area; thereafter, there will be no minimum area for the Order Button
When the user presses the Order Button, the Web Browser Module will render an
HTML page (the "Order Page") which will be designed by either GTE or Jutvision,
and which will be hosted on a Jutvision-designated server. GTE and Jutvision
will mutually agree on the design, and hosting of the Order Page, and neither
party's consent shall be unreasonably withheld. The order page will have all the
data entry fields required for a Broker to place an Order for Production
Services and for Jutvision to fulfill and bill for the ordered Production
Services. At a minimum the Order Page will contain both Jutvision's and GTE's
logos. No other logos will be displayed on the Order Page. No links will be
placed on the Order Page without GTE's express written approval. No products
other than the Production Services will be advertised, mentioned, or offered for
sale without GTE's express written approval.
System 4 Browser: For GTE Customers who use the System 4 Browser:
- ----------------
The System 4 Browser main menu lists the key program functions including the
"Home" function (name subject to change). When the user clicks on the "Home"
button, an HTML page is loaded which lists key information and e-commerce links.
On this page, viewable without scrolling on an 800 x 600 pixel
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
display, is a button (or link), which will include a Jutvision logo (Jutvision
Eyeflash icon) and shall be labelled "Order Virtual Tour" (the "Order Button").
From time to time, and upon the mutual agreement of GTE and Jutvision, the text
on the Order Button may be changed. Additionally, GTE, at its sole discretion,
shall have the right [*] provided that it has first elected [*] the Agreement to
[*] in accordance with the terms of [*] of the Agreement. At GTE's sole
discretion, GTE also may include graphics or animations on the Order Button,
provided that they do not promote or otherwise reference any third-party Virtual
Tour providers for so long as the initial [*]. Until such time as GTE provides
the System 4 Web-Based Listing Input Link (described below), the Order Button
will be a minimum 4096 pixels in area; thereafter, there will be no minimum area
for the Order Burton.
When a user clicks on the Order Button, the Order Page, as described above, is
rendered.
System 4 [*]: GTE plans to introduce an [*] entering and modifying listings.
- ------------
These plans are subject to change or cancellation. At such time as GTE releases
the [*] GTE will include a method to order Production Services directly from the
listing input form. One of two methods will be employed:
1. Order Button Link: GTE will include a button (or link) labelled "Order
Virtual Tour" ("Listing Input Order Button"). From time to time, GTE may
choose to modify the text, graphics or animation on the button provided
that they do not promote or otherwise reference any third-party Virtual
Tour providers for so long as the [*] When a user clicks on the Order
Button, the Order Page, as described above, is rendered.
2. Order Entry Fields: GTE will include an area on the listing input form,
where users will be able to directly enter order criteria for Production
Services. GTE and Jutvision will, mutually agree upon the order criteria.
GTE will capture the order information and forward it to Jutvision in a
mutually agreed-upon format. The data will be transmitted using [*] unless
otherwise agreed in writing by GTE and Jutvision.
Virtual Tour Display
System 4 Workstation: For GTE Customers who use the System 4 Workstation:
- --------------------
System 4 Workstation supports two primary databases: Listings, and Public
Records (optional at some sites). The listings database (active and off-market)
is accessed via a number of search functions, such as Listings Search, CMA, Open
House and Market Update. These functions may change from time to time. Within
these search functions, users may get specific information on one property by
launching the "Listing Search -- Details" screen. From this screen, users may
view still exterior photographs, text data and map information. The "Views"
button enables users to retrieve and display additional property information
such as interior photographs, neighbor photographs, listing history records, or
public records, via a pop-up menu. For properties with a Virtual Tour in the GTE
Database, a "Virtual Tour" option will appear in the pop-up list. When the user
selects this option, the Virtual Tour will be downloaded from the GTE Database
and displayed.
The Public Records Database is accessed via the Public Records Search function.
This function may change from time to time. Within this function, users may get
specific information on one property by launching the "Public Records - Details"
screen. From this screen, users may view still exterior
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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<PAGE>
photographs, text data and map information. The "Views" button enables users to
retrieve and display additional property information, via a pup-up menu. For
properties with a Virtual Tour in the GTE Database, a "Virtual Tour" option will
appear in the pop-up menu. When the user selects this option, the Virtual Tour
will be downloaded from the GTE Database and displayed.
System 4 Browser: For GTE Customers who use the System 4 Browser:
- ----------------
System 4 Browser supports two primary databases. Listings, and Public Records
(optional at some sites). Only the listings database is generally searchable. It
is accessed via search functions such as Listings Search and Market Update (Hot
Sheet). These functions may change from time to time. For properties with a
Virtual Tour in the GTE Database, a "Virtual Tour" link and/or tab will appear
in the Listing Search results. When the user clicks on the Virtual Tour link
and/or tab, the Virtual Tour will be downloaded from the GTE Database and
displayed.
Other Marketing Activities
From time to time, subject to provisions in the Agreement regarding use of
Jutvision Marks, GTE may, at the sole discretion of GTE and GTE Customers,
choose to promote Virtual Tours via special marketing campaigns such as:
1. Advertising on web-sites maintained by GTE Customers
2. Advertising in GTE Customers' communications with their Broker members,
including flyers, newspapers, general mailings, broadcast Email, or system
messages presented at log-in on the System 4 Workstation
3. Demonstrations at trade shows or technology fairs
4. Demonstrations during Broker training classes
-18-
<PAGE>
AMENDMENT TO DISTRIBUTION AGREEMENT
-----------------------------------
THIS AMENDMENT TO DISTRIBUTION AGREEMENT ("Amendment") is made and entered
into as of January 19, 1999 (the "Effective Date"), between Jutvision
Corporation, a Delaware corporation ("Jutvision"), and GTE Enterprise Solutions,
a division of GTE Enterprise Initiatives Incorporated, a Delaware corporation
("GTE").
BACKGROUND
----------
On January 12, 1999, the parties entered into a certain distribution
agreement ("Distribution Agreement") pertaining to the production, distribution,
promotion and marketing of virtual tour technologies. The parties now desire to
amend the Distribution Agreement under the terms more specifically set forth
below. Except as otherwise expressly provided in this Amendment, all defined
terms used herein shall have those meanings defined under the Distribution
Agreement.
IN CONSIDERATION of the mutual promises and covenants contained herein, and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties agree as follows:
1. Jutvision's Obligations.
- -- -----------------------
1.1 [*]. Jutvision will [*] all Jutvision Images to the GTE Database
that do not result from [*] whenever the [*] are made by Brokers, except in
those cases where: (a) the Broker objects to the posting; and/or (b) the [*]
of such Jutvision Images (collectively, the [*]) objects to the postings. In
the event a [*] Jutvision will provide 20 days' prior written notice of the
[*] to GTE before [*] to the GTE Database.
1.2 [*]. All postings to the GTE Database made under this Section 1
(hereinafter referred to as a [*]) shall be made [*] to the Broker. For
purposes of illustration only, if a [*] is made of a Jutvision Image for a Basic
Package order received through [*] and the price charged to the Broker to post
the Jutvision Image to the [*] site alone is ordinarily [*], the Jutvision Image
shall be [*] and [*] for the [*], without any [*] for the [*] to the GTE
Database.
1.3 Jutvision Images Posted to Third-Party Web Sites. Jutvision has
------------------------------------------------------
entered into separate agreements (collectively, the "Third Party Agreements")
with [*] under which Jutvision has the right to post Jutvision Images to their
respective Web sites. For so long as Jutvision has this right under each
respective Third Party Agreement, [*], consistent with Jutvision's [*], to
allow [*] Jutvision Images to these respective third-party Web sites.
2. [*]
Notwithstanding anything contained in the Distribution Agreement to the
contrary, no [*] will be due to [*]. Except as specifically provided in the
preceding sentence, GTE shall be entitled to all [*] as provided under the
Distribution Agreement.
3. Affirmation of Distribution Agreement.
- -- -------------------------------------
The parties acknowledge that the Distribution Agreement remains in full
force and effect under its terms, as modified by this Amendment. This
Amendment shall supersede and control over the Distribution Agreement to the
extent of any conflict therewith.
IN WITNESS WHEREOF the parties hereto have executed this Amendment as of the
day and year first above written.
JUTVISION CORPORATION GTE ENTERPRISE SOLUTIONS,
a division of GTE Enterprise
Initiatives Incorporated
By: ________________________ By: __________________________________
Howard Field Daniel Jensen
Vice President Vice President and General Manager
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
EXHIBIT 10.42
Agreement
This agreement (this "Agreement") is made as of November 6, 1998 (the
---------
"Effective Date") by and between Loop Ventures, Inc., a California corporation
- ---------------
("Loop") and Jutvision Corporation, a Delaware corporation ("Jutvision"). The
---- ---------
parties hereby agree as follows:
WHEREAS, Jutvision and Loop desire to offer Jutvision's service to the
participating organizations designated on Exhibit A attached hereto, as both
---------
parties may update from time to time by mutual agreement (the "Participating
-------------
Organizations"), all of whom are represented by Loop, by providing a link to
- -------------
Jutvision's Web site (the "Jutvision Link") from Loop's Web site that will allow
--------------
Participating Organizations to order electronic virtual tours in ".jut" format
of listed properties ("Virtual Tours") from Jutvision.
-------------
NOW THEREFORE, the parties agree as follows:
1. Loop's HTML pages.
-----------------
1.1 Jutvision Link. The Jutvision Link will include the hypertext
--------------
link, associated graphic icon or logo provided by Jutvision and Uniform Resource
Locator ("URL") "www.jutvision.com/orders/loopnet". The Jutvision Link will
---
link Participating Organizations to Jutvision's Web site where the Participating
Organization can order a Virtual Tour. Loop will display the Jutvision Link on
Loop's HTML home page located at URL "www.loopnet.com" (the "Loop Home Page")
--------------
and on the HTML pages used by all Participating Organizations to submit graphic
images to listings to Loop located at URL
"www.loopnet.com/asp/gfxupload/gfupload.asp?loopui=true" (the "Loop Submit
-----------
Graphics Page").
- -------------
1.2 Maintenance of Site. Jutvision will use commercially reasonable
-------------------
efforts to ensure that the HTML page located at the URL specified by the
Jutvision Link and all related hardware, data or software, including without
limitation Web sites, HTML pages, pointers, URL's, links, processes, and audio
or video material ("Jutvision Content"), will be functional and accessible at
-----------------
all times to users of the World Wide Web.
1.3 Virtual Tours. Jutvision will provide Virtual Tours to Loop as
-------------
ordered by such Participating Organizations. Such Virtual Tours will be placed
by Loop on the HTML pages containing the listed properties (the "Loop Pages").
----------
Jutvision will use best efforts to process and post each Virtual Tour to the
Loop Pages within [*] after image capture, in each case to the extent Jutvision
has the right to do so, provided that such posting is not delayed by factors
attributable to Loop or its systems or servers. In no event will Loop have any
liability to Jutvision for payment of Virtual Tours purchased by a Participating
Organization.
2. Jutvision Images.
----------------
2.1 Ownership. All Virtual Tours, whether or not produced for Loop
---------
or Participating Organizations and whether or not provided to Loop or a
Participating Organization, are, and at all times will remain, the exclusive
property of Jutvision, and no provision of this Agreement implies any transfer
to Loop or any Participating Organization of any ownership interest in any
Virtual Tour.
Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
<PAGE>
2.2 License Grant. Jutvision hereby grants to Loop a nonexclusive,
-------------
worldwide, royalty-free, nontransferable license to display, perform and
reproduce Virtual Tours on the Loop Pages solely for the purposes contemplated
in this Agreement. Loop will not distribute, modify, edit, or prepare derivative
works from the Virtual Tours without the prior written permission of Jutvision.
The foregoing license does not include any right to grant or authorize
sublicenses.
3. Trademark License.
-----------------
3.1 License Grant for Jutvision Marks. Subject to the restrictions
---------------------------------
set forth herein, Jutvision grants to Loop a nonexclusive, worldwide, royalty-
free, fully paid up, nontransferable right to use the trademarks, service marks
and/or trade names JUTVISION and the Jutvision Logo (the "Jutvision Marks"),
during the term of this Agreement, in connection with the display of the
Jutvision Link as provided in Section 1.1 and on the Loop Pages.
3.2 License Grant for Loop Marks. Subject to the restrictions set
----------------------------
forth herein, Loop grants to Jutvision a nonexclusive, worldwide, royalty-free,
fully paid up, nontransferable right to use the trademarks, service marks and/or
trade names LOOPNET, LOOPNET.COM and any logos associated therewith (the "Loop
----
Marks"), during the term of this Agreement, in connection with promotion and
marketing of Jutvision's services on Jutvision's Web site and in other marketing
materials.
3.3 Assignment of Goodwill; Quality. If either party, in the course
-------------------------------
of performing its services hereunder, acquires any goodwill or reputation in any
of the trademarks, service marks or trade names of the other party, all such
goodwill or reputation will automatically vest in the party originally owning
such marks when and as, on an ongoing basis, such acquisition of goodwill or
reputation occurs, and each party agrees to take all such actions necessary to
effect such vesting. Each party, as licensee hereunder, agrees to use all such
marks licensed by the other party in a manner commensurate with the style,
appearance and quality of the services and/or products of the licensor party
bearing such marks.
3.4 Ownership. Loop owns and at all times will continue to own the
---------
Loop Marks, and Jutvision will not take any actions inconsistent with Loop's
ownership rights. Jutvision owns and at all times will continue to own the
Jutvision Marks, and Loop will not take any actions inconsistent with
Jutvision's ownership rights.
3.5 Presentation. Neither party will have a right to use the other's
------------
trademark, service mark or trade name or to refer to the other party directly or
indirectly without the prior written approval of the other party. Loop does not
object to Jutvision listing the names and/or logos of any of the Participating
Organizations in connection with promotion and marketing of Jutvision's services
on Jutvision's Web Site and in other marketing materials; provided, however,
that Jutvision will obtain the prior written approval of any Participating
Organizations before its name or logo are referred to.
4. Exclusivity. Loop agrees not to promote the services or products of
-----------
any other provider of 360 degrees, three dimensional, virtual tour, virtual
reality, virtual walkthrough or other similar images ("Virtual Images") on the
--------------
Loop Home Page or Loop Submit Graphics Page, and the Jutvision Link will be the
only link to a provider of Virtual Images or associated services displayed on
the Loop Home Page or Loop Submit Graphics Page. Notwithstanding the foregoing,
Loop will be under no obligation to include any Virtual Tour on any Loop Pages
except as requested by a Participating Organization and
-2-
<PAGE>
may display any Virtual Tour or other Virtual Image on any Loop Pages, whether
created by Jutvision or a third party, as requested by a Participating
Organization. Should a Participating Organization request that the Jutvision
Link be removed from a Loop Submit Graphics Page designed for that Participating
Organization at any time, Loop will remove the Jutvision Link immediately.
5. Fees and Pricing.
----------------
5.1 Fees. Jutvision will pay Loop [*] (the "Fee") for the [*] due
---- ---
and payable [*]. It is understood that the Fee represents a reduced price in
partial consideration of Jutvision's agreements hereunder.
5.2 Interest. Subject to a five (5) day grace period, late payments
--------
will accrue interest at the rate of 1.5% per month, or the highest rate
permitted by law, whichever is lower.
5.3 [*] Jutvision agrees that throughout the term of this Agreement,
---
[*] Participating Organizations will, on the whole taking into account all
reasonably appropriate facts and circumstances, [*] offered [*] of the same
quantity and quality and in the same time period and geographic region, for
commercial properties in the United States. In the event Jutvision [*] in the
United States to [*] subject to the qualifications in the preceding sentence,
Jutvision will promptly notify Loop and the Participating Organizations and will
[*] effective upon the date [*] were [*].
6. Confidentiality.
---------------
6.1 Confidential Information. The parties acknowledge that by
------------------------
reason of their relationship they will have access to certain information and
materials that are confidential, trade secret and of substantial value to both
parties, which value would be impaired if such information were disclosed to
third parties "Confidential Information"). The terms and conditions of this
------------------------
Agreement, without limiting the generality of the foregoing, constitute
Confidential Information. Each party agrees that it will not use in any way on
its own behalf or on behalf of any third party, nor disclose to any third party,
any Confidential Information revealed to it by the other party. Each party will
take all reasonable measures to protect the secrecy of and avoid disclosure and
unauthorized use of the Confidential Information. Without limiting the
foregoing, each party will take at least those measures that such party takes to
protect its own most highly confidential information. Each party agrees to
immediately notify the other in the event of any unauthorized use or disclosure
of the Confidential Information and agrees to assist the other in remedying such
unauthorized use or disclosure of Confidential Information.
6.2 Exclusions. The obligations of the parties under Section 6.1
----------
hereof with respect to any portion of either party's Confidential Information
will terminate when the other party can establish that such information (i) was
publicly known and made generally available in the public domain prior to the
time of disclosure to the recipient of Confidential Information; (ii) becomes
publicly known and made generally available after disclosure to the recipient by
the other party through no action or inaction of the recipient; or (iii) was
rightfully in the possession of recipient, without any confidentiality
restrictions, at or subsequent to the time it was communicated to recipient by
the other party.
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-3-
<PAGE>
7. Warranties and Limitation of Liability.
--------------------------------------
7.1 Representations and Warranties. Each party represents and
------------------------------
warrants to the other that it has full power and right to enter into this
Agreement and that there are no conflicting claims relating to the rights
granted herein. Jutvision hereby represents, warrants, and covenants that (i)
Jutvision is the owner or valid licensee of the Jutvision Marks and the
Jutvision Content, and there are no conflicting claims with respect to
Jutvision's rights thereto; and (ii) the Jutvision Marks and the Jutvision
Content will not infringe the copyright, trademark, service mark or trade secret
rights of any party, or constitute fraud, defamation, obscenity, or a violation
of any right of privacy or publicity or any party. Loop hereby represents,
warrants, and covenants that (i) Loop is the owner or valid licensee of the Loop
Marks, as well as the Loop Home Page, the Loop Pages, the Loop Submit Graphics
Page and all related hardware, data or software, including without limitation
Web sites, HTML pages, pointers, URL's, links, processes, and audio or video
material (the "Loop Content"), and there are no conflicting claims with respect
------------
to Loop's rights thereto; and (ii) the Loop Marks and the Loop Content will not
infringe the copyright, trademark or trade secret rights of any party, or
constitute fraud, defamation, obscenity, or a violation of any right of privacy
or publicity or any party
7.2 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 7.1 ABOVE,
----------
NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR
IMPLIED. WITHOUT LIMITING THE ABOVE, NEITHER PARTY MAKES ANY IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, OR NON-INFRINGEMENT.
7.3 Limitation on Liability. IN NO EVENT WILL EITHER PARTY BE
-----------------------
LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR
PUNITIVE DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
8. Indemnification. Each party will indemnify, defend and hold harmless
---------------
the other party and its officers, directors, agents, employees, successors and
permitted assigns from and against any and all losses, claims, suits,
proceedings, liabilities, expenses (including reasonable attorneys' fees and
expenses), causes of action, damages and costs arising out of or in connection
with the breach, potential breach or inaccuracy of, or failure to comply with,
any of the representations and warranties contained in Section 7.1 on the part
of the indemnitor.
9. Term and Termination.
--------------------
9.1 Term. The term of this Agreement will commence on January 1,
----
1999 and continue until December 31, 1999 unless earlier terminated under the
provisions of this Section 9. Notwithstanding the foregoing, Jutvision may
accelerate the commencement of this Agreement by providing ten days' notice to
Loop of its desire to so accelerate and providing the Fee to Loop. This
Agreement will terminate automatically without notice unless prior to that time
the term of the Agreement is extended by mutual written consent of the parties.
9.2 Survival. Notwithstanding the foregoing, the obligations set
--------
forth in Section 6.1 regarding Confidential Information which either party has
received will continue in perpetuity unless
-4-
<PAGE>
terminated pursuant to Section 6.2. Moreover the provisions of Sections 2.1,
3.4, 7.3, 8, 9.2, and 12 will survive the expiration or termination of this
Agreement for any reason.
9.3 Termination for Cause. Either party will have the right to
---------------------
terminate this Agreement by written notice in the event the other party (i)
materially breaches any of the terms and conditions of this Agreement and such
material breach continues uncured in excess of thirty (30) days after notice,
(ii) ceases to function as a going concern, or (iii) has a petition filed by or
against it under any state or federal bankruptcy or insolvency law which
petition has not been dismissed or set aside within sixty (60) days of its
filing.
10. Assignment. Except upon a merger, reorganization or sale of
----------
substantially all of the assets of the assigning party, neither party will
assign this Agreement without the prior written consent of the other party. Any
assignment permitted herein will be subject to the written consent of the
assignee to all terms and provisions of this Agreement.
11. Press Plans. The parties agree to participate in a joint press
-----------
announcement regarding the relationship entered into hereunder that will take
place on a mutually agreed upon date. The parties will agree to the form and
content of the joint press release. Either party may issue its own press
release, subject to the other party's prior written approval, not to be
unreasonably withheld, of the content within the release. Each party will
furnish its written acceptance of or objection to any proposed announcement
within forty-eight (48) hours.
12. General Provisions. This Agreement constitutes the entire agreement
------------------
of the parties with respect to the subject matter hereof and supersedes all
prior and contemporaneous documents with respect hereto, and cannot be modified
except by a written instrument signed by both parties. In the event that any
provision or provisions of this Agreement will be held to be unenforceable, this
Agreement will continue in full force and effect without such provision and will
be interpreted to reflect the original intent of the parties. This Agreement
will be governed by the laws of the State of California without reference to any
conflicts of laws principles. The relationship of the parties hereunder will be
that of independent contractors. Nothing herein will be construed to constitute
a partnership between or joint venture of the parties, nor will either party be
deemed the agent of the other. All disputes arising out this Agreement will be
submitted to the jurisdiction of the state and federal courts in Santa Clara
County, California. This Agreement will be binding upon and will inure to the
benefit of the parties' successors and/or assignees. Waiver by either party of a
breach of any provision of this Agreement or the failure by either party to
exercise any right hereunder will not operate or be construed as a waiver of any
subsequent breach or as a waiver of any other right. Except for the payment of
fees, nonperformance of either party will be excused to the extent that
performance is rendered impossible by an event beyond such party's control. This
Agreement may be executed by exchange of signature pages by facsimile and/or in
any number of counterparts, each of which will be an original as against any
party whose signature appears thereon and all of which together will constitute
one and the same instrument.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
LOOP VENTURES, INC. JUTVISION CORPORATION
By: /s/ SIGNATURE ILLEGIBLE By: /s/ SIGNATURE ILLEGIBLE
----------------------------- -----------------------------
Title: President Title: ILLEGIBLE
--------------------------- ---------------------------
[Signature page to Agreement]
<PAGE>
Exhibit A
Participating Organizations
[*]
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
EXHIBIT 10.44
[LOGO OF RE/MAX]
RE/MAX APPROVED SUPPLIER LICENSE AGREEMENT
THIS AGREEMENT is entered into by and between RE/MAX International, Inc., a
Colorado corporation whose address is 8390 E. Crescent Parkway, Suite 500,
Greenwood Village, Colorado 80111 (hereinafter referred at as "RE/MAX") and
Bamboo.com, whose address is 124 University Ave, Palo Alto, CA 94301
(hereinafter referred to as "Supplier").
WHEREAS RE/MAX is in the business of selling RE/MAX real estate franchises
and providing services to its franchisees and other affiliates (hereinafter
"RE/MAX Affiliates") and is the owner of certain registered trademarks, trade
names, service marks, logos and commercial symbols (hereinafter "RE/MAX marks")
which are the exclusive property of RE/MAX; and
WHEREAS Supplier is in the business of manufacturing and/or supplying
goods, and desires to offer for sale and distribution to RE/MAX Affiliates its
goods, which may contain the registered RE/MAX marks, and further desires to
utilize RE/MAX directories, rosters and other member lists and publications for
the purpose of advertising such goods to RE/MAX Affiliates;
NOW, THEREFORE, it is agreed as follows:
1. RE/MAX hereby grants to Supplier, as a RE/MAX Approved Supplier, its
consent to affix or display the RE/MAX marks to the goods of Supplier, to
solicit from RE/MAX Affiliates purchases of such goods bearing the RE/MAX marks
and to display the RE/MAX Approved Supplier logo in all such solicitations. In
order to ensure that the Supplier's goods meet the quality control standards of
RE/MAX and that RE/MAX Affiliates obtain the best possible service, it is agreed
that:
(a) All such goods shall be manufactured in conformity with
all standards and specifications set forth by RE/MAX, and
shall be of high quality and competitively priced;
(b) Any RE/MAX marks affixed to or displayed on Supplier's
goods shall only be affixed or displayed in conformity with
the specifications and standards pertaining to the use of
such marks as from time to time promulgated by RE/MAX; and
(c) Delivery of goods to any RE/MAX Affiliate shall be made
timely and in a manner that is consistent with all other
terms and conditions of any purchase order or other
agreement or arrangement Supplier has with such RE/MAX
Affiliate.
2. Supplier agrees that it will not sell or distribute any of its goods
bearing the RE/MAX marks except to RE/MAX Affiliates who, under contracts with
RE/MAX or its licensees or franchisees, have the right to use or display such
RE/MAX marks in the conduct of their business.
3. Supplier agrees to refund all moneys received for, or to replace at no
charge, any goods sold to a RE/MAX Affiliate which do not conform to or are
otherwise in violation of the standards or specifications established by RE/MAX,
and further agrees to recall and/or destroy or cause to be recalled or
destroyed, at its expense, any such nonconforming goods or materials.
4. In advance of sale or distribution of any of its goods, Supplier shall
furnish to RE/MAX samples of such goods which bear any of the RE/MAX marks. Upon
request of RE/MAX, Supplier shall thereafter correct, change or modify any such
goods which incorrectly or improperly display such RE/MAX marks. Supplier shall
further, upon request, submit to RE/MAX copies of letters, memoranda, notations,
quotes, bids and the like which have been previously submitted to any RE/MAX
Affiliate in connection with the sale or distribution of goods bearing the
RE/MAX marks.
5. Supplier warrants that goods furnished hereunder will be unique, novel
and original and do not infringe upon the trade secrets, patents, copyrights or
other proprietary rights of any third party.
<PAGE>
6. As consideration for the rights granted hereunder, Supplier hereby
agrees to pay RE/MAX an initial fee of [*]. Thereafter, on or before January 31
of each year, Supplier shall pay an annual fee as established by RE/MAX.
7. Supplier hereby acknowledges that any and all rights granted under
this agreement shall be nonexclusive and non-divisible and shall not be
transferred or assigned.
8. Supplier agrees that it will not engage in any business that will
directly or indirectly compete with RE/MAX or RE/MAX Affiliates, or enter into
any kind of agreement or arrangement with third parties that will create or tend
to create a conflict of interest with any relationship created herein with
RE/MAX OR RE/MAX Affiliates.
9. It is expressly agreed that ownership, right and title to the RE/MAX
marks shall inure exclusively to, vest automatically in and remain solely and
exclusively the property of RE/MAX. Supplier will not at any time do or cause to
be done, anything that contests or in any way impairs or tends to impair any
part of such ownership, right and title in and to the RE/MAX marks. Supplier
shall not in any manner represent that it has any ownership or other interest in
the RE/MAX marks or in the registrations thereof.
10. Supplier hereby agrees to indemnify and hold harmless RE/MAX from and
against all losses, damages, liabilities, costs and expenses, including
reasonable attorney fees, that result from any claim, action, suit or proceeding
arising from Supplier's breach of this agreement, including any claim or action
by a RE/MAX Affiliate resulting from defects in materials or workmanship of any
goods sold hereunder.
11. Any dispute, controversy or claim which may arise between RE/MAX and
Supplier in connection with any term or the performance of any provision of this
agreement shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment on the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof.
12. This agreement shall continue in full force and effect so long as
Supplier complies with all of the terms and conditions hereof. In the event
Supplier breaches any of the provisions of this agreement or defaults on any of
its obligations required to be performed hereunder, this agreement may be
terminated by RE/MAX upon thirty (30) days' prior written notice given to
Supplier. Upon termination of this agreement, Supplier shall cease and desist
from all use of the RE/MAX marks in any way, shall return to RE/MAX all company
lists, rosters or other materials furnished to Supplier in connection with this
agreement, and shall deliver to RE/MAX or its authorized representatives all
goods or other materials still in possession of Supplier that bear any RE/MAX
marks. Supplier's obligations under this paragraph shall survive the termination
or expiration of this agreement.
13. Any notices required or permitted to be given to either party under
this agreement shall be deemed to have been properly served when mailed by
certified mail, postage prepaid, return receipt requested, addressed to the
designated party at the address set forth above.
14. No waiver of any breach of any provision or condition of this
agreement shall constitute a waiver of any subsequent breach of the same or any
other provision or condition of this agreement.
15. This agreement shall be interpreted and performed in accordance with
the laws of the state of Colorado.
IN WITNESS WHEREOF, this agreement has been executed this 5 day of April, 1999.
/s/ [SIGNATURE ILLEGIBLE]^^ RE/MAX INTERNATIONAL, INC.
- --------------------------------
SUPPLIER
/s/ Andre Marquis
- -------------------------------- _________________________________
By By
VP of Marketing
- -------------------------------- _________________________________
Title Title
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-1 of
our report dated March 12, 1999, except for Note 14, which is as of July 21,
1999, relating to the financial statements and financial statement schedule of
bamboo.com, which appear in such Registration Statement. We also consent to the
references to us under the headings "Experts" and "Selected Financial Data" in
such Registration Statement.
San Jose, California
July 21, 1999
