<PAGE>
As filed with the Securities and Exchange Commission on August 3, 1999
Registration No. 333-80639
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
Amendment No. 5
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. [_]
----------------
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--August 3, 1999
PROSPECTUS
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5,000,000 Shares
bamboo.com, Inc.
Common Stock
[LOGO OF BAMBOO.COM]
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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.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.................. 4
Risk Factors........................ 8
Forward Looking Statements.......... 17
Use of Proceeds..................... 18
Dividend Policy..................... 18
Capitalization...................... 19
Dilution............................ 20
Selected Consolidated Financial
Data............................... 21
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 22
Business............................ 28
<CAPTION>
Page
----
<S> <C>
Management......................... 39
Interests of Management and Others
in Transactions................... 48
Principal Stockholders............. 51
Description of Capital Stock....... 53
Shares Eligible for Future Sale.... 58
Underwriting....................... 59
Legal Matters...................... 61
Experts............................ 61
Available Information.............. 61
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.
- -------------------------------------------------------------------------------
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 a hundred cities 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 $900
billion in 1997, representing 11.5% 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 to provide our
virtual tours to the following leading 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.
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. Under these exclusive arrangements these real estate
destination Web sites will not promote or market on their Web sites or through
their direct sales forces any virtual tours other than bamboo.com virtual
tours. Our agreements with the other real estate destination sites enable our
virtual tours to be posted on these sites but do not include exclusive
promotional or marketing arrangements. These real estate destination Web sites
provide a broad distribution network for our virtual tours but we do not
currently receive any significant revenue from these Web sites.
4
<PAGE>
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.
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......... -- -- -- 123,534
Series C interest
charge................. -- -- -- (81,298)
----------- ------------- ----------- ------------
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 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;
. economic or other conditions that affect the real estate industry; and
8
<PAGE>
. economic conditions specific to the Internet.
We plan to increase our operating expenses to expand our sales and marketing
programs and to hire more employees in the areas of administration and research
and development. We determine our operating expenses partly based on
anticipated revenue trends. In future periods, we may generate lower than
anticipated revenue due to the termination of a significant distribution
relationship or an adverse change in our pricing policy caused by competition.
The generation of lower than anticipated revenue could result in substantial
operating losses.
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
9
<PAGE>
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.
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
10
<PAGE>
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 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, key 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.
11
<PAGE>
We are dependent on the widespread use of Java-enabled Web browsers.
Our Web-based virtual tour product requires a Java-enabled Web browser. If a
user's Web browser is not Java-enabled, still images will be displayed instead
of a virtual tour. We depend on the widespread use of Java-enabled Web browsers
to market our virtual tours to real estate agents. If real estate agents
believe that the percentage of online viewers unable to view our tours is
significant, they may decide not to purchase our tours, which may cause a
decline in the sales of our virtual tours and harm our business.
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.
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.
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 John Assaraf, our Senior Vice President of Sales and Mark Searle, our
Chief Operating Officer. 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 result in decreased sales and a lower
level of customer satisfaction. The employment of all of our key employees is
at will.
We may be liable for infringing the intellectual property rights of others.
We have received and 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.
12
<PAGE>
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
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 economic swings
may be caused by various factors, such as changes in interest rates, changes in
economic conditions and seasonal changes in various geographic regions. These
cyclical economic swings could hurt our business.
We may not be successful in establishing additional international operations.
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 believe existing cash balances, cash equivalents and cash generated from
operations, together with the net proceeds from this offering, will be
sufficient to meet our anticipated cash needs for working capital and capital
expenditures for a period in excess of 18 months. However, we may need to raise
additional funds through public or private debt or equity financing prior to
this 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. 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.
13
<PAGE>
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.
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
14
<PAGE>
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.
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
15
<PAGE>
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."
Future sales of common stock by existing stockholders may decrease our
stock price.
On June 11, 1999, we sold 1,250,830 shares of common stock for a nominal
price in connection with the sale of Series C redeemable preferred stock. When
these previously issued shares 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.
We have recently granted low priced stock options which may cause investors
to experience additional dilution.
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. To the
extent any of these options are exercised, you will suffer dilution greater
than the $8.36 per share described above.
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.
16
<PAGE>
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.
17
<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.
18
<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 a
total of 7,156,884 shares of 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. The redemption will result in an
additional interest charge of approximately $6.5 million to accrete the
preferred stock to its redemption value. The pro forma as adjusted
capitalization also includes an additional charge for stock based
compensation of approximately $1.8 million which will accrue from the
acceleration of certain options granted by the company.
<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
13,962,114 pro forma as
adjusted....................... 1,805 8,962 13,962
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 40,942,050 90,887,050
Notes receivable from
stockholders...................... (127,556) (127,556) (127,556)
Unearned stock-based compensation.. (8,838,128) (8,838,128) (70,311,188)
Accumulated other comprehensive
income............................ 8,144 8,144 8,144
Deficit accumulated during the
development stage................. (18,967,366) (18,967,366) (27,321,908)
------------ ------------ ------------
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.
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<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.
20
<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.......... -- -- -- -- 123,534
Series C interest
charge.................. -- -- -- -- (81,298)
----------- --------- ----------- ----------- ------------
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>
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>
21
<PAGE>
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 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 Java-enabled Web browser and
without special plug-in software to download or install. If a user's Web
browser is unable to view Java applets, our bamboo.com View-Anywhere system
will automatically display still images in HTML. We also distribute our virtual
tours via email in one convenient self-contained 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 comprehensive 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 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. For the six months ended June 30,
1999, direct expenses for videotaping, image processing and delivery were
approximately $229,000, $160,000 and $52,000, respectively.
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
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 proceeds of $12.5 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 capital
resources to support the implementation of our 60 person direct sales force,
increased investments in advertising and related marketing activities and the
expansion of our processing center and call center. We will continue to invest
to support our direct sales force and we anticipate increased advertising
activities and continued expansion of our processing center 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 of
1999 generated $24.5 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 a period in excess of 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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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, 2000. 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 June 30, 1999:
<TABLE>
<CAPTION>
Maturing in
1999
-----------
<S> <C>
Assets
Cash and cash equivalents........................................ $18,158,000
===========
Average interest rates........................................... 4.5%
===========
Liabilities
Bank line of credit.............................................. $ 630,000
===========
Average interest rates........................................... 15.5%
===========
</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 of
videographers, we offer our virtual tour service in over a hundred cities
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.
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 $900
billion in 1997, representing 11.5% 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 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 a hundred cities 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 real estate destination Web sites provide a broad distribution network
for our virtual tours but we do not currently receive any significant revenue
from these Web sites. 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 are not a party to any agreements with these Internet portals and
there is no guarantee that the Web sites we have agreements with will continue
to provide content to these Internet portals.
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
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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 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 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 a hundred cities across the United
States and Canada.
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
continue to be more real estate related products and services offered online,
creating e-commerce opportunities. We may develop relationships with companies
that
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offer real estate related products and services online, including mortgage
organization services, furniture, home improvement products and insurance.
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.
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.
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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 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 major
real estate destination Web sites described 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.
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.
Cendant Corporation. Cendant 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 Cendant under which bamboo.com virtual tours may
be displayed on such portal. We are required to pay Cendant 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. Homes.com listings can also be viewed on Yahoo! 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.
These real estate destination Web sites provide a broad distribution network
for our virtual tours but we do not currently receive any significant revenue
from these Web sites. In addition, we are not a party to any agreements with
any Internet portals such as America Online, @Home Network, Excite, GO
Network/Infoseek, Netscape Netcenter and Yahoo! There is no guarantee that the
real estate destination Web sites we have agreements with will continue to
provide content to these Internet portals.
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
Arvida Realty Services Windermere Real Estate
John L. Scott Real Estate Carlson/Better Homes & Gardens Realty
Keller Williams Southwest Region Northside Realty
The Equity Group Realtors Pacific Union
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. We
pay these multiple listing service companies transaction fees for sales
generated by them. 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
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. Full service provider of technology to the real
estate industry
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 list of real estate brokerage firms whose agents have
purchased our virtual tours:
<TABLE>
<S> <C> <C>
Alain Pinel Fred Sands Realtors Prudential Real Estate Affiliates
Arvida Realty Services John L. Scott Real Estate RE/MAX International
Better Homes & Gardens Keller Williams Royal LePage
Century 21 Koenig & Strey Towne and Country Realtor
Coldwell Banker Pacific Union Windermere Real Estate
ERA
</TABLE>
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. 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 also face competition from companies that have
developed virtual tour technology including Be Here Corporation, Cyclovision,
Inc. and Interactive Pictures Corporation. 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 $23,829, $41,567 and
$242,917 for the years ended December 31, 1996, 1997 and 1998, 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 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 Stock Plan.
41
<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 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 $25,308, respectively, for fees for services rendered to us for fiscal
year ended December 31, 1998.
(2) These options and stock were granted to Lanek Limited, an entity affiliated
with Leonard McCurdy.
42
<PAGE>
Option Grants in Last Fiscal Year and the Six Months Ended June 30, 1999
The following table sets forth grants of stock options to each of the named
executive officers during the year ended December 31, 1998. All of the stock
options listed below were fully vested and exercisable on the date of grant and
were exercised during 1998. bamboo.com has never granted any stock appreciation
rights. The potential realizable value is calculated by assuming that the
initial public offering price appreciates at the indicated rate for the entire
term of the option and that the option is exercised at the exercise price on
the last day at the appreciated price. The 5% and 10% assumed annual rates of
stock price appreciation are mandated by the rules of the Securities and
Exchange Commission and do not represent our estimate or projection of future
common stock prices.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------
Number of Percent of Potential Realizable Value at
Securities Total Options Assumed Annual Rates of Stock
Underlying Granted to Exercise or Price Appreciation for Option Term
Options Employees in Base Price Expiration ----------------------------------
Name Granted Fiscal Year(1) ($/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) $0.27 4/6/09
</TABLE>
- --------
(1) These options were fully exercisable on the date of grant.
(2) These options become fully exercisable upon the completion of this
offering.
(3) 25% of the shares subject to these options become exercisable upon the
completion of this offering.
43
<PAGE>
Option Exercises During the Last Fiscal Year
The following table provides summary information concerning option exercises
for the fiscal year ended December 31, 1998 by each of the named executive
officers. The named executive officers did not hold any options as of December
31, 1998.
<TABLE>
<CAPTION>
Shares
Acquired Value
Name On Exercise (#) Realized ($)
---- --------------- ------------
<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 Stock Plan
The Board of Directors adopted the 1998 Stock Plan in December 1998 and the
stockholders approved the 1998 Stock 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 Stock 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 Stock 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 Stock Plan, the Board of
Directors and the stockholders subsequently approved an increase of 1,400,000
shares for issuance under the 1998 Stock 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 Stock Plan
The 1998 Stock Plan administrator, which is the Board of Directors or a
committee of the Board, administers the 1998 Stock 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 Stock 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
44
<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
Stock 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 Stock 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
Stock purchase rights granted under the 1998 Stock Plan are granted at the
fair market value of our common stock at the time of grant as determined by the
administrator of the 1998 Stock Plan. The factors that the administrator
considers include: prices paid by independent third parties in transactions
involving our common stock and preferred stock; our financial condition;
prospects for financing and operating performance; and milestones in the
development of our business. 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 Stock 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 Stock 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 Stock 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 Stock Plan
Unless terminated sooner, the 1998 Stock 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 Stock 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
45
<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
46
<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 the 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 Stock
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.
47
<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>
48
<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 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 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 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.
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 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.
49
<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.
50
<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.
51
<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.
52
<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, 9,226,766 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. 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 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 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 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
54
<PAGE>
meeting. These provisions may make it more difficult for stockholders to take
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 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 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.
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 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.
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<PAGE>
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
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. 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 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 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 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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<PAGE>
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 that were retained by or released to the syndicate
member.
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.
E*OFFERING has agreed to allocate a portion of the shares that it purchases
to E*TRADE Securities, Inc. E*OFFERING and E*TRADE will allocate shares to
their respective customers in accordance with usual and customary industry
practices. A prospectus in electronic format has been made available on an
Internet site maintained by E*OFFERING. Other than the prospectus in electronic
format, the information on E*OFFERING's Internet site is not part of this
prospectus or the registration statement of which the prospectus forms a part.
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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.
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...................................... 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 August 2, 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 14. 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
August 2, 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 12)
--------- ----------- ------------ -------------
(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:
2,324,774 authorized
shares....................
Issued and outstanding:
zero in 1997 and 1998,
2,324,774 in 1999
(unaudited) and zero pro
forma (unaudited)
(Liquidation value:
$13,500,000)............. -- -- 2,325 --
Common stock:
$0.001 par value..........
28,000,000 authorized
shares...................
Issued and outstanding:
zero in 1997 and 1998,
1,805,230 in 1999
(unaudited) and 8,962,114
pro forma (unaudited).... -- -- 1,805 $ 8,962
Class B common stock:
$0.0001 par value
7,421,536 authorized
shares;..................
Issued and outstanding:
2,845,025 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......... -- -- -- -- -- 123,534 123,534
Series C interest
charge................. -- -- -- -- -- (81,298) (81,298)
--------- --------- ----------- ----------- ----------- ------------ ------------
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) $(4.31)
=========== =========== ============ ============
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 2,824,774
shares of convertible preferred stock, of which 500,000 is designated Series A
convertible preferred stock ("Series A") and 2,324,774 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) $(16,893,732) $(18,967,366)
=========== =========== ============ ============
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
convertible preferred
stock from the date of
issuance:
Series A convertible
preferred stock...... 96,715 30,564 647,500 113,746
Series B convertible
preferred stock...... -- -- 639,553 86,231
----------- ----------- ------------ ------------
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) $ (1.84) $ (4.31)
=========== =========== ============ ============
</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 shares of Series B
convertible preferred stock 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 authorized 1,100 shares of its Series C
redeemable preferred stock, and 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 redemption value of $11.0 million.
Employee Stock Purchase Plan
In addition, on June 9, 1999, the Board of Directors approved the 1999
Employee Stock Purchase Plan subject to stockholder approval and effectiveness
of the Company's IPO Registration Statement with the Securities and Exchange
Commission. On July 19, 1999, the Company's stockholders approved the adoption
of 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.
Stock Split
On July 19, 1999, the Company approved a 2.8 for 1 forward split of its
common stock, which will be effected prior to the closing of the public
offering. All common stock data and common stock option plan information has
been restated to reflect the forward split.
In addition, the conversion prices of the Company's Series A and Series B
convertible preferred stock have also been adjusted to reflect the effect of
the forward split.
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 140,000 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 [Intentionally omitted]
10.11 Form of bamboo.com Approved Web Pro Agreement.*
10.12 [Intentionally omitted]
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 PricewaterhouseCoopers LLC.
23.2 Consents of Wilson Sonsini Goodrich & Rosati, P.C.*
23.3 Consent of Dave Liniger.
24.1 Power of Attorney (see page II-7).*
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.
II-5
<PAGE>
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.
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. 5 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 August 3, 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. 5 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, August 3, 1999
______________________________________ Chairman and Director
Leonard B. McCurdy
* Kevin B. McCurdy Executive Vice President August 3, 1999
______________________________________ and Director
Kevin B. McCurdy
/s/ Randall I. Bresee Chief Financial Officer August 3, 1999
______________________________________
Randall I. Bresee
* Duncan Fortier Director August 3, 1999
______________________________________
Duncan Fortier
* John Moragne Director August 3, 1999
______________________________________
John Moragne
* Philip Sanderson Director August 3, 1999
______________________________________
Philip Sanderson
* James Marver Director August 3, 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 August 2, 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
August 2, 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 [Intentionally omitted]
10.11 Form of bamboo.com Approved Web Pro Agreement.*
10.12 [Intentionally omitted]
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 PricewaterhouseCoopers LLC.
23.2 Consents of Wilson Sonsini Goodrich & Rosati, P.C.*
23.3 Consents of Dave Liniger.
24.1 Power of Attorney (see page II-7).*
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>
bamboo.com, Inc.
_______Shares/1/
Common Stock
UNDERWRITING AGREEMENT
----------------------
________ ___, 1999
PRUDENTIAL SECURITIES INCORPORATED
DAIN RAUSCHER WESSELS, a division of
Dain Rauscher Incorporated
VOLPE BROWN WHELAN & COMPANY
E*OFFERING CORP.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Ladies and Gentlemen:
Each of bamboo.com, Inc., a Delaware corporation (the "Company"), the
shareholders of the Company named in Schedule 3 hereto (collectively, "Selling
Securityholders") and Kevin B. McCurdy and Howard Field (collectively, the "
Principal Selling Securityholders"), hereby confirms its agreement with the
several underwriters named in Schedule 1 hereto (the "Underwriters"), for whom
you have been duly authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
- -------------------
/1/ Plus an option to purchase from bamboo.com, Inc. and the Selling
Securityholders up to _____________ additional shares to cover over-
allotments.
<PAGE>
1. Securities. Subject to the terms and conditions herein contained, the
----------
Company and the Selling Securityholders propose to issue and sell to the several
Underwriters an aggregate of ___ shares (the "Firm Securities") of the Company's
Common Stock, par value $0.001 per share ("Common Stock"). The Company and the
Selling Securityholders also propose to issue and sell to the several
Underwriters not more than _______________ additional shares of Common Stock if
requested by the Representatives as provided in Section 4 of this Agreement.
Any and all shares of Common Stock to be purchased by the Underwriters pursuant
to such option are referred to herein as the "Option Securities," and the Firm
Securities and any Option Securities are collectively referred to herein as the
"Securities."
2.
3. Representations and Warranties of the Company and the Principal Selling
-----------------------------------------------------------------------
Securityholders. Each of the Company and the Principal Selling Securityholders
- ----------------
represents and warrants to, and agrees with, each of the several Underwriters
that:
4.
(a) A registration statement on Form S-1 (File No. 333-80639) with respect to
the Securities, including a prospectus subject to completion, has been
filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and
one or more amendments to such registration statement has been so filed.
After the execution of this Agreement, the Company will file with the
Commission either (i) if such registration statement, as it has been
amended, has been declared by the Commission to be effective under the Act,
either (A) if the Company relies on Rule 434 under the Act, a Term Sheet
(as hereinafter defined) relating to the Securities, that shall identify
the Preliminary Prospectus (as hereinafter defined) that it supplements
containing such information as is required or permitted by Rules 434, 430A
and 424(b) under the Act or (B) if the Company does not rely on Rule 434
under the Act, a prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment shall
have been filed, in such registration statement), with such changes or
insertions as are required by Rule 430A under the Act or permitted by Rule
424(b) under the Act, and in the case of either clause (i)(A) or (i)(B) of
this sentence as have been provided to and approved by the Representatives
prior to the execution of this Agreement, or (ii) if such registration
statement, as it has been amended, has not been declared by the Commission
to be effective under the Act, an amendment to such registration statement,
including a form of prospectus, a copy of which amendment has been
furnished to and approved by the Representatives prior to the execution of
this Agreement. The Company may also file a related registration statement
with the Commission pursuant to Rule 462(b) under the Act for the purpose
of registering certain additional Securities, which registration shall be
effective upon filing with the Commission. As used in this Agreement, the
term "Original Registration Statement" means the registration statement
initially filed relating to the Securities, as amended at the time when it
was or is declared effective, including all financial schedules and
exhibits thereto and including any information omitted therefrom pursuant
to Rule 430A under the Act and included in the Prospectus (as hereinafter
defined); the term "Rule 462(b) Registration Statement" means any
registration statement filed with the Commission pursuant to Rule 462(b)
under the Act (including the Registration Statement and any Preliminary
Prospectus or Prospectus incorporated therein at the time such Registration
Statement becomes effective); the term "Registration Statement" includes
both the Original Registration Statement and any Rule 462(b)
2
<PAGE>
Registration Statement; the term "Preliminary Prospectus" means each
prospectus subject to completion filed with any such registration
statement or any amendment thereto (including the prospectus subject to
completion, if any, included in the Registration Statement or any
amendment thereto at the time it was or is declared effective); the term
"Prospectus" means: (b)
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the
Act, the prospectus included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet.
(a) The Commission has not issued any order preventing or suspending use of any
Preliminary Prospectus. When any Preliminary Prospectus was filed with the
Commission it (i) contained all statements required to be stated therein in
accordance with, and complied in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. When the Registration Statement or any amendment
thereto was or is declared effective, it (i) contained or will contain all
statements required to be stated therein in accordance with, and complied
or will comply in all material respects with the requirements of, the Act
and the rules and regulations of the Commission thereunder and (ii) did not
or will not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not
misleading. When the Prospectus or any Term Sheet that is a part thereof
or any amendment or supplement to the Prospectus is filed with the
Commission pursuant to Rule 424(b) (or, if the Prospectus or part thereof
or such amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such amendment
or supplement to the Prospectus was or is declared effective) and on the
Firm Closing Date and any Option Closing Date (both as hereinafter
defined), the Prospectus, as amended or supplemented at any such time, (i)
contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with
the requirements of, the Act and the rules and regulations of the
Commission thereunder and (ii) did not or will not include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The foregoing provisions of
this
3
<PAGE>
paragraph (b) do not apply to statements or omissions made in any
Preliminary Prospectus, the Registration Statement or any amendment
thereto or the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for
use therein.
(b)
(c) If the Company has elected to rely on Rule 462(b) and the Rule 462(b)
Registration Statement has not been declared effective (i) the Company has
filed a Rule 462(b) Registration Statement in compliance with and that is
effective upon filing pursuant to Rule 462(b) and has received confirmation
of its receipt and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of
the Rule 462(b) Registration Statement, in compliance with Rule 111
promulgated under the Act or the Commission has received payment of such
filing fee.
(d)
(e) The Company and each of its subsidiaries have been duly organized and are
validly existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations and are in good standing under
the laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so qualified
could result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole ("Material Adverse Change").
(f)
(g) The Merger Agreement, dated as of ____ between the Company, a Delaware
corporation, and bamboo Canada Inc. ("bamboo Canada"), a Canadian
corporation (the "Merger Agreement"), which effected the reincorporation of
the Company under the laws of the State of Delaware, is effective and has
caused the merger of Jutvision Corporation, the predecessor company to the
Company, with and into bamboo Canada. The Merger Agreement has been duly
authorized, executed and delivered by each of the Company and bamboo Canada
and is a valid and binding agreement of the Company and bamboo Canada,
enforceable against each in accordance with its terms and conforms to the
description thereof in the Prospectus.
(h)
(i) The Conversion and Pairing Agreement, entered into between the Company and
bamboo Canada (the "Conversion and Pairing Agreement"), has been duly
authorized, executed and delivered by each of the Company and bamboo Canada
and is a valid and binding agreement of the Company and bamboo Canada,
enforceable against each in accordance with its terms and conforms to the
description thereof in the Prospectus.
(j)
(k) The Company and each of its subsidiaries have all requisite corporate power
and corporate authority to execute and deliver the Merger Agreement and to
consummate the transactions contemplated thereby.
(l)
(m) All consents, approvals and authorizations of and filings with any
governmental entity with respect to any applicable laws required on the
part of the Company or any of its subsidiaries in connection with the valid
execution and delivery
4
<PAGE>
of the Merger Agreement, or the consummation of the transaction
contemplated thereby, have been obtained or made.
(n)
(o) Neither the performance, execution and delivery of the Merger Agreement by
the Company or any of its subsidiaries, nor the consummation by the Company
and its subsidiaries of the transactions contemplated thereby, nor
compliance by the Company and its subsidiaries with any of the provisions
thereof, will result in any of the following: (a) a violation of the
restated certificate of incorporation or bylaws of the Company or its
subsidiaries, (b) a default or event that, with the notice or lapse of
time, or both would constitute a default, breach or violation of any
material contracts of the Company, (c) an event that would permit any
person or entity to terminate any material contract of the Company or to
accelerate the maturity of any obligation of the Company or its
subsidiaries, (d) a violation or breach of any applicable laws, or (e) a
violation of any judicial order to which the Company or any of its
subsidiaries are a party.
(p)
(q) The Class B common stock conforms to the description thereof in all
material respects under the heading "Description of Capital Stock - Class B
Common Stock."
(r)
(s) The Company and each of its subsidiaries have full power (corporate and
other) to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate and
other) to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it.
(t)
(u) The issued shares of capital stock of each of the Company's subsidiaries
have been duly authorized and are validly issued, fully paid and
nonassessable and, are owned beneficially and of record, by the Company
free and clear of any security interests, liens, encumbrances, equities or
claims, except for ___ shares of Series C preferred stock of bamboo Canada,
which convert at the option of the holder thereof into ___ shares of Common
Stock of the Company.
(v)
(w) The authorized, issued and outstanding capital stock of the Company is as
set forth in the Prospectus under the caption "Capitalization," and, after
giving effect to the offering will be set forth under the column "Pro Forma
As Adjusted" under the caption "Capitalization" (except for subsequent
issuances, if any pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus or
pursuant to the exercise of options referred to in the Prospectus). All of
the issued shares of capital stock of the Company and its subsidiaries have
been duly authorized and validly issued and are fully paid and
nonassessable; none of the outstanding shares of capital stock of the
Company or its subsidiaries was issued in violation of the preemptive or
other similar rights of any security holder of the Company. The shares of
issued and outstanding capital stock of the Company and its subsidiaries
have been issued in compliance, with all federal and state securities laws,
and Canadian laws; and no preemptive rights of, or rights of refusal in
favor of, stockholders exist with respect to the Common Stock, or the issue
and sale thereof,
5
<PAGE>
pursuant to the restated certificate of incorporation or bylaws of the
Company, and there are no contractual or statutory preemptive rights that
have not been waived, rights of first refusal or rights of co-sale which
exist with respect to the issue and sale of the Common Stock; except as
described in the Prospectus, there are no outstanding options, warrants
or other rights to purchase, agreements to issue or other rights to
convert any obligations into shares of capital stock of the Company or
any of its subsidiaries.
(x)
(y) The Firm Securities and the Option Securities have been duly authorized and
at the Firm Closing Date or the related Option Closing Date (as the case
may be), after payment therefor in accordance herewith, will be validly
issued, fully paid and nonassessable. No holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or
other rights to subscribe for any of the Securities, and no holder of
securities of the Company has any right which has not been fully exercised
or waived to require the Company to register the offer or sale of any
securities owned by such holder under the Act in the public offering
contemplated by this agreement.
(z)
(aa) The capital stock of the Company and its subsidiaries conforms to the
description thereof contained in the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus.
(bb)
(cc) Except as disclosed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), there are no
outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such subsidiary any such
capital stock or any such convertible or exchangeable securities or
obligations, or (C) obligations of the Company or any such subsidiary to
issue any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
(dd)
(ee) The consolidated financial statements and schedules of the Company and its
consolidated subsidiaries included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the financial position of the
Company and its consolidated subsidiaries and the results of operations and
changes in financial condition as of the dates and periods therein
specified. Such financial statements and schedules have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved. The financial data set forth
under the caption "Summary Consolidated Financial Data," "Capitalization"
and "Selected Consolidated Financial Data" in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly present, on the basis
6
<PAGE>
stated in the Prospectus (or such Preliminary Prospectus), the
information included therein.
(ff)
(gg) PricewaterhouseCoopers LLP, who have certified certain financial statements
of the Company and its consolidated subsidiaries and delivered their report
with respect to the audited consolidated financial statements and schedules
included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
are independent public accountants as required by the Act and the
applicable rules and regulations thereunder.
(hh)
(ii) The execution and delivery of this Agreement have been duly authorized by
the Company and this Agreement has been duly executed and delivered by the
Company, and is the valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(jj)
(kk) No legal or governmental proceedings are pending to which the Company or
any of its subsidiaries is a party or to which the property of the Company
or any of its subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not described therein
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), and no such proceedings have been threatened against the
Company or any of its subsidiaries or with respect to any of their
respective assets, technologies or properties; and no contract or other
document is required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement that
is not described therein (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) or filed as required.
(ll)
(mm) The issuance, offering and sale of the Securities to the Underwriters by
the Company pursuant to this Agreement, the compliance by the Company with
the other provisions of this Agreement and the consummation of the other
transactions herein contemplated do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required under
state securities or blue sky laws and, if the registration statement filed
with respect to the Securities (as amended) is not effective under the Act
as of the time of execution hereof, such as may be required (and shall be
obtained as provided in this Agreement) under the Act, or (ii) conflict
with or result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
or any of their respective properties are bound, or the charter documents
or by-laws of the Company or any of its subsidiaries, or any statute or any
judgment, decree, order,
7
<PAGE>
rule or regulation of any court or other governmental authority or any
arbitrator applicable to the Company or any of its subsidiaries.
(nn)
(oo) Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus, neither the Company nor
any of its subsidiaries has sustained any material loss or interference
with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from
any labor dispute or any legal or governmental proceeding and there has not
been any Material Adverse Change, or any development involving a
prospective Material Adverse Change.
(pp)
(qq) The Company has not, directly or indirectly, (i) taken any action designed
to cause or to result in, or that has constituted or which might reasonably
be expected to constitute, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold,
bid for, purchased, or paid anyone any compensation for soliciting
purchases of, the Securities or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
(rr)
(ss) The Company has not distributed and, prior to the later of (i) the Closing
Date and (ii) the completion of the distribution of the Securities, will
not distribute any offering material in connection with the offering and
sale of the Securities other than the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or other materials, if any permitted by
the Act.
(a) Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), (1) the Company and its
subsidiaries have not incurred any material liability or obligation, direct
or contingent, nor entered into any material transaction not in the
ordinary course of business; (2) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock; (3) the Company
has not purchased any of the outstanding capital stock of its subsidiaries,
nor declared, paid or otherwise made any dividend or distribution of any
kind on such capital stock and (4) there has not been any material change
in the capital stock, short-term debt or long-term debt of the Company and
its consolidated subsidiaries, except in each case as described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(b)
8
<PAGE>
(c) The Company and each of its subsidiaries have good and marketable title in
fee simple to all items of real property and marketable title to all
personal property owned by each of them, in each case free and clear of any
security interests, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of
such property and do not interfere with the use made or proposed to be made
of such property by the Company or such subsidiary, and any real property
and buildings held under lease by the Company or any such subsidiary are
held under valid, subsisting and enforceable leases, with such exceptions
as are not material and do not interfere with the use made or proposed to
be made of such property and buildings by the Company or such subsidiary,
in each case except as described in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(d)
(e) Except as described in the Prospectus, no labor dispute with the employees
of the Company or any of its subsidiaries exists or is threatened or
imminent that could result in a Material Adverse Change.
(f)
(g) The Company and its subsidiaries own or possess, all material patents,
patent applications, trademarks, service marks, trade names, licenses,
copyrights and proprietary or other confidential information currently
employed by them in connection with their respective businesses, and
neither the Company nor any such subsidiary has received any notice of
infringement of or conflict with asserted rights of any third party with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Change.
(h)
(i) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; neither the Company nor any such subsidiary has been refused
any insurance coverage sought or applied for; and neither the Company nor
any such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not cause a Material Adverse
Change. The officers and directors of the Company are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary for officers and directors
liability insurance of a public company and as would cover claims which
could be made in connection with the issuance of the Securities; and the
Company has no reason to believe that it will not be able to renew its
existing directors and officers liability insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to cover its officers and directors.
(j)
9
<PAGE>
(k) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as described in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(l)
(m) The Company and its subsidiaries possess all certificates, authorizations
and permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, and neither
the Company nor any such subsidiary has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a Material
Adverse Change.
(n)
(o) The Company will conduct its operations in a manner that will not subject
it to registration as an investment company under the Investment Company
Act of 1940, as amended, and this transaction will not cause the Company to
become an investment company subject to registration under such Act.
(p)
(q) The Company has filed all foreign, federal, state and local tax returns
that are required to be filed or has requested extensions thereof (except
in any case in which the failure so to file would not have a material
adverse effect on the Company and its subsidiaries) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is currently being
contested in good faith or as described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(r)
(s) Neither the Company nor any of its subsidiaries is in violation of any
federal or state law or regulation relating to occupational safety and
health or to the storage, handling or transportation of hazardous or toxic
materials and the Company and its subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal and
state occupational safety and health and environmental laws and regulations
to conduct their respective businesses, and the Company and each such
subsidiary is in compliance with all terms and conditions of any such
permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, singly or in the aggregate,
result in a Material Adverse Change.
(t)
10
<PAGE>
(u) The statistical and market-related data included in the Registration
Statement and the Prospectus are derived from sources which the Company
reasonably and in good faith believes to be accurate, reasonable and
reliable; such data agrees in all material respects with the sources from
which they were derived, and to the Company's knowledge, such data
reasonably describes the markets or industries in which the Company
conducts or proposes to conduct its business.
(v)
(w) Except for the shares of capital stock of each of the subsidiaries owned by
the Company and such subsidiaries, neither the Company nor any such
subsidiary owns any shares of stock or any other equity securities of any
corporation or has any equity interest in any firm, partnership,
association or other entity, except as described in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(x)
(y) The Shares have been duly authorized for listing on the Nasdaq National
Market, subject to official notice of issuance.
(z)
(aa) There are no holders of securities of the Company, who, by reason of the
filing of the Registration Statement, have the right (and have not waived
such right) to request the Company to register under the Act, or to include
in the Registration Statement, securities held by them.
(bb)
(cc) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or
specific authorizations; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3)
access to assets is permitted only in accordance with management's general
or specific authorization; and (4) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(dd)
(ee) No default exists, and no event has occurred which, with notice or lapse of
time or both, would constitute a default in the due performance and
observance of any term, covenant or condition of any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties is bound or may be
affected in any material adverse respect with regard to property, business
or operations of the Company and its subsidiaries.
(ff)
(gg) Except as disclosed in the Prospectus or except as not reasonably required
to be disclosed in the Prospectus, there are no outstanding loans,
advances,
11
<PAGE>
or guarantees of indebtedness by the Company to or for the benefit of any
of the executive officers or directors of the Company or any of the
members of the families of any of them.
(hh)
(ii) The execution and delivery of the Amendment to Joint Services Agreement,
Warrant and Option Agreement, entered into between the Company, RealSelect,
Inc. and HomeStore.com, Inc. has been duly authorized by the Company, and
is a valid and binding agreement of each party, enforceable against each
party in accordance with its terms canceling and terminating the terms of
the Option Agreement previously entered into between the Company and
RealSelect, Inc.
(jj)
(kk) Each certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
(ll)
2. Representations and Warranties of the Selling Securityholders. Each
--------------------------------------------------------------
Selling Securityholder represents and warrants to, and agrees with, each of the
several Underwriters that:
3.
(a) Such Selling Securityholder has full power to enter into this Agreement and
to sell, assign, transfer and deliver to the Underwriters the Securities to
be sold by such Selling Securityholder hereunder in accordance with the
terms of this Agreement; and this Agreement has been duly executed and
delivered by such Selling Securityholder.
(b)
(c) Such Selling Securityholder has duly executed and delivered a power of
attorney and custody agreement (with respect to such Selling
Securityholder, the "Power-of-Attorney" and the "Custody Agreement",
respectively), each in the form heretofore delivered to the
Representatives, appointing Kevin B. McCurdy as such Selling
Securityholder's attorney-in-fact (the "Attorney-in-Fact") with authority
to execute, deliver and perform this Agreement on behalf of such Selling
Securityholder and appointing Kevin B. McCurdy, as custodian thereunder
(the "Custodian"). Certificates in negotiable form, endorsed in blank or
accompanied by blank stock powers duly executed, with signatures
appropriately guaranteed, representing the Securities to be sold by such
Selling Securityholder hereunder have been deposited with the Custodian
pursuant to the Custody Agreement for the purpose of delivery pursuant to
this Agreement. Such Selling Securityholder has full power to enter into
the Custody Agreement and the Power-of-Attorney and to perform its
obligations under the Custody Agreement. The Custody Agreement and the
Power-of-Attorney have been duly executed and delivered by such Selling
Securityholder and, assuming due authorization, execution and delivery by
the Custodian, are the legal, valid, binding and enforceable instruments of
such Selling
12
<PAGE>
Securityholder. Such Selling Securityholder agrees that each
of the Securities represented by the certificates on deposit with the
Custodian is subject to the interests of the Underwriters hereunder, that
the arrangements made for such custody, the appointment of the Attorney-in-
Fact and the right, power and authority of the Attorney-in-Fact to execute
and deliver this Agreement, to agree on the price at which the Securities
(including such Selling Securityholder's Securities) are to be sold to the
Underwriters, and to carry out the terms of this Agreement, are to that
extent irrevocable and that the obligations of such Selling Securityholder
hereunder shall not be terminated, except as provided in this Agreement or
the Custody Agreement, by any act of such Selling Securityholder, by
operation of law or otherwise, whether in the case of any individual
Selling Securityholder by the death or incapacity of such Selling
Securityholder, in the case of a trust or estate by the death of the
trustee or trustees or the executor or executors or the termination of such
trust or estate, or in the case of a corporate or partnership Selling
Securityholder by its liquidation or dissolution or by the occurrence of
any other event. If any individual Selling Securityholder, trustee or
executor should die or become incapacitated or any such trust should be
terminated, or if any corporate or partnership Selling Securityholder shall
liquidate or dissolve, or if any other event should occur, before the
delivery of such Securities hereunder, the certificates for such Securities
deposited with the Custodian shall be delivered by the Custodian in
accordance with the respective terms and conditions of this Agreement as if
such death, incapacity, termination, liquidation or dissolution or other
event had not occurred, regardless of whether or not the Custodian or the
Attorney-in-Fact shall have received notice thereof.
(d)
(e) Such Selling Securityholder is the lawful owner of the Securities to be
sold by such Selling Securityholder hereunder and upon sale and delivery
of, and payment for, such Securities, as provided herein, such Selling
Securityholder will convey good and marketable title to such Securities,
free and clear of any security interests, liens, encumbrances, equities,
claims or other defects.
(f)
(g) Such Selling Securityholder has not, directly or indirectly, (i) taken any
action designed to cause or result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Securities or (B) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company (except for the sale of
Securities by the Selling Securityholders under this Agreement).
(h)
(i) To the extent that any statements or omissions are made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any
13
<PAGE>
amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by such Selling
Securityholder specifically for use therein, such Preliminary Prospectus
did, and the Registration Statement and the Prospectus and any amendments
or supplements thereto, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act and the respective rules and regulations of
the Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading. Such Selling
Securityholder has reviewed the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) and the
Registration Statement, and the information regarding such Selling
Securityholder set forth therein under the caption "Principal and Selling
Securityholders" is complete and accurate.
(j)
(k) The sale by such Selling Securityholder of Securities pursuant hereto is
not prompted by any adverse information concerning the Company that is not
set forth in the Registration Statement or the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(l)
(m) The sale of the Securities to the Underwriters by such Selling
Securityholder pursuant to this Agreement, the compliance by such Selling
Securityholder with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as have been obtained, such as may be required under state securities
or blue sky laws and, if the registration statement filed with respect to
the Securities (as amended) is not effective under the Act as of the time
of execution hereof, such as may be required (and shall be obtained as
provided in this Agreement) under the Act, or (ii) conflict with or result
in a breach or violation of any of the terms and provisions of, or
constitute a default under any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which such Selling Securityholder is a
party or by which such Selling Securityholder or any of such Selling
Securityholder's properties are bound, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to such Selling Securityholder.
(n)
(o) Such Selling Securityholder will deliver to the Representatives no later
than the third business day prior to the Option Closing Date a properly
completed and executed U.S. Treasury Department Form W-9 (or Form W-8 for
non-U.S. residents).
(p)
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<PAGE>
4. Purchase, Sale and Delivery of the Securities.
---------------------------------------------
5.
(a) On the basis of the representations, warranties, agreements and covenants
herein contained and subject to the terms and conditions herein set forth,
the Company agrees to issue and sell to each of the Underwriters, and each
of the Underwriters, severally and not jointly, agrees to purchase from the
Company, at a purchase price of $_____ per share, the number of Firm
Securities set forth opposite the name of such Underwriter in Schedule 1
hereto. One or more certificates in definitive form for the Firm Securities
that the several Underwriters have agreed to purchase hereunder, and in
such denomination or denominations and registered in such name or names as
the Representatives request upon notice to the Company at least 48 hours
prior to the Firm Closing Date, shall be delivered by or on behalf of the
Company to the Representatives for the respective accounts of the
Underwriters, against payment by or on behalf of the Underwriters of the
purchase price therefor by wire transfer in same-day funds (the "Wired
Funds") to the account of the Company. Such delivery of and payment for
the Firm Securities shall be made at the offices of Skadden, Arps, Slate,
Meagher & Flom LLP, Palo Alto, California 94301, at 9:30 A.M., New York
time, on __________, 1999, or at such other place, time or date as the
Representatives and the Company may agree upon or as the Representatives
may determine pursuant to Section 11 hereof, such time and date of delivery
against payment being herein referred to as the "Firm Closing Date". The
Company will make such certificate or certificates for the Firm Securities
available for checking and packaging by the Representatives at the offices
in New York, New York of the Company's transfer agent or registrar or of
Prudential Securities Incorporated at least 24 hours prior to the Firm
Closing Date.
(b)
(c) For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company and the Selling Securityholders hereby grant to the
several Underwriters an option to purchase, severally and not jointly, the
Option Securities. The purchase price to be paid for any Option Securities
shall be the same price per share as the price per share for the Firm
Securities set forth above in paragraph (a) of this Section 4. The option
granted hereby may be exercised as to all or any part of the Option
Securities from time to time within (thirty) days after the date of the
Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock
Exchange is open for trading). The Underwriters shall not be under any
obligation to purchase any of the Option Securities prior to the exercise
of such option. The Representatives may from time to time exercise the
option granted hereby by giving notice in writing or by telephone
(confirmed in writing) to the Company and the Selling Securityholders
setting forth the aggregate number of Option Securities as to which the
several Underwriters are then exercising the option and the date and time
for delivery of and payment for such Option Securities. Any such date of
delivery shall be determined
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by the Representatives but shall not be earlier than two business days or
later than five business days after such exercise of the option and, in
any event, shall not be earlier than the Firm Closing Date. The time and
date set forth in such notice, or such other time on such other date as
the Representatives and Company may agree upon or as the Representatives
may determine pursuant to Section 11 hereof, is herein called the "Option
Closing Date" with respect to such Option Securities. The obligation of
each Underwriter to the Company and each of the Selling Securityholders
shall be to purchase from the Company and the Selling Securityholders
that number of shares of the Option Securities which represents the same
proportion of the total number of shares of the Option Securities to be
sold by each of the Company and the Selling Securityholders pursuant to
this Agreement as the number of shares of the Option Securities set forth
opposite the name of such Underwriter in Schedule I hereto represents of
the total number of shares of Option Securities to be purchased by all
Underwriters pursuant to this Agreement, as adjusted by you in such
manner as you deem advisable to avoid fractional shares. In entering into
this Agreement, each Underwriter is contracting severally and not
jointly; except as provided in Section 11, the agreement of each
Underwriter is to purchase only the respective number of shares of the
Option Securities as specified in Schedule 1. If the option is exercised
as to all or any portion of the Option Securities, one or more
certificates in definitive form for such Option Securities, and payment
therefor, shall be delivered on the related Option Closing Date in the
manner, and upon the terms and conditions, set forth in paragraph (a) of
this Section 4, except that reference therein to the Firm Securities and
the Firm Closing Date shall be deemed, for purposes of this paragraph
(b), to refer to such Option Securities and Option Closing Date,
respectively.
(d)
(e) Each of the Company and the Selling Securityholders hereby acknowledges
that the wire transfer by or on behalf of the Underwriters of the purchase
price for any Shares does not constitute closing of a purchase and sale of
the Shares. Only execution and delivery of a receipt for Shares by the
Underwriters indicates completion of the closing of a purchase of the
Shares from the Company and the Selling Securityholders . Furthermore, in
the event that the Underwriters wire funds to the Company or the Selling
Securityholders prior to the completion of the closing of a purchase of
Shares, each of the Company and the Selling Securityholders hereby
acknowledges that until the Underwriters execute and deliver a receipt for
the Shares, by facsimile or otherwise, the Company or the Selling
Securityholder, as the case may be, will not be entitled to the Wired Funds
and shall return the Wired Funds to the Underwriters as soon as practicable
(by wire transfer of same-day funds) upon demand. In the event that the
closing of a purchase of Shares is not completed and the Wired Funds are
not returned by the Company or the Selling Securityholders to the
Underwriters on the same day the Wired Funds were received by such party,
such party agrees to pay to the Underwriters in respect of each day the
Wired Funds are not returned by it, in same-day funds, interest on the
16
<PAGE>
amount of such Wired Funds in an amount representing the Underwriters' cost
of financing as reasonably determined by Prudential Securities
Incorporated.
(f)
(g) It is understood that any of you, individually and not as one of the
Representatives, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall
relieve such Underwriter or Underwriters from any of its or their
obligations hereunder.
(h)
6. Offering by the Underwriters. Upon your authorization of the
-----------------------------
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
7.
8. Covenants of the Company. The Company covenants and agrees with each
-------------------------
of the Underwriters that:
9.
(a) The Company will use its best efforts to cause the Registration Statement,
if not effective at the time of execution of this Agreement, and any
amendments thereto to become effective as promptly as possible. If
required, the Company will file the Prospectus or any Term Sheet that
constitutes a part thereof and any amendment or supplement thereto with the
Commission in the manner and within the time period required by Rules 434
and 424(b) under the Act. During any time when a prospectus relating to
the Securities is required to be delivered under the Act, the Company (i)
will comply with all requirements imposed upon it by the Act and the rules
and regulations of the Commission thereunder to the extent necessary to
permit the continuance of sales of or dealings in the Securities in
accordance with the provisions hereof and of the Prospectus, as then
amended or supplemented, and (ii) will not file with the Commission the
prospectus, Term Sheet or the amendment referred to in the second sentence
of Section 2(a) hereof, any amendment or supplement to such Prospectus,
Term Sheet or any amendment to the Registration Statement or any Rule
462(b) Registration Statement of which the Representatives previously have
been advised and furnished with a copy for a reasonable period of time
prior to the proposed filing and as to which filing the Representatives
shall not have given their consent. The Company will prepare and file with
the Commission, in accordance with the rules and regulations of the
Commission, promptly upon request by the Representatives or counsel for the
Underwriters, any amendments to the Registration Statement or amendments or
supplements to the Prospectus that may be necessary or advisable in
connection with the distribution of the Securities by the several
Underwriters, and will use its best efforts to cause any such amendment to
the Registration Statement to be declared effective by the Commission as
promptly as possible. The Company will advise the Representatives,
promptly after receiving notice thereof, of the time when the Registration
Statement or any amendment thereto has been filed or declared effective or
the Prospectus or any amendment or
17
<PAGE>
supplement thereto has been filed and will provide evidence satisfactory
to the Representatives of each such filing or effectiveness.
(b)
(c) The Company will advise the Representatives, promptly after receiving
notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, (ii) the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, (iii) the institution, threatening or
contemplation of any proceeding for any such purpose or (iv) any request
made by the Commission for amending the Original Registration Statement or
any Rule 462(b) Registration Statement, for amending or supplementing the
Prospectus or for additional information. The Company will use its best
efforts to prevent the issuance of any such stop order and, if any such
stop order is issued, to obtain the withdrawal thereof as promptly as
possible.
(d)
(e) The Company will arrange for the qualification of the Securities for
offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection
-----------------
therewith the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(f)
(g) If, at any time prior to the later of (i) the final date when a prospectus
relating to the Securities is required to be delivered under the Act or
(ii) the Option Closing Date, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if for any other reason it
is necessary at any time to amend or supplement the Prospectus to comply
with the Act or the rules or regulations of the Commission thereunder, the
Company will promptly notify the Representatives thereof and, subject to
Section 6(a) hereof, will prepare and file with the Commission, at the
Company's expense, an amendment to the Registration Statement or an
amendment or supplement to the Prospectus that corrects such statement or
omission or effects such compliance.
(h)
(i) The Company will, without charge, provide (i) to the Representatives and to
counsel for the Underwriters a conformed copy of the registration statement
originally filed with respect to the Securities and each amendment thereto
(in each case including exhibits thereto) or any Rule 462(b) Registration
Statement, certified by the Secretary or an Assistant Secretary of the
Company to be true and complete
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<PAGE>
copies thereof as filed with the Commission by electronic transmission,
(ii) to each other Underwriter, a conformed copy of such registration
statement or any Rule 462(b) Registration Statement and each amendment
thereto (in each case without exhibits thereto) and (iii) so long as a
prospectus relating to the Securities is required to be delivered under
the Act, as many copies of each Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto as the Representatives may
reasonably request; without limiting the application of clause (iii) of
this sentence, the Company, not later than (A) 6:00 P.M., New York City
time, on the date of determination of the public offering price, if such
determination occurred at or prior to 10:00 A.M., New York City time, on
such date or (B) 2:00 P.M., New York City time, on the business day
following the date of determination of the public offering price, if such
determination occurred after 10:00 A.M., New York City time, on such
date, will deliver to the Underwriters, without charge, as many copies of
the Prospectus and any amendment or supplement thereto as the
Representatives may reasonably request for purposes of confirming orders
that are expected to settle on the Firm Closing Date.
(j)
(k) The Company, as soon as practicable, will make generally available to its
securityholders and to the Representatives a consolidated earnings
statement of the Company and its subsidiaries that satisfies the provisions
of Section 11(a) of the Act and Rule 158 thereunder.
(l)
(m) The Company will apply the net proceeds from the sale of the Securities as
set forth under "Use of Proceeds" in the Prospectus.
(n)
(o) The Company will not, directly or indirectly, without the prior written
consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant
any option to purchase or otherwise sell or dispose (or announce any offer,
sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for shares of
Common Stock for a period of 180 days from the date of the Prospectus,
except pursuant to this Agreement and except for issuances pursuant to the
existing employee benefit plans or stock option plans of the Company
outstanding on the date hereof or pursuant to the terms of convertible
securities of the Company or its subsidiaries outstanding on the date
hereof, in each case pursuant to the plans described in the Prospectus.
(p)
(q) The Company will not, directly or indirectly, (i) take any action designed
to cause or to result in, or that has constituted or which might reasonably
be expected to constitute, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any
compensation for soliciting purchases of, the Securities
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<PAGE>
or (B) pay or agree to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
(r)
(s) The Company will obtain the agreements described in 9(g) hereof prior to
the Firm Closing Date.
(t)
(u) If at any time during the 25-day period after the Registration Statement
becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall
occur as a result of which in your opinion the market price of the Common
Stock has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus), the Company will, after notice from you
advising the Company to the effect set forth above, forthwith prepare,
consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you,
responding to or commenting on such rumor, publication or event.
(v)
(w) If the Company elects to rely on Rule 462(b), the Company shall both file a
Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111
promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern time on
the date of this Agreement and (ii) the time confirmations are sent or
given, as specified by Rule 462(b)(2).
(x)
(y) The Company will cause the Securities to be duly included for quotation on
The Nasdaq Stock Market's National Market (the "Nasdaq National Market")
prior to the Firm Closing Date. The Company will ensure that the
Securities remain included for quotation on the Nasdaq National Market
following the Firm Closing Date.
(z)
(aa) The Company will promptly redeem each share of Class B common stock prior
to and upon the effectiveness of the conversion of each share of Series C
preferred stock of bamboo Canada into shares of Common Stock of the Company
in accordance with the terms of the Conversion and Pairing Agreement and
their respective charters.
(bb)
10. Covenants of the Selling Securityholders. Each of the Selling
----------------------------------------
Securityholders covenants and agrees with each of the Underwriters that:
11.
(a) Each Selling Securityholder will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale,
contract of sale, pledge, grant of any
20
<PAGE>
option to purchase or other sale or disposition) of any Securities
legally or beneficially owned by such Selling Securityholder or any
securities convertible into, or exchangeable or exercisable for,
Securities for a period of 180 days after the date hereof.
(b)
(c) Such Selling Securityholder will not, directly or indirectly, (i) take any
action designed to cause or result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities or (ii) (A) sell, bid for, purchase, or
pay anyone any compensation for soliciting purchases of, the Securities or
(B) pay or agree to pay to any person any compensation for soliciting
another to purchase any other securities of the Company (except for the
sale of Securities by the Selling Securityholders under this Agreement).
(d)
12. Expenses. The Company will pay all costs and expenses incident to
--------
the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 13 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus and the Prospectus and any
amendment or supplement thereto, this Agreement and any blue sky memoranda, (ii)
all arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees, (v)
the qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
relating thereto, (vi) the filing fees of the Commission and the National
Association of Securities Dealers, Inc. relating to the Securities and the fees
of underwriter's counsel incurred in connection with the review of the Offering
by the NASD, (vii) any quotation of the Securities on the Nasdaq National
Market, (viii) any meetings with prospective investors in the Securities (other
than as shall have been specifically approved by the Representatives to be paid
for by the Underwriters) and (ix) advertising relating to the offering of the
Securities (other than as shall have been specifically approved by the
Representatives to be paid for by the Underwriters).
13.
14. If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 9 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 13 hereof or because of any failure, refusal or inability on
the part of the Company to
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<PAGE>
perform all obligations and satisfy all conditions on its part to be performed
or satisfied hereunder other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities. The Company shall not in any
event be liable to any of the Underwriters for the loss of anticipated profits
from the transactions covered by this Agreement.
15.
16. Conditions of the Underwriters' Obligations. The obligations of the
-------------------------------------------
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm Closing
Date, to the accuracy of the statements of the Company's officers made pursuant
to the provisions hereof, to the performance by the Company of its covenants and
agreements hereunder and to the following additional conditions:
17.
(a) If the Original Registration Statement or any amendment thereto filed prior
to the Firm Closing Date has not been declared effective as of the time of
execution hereof, the Original Registration Statement or such amendment
and, if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later than
the earlier of (i) 11:00 A.M., New York time, on the date on which the
amendment to the registration statement originally filed with respect to
the Securities or to the Registration Statement, as the case may be,
containing information regarding the initial public offering price of the
Securities has been filed with the Commission and (ii) the time
confirmations are sent or given as specified by Rule 462(b)(2), or with
respect to the Original Registration Statement, or such later time and date
as shall have been consented to in writing by the Representatives; if
required, the Prospectus or any Term Sheet that constitutes a part thereof
and any amendment or supplement thereto shall have been filed with the
Commission in the manner and within the time period required by Rules 434
and 424(b) under the Act; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto shall have been issued, and
no proceedings for that purpose shall have been instituted or threatened
or, to the knowledge of the Company or the Representatives, shall be
contemplated by the Commission; and the Company shall have complied with
any request of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise).
(b)
(c) The Representatives shall have received an opinion, dated the Firm Closing
Date, of Wilson, Sonsini, Goodrich & Rosati, a professional corporation,
counsel for the Company, to the effect that:
(d)
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(i) the Company and each of its subsidiaries listed in Exhibit 22 to the
Registration Statement (the "Subsidiaries") have been duly organized and
are validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations and are in good standing under
the laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so qualified
would not have a Material Adverse Change.
(i) the Merger Agreement, dated as of ____ between the Company, a Delaware
corporation, and bamboo Canada Inc. ("bamboo Canada"), a Canadian
corporation (the "Merger Agreement"), which effected the reincorporation of
the Company under the laws of the State of Delaware, is effective and has
caused the merger of Jutvision Corporation, the predecessor company to the
Company, with and into bamboo Canada. The Merger Agreement has been duly
authorized, executed and delivered by each of the Company and bamboo Canada
and is a valid and binding agreement of the Company and bamboo Canada,
enforceable against each in accordance with its terms and conforms to the
description thereof in the Prospectus;
(i) the Conversion and Pairing Agreement, entered into between the Company and
bamboo Canada (the "Conversion and Pairing Agreement"), has been duly
authorized, executed and delivered by each of the Company and bamboo Canada
and is a valid and binding agreement of the Company and bamboo Canada,
enforceable against each in accordance with its terms and conforms to the
description thereof in the Prospectus;
(i) the Company has all requisite corporate power and corporate authority to
execute and deliver the Merger Agreement and to consummate the transactions
contemplated thereby;
(i) all consents, approvals and authorizations of and filings with any
governmental entity with respect to any applicable laws required on the
part of the Company or any of its subsidiaries in connection with the valid
execution and delivery of the Merger Agreement, or the consummation of the
transaction contemplated thereby, have been obtained or made;
23
<PAGE>
(i) neither the performance, execution and delivery of the Merger Agreement by
the Company or any of its subsidiaries, nor the consummation by the Company
and its subsidiaries of the transactions contemplated thereby, nor
compliance by the Company and its subsidiaries with any of the provisions
thereof, will result in any of the following: (a) a violation of the
restated certificate of incorporation or bylaws of the Company or its
subsidiaries, (b) a default or event that, with the notice or lapse of
time, or both would constitute a default, breach or violation of any
material contracts, (c) an event that would permit any person or entity to
terminate any material contract or to accelerate the maturity of any
obligation of the Company or its subsidiaries, (d) a violation or breach of
any applicable laws, or (e) a violation of any judicial order to which the
Company or any of its subsidiaries are a party;
(i) the Class B common stock conforms to the description thereof in all
material respects under the heading "Description of Capital Stock - Class B
Common Stock;"
(i) the Company and each of its subsidiaries have full power (corporate and
other) to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate and
other) to enter into this Agreement and to consummate the transactions
contemplated thereby;
(i) the issued shares of capital stock of each of the Company's subsidiaries
have been duly authorized and validly issued, are fully paid and
nonassessable and, are owned beneficially and of record, by the Company
free and clear of any security interests, liens, encumbrances, equities or
claims, except for ___ shares of Series C preferred stock of bamboo Canada,
which convert at the option of the holder thereof into ___ shares of Common
Stock of the Company;
(i) the authorized, issued and outstanding capital stock of the Company is as
set forth in the Prospectus under the caption "Capitalization," and, after
giving effect to the offering will be set forth under the column "Pro Forma
As Adjusted" under the caption "Capitalization" (except for subsequent
issuances, if any pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus or
pursuant to the exercise of options referred to in the Prospectus). All of
the issued
24
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shares of capital stock of the Company and its subsidiaries have been
duly authorized and validly issued and are fully paid and nonassessable;
none of the outstanding shares of capital stock of the Company or its
subsidiaries was issued in violation of the preemptive or other similar
rights of any security holder of the Company. The shares of issued and
outstanding capital stock of the Company and its subsidiaries have been
issued in compliance, with all federal and state securities laws, and
Canadian laws; and no preemptive rights of, or rights of refusal in favor
of, stockholders exist with respect to the Common Stock, or the issue and
sale thereof, pursuant to the restated certificate of incorporation or
bylaws of the Company, and there are no contractual or statutory
preemptive rights that have not been waived, rights of first refusal or
rights of co-sale which exist with respect to the issue and sale of the
Common Stock; except as described in the Prospectus, there are no
outstanding options, warrants or other rights to purchase, agreements to
issue or other rights to convert any obligations into shares of capital
stock of the Company or any of its subsidiaries;
(i) the Firm Securities and the Option Securities have been duly authorized and
at the Firm Closing Date or the related Option Closing Date (as the case
may be), after payment therefor in accordance herewith, will be validly
issued, fully paid and nonassessable. No holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or
other rights to subscribe for any of the Securities, and no holder of
securities of the Company has any right which has not been fully exercised
or waived to require the Company to register the offer or sale of any
securities owned by such holder under the Act in the public offering
contemplated by this agreement;
(i) the statements set forth (A) under the heading "Description of Capital
Stock," "Certain Transactions," and "Management" in the Prospectus and (B)
in the Registration Statement under Item 14, insofar as such statements
constitute matters of law, summaries of legal matters, the Company's
charters and by-laws or legal proceedings, or legal conclusions, have been
reviewed by us and is correct in all material respects;
(i) the execution and delivery of this Agreement have been duly authorized by
all necessary corporate action of the Company and this Agreement has been
duly executed and delivered by the Company;
25
<PAGE>
(i) (A) no legal or governmental proceedings are pending to which the Company
or any of the Subsidiaries is a party or to which the property of the
Company or any of the Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not
described therein, and, to the best knowledge of such counsel, no such
proceedings have been threatened against the Company or any of the
subsidiaries or with respect to any of their respective properties and (B)
no contract or other document is required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement that is not described therein or filed as
required;
(i) the issuance, offering and sale of the Securities to the Underwriters by
the Company pursuant to this Agreement, the compliance by the Company with
the other provisions of this Agreement and the consummation of the other
transactions herein contemplated do not (A) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained and such as may be required
under state securities or blue sky laws, or (B) conflict with or result in
a breach or violation of any of the terms and provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which the Company or any
of the subsidiaries is a party or by which the Company or any of the
subsidiaries or any of their respective properties are bound, or the
charter documents or by-laws of the Company or any of the subsidiaries, or
any statute or any judgment, decree, order, rule or regulation of any court
or other governmental authority or any arbitrator known to such counsel and
applicable to the Company or subsidiaries;
(i) the Registration Statement is effective under the Act; any required filing
of the Prospectus, or any Term Sheet that constitutes a part thereof,
pursuant to Rules 434 and 424(b) has been made in the manner and within the
time period required by Rules 434 and 424(b); and no stop order suspending
the effectiveness of the Registration Statement or any amendment thereto
has been issued, and no proceedings for that purpose have been instituted
or threatened or, to the best knowledge of such counsel, are contemplated
by the Commission;
26
<PAGE>
(i) the Registration Statement originally filed with respect to the Securities
and each amendment thereto, any Rule 462(b) Registration Statement and the
Prospectus (in each case, other than the financial statements and other
financial information contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
applicable requirements of the Act and the rules and regulations of the
Commission thereunder; and
(i) if the Company elects to rely on Rule 434, the Prospectus is not
"materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time of its
effectiveness or an effective post-effective amendment thereto (including
such information that is permitted to be omitted pursuant to Rule 430A).
Such counsel shall also state that they have no reason to believe that the
Registration Statement, as of its effective date and the date of such opinion,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of its date or the date of
such opinion, included or includes any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials and as to matters involving the
application of laws of any jurisdiction other than the State of Delaware or the
United States, to the extent satisfactory in form and scope to counsel for the
Underwriters upon the opinion of _____________, Canadian counsel. The foregoing
opinion shall also state that the Underwriters are justified in relying upon
such opinion of Canadian counsel, and copies of such opinion shall be delivered
to the Representatives and counsel for the Underwriters.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(a) The Representatives shall have received an opinion, dated the Firm Closing
Date, of _________________, Canadian counsel for the Company, to the effect
that:
(b)
(i) [TO COME]
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<PAGE>
Such counsel shall also state that they have no reason to believe that the
Registration Statement, as of its effective date, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or the date of such opinion, included or includes any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(a) The Representatives shall have received an opinion, dated the Firm Closing
Date, of Skadden, Arps, Slate, Meagher & Flom LLP, 525 University Avenue,
Suite 220, Palo Alto, CA 94301, counsel for the Underwriters, with respect
to the issuance and sale of the Firm Securities, the Registration Statement
and the Prospectus, and such other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters. In rendering such opinion, such
counsel may rely as to all matters of law upon the opinion of Canadian
counsel referred to in paragraph (b) above.
(b)
(c) The Selling Securityholders shall have furnished to the Representatives the
opinion of Wilson, Sonsini, Goodrich and Rosati, a professional
corporation, counsel for the Selling Securityholders, dated the Closing
Date, to the effect that:
(d)
(i) such Selling Securityholder has full power to enter into this Agreement,
the Custody Agreement and the Power-of-Attorney and to sell, transfer and
deliver the Securities being sold by such Selling Securityholder hereunder
in the manner provided in this Agreement and to perform its obligations
under the Custody Agreement; this Agreement, the Custody Agreement and the
Power-of-Attorney have been duly executed and delivered by each Selling
Securityholder; assuming due authorization, execution and delivery by the
Custodian, the Custody Agreement and the Power-of-Attorney are the legal,
valid, binding and enforceable instruments of such Selling Securityholder,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
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<PAGE>
(i) the delivery by each Selling Securityholder to the several Underwriters of
certificates for the Securities being sold hereunder by such Selling
Securityholder against payment therefor as provided herein, will convey
good and marketable title to such Securities to the several Underwriters,
free and clear of all security interests, liens, encumbrances, equities,
claims or other defects;
(i) the sale of the Securities to the Underwriters by such Selling
Securityholder pursuant to this Agreement, the compliance by such Selling
Securityholder with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as have been obtained and such as may be required under state
securities or blue sky laws, or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under any indenture, mortgage, deed of trust, lease or other agreement or
instrument to which such Selling Securityholder is a party or by which such
Selling Securityholder or any of such Selling Securityholder's properties
are bound, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any arbitrator
applicable to such Selling Securityholder.
In rendering such opinion, such counsel may rely, as to matters of fact, to
the extent such counsel deems proper, on certificates of responsible officers of
the Company and public officials and, as to matters involving the application of
laws of any jurisdiction other than the State of Delaware or the United States,
to the extent satisfactory in form and scope to counsel for the Underwriters,
upon the opinion of ________, Canadian counsel. The foregoing opinion shall also
state that the Underwriters are justified in relying upon such opinion of
Canadian counsel, and copies of such opinion shall be delivered to the
Representatives and counsel for the Underwriters.
References to the Registration Statement and the Prospectus in this
paragraph (e) shall include any amendment or supplement thereto at the date of
such opinion.
(a) The Representatives shall have received from PricewaterhouseCoopers LLP a
letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the
effect that:
(b)
29
<PAGE>
(i) they are independent accountants with respect to the Company and its
consolidated subsidiaries within the meaning of the Act and the applicable
rules and regulations thereunder;
(i) in their opinion, the audited consolidated financial statements and
schedules examined by them and included in the Registration Statement and
the Prospectus comply in form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(i) on the basis of a reading of the latest available interim unaudited
consolidated financial statements of the Company and its consolidated
subsidiaries, carrying out certain specified procedures (which do not
constitute an examination made in accordance with generally accepted
auditing standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph
(iii), a reading of the minute books of the shareholders, the board of
directors and any committees thereof of the Company and each of its
consolidated subsidiaries, and inquiries of certain officials of the
Company and its consolidated subsidiaries who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that:
(i) the unaudited consolidated financial statements of the Company and its
consolidated subsidiaries included in the Registration Statement and the
Prospectus do not comply in form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations thereunder or are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent
with that of the audited consolidated financial statements included in the
Registration Statement and the Prospectus;
(i) at a specific date not more than five business days prior to the date of
such letter, there were any changes in the capital stock or long-term debt
of the Company and its consolidated subsidiaries or any decreases in net
current assets or stockholders' equity of the Company and its consolidated
subsidiaries, in each case compared with amounts shown on the March 31,
1999 unaudited consolidated balance sheet included in the Registration
Statement and the Prospectus, or for the period from April 1, 1999 to
________________________;
30
<PAGE>
(i) they have carried out certain specified procedures, not constituting an
audit, with respect to certain amounts, percentages and financial
information that are derived from the general accounting records of the
Company and its consolidated subsidiaries and are included in the
Registration Statement and the Prospectus under the captions "Summary
Consolidated Financial Date," "Capitalization," "Selected Financial Data,"
and "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and in Exhibit 11 to the Registration Statement,
and have compared such amounts, percentages and financial information with
such records of the Company and its consolidated subsidiaries and with
information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation; and
(i) they have performed the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial information
as described in Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in the
Registration Statement.
In the event that the letters referred to above set forth any such changes,
decreases or increases, it shall be a further condition to the obligations of
the Underwriters that (A) such letters shall be accompanied by a written
explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (d) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(a) The Representatives shall have received a certificate, dated the Firm
Closing Date, Leonard B. McCurdy and Randall I. Bresee of the Company to
the effect that:
(b)
(i) the representations and warranties of the Company in this Agreement are
true and correct as if made on and as of the Firm Closing Date; the
Registration Statement as of its date, as of the time of its effectiveness
and as of the Firm Closing Date, as
31
<PAGE>
amended as of the Firm Closing Date, does not include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading, and the Prospectus as of
its date and as of the Firm Closing Date, as amended or supplemented as
of the Firm Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; and the Company has performed all
covenants and agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Firm Closing Date;
(i) no stop order suspending the effectiveness of the Registration Statement or
any amendment thereto has been issued, and no proceedings for that purpose
have been instituted or threatened or, to the best of the Company's
knowledge, are contemplated by the Commission; and
(i) subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, neither the Company nor any of
its subsidiaries has sustained any material loss or interference with their
respective businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has not been any
material adverse change, or any development involving a prospective
Material Adverse Change.
(a) The Representatives shall have received a certificate from each Selling
Securityholder, signed by such Selling Securityholder, dated the Option
Closing Date, to the effect that:
(b)
(i) the representations and warranties of such Selling Securityholder in this
Agreement are true and correct as if made on and as of the Closing Date;
(i) to the extent that any statements or omissions are made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by such Selling Securityholder
specifically for use therein, the Registration Statement, as amended as of
the Closing Date, does not include any untrue statement of a material fact
or omit to state any
32
<PAGE>
material fact necessary to make the statements therein not misleading,
and the Prospectus, as amended or supplemented as of the Closing Date,
does not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and
(i) such Selling Securityholder has performed all covenants and agreements on
its part to be performed or satisfied at or prior to the Closing Date.
(a) The Representatives shall have received from each person who is a director
or officer of the Company or who owns any securities of the Company or its
subsidiaries an agreement to the effect that such person will not, directly
or indirectly, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, offer, sell, offer to sell,
contract to sell, pledge, grant any option to purchase or otherwise sell or
dispose (or announce any offer, sale, offer of sale, contract of sale,
pledge, grant of any option to purchase or other sale or disposition) of
any shares of Common Stock or any securities convertible into, or
exchangeable or exercisable for, shares of Common Stock of itself or any
subsidiary or file any registration statement under the 1933 Act with
respect to any of the foregoing, except for filing a Registration Statement
on Form S-8 to register shares of Common Stock for issuance under the
Company stock option plan, for a period of 180 days from the date of the
Prospectus, except pursuant to this Agreement and except for issuances
pursuant to the existing employee benefit plans or stock option plans of
the Company outstanding on the date hereof or pursuant to the terms of
convertible securities of the Company outstanding on the date hereof, in
each case pursuant to the plans described in the Prospectus.
(b)
(c) On or before the Firm Closing Date, the Representatives and counsel for the
Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
(d)
(e) Prior to the commencement of the offering of the Securities, the Securities
shall have been included for trading on the Nasdaq National Market.
(f)
(g) All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the
Representatives such conformed copies of such opinions, certificates,
letters and documents in such quantities as the Representatives and counsel
for the Underwriters shall reasonably request.
(h)
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<PAGE>
(i) The respective obligations of the several Underwriters to purchase and pay
for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed
to refer to such Option Securities and the related Option Closing Date,
respectively.
(j)
2. Indemnification and Contribution.
---------------------------------
3.
(a) The Company and each Selling Securityholder, jointly and severally, agree
to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934 (the "Exchange Act")
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter or such controlling person may become subject under
state law, common law, the Exchange Act, the Act, Canadian law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(b)
(i) any untrue statement or alleged untrue statement made by the Company or a
Principal Selling Securityholder in Section 2 or the Selling Security
holders in Section 3 of this Agreement; provided, however, that no
indemnification agreement is made by the Selling Securityholders other than
the Principal Selling Securityholders with respect to statements made in
Section 2;
(i) any untrue statement or alleged untrue statement of any material fact
contained in (A) the Registration Statement or any amendment or supplement
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or a Selling
Securityholder or based upon written information furnished by or on behalf
of the Company or a Selling Securityholder filed in any jurisdiction
(foreign or domestic) in order to qualify the Securities under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each a "Application");
(i) the omission or alleged omission to state in the Registration Statement or
any amendment or supplement thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading; or
34
<PAGE>
(i) any untrue statement or alleged untrue statement of any material fact
contained in any audio or visual materials provided by the Company or based
upon written information furnished by or on behalf of the Company,
including, without limitation, slides, videos, films, tape recordings, used
in connection with the marketing of the Securities, including, without
limitation, statements communicated to securities analysts employed by the
Underwriters;
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and each
-----------------
Selling Securityholder will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto or any
Application in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and provided, further, that the Company and each
-------- --------
Selling Securityholder will not be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the Prospectus
(or any amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act and it shall have been determined by a final judgment of
a court of competent jurisdiction that any Underwriter or any person controlling
such Underwriter would not have incurred such loss, claim, damage or liability
had the Prospectus (as amended or supplemented) been delivered or sent, unless
such failure to deliver the Prospectus (as amended or supplemented) was a result
of noncompliance by the Company with Section 6(d) and (e) of this Agreement.
This indemnity agreement will be in addition to any liability which the Company
and the Selling Securityholder may otherwise have. Neither the Company nor any
Selling Securityholder will, without the prior written consent of the
Representatives settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Underwriter or
any person who controls any such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to
35
<PAGE>
such claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of all of the Underwriters and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding.
(a) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, each Selling Securityholder and each
person, if any, who controls the Company or such Selling Securityholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act against any losses, claims, damages or liabilities to which the Company
or any such director, officer or controlling person of the Company or such
Selling Securityholder may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application or
(ii) the omission or the alleged omission to state therein a material fact
required to be stated in the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company or
any such director, officer or controlling person or such Selling
Securityholder in connection with investigating or defending any such loss,
claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(b)
(c) Promptly after receipt by an indemnified party under this Section 10 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 10, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party otherwise
than under this Section 10. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party; provided, however,
-----------------
that if the defendants in
36
<PAGE>
any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that
there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnifying party shall not
have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall
have the right to select separate counsel to defend such action on behalf
of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 10 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i)
the indemnified party shall have employed separate counsel in accordance
with the proviso to the next preceding sentence (it being understood,
however, that in connection with such action the indemnifying party shall
not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but
substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the
Representatives in the case of paragraph (a) of this Section 10,
representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party does
not promptly retain counsel satisfactory to the indemnified party or
(iii) the indemnifying party has authorized the employment of counsel for
the indemnified party at the expense of the indemnifying party. After
such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party.
(d)
(e) In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 10 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Securities or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law,
not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits
37
<PAGE>
received by the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriters, the parties' relative intents, knowledge, access to
information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Underwriters agree that it would not
be equitable if the amount of such contribution were determined by pro
rata or per capita allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that
does not take into account the equitable considerations referred to above
in this paragraph (d). Notwithstanding any other provision of this
paragraph (d), no Underwriter shall be obligated to make contributions
hereunder that in the aggregate exceed the total public offering price of
the Securities purchased by such Underwriter under this Agreement, less
the aggregate amount of any damages that such Underwriter has otherwise
been required to pay in respect of the same or any substantially similar
claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section II (f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to contribute hereunder are several in
proportion to their respective underwriting obligations and not joint,
and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among
Underwriters. For purposes of this paragraph (d), each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, shall have the same rights
to contribution as the Company.
(f)
2. Default of Underwriters. If one or more Underwriters default in
-----------------------
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall
38
<PAGE>
be obligated severally in proportion to their respective commitments hereunder
to purchase the Firm Securities or Option Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase. If one or more
Underwriters so default with respect to an aggregate number of Securities that
is more than ten percent of the aggregate number of Firm Securities or Option
Securities, as the case may be, to be purchased by all of the Underwriters at
such time hereunder, and if arrangements satisfactory to the Representatives
are not made within 36 hours after such default for the purchase by other
persons (who may include one or more of the non-defaulting Underwriters,
including the Representatives) of the Securities with respect to which such
default occurs, this Agreement will terminate without liability on the part of
any non-defaulting Underwriter or the Company other than as provided in
Section 12 hereof. In the event of any default by one or more Underwriters as
described in this Section 11, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 4 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 11. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
3.
4. Survival. The respective representations, warranties, agreements,
--------
covenants, indemnities and other statements of the Company, its officers and the
several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 10 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 2, 6,7 and 10 hereof shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement.
5.
6. Termination.
-----------
7.
(a) This Agreement may be terminated with respect to the Firm Securities or any
Option Securities in the sole discretion of the Representatives by notice
to the Company given prior to the Firm Closing Date or the related Option
Closing Date, respectively, in the event that the Company shall have
failed, refused or been unable to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing
Date, respectively,
(b)
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<PAGE>
(i) the Company or any of its subsidiaries shall have, in the sole judgment of
the Representatives, sustained any material loss or interference with their
respective businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding or there shall have been
any material adverse change, or any development involving a prospective
material adverse change (including without limitation a change in
management or control of the Company), in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries;
(i) trading in the Common Stock shall have been suspended by the Commission or
the Nasdaq National Market or trading in securities generally on the New
York Stock Exchange or Nasdaq National Market shall have been suspended or
minimum or maximum prices shall have been established on any such exchange
or market system;
(i) a banking moratorium shall have been declared by New York or United States
authorities; or
(i) there shall have been (A) an outbreak or escalation of hostilities between
the United States and any foreign power, (B) an outbreak or escalation of
any other insurrection or armed conflict involving the United States or (C)
any other calamity or crisis or material adverse change in general
economic, political or financial conditions having an effect on the U.S.
financial markets that, in the sole judgment of the Representatives, makes
it impractical or inadvisable to proceed with the public offering or the
delivery of the Securities as contemplated by the Registration Statement,
as amended as of the date hereof.
(a) Termination of this Agreement pursuant to this Section 13 shall be without
liability of any party to any other party except as provided in Section 12
hereof.
(b)
2. Limitation of Liability.
------------------------
3.
4. The liability of each Selling Securityholder, including the
Principal Selling Security holders, under Sections 2 and 10 shall not exceed an
amount equal to the initial public offering price of the Option Securities sold
by such Selling Securityholder to the Underwriters. The Underwriters shall seek
indemnification or
40
<PAGE>
other remedies, to which they are entitled under Sections 2 and 10 first from
the Company. If the Company does not respond to the Underwriters after 30
days, then the Underwriters may seek such indemnification or other remedies
from the Selling Security holders. In the event that the Underwriters are
unable (or believe that they will be unable to) obtain such indemnification or
other remedies from the Company, the Underwriters may then seek
indemnification or other remedies from the Selling Security holders.
5.
6. Information Supplied by Underwriters. The statements set forth in the
-------------------------------------
last paragraph on the front cover page and under, the tables below paragraphs 1
and 4, and paragraphs 2, 3, 8, 9, 11- 13, of the heading "Underwriting" in any
Preliminary Prospectus or the Prospectus (to the extent such statements relate
to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(b) and 10 hereof. The Underwriters confirm that such statements (to
such extent) are correct.
7.
8. Notices. All communications hereunder shall be in writing and, if
-------
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, One New York Plaza, New York, New York 10292, Attention: Equity
Transactions Group; with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, 525
University Avenue, Suite 220, Palo Alto, CA 94301, Attention: Gregory C.
Smith, and if sent to the Company, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to the Company at 124 University
Avenue, Palo Alto, CA 94301, Attention: Randall I. Bresee; with a copy to
Wilson, Sonsini, Goodrich & Rosati, a professional corporation, 650 Page Mill
Road, Palo Alto, CA 94304, Attention: Isaac J. Vaughn.
9.
10. Successors. This Agreement shall inure to the benefit of and shall be
----------
binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 10 of this Agreement shall
also be for the benefit of any person or persons who control any Underwriter
within the meaning of Section 15 of the
41
<PAGE>
Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Underwriters contained in Section 10 of this Agreement shall also be for the
benefit of the directors of the Company, the officers of the Company who have
signed the Registration Statement and any person or persons who control the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act. No purchaser of Securities from any Underwriter shall be deemed
a successor because of such purchase.
11.
12. Applicable Law. The validity and interpretation of this Agreement,
--------------
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
13.
14. Consent to Jurisdiction and Service of Process. All judicial
----------------------------------------------
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, each Selling Securityholder accepts
for itself and in connection with its properties, generally and unconditionally,
the nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. Each Selling Securityholder
designates and appoints Kevin B. McCurdy, and such other persons as may
hereafter be selected by such Selling Securityholder irrevocably agreeing in
writing to so serve, as its agent to receive on its behalf service of all
process in any such proceedings in any such court, such service being hereby
acknowledged by such Selling Securityholder to be effective and binding service
in every respect. A copy of any such process so served shall be mailed by
registered mail to each Selling Securityholder at its address provided in
Section 15 hereof; provided, however, that, unless otherwise provided by
-------- -------
applicable law, any failure to mail such copy shall not affect the validity of
service of such process. If any agent appointed by any Selling Securityholder
refuses to accept service, such Selling Securityholder hereby agrees that
service of process sufficient for personal jurisdiction in any action against
such Selling Securityholder in the State of New York may be made by registered
or certified mail, return receipt requested, to such Selling Securityholder at
its address provided in Section 15 hereof, and such Selling Securityholder
hereby acknowledges that such service shall be effective and binding in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of any Underwriter to bring
proceedings against any Selling Securityholder in the courts of any other
jurisdiction.
15.
16. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17.
42
<PAGE>
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company and each of the
several Underwriters.
Very truly yours,
bamboo.com, Inc.
By ________________________
[Title]
PRINCIPAL SELLING SECURITYHOLDERS
By ________________________
Name: Kevin B. McCurdy
By ________________________
Name: Howard Field
SELLING SECURITYHOLDERS
By ________________________
Attorney-in-Fact
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
DAIN RAUSCHER WESSELS, A Division of
Dain Rauscher Incorporated
43
<PAGE>
VOLPE BROWN WHELAN & COMPANY
E*OFFERING CORP.
By PRUDENTIAL SECURITIES INCORPORATED
By _____________________
Jean-Claude Canfin
Managing Director
For itself and on behalf of the Representatives.
44
<PAGE>
SCHEDULE 1
UNDERWRITERS
Securities to Number of Firm
Underwriter be Purchased
- ----------- ------------
PRUDENTIAL SECURITIES INCORPORATED.......
DAIN RAUSCHER WESSELS, a division of
Dain Rauscher Incorporated
VOLPE BROWN WHELAN & COMPANY
E*OFFERING CORP.
_______________
Total ..............
45
<PAGE>
SCHEDULE 2
SUBSIDIARIES
Name Jurisdiction of Incorporation
- ---- -----------------------------
46
<PAGE>
SCHEDULE 3
Name Number of Shares to be Sold
- ---- ---------------------------
bamboo.com, Inc.
Kevin B. McCurdy
Howard Field
Andrew P. Laszlo
Vestmark Limited
47
<PAGE>
EXHIBIT 10.6
[Execution Draft]
JOINT SERVICES AGREEMENT
------------------------
THIS JOINT SERVICES AGREEMENT (the "Agreement") is entered into as of
November 11, 1998 (the "Effective Date"), between Jutvision Corporation, a
Delaware corporation ("Jutvision"), and RealSelect, Inc., a Delaware corporation
("RealSelect").
BACKGROUND
A. Jutvision uses the Jutvision Technology (as defined below) and
provides the Production Services (as defined below).
B. RealSelect operates the RealSelect Sites (as defined below).
C. Jutvision desires to be the exclusive provider of Virtual Tour Images
(as defined below) and Production Services for the RealSelect Sites.
D. RealSelect desires to distribute the Production Services.
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
-----------
The following terms shall have the meanings set forth below when used in this
Agreement. All Section references refer to Sections of this Agreement unless
otherwise stated.
1.1 "Basic Package" means the services provided to Brokers by or on behalf
-------------
of Jutvision consisting of (i) capturing up to four images of a designated
Residential Property, (ii) processing these images to create one Jutvision Image
of each image captured and (iii) posting the Jutvision Images to a Web server.
1.2 "Broker" means any licensed realtor, real estate broker, real estate
------
agent or any other agent or representative acting in a similar capacity, whether
an individual or organized entity, representing a seller of a Residential
Property.
1.3 "Combination Package" means a Basic Package or Upgrade Package sold to
-------------------
a RealSelect Customer that includes posting of the Jutvision Images to both (a)
a RealSelect Site and (b) a third-party Web site not owned or controlled by
RealSelect.
1.4 "Data Content Provider" means a Residential Property MLS or
---------------------
Residential Property listing agent that provides data to a RealSelect Site.
<PAGE>
1.5 "Development Seminars" means any seminar or meeting that RealSelect
--------------------
or its sales representatives conducts with Brokers regarding the development of
Web sites.
1.6 "HTML Page" means a document that displays text and graphical images
---------
accessible on the Internet.
1.7 "Internet Marketing" means a grouping of HTML Pages on a RealSelect
------------------
Site that describes the benefits of the various advertising opportunities for
third parties on the RealSelect Sites.
1.8 "Jutvision for Java Software" means (i) Jutvision's proprietary
---------------------------
"Jutvision for Java" software existing as of the Effective Date and (ii) all
versions thereof and upgrades, modifications and enhancements thereto
subsequently developed by Jutvision during the JJS License Period (as defined
below) that, taking into account the limited purpose for which users of the
RealSelect Sites access and view the Jutvision Images, would reasonably enable,
enhance or improve such users' ability to view Jutvision Images that are posted
to the RealSelect Sites during the Term or JJS License Period (as defined
below).
1.9 "Jutvision Image" means an electronic image of a Residential
---------------
Property produced by or on behalf of Jutvision for the sole purpose of
fulfilling Jutvision's obligations under this Agreement.
1.10 "Jutvision Technology" means software and hardware used to capture,
--------------------
process and view Jutvision Images.
1.11 "JV Image Page" means any page on a RealSelect Site that displays
-------------
any Jutvision Image.
1.12 "Net Revenues" means the gross revenues received by Jutvision from
------------
Brokers for sales of the Basic Packages, Upgrade Packages and Combination
Packages less [*]
1.13 "Operational Member" means any individual or entity with which
-----------------
Jutvision has entered into an agreement to capture, or any employee of Jutvision
designated to capture, images at Residential Property as part of the Service
Provider Network.
1.14 "Production Services" means the services provided by or on behalf of
-------------------
Jutvision in preparing the Basic Packages, Upgrade Packages and Combination
Packages.
1.15 "Production Services Page" means an HTML Page on a RealSelect Site
------------------------
created by Jutvision and approved by RealSelect, which approval RealSelect will
not unreasonably withhold or delay, that highlights the advantages of using the
Production Services and contains a detailed description of the Production
Services, an electronic order form permitting submission of orders for
Production Services directly to a Web server operated by or for the benefit of
Jutvision, and a Jutvision logo, of reasonable size and prominence, located
above the fold.
[*] = 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>
1.16 "RealSelect Customer" means any Broker whose order is received via
-------------------
the RS Sales Line or via an electronic order form originating from a Production
Services Page, in each case with respect to those orders so received.
1.17 "RealSelect Sites" means the collection of English language HTML
----------------
Pages residing on servers controlled or owned by RealSelect or an entity
majority owned or controlled by RealSelect that display Residential Property
listings, which are http://www.realtor.com and http://www.homebuilder.com.
----------------------
1.18 "Residential Property" means any piece of residential real estate
--------------------
within the Territory, including without limitation new homes, offered for sale
or resale.
1.19 "RS Sales Line" means the telephone and facsimile lines that
-------------
Jutvision establishes, maintains and operates solely to receive orders for
Production Services from Brokers pursuant to this Agreement and that are
designated by one or more toll-free numbers included in promotional information
on the RealSelect Sites and in subscription forms and marketing materials
RealSelect and its sales representatives provide to Brokers pursuant to Section
3.1(b) of this Agreement.
1.20 "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.
1.21 "Sponsorship Fee" means the monthly fee Jutvision will pay to
---------------
RealSelect during the Initial Term according to the schedule set forth in
Section 4.1.
1.22 "Term" means the Initial Term of this Agreement and the Renewal
----
Term, if any, as set forth in Section 6.
1.23 "Territory" means the United States and its possessions.
---------
1.24 "Transaction Fee" means the quarterly fee Jutvision will pay to
---------------
RealSelect during the Term based on sales of Basic Packages, Upgrade Packages
and Combination Packages as provided in Section 4.2.
1.25 "Upgrade Package" means an addition to a Basic Package consisting of
---------------
(i) capturing one additional image at the same designated Residential Property
of the Basic Package for such Residential Property, (ii) processing this image
to create one additional Jutvision Image for the image captured and (iii)
posting the Jutvision Image to a Web server.
1.26 "Virtual Tour Image" means an electronic image, including without
------------------
limitation 360 degrees, three dimensional, virtual reality and virtual tour
images.
2. PROVISION OF PRODUCTION SERVICES; EXCLUSIVITY
---------------------------------------------
2.1 Sales and Billing. Jutvision will be responsible for receiving and
-----------------
fulfilling orders for Basic Packages, Upgrade Packages and Combination Packages.
Jutvision will establish,
-3-
<PAGE>
operate and maintain at its expense the RS Sales Line and will process
electronic orders for Basic Packages, Upgrade Packages and Combination Packages
received via order forms on the Production Services Pages. In addition,
Jutvision will assume all costs and responsibility for invoicing and collecting
revenues for all sales of Basic Packages, Upgrade Packages and Combination
Packages.
2.2 Pricing. As of the Effective Date, excluding any applicable taxes,
-------
RealSelect Customers will be charged [*] for each Basic Package and [*] for each
Upgrade Package (the "RealSelect Customer Prices"). Jutvision will not increase
such RealSelect Customer Prices during the first twelve (12) months of the
Agreement. However, Jutvision may increase such RealSelect Customer prices
thereafter in its sole discretion; provided, that after the initial twelve month
period Jutvision may not increase the RealSelect Customer Prices by more than
[*] percent during the Initial Term above the RealSelect Customer Prices in
effect as of the Effective Date without obtaining RealSelect's prior approval,
which RealSelect will not withhold or delay unreasonably. Price changes will not
take effect until at least forty-five (45) days after Jutvision declares a price
change with the approval of RealSelect. The parties contemplate that Jutvision
will offer volume-based pricing during the Term in certain circumstances, and
the parties agree to negotiate in good faith regarding the terms of any volume-
based pricing proposed by either party. In the event either party identifies an
opportunity for volume-based pricing, Jutvision will use commercially reasonable
efforts to deliver a proposal within three (3) days, and RealSelect shall use
commercially reasonable efforts to respond to such proposal within three (3)
days.
2.3 Support. Jutvision will establish and maintain a "mailto" link on each
-------
Production Services Page that RealSelect Customers may use to send support-
related e-mail messages to Jutvision. Jutvision will also establish and maintain
a toll-free support telephone line RealSelect Customers 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 9:00 am to 5:00 pm Eastern time. Within
thirty (30) days of the end of each calendar quarter, Jutvision will provide
RealSelect with a quarterly written report providing a summary of any
significant email and telephone support issues arising during such quarter,
including the date each issue arose, the date of each corresponding response and
the resolution. In addition, Jutvision agrees to use commercially reasonable
efforts to respond to all support-related emails and phone calls within two (2)
business days.
2.4 Image Capturing, Processing and Posting. Jutvision will have sole
---------------------------------------
responsibility for, and will bear all costs associated with, capturing images at
designated Residential Properties, processing captured images and posting
Jutvision Images to the RealSelect Sites. Jutvision will use commercially
reasonable efforts to process and post each Jutvision Image on behalf of all
RealSelect Customers within four (4) business days 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 RealSelect. Notwithstanding
any other provisions of this Agreement, (i) in the event that within a given
Major Metropolitan Area (as defined in Section 2.6(a) of this Agreement) within
a given month twenty-five percent (25%) or more of the Jutvision Images are
posted to the RealSelect Sites more than five (5) business days after capture
due to no fault of RealSelect, then, subject to a forty-five (45) day cure
period, RealSelect may enter into an
[*] = 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.
-4-
<PAGE>
agreement on a non-exclusive basis for services comparable to the Production
Services in such Major Metropolitan Area with a third party without being in
breach of this Agreement and (ii) if Jutvision Images are not posted within
seven (7) days after the captures of the Jutvision orders, provided that posting
is not delayed by factors attributable to RealSelect, then the RealSelect
Customer will not be charged. In addition, Jutvision will use commercially
reasonable efforts to have enough customer support to take all orders for
Production Services from RealSelect Customers at the time of that RealSelect
Customer's first attempt to place such an order. Jutvision will provide a good
faith report within fifteen (15) days of the end of each month listing the
number of orders for each Major Metropolitan Area and the number of Jutvision
Image orders posted to a RealSelect Site more than five (5) business days after
capture.
2.5 Quality of Technology.
---------------------
(a) Jutvision agrees to use commercially reasonable efforts during
the Initial Term to keep the Jutvision Technology updated and compatible with
the systems and components forming the RealSelect Sites. During the Initial
Term, Jutvision will further use commercially reasonable efforts to enhance the
Jutvision Technology, (i) to maintain the compatibility of such Jutvision
Technology with new releases of major operating systems and web browsers of
Microsoft, Netscape and AOL, and their successors or assigns; (ii) subject to
Section 2.5(b), to maintain the capability of a majority of users of the
RealSelect Sites to view the Jutvision Images; and (iii) to keep the Jutvision
Technology competitive with the features and functionalities of the viewing
technology that third parties offer. If RealSelect, acting in good faith,
determines that a majority of the Brokers in the Territory that use the
RealSelect Sites or substantially similar sites to post Residential Property
listings demand a specific feature or functionality in viewing technology not
then available in the Jutvision Technology, RealSelect may, at its option, send
Jutvision a written request that Jutvision develop and implement such new
feature or functionality. Jutvision will then use commercially reasonable
efforts to create, in a reasonable amount of time, an appropriate project plan
regarding the development and implementation of such new feature or
functionality and will use commercially reasonable efforts to implement such
project plan in a reasonable amount of time.
(b) During the Initial Term, RealSelect will use commercially
reasonable efforts to enhance the RealSelect Sites in order to maintain the
compatibility of the RealSelect Sites with new releases of web browsers of
Microsoft, Netscape and AOL, and their successors or assigns.
2.6 Service Provider Network.
------------------------
(a) Jutvision will establish and maintain a Service Provider Network
to capture images at designated Residential Properties on Jutvision's behalf.
Jutvision will exercise reasonable efforts to establish an Operational Member in
a minimum of twenty-five (25) Major Metropolitan Areas (as defined below) within
the Territory by February 1, 1999. During each calendar month following February
1999, Jutvision will exercise reasonable efforts to establish an Operational
Member in five (5) additional Major Metropolitan Areas until the entire Service
Provider Network spans a total of sixty-five (65) Major Metropolitan Areas.
"Major
-5-
<PAGE>
Metropolitan Area" means a greater metropolitan area in the list set forth in
Exhibit A hereto. The parties agree that sixteen (16) of the first twenty-five
(25) Major Metropolitan Areas to be implemented are those listed in Exhibit E to
this Agreement. The parties agree to work together in good faith to develop a
plan under which Jutvision will provide the Production Services in rural markets
not included in Exhibit A.
(b) In the event Jutvision fails to establish an Operational Member
in a minimum of twenty-five (25) Major Metropolitan Areas within the Territory
by February 1, 1999, notwithstanding Section 2.7 or any other provision to the
contrary herein, RealSelect may choose the remaining Major Metropolitan Areas
necessary to reach such minimum (the "Shortfall Areas") and may enter into
agreements with third parties, for non-renewable terms expiring no later than
September 30, 1999, whereby, during the term of such agreements such third
parties will provide interim services reasonably comparable to the Production
Services in the Shortfall Areas. Upon expiration or termination of any such
agreements with third parties, and provided that Jutvision has established an
Operational Member in such Shortfall Areas, RealSelect agrees immediately to
cease using such services of such third parties and use Jutvision Production
Services. In the event that, as of September 30, 1999, Jutvision does not have
Operational Members in the Shortfall Areas, then the parties agree that
RealSelect may enter into long-term agreements with third parties to provide
services reasonably comparable to the Production Services.
(c) Jutvision will have sole responsibility for training, monitoring
and compensating Operational Members, and Jutvision will require each
Operational Member to be adequately bonded or insured prior to becoming an
Operational Member and during that Operational Member's participation in the
Service Provider Network.
2.7 Exclusivity. Except as specifically provided in Sections 2.4 and
-----------
2.6(b), and subject to RealSelect's existing agreements pertaining to the
provision of Virtual Tour Images or technology or services equivalent to the
Production Services with respect to Homebuilder.com (the "Homebuilder.com
Agreements"), during the Term, RealSelect will not directly or indirectly (i)
promote or market itself or any third party as a provider, for Residential
Property listings in the Territory posted to a Real Select Site, of Virtual Tour
Images or technology or services equivalent to the Production Services for such
Virtual Tour Images; (ii) provide the services equivalent to the Production
Services for Residential Property listings in the Territory on RealSelect Sites;
(iii) use the services equivalent to the Production Services of, or enter into
any arrangement under which services equivalent to the Production Services will
be provided by, any third party with respect to Virtual Tour Images for
Residential Property listings in the Territory on RealSelect Sites; or (iv) take
any other action inconsistent with the parties' understanding hereunder that
Jutvision will act as the exclusive provider of Virtual Tour Images, and
Production Services therefor, for Residential Property listings in the Territory
on RealSelect Sites; provided, however, that, upon Jutvision's entry into a
market covered by any Homebuilder.com Agreement, RealSelect will use
commercially reasonable efforts promptly to terminate such Homebuilder.com
Agreement. Notwithstanding the foregoing, if a Data Content Provider posts data
to any RealSelect Site containing any unsolicited features or functionalities
-6-
<PAGE>
imbedded in such posting that are competitive with a Jutvision Virtual Tour
Image, such posting shall not constitute a breach of this Agreement.
3. MARKETING AND PROMOTION
-----------------------
3.1 RealSelect Obligations. RealSelect agrees to market, promote and
----------------------
facilitate sales of the Production Services as follows:
(a) RealSelect Sites. RealSelect agrees to market and promote the
----------------
Production Services on each of the RealSelect Sites, and to do so in accordance
with the branding requirements set forth in Section 5.3. Such marketing and
promotion will include, without limitation, inclusion of one or more Production
Services Pages in the "Internet Marketing" sections of each of the RealSelect
Sites, or such similar sections as RealSelect creates from time to time.
RealSelect may procure and display advertisements on the Production Services
Pages, and any JV Image Pages, running on a server owned, operated or controlled
by or for RealSelect without the approval of Jutvision and will retain all
revenues derived from such advertisement placements; provided, however, that
RealSelect will not display any advertisements of competitors of Jutvision
listed on Exhibit D hereto on any RealSelect Site without the prior approval of
Jutvision. In addition, Jutvision may, in its sole discretion, update or revise
the list of competitors on Exhibit D hereto by providing written notice to
RealSelect once in every twelve (12) month period from the anniversary date of
this Agreement; provided, however, that in no event will Jutvision be able to
list more than four (4) such competitors.
(b) Development Seminars and Trade Shows. RealSelect will at its
------------------------------------
sole discretion invite Jutvision to speak at Development Seminars RealSelect
conducts during the Term. In addition, RealSelect or its sales representatives
will use commercially reasonable efforts to distribute to Brokers at Development
Seminars subscription forms and marketing materials created and paid for
(including, but not limited to, printing and delivery expenses) by Jutvision and
approved by RealSelect that promote the Production Services. In addition, to the
extent not prohibited by third-party agreements, RealSelect will at its sole
discretion permit Jutvision to distribute subscription forms and marketing
materials created by Jutvision that promote the Production Services at the
RealSelect booth. The forms and materials distributed at Development Seminars
and trade shows will, without limitation, (i) describe and highlight the
advantages of the Production Services; (ii) designate the Production Services in
accordance with the branding requirements set forth in Section 5.3; (iii)
provide the address(es) of Production Services Pages on each of the RealSelect
Sites; and (iv) provide the toll-free number(s) and hours of operation for the
RS Sales Line. RealSelect will promptly forward to Jutvision via the RS Sales
Line all orders for, and information requests regarding, the Production Services
it receives directly from Brokers. All subscription forms that RealSelect sales
representatives provide to Brokers in Development Seminars will include a unique
sales representative number provided by RealSelect which will be used to track
commissions for each RealSelect sales representative.
(c) RealSelect shall cooperate with Jutvision in the performance of
----------------
Jutvision's obligations under this Agreement. Jutvision shall cooperate with
RealSelect in the performance of RealSelect's obligations under this Agreement.
-7-
<PAGE>
3.2 Jutvision Obligations. Jutvision will be responsible for creating (i)
---------------------
the Production Services Pages, including without limitation the electronic order
form permitting submission of orders for Production Services directly to a
server operated by Jutvision and (ii) the marketing materials described in
Sections 3.1(a)(iv) and 3.1(b). Jutvision will have the right to use the
RealSelect Marks (as defined in Section 5.4(b)) in accordance with the identity
standards RealSelect agrees to with the National Association of Realtors
("NAR"). During the Term, Jutvision agrees to use commercially reasonable
efforts to give RealSelect preferred vendor status in Jutvision's marketing
materials and other direct sales efforts, whether printed, oral or on the
Internet, by listing the RealSelect Sites first before listing any other Web
sites comparable to the RealSelect Sites. Jutvision agrees that the RealSelect
Sites will be the default Internet site for the Basic Package. In addition,
Jutvision understands and agrees that it will not list the name of any of the
RealSelect Sites on the same page of any marketing materials as any other Web
sites comparable to the RealSelect Sites. In clarification of the foregoing, no
brochure or other marketing material, if unfolded and photocopied, may display
the name of any of the RealSelect Sites on the same page as any other Web sites
comparable to the RealSelect Sites. In addition, Jutvision will not display the
name of any of the RealSelect Sites on the same HTML page as any other Web sites
comparable to the RealSelect Sites.
3.3 Additional Obligations. The parties 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; WARRANTS
--------------
4.1 Sponsorship Fees. During the Initial Term, subject to Section 11.8,
----------------
Jutvision will pay to RealSelect monthly Sponsorship Fees as follows:
(a) During the first year of the Initial Term, Jutvision will pay the
following amounts according to the following schedule:
<TABLE>
- --------------------------------------------------------------------
<S> <C>
Effective Date -- [*] Month 7 -- [*]
- --------------------------------------------------------------------
Month 1 -- [*] Month 8 -- [*]
- --------------------------------------------------------------------
Month 2 -- [*] Month 9 -- [*]
- --------------------------------------------------------------------
Month 3 -- [*] Month 10 -- [*]
- --------------------------------------------------------------------
Month 4 -- [*] Month 11 -- [*]
- --------------------------------------------------------------------
Month 5 -- [*] Month 12 -- [*]
- --------------------------------------------------------------------
</TABLE>
[*] = 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.
-8-
<PAGE>
<TABLE>
- --------------------------------------------------------------------
<S> <C>
Month 6-- [*]
- --------------------------------------------------------------------
</TABLE>
(b) During the second year of the Initial Term, Jutvision will make
twelve (12) equal monthly payments of [*].
(c) During the third year of the Initial Term, Jutvision will make
twelve (12) equal monthly payments of [*].
"Month 1" of the first year of the Initial Term means the first calendar month
beginning immediately following the calendar month in which the RealSelect Sites
become fully ready to receive postings of Jutvision Images, but in no event
shall Month 1 be prior to February 1999. When RealSelect determines that it is
ready to receive Jutvision postings, RealSelect shall send written notice to
Jutvision confirming the day of "Month 1". Except for the payment due on the
Effective Date, Jutvision will make all payments of Sponsorship Fees net thirty
(30) days from the end of the month for which such payment is due.
4.2 Transaction Fees for Initial Term. During the Initial Term, Jutvision
---------------------------------
will pay RealSelect quarterly Transaction Fees as follows:
(a) With respect to all Production Services sold by Jutvision to
RealSelect Customers for Jutvision Images of Residential Property listings
posted to a RealSelect Site, Jutvision will pay to RealSelect for each calendar
quarter (i) [*] for each Basic Package so sold to such RealSelect Customers
during the quarter [*] of Net Revenues from sales of Basic Packages to such
RealSelect Customers during the quarter and (ii) [*] for each Upgrade Package so
sold to RealSelect Customers during the quarter [*] of Net Revenues from
sales to such RealSelect Customers of Upgrade Packages during the quarter.
(b) With respect to all Production Services sold by Jutvision to
Brokers that are not RealSelect Customers ("Other Customers") for Jutvision
Images of Residential Property listings, Jutvision will pay to RealSelect for
each calendar quarter (i) for Residential Property listings posted solely to a
RealSelect Site, [*] for each Basic Package so sold to such Other Customers
during the quarter [*] of Net Revenues from sales of Basic Packages to such
Other Customers during the quarter and (ii) for Residential Property listings
posted solely to a RealSelect Site, [*] for each Upgrade Package so sold to such
Other Customers during the quarter [*] of Net Revenues from sales of Upgrade
Packages to such Other Customers during the quarter.
(c) With respect to all Production Services sold by Jutvision to
Other Customers for Jutvision Images of Residential Property listings posted
solely to Web sites other than the RealSelect Sites, Jutvision will pay to
RealSelect for each calendar quarter (i) [*] for each Basic Package so sold to
such Other Customers during the quarter [*] of Net Revenues from sales of Basic
Packages to such Other Customers during the quarter and (ii) the greater of $1
for each Upgrade Package so sold to such Other Customers during the quarter or
5% of Net Revenues from sales of Upgrade Packages to such Other Customers during
the quarter.
[*] = 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.
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<PAGE>
(d) With respect to all Combination Packages sold by Jutvision to a
RealSelect Customer for Jutvision Images of Residential Property listings posted
both to a RealSelect Site and a Web site other than the RealSelect Sites, for
each calendar quarter, Jutvision will pay RealSelect (x) an amount in accordance
with Section 4.2(a) with respect to Net Revenues received for Jutvision Images
of Residential Property listings posted to a RealSelect Site plus (y) [*] of
----
Net Revenues received for Jutvision Images of Residential Property listings
posted to Web sites other than the RealSelect Sites. In clarification of the
preceding sentence, and as hypothetical examples only, (i) if Jutvision sells a
Combination Package to post Jutvision Images to Realtor.com and one non-
RealSelect Site for $150, RealSelect will receive [*] or [*], whichever is
greater, plus [*]; (ii) if Jutvision sells a Combination Package to post
Jutvision Images to Realtor.com and two non-RealSelect Sites for $180,
RealSelect will receive [*] or [*], whichever is greater, plus [*]; and (iii) if
Jutvision sells a Combination Package to post Jutvision Images to Realtor.com
and three non-RealSelect Sites for $200, RealSelect will receive [*] or [*],
whichever is greater, plus [*].
(e) No Transaction Fees will be due with respect to any Production
Services Jutvision and RealSelect mutually agree in writing to distribute free
of charge on a promotional basis.
Calculation of quarterly Transaction Fees will commence immediately for the
calendar quarter in which the Effective Date occurs. Jutvision will make all
payments of Transaction Fees net thirty (30) days from the end of each calendar
quarter. With each quarterly payment, Jutvision will provide a report stating
the number of Basic Packages, Upgrade Packages and Combination Packages sold
during the quarter and providing a calculation of the Transaction Fees payable.
4.3 Transaction Fees for Renewal Term. Upon commencement of the Renewal
---------------------------------
Term (as defined below), if any, the amount and nature of Transaction Fees to be
paid during the Renewal Term will be the greater of the following:
(a) If, during the third year of the Initial Term, Jutvision sells at
least an aggregate of [*] Basic Packages, Upgrade Packages and/or Combination
Packages to RealSelect Customers, Jutvision will pay RealSelect the quarterly
Transaction Fees set forth in Section 4.2 during the Renewal Term, or
(b) The amounts equal to the highest Transaction Fees paid to any
other third party by Juvision that markets and promotes Jutvision on a non-
exclusive basis for Residential Property; provided however, if there are no
other such third party Transaction Fees or such Transaction Fees are zero or
less, then the parties shall do as follows. The parties agree to negotiate in
good faith regarding the amount and nature of Transaction Fees to be paid during
the Renewal Term. If the parties fail to reach an agreement within thirty (30)
days following the commencement of the Renewal Term with respect to such
Transaction Fees, the amount and nature of the Transaction Fees to be paid
during the Renewal Term will be settled by binding arbitration in Los Angeles,
California under the commercial arbitration rules (the "Rules") of the American
Arbitration Association ("AAA"). Within ten (10) days after such thirty (30) day
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED TO THE
OMITTED PORTIONS.
-10-
<PAGE>
negotiation period has lapsed, Jutvision and RealSelect shall each 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 thirty (30) days of the third arbitrator's appointment. The
Transaction Fees established by the arbitrators will be applicable retroactively
to the start of the Renewal Term and remain in effect for the duration of such
Renewal Term.
4.4 Inspection of Records. RealSelect 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 Transaction
Fees paid 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. In the event any such audit establishes an underpayment of Transaction
Fees, Jutvision shall pay the amount of the deficit within thirty (30) days of
written notification by RealSelect of such deficiency. In the event such audit
identifies an overpayment of Transaction Fees, at the option of RealSelect, (i)
such overpayment shall be deducted from future Transaction Fees, or (ii)
RealSelect shall remit payment of the overpayment due Vendor within thirty (30)
days of written notification from Jutvision. If an audit establishes an
underpayment of commissions greater than five percent (5%) of the total
Transaction Fees due and payable to RealSelect for the period at issue,
Jutvision shall pay for the costs and expenses of such audit.
4.5 Warrant. Within thirty (30) days following the Effective Date,
-------
Jutvision will issue to RealSelect a warrant granting RealSelect the right,
exercisable for three (3) years following the date of issuance, to purchase, at
a price per share equal to the lowest price per share paid by an investor in the
most recent financing of Jutvision preceding the Effective Date, an amount of
shares of Jutvision common stock equal to five percent (5%) of the equity
securities of Jutvision on a fully diluted basis, excluding employee stock
options, calculated as of the Effective Date, all as set forth in the form of
warrant attached hereto as Exhibit B. Jutvision will permit RealSelect to
inspect documentation reasonably sufficient to demonstrate that the number of
shares of Jutvision common stock and the price per share set forth in such
warrant are consistent with the number and price described this Section 4.5.
5. PROPRIETARY RIGHTS
------------------
5.1 Jutvision for Java Software. Jutvision hereby grants to RealSelect a
---------------------------
nonexclusive, worldwide, royalty-free license, commencing on the Effective Date
and extending for a period of five (5) years from the date of expiration or
termination of the Agreement (the "JJS License Period"), to use the Jutvision
for Java Software, in object code only, to display Jutvision Images on the
RealSelect Sites. The foregoing license is subject to all of the terms and
conditions set forth in the Jutvision for Java License Agreement attached hereto
as Exhibit C; provided that, in the event of any inconsistency between such
Jutvision for Java License Agreement and this Agreement, this Agreement will
govern. The foregoing license will expire at the end of the JJS License Period,
and upon such expiration RealSelect will use commercially reasonable efforts to
-11-
<PAGE>
cease all use of the Jutvision for Java Software and will use commercially
reasonable efforts to purge all Jutvision for Java Software from its servers.
5.2 Jutvision Images.
----------------
(a) All Jutvision Images, whether or not produced for RealSelect
Customers and whether or not posted to either RealSelect Site, are, and at all
times will remain, the exclusive property of Jutvision, and no provision of this
Agreement implies any transfer to RealSelect of any ownership interest in any
Jutvision Image.
(b) Jutvision hereby grants to RealSelect a nonexclusive, worldwide,
royalty-free, nontransferable license, during the JJS License Period, (i) to
display, perform and reproduce Jutvision Images on the RealSelect Sites solely
for the purposes contemplated in this Agreement and (ii) to distribute Jutvision
Images solely to users of the RealSelect Sites via the browsers of such users
for the purposes contemplated in this Agreement. Other than as agreed to in this
Agreement, RealSelect will not reproduce, 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. The foregoing license will expire at the end of the JJS
License Period, and upon such expiration RealSelect will use commercially
reasonable efforts to cease all use of the Jutvision Images and will use
commercially reasonable efforts to purge all Jutvision Images from its servers.
5.3 Branding; Marketing and Advertising Approval.
--------------------------------------------
(a) Subject to Section 5.4, RealSelect will designate a private brand
under which RealSelect and Jutvision will market, promote and sell the
Production Services pursuant to Sections 2.1, 3.1(a) and 3.1(b) (the "Private
Brand"), provided, however, that RealSelect may elect, in its sole discretion,
in one or more circumstances, for the Production Services to be marketed,
promoted or sold under the Jutvision brand alone. Subject to the exception set
forth in the preceding sentence, the following combination logo must appear on
all Production Services Pages and all subscription forms and marketing material
that RealSelect hands out pursuant to Section 3.1(b): "[Private Brand] powered
by Jutvision(R)" (the "Private Brand Combination Logo"). The Jutvision name must
be of reasonable size and prominence in each use of the Private Brand
Combination Logo, and the parties will mutually approve the final form of the
Private Brand Combination Logo and any subsequent variation thereof. In
addition, the following legend must be included in the HTML Page or Pages on
each of the RealSelect Sites in which RealSelect provides general information
about trademarks and other intellectual property appearing on the sites:
"Jutvision Corporation, located at www.jutvision.com, is the exclusive provider
of virtual tours for [Private Brand]. JUTVISION and the Jutvision logo are
registered trademarks and service marks of Jutvision Corporation."
(b) Each party will have the right to approve all Web pages and other
materials produced by the other party that display the Private Brand or that are
otherwise produced pursuant to Sections 3.1(a) and 3.1(b), and Jutvision will
have the right to approve any use by RealSelect of the Jutvision brand alone
pursuant to the first sentence of Section 5.3(a). A party will approve or object
to such pages or material submitted to it within ten (10) days after
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<PAGE>
receiving such submission. A failure to respond during such ten (10) day period
will be deemed an approval of such pages or material.
5.4 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"). RealSelect will not take any actions inconsistent
with Jutvision's ownership rights.
(ii) Subject to the restrictions set forth herein,
Jutvision hereby grants RealSelect a nonexclusive, worldwide, royalty-free,
fully paid up, nontransferable right to use the Jutvision Marks, during the term
of this Agreement, solely in connection with promotion and marketing of the
Production Services as provided in Section 3. RealSelect's use of the Jutvision
Marks will not create in RealSelect any right, title or interest therein or
thereto. All use by RealSelect of the Jutvision Marks will inure to the
exclusive benefit of Jutvision. At Jutvision's reasonable request, RealSelect
will assist Jutvision with the protection and maintenance of the Jutvision
Marks. RealSelect may only use the Jutvision Marks as expressly permitted
herein. RealSelect 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) RealSelect Marks.
----------------
(i) RealSelect owns and at all times will continue to own
the trademarks, service marks and/or trade names of the Private Brand,
REALTOR.COM and HOMEBUILDER.COM (the "RealSelect Marks"). Jutvision will not
take any actions inconsistent with RealSelect's ownership rights.
(ii) Subject to the restrictions set forth herein,
RealSelect hereby grants Jutvision a nonexclusive, worldwide, royalty-free,
fully paid up, nontransferable right to use the RealSelect Marks, during the
term of this Agreement, solely in connection with promotion and marketing of the
Production Services as provided in Section 3. Jutvision's use of the RealSelect
Marks will not create in Jutvision any right, title or interest therein or
thereto. All use by Jutvision of the RealSelect Marks will inure to the
exclusive benefit of RealSelect. At RealSelect's reasonable request, Jutvision
will assist RealSelect with the protection and maintenance of the RealSelect
Marks. Jutvision may only use the RealSelect Marks as expressly permitted
herein. Jutvision agrees to use the RealSelect Marks in a manner commensurate
with the style, appearance and quality of RealSelect's services and/or products
bearing such marks.
(c) Combination Mark. The Private Brand Combination Logo provided
----------------
for in Section 5.3(a) constitutes a combination mark incorporating the mark of
each party ("Combination Mark"). Neither party may assert any ownership interest
in the Combination Marks beyond the respective ownership described in Sections
5.4(a) and 5.4(b). Without limiting the generality of the foregoing sentence,
except as expressly permitted in this Agreement, neither party shall use,
license, or apply to register the Combination Mark.
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<PAGE>
5.5 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. 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 three
(3) years from the first day of Month 1 (as defined in Section 4.1) (the
"Initial Term"). Upon written notice from RealSelect given at least thirty (30)
days prior to expiration of the Initial Term, RealSelect may, in its sole
discretion, renew the Agreement, on a non-exclusive basis, for an additional
period of two (2) years ("Renewal Term"); provided, however, that Jutvision will
have no obligation to pay any Sponsorship Fees during the Renewal Term; and
provided, further, that Transaction Fees to be paid during the Renewal Term will
be determined in accordance with the final paragraph of Section 4.3.
6.2 Rights of First Offer.
---------------------
(a) Upon any termination or expiration of this Agreement, Jutvision
shall have the right of first offer with respect to providing Virtual Tour
Images for postings of Residential Property listings in the Territory on
RealSelect Sites. Jutvision will exercise such right of first offer within
thirty (30) days after notice from RealSelect.
(b) During and after the Term, Jutvision shall have the right of
first offer with respect to providing Virtual Tour Images for postings of
Residential Property listings outside the Territory on RealSelect Sites.
Jutvision will exercise such right of first offer within thirty (30) days after
notice from RealSelect.
6.3 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 sixty (60) days after being
notified in writing by the non-breaching party of such breach or failure.
6.4 Effects of Termination. Upon expiration or termination of this
----------------------
Agreement:
(a) Jutvision will cease all use of the RealSelect Marks and the
Combination Marks and will cease creating and distributing the promotional and
marketing materials provided for in Section 3.1(b);
(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;
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<PAGE>
(c) Except as provided in Sections 5.1 and 5.2, RealSelect will cease
all use of the Jutvision Marks, the Combination Marks, the Jutvision Technology
and the Jutvision Images and shall use all commercially reasonable efforts to
purge all Jutvision Technology and Jutvision Images from its servers within a
commercially reasonable time frame.
(d) Each party will promptly destroy or return any Confidential
Information of the other party in its possession.
(e) Jutvision will return to RealSelect an electronic copy of all
RealSelect Customers information including but not limited to names, phone and
fax numbers, email address, billing address and shall use commercially
reasonable efforts to remove from its records all such information.
6.5 Survival of Certain Terms. The provisions of Sections 5.1, 5.2,
-------------------------
5.4(a)(i), 5.4(b)(i), 5.4(c), 5.5, 6.2, 6.4, 6.5, 7, 8, 9, 10, 11.2, 11.3, 11.4,
11.5, 11.6, 11.8, 11.9, 11.10, 11.11 and 11.12, and the provisions of Exhibit C
specified therein to survive, 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.
7.2 General. Subject to Section 11.3, 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 11.3, 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
-15-
<PAGE>
(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 RealSelect further represents and warrants that it has entered into,
and will maintain in effect throughout the Term, an agreement with the National
Association of Realtors to be its official Internet site. Jutvision may
immediately terminate the Agreement upon any breach of the foregoing
representation and warranty.
8.3 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),
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<PAGE>
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 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; LIQUIDATED DAMAGES
-------------------------------------------
10.1 SUBJECT TO SECTION 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 (COLLECTIVELY "CONSEQUENTIAL
DAMAGES").
10.2 IN THE EVENT THAT THIS AGREEMENT IS TERMINATED IN ACCORDANCE WITH
SECTION 6.3 BASED ON A PARTY'S MATERIAL BREACH OF ANY TERM OR CONDITION,
COVENANT, OBLIGATION OR WARRANTY SET FORTH IN THIS AGREEMENT, THE PARTIES AGREE
THAT, AS LIQUIDATED DAMAGES AND NOT AS A PENALTY, THE BREACHING PARTY SHALL BE
LIABLE TO THE NON-BREACHING PARTY FOR DAMAGES (THE "LIQUIDATED DAMAGES")
CALCULATED AS FOLLOWS:
(a) IF THE BREACH OCCURS DURING THE TWELVE (12) MONTH PERIOD
IMMEDIATELY FOLLOWING THE EFFECTIVE DATE, [*];
(b) IF THE BREACH OCCURS DURING THE TWELVE (12) MONTH PERIOD
IMMEDIATELY FOLLOWING THE FIRST ANNIVERSARY OF THE EFFECTIVE DATE, [*]; OR
(c) IF THE BREACH OCCURS ANY TIME FOLLOWING THE SECOND ANNIVERSARY
OF THE EFFECTIVE DATE UNTIL THE END OF THE INITIAL TERM, [*].
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED TO THE
OMITTED PORTIONS.
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<PAGE>
THE PARTIES AGREE THAT THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE
APPROXIMATION OF THE HARM EITHER PARTY WOULD SUFFER IN THE EVENT OF A MATERIAL
BREACH BY THE OTHER PARTY RESULTING IN TERMINATION.
11. GENERAL PROVISIONS
------------------
11.1 No Less Favorable Pricing. During the Term, Jutvision agrees (i)
-------------------------
that the amounts charged to [*] for Basic Packages or Upgrade Packages
(excluding Combination Packages) will not [*] the amounts charged to Brokers who
are [*] for Basic Packages or Upgrade Packages of the same quality and quantity
and in the same time period and geographic region and (ii) the price Jutvision
charges for Combination Packages will [*] price Jutvision charges for Basic
Packages or Upgrade Packages of the same quality and quantity and in the same
time period and geographic region.
11.2 Independent Contractors. The relationship of Jutvision and
-----------------------
RealSelect 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.
11.3 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
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, and any failure to furnish such written
acceptance or objection during such time frame will be deemed an acceptance of
such proposed announcement.
11.4 Governing Law; Jurisdiction; Venue. This Agreement will be governed
----------------------------------
by and construed under the laws of the State of California without reference to
conflict of laws principles. For any disputes arising out of this Agreement, the
parties irrevocably consent to the personal and exclusive jurisdiction of, and
venue in, the state or federal courts within Los Angeles County, California.
11.5 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 both parties.
11.6 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
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONNFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
-18-
<PAGE>
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. Either party may change its address for notice hereunder at
any time upon written notice to the other party.
If to RealSelect: General Counsel
RealSelect, Inc.
5655 Lindero Canyon Road
Suite 120
Westlake Village, CA 91362
If to RealSelect after December 1, 1998:
General Counsel
RealSelect, Inc.
225 West Hillcrest Drive
Suite 100
Thousand Oaks, CA 91360
If to Jutvision: Chief Executive Officer
Jutvision Corporation
One Eglinton Avenue East
Suite 620
Ontario M4P 3A1
Canada
11.7 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.
11.8 Non-Assignability; Change of Control. Except as expressly provided
------------------------------------
herein, this Agreement may not be assigned or transferred, nor 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. Jutvision may not
engage in a Change of Control (as defined below) prior to the expiration or
earlier termination of the [*], (as defined in the [*], dated as of the
Effective Date, between RealSelect and certain shareholders of Jutvision
identified therein). Following the expiration or earlier termination of the [*],
Jutvision may engage in a Change of Control. Within ten (10) days following such
Change of Control, Jutivision shall provide written notice to RealSelect of such
Change of Control. In the event of such Change of Control, RealSelect may,
within thirty (30) days following the date it receives notice of such Change of
Control, or Jutvision may, within thirty (30) days following the date of such
Change of Control, provide written notice to the other party whereupon [*] and
Jutvision will have no further obligation to pay any Sponsorship Fees that
otherwise would have become payable after the month such notice was received.
"Change
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED TO THE
OMITTED PORTIONS.
-19-
<PAGE>
of Control" means with respect to Jutvision: (A) the direct or indirect
acquisition by a bona fide individual third party or bona fide multiple third
parties acting in concert, in each case in either a single transaction or
multiple but related transactions, of either (i) the majority of the equity
securities of Jutvision or (ii) all or substantially all of the assets of
Jutvision; (B) Jutvision is merged with, or into, another entity; or (C) a
change in control of the voting rights of the Jutvision shareholders or
directors, either by shareholder agreement or other corporate governance
document, that results in a bona fide individual third party or bona fide
multiple third parties acting in concert, in each case in either a single
transaction or multiple but related transactions, controlling a majority of the
voting stock of Jutvision and/or a majority of the seats of the Jutvision board
of directors.
11.9 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.
11.10 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.
11.11 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.
11.12 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 REALSELECT, INC.
By: /s/ Kevin B. McCurdy By: /s/ Stuart Wolff
Title:___________________________ Title:___________________________
Date:____________________________ Date:____________________________
-3-
<PAGE>
EXHIBIT A
---------
Major Metropolitan Areas
<TABLE>
<S> <C> <C>
New York, NY Chicago, IL Los Angeles, CA
Boston, MA Dallas/Ft Worth, TX San Francisco, CA
Philadelphia, PA Detroit, MI Seattle, WA
Baltimore, MD Houston, TX San Diego, CA
Washington, DC Minneapolis/St. Paul, MN Denver, CO
Miami, FL St Louis, MO Oakland, CA
Atlanta, GA Cleveland, OH Long Beach, CA
Hartford, CT Pittsburgh, PA San Jose, CA
Providence, RI Portland, ME Palm/Broward/Dade, FL
Memphis, TN Milwaukee, WI Phoenix, AZ
Nashville, TN Kansas City, MO Portland, OR
New Orleans, LA San Antonio, TX San Bernardino, CA
Tampa/St. Pete, FL Indianapolis, IN Tucson, AZ
Jacksonville, FL Cincinnati, OH Albuquerque, NM
Buffalo. NY Austin, TX Sacramento, CA
Orlando, FL Oklahoma City, OK Fresno, CA
Tallahassee, FL Tulsa, OK El Paso, TX
Raleigh/Dur., NC Columbus, OH Salt Lake City, UT
Rochester, NY Omaha, NB Las Vegas, NV
Fairfield, CT Toledo, OH Naples, FL
Birmingham, AL Wichita, KA
</TABLE>
-21-
<PAGE>
EXHIBIT B
---------
Warrant
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
STOCK PURCHASE WARRANT
To Purchase Shares of the Common Stock of
[JUTVISION CORPORATION]
THIS CERTIFIES that RealSelect, Inc. (the "Holder") is entitled, upon the
terms and subject to the conditions hereinafter set forth, at any time on or
after the date of this Warrant and on or prior to October ___, 2001, but not
thereafter, to subscribe for and purchase, from [Jutvision Corporation], a
Delaware corporation (the "Company"), ________ shares of Common Stock (the
"Shares") at an exercise price of $4.00 per share.
1. Exercise of Warrant.
-------------------
Unless earlier terminated under Section 7, the purchase rights represented
by this Warrant are exercisable by the Holder, in whole or in part, at any time
after six (6) months from the date hereof and before the close of business on
October ___, 2001 by the surrender of this Warrant and the Notice of Exercise
annexed hereto duly executed at the office of the Company, in _________ (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
Company), and upon payment of the Exercise Price of the Shares thereby purchased
(by cash or by check or bank draft payable to the order of the Company in an
amount equal to the Exercise Price of the shares thereby purchased); whereupon
the Holder shall be entitled to receive a certificate for the number of Shares
so purchased. The Company agrees that if at the time of the surrender of this
Warrant and purchase of the Shares, the Holder shall be entitled to exercise
this Warrant, the Shares so purchased shall be and be deemed to be issued to
such holder as the record owner of such Shares as of the close of business on
the date on which this Warrant shall have been exercised as aforesaid.
Certificates for Shares purchased hereunder shall be delivered to the
Holder within a reasonable time after the date on which this Warrant shall have
been exercised as aforesaid.
<PAGE>
The Company covenants that all Shares which may be issued upon the exercise
of rights represented by this Warrant will, upon exercise of the rights
represented by this Warrant, be fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).
2. No Fractional Shares or Scrip.
-----------------------------
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. With respect to any fraction of a
share called for upon the exercise of this Warrant, an amount equal to such
fraction multiplied by the then current price at which each Share may be
purchased hereunder shall be paid in cash to the Holder.
3. Charges, Taxes and Expenses.
---------------------------
Issuance of certificates for Shares upon the exercise of this Warrant shall
be made without charge to the holder hereof for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder.
4. No Rights as Shareholders.
-------------------------
This Warrant does not entitle the Holder to any voting rights or other
rights as a shareholder of the Company prior to the exercise thereof.
5. Loss, Theft, Destruction or Mutilation of Warrant.
-------------------------------------------------
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated, the
Company will make and deliver a new Warrant of like tenor and dated as of such
cancellation, in lieu of this Warrant.
6. Saturdays, Sundays, Holidays, etc.
----------------------------------
If the last or appointed day for the taking of any action or the expiration
of any right required or granted herein shall be a Saturday or a Sunday or shall
be a legal holiday, then such action may be taken or such right may be exercised
on the next succeeding day not a legal holiday.
7. Early Termination and Dilution.
------------------------------
7.1 Early Termination on Merger, etc. If at any time the Company proposes
--------------------------------
to merge with or into any other corporation, effect a reorganization, or sell or
convey all or substantially all of its assets to any other entity in a
transaction in which the shareholders of the Company
-2-
<PAGE>
immediately before the transaction own immediately after the transaction less
than a majority of the outstanding voting securities of the surviving entity (or
its parent), then the Company shall give the Holder thirty (30) days written
notice of the proposed effective date of the transaction and, if the Warrant has
not been exercised by the effective date of the transaction, the Warrant shall
terminate.
7.2 Early Termination on Initial Public Offering. If at any time the
--------------------------------------------
Company proposes to sell its Common Stock in a bona fide, firm commitment
underwriting pursuant to a registration statement under the Securities Act of
1933, as amended, then the Company shall give the holder of this Warrant thirty
(30) days written notice of the proposed initial filing date of such
registration statement and if the holder of the Warrant has not given notice of
exercise by the initial filing date of such registration statement, the Warrant
shall terminate. If the holder of the Warrant has given timely notice of
exercise in connection with an initial public offering, the exercise of the
Warrant pursuant to such notice shall be effective as of the effective date of
such registration statement.
7.3 Reclassification, etc. If the Company at any time shall, by
----------------------
subdivision, combination or reclassification of securities or otherwise, change
any of the securities to which purchase rights under this Warrant exist into the
same or a different number of securities of any class or classes, this Warrant
shall thereafter be to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities which
were subject to the purchase rights under this Warrant immediately prior to such
subdivision, combination, reclassification or other change. If the Shares are
subdivided or combined into a greater or smaller number of Shares, the Exercise
Price under this Warrant shall be proportionately reduced in case of subdivision
of shares or proportionately increased in the case of combination of shares, in
both cases by the ratio which the total number of Shares to be outstanding
immediately after such event bears to the total number of Shares outstanding
immediately prior to such event.
7.4 Breach of the Joint Services Agreement. If at any time the Holder
--------------------------------------
materially breaches the Joint Services Agreement dated _____ between the Holder
and the Company, the Company may notify the Holder in writing of its desire to
terminate the Warrant. The Holder shall have a period of sixty (60) days from
the date of the receipt of such written notice to cure the breach to the
reasonable satisfaction of the Company (the "Cure Period"). In the event Holder
fails or declines to cure the breach during the Cure Period, the Company shall
have sixty (60) days from the end of the Cure Period (the "Termination Period")
to notify the Holder in writing that it is exercising its right to terminate the
Warrant and upon Holder's receipt of this notification the Warrant shall be
terminated. Notwithstanding any other provision of this Warrant, the Holder may
not exercise the Warrant during the Cure Period and the Termination Period.
7.5 Cash Distributions. No adjustment on account of cash dividends or
------------------
interest on the Shares or other securities purchasable hereunder will be made to
the Exercise Price under this Warrant.
-3-
<PAGE>
8. Market Stand-Off.
----------------
The Holder agrees, in connection with the Company's initial public offering
of the Company's securities, (i) not to sell, make short sales of, loan, grant
any options for the purchase of, or otherwise dispose of any shares of Common
Stock of the Company held by the Holder (other than those shares included in the
registration) without the prior written consent of the Company or the
underwriters managing such initial underwritten public offering of the Company's
securities for one hundred eighty (180) days from the effective date of such
registration and (ii) further agrees to execute any agreement reflecting (i)
above as may be requested by the underwriters at the time of the public
offering.
9. Miscellaneous.
-------------
9.1 Issue Date. The provisions of this Warrant shall be construed and
----------
shall be given effect in all respect as if it had been issued and delivered by
the Company on the date hereof. This Warrant shall be binding upon any
successors or assigns of the Company. This Warrant shall constitute a contract
under the laws of the State of California and for all purposes shall be
construed in accordance with and governed by the laws of said state without
regard to conflict of law principles.
9.2 Restrictions. The Holder acknowledges that the Shares acquired upon
------------
the exercise of this Warrant may have restrictions upon its resale imposed by
state and federal securities laws.
9.3 Waivers and Amendments. This Warrant and any provisions hereof may be
----------------------
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
9.4 Assignment and Transferability. This Warrant may be assigned or
------------------------------
transferred by the Holder only with the prior written approval of the Company.
IN WITNESS WHEREOF, Jutvision Corporation has caused this Warrant to be
executed by its officers thereunto duly authorized.
Dated: October ___, 1998.
Jutvision Corporation.
By:___________________________________________
Kevin B. McCurdy, President
-4-
<PAGE>
NOTICE OF EXERCISE
------------------
TO: Jutvision Corporation
ATTN: Secretary
(1) The undersigned hereby elects to purchase ______________ shares of
Common Stock (the "Shares") of Jutvision Corporation pursuant to the terms of
the attached Warrant, and tenders herewith payment of the purchase price in
full, together with all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing the Shares in
the name of the undersigned or in such other name as is specified below:
___________________________________________
(Print Name)
Address:
___________________________________________
___________________________________________
___________________________________________
(3) The undersigned confirms that the Shares are being acquired for the
account of the undersigned for investment only and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no present intention of distributing or selling the Shares.
___________________ _____________________________________
(Date) (Signature)
_____________________________________
(Print Name)
-5-
<PAGE>
EXHIBIT C
---------
Jutvision for Java License Agreement
If you download, install, copy, or in any other way obtain Jutvision class files
or software, you indicate that you consent to the terms listed.
Jutvision Corporation ("JUTVISION")
Jutvision(R) for Java License Agreement
By installing or using these Jutvision for Java Class Files and/or Jutvision
Demo (the "Software"), you indicate your agreement to the terms of this license
agreement. If you do not agree to the terms herein, you are not authorized to
copy or use the Software.
Limited Warranty and Limitation of remedies:
NO WARRANTIES. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, JUTVISION
CORPORATION EXPRESSLY DISCLAIMS ANY WARRANTY FOR SOFTWARE. THE SOFTWARE AND ANY
RELATED DOCUMENTATION IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THE ENTIRE RISK ARISING OUT
OF USE OR PERFORMANCE OF THE SOFTWARE REMAINS WITH YOU.
NO LIABILITY FOR DAMAGES. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
NEITHER JUTVISION CORPORATION NOR ITS CLIENTS SHALL BE LIABLE FOR ANY DAMAGES
WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFIT,
BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, OR ANY OTHER PECUNIARY
LOSS) ARISING OUT OF THE USE OR INABILITY TO USE THIS SOFTWARE, EVEN IF
JUTVISION CORPORATION HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
BECAUSE SOME STATES/PROVINCES JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR
LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE
LIMITATION MAY NOT APPLY TO YOU.
CUSTOMER REMEDIES. JUTVISION CORPORATION'S ENTIRE LIABILITY AND YOUR EXCLUSIVE
REMEDY SHALL NOT EXCEED THE PRICE PAID FOR THE SOFTWARE PRODUCT.
ATTENTION: USE OF THE SOFTWARE IS SUBJECT TO THE JUTVISION SOFTWARE LICENSE
TERMS SET FORTH BELOW. USING THE SOFTWARE INDICATES YOUR ACCEPTANCE OF THESE
LICENSE TERMS. IF YOU DO NOT ACCEPT THESE LICENSE TERMS, YOU ARE NOT AUTHORIZED
TO USE THIS SOFTWARE.
<PAGE>
JUTVISION(R) FOR JAVA CLASS FILE LICENSE TERMS
The following License Terms govern your use of the accompanying Jutvision for
Java Class Files ("Software").
License Grant. JUTVISION grants you a license to use one copy of the Software
including all upgrades, modifications, versions and enhancements. "Use" means
storing, loading, installing, executing or displaying the Software. You may not
modify the Software or disable any licensing or control features of the
Software.
Ownership. The Software is owned and copyrighted by JUTVISION. Your license
confers no title to, nor ownership in, the Software and is not a sale of any
rights in the Software.
Copies and Adaptations. You 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. You must reproduce all copyright notices in the
original Software on all copies or adaptations. You may not copy the Software
onto any network. Class files are only permitted to be transferred when they are
called on by a "requesting" server in the normal course of Java Applet
execution. Distribution of the Jutvision for Java Class files is not permitted.
File Format. The Software may only be used to read .jut files, a file format
proprietary to JUTVISION CORPORATION.
LINKS, REPRESENTATION & SPLASH SCREEN: Any Web site that uses the Software must
provide a visible link to either Jutvision scenes on that site, or directly to
http://www.jutvision.com. The image displayed when loading each scene
("JUTVISION SPLASH SCREEN") may not be tampered with in any way and must be
fully visible upon loading of each Jutvision scene. In no way may the JUTVISION
SPLASH SCREEN and/or Jutvision logo be obstructed by any other images, frames,
tables or any other HTML or JavaScript code.
NO DISASSEMBLY OR DECRYPTION: You may not disassemble or decompile the Software
including single Jutvision Java Class files under any circumstances. The
disassembly or decryption of any Jutvision Java Class file will result in a
breach of this agreement.
TRANSFER. Your license will automatically terminate upon any transfer of the
Software other than the copying and server rights noted above.
TERMINATION. JUTVISION CORPORATION may terminate your license upon notice for
failure to comply with any of these License Terms. Upon termination, you must
immediately destroy the Software, together with all copies, adaptations and
merged portions in any form. Failure to do so will result in immediate legal
action.
EXPORT REQUIREMENTS. You may not export or re-export the Software or any copy
or adaptation in violation of any applicable laws or regulations.
-2-
<PAGE>
U.S GOVERNMENT RESTRICTED RIGHTS: 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. You have only
those rights provided for such Software and any accompanying documentation by
the applicable FAR or DFARS clause or the Jutvision Corporation standard
software agreement for the product involved.
If you have any questions regarding this Agreement or if you wish to request any
information from Jutvision Corporation, please contact the firm in writing:
Jutvision Corporation
-3-
<PAGE>
EXHIBIT D
---------
List of Competitors of Jutvision
Live Picture
Interactive Pictures Corporation (IPIX)
BeHere
<PAGE>
EXHIBIT E
---------
Sixteen Major Metropolitan Areas
New York, NY
Boston, MA
Philadelphia, PA
Baltimore, MD
Washington, DC
Chicago, IL
Dallas/Ft. Worth, TX
Pittsburgh, PA
Los Angeles, CA
San Francisco, CA
Oakland, CA
San Jose, CA
San Diego, CA
Detroit, MI
Atlanta, GA
Houston, TX
<PAGE>
AMENDMENT TO
JOINT SERVICES AGREEMENT, WARRANT AND OPTION AGREEMENT
------------------------------------------------------
THIS AMENDMENT TO JOINT SERVICES AGREEMENT, WARRANT AND OPTION AGREEMENT
(the "Amendment"), dated as of June 11, 1999 (the "Amendment Date"), among
bamboo.com, Inc., a Delaware corporation (formerly known as Jutvision
Corporation ) ("bamboo.com"), RealSelect, Inc, a Delaware corporation
("RealSelect") and HomeStore.com, Inc., a Delaware corporation ("HomeStore")
amends (i) the Joint Services Agreement, dated as of November 11, 1998, between
bamboo.com and RealSelect (the "Agreement"); (ii) the Warrant issued to
RealSelect on January 18, 1999 pursuant to Section 4.5 of the Agreement (the
"Warrant"); and (iii) the Option Agreement, dated as of November 11, 1998,
between bamboo.com and RealSelect (the "Option").
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. Bamboo.com as Exclusive Provider of Virtual Tour Images.
-------------------------------------------------------
The parties acknowledge and agree that RealSelect will promote, market and
endorse bamboo.com, as the exclusive provider of Virtual Tour Images to the
RealSelect Sites and the HomeStore.com site for Residential Property and will
sell the Production Services, all to the exclusion of any third-party providers
of Virtual Tour Images. On the RealSelect Sites, the HomeStore.com site and in
marketing materials produced by RealSelect that refer to bamboo.com, RealSelect
shall use commercially reasonable efforts to refer to bamboo.com where
appropriate as "the exclusive provider" of Virtual Tour Images to the RealSelect
Sites and the HomeStore.com site.
2. Limited Third-Party Postings.
----------------------------
Notwithstanding Section 2.7 of the Agreement or any other provision therein to
the contrary, RealSelect shall be permitted to receive on the RealSelect Sites
postings of Virtual Tour Images from one (1) third-party provider of Virtual
Tour Images in addition to bamboo.com (the "Additional Provider") during the
Term for those customers of such Additional Provider that request such postings;
provided, however, that:
(i) During the Term, RealSelect will not directly or indirectly (a)
promote, market or endorse such Additional Provider as a provider of
Virtual Tour Images or technology or services equivalent or similar to the
Production Services for such Virtual Tour Images; (b) solicit orders from,
or make sales to, the customers of such Additional Provider; or (c)
intentionally take any other action inconsistent with the parties'
understanding hereunder that, except as specifically provided above and in
Section 2.7 of the Agreement, bamboo.com will act as the exclusive provider
of Virtual Tour Images, and Production Services therefor, for Residential
Property listings in the Territory on RealSelect Sites and the
HomeStore.com site;
(ii) During the Term, RealSelect will charge the Additional Provider
transaction fees, based on sales of packages of Virtual Tours posted to the
RealSelect Sites, not less than the percentage Transaction Fees paid by
bamboo.com pursuant to Section 4.2(b) of the Agreement; and
(ii) RealSelect may select the Additional Provider in its sole and
exclusive discretion, provided that RealSelect must provide bamboo.com with
written notice of the name of the
<PAGE>
Additional Provider thirty (30) days in advance of commencing to receive
postings from such Additional Provider, and must provide bamboo.com with
written notice thirty (30) days in advance of substituting a new Additional
Provider.
The parties acknowledge that, except as narrowly modified in this Section 2,
the exclusivity provisions of Section 2.7 of the Agreement will remain in full
force and effect.
3. Marketing Plan.
--------------
3.1 The parties will use best efforts to develop by July 1, 1999, and in no
event later than July 31, 1999, a detailed marketing plan (the "Marketing Plan")
for the exclusive purposes of promoting and marketing the Production Services
and developing, promoting and fostering the bamboo.com brand through banner ads,
buttons, logos and similar online elements appearing on the www.homestore.com
-----------------
and www.realtor.com web sites (collectively, the "Web Sites") as well as through
---------------
the HomeStore's direct sales force. Bamboo.com shall be responsible for the
initial draft of such Marketing Plan and any such Marketing Plan shall require
RealSelect's written approval, which RealSelect shall not unreasonably withhold.
Among other things, the Marketing Plan shall require the display of the
bamboo.com logo on the "home pages" of www.homestore.com and www.realtor.com.
----------------- ---------------
The parties will cooperate to establish the precise size and placement of such
bamboo.com logos. When clicked on, these bamboo.com logos shall link directly
to pages providing information about the Production Services and an electronic
order form permitting Brokers to submit orders for Production Services to
bamboo.com. These pages shall be designed by bamboo.com, with approval from
RealSelect, and will be incorporated into, and form a part of, the respective
Web Sites.
3.2 Notwithstanding the Agreement, as modified by this Amendment, to the
contrary: (i) any Production Services sold as a result of "click-throughs"
through any online elements prescribed under the Marketing Plan shall give rise
only to those Transaction Fees described under subsection 4.2(b) of the
Agreement; and (ii) Brokers making such purchases shall be deemed to be "Other
Customers," as that term is defined under Section 4.2(b) of the Agreement.
3.3 The implementation of the Marketing Plan shall commence on the first
day of the first calendar month following RealSelect's approval (the
"Implementation Date") and, subject to Section 6 below, shall extend through the
expiration or earlier termination of the Initial Term.
3.4 For the specific purpose of implementing the Marketing Plan, bamboo.com
shall pay RealSelect, on a monthly basis, the following marketing fees
(collectively, the "Marketing Fees"): (i) [*] during the first year of the
Marketing Plan; (ii) increasing to [*] commencing on the first anniversary
of the Amendment Date; and (iii) increasing to [*] for the remainder of the
Marketing Plan, commencing on the second anniversary of the Amendment Date. The
quality and quantity of banner ads, buttons, logos and similar online elements
bamboo.com shall select under the Marketing Plan, during any given month, shall
be determined based upon the fair market value thereof, determined by the
parties mutual, reasonable determination, less a fixed discount equal to [*].
For purposes of illustration only, for each month during the first year of the
Marketing Plan, bamboo.com shall select a particular combination of banner ads,
buttons, logos and similar online elements having a fair market value of
[*]. Bamboo.com shall make payments of all Marketing Fees net thirty
(30) days from the end of the month for which such payment was due.
4. [*].com.
----------------
The parties agree to negotiate in good faith and use best efforts to enter
into a separate agreement (the "[*] Agreement") whereby, if such [*] Agreement
is executed on behalf of both parties (i) bamboo.com will act as a preferred
provider of Virtual Tour Images and Production Services to [*].com in return for
a monthly sponsorship fee of [*] (for corresponding marketing value) during the
term of the agreement, which fee will increase by [*] percent ([*]%) at the
beginning of
[*] = 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>
each annual renewal term; and (ii) RealSelect will market and promote bamboo.com
exclusively as the provider of Virtual Tour Images to the [*].com Site, provided
that there shall be limed posting rights for a single virtual provider along the
lines of those provided above with respect to the Web Sites. Notwithstanding
anything contained herein to the contrary, the parties shall enter into an
agreement consistent with the intent of this Section 4 for a period beginning
June 30, 1999 and ending [*] if they are unable to agree-upon an agreement for a
longer term.
5. RealSelect Warrant.
------------------
Notwithstanding anything to the contrary in the Warrant or the Agreement, (i)
subject to Section 7.1 of the Warrant, the purchase rights represented by the
Warrant shall be exercisable from the Amendment Date through and including
December 31, 1999, whereupon the Warrant shall expire; (ii) subject to those
provisions pertaining to reclassification under Section 7.3 of the Warrant, the
number of shares of common stock of bamboo.com subject to the Warrant equal a
total of 100,000 shares; (iii) RealSelect or HomeStore, for its benefit, may
exercise all or a portion the Warrant in its sole discretion; (iv) RealSelect or
HomeStore, as the case may be, will be provided the benefit of a "net exercise"
provision; and (v) RealSelect or HomeStore, as the case may be, will have the
benefit of piggyback registration rights.
6. Effective Period.
----------------
Subject to Section 11 below, this Amendment will take effect as of the
Amendment Date and will continue in effect until the expiration or prior
termination of the Initial Term. Notwithstanding the preceding sentence,
bamboo.com, in its sole discretion, may elect to terminate this Amendment
effective at the end of the eighteen (18) month period immediately following the
Amendment Date, and RealSelect, in its sole discretion, may elect to terminate
this Amendment (collectively the "Amendment Termination") effective at the end
of the twenty-one (21) month period immediately following the Amendment Date, in
each case upon notice given at least sixty (60) days prior to the end of such
twelve (12) month period. Sections 2, 5 and 8 shall survive any expiration or
termination of this Amendment.
7. Certain Disclosure.
------------------
Notwithstanding Section 7 of the Agreement and any non-disclosure agreement
between the parties to the contrary, RealSelect hereby authorizes bamboo.com
subject to RealSelect's approval in advance in writing to (i) use RealSelect's
logo in a registration statement bamboo.com plans to file under the Securities
Act of 1933 (the "Registration Statement"); (ii) mention and describe the
Agreement and this Amendment in the body of the Registration Statement; and
(iii) attach and file the Agreement and this Amendment as exhibits to the
Registration Statement. RealSelect understands that bamboo.com plans to file
with the SEC a request for confidential treatment, subject to RealSelect's
approval in advance in writing, of key provisions in the Agreement and this
Amendment.
8. [*] Agreement.
----------------
The parties agree that the [*] Agreement is cancelled and terminated and is,
therefore, without further force and effect. The Control Parties, as that term
is defined under the [*] Agreement, are intended third-party beneficiaries of
this covenant.
9. Conditions Precedent.
--------------------
Notwithstanding anything to the contrary herein, this Amendment shall become
effective only upon the occurrence and fulfillment of both of the following
conditions (collectively, the "Conditions Precedent"): (i) bamboo.com
closes its Series C round of mezzanine financing ; and (ii) bamboo.com
[*] = 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>
submits electronically or by other means its Registration Statement to the SEC.
In the event the Conditions Precedent are not fulfilled on or before midnight on
December 31, 1999, this Amendment shall be cancelled, rescinded and void ab
initio, unless both parties agree in writing to extend the deadline. Bamboo.com
shall use commercially reasonable efforts to close such mezzanine financing.
10. Technology Access Fees.
----------------------
The parties acknowledge that, to implement the Agreement, as modified by this
Amendment, bamboo.com requires, and shall have, access to unique technologies
owned by RealSelect and incorporated into the Web Sites and the servers hosting
the Web Sites. As consideration for its access to these unique technologies,
subject to Section 6 above, bamboo.com shall pay to RealSelect a monthly
technology access fee (collectively, the "Technology Access Fees") in accordance
with the following schedule: (i) for the twelve (12) month period commencing on
June 30, 1999, [*] per month; (ii) for the twelve (12) month period commencing
on June 30, 2000, [*] per month; and (iii) for the balance of the Initial Term,
[*] per month. Bamboo.com shall make payments of all Technology Access Fees net
thirty (30) days from the end of the month for which such payment was due.
11. Miscellaneous.
-------------
The parties understand and agree that all references in the Agreement to the
mark JUTVISION, the Jutvision logo and the Jutvision Marks will incorporate the
mark BAMBOO.COM and the bamboo.com logo, as appropriate. Except as expressly
amended hereby, the Agreement is, and shall remain, in full force and effect and
each and every term and condition thereof is hereby confirmed, continued and
ratified. All terms defined in the Agreement, except as otherwise defined
herein, shall have the same meanings where used herein. This Amendment may not
be altered, amended or modified in any way except by a writing signed by both
parties. This Amendment 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 the 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 Amendment as of the
day and year first above written.
BAMBOO.COM, INC. REALSELECT, INC.
By: /s/ Leonard B. McCurdy By: /s/ David M. Rosenblatt
--------------------------- ---------------------------
Name: Name:
--------------------------- ---------------------------
Title: Title:
--------------------------- ---------------------------
HOMESTORE.COM, INC.
By: /s/ David M. Rosenblatt
---------------------------
Name:
---------------------------
Title:
---------------------------
[*] = 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.
4
<PAGE>
EXHIBIT 10.7
DISTRIBUTION AGREEMENT
----------------------
THIS DISTRIBUTION AGREEMENT (the "Agreement") is entered into as of March
16, 1999 (the "Effective Date"), between Jutvision Corporation, a Delaware
corporation ("Jutvision"), and Microsoft Corporation, a Washington corporation
("Microsoft").
BACKGROUND
A. Jutvision uses the Jutvision Technology (as defined below) and provides
the Production Services (as defined below).
B. Microsoft operates the HomeAdvisor Site (as defined below).
C. Jutvision desires to provide virtual tour technology, hosting and
provision of Jutvision Images and production services for the HomeAdvisor 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 "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.
1.2 "HomeAdvisor Site" means the real estate related products and/or
----------------
services known as "HomeAdvisor" created by or for Microsoft and located at
www.homeadvisor.msn.com (including any future versions, upgrades, successors and
- -----------------------
replacements thereof) that is published via the Internet or any and all other
means of electronic delivery now or hereafter known.
1.3 "Initial Linking Date" means the date on which Microsoft begins
--------------------
linking listings on the HomeAdvisor Site to corresponding Jutvision Images.
Microsoft will provide Jutvision with written notice of the Initial Linking
Date, which Jutvision will promptly confirm in a reply written notice sent to
Microsoft.
1.4 "Jutvision Image" means an electronic 360, panoramic image of a
---------------
Property produced by or on behalf of Jutvision which renders in its own browser
window with nothing else (including, without limitation advertising or other
information) in such window or in the splash screen that appears while such
image loads, other than the Jutvision Marks.
1.5 "Jutvision Technology" means software and hardware, including the
--------------------
Software, used to capture, process and view Jutvision Images.
<PAGE>
1.6 "Production Services" means the services provided by or on behalf of
-------------------
Jutvision in producing Jutvision Images.
1.7 "Property" means any piece of residential real estate that is offered
--------
"for sale" within the Territory, including without limitation new homes, offered
for sale or resale.
1.8 "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.
1.9 "Software" means the Jutvision for Java Software and any Active X
--------
code or Active X Player developed pursuant to Section 2.4.
1.10 "Term" means the Initial Term of this Agreement and the Renewal Term,
----
if any, as set forth in Section 5.
1.11 "Territory" means the United States and its possessions.
---------
1.12 "Private Label Versions" means the real estate related products
----------------------
and/or services created by or for Microsoft (including any future versions,
upgrades, successors and replacements thereof) that are published via the
Internet or any and all other means of electronic delivery now or hereafter
known under a co-branding arrangement (e.g., branded with a Microsoft mark and
the mark of a third party) or under a third party's mark or brand.
2. PROVISION OF PRODUCTION SERVICES
--------------------------------
2.1 Sales and Billing. Jutvision will be responsible for receiving and
-----------------
fulfilling orders for Production Services. Jutvision will assume all costs and
responsibility for invoicing and collecting revenues from Brokers for all sales
of Production Services.
2.2 Image Capturing and Processing. 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.
2.3 Linking; HomeAdvisor Site. The parties will use best efforts to
-------------------------
implement a system (the "Jutvision Linking System") whereby Jutvision will
designate to Microsoft, on a daily basis, listings on the HomeAdvisor Site
having corresponding Jutvision Images by sending an ASCII, tab delimited file
via FTP that might include fields such as MLS number, zip code, address, URL,
Agent ID, and such other fields reasonably needed by Microsoft to match its
listings with the corresponding Jutvision Images. Unless Jutvision causes delays
in the implementation of the Jutvision Linking System, Microsoft will exercise
commercially reasonable efforts to implement the Jutvision Linking System at the
least at the same time as implementing with any competitor of Jutvision any
linking or posting system similar to the Jutvision Linking System. In
collaboration with Jutvision, Microsoft agrees to develop and include the
following on the HomeAdvisor Site throughout the Term:
-2-
<PAGE>
(a) a link within the Partners Center area of the HomeAdvisor Site
to an electronic order form with a look and feel consistent with the HomeAdvisor
Site, approved by both parties, which approvals shall not be unreasonably
withheld, hosted on a Jutvision server, framed on the HomeAdvisor Site and
containing links only back to the HomeAdvisor Site, that permits a user to
submit orders for Production Services to Jutvision via the Internet;
(b) a link, consisting of a Jutvision logo, located above the fold
(i.e., visible to an end user without scrolling or navigation on a 640 by 480
pixel page) within each "Detailed Listing Page"( that is, a page within the
HomeAdvisor Site that displays information about only one specific Property)
having a corresponding Jutvision Image, that, when clicked on, links directly to
a Jutvision Image residing on a Jutvision server (with the logo size and exact
placement above the fold to be determined in Microsoft's discretion); and
(c) an indicator in that section of the HomeAdvisor Site that
displays information about multiple properties that fit a user's search
parameters to indicate whether Jutvision Images are available for a listing.
Microsoft shall cooperate with Jutvision in the performance of Jutvision's
obligations under this Agreement and Jutvision shall cooperate with Microsoft in
the performance of Microsoft's obligations under this Agreement.
2.4 Code Development. Within ninety (90) days of the Effective Date,
----------------
Jutvision will develop and implement code of a high grade, nature and quality
for Active X capability in displaying the Jutvision Images (the "Active X
Player").. In the event that Microsoft determines that the Active X Player does
not function in accordance with Microsoft's reasonable standards, Microsoft may
provide Jutvision with a written notice specifying all defects in the Active X
Player. Jutvision will have thirty (30) days to cure any such defects, and
Microsoft will cooperate with and assist Jutvision in curing such defects during
such cure period. If, by the end of such cure period, the parties have not
developed a cure reasonably acceptable to Microsoft, Microsoft may develop its
own player. Notwithstanding anything to the contrary in this Agreement, if
Jutvision has created an Active X Player in accordance with the requirements of
this Section 2.4, Microsoft may require Jutvision to provide the Active X Player
or the Jutvision for Java Software player with Jutvision Images accessed by
users of the HomeAdvisor Site, and to users of Private Label Versions permitted
under Section 4.1(b) (provided in each case, that Jutvision (x) will not be
obligated to provide a player that is not supported by the user's browser and
(y) if Microsoft requests that the Active X Player be provided, but the user has
turned off Active X functionality, Jutvision may deliver the Jutvision for Java
Software player rather than the Active X Player). If Jutvision has not created
an Active X Player in accordance with the requirements of this Section 2.4,
Microsoft may require Jutvision to provide the Jutvision for Java Software
player or no player-- in the same circumstances contemplated by the foregoing
sentence until Jutvision has developed an Active X player which meets
Microsoft's reasonable standards.
2.5 Testing and Performance Standards. Jutvision will conduct performance
---------------------------------
testing of Jutvision Images and the Software, including without limitation the
Active X code, with the
-3-
<PAGE>
following browsers and platforms: (i) Internet Explorer 3.0 and above; (ii)
Netscape Navigator 3.0 and above; (iii) Windows 95/98; (iv) Windows NT 4.0 SP3;
and (v) Macintosh OS 8 and above. Jutvision will provide approximately ninety-
nine percent (99%) availability (excluding reasonable scheduled outages and
maintenance that are restricted to certain days and times) of Jutvision servers
hosting linked Jutvision Images ("Server Uptime Level"). The Server Uptime Level
is to be measured by the total number of minutes during a calendar month in
which Jutvision servers hosting linked Jutvision Images are completely available
to provide users of the World Wide Web access to linked Jutvision Images,
divided by the total number of minutes during the calendar month. For purposes
of the Server Uptime Level, a lapse in server availability is calculated from
the time Jutvision detects or otherwise becomes aware of an incidence of a
service interruption and ending when the service is restored, regardless of
where the outage originated. In addition, Jutvision will use commercially
reasonable efforts to ensure that Jutvision Images will fully render in a
browser within sixty (60) seconds when the computer accessing such Jutvision
Images has a Pentium 200 MHz or faster CPU, 32 MB of RAM and a 28.8 or faster
modem, and is running Windows 95 and Internet Explorer 4.0, provided that such
rendering of Jutvision Images is not delayed by Internet or network disruptions
beyond Jutvision's control or factors attributable to Microsoft. Performance
criteria to apply to browsers running Jutvision for Java or with Jutvision
Active X component installed already.
2.6 Marketing; Additional Obligations. Subject to Microsoft's prior
---------------------------------
approval, which Microsoft 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. In addition, Jutvision and Microsoft 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.
2.7 Advertisements of Competitors: Without prior consent from Jutvision,
-----------------------------
Company will not display any advertisements of any competitor of Jutvision on
Detailed Listing Pages that have Jutvision Images, but the foregoing shall not
prevent Microsoft from displaying electronic images of the same Property
provided by another company or person on such Detailed Listing Pages . For
purposes of this section, `competitor of Jutvision' is defined as any virtual
tour provider including but not limited to IPIX, NetXL, URThere, BeHere and
Cyclovision.
2.8 Agreements with Third Parties. In the event Jutvision learns that
-----------------------------
Microsoft has entered into any arrangement under which Microsoft will grant
"preferred vendor" status to any competitor of Jutvision, Jutvision may request
in writing that Microsoft afford Jutvision an opportunity to obtain such status
under materially similar terms. Microsoft will seek, but will not be obligated,
to allow Jutvision to obtain such status under materially similar terms;
provided, however, that, if Microsoft does not do so within thirty (30) days of
Jutvision's written request, Jutvision may, at Jutvision's election and upon
written notice to Microsoft, terminate this Agreement effective immediately or
at the end of the then-current Payment Period (as defined below).
-4-
<PAGE>
3. FEES
----
3.1 Sponsorship Fees. On the Initial Linking Date, and by the end of each
----------------
successive ninety (90) day period following the Initial Linking Date during the
Term (each a "Payment Period"), Jutvision will pay Microsoft a fee of [*] (the
"Sponsorship Fee").
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 Brokers and
whether or not linked to the HomeAdvisor Site or Private Label Versions, are,
and at all times will remain, the exclusive property of Jutvision, and no
provision of this Agreement implies any transfer to Microsoft of any ownership
interest in any Jutvision Technology. Microsoft 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 Microsoft a nonexclusive, worldwide,
royalty-free, nontransferable license to include on the HomeAdvisor Site and in
Permitted Private Label Versions (as defined below) links to Jutvision Images on
Jutvision's servers solely for the purposes contemplated in this Agreement. The
foregoing license does not include any right to grant or authorize sublicenses,
except as permitted above with respect to "Permitted Private Label Versions".
Microsoft has no obligation under this Agreement to include any links to
Jutvision Images in any Private Label Versions. "Permitted Private Label
Versions" means Private Label Versions that Jutvision could participate in, on
the terms contemplated by this Agreement, without violating one of Jutvision's
existing or future third party contractual relationships. If Microsoft wishes
to create a Private Label Version it shall notify Jutvision and Jutvision shall
within 10 business days after receipt of Microsoft's notice, notify Microsoft
whether or not such a transaction would be a Permitted Private Label Version,
and if not, the specific reasons therefor.
4.2 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,
as well as any name or mark Jutvision may subsequently adopt as a trade name or
to designate the Production Services or any other goods and services furnished
by Jutvision hereunder (collectively, the "Jutvision Marks"). Microsoft will not
take any actions inconsistent with Jutvision's ownership rights.
[*] = 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.
-5-
<PAGE>
(ii) Subject to the restrictions set forth herein, Jutvision
hereby grants Microsoft a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Jutvision Marks, during the term of this
Agreement, solely in connection with promotion and marketing of the Jutvision
Images and Production Services as provided in Section 2. Microsoft's use of the
Jutvision Marks will not create in Microsoft any right, title or interest
therein or thereto. All use by Microsoft of the Jutvision Marks will inure to
the exclusive benefit of Jutvision. At Jutvision's reasonable request and at
Jutvision's sole expense, Microsoft will assist Jutvision with the protection
and maintenance of the Jutvision Marks. Microsoft may only use the Jutvision
Marks as expressly permitted herein. Microsoft 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) Microsoft Marks.
---------------
(i) Microsoft owns and at all times will continue to own the
trademarks, service marks and/or trade names MICROSOFT, the Microsoft logo, and
HOMEADVISOR (the "Microsoft Marks"). Jutvision will not take any actions
inconsistent with Microsoft's ownership rights.
(ii) Subject to the restrictions set forth herein, Microsoft
hereby grants Jutvision a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the Microsoft Marks, during the term of this
Agreement, solely in connection with promotion and marketing of the Jutvision
Images and Production Services as provided in Section 2 and in accordance with
Microsoft's then current usage policies with respect thereto. Jutvision's use of
the Microsoft Marks will not create in Jutvision any right, title or interest
therein or thereto. All use by Jutvision of the Microsoft Marks will inure to
the exclusive benefit of Microsoft. At Microsoft's reasonable request and at
Microsoft's sole expense, Jutvision will assist Microsoft with the protection
and maintenance of the Microsoft Marks. Jutvision may only use the Microsoft
Marks as expressly permitted herein. Jutvision agrees to use the Microsoft Marks
in a manner commensurate with the style, appearance and quality of Microsoft's
services and/or products bearing such marks.
4.3 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.
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
twelve (12) months measured from the Initial Linking Date (the "Initial Term").
Thereafter, this Agreement will be automatically renewed for an additional six
(6) month period (the "Renewal Term") unless either party notifies the other in
writing not less than ninety (90) days prior to the end of the Initial Term of
its intention to terminate this Agreement as of the end of 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
-6-
<PAGE>
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 Microsoft 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) Microsoft will cease all use of the Jutvision Marks;
(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 (a),
-------------------------
4.2(a)(i), 4.2(b)(i), 4.3, 5.4, 5.5, 6, 7.1, 7.2, 7.3, 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.
5.6 Removal. Microsoft may at any time remove or delete access to
- --------
particular Jutvision Images if it reasonably believes that such image or images
fail to comply with Jutvision's representations and warranties set forth in this
Agreement or may have an adverse effect on the image or reputation of Microsoft.
Within three (3) days after any such removal or deletion, Microsoft shall
provide Jutvision with written notice identifying the specific Jutvision Images
removed or deleted and indicating the reason(s) therefor .
6. CONFIDENTIALITY
----------------
6.1 Microsoft and Jutvision have entered into a Non-Disclosure Agreement
dated March 5, 1999. The terms of such Non-Disclosure Agreement shall be deemed
incorporated herein, and all terms and conditions of this Agreement shall be
deemed Confidential Information as defined therein.
-7-
<PAGE>
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;
(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 Jutvision represents and warrants to Microsoft that:
(a) the Jutvision Technology is original to Jutvision and does not
infringe any copyright, patent, trade secret or other proprietary right held by
any third party;
(b) the Jutvision Images are not defamatory, do not violate any
rights of privacy or publicity of any third party and comply with all applicable
laws;
(c) Jutvision has secured in writing all necessary third party
permissions so that no further permissions and/or payments of any kind will be
required for Microsoft's use of the Jutvision Images as contemplated herein;
(d) the Production Services will be of a high grade, nature, and
quality and will be performed in a professional manner.
(e) there has been no "Competitor Control Event" (as that term is
defined under Section 10.11 below).
7.3 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-
<PAGE>
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. In addition, (a) Jutvision will indemnify,
defend and hold harmless the Indemnified Party from and against all Claims
arising out of or in connection with the Jutvision Technology, the Jutvision
Images, the Production Services and/or the Service Provider Network, and (b)
Microsoft will indemnify, defend and hold harmless the Indemnified Party from
and against all Claims arising out of or in connection with the HomeAdvisor Site
(other than those Claims covered by (a) above).
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 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 Microsoft
-----------------------
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
-9-
<PAGE>
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.
-----------
(a) 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 each party's releases. 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.
(b) Microsoft agrees not to publicly announce, or authorize the
public announcement of, any agreement with any competitor of Jutvision prior to,
or within ten (10) business days following, the Effective Date.
10.3 Entire Agreement. This Agreement, including all exhibits attached
----------------
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.
10.4 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 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 Microsoft: Bryan Mistele
Product Unit Manager
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052
Tel: (425) 703-4581
Fax: (425) 936-7329
Cc: Law & Corporate Affairs (at same address)
If to Jutvision: Andrew P. Laszlo
Senior Vice President of
Business Development
Jutvision Corporation
124 University Avenue
Third Floor
Palo Alto, CA 94301
Tel: 650-325-6787
Fax: 650-325-9337
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<PAGE>
10.5 Force Majeure. Nonperformance of either party will be excused for a
-------------
period not to exceed 30 days, 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.
10.6 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.
10.7 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.
10.8 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.
10.9 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.
10.10 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.
10.11 Competitor Control Event. In the event that any direct competitor of
------------------------
Microsoft acquires [*] of the capital stock of Jutvision and/or obtains, through
any means whatsoever, the right to control or otherwise direct the voting rights
associated with [*] of the capital stock of Jutvision (collectively referred to
as a "Competitor Control Event"), Jutvision shall immediately notify Microsoft
in writing and either party shall, for a period of 30 days thereafter, have the
right [*] upon written notice to the other party. In the event [*] is elected by
Microsoft, Microsoft shall refund to Jutvision that
[*] = 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.
-11-
<PAGE>
portion of the most recently paid Sponsorship Fee corresponding to the unexpired
portion of the then current Payment Period.
10.12 Agreement Nonexclusive. Microsoft and Jutvision each shall have
----------------------
the right to enter into agreements similar to this Agreement with others without
the consent of the other.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
JUTVISION CORPORATION MICROSOFT CORPORATION
By: /s/ Andrew P. Laszlo By: /s/ Bryan Mistele
Title: SVP Business Development Title: Product Unit Manager
Date: 3/15/99 Date: 3/15/99
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<PAGE>
EXHIBIT 10.8
[Execution Draft]
DISTRIBUTION AGREEMENT
----------------------
THIS DISTRIBUTION AGREEMENT (the "Agreement") is entered into as of
November 20, 1998 (the "Effective Date"), between Jutvision Corporation, a
Delaware corporation ("Jutvision"), and HomeSeekers.com, Inc., a Nevada
corporation ("HomeSeekers").
BACKGROUND
A. Jutvision uses the Jutvision Technology (as defined below) and provides
the Production Services (as defined below).
B. HomeSeekers operates the HomeSeekers Sites (as defined below).
C. Jutvision desires to be the exclusive provider of virtual tour
technology and production services for the HomeSeekers 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 "Basic Package" means up to four scenes captured in a designated
-------------
Residential Property and converted into a corresponding number of Jutvision
Images.
1.2 "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 Residential
Property.
1.3 "CD ROM Product" means the CD ROM product, tentatively titled "Realty
--------------
2000," that HomeSeekers plans to market and distribute to Brokers and that
bundles information regarding Jutvision's Production Services and an electronic
form for ordering such Production Services.
1.4 "HomeSeekers Coupons" means the coupons that Brokers will receive at
-------------------
seminars conducted by HomeSeekers or its representatives that permit such
Brokers to order Basic Packages and Upgrade Packages. Each HomeSeekers Coupon
will contain a unique coupon number that a Broker will provide to Jutvision for
authentication and tracking purposes.
1.5 "HomeSeekers Sites" means the collection of English and Spanish
-----------------
language HTML documents residing on servers operated by or for HomeSeekers or
its affiliate and accessible on or after the Effective Date by Brokers or the
public via the Internet, including those currently accessible at the URL
http://www.homeseekers.com.
- --------------------------
<PAGE>
1.6 "HS Originated Order" means any order received by Jutvision for a
-------------------
Basic Package or Upgrade Package placed by a Broker using a HomeSeekers Coupon
or via an electronic order form submitted by means of the CD ROM Product.
1.7 "Jutvision Image" means an electronic image of a Residential Property
---------------
produced by or on behalf of Jutvision.
1.8 "Jutvision Technology" means software and hardware used to capture,
--------------------
process and view Jutvision Images.
1.9 "Net Revenues" means the gross amount received by Jutvision from
------------
Brokers for sales of the Basic Packages and Upgrade Packages less (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.
1.10 "Production Services" means the services provided by or on behalf of
-------------------
Jutvision in preparing the Basic Packages and Upgrade Packages.
1.11 "Residential Property" means any piece of residential real estate
--------------------
within the Territory, including without limitation new homes, offered for sale
or resale.
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 "Standard Basic Package Price" means the price Jutvision generally
----------------------------
charges third parties for each Basic Package during a particular time period. As
of the Effective Date, the Standard Basic Package Price is $99; provided,
however, that Jutvision will notify HomeSeekers in writing of any change in the
Standard Basic Package Price during the Term.
1.14 "Standard Upgrade Package Price" means the price Jutvision generally
------------------------------
charges third parties for each Upgrade Package during a particular time period.
As of the Effective Date, the Standard Upgrade Package Price is $20; provided,
however, that Jutvision will notify HomeSeekers in writing of any change in the
Standard Upgrade Package Price during the Term.
1.15 "Term" means the Initial Term of this Agreement and all Renewal Terms,
----
if any, as set forth in Section 6.
1.16 "Territory" means the United States and its possessions.
---------
1.17 "Transaction Fee" means the fees paid during the Term based on sales
---------------
of Basic Packages and Upgrade Packages as provided in Section 4.1.
1.18 "Upgrade Package" means an addition to a Basic Package consisting of
---------------
one additional scene captured at the same designated Residential Property of the
Basic Package and converted into one additional Jutvision Image for the scene
captured.
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<PAGE>
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.
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
HomeSeekers Sites. HomeSeekers will permit such postings and will work with
Jutvision to maintain the ability of the HomeSeekers Sites to receive such
postings throughout the Term.
2.3 Exclusivity. During the Term, HomeSeekers will not directly or
-----------
indirectly (i) promote or market itself or any third party as a provider, for
listings in the Territory posted to a HomeSeekers Site, 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 for listings in the Territory posted to a HomeSeekers Site;
(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 listings in the Territory posted to a HomeSeekers Site;
(iv) permit any Virtual Tour Images (other than those supplied by Jutvision) 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 a HomeSeekers Site; or (v) take any other action inconsistent
with the parties' understanding hereunder that Jutvision will act as the
exclusive provider of Virtual Tour Images, and production services therefor, for
listings in the Territory posted to a HomeSeekers Site. In the event that
Jutvision fails to use commercially reasonable efforts during the Term to keep
the Jutvision Technology competitive with the viewing technology that
Jutvision's competitors offer to the mass market at similar price points and for
a similar use, HomeSeekers may provide Jutvision with a written notice
specifying the steps Jutvision should take to make the Jutvision Technology
competitive. If Jutvision fails to take such specified steps or such steps as
Jutvision and HomeSeekers subsequently mutually agree upon within ninety (90)
days after receiving such written notice, this Agreement will become non-
exclusive.
3. MARKETING AND PROMOTION
-----------------------
3.1 HomeSeekers Obligations. HomeSeekers agrees to market, promote and
-----------------------
facilitate sales of the Production Services as follows:
(a) HomeSeekers Sites. HomeSeekers will market and promote the
-----------------
Production Services on the HomeSeekers Sites. As part of such marketing and
promotion, on the "home page" of each of the HomeSeekers Sites, or the page that
is first accessed when the URL http://www.homeseekers.com or the URLs of other
such sites are designated in an Internet browser, and on pages of the
HomeSeekers Sites displaying Jutvision Images, HomeSeekers will display a
prominent Jutvision logo that, when clicked on, links to an HTML page located at
a
-3-
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URL supplied by Jutvision. HomeSeekers agrees not to display any advertisements
of any competitor of Jutvision on any HomeSeekers Site without the prior
approval of Jutvision.
(b) Seminars and Trade Shows. At seminars HomeSeekers or its
------------------------
representatives conduct with Brokers, HomeSeekers or its sales representatives
will distribute to Brokers HomeSeekers Coupons and marketing materials created
by Jutvision that promote and highlight the advantages of the Production
Services.
(c) CD ROM Products. HomeSeekers will distribute CD ROM Products to
---------------
Brokers throughout the Term. The main menu or screen displayed in all such CD
ROM Products will contain a button that links to information on the CD ROM
Products about Jutvision's Production Services and to an electronic order form
on the CD ROM Products permitting Brokers to submit to Jutvision via the
Internet orders for Basic Packages and Upgrade Packages. Such button, which at
Jutvision's election may be an animated .gif image, will be at least as
prominent in size, usage and placement as buttons or links for any other
products or services of third parties bundled on the CD ROM Products.
HomeSeekers agrees that Jutvision is the exclusive provider of Virtual Tour
Images with respect to the CD ROM Products and agrees not to include in any CD
ROM Product any information, order forms or other references to any technology
or production services for Virtual Tour Images of any third party.
(d) Email and Direct Marketing. HomeSeekers 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, HomeSeekers will permit Jutvision to
post email messages, written by Jutvision and containing marketing information
regarding the Production Services, through servers controlled by HomeSeekers at
least twelve (12) times during each twelve (12) month period in the Term.
(e) HomeSeekers shall cooperate with Jutvision in the performance of
Jutvision's obligations under this Agreement.
3.2 Additional Obligations. The parties 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, each party will pay Transaction Fees
----------------
to the other as follows:
(a) With respect to the first 200,000 HS Originated Orders fulfilled by
Jutvision during the Term:
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(i) HomeSeekers will pay to Jutvision (x) [*], plus applicable
sales tax, for each Basic Package that Jutvision provides to a Broker in
fulfillment of a HomeSeekers Coupon and (y) [*], plus applicable sales tax, for
each Upgrade Package that Jutvision provides to a Broker in fulfillment of a
HomeSeekers Coupon.
(ii) Jutvision will pay to HomeSeekers for each semi-monthly period
(x) [*] for each Basic Package sold to a Broker during such period, for which
revenue is collected, in fulfillment of an electronic order received via the CD
ROM Product and (y) [*] for each Upgrade Package sold to a Broker during such
period, for which revenue is collected, in fulfillment of an electronic order
received via the CD ROM Product.
(b) With respect to HS Originated Orders fulfilled by Jutvision during
the Term in excess of 200,000:
(i) HomeSeekers will pay to Jutvision (x) the Standard Basic
Package Price, plus applicable sales tax, for each Basic Package that Jutvision
provides to a Broker in fulfillment of a HomeSeekers Coupon minus [*] for each
Package so provided [*] of Net Revenues from sales of Basic Packages so
provided, calculated at the Standard Basic Package Price, and (y) the Standard
Upgrade Package Price, plus applicable sales tax, for each Upgrade Package that
Jutvision provides to a Broker in fulfillment of a HomeSeekers Coupon minus [*]
for each Upgrade Package so provided [*] of Net Revenues from sales of Upgrade
Packages so provided, calculated at the Standard Upgrade Package Price.
(ii) Jutvision will pay to HomeSeekers for each semi-monthly period
(x) [*] for each Basic Package sold to a Broker during such period, for which
revenue is collected, in fulfillment of an electronic order received via the CD
ROM Product [*] of Net Revenues from sales of Basic Packages so sold during such
period and (y) [*] for each Upgrade Package sold to a Broker during such period,
for which revenue is collected, in fulfillment of an electronic order received
via the CD ROM Product [*] of Net Revenues from sales of Upgrade Packages so
sold during such period.
The parties acknowledge that the differences between the Transaction Fees paid
in 4.1(a) and 4.1(b) account for the [*] in value Jutvision will receive through
HomeSeekers' inclusion of information pertaining to the Production Services in
the CD ROM Products. The foregoing sentence does not state any additional
obligation or liability with respect to either party.
(c) With respect to all sales of Production Services by Jutvision that
do not directly result from HS Originated Orders, Jutvision will pay to
HomeSeekers for each semi-monthly period [*] for each Basic Package it posts to
a HomeSeekers Site during such period and [*] for each Upgrade Package it posts
to a HomeSeekers Site during such period.
(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)
[*] = 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.
-5-
<PAGE>
with respect to any Production Services Jutvision distributes free of charge on
a promotional basis.
4.2 Invoices; Reports; Payment of Fees. Except as otherwise provided in
----------------------------------
Section 4.2(a), calculation of Transaction Fees will commence semi-monthly as
provided above. The parties shall issue invoices and reports and make payments
of fees as follows:
(a) HomeSeekers Coupons. Jutvision will promptly send HomeSeekers the
-------------------
tracking number of each HomeSeekers Coupon it has been requested to fulfill
together with a description of the Production Services to be provided in
fulfillment of such HomeSeekers Coupon. Within twenty-four (24) hours after
receiving each such tracking number, HomeSeekers will issue to Jutvision a
credit card payment for the Transaction Fees specified in Sections 4.1(a)(1) or
4.1 (b)(1), as applicable; alternatively, HomeSeekers may, as Jutvision in its
sole discretion deems acceptable, pay such Transaction Fees in some other form
of immediately available funds or furnish other security acceptable to Jutvision
prior to Jutvision's fulfillment of such HomeSeekers Coupon. In the event
HomeSeekers sells a HomeSeekers Coupon for a Basic Package as a standalone
product, HomeSeekers agrees that the price it charges Brokers for any such
HomeSeekers Coupon will never be less than the Standard Basic Package Price. In
the event HomeSeekers sells a HomeSeekers Coupon for an Upgrade Package as a
standalone product, HomeSeekers further agrees that the price it charges Brokers
for such HomeSeekers Coupon will never be less than the Standard Upgrade Package
Price.
(b) CD ROM Products Sales. Jutvision will make all payments of
---------------------
Transaction Fees payable pursuant to Sections 4.1(a)(ii) and 4.1(b)(ii) twice
monthly; provided, however, that Jutvision will not be required to pay any such
Transaction Fees on particular sales of Basic Packages and Upgrade Packages
until credit card payments or other payments from Brokers for such Basic
Packages and Upgrade Packages have been fully credited to Jutvision. With each
semi-monthly payment, Jutvision will provide a report stating (i) the number of
Basic Packages and Upgrade Packages sold in accordance with Sections 4.1(a)(ii)
and 4.1(b)(ii) during the period and providing a calculation of the Transaction
Fees payable.
(c) Non-HS Originated Orders. Jutvision will make all payments of
------------------------
Transaction Fees payable pursuant to Section 4.1(c) twice monthly. With each
semi-monthly payment, Jutvision will provide a report stating (i) the number of
Basic Packages and Upgrade Packages posted to HomeSeekers Sites during the
period and providing a calculation of the Transaction Fees payable.
4.3 Inspection of Records. HomeSeekers 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.
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5. PROPRIETARY RIGHTS
------------------
5.1 Jutvision for Java Software. Jutvision hereby grants to HomeSeekers a
---------------------------
nonexclusive, worldwide, royalty-free license to use the Jutvision for Java
software during the Term, in object code only, to display Jutvision Images on
the HomeSeekers Sites. The foregoing license is subject to all of the terms and
conditions set forth in the Jutvision for Java License Agreement attached hereto
as Exhibit A.
5.2 Jutvision Images.
----------------
(a) All Jutvision Images, whether or not produced for HomeSeekers
customers and whether or not posted to a HomeSeekers Site, are, and at all times
will remain, the exclusive property of Jutvision, and no provision of this
Agreement implies any transfer to HomeSeekers of any ownership interest in any
Jutvision Image. Despite Jutvision's ownership of the Jutvision Images, however,
Jutvision will not impair the ability of Brokers to link to or otherwise use the
Jutvision Images in accordance with Jutvision's standard terms and conditions
governing the sale of Basic Packages and Upgrade Packages.
(b) Jutvision hereby grants to HomeSeekers a nonexclusive, worldwide,
royalty-free, nontransferable license to display, perform and reproduce
Jutvision Images on the HomeSeekers Sites solely for the purposes contemplated
in this Agreement. HomeSeekers 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"). HomeSeekers will not take any actions inconsistent with
Jutvision's ownership rights.
(ii) Subject to the restrictions set forth herein, Jutvision
hereby grants HomeSeekers a nonexclusive, worldwide, royalty-free, fully paid
up, nontransferable right to use the Jutvision Marks, during the term of this
Agreement, solely in connection with promotion and marketing of the Production
Services as provided in Section 3. HomeSeekers' use of the Jutvision Marks will
not create in HomeSeekers any right, title or interest therein or thereto. All
use by HomeSeekers of the Jutvision Marks will inure to the exclusive benefit of
Jutvision. At Jutvision's reasonable request, HomeSeekers will assist Jutvision
with the protection and maintenance of the Jutvision Marks. HomeSeekers may only
use the Jutvision Marks as expressly permitted herein. HomeSeekers 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) HomeSeekers Marks.
-----------------
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(i) HomeSeekers owns and at all times will continue to own the
Private Brand and the trademarks, service marks and/or trade names
HOMESEEKERS.COM as well as those outlined in Exhibit B (the "HomeSeekers
Marks"). Jutvision will not take any actions inconsistent with HomeSeekers'
ownership rights.
(ii) Subject to the restrictions set forth herein, HomeSeekers
hereby grants Jutvision a nonexclusive, worldwide, royalty-free, fully paid up,
nontransferable right to use the HomeSeekers Marks, during the term of this
Agreement, solely in connection with promotion and marketing of the Production
Services. Jutvision's use of the HomeSeekers Marks will not create in Jutvision
any right, title or interest therein or thereto. All use by Jutvision of the
HomeSeekers Marks will inure to the exclusive benefit of HomeSeekers. At
HomeSeekers' reasonable request, Jutvision will assist HomeSeekers with the
protection and maintenance of the HomeSeekers Marks. Jutvision may only use the
HomeSeekers Marks as expressly permitted herein. Jutvision agrees to use the
HomeSeekers Marks in a manner commensurate with the style, appearance and
quality of HomeSeekers' 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 three
(3) years (the "Initial Term"). Thereafter, this Agreement will automatically
renew for successive one (1) year periods (each a "Renewal Term") unless either
party notifies the other in writing not less than sixty (60) 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, or (iii) upon either party's
dissolution or cessation of business. HomeSeekers may terminate this Agreement
in the event technical problems or problems with the Jutvision Technology cause
Jutvision to materially fail to perform any of its obligations or undertakings
under Section 2.2, and Jutvision fails to remedy such default within ninety (90)
days after being notified by HomeSeekers of such failure.
6.3 Effects of Termination. Upon expiration or termination of this
----------------------
Agreement:
(a) Jutvision will cease all use of the HomeSeekers 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;
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(c) HomeSeekers 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 survive for a period of six (6) months thereafter
with respect to Jutvision for Java and Jutvision Images provided to HomeSeekers
hereunder prior to expiration or termination, to the extent that such Jutvision
Images accompany listings on the HomeSeekers Sites 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 5.2(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 and 11.11, and the provisions of Exhibit A specified
therein to survive, 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.
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
-9-
<PAGE>
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
-10-
<PAGE>
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.
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 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
-----------------------
HomeSeekers 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
release, 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.
11.3 Governing Law. This Agreement will be governed by and construed under
-------------
the laws of the State of California without reference to conflict of laws
principles.
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-
<PAGE>
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 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 HomeSeekers: Chief Executive Officer
HomeSeekers.com, Inc.
2241 Park Place
Suite E
Minden, NV 89423-8602
If to Jutvision: Chief Executive Officer
Jutvision Corporation
124 University Avenue
Suite 202
Palo Alto, CA 94301
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.
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
-12-
<PAGE>
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 two or more counterparts,
each of which will be deemed an original.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
JUTVISION CORPORATION HOMESEEKERS.COM, INC.
By: /s/ Leonard B. McCurdy By: [Signature Illegible]
____________________________ ____________________________
Title: CEO Title: CEO
_________________________ _________________________
Date: 98/11/23 11/22/98
_________________________ Date: _________________________
-13-
<PAGE>
EXHIBIT A
---------
Jutvision for Java License Agreement
If you download, install, copy, or in any other way obtain Jutvision class files
or software, you indicate that you consent to the terms listed.
Jutvision Corporation ("JUTVISION")
Jutvision(R) for Java License Agreement
By installing or using these Jutvision for Java Class Files and/or Jutvision
Demo (the "Software"), you indicate your agreement to the terms of this license
agreement. If you do not agree to the terms herein, you are not authorized to
copy or use the Software.
Limited Warranty and Limitation of remedies:
NO WARRANTIES. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, JUTVISION
CORPORATION EXPRESSLY DISCLAIMS ANY WARRANTY FOR SOFTWARE. THE SOFTWARE AND ANY
RELATED DOCUMENTATION IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THE ENTIRE RISK ARISING
OUT OF USE OR PERFORMANCE OF THE SOFTWARE REMAINS WITH YOU.
NO LIABILITY FOR DAMAGES. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
NEITHER JUTVISION CORPORATION NOR ITS CLIENTS SHALL BE LIABLE FOR ANY DAMAGES
WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFIT,
BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, OR ANY OTHER PECUNIARY
LOSS) ARISING OUT OF THE USE OR INABILITY TO USE THIS SOFTWARE, EVEN IF
JUTVISION CORPORATION HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
BECAUSE SOME STATES/PROVINCES JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR
LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE
LIMITATION MAY NOT APPLY TO YOU.
CUSTOMER REMEDIES. JUTVISION CORPORATION'S ENTIRE LIABILITY AND YOUR EXCLUSIVE
REMEDY SHALL NOT EXCEED THE PRICE PAID FOR THE SOFTWARE PRODUCT.
ATTENTION: USE OF THE SOFTWARE IS SUBJECT TO THE JUTVISION SOFTWARE LICENSE
TERMS SET FORTH BELOW. USING THE SOFTWARE INDICATES YOUR ACCEPTANCE OF THESE
LICENSE TERMS. IF YOU DO NOT ACCEPT THESE LICENSE TERMS, YOU ARE NOT AUTHORIZED
TO USE THIS SOFTWARE.
-14-
<PAGE>
JUTVISION(R) FOR JAVA CLASS FILE LICENSE TERMS
The following License Terms govern your use of the accompanying Jutvision for
Java Class Files ("Software").
License Grant. JUTVISION grants you a license to use one copy of the Software.
"Use" means storing, loading, installing, executing or displaying the Software.
You may not modify the Software or disable any licensing or control features of
the Software.
Ownership. The Software is owned and copyrighted by JUTVISION. Your license
confers no title to, nor ownership in, the Software and is not a sale of any
rights in the Software.
Copies and Adaptations. You 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. You must reproduce all copyright notices in the
original Software on all copies or adaptations. You may not copy the Software
onto any network. Class files are only permitted to be transferred when they
are called on by a "requesting" server in the normal course of Java Applet
execution. Distribution of the Jutvision for Java Class files is not permitted
File Format. The Software may only be used to read .jut files, a file format
proprietary to JUTVISION CORPORATION.
LINKS, REPRESENTATION & SPLASH SCREEN: Any Web site that uses the Software must
provide a visible link to either Jutvision scenes on that site, or directly to
http://www.jutvision.com. The image displayed when loading each scene
("JUTVISION SPLASH SCREEN") may not be tampered with in any way and must be
fully visible upon loading of each Jutvision scene. In no way may the JUTVISION
SPLASH SCREEN and/or Jutvision logo be obstructed by any other images, frames,
tables or any other HTML or JavaScript code.
NO DISASSEMBLY OR DECRYPTION: You may not disassemble or decompile the Software
including single Jutvision Java Class files under any circumstances. The
disassembly or decryption of any Jutvision Java Class file will result in a
breach of this agreement.
TRANSFER. Your license will automatically terminate upon any transfer of the
Software other than the copying and server rights noted above.
TERMINATION. JUTVISION CORPORATION may terminate your license upon notice for
failure to comply with any of these License Terms. Upon termination, you must
immediately destroy the Software, together with all copies, adaptations and
merged portions in any form. Failure to do so will result in immediate legal
action.
EXPORT REQUIREMENTS. You may not export or re-export the Software or any copy
or adaptation in violation of any applicable laws or regulations.
-15-
<PAGE>
U.S GOVERNMENT RESTRICTED RIGHTS: 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. You have only
those rights provided for such Software and any accompanying documentation by
the applicable FAR or DFARS clause or the Jutvision Corporation standard
software agreement for the product involved.
If you have any questions regarding this Agreement or if you wish to request any
information from Jutvision Corporation, please contact the firm in writing:
Jutvision Corporation
20 Toronto Street
Suite 520
Toronto Ontario
Canada
M5C 2B8
Fax: 416-368-3086
-16-
<PAGE>
EXHIBIT B
HomeSeekers Marks
HomeSeekers.com
RentSeekers.com
CommercialSeekers.com
LandSeekers.com
ResortSeekers.com
EstateSeekers.com
ReoSeekers.com
NewHomeSeekers.com
CabinSeekers.com
GolfSeekers.com
BoatSeekers.com
TruckSeekers.com
AgentSeekers.com
InsuranceSeekers.com
AutomotiveSeekers.com
OfficeSeekers.com
EmployementSeekers.com
FoodSeekers.com
-17-
<PAGE>
EXHIBIT 10.9
EXECUTION DRAFT
DISTRIBUTION AGREEMENT
----------------------
THIS DISTRIBUTION AGREEMENT (the "Agreement") is entered into as of May 10,
1999 (the "Effective Date"), between bamboo.com, Inc., a Delaware corporation
with an office located at 124 University Avenue #202, Palo Alto, CA 94301
("bamboo.com"), and Homes.com, a division of PCL Media Limited, a Florida
corporation with an office located at 1600 Capital Circle SW, Tallahassee, FL
32310 ("Company").
Bamboo.com uses the Bamboo.com Technology and provides the Production
Services. Bamboo.com 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 "Bamboo.com Image" means an electronic image of a property produced by
----------------
or on behalf of bamboo.com.
1.2 "Bamboo.com Technology" means software and hardware, including the
---------------------
Bamboo.com for Java Software, used to capture, process and view Bamboo.com
Images.
1.3 "Basic Package" means up to four scenes captured at a designated
-------------
property, converted to a corresponding number of Bamboo.com Images, and linked
to Company Site.
1.4 "Customer" means any realtor, real estate Customer, real estate agent,
--------
property manager or any other agent or representative acting in a similar
capacity, whether an individual or some other type of entity, representing a
seller or renter of a property.
1.5 "Company Originated Order" means any order received by bamboo.com for
------------------------
Production Services via telephone, facsimile or electronic or paper order form
from a Customer referencing Company's assigned sales origination partner code.
1.6 "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 Customers or the public via the Internet, including those
currently accessible at the URL http://www.homes.com, www.preferredpages.com and
-------------------- ----------------------
Company private label sites and OEM websites.
1.7 "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 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.
1.8 "Initial Linking Date" means the date on which bamboo.com will
--------------------
commence providing Production Services and Company will begin linking the
Company Site to the Bamboo.com Images under this Agreement.
1.9 "Net Revenues" means the gross amount received by bamboo.com from
------------
Customers for sales of the Basic Packages less [*] covering: (i) refunds,
discounts, promotions, credits and allowances, (ii) packaging, handling 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.
1.11 "Service Provider Network" means the network of individuals
------------------------
throughout our service area with whom bamboo.com has entered into agreements to
capture images at designated sites on bamboo.com's behalf.
1.12 "Term" means the Initial Term of this Agreement and the Renewal Terms,
----
if any, as set forth in Section 6.
1.13 "Transaction Fee" means the quarterly fee bamboo.com will pay to
---------------
Company during the Term based on sales of Bamboo.com Virtual Tour Images as
provided in Section 4.1.
1.14 "Virtual Tour Images" means 360, 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. Bamboo.com will assume all costs and responsibility for
invoicing and collecting revenues for all sales, provided, however, that
bamboo.com does not assume the risk of collection. Company will be responsible
for, and shall work with bamboo.com regarding, providing a mechanism for
Customers to order Production Services at the same time listings are created on
the Company Site.
2.2 Image Capturing, Processing and Linking. 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. Company will permit linking of the Company
Site to Bamboo.com Images for both Rental Properties (as defined below) and Sale
Properties (as defined below), and the parties will use best efforts to work
together to expeditiously implement within 45 days of the Effective Date, and
maintain throughout the Term, a system whereby Company will be capable of
linking the Company Site to Bamboo.com Images.
2.3 Preferred Vendor. Bamboo.com will be the preferred provider of
----------------
Virtual Tour Images for the Company Site for rental properties ("Rental
Properties"). Company agrees to give bamboo.com preferred vendor status in
Company's rental-related marketing materials and other direct sales efforts,
whether printed, oral or on the Company Site, by listing bamboo.com first before
listing any other providers of virtual tours. Bamboo.com will be a nonexclusive
provider of Virtual Tour Images for the Company Site for residential sale
properties ("Sale Properties").
2.4 Agreement to Negotiate. Within the [*] following the Effective Date,
----------------------
and in any event prior to Company's renewal of the current agreement or
relationship between Company and [*], and prior to Company's entering into 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>
agreement or relationship with any third party Virtual Tour Images provider with
respect to [*], Company agrees to negotiate in good faith with bamboo.com for
the exclusive provision of Virtual Tour Images to Company by bamboo.com with
respect to [*].
3. MARKETING AND PROMOTION
3.1 Company. Subject to bamboo.com's ongoing approval, Company agrees to
-------
consistently promote bamboo.com as Company's preferred provider of Virtual Tour
Images for Rental Properties and nonexclusive provider of Virtual Tour Images
for Sale Properties, and to market, promote and facilitate orders of the
Production Services, as follows:
(a) Company Site. Company agrees to prominently market and promote
------------
the Production Services on the Company Site. Company will provide the capability
for Customers to order Production Services on the Member Access Panel which is
the user interface for customers to manage and access their content on the
Company Site. Additionally, Company will provide a description of the Production
Services in the appropriate area(s) of the Company Site, including use of the
bamboo.com logo. Description and logo will be at least the same size and
positioning as other partner descriptions and logos. Such logo, when clicked on,
will link directly to an electronic order form permitting Customers to submit
orders for Production Services for both Sales Properties and Rental Properties
to bamboo.com via the Internet.
(b) Gallery of Bamboo.com Images. Company agrees to include on the
----------------------------
Company Site (i) Bamboo.com Images produced on behalf of Customers for Sales
Properties in its current gallery for residential properties, and (ii) a co-
branded gallery of Bamboo.com Images produced on behalf of Customers for Rental
Properties (the "Rental Gallery"). Each page of the Rental Gallery will include
a Bamboo.com Mark (as defined below) that, when clicked on, links directly to an
electronic order form permitting Customers to submit orders for Production
Services for Rental Properties to bamboo.com via the Internet.
(c) Introduction of Services. Within sixty (60) days of the
------------------------
Effective Date, Company will send an announcement, reasonably satisfactory to
bamboo.com, highlighting the availability and features of the Production
Services to its Customers, OEMs, Resellers, and Associate Publishers via its
current communications including e-mail, newsletters, Company Site, and general
mailings.
(d) Print Advertising. To the extent Company creates and distributes
-----------------
print advertising to Customers and potential Customers, including without
limitation print advertising in magazines, flyers, newsletters and general
mailings, Company will include, as appropriate and from time to time, in such
advertising a bamboo.com logo and a brief, suitable reference to the
availability of the Production Services. Marketing materials for Production
Services will be included in the materials sent to Customers for tips and
training information ("Member Kit") for Rental Properties versions of the
Preferred Pages product. Marketing materials for Production Services may be
included, as deemed appropriate by Company, in the Member Kit for Sales
Properties versions of the Preferred Pages product.
(e) Email and Direct Marketing. Company agrees to include in email
--------------------------
and direct marketing that it generates and sends to Customers and potential
Customers, as appropriate and from time to time a section, reasonably
satisfactory to bamboo.com, highlighting the availability and features of the
Production Services. Bamboo.com agrees to include in email and direct marketing
that it generates and sends to Customers and potential Customers, as appropriate
and from time to time a section, reasonably satisfactory to Company,
highlighting the availability and features of Company products and services.
(f) Seminars and Trade Shows. Company or its sales representatives
------------------------
will distribute marketing materials created by bamboo.com that promote the
Production Services to rental Customers at (i) regional trade shows attended by
Company and (ii) seminars, presentations, training sessions and follow-up
meetings sponsored by Company. Company will ensure that any third-party speaker
hired by Company to promote rental-related Web products and services will
mention, in a positive manner, bamboo.com when referencing Virtual Tour Images
and Internet marketing.
(g) 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; 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.
3.2 Additional Obligations. Bamboo.com and Company agree to discuss joint
----------------------
marketing opportunities, and the parties will use reasonable efforts to
cooperate in any such joint marketing efforts as they may mutually agree upon.
Each party will assign a project manager to act as the primary liaison with
respect to the relationship.
4. FEES
4.1 Transaction Fees. During the Term, bamboo.com will pay quarterly
----------------
Transaction Fees to Company as follows:
(a) With respect to all Company Originated Orders fulfilled by
bamboo.com during the Term through which Bamboo.com Images are linked to
www.homes.com, bamboo.com will pay to Company for each calendar quarter [*] of
Net Revenues collected from sales for which bamboo.com has received payment on
during the quarter.
(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 Payment of Fees. Calculation of quarterly Transaction Fees will
---------------
commence immediately for the calendar month in which the Initial Linking Date
occurs. Bamboo.com will make all payments of Transaction Fees net thirty (30)
days from the end of each quarter. To the extent the parties have not
implemented a system to automatically track the originating Company Customer for
each order of Production Services, bamboo.com will include with each payment of
Transaction Fees a report stating such information for orders covered by such
payment.
4.3 Inspection of Records. Company 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 bamboo.com necessary to verify the accuracy of fees paid
or invoiced by bamboo.com under the terms of this Agreement,
Page 2
[*] = 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>
provided that such independent auditor has executed a confidentiality agreement
with respect to such records that is reasonably acceptable to bamboo.com. Such
inspections will take place during bamboo.com's normal business hours, upon not
less than twenty (20) days' prior written to bamboo.com and on a date mutually
agreed upon by the parties. In the event any such auditors find an underpayment
in Transaction Fees paid to Company of more than five percent (5%) of the total
Transaction Fees due and payable to Company for the period at issue, bamboo.com
shall pay such shortfall to Company within thirty (30) days and shall reimburse
Company for the cost of such audit. In the event such audit identifies an
overpayment of Transaction Fees, Company shall remit payment of the overpayment
to bamboo.com within thirty (30) days of written notification from bamboo.com.
5. PROPRIETARY RIGHTS
5.1 Bamboo.com Technology.
---------------------
(a) All Bamboo.com Images and Bamboo.com Technology, whether or not
produced for Customers and whether or not 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 or Customers of any ownership
interest in any Bamboo.com Image or Bamboo.com Technology.
(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. 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 promotion and marketing and/or
financing of the Production Services and Company 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 promotion and
marketing and/or financing of the Production Services and bamboo.com. 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 continue for a period of
eighteen (18) months (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 Bamboo.com Images
and will purge all such Bamboo.com Technology and Bamboo.com Images from its
servers, systems and products.
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(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
---------------
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. Indemnification by bamboo.com. Bamboo.com warrants that bamboo.com or its
affiliates own, or have sufficient interest in, bamboo.com's business to fulfill
bamboo.com's obligations under this Agreement. Bamboo.com shall defend or
settle, at its own expense, any claim made against Company or any of its
affiliates, and/or Company's Customers that bamboo.com's business and applicable
data infringes upon any United States patent, copyrights,
Page 3
<PAGE>
trade secret or other proprietary rights and shall indemnify and hold harmless
Company, any of Company's affiliated companies, and/or any of Company's
Customers against any final judgement including an award of attorney's fees that
may be awarded by a court of final jurisdiction against Company, any of
Company's affiliated companies, and/or Company's Customers as a result of the
foregoing for all costs, damages, losses, and expenses arising from a breach of
the warranties set forth in this Agreement.
10. Indemnification by Company. The Company warrants that Company or its
affiliates own, or have sufficient interest in, Company's business, Company
Marks and the Company Site as a compilation to fulfill Company's obligations
under this Agreement. Company shall defend or settle, at its own expense, any
claim made against bamboo.com or any of bamboo.com affiliates or customers that
Company's business, Company Marks, Company Site and applicable data infringes
upon any United States patent, copyrights, trade secret or other proprietary
rights and shall indemnify and hold harmless bamboo.com, any of bamboo.com's
affiliated companies, and/or any of bamboo.com's customers against any final
judgement including an award of attorney's fees that may be awarded by a court
of final jurisdiction against bamboo.com, any of bamboo.com's affiliated
companies, and/or bamboo.com's customers as a result of the foregoing for all
costs, damages, losses, and expenses arising from a breach of the warranties set
forth in this Agreement.
11. 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 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.
12. GENERAL PROVISIONS
------------------
12.1 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 at the top of this Agreement. Delivery will be
deemed effective three (3) days after deposit with postal authorities.
12.2 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. Notwithstanding anything to the contrary herein, in the event that
PCL Media Limited [*] or otherwise [*] Homes.com, and Homes.com [*] a [*]; in
such event this Agreement may be assigned to Homes.com. The parties' rights and
obligations will bind and inure to the benefit of their respective successors,
heirs, executors and administrators and permitted assigns. Company shall have
the right to substitute replacement tradenames and trademarks during the term of
this Agreement. 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.
BAMBOO.COM, INC. HOMES.COM, a division of PCL Media Limited
By: /s/ Andrew P. Laszlo By: /s/ Frances C. Lowe
Name: Andrew P. Laszlo Name: Frances C. Lowe
Title: SVP, Biz Dev Title: CAO
Date: 5/10/99 Date: 5/10/99
Page 4
[*] = 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 10.18
SERVICE PROVIDER AGREEMENT
This Service Provider Agreement (the "Agreement") is made and entered into
this 23rd day of November, 1998, by and between JUTVISION CORPORATION, a
corporation under the laws of the Dominion of Canada ("Jutvision") located at
124 University Avenue, Suite 202, Palo Alto, CA 94301, and TBI IMAGING, INC., a
corporation incorporated under the laws of the State of Illinois ("TBI") located
at P.O. Box 278, Lincolnshire, IL 60069.
WHEREAS, Jutvision produces Virtual Tours for display on the World Wide Web
(the "Web");
WHEREAS, the production of Virtual Tours for the Web requires the capturing
of video content;
WHEREAS, Jutvision desires to retain the services of TBI as an independent
contractor to capture video content;
WHEREAS, TBI is an independent business and desires to provide such service
pursuant to the terms set forth in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Definitions
-----------
1.1. "Basic Order" shall mean a request by Jutvision for TBI to capture
four (4) scenes at the site specified in the Order.
1.2. "Broker" shall mean any person working with, representing or
associated with the owner of the property in connection with a real estate
transaction.
1.3. "Dispatch System" shall mean the process of distributing Orders
directly to the JSPs via a text message to the cell phones of each JSP.
1.4. "Jutvision Service Provider" or "JSP" means the individual who
captures the video image of a property specified in the Order on behalf of TBI.
1.5. "Order" shall mean a request by Jutvision for TBI to perform the
Services with respect to a specific property. Each Order shall consist of the
name of the Ordering Party requesting the video image capture, that Ordering
Party's name and phone number and the address of the property to be video taped.
1.6. "Ordering Party" shall mean the person who places the Order with
Jutvision.
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<PAGE>
1.7. "Seller" shall mean the owner, or someone acting on behalf of the
owner, of the property being serviced pursuant to this Agreement.
1.8. "Test Tape" shall mean the videotape submitted by a potential JSP
pursuant to the Training Manual.
1.9. "U.S. Address" shall mean Jutvision Corp., 124 University Ave., Palo
Alto, CA, 94301
1.10. "Training Manual" shall mean the materials attached to this Agreement
as Exhibit 1, including a training videotape prepared by Jutvision and any
---------
additions to those materials that Jutvision may make from time to time.
1.11. "Virtual Tour" shall mean a panoramic scene for display on the Web.
1.12. "Virtual Tour Business Activities" shall mean all aspects of
providing a full-service, production solution for the capture, processing and
posting of panoramic images on the Web created using the Jutvision Equipment
listed on Schedule D.
2. Independent Contractor Relationship
-----------------------------------
TBI is an independently established business and desires to contract with
Jutvision to perform services pursuant to this Agreement as an independent
contractor. TBI further agrees that neither TBI nor any employees or
subcontractors of TBI is entitled to unemployment, workers compensation or other
benefits in any event pursuant to TBI's provision of the Services.
3. Services Provided by TBI
------------------------
3.1. Jutvision engages TBI, and TBI shall cause its JSPs, to perform all
services and responsibilities set forth in Schedule A, as such schedule may be
----------
reasonably amended from time to time upon the mutual written agreement of the
parties, and elsewhere in this Agreement (the "Services"). TBI accepts such
engagement and agrees, during the term of this Agreement and thereafter, as
specified herein, to perform the Services in a professional and timely manner,
to furnish its best skill and judgment in performing the Services, to devote
sufficient time and resources to performing the Services, and to use best
efforts to comply with the project schedules established by Jutvision herein,
and from time to time. If TBI is unable to perform the Services, it shall notify
Jutvision of its inability to perform the Services as soon as it is aware of
that inability.
3.2. TBI shall cause each of its JSPs to sign and deliver to Jutvision a
Non-Disclosure Agreement in the form attached hereto as Exhibit 2.
---------
2
<PAGE>
3.3. The JSPs shall not perform any other services, other than the
Services or any other services agreed to by Jutvision and TBI, during the
performance of the Services, except Multiple Listing Service real estate
photographic services of exterior still images of real estate properties.
3.4. The JSPs shall not accept gratuities from the Seller, buyer, Broker
or any other individual requesting or involved in the transactions contemplated
in this Agreement.
3.5. From time to time, at the agreement of the parties, TBI shall
participate in, and cause its JSPs to participate in, marketing and promotional
programs with regard to the Services, Jutvision or Virtual Tours. Such
participation shall be of a nature which does not materially or significantly
add to the time or effort required of TBI or its JSPs in the performance of the
Services.
4. Term of Agreement
-----------------
4.1. This Agreement takes effect at 12:00 A.M. EST, Jan 4, 1999, and,
unless sooner terminated as provided herein, will continue in effect for a
period of two years ending at 11:59 P.M. EST, Jan 3, 2001. This Agreement may be
renewed for an additional term of two years at Jutvision's or TBI's option,
which option shall be exercised no later than 30 days prior to the date of the
termination of the initial term. This Agreement may be further extended by
mutual written agreement between Jutvision and TBI.
5. Fees
----
5.1. Jutvision agrees to pay the fees specified on Schedule B pursuant to
----------
the terms of this Agreement.
5.2. Schedule B shall not be changed, modified, supplemented or amended
----------
except by express written agreement signed by Jutvision and TBI.
6. Billing
-------
6.1. TBI shall produce and send an invoice to Jutvision on the 15th and
last day of each month detailing the Fees owing to TBI. Jutvision will pay TBI
for its services within thirty (30) days after the date of TBI's invoice.
6.2. Invoices unpaid by Jutvision shall be charged interest at the rate of
one and one-half percent (1.5%) per month, or eighteen percent (18%) per annum,
calculated daily, compounded annually.
6.3. In the event that Jutvision disputes the validity of an invoice or
part of an invoice rendered by TBI, Jutvision shall continue to pay any
undisputed amounts but shall not pay the amount in dispute. Jutvision shall not
incur any interest charges for the
3
<PAGE>
disputed amount(s) from the date Jutvision notifies TBI of Jutvision's
disagreement with TBI's invoice. In the event of a dispute, the parties shall
confer within ten (10) days for the purpose of resolving the dispute. If the
dispute cannot be resolved within ten (10) days from the date the parties
confer, either party may request arbitration pursuant to Section 16 of this
Agreement. To the extent the arbitration is resolved in favor of TBI, Jutvision
shall owe interest, pursuant to paragraph 6.2, on the amounts awarded to TBI
from the date ten (10) days after the parties met to confer.
7. Service Area
------------
7.1. TBI agrees to perform the Services in the geographical area(s) (the
"Service Area") specified in Schedule C, as may be amended from time to time by
----------
the parties.
7.2. From time to time, Jutvision may expand the Service Area to include
additional geographical areas. Upon notification by Jutvision, TBI shall take
all necessary action to provide the Services in the Service Area, as expanded,
including identifying to Jutvision an individual or individuals suitable to
perform the Services within one week of the time Jutvision notifies TBI of its
desire to expand the Service Area.
8. Equipment
---------
8.1. Jutvision shall provide, at Jutvision's cost, the equipment specified
on Schedule D (the "Jutvision Equipment") in quantities adequate for the
----------
performance of the Services by TBI. At all times Jutvision maintains ownership
of the Jutvision Equipment and can recall any or all of the Jutvision Equipment
at any time.
8.2. License Grant
-------------
8.2.1. Grant. Following Jutvision's provision of the Jutvision
-----
Equipment to TBI and its JSPs, and subject to all the terms and conditions of
this Agreement, Jutvision hereby grants to TBI and its JSPs a limited, royalty-
free, personal, non-transferable, non-exclusive, non-sublicensable license to
the Jutvision Equipment during the term of this Agreement solely for the use of
the Jutvision Equipment in connection with the provision of the Services, and
not for or on behalf of any third party.
8.2.2. No Sale. The parties acknowledge and agree that: (i) all
-------
Jutvision Equipment provided by Jutvision hereunder is licensed in accordance
herewith and not sold; and (ii) as between Jutvision and TBI and its JSPs,
subject only to the license grants expressly made herein, Jutvision is the sole
owner of all right, title and interest in and to the Jutvision Equipment,
including without limitation, all intellectual property and proprietary rights
therein and thereto.
4
<PAGE>
8.2.3. No Modification or Reverse Engineering. Except as otherwise
--------------------------------------
expressly permitted by applicable law, TBI and its JSPs shall not modify,
disassemble or in any way reverse engineer, the Jutvision Equipment or any
portion, derivative or version thereof or permit any third party to do so.
8.2.4. Termination. The license granted in this section shall
-----------
immediately terminate upon any expiration or termination of this Agreement.
8.3. Jutvision shall pay for all Equipment repair costs associated with
normal wear and tear. If any of the Jutvision Equipment needs repair, TBI or one
of its employees, agents, contractors or subcontractors shall be responsible for
sending or delivering, at Jutvision's cost, the non-functioning Jutvision
Equipment to Jutvision at its U.S Address. Upon receiving the non-functioning
Jutvision Equipment, Jutvision will send TBI, or the JSP identified by TBI as
needing the equipment, replacement Jutvision Equipment. The Training Manual
details an alternative procedure acceptable to Jutvision for the shipment of
Equipment.
8.4. TBI shall pay for all repair and delivery costs associated with the
repairs that do not result from normal wear and tear, including the repair of
damage caused by the negligence of TBI or one of its employees, agents,
contractors or subcontractors or any modification of the equipment by TBI or one
of its employees, agents, contractors or subcontractors. If any Jutvision
Equipment is lost, stolen or damaged while in the possession of TBI, its
employees, agents, contractors or subcontractors, TBI shall pay, within 30 days,
the replacement cost of such Jutvision Equipment to Jutvision. The cost of
replacement shall be the cost of purchasing replacement equipment as specified
on Schedule D. If TBI fails to pay for the lost, stolen or damaged equipment
----------
within 30 days, then Jutvision may deduct those costs from its next payments to
TBI.
8.5. WARRANTY DISCLAIMER
-------------------
THE JUTVISION EQUIPMENT AND ANY OTHER MATERIALS PROVIDED HEREUNDER TO TBI AND TO
ITS JSPS ARE PROVIDED "AS IS" AND WITHOUT WARRANTY OF ANY KIND. JUTVISION MAKES
NO WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY REGARDING OR RELATING TO
THE JUTVISION EQUIPMENT OR ANY OTHER MATERIALS PROVIDED TO TBI OR TO ITS JSPS
UNDER THIS AGREEMENT. SPECIFICALLY, JUTVISION DOES NOT WARRANT THAT THE
JUTVISION EQUIPMENT WILL BE ERROR FREE OR WILL PERFORM IN AN UNINTERRUPTED
MANNER. TO THE GREATEST EXTENT ALLOWED BY LAW, JUTVISION SPECIFICALLY DISCLAIMS
ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE
(EVEN IF JUTVISION HAD BEEN INFORMED OF SUCH PURPOSE), AND NONINFRINGEMENT WITH
RESPECT TO THE JUTVISION EQUIPMENT AND ANY SUCH OTHER MATERIALS AND WITH RESPECT
TO THE USE OF ANY OF THE FOREGOING.
5
<PAGE>
9. Indemnification
---------------
9.1 TBI shall indemnify, and hold harmless Jutvision from any and all
damages, liabilities, costs and expenses (including reasonable attorneys' fees)
incurred by Jutvision arising from or relating to (i) TBI's use of the Jutvision
Equipment or any services provided by TBI hereunder and (ii) any breach by a JSP
of this Agreement. Jutvision shall promptly notify TBI in writing of any such
claim and promptly tender the control of the defense and settlement of any such
claim to TBI at TBI's expense and with TBI's choice of counsel. Jutvision shall
cooperate with TBI, at TBI's expense, in defending or settling such claim and
Jutvision may join in the defense with counsel of its choice at its own expense.
9.2 Jutvision shall indemnify, and hold harmless TBI from any and all
damages, liabilities, costs and expenses (including reasonable attorneys' fees)
incurred by TBI arising from or relating to Jutvision's action or omissions. TBI
shall promptly notify Jutvision in writing of any such claim and promptly tender
the control of the defense and settlement of any such claim to Jutvision at
Jutvision's expense and with Jutvision's choice of counsel. TBI shall cooperate
with Jutvision, at Jutvision's expense, in defending or settling such claim and
TBI may join in the defense with counsel of its choice at its own expense.
9.3 Jutvision requires each JSP to be bonded in the amount of at least
$2500. Upon the mutual agreement of the parties, the parties may alter the
amount and nature of the bond. Maintenance of such a bond shall in no way be
interpreted as relieving TBI or its JSPs of any responsibility under this
Agreement. Jutvision requires each potential JSPs to permit Jutvision to
perform, or cause to be performed, a background check on that individual before
the individual can begin to fulfill Orders.
10. Confidential Information
------------------------
10.1. Definition. The term "Confidential Information" shall mean any
----------
information disclosed by one party to this Agreement (the "Disclosing Party") to
the other party to this Agreement (the "Receiving Party") in connection with
this Agreement which, if in written, graphic, machine-readable or other tangible
form, is marked as "Confidential" or "Proprietary," or which, if disclosed
orally, is identified at the time of initial disclosure as confidential and such
identification is reduced to a writing delivered to the Receiving Party within
thirty (30) days of such oral disclosure. Without limiting the foregoing, the
terms and conditions of this Agreement shall be considered Confidential
Information.
10.2. Exclusions. Confidential Information shall exclude information that:
----------
(a) was independently developed by the Receiving Party without any use of the
Disclosing Party's Confidential Information or by the Receiving Party's
employees or other agents (or independent contractors hired by the Receiving
Party) who have not been exposed to the Disclosing Party's Confidential
Information; (b) becomes known to the Receiving Party, without restriction, from
a source other than the Disclosing Party without breach of
6
<PAGE>
this Agreement and that had a right to disclose it; (c) was in the public domain
at the time it was disclosed or becomes in the public domain through no act or
omission of the Receiving Party; or (d) was rightfully known to the Receiving
Party, without restriction, at the time of disclosure.
10.3. Compelled Disclosure. If a Receiving Party is, or believes that it
--------------------
will be, compelled by a court or other authority to disclose Confidential
Information of the Disclosing Party, it shall give the Disclosing Party prompt
notice so that the Disclosing Party may take steps to oppose such disclosure.
10.4. Obligations. The Receiving Party shall treat as confidential all of
-----------
the Disclosing Party's Confidential Information and shall not disclose such
Confidential Information to a third party except as expressly permitted under
this Agreement. Without limiting the foregoing, the Receiving Party shall use at
least the same degree of care which it uses to prevent the disclosure of its own
confidential information of like importance, but in no event less than
reasonable care, to prevent the disclosure of the Disclosing Party's
Confidential Information.
11. Non-Competition
---------------
In view of the fact that any activity of TBI in violation of the terms
hereof would adversely affect Jutvision and its subsidiaries, and to preserve
the goodwill associated with Jutvision's business, TBI hereby agrees to the
following restrictions on its activities:
11.1. TBI hereby agrees that during the term of this Agreement and during
the period commencing on the date this Agreement is terminated for any reason
and ending on the date which is the third anniversary of the date thereof (the
"Non-compete Period"), TBI will not, without the express written consent of
Jutvision, directly or indirectly, engage in any activity which is competitive
with any of the Virtual Tour Business Activities currently conducted or offered
by Jutvision, or its subsidiaries or affiliates, or currently proposed to be
conducted or offered by Jutvision, or its subsidiaries or affiliates, or such
by-product business, activities, products or services. For the purposes of this
Section 11.1, "by-product" business, activities, products or services shall
refer to those business, activities, products or services that are created, or
which the opportunity for is created, directly through the provision of Virtual
Tours for the Web. Notwithstanding the foregoing, TBI's provision of its still
photo imaging and MLS delivery services and the posting of those photographs to
the World Wide Web shall not contravene this Section 11.1.
11.2. In the event TBI determines to solicit bids from third parties for a
potential Acquisition of TBI (as defined below), or begin negotiations or
discussions of a potential Acquisition of TBI, upon such event, TBI shall notify
Jutvision and Jutvision shall have the exclusive right to negotiate such an
Acquisition with TBI for a period of thirty (30) days after the date of receipt
of such notice. In the event Jutvision and TBI are unable to come to an
agreement as to the Acquisition of TBI by Jutvision within such thirty (30) days
and after such period (i) TBI receives an acceptable offer for the Acquisition
of TBI,
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<PAGE>
or (ii) TBI determines to solicit and receives an acceptable bid from a third
party for a potential Acquisition of TBI, TBI shall notify Jutvision upon
receipt of such offer or bid and Jutvision shall have the exclusive right of
first refusal to Acquire TBI pursuant to the provisions of such offer or bid.
11.3. For purposes of this Agreement, the "Acquisition" of a party shall
mean; (i) a merger, consolidation or other reorganization, if the individuals
and entities who were stockholders of the party immediately prior to the
effective date of the transaction have "beneficial ownership" (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of less than
fifty percent (50%) of the total combined voting power for election of directors
(or their equivalent) of the surviving entity following the effective date of
the transaction; (ii) acquisition by any entity or group of direct or indirect
beneficial ownership in the aggregate of securities of the party then issued and
outstanding representing fifty percent (50%) or more of the total combined
voting power of the party; or (iii) a sale of all or substantially all of the
party's assets.
11.4. For purposes of this Agreement, any reference to the subsidiaries of
Jutvision shall be deemed to include all entities directly or indirectly
controlled by it through an ownership of more than fifty percent (50%) of the
voting interests. The term "affiliate" shall mean, with respect to any person or
entity, any person or entity that directly or indirectly controls, is controlled
by or is under common control with such person or entity. The term "person"
shall mean an individual, a corporation, an association, a partnership, a
limited liability company, an estate, a trust, and any other entity or
organization.
11.5. The Non-compete Period shall expire upon the bankruptcy or insolvency
of Jutvision or upon a breach by Jutvision of the terms of this Agreement.
12. Jutvision Exclusivity
---------------------
12.1. Jutvision shall use TBI exclusively within the Service Areas listed
in Schedule C for the provision of the Services. From time to time, upon the
----------
parties' written agreement, the parties may change, modify, supplement or amend
Schedule C.
- ----------
13. LIMITATION OF LIABILITY
-----------------------
13.1. IN NO EVENT WILL JUTVISION BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF
USE, BUSINESS INTERRUPTION, LOSS OF DATA, COST OF COVER OR INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH OR ARISING
OUT OF THE FURNISHING, PERFORMANCE OR USE OF THE JUTVISION EQUIPMENT OR ANY
OTHER MATERIALS PROVIDED BY JUTVISION HEREUNDER, WHETHER ALLEGED AS A BREACH OF
CONTRACT OR TORTIOUS CONDUCT, INCLUDING NEGLIGENCE, AND EVEN IF JUTVISION HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION, JUTVISION WILL NOT
BE LIABLE FOR ANY DAMAGES CAUSED BY DELAY IN DELIVERY OF THE
8
<PAGE>
JUTVISION EQUIPMENT OR ANY OTHER MATERIALS PROVIDED HEREUNDER. JUTVISION'S
LIABILITY UNDER THIS AGREEMENT FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL AND
CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, RESTITUTION,
WILL NOT, IN ANY EVENT, EXCEED THE AMOUNTS PAID BY JUTVISION TO TBI UNDER THIS
AGREEMENT FOR THE SERVICES GIVING RISE TO SUCH CLAIM.
13.2. The provisions of this Section allocate risks under this Agreement
between TBI and Jutvision. Jutvision's pricing reflects this allocation of risks
and limitation of liability.
14. Trademark License
-----------------
14.1 License. Jutvision hereby grants TBI a limited, royalty-free,
-------
personal, non-transferable, nonsublicensable, non-exclusive license to use the
Jutvision logos, any other images, its trade names and trademarks (collectively,
the "Jutvision Logos"), and such other images and materials for which Jutvision
grants its prior written consent, solely for the purpose of identifying
Jutvision in TBI's promotional materials. TBI shall submit to Jutvision all
representations of the Jutvision Logos that TBI intends to use in connection
with the TBI promotional materials, for Jutvision's approval of design, color,
and other details. TBI shall not publish, disseminate, exhibit, or otherwise
distribute any such material without Jutvision's prior approval. TBI's use of
the Jutvision Logos shall at all times be of a high quality, commensurate with
Jutvision's own products and marketing. TBI shall not harm, misuse or bring into
disrepute the Jutvision Logos. Jutvision reserves all of its rights in the
Jutvision Logos, any other images, its trade names and trademarks, and all other
intellectual property or proprietary rights. TBI acknowledges that the Jutvision
Logos and the goodwill associated therewith are valuable properties belonging to
Jutvision and that all rights thereto are and shall remain the sole and
exclusive property of Jutvision. TBI agrees to use the Jutvision Logos in a
manner that will protect Jutvision's rights and goodwill therein. TBI agrees
that it will do nothing inconsistent with Jutvision's ownership and that all
uses of the same shall inure to the sole benefit of and be on behalf of
Jutvision.
14.2. Effect of Termination. Upon the expiration or termination of this
---------------------
Agreement for any reason, TBI shall immediately stop all activities hereunder,
cease using the Jutvision logo and not thereafter use the Jutvision logo for any
reason.
15. Termination
-----------
15.1. Either party may terminate this Agreement upon thirty (30) days
written notice in the event of a Default by the other party, provided that the
defaulting party has been given notice by the non-defaulting party of the
default and has failed to correct such default within thirty (30) days after
receipt of such notice. Default shall be defined as a material failure to
fulfill or perform duties or responsibilities as such are set forth in this
Agreement, including but not limited to a failure to perform the Services in the
manner
9
<PAGE>
described in Schedule A, a 5% failure rate over a sixty (60) day period at
capturing usable images (requiring refilming), a failure to follow the Training
Manual, fraud, misrepresentation, bankruptcy, insolvency or court ordered
liquidation of all or substantially all of the party's assets for the benefit of
creditors.
15.2 Effect of Termination. Upon the expiration or termination of this
---------------------
Agreement for any reason, TBI shall (i) immediately stop all activities
hereunder, cease using the Jutvision logo and not thereafter use the Jutvision
logo for any reason, and (ii) promptly return all materials and Equipment to
Jutvision.
16. Arbitration
-----------
Any dispute, controversy or claim arising out of or relating to the
validity, construction, enforceability or performance of this Agreement,
including disputes relating to alleged breach or to termination of this
Agreement, shall be settled by final, binding arbitration in the manner
described in this Section. The arbitration shall be conducted pursuant to the
Commercial Rules of the American Arbitration Association then in effect
("Rules"). Notwithstanding those rules, the following provisions shall apply to
the arbitration hereunder:
16.1. Arbitrators. A panel of three (3) arbitrators ("the Panel") shall
-----------
conduct the arbitration. Each party shall have the right to appoint one (1)
member of the Panel, with the third member to be mutually agreed by the two (2)
Panel members appointed by the parties or appointed in accordance with the rules
of the American Arbitration Association.
16.2. Proceedings. The parties and the arbitrators shall use their best
-----------
efforts to complete the arbitration within three (3) months after the
appointment of the Panel under Section 16.1 above, unless a party can
demonstrate to the Panel that the complexity of the issues or other reasons
warrant the extension of the time table. In such case, the Panel may extend such
timetable as reasonably required. The Panel shall, in rendering its decision,
apply the substantive law of the State of California, without regard to its
conflict of laws provisions, except that the interpretation of and enforcement
of this Section 16.2 shall be governed by the U.S. Federal Arbitration Act. The
proceeding shall take place in the city and county of Palo Alto, California. The
losing party which party shall be designated by the Panel shall pay the fees of
the Panel. If the Panel is unable to designate a losing party, it shall so state
and the fees shall be shared equally between the parties.
17. Assignment
----------
Neither party hereto shall assign or delegate this Agreement, or any of its
rights or duties hereunder, directly, indirectly, by operation of law, or
otherwise, without the prior written consent of the other party.
10
<PAGE>
18. Miscellaneous Provisions
------------------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of California. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which will be
considered one and the same Agreement. This Agreement supersedes all prior
agreements, written or oral, between Jutvision and TBI relating to the subject
matter of this Agreement. Any amendment or modification of this Agreement shall
be in writing and shall be signed by both parties hereto. TBI acknowledges that
the Confidential Information represents valuable property and agrees that the
provisions of this Agreement shall be enforceable by specific performance and
other equitable relief in addition to any action for damages or other remedy
available to Jutvision. If any provision of this Agreement is for any reason
held to any extent to be invalid or unenforceable, the remainder of this
Agreement will not be affected and will be interpreted so as reasonably to
effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of the void or unenforceable provision.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
TBI Imaging, Inc.
By: /s/ Thomas Beverly
_________________________________
Name: Thomas Beverly
Title: President
Jutvision Corporation
By: /s/ L. B. McCurdy
_________________________________
Name: L. B. McCurdy
Title: President
Date: 12/1/98
11
<PAGE>
Schedule A
----------
SERVICES PROVIDED BY TBI
A. Services Provided.
1. TBI and its JSPs must successfully complete all Orders transmitted to TBI
or its JSPs by Jutvision.
2. TBI must be able to receive digitally transmitted Orders provided by
Jutvision.
3. TBI agrees to use the Dispatch System, or other dispatch system approved by
Jutvision prior to adoption that allows TBI to perform the Services.
4. A JSP must contact the Ordering Party specified in the Order within two (2)
hours of the time TBI received the Order, unless the Order is received after
4:30 P.M. local time, in which case the JSP must contact the person specified in
the Order by 10:00 A.M. local time the following day. If the Ordering Party is
not available at the time that the JSP receiving the Order calls to schedule the
content capture appointment, the JSP must leave the scripted message specified
in the Training Manual. In the event that the ordering party does not return the
JSP's scheduling call within 24 hours, the JSP shall repeat the above call
procedure.
5. TBI must provide to Jutvision by 10:00 A.M. local time a complete list
including the time and date of each appointment scheduled by its JSPs the prior
day and the Federal Express tracking number for each video taped shipped the
prior day. If a JSP is unable to schedule an appointment the day the JSP
receives the Order, TBI must indicate on the list that the JSP has not yet
scheduled the appointment.
6. The JSP must be available to perform the content capture within 48 hours
from the time the JSP contacted the Ordering Party.
7. If the JSP fails to meet the timing requirements specified in paragraphs 4
and 6 for an Order, Jutvision will not compensate TBI for the fulfillment of
that Order. Nonetheless, TBI and its JSPs are obligated to fulfill the Order as
expeditiously as possible.
8. If, for any reason, the JSP is unable to meet the Ordering Party at the
scheduled appointment time, the JSP must notify the Ordering Party at least one
(1) hour prior to the scheduled appointment and reschedule the appointment at a
mutually convenient time within the next 24 hours. If the JSP fails to notify
the Ordering Party one (1) hour prior to missing a scheduled appointment, JSP
shall contact the Ordering Party within one (1) hour after the originally
scheduled time and reschedule the appointment at a mutually convenient time
within the next 24 hours. TBI shall notify Jutvision of the time and date of the
new appointment in the same manner as specified in paragraph 4 above. Jutvision
12
<PAGE>
will not compensate TBI for the Services performed for the Ordering Party when a
JSP has missed an appointment without contacting the Ordering Party at least one
(1) hour prior to the scheduled appointment time in order to reschedule the
appointment.
9. The JSP must capture the video content pursuant to the Training Manual. An
Order is not successfully completed, if in Jutvision's discretion, the video
images captured pursuant to that Order cannot be converted into a Virtual Tour
for posting on the Web. If for any reason, the JSP does not successfully
complete the Order, TBI shall be responsible for refilming the site at its
expense upon Jutvision's request pursuant to the procedures set forth in this
Schedule for the fulfillment of an initial Order.
10. At Jutvision's request, TBI must allow and the JSPs must distribute
Jutvision marketing materials to the Broker, Seller or potential buyer as part
of the normal course of fulfilling an Order; such efforts shall not increase
materially or substantially the time and effort required of TBI or its JSPs to
perform the Services. Neither TBI nor any of its JSPs, or any agent, employee,
representative, affiliate, subsidiary or any other entity controlled or owned by
TBI, may distribute any materials, other than those requested by Jutvision or
mutually agreed to by the parties, to Buyer, Seller and/or Broker, except as
otherwise agreed to by Jutvision in writing, during the term of this Agreement.
11. All video tape(s) from a day of filming with video content ready for
processing, along with accompanying paperwork, as such shall be specified in the
Training Manual, must be sent, at Jutvision's expense, to the U.S. Address for
delivery before 3 P.M. PST on the day the JSP films the content. Jutvision shall
provide each JSP with a sufficient number of pre-paid, pre-addressed Federal
Express envelopes for the purpose of shipping each days tape to Jutvision at the
U.S. Address. Each JSP must write the tracking number for the Federal Express
package on the JSP Daily Activity Log, to be provided by Jutvision at the time
of training.
12. If Jutvision, in its discretion, is unable to process a videotape because
the accompanying paperwork is improperly completed pursuant to the Training
Manual, TBI shall be responsible for refilming the property at its expense or
for providing Jutvision with the information it needs to process the content on
the video tape in a timely manner.
13. TBI shall be responsible for the timely distribution of all of videotapes
to the JSPs upon receipt of the tapes from Jutvision. TBI shall identify a
single location or a reasonable number of locations in the United States to
which Jutvision will ship such replacement tapes.
14. Jutvision shall have the right to interview every potential JSP identified
by TBI before the JSP begins fulfilling Orders and shall have the right in its
discretion to require TBI to identify another individual. TBI shall be
responsible for training each JSP pursuant to the Training Manual.
15. Once Jutvision notifies TBI that a potential JSP's Test Tape is acceptable,
that individual may begin fulfilling Orders. If Jutvision determines that that
individual's Test
13
<PAGE>
Tape is not acceptable, Jutvision shall notify TBI of the reason that the Tape
is not acceptable and that individual may submit a second Test Tape for
Jutvision's review.
16. TBI and all JSPs must follow all procedures specified in the Training
Manual. TBI shall allow and TBI and the JSPs agree to participate in and
complete all training mandated by Jutvision.
Initials: /s/ Leonard B. McCurdy
______________________ Jutvision.
/s/ Thomas Beverly
______________________ TBI
14
<PAGE>
Schedule B
----------
FEES AND BILLING
A. Fees
1. Jutvision agrees to pay TBI [*] dollars ($[*]) for each Basic Order
successfully completed as specified in Schedule A.
2. Jutvision agrees to pay TBI [*] dollars ($[*]) for each scene in excess
of four (4) captured at the site specified in the Order.
B. Cancellation Policy
If an Order is canceled on the day the JSP and the Ordering Party had
scheduled to perform the Services, Jutvision shall pay TBI [*] dollars ($[*]).
If the Ordering Party does not show-up for his or her appointment and the JSP is
unable to perform the Services, Jutvision shall pay TBI [*] dollars ($[*]). If
the JSP films the property and then the Order is canceled, Jutvision shall pay
TBI [*] dollars ($[*]).
D. Minimum Order Commitments
The following provision applies to the Service Areas listed on Schedule C
as of the date of this contract:
In the event that, three (3) months after Jutvision first provides an Order
to TBI in a Service Area, TBI receives less than [*] Orders per week in that
Service Area during any week of the fourth, fifth or sixth month, Jutvision
agrees to pay TBI [*] dollars ($[*]) for each Basic Order successfully completed
in that Service Area during those weeks in which TBI received less than [*]
Orders.
In the event that, six (6) months after Jutvision first provides an Order
to TBI in a Service Area, TBI receives less than [*] Orders per week in that
Service Area during any week of the seventh, eighth, ninth, tenth, eleventh or
twelfth month, Jutvision agrees to pay TBI [*] dollars ($[*]) for each Basic
Order successfully completed in that Service Area during those weeks in which
TBI received less than [*] Orders.
In the event that, one (1) year after Jutvision first provides Orders to
TBI in a Service Area, TBI receives less than an average of [*] listed on
Schedule C per week over one month period in a particular Service Area, the Non-
Compete provisions in 11.1 shall no longer apply to TBI for that particular
Service Area.
Initials: /s/ Leonard B. McCurdy
______________________ Jutvision.
/s/ Thomas Beverly
____________________ TBI
[*] = 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.
15
<PAGE>
Schedule C
----------
SERVICE AREAS
(Minimum [*] of Weekly Listing Volume)
<TABLE>
<CAPTION>
Area Territory Probable [*] Volume
- ---- ---------- -------------------
<S> <C> <C>
Metropolitan Boston 30 Mile Radius [*] Houses Per Week
Long Island Brooklyn, Queens, Long Island [*] Houses Per Week
Metropolitan Philadelphia Bucks, Montgomery, [*] Houses Per Week
Chester and Philadelphia, and
Delaware Counties in Pennsylvania
City of Wilmington, Delaware
Metropolitan Miami Palm Beach, Broward [*] Houses Per Week
and Dade Counties
Metropolitan Cleveland Cleveland,Akron, Canton, [*] Houses Per Week
and Youngstown
Metropolitan Dallas/ "Metroplex" [*] Houses Per Week
Ft. Worth
Metropolitan Chicago Lake, Cook and [*] Houses Per Week
DuPage Counties
Metropolitan Detroit Wayne, Oakland and [*] Houses Per Week
McComb Counties
Metropolitan Minneapolis/ 20 Mile Radius [*] Houses Per Week
St. Paul
Metropolitan Pittsburgh 20 Mile Radius [*] Houses Per Week
Northern California Contra Costa, Alameda; [*] Houses Per Week
Lower half of Napa, Sonoma
and Solano Counties, and Marin Co.
Metropolitan Denver 25 Mile Radius [*] Houses Per Week
</TABLE>
/s/ Thomas Beverly
/s/ Leonard B. McCurdy
[*] = 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.
16
<PAGE>
<TABLE>
<S> <C> <C>
Los Angeles Jurisdictions of Central Los [*] Houses Per Week
Angeles West M.L.S., South Bay
M.L.S., So. Cal M.L.S.
</TABLE>
Other Metropolitan Areas for future TBI set-up.
<TABLE>
<S> <C> <C>
Louisville 15 Mile Radius [*] Houses Per Week
Tucson 15 Mile Radius [*] Houses Per Week
Birmingham 15 Mile Radius [*] Houses Per Week
Fairfield 20 Mile Radius [*] Houses Per Week
Orlando 20 Mile Radius [*] Houses Per Week
Lansing 15 Mile Radius [*] Houses Per Week
Naples 15 Mile Radius [*] Houses Per Week
Charlotte 20 Mile Radius [*] Houses Per Week
</TABLE>
Potential future sites for TBI.
[*]
[*] [*]
[*] [*]
Initials: /s/ Leonard B. McCurdy Jutvision.
_______________________
/s/ Thomas Beverly
_______________________ TBI
[*] = 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.
17
<PAGE>
Schedule D
----------
EQUIPMENT PROVIDED BY JUTVISION
The "Equipment" shall consist of:
1. Jutvision Field Kit consisting of one (1) Jutvision Roundabout (TM), one
(1) video camera with light and necessary accessories, including the necessary
power source, one (1) tripod, two (2) video tapes, one (1) wide angle lens, one
(1) video camera battery recharger, and a carrying case. The JSPs shall provide
the batteries for the Jutvision Roundabout (TM) and shall be responsible for the
ongoing maintenance of the video camera, including, but not limited to, the
replacement of the rechargeable batteries for the camera.
2. Virtual Reality Listing Forms to be completed by JSP for each Order
pursuant to the Training Manual.
3. Cellular phone and accessories for Dispatch System.
4. Materials necessary for daily shipment of video tapes to the U.S. Address.
Initials: /s/ Leonard B. McCurdy Jutvision.
_______________________
/s/ Thomas Beverly
_______________________ TBI
18
<PAGE>
Schedule E
----------
COST OF REPLACEMENT EQUIPMENT
1. Sony Camcorder $900.00
2. Camcorder Battery $ 75.00
3. Camcorder Light $ 60.00
4. Camcorder Battery Recharger $ 50.00
5. Carrying Case $ 80.00
6. Tripod $ 90.00
7. Tripod Head $ 60.00
8. Video Tape $ 8.00
9. Jutvision Roundabout $350.00
10. Lens $ 40.00
11. Cell Phone $100.00
Initials: /s/ Leonard B. McCurdy Jutvision.
_______________________
/s/ Thomas Beverly
_______________________ TBI
19
<PAGE>
Exhibit 2
---------
NONDISCLOSURE AGREEMENT
THIS NONDISCLOSURE AGREEMENT ("Agreement") is made and entered into as of
_____________ (date) between Jutvision Corporation and ______________
(JSP/Jutvision Service Provider).
1. Purpose. The parties desire the JSP to perform certain services as
-------
further described in the Service Provider Agreement between Jutvision and TBI,
dated _____________, and in connection with this opportunity, Jutvision
("Disclosing Party") may disclose to JSP ("Receiving Party" or "Jutvision
Service Provider") certain confidential technical and business information which
the Disclosing Party desires the Receiving Party to treat as confidential.
2. "Confidential Information" means any information disclosed by the
------------------------
Disclosing Party to the Receiving Party, either directly or indirectly, in
writing, orally or by inspection of tangible objects (including without
limitation documents, prototypes, samples, plant and equipment), which is
designated as "Confidential," "Proprietary" or some similar designation.
Confidential Information will include without limitation all information
regarding Jutvision's image capturing technique, its proprietary technology and
equipment, whether or not so designated upon disclosure. Information
communicated orally will be considered Confidential Information if such
information is confirmed in writing as being Confidential Information within a
reasonable time after the initial disclosure. Confidential Information may also
include information disclosed to a Disclosing Party by third parties.
Confidential Information will not, however, include any information which (i)
was publicly known and made generally available in the public domain prior to
the time of disclosure by the Disclosing Party; (ii) becomes publicly known and
made generally available after disclosure by the Disclosing Party to the
Receiving Party through no action or inaction of the Receiving Party; (iii) is
already in the possession of the Receiving Party at the time of disclosure by
the Disclosing Party as shown by the Receiving Party's files and records
immediately prior to the time of disclosure; (iv) is obtained by the Receiving
Party from a third party without a breach of such third party's obligations of
confidentiality; (v) is independently developed by the Receiving Party without
use of or reference to the Disclosing Party's Confidential Information, as shown
by documents and other competent evidence in the Receiving Party's possession;
or (vi) is required by law to be disclosed by the Receiving Party, provided that
the Receiving Party gives the Disclosing Party prompt written notice of such
requirement prior to such disclosure and assistance in obtaining an order
protecting the information from public disclosure.
3. Non-use and Non-disclosure. The Receiving Party agrees not to use any
--------------------------
Confidential Information of the Disclosing Party for any purpose except to
perform the services described in the Service Provider Agreement. The Receiving
Party agrees not to disclose any Confidential Information of the Disclosing
Party to third parties. The
20
<PAGE>
Receiving Party shall not reverse engineer, disassemble or decompile any
prototypes, software or other tangible objects which embody the Disclosing
Party's Confidential Information and which are provided to the Receiving Party
hereunder.
4. Maintenance of Confidentiality. The Receiving Party shall take
------------------------------
reasonable measures to protect the secrecy of and avoid disclosure and
unauthorized use of the Confidential Information of the Disclosing Party.
Without limiting the foregoing, the Receiving Party shall take at least those
measures that it takes to protect its own most highly confidential information.
The Receiving Party shall not make copies of the Confidential Information of the
Disclosing Party unless the Disclosing Party previously approves the same in
writing. The Receiving Party shall reproduce the Disclosing Party's proprietary
rights notices on any such approved copies, in the same manner in which such
notices were set forth in or on the original.
5. No Obligation. Nothing herein will obligate the Disclosing Party to
-------------
disclose any of its Confidential Information to the Receiving Party, nor will
either party be in any way obligated to enter into a separate agreement with the
other party, perform services for the other party, or purchase services from the
other party.
6. No Warranty. ALL CONFIDENTIAL INFORMATION IS PROVIDED "AS IS". THE
-----------
DISCLOSING PARTY MAKES NO WARRANTIES, EXPRESS, IMPLIED OR OTHERWISE, REGARDING
ITS ACCURACY, COMPLETENESS OR PERFORMANCE.
7. Return of Materials. All documents and other tangible objects
-------------------
containing or representing Confidential Information which have been disclosed by
the Disclosing Party to the Receiving Party, and all copies thereof which are in
the possession of the Receiving Party, will remain the property of the
Disclosing Party and must be promptly returned to the Disclosing Party upon the
Disclosing Party's written request.
8. No License. Nothing in this Agreement is intended to grant any rights
----------
to either party under any patent, mask work right or copyright of the other
party, nor will this Agreement grant the Receiving Party any rights in or to the
Confidential Information of the Disclosing Party except as expressly set forth
herein.
9. Term. The obligations of the Receiving Party hereunder will survive
----
until such time as all Confidential Information of the Disclosing Party
disclosed hereunder becomes publicly known and made generally available through
no action or inaction of the Receiving Party.
10. Remedies. Each party agrees that any violation or threatened
--------
violation of this Agreement may cause irreparable injury to the Disclosing
Party, entitling the Disclosing Party to seek injunctive relief in addition to
all legal remedies.
11. Miscellaneous. This Agreement will bind and inure to the benefit of
-------------
the parties hereto and their successors and assigns. This Agreement will be
governed by the
21
<PAGE>
laws of the State of California, without reference to conflict of laws
principles. This document contains the entire agreement between the parties with
respect to the subject matter hereof, and neither party will have any
obligation, express or implied by law, with respect to trade secret or
proprietary information of the other party except as set forth herein. Any
failure to enforce any provision of this Agreement will not constitute a waiver
thereof or of any other provision. This Agreement may not be amended, nor any
obligation waived, except by a writing signed by both parties hereto.
__________________________________ __________________________________
JUTVISION JUTVISION SERVICE PROVIDER
By: ______________________________ By: ______________________________
Name: ____________________________ Name: ____________________________
Title: ___________________________ Title: ___________________________
22
<PAGE>
SERVICE PROVIDER AGREEMENT
This Service Provider Agreement (the "Agreement") is made and entered into
this __ day of __________, 199_, by and between JUTVISION CORPORATION, a
Delaware corporation ("Jutvision"), 124 University Avenue, Palo Alto,
California, 94301 and ________________, _______________________ ("Provider").
WHEREAS, Jutvision produces Virtual Tours for the World Wide Web ("Web");
WHEREAS, the production of Virtual Tours for the Web requires the capturing
of video images;
WHEREAS, Jutvision desires to retain the services of Provider as an
independent contractor to capture video content;
WHEREAS, Provider is an independent business and desires to provide such
service pursuant to the terms set forth in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS
-----------
1.1 "Basic Order" shall mean a request by Jutvision for Provider to film
four (4) scenes at the site specified in the Order.
1.2 "Broker" shall mean any person working with, representing or
associated with the homeowner or home seller in connection with a
real estate transaction.
1.3 "Dispatch System" shall mean the process of distributing Orders
directly to the JSPs via a text message to the cell phones of each
JSP.
1.4 "Jutvision Service Provider" or "JSP" means the individual who
captures the video image of the property specified in the Order on
behalf of Provider.
1.5 "Order" shall mean a request by Jutvision for Provider to perform
the Services with respect to a specific property. Each Order shall
consist of the name of the Ordering Party requesting the video
image capture, that Ordering Party's phone number and the address
of the property to be videotaped.
1.6 "Ordering Party" shall mean the person who places the Order with
Jutvision.
23
<PAGE>
1.7 "Seller" shall mean the owner, or someone acting on behalf of the
owner, of the property being serviced pursuant to this Agreement.
1.8 "Test Tape" shall mean the videotape submitted by a potential JSP
pursuant to the Training Manual.
1.9 "US Address" shall mean Jutvision Corp., 124 University Avenue,
Palo Alto, California, 94301.
1.10 "Training Manual" shall mean the materials attached hereto as
Exhibit 1, a training videotape prepared by Jutvision, and
---------
any additions to those materials that Jutvision may make from time
to time.
1.11 "Virtual Tour" shall mean a panoramic scene for display on the
Web.
2. INDEPENDENT CONTRACTOR RELATIONSHIP
-----------------------------------
Provider is an independently established business and desires to contract
with Jutvision to perform services pursuant to this Agreement as an
independent contractor. Provider further agrees that neither Provider nor
any employees or subcontractors of Provider is entitled to unemployment,
workers compensation or other benefits in any event pursuant to Provider's
provision of service under this Agreement.
3. SERVICES PROVIDED BY Provider
-----------------------------
3.1 Jutvision engages Provider, and Provider shall cause its JSPs, to
perform all services and responsibilities set forth in this
Agreement (the "Services"), including those set forth in Schedule
--------
A. These Services may be reasonably amended upon the mutual consent
--
of the parties at anytime. Provider accepts such engagement and
agrees, during the term of this Agreement and thereafter, as
specified herein, to perform the services and responsibilities set
forth herein in a professional and timely manner, to furnish its
best skill and judgment in performing the Services, to devote
sufficient time and resources to performing the Services, and to
use best efforts to perform the Services. If Provider is unable to
perform the Services, it shall notify Jutvision of its inability to
perform the Services as soon as it is aware of that inability.
3.2 Provider shall cause each of its JSPs to sign and deliver to
Jutvision the non-disclosure agreement attached hereto as Exhibit
-------
2.
--
3.3 The JSPs shall not perform any other services, other than the
Services or any other services agreed to by Jutvision and Provider,
during the provision of the Services.
24
<PAGE>
3.4 The JSPs shall not accept gratuities from the Seller, Broker or any
other individual requesting or involved in the transactions
contemplated in this Agreement.
3.5 From time to time, at the agreement of the parties, Provider shall
participate in marketing and promotional programs with regard to
the Services, Jutvision or Virtual Tours. Such participation shall
be of a nature that does not materially or significantly add to the
time or effort required of Provider or its JSPs to perform the
Services.
4. TERM OF AGREEMENT RENEWAL
-------------------------
This Agreement takes effect at 12:00 A.M. EST, January 11, 1999, and,
unless sooner terminated as provided herein, will continue in effect for a
period of two years ending at 11:59 P.M. EST, January 10, 2001. This
Agreement may be renewed for an additional term of two years at Jutvision's
option, which option shall be exercised no later than thirty (30) days
prior to the date of the termination of the initial term. This Agreement
may be further extended by mutual written agreement between Jutvision and
Provider.
5. FEES
----
5.1 Jutvision agrees to pay the fees specified on Schedule B pursuant
----------
to the terms of this Agreement.
5.2 Schedule B shall not be changed, modified, supplemented or amended
----------
except by express written agreement signed by Jutvision and
Provider.
6. BILLING
-------
6.1 Provider shall produce and send an invoice to Jutvision on the 15th
and last day of each month detailing the Fees owing to Provider
Jutvision will pay Provider for its services by means of electronic
transfer to Provider's bank account. Jutvision will make its best
efforts to make those payments within ten (10) business days after
receiving Provider' invoice.
6.2 Invoices unpaid by Jutvision thirty (30) days after receipt of an
invoice from Provider shall be charged interest at the rate of one
and one-half percent (1.5%) per month, or eighteen percent (18%)
per annum, calculated daily, compounded annually.
6.3 Jutvision shall inform Provider of any disputes regarding an
invoice within ten (10) business days of receipt of that invoice.
In the event that Jutvision disputes the validity of an invoice or
part of an invoice rendered by Provider, Jutvision shall continue
to pay any undisputed amounts but shall not pay the amount in
dispute. Jutvision shall not incur any interest charges
25
<PAGE>
for the disputed amount from the date Jutvision notified Provider
of its disagreement with Provider's invoice. In the event of a
dispute, the parties shall confer within ten (10) business days for
the purpose of resolving the dispute. If the dispute cannot be
resolved within ten (10) business days of the first conference,
either party may request arbitration, which shall be subject to the
terms of Section 15.
7. SERVICE AREA
------------
7.1 Provider agrees to perform the Services in the geographical areas
(the "Service Areas") identified in Schedule C.
----------
7.2 Provider will be the exclusive provider of Services within the
Service Areas listed in Schedule C and defined in the Service Area
----------
Agreement. From time to time, upon the parties' written agreement,
the parties may change, modify, supplement or amend Schedule C.
----------
7.3 From time to time, Jutvision may expand the Service Areas to
include additional geographical areas. Upon notification by
Jutvision, Provider shall take all necessary actions to provide the
Services in a Service Area, including identifying an individual or
individuals suitable to perform the Services within one week of the
time Jutvision notifies Provider of its desire to expand a Service
Area.
8. EQUIPMENT
---------
8.1 Jutvision shall provide, at Jutvision's cost, the equipment
specified in Schedule D (the "Equipment") in quantities adequate
for the performance of the Services by Provider. At all times
Jutvision maintains ownership of the Equipment and can recall any
or all of the Equipment at any time.
8.2 License Grant.
-------------
8.2.1 Grant. Following Jutvision's provision of the Equipment
------
to Provider and its JSPs, and subject to all the terms
and conditions of this Agreement, Jutvision hereby grants
to Provider and its JSPs a limited, royalty-free,
personal, non-transferable, non-sublicensable, non-
exclusive license to the Equipment during the term of
this Agreement. The Equipment shall be used only in
connection with the Services hereunder, and not for or on
behalf of any third party.
8.2.2 No Sale. The parties acknowledge and agree that (i) all
--------
Equipment provided by Jutvision hereunder is licensed in
accordance herewith and not sold and (ii) as between
Jutvision and Provider and its JSPs, subject only to the
license grants expressly made herein, Jutvision is the
sole owner of all right, title and interest in and to
26
<PAGE>
the Equipment, including without limitation all
intellectual property and proprietary rights therein and
thereto.
8.2.3 No Modification or Reverse Engineering. Except as
---------------------------------------
otherwise expressly permitted by applicable law, Provider
and its JSPs shall not modify, disassemble or in any way
reverse engineer, the Equipment or any portion,
derivative or version thereof or permit any third party
to do so.
8.2.4 Termination. The license granted in this section shall
------------
immediately terminate upon any expiration or termination
of this Agreement.
8.3 The Equipment shall be functional when received by Provider. If the
Equipment is not functioning when initially received, Provider
shall immediately notify Jutvision and within 24 hours send or
deliver, at Jutvision's cost, the Equipment to Jutvision's U.S.
Address.
8.4 Jutvision shall pay for all Equipment repair costs associated with
normal wear and tear. If any of the Equipment needs repair,
Provider or one of its employees, agents, contractors or
subcontractors shall be responsible for sending or delivering, at
Jutvision's cost (except as specified in Section 8.5), the non-
functioning Equipment to Jutvision at its U.S Address. Upon
receiving the non-functioning Equipment, Jutvision will send
Provider, or the JSP identified by Provider as needing the
Equipment, replacement Equipment. The Training Manual details an
alternative procedure acceptable to Jutvision for the shipment of
Equipment.
8.5 Provider shall pay for all repair costs not associated with normal
wear and tear, including the repair of damage caused by the
negligence of Provider or one of its employees, agents, contractors
or subcontractors or any modification of the equipment by Provider
or one of its employees, agents, contractors or subcontractors.
Provider or one of its employees, agents, contractors or
subcontractors shall be responsible for immediately sending or
delivering, at Provider's expense, the negligently damaged to
Jutvision at its U.S. Address.
8.6 If any Equipment is lost, stolen, or damaged while in the
possession of Provider, its employees, agents, contractors or
subcontractors, Provider shall pay, within 30 days, the repair or
replacement cost of such Equipment to Jutvision. The cost of
replacement shall be the cost of purchasing replacement equipment
as specified in Schedule E. The cost of repair will not exceed the
-----------
cost of purchasing replacement equipment as specified in Schedule
--------
E. If Provider fails to pay for the lost, stolen or damaged
--
equipment within 30 days, then Jutvision may deduct those costs
from its next payment to Provider.
27
<PAGE>
8.7 Warranty Disclaimer.
--- -------------------
THE EQUIPMENT AND ANY OTHER MATERIALS PROVIDED HEREUNDER TO
PROVIDER AND TO ITS JSPS ARE PROVIDED "AS IS" AND WITHOUT WARRANTY
OF ANY KIND. JUTVISION MAKES NO WARRANTIES, WHETHER EXPRESS,
IMPLIED, OR STATUTORY REGARDING OR RELATING TO THE EQUIPMENT OR ANY
OTHER MATERIALS PROVIDED TO PROVIDER OR TO ITS JSPS UNDER THIS
AGREEMENT. SPECIFICALLY, JUTVISION DOES NOT WARRANT THAT THE
EQUIPMENT WILL BE ERROR FREE OR WILL PERFORM IN AN UNINTERRUPTED
MANNER. TO THE GREATEST EXTENT ALLOWED BY LAW, JUTVISION
SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE (EVEN IF JUTVISION HAD BEEN
INFORMED OF SUCH PURPOSE), AND NONINFRINGEMENT WITH RESPECT TO THE
EQUIPMENT AND ANY SUCH OTHER MATERIALS AND WITH RESPECT TO THE USE
OF ANY OF THE FOREGOING.
9. INDEMNIFICATION
---------------
9.1 Provider shall indemnify, and hold harmless Jutvision from any and
all damages, liabilities, costs and expenses (including reasonable
attorneys' fees) incurred by Jutvision arising from or relating to
Provider's use of the Equipment or any services provided by
Provider hereunder. Jutvision shall promptly notify Provider in
writing of any such claim and promptly tender the control of the
defense and settlement of any such claim to Provider at Provider's
expense and with Provider's choice of counsel. Jutvision shall
cooperate with Provider, at Provider's expense, in defending or
settling such claim and Jutvision may join in the defense with
counsel of its choice at its own expense.
9.2 Jutvision shall indemnify, and hold harmless Provider from any and
all damages, liabilities, costs and expenses (including reasonable
attorneys' fees) incurred by Provider arising from or relating to
Jutvision's trademark, copyright, patents, or business practices
related to Jutvision's trademark, copyright, or patents. Provider
shall promptly notify Jutvision in writing of any such claim and
promptly tender the control of the defense and settlement of any
such claim to Jutvision at Jutvision's expense and with Jutvision's
choice of counsel. Provider shall cooperate with Jutvision, at
Jutvision's expense, in defending or settling such a claim and
Provider may join in the defense with counsel of its choice at its
own expense.
9.3 Throughout the term of this Agreement, Provider, for its employees
who perform the Services, shall procure and maintain, at its sole
cost and expense: (a) adequate levels of Workers Compensation and
Employer's
28
<PAGE>
Liability insurance in accordance with applicable State Law; (b)
comprehensive general liability insurance for claims for damages
due to bodily injury (including death) and property damage caused
by or arising out of acts or omissions of its employees; and (c)
sufficient contractual liability insurance to cover the liabilities
assumed by Provider under this Agreement. In addition, all of
Provider JSPs, whether employees or independent contractors of
Provider, shall provide to Jutvision proof of bonding. For purposes
of the foregoing, "bond" shall refer to an Individual Fidelity Bond
for $2,500. Maintenance of such insurance shall in no way be
interpreted as relieving Provider of any responsibility under this
Agreement.
10. CONFIDENTIAL INFORMATION
------------------------
10.1 Definition. The term "Confidential Information" shall mean any
-----------
information disclosed by one party (the "Disclosing Party") to
this Agreement to the other (the "Receiving Party") of this
Agreement in connection with this Agreement which, if in written,
graphic, machine-readable or other tangible form is marked as
"Confidential" or "Proprietary," or which, if disclosed orally, is
identified at the time of initial disclosure as confidential and
such identification is reduced to a writing delivered to the
Receiving Party within thirty (30) days of such oral disclosure.
Without limiting the foregoing, the terms and conditions of this
Agreement shall be considered Confidential Information.
10.2 Exclusions. Confidential Information shall exclude information
-----------
that: (a) was independently developed by the Receiving Party
without any use of the Disclosing Party's Confidential Information
or by the Receiving Party's employees or other agents (or
independent contractors hired by the Receiving Party) who have not
been exposed to the Disclosing Party's Confidential Information;
(b) becomes known to the Receiving Party, without restriction,
from a source other than the Disclosing Party without breach of
this Agreement and that had a right to disclose it; (c) was in the
public domain at the time it was disclosed or becomes in the
public domain through no act or omission of the Receiving Party;
or (d) was rightfully known to the Receiving Party, without
restriction, at the time of disclosure.
10.3 Compelled Disclosure. If a Receiving Party is, or believes that it
---------------------
will be, compelled by a court or other authority to disclose
Confidential Information of the Disclosing Party, it shall give
the Disclosing Party prompt notice so that the Disclosing Party
may take steps to oppose such disclosure.
10.4 Obligations. The Receiving Party shall treat as confidential all
of the Disclosing Party's Confidential Information and shall not
use or disclose such Confidential Information to a third party
except as expressly permitted under this Agreement. Without
limiting the foregoing, the Receiving Party shall use at least the
same degree of care which it uses to prevent the
29
<PAGE>
disclosure of its own confidential information of like importance,
but in no event less than reasonable care, to prevent the
disclosure of the Disclosing Party's Confidential Information.
11. NON-COMPETITION
---------------
11.1 In view of the fact that any activity of Provider in violation of
the terms hereof would adversely affect Jutvision and its
subsidiaries, and to preserve the goodwill associated with
Jutvision's business, Provider hereby agrees to the following
restrictions on its activities:
11.1.1 Provider hereby agrees that during the term of this
Agreement and during the period commencing on the date
this Agreement is terminated for any reason and ending
on the date which is the third anniversary of the date
thereof (the "Noncompete Period") Provider will not,
without the express written consent of Jutvision,
directly or indirectly, engage in any activity that is
competitive with any of the business activities,
products or services conducted or offered by Jutvision
and its subsidiaries and affiliates or proposed to be
conducted or offered by Jutvision and its subsidiaries
and affiliates.
11.1.2 In the event (i) Provider receives and considers any
offer for an Acquisition (as defined below) of Provider,
or (ii) Provider determines to solicit bids from third
parties for a potential Acquisition, Provider shall
notify Jutvision, and Jutvision shall have the exclusive
right to negotiate such an Acquisition with Provider for
a period of thirty (30) days after the date of receipt
of such notice.
11.1.3 For purposes of this Agreement, the "Acquisition" of a
party shall mean (i) a merger, consolidation or other
reorganization, if the individuals and entities who were
stockholders of the party immediately prior to the
effective date of the transaction have "beneficial
ownership" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of less
than sixty percent (60%) of the total combined voting
power for election of directors (or their equivalent) of
the surviving entity following the effective date of the
transaction, (ii) acquisition by any entity or group of
direct or indirect beneficial ownership in the aggregate
of securities of the party then issued and outstanding
representing forty percent (40%) or more of the total
combined voting power of the party, or (iii) a sale of
all or substantially all of the party's
30
<PAGE>
assets.
11.1.4 For purposes of this Agreement, any reference to the
subsidiaries of Jutvision shall be deemed to include all
entities directly or indirectly controlled by it through
an ownership of more than fifty percent (50%) of the
voting interests. The term "affiliate" shall mean, with
respect to any person or entity, any person or entity
which directly or indirectly controls, is controlled by
or is under common control with such person or entity.
The term "person" shall mean an individual, a
corporation, an association, a partnership, a limited
liability company, an estate, a trust, and any other
entity or organization.
12. LIMITATION OF LIABILITY
-----------------------
IN NO EVENT WILL JUTVISION BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF USE,
BUSINESS INTERRUPTION, LOSS OF DATA, COST OF COVER OR INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH OR ARISING
OUT OF THE FURNISHING, PERFORMANCE OR USE OF THE EQUIPMENT OR ANY OTHER
MATERIALS PROVIDED BY JUTVISION HEREUNDER, WHETHER ALLEGED AS A BREACH OF
CONTRACT OR TORTIOUS CONDUCT, INCLUDING NEGLIGENCE, AND EVEN IF JUTVISION HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION, JUTVISION WILL NOT
BE LIABLE FOR ANY DAMAGES CAUSED BY DELAY IN DELIVERY OF THE EQUIPMENT OR ANY
OTHER MATERIALS PROVIDED HEREUNDER. JUTVISION'S LIABILITY UNDER THIS AGREEMENT
FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL AND CONSEQUENTIAL DAMAGES OF ANY KIND,
INCLUDING, WITHOUT LIMITATION, RESTITUTION, WILL NOT, IN ANY EVENT, EXCEED THE
AMOUNTS PAID BY JUTVISION TO Provider UNDER THIS AGREEMENT FOR THE SERVICES
GIVING RISE TO SUCH CLAIM.
The provisions of this Section allocate risks under this Agreement between
Provider and Jutvision. Jutvision's pricing reflects this allocation of risks
and limitation of liability.
13. TRADEMARK LICENSE
-----------------
13.1 License. Jutvision hereby grants Provider a limited, royalty-free,
-------
personal, non-transferable, nonsublicensable, non-exclusive license
to use the Jutvision logos, any other images, its trade names and
trademarks (collectively, the "Jutvision Logos"), and such other
images and materials for which Jutvision grants its prior written
consent, solely for the purpose of identifying Jutvision in
Provider's promotional materials. Provider shall submit to Jutvision
all representations of the Jutvision logo that Provider intends to
use in connection with the Provider promotional materials, for
31
<PAGE>
Jutvision's approval of design, color, and other details. Provider
shall not publish, disseminate, exhibit, or otherwise distribute any
such material without Jutvision's prior approval. Provider' use of
the Jutvision Logos shall at all times be of a high quality,
commensurate with Jutvision's own products and marketing. Provider
shall not harm, misuse or bring into disrepute the Jutvision Logo.
Jutvision reserves all of its rights in the Jutvision Logos, any
other images, its trade names and trademarks, and all other
intellectual property or proprietary rights. Provider acknowledges
that the Jutvision Logos and the goodwill associated therewith are
valuable properties belonging to Jutvision and that all rights
thereto are and shall remain the sole and exclusive property of
Jutvision. Provider agrees to use the Jutvision Logos in a manner
that will protect Jutvision's rights and goodwill therein. Provider
agrees that it will do nothing inconsistent with Jutvision's
ownership and that all uses of the same shall inure to the sole
benefit of and be on behalf of Jutvision.
13.2 Effect of Termination. Upon the expiration or termination of this
---------------------
Agreement for any reason, Provider shall immediately stop all
activities hereunder, cease using the Jutvision logo and not
thereafter use the Jutvision logo for any reason.
14. TERMINATION
-----------
Either party may terminate this Agreement upon thirty (30) days written
notice in the event of a default by the other party, provided that the
defaulting party has been given notice by the non-defaulting party of the
default and has failed to correct such default within thirty (30) days
after receipt of such notice. Default shall be defined as a material
failure to fulfill or perform duties or responsibilities as such are set
forth in this Agreement, including but not limited to a failure to perform
the Service in the manner described in this Agreement (including Schedule
------------------
A), a 5% failure rate at capturing usable images (i.e. images requiring
--
reshooting), a failure to follow the Training Manual, fraud,
misrepresentation, non-payment, bankruptcy, insolvency or court-ordered
liquidation of all substantially all of the party's assets for the benefits
of creditors.
15. ARBITRATION
-----------
Any dispute, controversy or claim arising out of or relating to the
validity, construction, enforceability or performance of this Agreement,
including disputes relating to alleged breach or to termination of this
Agreement, shall be settled by final, binding arbitration in the manner
described in this Section. The arbitration shall be conducted pursuant to
the Commercial Rules of the American Arbitration Association then in effect
("Rules"). Notwithstanding those rules, the following provisions shall
apply to the arbitration hereunder:
15.1 Arbitrators. The arbitration shall be conducted by a panel of three
-----------
(3) arbitrators ("the Panel"). Each party shall have the right to
appoint one (1)
32
<PAGE>
member of the Panel, with the third member to be mutually agreed by
the two (2) Panel members appointed by the parties or appointed in
accordance with the rules of the American Arbitration Association.
15.2 Proceedings. The parties and the arbitrators shall use their best
-----------
efforts to complete the arbitration within one (1) year after the
appointment of the Panel under Section 15.1 above, unless a party can
demonstrate to the Panel that the complexity of the issues or other
reasons warrant the extension of the timetable. In such case, the
Panel may extend such timetable as reasonably required. The Panel
shall, in rendering its decision, apply the substantive law of the
State of California, without regard to its conflict of laws
provisions, except that the interpretation of and enforcement of
Section 15.2 shall be governed by the U.S. Federal Arbitration Act.
The proceeding shall take place in the city and county of San
Francisco. The fees of the Panel and all reasonable attorney's fees
shall be paid by the losing party as designated by the Panel. If the
Panel is unable to designate a losing party, it shall so state and
the fees shall be shared equally between the parties.
16. ASSIGNMENT
----------
Provider shall not assign or delegate this Agreement, or any of its rights
otherwise, without the prior written consent of Jutvision.
17. MISCELLANEOUS PROVISIONS
------------------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of California. This Agreement may be executed in one or
more counterparts, each of which will be deemed an original and all of
which will be considered one and the same Agreement. This Agreement
supersedes all prior agreements, written or oral, between Jutvision and
Provider relating to the subject matter of this Agreement. Any amendment
or modification of this Agreement shall be in writing and shall be signed
by both parties hereto. Provider acknowledges that the Confidential
Information represents valuable property and agrees that the provisions of
this Agreement shall be enforceable by specific performance and other
equitable relief in addition to any action for damages or other remedy
available to Jutvision. If any provision of this Agreement is for any
reason held to any extent to be invalid or unenforceable, the remainder of
this Agreement will not be affected and will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further
agree to replace such void or unenforceable provision of this Agreement
with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of the void or
unenforceable provision.
33
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
Provider
By:_________________________________
Name:
Title:
Jutvision Corporation
By:_________________________________
Name:
Title:
34
<PAGE>
Schedule A
----------
SERVICES PROVIDED BY Provider
1. Provider and its JSPs must successfully complete all Orders transmitted to
Provider or its JSPs by Jutvision.
2. Provider and its JSPs must be able to receive digitally transmitted Orders
provided by Jutvision.
3. Provider agrees to use the Dispatch System, or other dispatch system
approved by Jutvision that allows Provider to perform the Services.
4. A JSP must contact the Ordering Party specified in the Order within two (2)
hours from the time Provider or the JSP received the Order, unless the Order
is received after 4:30 P.M. local time, in which case the JSP must contact
the person specified in the Order by 10:00 A.M. local time the following
day. If the Ordering Party is not available at the time that the JSP
receiving the Order calls to schedule the content capture appointment, the
JSP must leave the scripted message specified in the Training Manual. In the
event that the Ordering Party does not return the JSP's scheduling call
within 24 hours, the JSP shall repeat the above call procedure.
5. Provider must provide to Jutvision by 10:00 A.M. local time each day a
complete list of the appointments scheduled by its JSPs the prior day,
including the time and date of each appointment. If a JSP is unable to
schedule an appointment the day the JSP receives the Order, Provider must
indicate on the list that the JSP has not yet scheduled the appointment.
6. The JSP must be available to perform the content capture within 48 hours
from the time the JSP contacted the Ordering Party.
7. If the JSP fails to meet the timing requirements specified in paragraphs 4
and 6 for an Order, Jutvision will not compensate Provider for the
fulfillment of that Order. Nonetheless, Provider is obligated to fulfill the
Order as expeditiously as possible.
8. If, for any reason, the JSP is unable to meet the Ordering Party at the
scheduled appointment time, the JSP must notify the Ordering Party at least
two (2) hours prior to the scheduled appointment and reschedule the
appointment at a mutually convenient time within the next 24 hours. If the
JSP fails to notify the Ordering Party two (2) hours prior to missing a
scheduled appointment, JSP shall contact the Ordering Party within one (1)
hour after the originally scheduled time and reschedule the appointment at a
mutually convenient time within the next 24 hours. Provider shall notify
Jutvision of the time and date of the new appointment in the same manner as
specified in paragraph 5 above. Jutvision will not compensate Provider for
the Services performed for the Ordering Party when a JSP has missed an
appointment
35
<PAGE>
without contacting the Ordering Party at least two (2) hours prior to the
scheduled appointment time in order to reschedule the appointment.
9. The JSP must capture the video content pursuant to the Training Manual. An
Order is not successfully completed, if in Jutvision's discretion, the video
images captured pursuant to that Order cannot be converted into a Virtual
Tour for posting on the Web. Jutvision must inform Provider within 5
business days from when the image was captured that the image can not be
successfully converted. If for any reason, the JSP does not successfully
complete the Order, Provider shall be responsible for refilming the site at
its expense upon Jutvision's request pursuant to the procedures set forth in
this Schedule for the fulfillment of an initial Order.
10. At Jutvision's request, Provider must allow and the JSPs must distribute
Jutvision marketing materials to the Broker, Seller or potential buyers as
part of the normal course of fulfilling an Order. Such efforts shall not
increase materially or significantly the time or effort required of Provider
or its JSPs to perform the Services. Neither Provider nor any of its JSPs,
or any agent, employee, representative, affiliate, subsidiary or any other
entity controlled or owned by Provider, may distribute any materials, other
than those requested by Jutvision or mutually agreed to by the parties, to
the Broker, Seller or potential buyers, except as otherwise agreed to by
Jutvision in writing, during the term of this Agreement. This provision
should not be read to limit Provider's pre-existing business relationships
with any party.
11. All video tape(s) from a day of filming with video content ready for
processing, along with accompanying paperwork, as such shall be specified in
the Training Manual, must be sent, at Jutvision's expense, to the U.S.
Address for delivery before 3 P.M. PST on the day after the JSP films the
content. Jutvision shall provide each JSP with a sufficient number of pre-
paid, pre-addressed Federal Express envelopes to be used for the sole
purpose of shipping each days tape to Jutvision at the U.S. Address. Each
JSP must write the tracking number for the Federal Express package on the
JSP Daily Activity Log, which will be provided by Jutvision at the time of
training.
12. If Jutvision, in its discretion, is unable to process the videotape because
the accompanying paperwork is not completed pursuant to the Training Manual,
Provider shall be responsible for reimaging the property at its expense or
for providing Jutvision with the information it needs to process the images
on the video tape in a timely manner.
13. Provider shall be responsible for the timely distribution of all of
videotapes to its JSPs upon receipt of the tapes from Jutvision. Provider
shall identify one location or a reasonable number of strategic locations to
which Jutvision will ship such replacement tapes.
14. Jutvision shall have the right to interview every potential JSP identified
by Provider before the JSP begins fulfilling Orders and shall have the right
in its discretion to
36
<PAGE>
require Provider to identify another individual. Provider, with Jutvision's
assistance, shall be responsible for training each JSP pursuant to the
Training Manual.
15. Once Jutvision notifies Provider that a potential JSP's Test Tape is
acceptable, that individual may begin fulfilling Orders. If Jutvision
determines that that individual's Test Tape is not acceptable, Jutvision
shall notify Provider of the reason that Test Tape is not acceptable and
that individual may submit a second Test Tape for Jutvision's review.
16. Provider and all JSPs must follow all procedures specified in the Training
Manual. Provider and the JSPs agree to participate in and complete all
training mandated by Jutvision.
Initials: ________ Jutvision
_________ Provider
37
<PAGE>
Schedule B
----------
FEES AND BILLING
A. Fees
- ---------
1. Jutvision agrees to pay Provider ____________ for each Basic Order
successfully completed as specified in Schedule A.
----------
2. Jutvision agrees to pay Provider _______________ for each scene in excess of
four (4) captured at the site specified in the Order.
B. Cancellation Policy
-------------------
1. If an Order is cancelled on the day the JSP and the Ordering Party had
scheduled to perform the Services, Jutvision shall pay Provider _________.
If the Ordering Party does not show-up for his or her appointment and the
JSP is unable to perform the Services, Jutvision shall pay Provider
___________. If the JSP films the property and then the Order is cancelled,
Jutvision shall pay Provider ______________.
Initials: ________ Jutvision
_________ Provider
38
<PAGE>
Schedule C
----------
SERVICE AREAS
The following zip codes, as modified by the comments, serve as the outer
boundary of the "Service Area":
Initials: ________ Jutvision
_________ Provider
39
<PAGE>
Schedule D
----------
EQUIPMENT PROVIDED BY JUTVISION
The "Equipment" shall consist of:
1. Jutvision Field Kit consisting of one (1) Jutvision Roundabout (TM), one (1)
video camera with light and necessary accessories, including the necessary
power source, one (1) tripod, two (2) video tapes, one (1) wide angle lens,
one (1) video camera battery recharger and a carrying case. The JSPs shall
provide the batteries for the Jutvision Roundabout (TM) and shall be
responsible for the ongoing maintenance of the video camera, including, but
not limited to, the replacement of the rechargeable batteries for the
camera.
2. Virtual Reality Requisition Forms to be completed by JSP for each Order
pursuant to the Training Manual.
3. Cellular phone and accessories for Dispatch System. Jutvision will maintain
all cellular phone contracts and service agreements and will pay for all
cellular phone charges incurred by Provider' JSPs during the course of
fulfilling Orders.
4. Materials necessary for daily shipment of video tapes to the U.S. Address.
5. Training manuals that include instructions on the maintenance of the camera,
battery, and cellular phone.
Initials: ________ Jutvision
_________ Provider
40
<PAGE>
Schedule E
----------
COST OF REPLACEMENT EQUIPMENT
<TABLE>
<CAPTION>
Description Unit Cost
- --------------------------------- ---------
<S> <C>
1. Sony Camcorder $900.00
2. Camcorder Battery $ 75.00
3. Camcorder Battery Recharger $ 50.00
4. Camcorder Light $ 60.00
5. Carrying Case $ 80.00
6. Lens $ 40.00
7. Tripod $ 90.00
8. Tripod Head $ 60.00
9. Video Tape $ 8.00
10. Jutvision Roundabout $350.00
11. Cell Phone $100.00
</TABLE>
Initials: ________ Jutvision
_________ Provider
41
<PAGE>
Exhibit 2
NONDISCLOSURE AGREEMENT
THIS NONDISCLOSURE AGREEMENT ("Agreement") is made and entered into as of
_____________ (date) between Jutvision Corporation and ______________
(JSP/Jutvision Service Provider).
1. Purpose. The parties desire the JSP to perform certain services as
-------
further described in the Service Provider Agreement between Jutvision and
Provider, dated _____________, and in connection with this opportunity,
Jutvision ("Disclosing Party") may disclose to JSP ("Receiving Party" or
"Jutvision Service Provider") certain confidential technical and business
information which the Disclosing Party desires the Receiving Party to treat as
confidential.
2. "Confidential Information" means any information disclosed by the
------------------------
Disclosing Party to the Receiving Party, either directly or indirectly, in
writing, orally or by inspection of tangible objects (including without
limitation documents, prototypes, samples, plant and equipment), which is
designated as "Confidential," "Proprietary" or some similar designation.
Confidential Information will include without limitation all information
regarding Jutvision's image capturing technique, its proprietary technology and
equipment, whether or not so designated upon disclosure. Information
communicated orally will be considered Confidential Information if such
information is confirmed in writing as being Confidential Information within a
reasonable time after the initial disclosure. Confidential Information may also
include information disclosed to a Disclosing Party by third parties.
Confidential Information will not, however, include any information which (i)
was publicly known and made generally available in the public domain prior to
the time of disclosure by the Disclosing Party; (ii) becomes publicly known and
made generally available after disclosure by the Disclosing Party to the
Receiving Party through no action or inaction of the Receiving Party; (iii) is
already in the possession of the Receiving Party at the time of disclosure by
the Disclosing Party as shown by the Receiving Party's files and records
immediately prior to the time of disclosure; (iv) is obtained by the Receiving
Party from a third party without a breach of such third party's obligations of
confidentiality; (v) is independently developed by the Receiving Party without
use of or reference to the Disclosing Party's Confidential Information, as shown
by documents and other competent evidence in the Receiving Party's possession;
or (vi) is required by law to be disclosed by the Receiving Party, provided that
the Receiving Party gives the Disclosing Party prompt written notice of such
requirement prior to such disclosure and assistance in obtaining an order
protecting the information from public disclosure.
3. Non-use and Non-disclosure. The Receiving Party agrees not to use any
--------------------------
Confidential Information of the Disclosing Party for any purpose except to
perform the services described in the Service Provider Agreement. The Receiving
Party agrees not to disclose any Confidential Information of the Disclosing
Party to third parties. The
42
<PAGE>
Receiving Party shall not reverse engineer, disassemble or decompile any
prototypes, software or other tangible objects which embody the Disclosing
Party's Confidential Information and which are provided to the Receiving Party
hereunder.
4. Maintenance of Confidentiality. The Receiving Party shall take reasonable
------------------------------
measures to protect the secrecy of and avoid disclosure and unauthorized use of
the Confidential Information of the Disclosing Party. Without limiting the
foregoing, the Receiving Party shall take at least those measures that it takes
to protect its own most highly confidential information. The Receiving Party
shall not make copies of the Confidential Information of the Disclosing Party
unless the same are previously approved in writing by the Disclosing Party. The
Receiving Party shall reproduce the Disclosing Party's proprietary rights
notices on any such approved copies, in the same manner in which such notices
were set forth in or on the original.
5. No Obligation. Nothing herein will obligate the Disclosing Party to
-------------
disclose any of its Confidential Information to the Receiving Party, nor will
either party be in any way obligated to enter into a separate agreement with the
other party, perform services for the other party, or purchase services from the
other party.
6. No Warranty. ALL CONFIDENTIAL INFORMATION IS PROVIDED "AS IS". THE
-----------
DISCLOSING PARTY MAKES NO WARRANTIES, EXPRESS, IMPLIED OR OTHERWISE, REGARDING
ITS ACCURACY, COMPLETENESS OR PERFORMANCE.
7. Return of Materials. All documents and other tangible objects containing
-------------------
or representing Confidential Information which have been disclosed by the
Disclosing Party to the Receiving Party, and all copies thereof which are in the
possession of the Receiving Party, will remain the property of the Disclosing
Party and must be promptly returned to the Disclosing Party upon the Disclosing
Party's written request.
8. No License. Nothing in this Agreement is intended to grant any rights to
----------
either party under any patent, mask work right or copyright of the other party,
nor will this Agreement grant the Receiving Party any rights in or to the
Confidential Information of the Disclosing Party except as expressly set forth
herein.
9. Term. The obligations of the Receiving Party hereunder will survive until
----
such time as all Confidential Information of the Disclosing Party disclosed
hereunder becomes publicly known and made generally available through no action
or inaction of the Receiving Party.
10. Remedies. Each party agrees that any violation or threatened violation
--------
of this Agreement may cause irreparable injury to the Disclosing Party,
entitling the Disclosing Party to seek injunctive relief in addition to all
legal remedies.
11. Miscellaneous. This Agreement will bind and inure to the benefit of the
-------------
parties hereto and their successors and assigns. This Agreement will be
governed by the
43
<PAGE>
laws of the State of California, without reference to conflict
of laws principles. This document contains the entire agreement between the
parties with respect to the subject matter hereof, and neither party will have
any obligation, express or implied by law, with respect to trade secret or
proprietary information of the other party except as set forth herein. Any
failure to enforce any provision of this Agreement will not constitute a waiver
thereof or of any other provision. This Agreement may not be amended, nor any
obligation waived, except by a writing signed by both parties hereto.
______________________________________________________________________
Jutvision Corporation Jutvision Service Provider
By:_______________________ By:_________________________
Name:_____________________ Name:_______________________
Title:____________________ Title:______________________
44
<PAGE>
EXHIBIT 10.28
EXECUTION DRAFT
DISTRIBUTION & CO-MARKETING AGREEMENT
-------------------------------------
THIS DISTRIBUTION & CO-MARKETING AGREEMENT (the "Agreement") is entered
into as of June 3, 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
----------------------------
promotional offer (the "Offer") available to Company's Sales Agents through a
bamboo.com account representative during in-office presentations, and such Offer
will only be available on the day of such presentations and one Offer per
customer. The Offer will be available through [*]. Sales Agents must supply
listings by [*]. "Basic Package" means four scenes captured at a designated
property placed on http://www.northsiderealty.com.
<TABLE>
<CAPTION>
Buy Price Bonus
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
3 Basic Packages $ [*] [*] free scenes and each tour placed on Northside Realty and Realtor.com
- ------------------------------------------------------------------------------------------------------------------------------------
5 Basic Packages $ [*] [*] free Basic Package and each tour placed on Northside Realty and Realtor.com
- ------------------------------------------------------------------------------------------------------------------------------------
10 Basic Packages $ [*] [*] free Basic Packages and each tour placed on Northside Realty and Realtor.com
- ------------------------------------------------------------------------------------------------------------------------------------
20 Basic Packages $ [*] [*] free Basic Packages and [*] free scenes and each tour placed on Northside Realty and Realtor.com
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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. Bamboo.com will use
commercially reasonable efforts to process and post each Bamboo.com Image within
four (4) business days after capture of such image. Notwithstanding any other
provisions of this Agreement, in the event that within a given city, within a
given month twenty-five percent (25%) or more of the Jutvision Images are posted
to the Company Sites more than five (5) business days after capture due to no
fault of Company or Sales Agents, then, subject to a thirty (30) day cure
period, Company may enter into an agreement with a third party for services
comparable to the Production Services.
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;
. 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;
. In the event, a hyperlink on the Bamboo.com Image, links the Northside Realty
website to a webpage that has competitor information, bamboo.com agrees to
discuss a remedy with Company.
. 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 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.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMANT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
IN WITNESS WHEREOF the parties hereto have executed disagreement.
BAMBOO.COM, INC. NORTHSIDE REALTY
By: /s/ Andy Laszlo By: /s/ Terry Morris
__________________________ _____________________________
Name/Title: Andy Laszlo Name/Title: Terry Morris
Sr. V.P. Business Development President
- --------------
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 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
-2-
<PAGE>
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.
-3-
<PAGE>
EXHIBIT 10.29
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. Volume Purchase. Carlson Real Estate will purchase [*] bamboo.com Basic
---------------
Package Virtual Tours. In return, bamboo.com will provide [*] complimentary
bamboo.com Basic Package Virtual Tours. The tours shall be used for current
inventory. Carlson will make best efforts to use these tours by the end of
[*], and at the latest by the end of [*]. Bamboo.com will provide an invoice
to Carlson Real Estate by May 19, 1999. Carlson will remit payment to
bamboo.com of [*] on May 28, 1999.
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, SVP Name/Title: Director of Marketing
________________________ _____________________
Biz Dev
________________________
[*] = 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>
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 operating and
maintaining the call center.
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, (i) to [*] the Company Site, [*] and (ii) to [*] of the
following: (a) Realtor.com, (b) HomeSeekers.com, [*] (c) HomeAdvisor.com (when
implemented).
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 Internet 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 Internet or otherwise to obtain
listings and other information in the MRIS System.
1.15 "Multi-Site Package" means four scenes captured in a designated
------------------
Property and converted into a corresponding number of Bamboo.com Images. The
Multi-Site Package service includes posting or linking, to the extent bamboo.com
has the right to do so, (i) to [*], the Company Site, [*] and (ii) to [*] the
following: (a) Realtor.com, (b) HomeSeekers.com, [*] (c) HomeAdvisor.com (when
implemented).
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.
[*] = 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>
1.19 "Strategic Partner Originated Order" means any order from an MRIS
----------------------------------
Subscriber for Production Services originated through the strategic partners of
bamboo.com.
1.20 "Term" means the Initial Term of this Agreement and the Renewal
----
Terms, if any, as set forth in Section 6.
1.21 "Territory" means Company's area of coverage in West Virginia,
---------
Virginia, Maryland, Washington D.C., Delaware and Pennsylvania.
1.22 "Upgrade Package" means an addition to a Basic Package or Multi-Site
---------------
Package consisting of one additional scene captured at the same designated
Property of the Basic Package or Multi-Site Package, converted into one
additional Bamboo.com Image for the scene and posted or linked in a manner
consistent with the Basic Package or Multi-Site Package.
1.23 "Virtual Tour Images" means 360, 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
receiving orders and invoicing and collecting revenues for sales of Production
Services. Accordingly, except as provided in Section 2.3, Company will be
responsible, at Company's expense, for all such order receipt and invoicing and
revenue collection during the Term.
(a) Call Center. Company will maintain and operate at Company's
--- -----------
expense a call center to receive orders for Production Services from MRIS
Subscribers. At all times during the Term, Company's call center 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 Company's call
center, as well as such additional training and information as Company's call
center may require from time to time during the Term. In addition, bamboo.com
will make members of bamboo.com's call center 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 second-level
support for Company's call center in the form of information and guidance solely
to Company's call center regarding the Production Services. Company and its call
center will only offer and sell Production Services to MRIS Subscribers, and in
packages and at prices consistent with bamboo.com's national pricing 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 lower the prices at which Production Services are offered, then,
taking into account the quality, quantity, time period and geographic region of
such offer, bamboo.com will permit Company to effect the same decrease in
pricing offered to MRIS Subscribers. As of the Effective Date, Company and the
call center may only offer the following service packages for the following
prices: Basic Package [*], Upgrade Package for [*] per additional scene and
Multi-Site Package for [*].
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) post
or link Bamboo.com Images to HomeSeekers.com, Realtor.com and HomeAdvisor.com.
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 six (6) months 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 Strategic Partner Originated Orders. Notwithstanding Section 2.1, with
--- -----------------------------------
respect to all Strategic Partner Originated Orders, 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 Strategic Partner
Originated Orders, except in those cases in which (a) the MRIS Subscriber
objects to the posting and/or (b) the strategic partner originating the order
objects to the posting.
2.4 Preferred Vendor. Bamboo.com will be the preferred vendor of Virtual
----------------
Tour Images for the MRIS System and
[*] = 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>
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 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 the GTE System 4 software during the Term, Company shall
not permit the display of such ordering mechanism by means of the GTE System 4
software within the MRIS System unless, and until such time as, [*] and
bamboo.com [*] to the [*] between [*] and bamboo.com.
(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, IPIX, Live Picture,
BeHere, URThere, NetXL and Cyclovision.
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 all Company
Originated Orders, (i) Company will [*], and will [*], of gross revenues from
the sale of Basic Packages, Upgrade Packages, and Multi-Site Packages (solely
based on the portion of the Multi-Site Package price equal to the Basic Package
price); (ii) Company will [*], and will [*], of gross revenues from the sale of
Multi-Site Packages (solely based on the portion of the Multi-Site Package price
in excess of the Basic Package price and Upgrade Package price (if any)); and
(iii) Company will [*] for each Basic Package and Multi-Site Package so ordered
and [*] for each Upgrade Package so ordered. For example, if an order for one
Basic Package and one Upgrade Package is placed through Company's call center,
based on bamboo.com's pricing of [*] and [*], respectively, in effect as of the
Effective Date, Company will [*], of Basic Package price), plus [*], plus [*]
([*] of Upgrade Package price), plus [*]. As a further example, if an order for
one Multi-Site Package is placed through Company's call center, based on
bamboo.com's pricing of [*] in effect as of the Effective Date, Company will [*]
([*] of portion of Multi-Site Package price equal to Basic Package price), plus
[*] ([*] of portion of Multi-Site Package price in excess of Basic Package
price), plus [*]. In order to permit Company to pay for the costs of Company's
call center during the Term, notwithstanding anything to the contrary herein, in
no event will Company [*] for each Company Originated Order of a Basic Package
or Multi-Site Package, regardless of any promotional pricing that bamboo.com
implements during the Term.
(b) With respect to orders from MRIS Subscribers for Basic Packages,
Upgrade Packages and Multi-Site Packages originated through the sales efforts of
the bamboo.com sales force in the Territory or through tradeshows, seminars or
conferences in the Territory not hosted by Company, Company will (i) [*], and
will [*], of gross revenues from such orders (the "Kick-Off Adjustment") and
(ii) [*] for each Basic Package and Multi-Site Package so ordered; provided,
however, that the Kick-Off Adjustment will only apply to First-Time Orders 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)
"First-Time Order" means an order for one Basic Package, Multi-Site Package or
Upgrade Package to be captured within sixty (60) days after the entry of such
order into the Company call center and (b) First-Time-
[*] = 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>
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 Kick-Off Adjustment and except as provided in Section 4.1(c), all
orders from MRIS Subscribers originated through the bamboo.com sales force in
the Territory or through tradeshows, seminars or conferences in the Territory
not hosted by Company will constitute Company Originated Orders, and bamboo.com
will forward all such orders to Company's call center.
(c) With respect to all Strategic Partner Originated Orders, bamboo.com
will pay Company the [*] for each Multi-Site Package sold or (ii) [*] of gross
revenues from the sale of such Multi-Site Package, solely based on the portion
of the Multi-Site Package price in excess of the Basic Package price and Upgrade
Package price (if any).
(d) Company will not retain or receive 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 retain [*] and bamboo.com will retain [*] 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:
<TABLE>
<CAPTION>
Company Originated Order Through Strategic Partner
Order bamboo.com Sales Originated Orders
Force ("Kick-Off")
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Basic Packages, Company [*], Company [*], Not applicable
Upgrade Packages and plus [*] plus [*]
Portion of Multi-Site (Basic) or [*] (Basic) or [*]
Packages Representing (Upgrade) (Upgrade)
Basic Package Price (4.1(a)(i), (iii)) (4.1(b))
- ---------------------------------------------------------------------------------------------
Portion of Multi-Site Company Company Company
Packages in Excess of [*] [*] [*]
Basic Package Price (4.1(a)(ii), (iii)) (4.1(b)) (4.1(c))
and Upgrade Package
price (if any)
- ---------------------------------------------------------------------------------------------
Administrative Fees Company Company Company
for Production [*] (4.1(d)) [*] (4.1(d)) [*] (4.1(d))
Services sold to MRIS
Subscribers
- ---------------------------------------------------------------------------------------------
</TABLE>
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 end of each
calendar month in which such order was received. With each monthly payment, the
paying party will provide a report stating the number of Basic Packages, Upgrade
Packages and Multi-Site Packages sold in accordance with Section 4.1 during the
month 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 JavaScript 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
[*] = 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>
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, bamboo.com will not make use of such Bamboo.com Image outside
of the scope of this Agreement without the consent of such MRIS Subscriber.
(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, 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
------------------
<PAGE>
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 solicit and receive orders, invoice and collect revenues for sales of
Production Services, and operate a call center and help desk as provided in
Section 2.1, 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 call center; and (c) any material breach by members
of Company's call center 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 reason 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: Presient and Chief Executive Officer
-------------------------- --------------------------------------
Date: June 9, 1999 Date: June 9, 1999
-------------------------- ---------------------------
<PAGE>
EXHIBIT A
---------
CALL CENTER CRITERIA
1. To the extent bamboo.com deems necessary in its reasonable discretion,
bamboo.com may request that members of Company's call center staff and customer
support staff (collectively, the "Call Center") attend mandatory training
sessions conducted by bamboo.com. Company will provide bamboo.com with access
to the Call Center for training purposes. Prior to taking any calls, each Call
Center operator must be properly trained by bamboo.com or such Company
representative as bamboo.com shall designate.
2. The Call Center 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 calls not meeting the foregoing criteria ("Misdirected Calls"),
the Call Center will implement a system with bamboo.com whereby the Call Center
will immediately forward to the bamboo.com call center all Misdirected Calls.
Bamboo.com will have the right to pursue in its discretion any leads from
Misdirected Calls through its own sales force and call center, and to expand
bamboo.com's service provider network appropriately. No orders resulting from
Misdirected Calls will constitute Company Originated Orders or Strategic Partner
Originated Orders.
3. The Call Center will make commercially reasonable efforts to upsell the
Multi-Site Packages.
4. Each party will designate an individual representative that will be the
dedicated liaison for the Call Center program (the "Representatives"). In
addition to any other meetings scheduled from time to time, the Representative
from each party will meet quarterly for reviews.
5. The Call Center shall use it's best efforts to maintain a 95% accuracy on
average rate 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 Call
center, the Call Center 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 the call to the bamboo.com dedicated contact for the Call Center.
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 Call
Center.
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. The Call Center will operate and receive calls, at a minimum, during the
following hours: 9 am to 6 pm EST, Monday through Saturday, and 9 am to 5 pm
EST, Sunday.
8. Company will use commercially reasonable efforts to cause the Call Center
to adhere to a 90% service level for bamboo.com orders (90% of the calls
answered in 90 seconds), calculated on a monthly basis, and will have an abandon
rate of no higher then a 1% within 10 seconds, calculated on a monthly basis.
The Call Center will implement a system for recording the number of calls
received verses orders placed daily, and will maintain such additional
statistics on calls 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 the Call Center as bamboo.com, in bamboo.com's reasonable
discretion, may request from time to time during the Term.
<PAGE>
EXHIBIT B
---------
SERVER PERFORMANCE CRITERIA
Bamboo.com will use commercially reasonable efforts to ensure that its servers
in the United States storing Bamboo.com Images produced under the Agreement
("Local Servers") meet the following performance criteria during the Term:
Uptime:
- ------
Local Servers, in the aggregate, will maintain 99% availability (excluding
scheduled outages and maintenance and Internet disasters beyond the control of
bamboo.com) (the "Uptime Standard"). The Uptime Standard is to be measured by
the total number of minutes during a calendar month in which the Local Servers
are available divided by the total number of minutes during the calendar month.
For purposes of the Uptime Standard, a lapse in Local Server availability is
calculated from the time bamboo.com detects or otherwise becomes aware of an
incidence of a service interruption and ending when the service is restored,
regardless of where the outage originated.
Response Time:
- -------------
Measured as an average for each calendar month, Local Servers, in the aggregate,
will respond to 90% of Web hits originating in the U.S. in under 10 seconds.
Downtime:
- --------
Bamboo.com will notify Company immediately upon discovery in the event any
Local Server experiences continuous, unscheduled downtime; provided, however,
that bamboo.com will have no obligation to provide such notification with
respect to downtime resulting from performance degradation caused by Internet
load or traffic outside of bamboo.com's reasonable control.
<PAGE>
EXHIBIT 10.31
EXECUTION DRAFT
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. Volume Purchase. Company will purchase [*] bamboo.com Basic Package
---------------
Tours. In return, bamboo.com will provide [*] complimentary
bamboo.com Basic Package Tours. The tours shall be used for current
inventory. Company will use purchased plus complimentary bamboo.com Tours
by [*]. Bamboo.com will provide an invoice to Company by May 28,
1999. Company will remit payment to bamboo.com of [*] on June 1,
1999.
2. Bamboo.com Service. Bamboo.com will be responsible for receiving orders and
------------------
invoicing and collecting revenues for sales of Production Services.
Bamboo.comwill 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 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 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/BELIARD GORDON
By: /s/ Andrew P. Laszlo By: [SIGNATURE ILLEGIBLE]
_________________________________ ________________________________
Name/Title: Andrew P. Laszlo Name/Title: Executive Vice President
_________________________ ________________________
SVP, Business Development
_________________________
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPERATELY
WITH THE COMMISSSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<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 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.
-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 [*] Community
---------------
Images over the next 30 days. 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 bamboo.com [*] for the initial location
in a community and [*] for each image taken within 5 miles 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) [*] means a vendor of Prudential (i) for which Prudential enters into [*] as
is represented by [*], including, but not limited to, [*] of any and all
types of Internet products and Services, and (ii) to which Prudential offers
and receives [*], including but not limited to such terms as [*] and [*] (as
specifically described in Section 10(i)), for any product or service that
[*] or [*] 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 [*] on
bamboo.com. Vendor will use commercially reasonable efforts to negotiate
[*] from [*].
(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 within [*] hours of receiving an order. In addition,
Vendor will use commercially reasonable efforts to process and post each
virtual tour image within [*] business days after capture of such 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, at a
minimum, business days from 9:00 am to 5:00pm Eastern time. Vendor agrees
to use commercially reasonable efforts to respond to all support-related
phone calls, at a minimum, within [*].
(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
development of services that are the [*] as Services 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 any [*] in connection
with residential real estate listings, of any [*] 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 those
alternative [*].
(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 [*] regional events per year (including
"Cybercafes"), at the [*] level and an additional [*] regional 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, [*] of residential
property [*] 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 informed of
Vendor's [*] and will be [*] from [*] virtual tour services for residential
properties at such event. Breach by the commercial exhibitor will result
[*] at 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 [*] (which may be by [*]) from [*] including a
[*] 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 [*] (which may be [*]) from [*] including a [*] encouraging
them to schedule office presentations by Vendor. Vendor will be provided
with a [*] efforts to [*].
(d) Prudential will include [*] mention (commensurate with other [*]
service 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.
<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) [*] for any [*] whose core service is [*] which remains on the site for
more than [*] until such time as the [*] is removed from the site and (b)
Vendor may have a brand identifier on the [*] between [*] 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 [*] of Vendor's [*] 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 an IPO by
Vendor, should one be undertaken.
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 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 [*] by another [*] 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 price [*] 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 [*] business hours
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 "Quiet Period" restraints, 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
---------
<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. [*] Services
Before the close of 3rd quarter, 1999, project managers for the parties will
make reasonable efforts to create a written plan, which will if created, would
be incorporated into an amendment to this Agreement, aimed both at: (a)
developing and implementing ways to feature and promote bamboo.com's virtual
tour services in the [*] and (b) enhancing and supporting Prudential's [*]. Such
possibilities include virtual tours of [*] and [*]. 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) the
Company Database, (ii) the Company Site or (iii) pre-approved fax order forms.
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 less [*] covering: (i) refunds,
discounts, promotions, credits and allowances, (ii) packaging, handling 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 quarterly fee bamboo.com will pay to
---------------
Company during the Term based on sales of Basic Packages, Upgrade Packages and
Multi-Site Packages (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, 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 Moore Data Systems, 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
[*] = 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.
-1-
<PAGE>
behalf of Company Members within four (4) business days 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.
2.3 Pricing. As of the Effective Date, in addition to any other pricing
-------
offers, bamboo.com will offer the following packages of Production Services to
Company Members hereunder:
(a) One-Site Package. For [*], Company Customers may purchase a
----------------
Basic Package that includes posting or linking to (i) [*] the following:
Realtor.Com, HomeSeekers, HomeAdvisor (once implemented) [*] the [*] (ii) the
Company Site and the Company Database.
(b) Multi-Site Package. For [*], Company Customers may purchase a
------------------
Basic Package that includes posting or linking to [*]: Realtor.com, HomeSeekers,
HomeAdvisor (once implemented), [*], the Company Site [*] the Company Database
(the "Multi-Site Package").
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 individual third party sites listed above is subject to
bamboo.com's right to engage in such posting or linking, and bamboo.com will
negotiate with Company regarding lowering the price set forth in Section 2.3(b)
if one or more third party sites becomes unavailable.
Bamboo.com will automatically link appropriate Bamboo.com Images to the Company
Site and Company Database that do not result from Company Originated Orders
("Non-Company-Originated Orders"), whenever the Non-Company-Originated Orders
are made by Company Members, except in those cases where: (a) the Company Member
objects to the linking and/or (b) the Web site or other third party channel
originating the sale of such Bamboo.com Images objects to the linking.
Notwithstanding anything to the contrary in this Agreement, bamboo.com will not
pay any Transaction Fees to Company with respect to any Non-Company-Originated
Orders.
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 Moore Data Systems and/or Terradatum, perform such
programming on behalf of Company.
2.5 Preferential Status; Right to Terminate. During the Term, in the event
---------------------------------------
that bamboo.com enters into an agreement with [*] to provide the Production
Services to [*], this Agreement will immediately terminate. Notwithstanding the
preceding sentence, during the Term nothing herein shall prevent strategic
partners of bamboo.com from offering and/or selling the Production Services to
[*] or [*] of [*], and nothing herein shall prevent bamboo.com from offering
and/or selling the Production Services to [*] of [*]; provided, however, that
bamboo.com will not offer the [*] to [*] of [*].
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 alliance with any third-party
producer of Virtual Tour Images, including without limitation IPIX prior to the
initial announcement by bamboo.com.
[*] = 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>
(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, 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 paying the [*] (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 quarterly
----------------
Transaction Fees to Company as follows:
(a) With respect to all Company Originated Orders 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
calendar quarter [*] of Net Revenues collected from sales of Basic Packages,
Upgrade Packages and Multi-Site Packages so sold during the quarter. The parties
agree that, with respect to each Basic Package, Upgrade Package, and/or Multi-
Site Package purchased by a Company Member during the Term, Company will [*],
out of the Transaction Fees it receives for such purchase, [*] (the "[*]") of
the Transaction Fees paid to Company with respect to such purchase. Bamboo.com
will administer all [*] 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 quarterly
----------------------------------
Transaction Fees 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 each calendar quarter. With each quarterly
payment, bamboo.com will provide a report stating the number of Bamboo.com Tours
sold in accordance with Section 4.1(a) during the quarter 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 to 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
[*] = 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>
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 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 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 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, 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;
-4-
<PAGE>
(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 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. In 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
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. Volume Purchase. Company will purchase [*] bamboo.com Basic Package
---------------
Virtual Tours. In return, bamboo.com will provide [*] complimentary
bamboo.com Basic Package Virtual Tours. Company will use purchased plus
complimentary bamboo.com Tours by [*]. Bamboo.com will provide an invoice to
Company by May 28, 1999. Company will remit payment to bamboo.com of [*] by
June 1, 1999.
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 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 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 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. KELLER WILLIAMS FOX & ASSOCIATES
By: /s/ Andrew P. Laszlo By: [Signature Illegible]
_______________________________ _______________________________
Name/Title: SVP Bus. Dev Name/Title: Team Leader
_______________________ _______________________
[*] = 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>
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.
-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 Mils, 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, less [*] covering:
(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,
----
any, as set forth in Section 6.
1.10 "Territory" means all Toronto Real Estate Board Districts.
---------
1.11 "Transaction Fee" means the quarterly fee Jutvision will pay to TREB
---------------
during the Term based on sales of Basic Packages and Upgrade Packages 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 Package placed by a TREB Member via the TREBNet MLS
Software or pre-approved fax order forms.
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 [*] will result
in a reduction of Transaction Fees pursuant to Section 4.1 (b). 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 within four (4) business days 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, 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
[*] = 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>
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 provider 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 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 business days (excluding bank holidays)
from 9:00 am to 5:00 pm Eastern time.
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 logos 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 logos 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 Internet or a closed 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 promoting the TREBNet System, including 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 quarterly
----------------
Transaction Fees to TREB as follows:
(a) With respect to orders for Production Services placed via the
TREBNet System by TREB Members ("TREB Originated Orders"), Jutvision will pay to
TREB for each calendar month [*] of Net Revenues 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 [*] of Net Revenues 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 quarterly Transaction Fees will
---------------
commence immediately for the calendar month in which the Initial Ordering Date
occurs. Jutvision will make all payments of Transaction Fees net thirty (30)
days from the end of each quarter.
4.3 Inspection of Records. TREB will have the right, at its own expense
---------------------
and not more than once in any twelve (12)
[*] = 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>
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.
--------
(a) Jutvision hereby grants to TREB a nonexclusive, worldwide,
royalty-free license to use the Jutvision for Java 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, Jutvision will not make use of such
Jutvision Image outside of the scope of this Agreement without the consent of
such TREB Member.
(b) Jutvision hereby grants to TREB a nonexclusive, worldwide,
royalty-free, nontransferable license to display, perform and reproduce
Jutvision Images on 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 mark Jutvision
may subsequently adopt as a trade name or to 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' 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.
-3-
<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 (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.
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 survive for a period of six (6) months thereafter 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,
-4-
<PAGE>
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 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 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 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 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 waiver 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.
-5-
<PAGE>
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
-6-
<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 with 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, three-dimensional, virtual reality,
-------------------
virtual tour, virtual walkthrough or other similar images, 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 listing is sold or the term of the listing expires. The Company
may continue to access the Jutvision Images on the Jutvision Server if the Sales
Agent re-lists the Property within 2 days of the expiration of the listing,
provided that Jutvision does not incur any administrative burden as a result of
this re-listing.
2.2 Performance Standards. Jutvision will use commercially reasonable
---------------------
efforts to have a member of its Service Provider Network available to capture
Jutvision Images within three (3) business days after 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 within four (4) business days after capture of such
Jutvision Image, provided that such posting is not delayed by factors
attributable to Company or Sales Agent.
2.3 Pricing. During the term of this Agreement, Jutvision will offer Sales
-------
Agents pricing, on all orders for Production Services placed pursuant to this
Agreement, not in excess of Jutvision's standard national pricing then in
effect, excluding any special pricing 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 a third party offers comparable Production Services to Company in the
entire geographic territory where Company provides service (including the same
or better technical features and functionalities) at a price that is comparable
to the price charged by Jutvision 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 an agreement with that third party
for services comparable to the Production Services without being in breach of
this Agreement.
3. MARKETING AND PROMOTION
-----------------------
3.1 Jutvision Obligations. 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;
<PAGE>
(c) Offer a special promotional at office presentations made by
Jutvision representatives to Sales Agents during the period 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 email and direct marketing material
generated from time 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
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,
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. 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 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 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 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.
5.3 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 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. 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
-2-
<PAGE>
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 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 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.
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 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.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
JUTVISION CORPORATION JOHN L. SCOTT, INC.
By: /s/ Andrew P. Laszlo By: /s/ Jerry L. Moon
________________________________ _______________________________
Name: /s/ Andrew P. Laszlo Name: /s/ Jerry L. Moon
______________________________ _______________________________
Title: SVP, Business Development Title: Exec. V.P.
_____________________________ _____________________________
Date: 4/9/99 Date: 4/14/99
______________________________ ______________________________
-3-
<PAGE>
EXHIBIT 10.39
EXECUTION DRAFT
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 (i) a co-branded electronic
order form contained on any of the Company Sites; (ii) an order form indicating
the unique tracking number Jutvision has assigned Company; or (iii) a telephone
or facsimile order referencing the unique tracking number Jutvision has assigned
Company.
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 "Property" 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, three-dimensional, virtual
-------------------
reality, virtual tour, virtual walkthrough or other similar images, or
production services 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
within three (3) business days after Jutvision has received an order from a
Sales Agent in the following areas: 30 miles by road east and west of Highway I-
5 from the Canadian border to Olympia including Kitsap Pennisula; Spokane within
a 30 mile radius; TriCities (WA) within a 30 mile radius; Vancouver (WA) within
a 30 mile radius; Portland within a 30 mile radius; Salem within a 30 mile
radius; Eugene/Springfield within a 30 mile radius; and Boise (ID) 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 is not available to capture Jutvision Images,
within three (3) business days after order receipt, twenty-five (25%) or more of
the time within a given month due to no fault of Company or Sales Agents, then,
subject to a thirty (30) day cure period, Company may enter into an agreement
with a third party for service comparable 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
within ten (10) business days 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 within four (4) business
days 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,
within a given month twenty-five percent (25%) or more of the Jutvision Images
are posted to the Company Sites more than five (5) business days after capture
due to no fault of Company or Sales Agents, then, subject to a thirty (30) day
cure period, Company may enter into an agreement with a third party for services
comparable to the Production Services in that city without being in breach of
this Agreement.
2.3 Exclusivity. Except as specifically provided in Sections 2.2(b),
-----------
2.2(c), 2.4, and 4.1, 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 otherwise made accessible through
the Company Sites in territories where Jutvision is the
<PAGE>
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 March 15, 1999:
30 miles by road east and west of Highway I-5 from the Canadian border to
Olympia including Kitsap Pennisula, Spokane within a 30 mile radius, Portland,
and Vancouver (WA) within a 30 mile radius. By April 19, 1999, 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 Whistler BC by April 30, 1999. Notwithstanding
Section 2.3, in the event Jutvision fails to implement the Service Provider
Network in the Territory in accordance with the schedule set forth above,
Company may provide, or may enter into agreements with third parties to provide,
services comparable to the Production Services 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 fourteen (14) days from the date of receipt of
such notice to investigate and correct the performance problem, if possible. In
the event that after such 14-day period Jutvision has not corrected such problem
to Company's reasonable satisfaction, Jutvision shall substitute another Service
Provider Network member within five (5) business days. 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, IPIX,
Live Picture, BeHere, URThere, NetXL and Cyclovision.
3.2 Additional Obligations. Subject to Windermere'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 Price. If during the term of this Agreement, Jutvision charges Sales
-----
Agents in excess of [*] 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 to convert this Agreement to
a non-exclusive Agreement for the remainder of the term. In the event Company
elects to convert to a non-exclusive Agreement, Jutvision will have no
obligation thereafter to [*] pursuant to Section 4.2. During
the term, Jutvision agrees that the amount charged to Sales Agents for Basic
Packages will not be greater than the amounts charged to other brokers for Basic
Packages 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 based on sales of Production Services
[*] 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 [*] Company for each calendar quarter
[*] for each Jutvision Tour so sold for which Jutvision has received payment
during the quarter; provided, however, that Jutvision will have no obligation to
[*] Company aggregate [*] in excess of [*] 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) No [*] will be due hereunder (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 Invoices; Reports;[*].Calculation of quarterly [*] will commence
---------------------
immediately for the calendar quarter in which the Effective Date occurs.
Jutvision will make all [*] of [*] from the end of each calendar quarter. With
each quarterly [*], Jutvision will provide a report stating the number of
Jutvision Tours sold in accordance with Sections 4.2(a) during the quarter and
providing a [*] of the [*].
5. PROPRIETARY RIGHTS
------------------
5.1 Jutvision for Java Software.
---------------------------
[*] = 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>
(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 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 case 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 Company'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 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
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 fails to remedy such default within forty-five (45) days after being
notified by the non-breaching party of such breach or failure.
6.3 Survival of Certain Terms. The provisions of Sections 5.1(b), 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 display, performance and reproduction of the
Jutvision Images on Company's intranet for internal purposes only; (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 (ii) 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
-3-
<PAGE>
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 2.3 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 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 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
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 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 WINDERMERE REAL ESTATE SERVICES COMPANY
/s/ Howard Field /s/ Geoffrey P. Wood
By:_____________________________ By:_____________________________
Howard Field Geoffrey P. Wood
Name: __________________________ Name:___________________________
Vice President President
Title:__________________________ Title:__________________________
3-22-99 3-18-99
Date: __________________________ Date:___________________________
-4-
<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.
<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 Jutvision 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 within forty-eight (48) hours 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 within four (4) business days 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 Internet, 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.
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, free of charge, 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
4
<PAGE>
Company with the Listing Tools, free of charge. 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 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.
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
6
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use the Company Marks, during the Term, with the prior written approval of
Company and 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 any 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;
7
<PAGE>
(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 licenses granted above under Sections 4.1 and 4.2
shall survive for a period of six (6) months thereafter 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
8
<PAGE>
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.
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
<PAGE>
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 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
10
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Arvida Realty Services
19353 U.S .Highway 19 North, Suite 100
Clearwater, Florida 33764
with a copy to: Linda Burger, Executive Vice-President
Arvida Realty Services
19353 U.S. Highway 19 North, Suite 100
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.
11
<PAGE>
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 of 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 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: Excecutive Vice-President
--------------------------- ----------------------------
Date: March 5, 1999 Date: March 25, 1999
--------------------------- -----------------------------
12
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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 four scenes captured in a designated
-------------
Property, converted 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 via the System 4 Product.
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.
<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 less (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" means the United States and its possessions.
---------
1.20 "Transaction Fee" means the monthly fee 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 scene captured
and posted to the GTE Database.
1.22 "Virtual Tour Images" means 360(degrees) images through which a user
-------------------
can navigate with pointing device, or technology or production services for such
images.
2. PROVISION OF PRODUCTION SERVICES; EXCLUSIVITY
---------------------------------------------
-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 Image 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 March 1, 1999 as a
target for the Initial Posting Date. However, in no event will the Initial
Posting Date occur later than May 1, 1999. If, despite the parties' reasonable
commercial efforts, the Initial Posting Date occurs after May 1, 1999, then,
notwithstanding Section 4.1(a), Transaction Fees on all Annual Initial Orders
(as defined below) will be calculated solely in accordance with Section 4.1(b)
for the twelve (12) month period commencing on the Initial Posting Date and will
not be calculated in accordance with Section 4.1(a) 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 four (4)
business days 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 within forty-eight (48) hours of
receiving an order for Production Services from a Broker.
2.3 Exclusivity.
-----------
(a) Subject to Section 2.3(b), during the Term, GTE will not
directly or indirectly (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, in its sole discretion, elect to terminate Section 2.3(a) upon thirty (30)
days' prior written notice to Jutvision, thereby making the Agreement non-
exclusive; provided, however, that, if GTE makes such an election, as of the
effective date of the non-exclusivity period and throughout the remainder of the
Term, notwithstanding Section 4.1(a) and Section 11.2(b) to the contrary,
Transaction Fees on all Annual Initial Orders (as defined below) will be
calculated solely in accordance with Section 4.1(b) and will not be calculated
in accordance with Section 4.1(a) and 11.2(b) will immediately terminate and
none of the restrictions set forth in Section 11.2(b) will continue to apply.
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<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 this Agreement is exclusive 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 4 Product that contains a Jutvision Image.
For the purposes of this Section 2.3(d), competitors of Jutvision include,
without limitation, IPIX, Live Picture and BeHere.
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
9:00 am to 8:00 pm Eastern time. 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 within twenty-four (24) hours and Jutvision will use commercially
reasonable efforts to correct 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
any 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:
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<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 designees.
(b) The parties will cooperate with each other in the performance of
their obligations under this Agreement.
4. FEES
----
4.1 Transaction Fees. During the Term, Jutvision will pay monthly
----------------
Transaction Fees to GTE as follows:
(a) With respect to the first 100,000 GTE Originated Orders
fulfilled by Jutvision during each Annual Period of the Initial Term for
Jutvision Images posted to the GTE Database (the "Annual Initial Orders"),
Jutvision will pay to GTE for each calendar month
(i) the [*] for each Basic Package so sold for which Jutvision
has received payment during the month [*] of Net Revenues collected from sales
of Basic Packages so sold during the month; and,
(ii) the [*] for each Upgrade Package so sold for which
Jutvision has received payment during the month [*] of Net Revenues collected
from sales of Upgrade Packages so sold during the month;
provided, however, that, in the event that GTE facilitates the default loading
of a Jutvision Image, on or before June 1, 1999, on the Listing Overview Screen
for each and every listing of a Property that has a corresponding Jutvision
Image ("Default Loading"), thereby replacing the current default of a still
photograph, for as long as GTE maintains Default Loading Jutvision will pay to
GTE for each calendar month with respect to Annual Initial Orders
(iii) the [*] for each Basic Package so sold for which Jutvision
has received payment during the month [*] of Net Revenues collected from sales
of Basic Packages so sold during the month and
(iv) the [*] for each Upgrade Package so sold for which
Jutvision has received payment during the month [*] of Net Revenues collected
from sales of Upgrade Packages so sold during the month; and,
(v) provided, further, that such increased percentage/minimum
per unit payment will apply retroactively to all Net Revenues collected from
sales on Annual Initial Orders made prior to the date of such percentage
increase, and Jutvision shall make a payment to GTE to adjust for such
retroactive increase.
(b) With respect to all GTE Originated Orders, other than Annual
Initial Orders, fulfilled by Jutvision during the Term for Jutvision Images
posted to the GTE Database, Jutvision will pay to GTE for each calendar month
(i) the [*] for each Basic Package so sold for which Jutvision has received
payment during the month [*] of Net Revenues collected from sales of Basic
Packages so sold during the month and (ii) the [*] for each Upgrade Package so
sold for which
[*] = 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.
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<PAGE>
Jutvision has received payment during the month [*] of Net Revenues collected
from sales of Upgrade Packages so sold during the month.
(c) With respect to all sales of Production Services by Jutvision,
for Jutvision Images posted to the GTE Database, that do not directly result
from GTE Originated Orders, Jutvision will pay to GTE for each calendar month
(i) the [*] for each Basic Package so sold for which Jutvision has received
payment during the month [*] of Net Revenues collected from sales of Basic
Packages so sold during the month and (ii) the [*] for each Upgrade Package so
sold for which Jutvision has received payment during the month [*] of Net
Revenues collected from sales of Upgrade Packages so sold during the month.
(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
enter into [*] (as defined herein) and agrees that, during the Term, if
Jutvision enters into an agreement with [*] containing any clause or provision
restricting Jutvision's ability [*] to any third party on terms more favorable
than those offered to [*], as the case may be, (a "[*] Partner Clause") then
Jutvision will amend this Agreement to include the same [*] Partner Clause
herein provided the [*] to GTE shall not [*].
(f) As of the Effective Date, excluding any applicable taxes,
Jutvision will charge Brokers of GTE Customers [*] for each Basic Package and
[*] for each Upgrade Package (the "GTE Broker Prices"). During the period
commencing on the Effective Date and extending until January 1, 2000, Jutvision
may not increase such GTE Broker Prices by more than [*]; provided, however,
that Jutvision may modify such GTE Broker Prices thereafter in its sole
discretion.
4.2 Invoices; Reports; Payment of Fees. Calculation of monthly
----------------------------------
Transaction Fees 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 each calendar month. With each
monthly 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) during the month 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 calendar month.
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. In 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 COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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<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-
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. 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 will 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.
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<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 extend 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 and
5.2, with respect to the Software and Jutvision Images provided to GTE hereunder
prior to expiration or 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 any then-current term of
any agreement between GTE and a GTE Customer 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(f), 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
---------------
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<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 an 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
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<PAGE>
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 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 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.
10. LIMITATION OF LIABILITY
-----------------------
EXCEPT WITH RESPECT TO A BREACH BY EITHER PARTY OF ITS OBLIGATIONS
DESCRIBED IN SECTION 7 THROUGH NELIGENCE, 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
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<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 January 12,
1999, Jutvision agrees not to announce publicly any agreement with [*] until the
later of the following events occurs: (i) thirty (30) days after the Effective
Date or (ii) the date on which, in Jutvision's sole opinion, [*] demonstrate to
Jutvision a [*] 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) days 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
[*] = 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.
-13-
<PAGE>
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 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.
-14-
<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 sole discretion, shall have the right
to remove the Jutvision logo provided that it has first elected to convert the
Agreement to a non-exclusive basis in accordance with the terms of Section
2.3(b) 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 Agreement remains exclusive under section 2.3.. Until such time as GTE
provides the System 4 [*] (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 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 to remove the Jutvision logo provided that it has first
elected to convert the Agreement to a non-exclusive basis in accordance with the
terms of Section 2.3(b) 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 Agreement remains exclusive under section 2.3. Until such
time as GTE provides the System 4 [*] (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 a user clicks on the Order Button, the Order Page, as described above, is
rendered.
System 4 [*]: GTE plans to introduce an [*] for 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 initial Agreement remains exclusive under
section 2.3.. 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 [*] and via
the [*], 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 COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
-17-
<PAGE>
photographs, text data and map information. The "Views" button enables users to
retrieve and display additional property information, 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 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 Automatic Posting. Jutvision will automatically post all Jutvision
-----------------
Images to the GTE Database that do not result from GTE Originated Orders ("Non-
GTE Originated Orders"), whenever the Non-GTE Originated Orders are made by
Brokers, except in those cases where: (a) the Broker objects to the posting;
and/or (b) the Web site or other third-party channel originating the sale of
such Jutvision Images (collectively, the "Third-Party Originator") objects to
the postings. In the event a Third-Party Originator objects to the postings,
Jutvision will provide 20 days' prior written notice of the objection to GTE
before discontinuing the postings to the GTE Database.
1.2 Pricing. All postings to the GTE Database made under this Section 1
-------
(hereinafter referred to as a "[*] Posting") shall be made [*] to the Broker.
For purposes of illustration only, if a [*] Posting is made of a Jutvision
Image for a Basic Package order received through HomeSeekers, and the price
charged to the Broker to post the Jutvision Image to the HomeSeekers Web site
alone is ordinarily [*], the Jutvision Image shall be posted both to the
HomeSeekers Web site and the GTE Database for the [*], without any [*] for the
[*] Posting 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 Realtor.com, Homeseekers.com and Loopnet.com 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, GTE shall
have the right, consistent with Jutvision's pricing policies, to allow Brokers,
placing GTE Originated Orders, to post Jutvision Images to these respective
third-party Web .sites.
2. Transaction Fees for Non-GTE Originated Orders.
-----------------------------------------------
Notwithstanding anything contained in the Distribution Agreement to the
contrary, no Transaction Fees or other remuneration will be due to GTE for [*]
Postings. Except as specifically provided in the preceding sentence, GTE shall
be entitled to all Transaction Fees and other consideration 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: /s/ Howard Field By: /s/ Daniel Jensen
------------------------------ ----------------------------------
Howard Field Daniel Jensen
Vice President Vice President and General Manager
[*] = 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 10.42
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 seven (7) business days 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.
<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 [*] per month (the "Fee") for the
---- ---
term of this Agreement, due and payable on the first day of each month. 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 Most Favored Customer. Jutvision agrees that throughout the term
---------------------
of this Agreement, the prices offered for Virtual Tours to Participating
Organizations will, on the whole taking into account all reasonably appropriate
facts and circumstances, be as good as the best prices, terms and conditions
offered by Jutvision to any other customer purchasing Virtual Tours, 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 offers
Virtual Tours for commercial properties in the United States to other customers
at more favorable prices, terms or conditions, subject to the qualifications in
the preceding sentence, Jutvision will promptly notify Loop and the
Participating Organizations and will make such terms available to the
Participating Organizations, effective upon the date the more favorable prices,
terms or conditions were offered to other customers.
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 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
/s/ [SIGNATURE ILLEGIBLE] /s/ Howard Field
By: ___________________________ By: ___________________________
President VP Sales
Title: __________________________ Title: __________________________
[Signature page to Agreement]
-6-
<PAGE>
Exhibit A
Participating Organizations
_ Colliers International
_ Grubb & Ellis
_ Coldwell Banker
_ Trammell Crow Company
_ The Staubach Company
_ LaSalle Partners
_ Society of Industrial and Office REALTORS
_ ONCOR International
_ RE/MAX International
_ Prudential Real Estate
_ The Commercial Network
_ CORFAC International
_ The CORE Network
_ FIABCI
_ Atlanta Commercial Board of REALTORS
_ Cincinnati Area Board of REALTORS - CID
_ Dayton Area Board of REALTORS - CID
_ Detroit Area Commercial Board of REALTORS
_ Florida Gulfcoast Commercial Association of REALTORS
_ Greater Las Vegas Association of REALTORS - CID
_ Greater Washington D.C. Commercial Association of REALTORS
_ Greater Springfield Association of REALTORS - CID
_ Houston Association of REALTORS - CID
_ Indiana Commercial Board of REALTORS
_ Iowa Commercial/Land Board of REALTORS
_ Maine Commercial Association of REALTORS
_ Metropolitan Kansas City Board of REALTORS - CID
_ New Hampshire Commercial Investment Board of REALTORS
_ New Orleans Metropolitan Association of REALTORS - CID
_ New York State Commercial Association of REALTORS
_ North Texas Commercial Association of REALTORS
_ Northern Illinois Commercial Association of REALTORS
_ Ohio Association of REALTORS
_ Omaha Area Board of REALTORS
_ Texas Association of REALTORS
_ Vermont Commercial Investment Board of REALTORS
_ Virginia Association of REALTORS - CID
_ CCIM Chapters of 22 States
<PAGE>
EXHIBIT 10.43
Execution Draft
ACCESS AGREEMENT
----------------
THIS ACCESS AGREEMENT (the "Agreement") is entered into as of July 15, 1999
(the "Effective Date"), by and between bamboo.com, Inc., a Delaware corporation
with an office located at 124 University Avenue #202, Palo Alto, CA 94301
("bamboo.com") and Cendant Corporation, a Delaware corporation with an office
located at 6 Sylvan Way, Parsippany, NJ 07054 ("Company").
Bamboo.com uses the Bamboo.com Technology and provides the Production
Services to its customers on a nationwide basis. In the event that Company, or a
Company affiliate establishes a real estate Super Site which aggregates property
listings contained on the web sites of the Franchisors for the Real Estate
Systems and the Super Site offers the opportunity to associate images with such
listings, bamboo.com desires that any such listings of the Real Estate Systems
for which bamboo.com provides Bamboo.com Images shall display the Bamboo.com
Images, on a non-exclusive basis, on the Super 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 "Grant Fees" means the fees bamboo.com will pay to Company, as
----------
provided in Section 4.1.
1.2 "Bamboo.com Image" means an electronic image of a property produced by
----------------
or on behalf of bamboo.com through the use of Bamboo.com Technology.
1.3 "Bamboo.com Technology" means the software and hardware owned or
---------------------
licensed by Bamboo.com, including Bamboo.com Images and the Bamboo.com for Java
Software, used to capture, process and view Bamboo.com Images.
1.4 "Franchisee" means any Franchisee of the Real Estate Systems including
----------
the licensed brokers and sales associates of the Franchisee.
1.5 "Real Estate Systems" means the CENTURY 21(R), ERA(R) and Coldwell
-------------------
Banker(R) real estate brokerage franchise systems.
1.6 "Franchisors" mean the franchisors of the Real Estate Systems.
-----------
1.7 "Commencement Date" means the date on which the earlier of the
-----------------
following events occurs: (i) all of the Real Estate System Web Sites are
capable and available to receive links to or postings of Bamboo.com Images and
integrating such Bamboo.com Images with listings or (ii) the Super Site is
launched, includes aggregated property listings contained on the Real Estate
System Web Sites and offers the opportunity to associate images with such
listings.
1.8 "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.
1.9 "Real Estate System Web Sites" means the collection of HTML documents
-----------------------------
residing on servers operated by or for Company or its affiliates and currently
accessible on or after the Effective Date by Franchisees or the public via the
Internet at the following URLs: http://www.coldwellbanker.com;
-----------------------------
http://www.era.com and http://www.century21.com.
- ------------------ ------------------------
1.10 "Production Services" means the services provided by or on behalf of
-------------------
bamboo.com in producing the Bamboo.com Images through the use of Bamboo.com
Technology.
1.11 "Service Provider Network" means the network of individuals
------------------------
throughout bamboo.com's service area in North America with whom bamboo.com has
entered into agreements to capture images at designated sites on bamboo.com's
behalf.
1.12 "Super Site" means the contemplated real estate Internet portal which
----------
may aggregate property listings contained on the Real Estate System Web Sites.
1.13 "Term" means the Term of this as set forth in Section 6.
----
1.14 "Virtual Tour Images" means any 360 (degrees), three dimensional or
-------------------
virtual tour or virtual walkthrough utilizing images.
2. GRANT OF ACCESS TO BAMBOO.COM
To the extent the Real Estate System Web Sites offer the opportunity to
associate Virtual Tour Images with property listings contained on any or all of
the Real Estate System Web Sites, any such listings of the Real Estate System
Web Sites for which bamboo.com provides Bamboo.com Images shall display (i.e.,
link to or receive postings of) the Bamboo.com Images, on a non-exclusive basis,
on the Real Estate System Web Sites. The parties acknowledge that as of the date
of this Agreement Virtual Tour Images of such property listings on such Real
Estate System Web Sites are offered and that the parties shall cooperate with
each other in good faith in an effort to display Bamboo.com Images as provided
in the preceding sentence by November 30, 1999. Further, In the event that
Cendant or a Cendant affiliate establishes a Super Site which aggregates
property listings contained on the Real Estate System Web Sites and the Super
Site offers the opportunity to
-1-
<PAGE>
associate images with such listings, any such listings of the Real Estate System
Web Sites for which bamboo.com provides Bamboo.com Images shall display (i.e.,
link to or receive postings of) the Bamboo.com Images, on a non-exclusive basis,
on the Super Site.
3. BANNER AD PLACEMENT; PROVISION OF PRODUCTION SERVICES
3.1 Banner Ads. Company will place banner ads on the Super Site which ads
----------
shall appear on prominent web pages of the Super Site (except that no banners
shall be placed on any web pages of the Super Site which pages are designated to
or used for the purpose of joint or co-marketing activities with parties other
than bamboo.com). The parties will cooperate to establish the precise size and
placement of such banner ads. When clicked on, these banner ads shall link
directly to HTML pages hosted and designated by bamboo.com that will focus on
the promotion of bamboo.com and its products. In no event shall such banner ads
link to any web site other than HTML pages hosted and designated by bamboo.com
or shall any such banner ad links be utilized to offer for sale, market or
otherwise promote the sale of products or services other than the Production
Services. Nothing contained in this Agreement shall entitle bamboo.com to
place any banner ads on the Real Estate System Web Sites.
3.2 Press Releases. There will be a joint press release issued, which the
--------------
parties in good faith will endeavor to issue on July 15, 1999, approved by both
parties, which approvals shall not be unreasonably withheld, indicating the
relationship entered into by and between Company and bamboo.com under this
Agreement, but in no event later than July 21, 1999. Additionally and subject to
the prior approval of Company, not to be unreasonably withheld, bamboo.com may
(i) briefly describe the terms of this Agreement in amendments (the
"Amendments") to bamboo.com's registration statement to be filed in connection
with the sale of bamboo.com's common stock in a firm commitment underwriting
(the "Bamboo.com IPO"); provided, however, in no event shall such description
include any more information or descriptions than are (x) required by applicable
law or regulations as they relate to such Amendments or (y) disclosed in any
press release issued under this Section 3.2; and (ii) if legal counsel for
bamboo.com advises, and subject to the prior approval of Company, not to be
unreasonably withheld, attach a redacted version of this Agreement as an exhibit
to the Amendments, provided that bamboo.com seeks confidential treatment of this
Agreement with the Securities and Exchange Commission. 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
unreasonably; provided, however, that bamboo.com shall not indicate in any press
release [*] that it has the right to include Bamboo.com Images on the Real
Estate System Web Sites or that, except with respect to the banner purchases for
the Super Site provided for in Section 3.1 or access to Bamboo.com Images
provided for in Section 2, Bamboo.com entered into or maintains any marketing or
promotion arrangement with Company or Company affiliates to be marketed or
promoted to the Franchisees of the Real Estate Systems or the franchisees of any
other brand or franchised system of Cendant or a Cendant affiliate.
3.3 Customer Sales and Billing. Bamboo.com is responsible for and will
--------------------------
manage and coordinate any and all sales of Production Services, including by
means of bamboo.com's direct sales force, to its customers. Bamboo.com will be
responsible for receiving and fulfilling orders for Production Services and will
assume all costs and responsibility for invoicing and collecting revenues for
all customer sales. Bamboo.com will maintain a full-service, live customer call
center, available seven days per week, at reasonable hours, to handle inquiries
from prospective customers and customers alike.
3.4 Image Capturing, Processing and Linking. 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. Subject to Section 2 above, Bamboo.com will
provide HTML links from the Super Site and the Real Estate System Web Sites to
bamboo's servers so that users searching listings on the Super Site or any Real
Estate System Web Site will be able to view any Bamboo.com Image associated with
a listing that appears in the solution set generated by the user's search query.
Notwithstanding anything to the contrary in this Agreement, in the event that
Company, in its reasonable discretion, determines that posting of Bamboo.com
Images to the Super Site or the Real Estate System Web Sites is preferable to
linking, then, subject to Section 5.2, bamboo.com will post images to the Super
Site or Real Estate System Web Sites. Company will permit linking of the Super
Site and Real Estate System Web Sites to Bamboo.com Images, or posting of
Bamboo.com Images to the Super Site or Real Estate System Web Sites, as the case
may be, and the parties will use commercially reasonable efforts to work
together to expeditiously implement, and maintain throughout the Term, a system
whereby bamboo.com will be capable of linking or posting, as the case may be, to
the Super Site and Real Estate System Web Sites, subject to Section 2 above.
Any Bamboo.com Images posted or linked to the Super Site and the Real Estate
System Web Sites will fully render within a reasonable time comparable to
similar services, unless a delay in such rendering is caused by the Internet or
the systems of Company or Company affiliates.
3.5 Prominence of Promotion. A third-party provider of Virtual Tour Images
--- -----------------------
may be able to obtain more favorable treatment than bamboo.com, online or
offline, in marketing on the Super Site and in other marketing or promotional
materials generated by Company or Company affiliates; provided that bamboo.com
will be granted a right of first refusal to participate on the same basis. To
the extent that Company or Company affiliates publish in any media a list of
vendors for the Super Site, as reasonably determined by Company in good faith,
Company may include bamboo.com in such list during the Term.
3.6 Bamboo.com Promotion Obligations. At Company's election, Bamboo.com
--------------------------------
will include and display the logo of the designated Company affiliate relating
to the Super Site in any page on bamboo.com's Web site that lists, and displays
the logos of, other alliances of bamboo.com. In addition, at the sole election
of Company, bamboo.com will permit Company or a designated Company affiliate to
make a presentation at any regularly scheduled meeting (generally, held on a
quarterly basis) of Regional Directors of bamboo.com.
3.7 Solution Set Symbol. Company shall ensure that, when a listing
--------------------
solution set queried on the Super Site or a Real Estate System Web Site includes
a listing associated with a Bamboo.com Image, there shall appear beside the
listing a generic symbol selected by Company indicating that the listing is
associated with Virtual Tour Images. In no event shall any such symbol as may
be placed on the Real Estate System Web Sites include or identify "bamboo.com"
or imply any affiliation with or to bamboo.com.
4. FEES; BANNER PURCHASES
[*] = 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>
4.1 [*] Fees. In consideration of the [*] of [*] afforded to bamboo.com in
--------
Section 2 above, bamboo.com will pay Company a [*] Fee in the aggregate amount
of [*] as follows: (i) [*] upon [*]; (ii) [*] on the [*] of the [*]; and (iii)
[*] upon receipt by bamboo.com of an invoice from Company following the
occurrence of the [*]. Said fee is fully earned upon payment by bamboo.com.
4.2 Banner Purchases. In the aggregate, Bamboo.com will purchase from
----------------
Company (or Company's affiliate as may be designated by Company) a [*] banner
ads per year over two years, payable in [*], beginning upon the occurrence of
the [*], at a CPM of [*]. Bamboo.com banner ads will not exceed 5% of Super Site
ad inventory in a given month. Should the purchased banner ads exceed 5% of
Super Site inventory, the excess ads will be applied at subsequent period(s)
when the addition of those ads to the scheduled ad buy for the particular
subsequent month does not exceed the 5% threshold; provided, however, that the
deferral of such ads will in no way modify the timing or amount of monthly
payments provided for in the first sentence of this Section 4.2.
5. PROPRIETARY RIGHTS
------------------
5.1 Bamboo.com Images.
-----------------
(a) All Bamboo.com Technology, including without limitation all
Bamboo.com Images 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 affiliates of any ownership interest in any Bamboo.com Technology.
(b) Bamboo.com hereby grants to Company or the designated Company
affiliate a nonexclusive, worldwide, royalty-free, nontransferable license to
include on the Super Site and Real Estate System Web Sites links to Bamboo.com
Images on bamboo.com's servers solely for the purposes contemplated in this
Agreement. Except with respect to designated Company affiliates, the foregoing
license does not include any right to grant or authorize sublicenses. In the
event that Company requires bamboo.com to post the Bamboo.com Images to the
Super Site and the Real Estate System Web Sites, bamboo.com grants Company
and/or designated Company affiliates the licenses set forth in Exhibit A
attached hereto.
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.
(b) Bamboo.com specifically acknowledges that this Agreement does not
confer upon bamboo.com any interest in or right to use any trademark, service
mark or other intellectual property right of Company or any Company affiliate
(collectively referred to as the "Company Marks") in connection with Agreement
unless bamboo.com receives the prior written consent of Company which consent
Company may grant or withhold in its sole discretion; provided, however, that,
subject to the prior approval of Company, not to be unreasonably withheld,
bamboo.com may include the logos of the Real Estate Systems in the amendments to
the registration statement filed in connection with bamboo.com's IPO. Bamboo.com
further agrees that upon termination of this Agreement, bamboo.com shall
immediately cease and discontinue all use of the Company Marks, including the
Super Site Marks. Further, if bamboo.com wishes to utilize the Company Marks
in advertising or promotional materials, it must submit such materials to
Company for final approval before utilizing them. In no event may bamboo.com or
any affiliated or associated person or entity utilize the Company Marks in
connection with any products or services other than the Production Services as
contemplated in this Agreement. Bamboo.com further acknowledges that this
Agreement does not create or grant any rights in bamboo.com to use any
intellectual property rights owned or controlled by any Franchisee or its
affiliates, nor does Company have any right to grant any such rights.
(c) Subject to the restrictions set forth herein, the parties
contemplate that bamboo.com shall have the right to use the logo of the
designated Company affiliate relating to Super Site, if any, subject to the
consent of Company or such Company affiliate in its sole discretion.
(d) Subject to the restrictions set forth herein, bamboo.com hereby
grants Company and designated Company affiliates 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, solely in connection with Section 3.1 above.
(e) Further, subject to the restrictions set forth herein, each party
may only use the Bamboo.com Marks or Company Marks, as the case maybe, as
expressly permitted herein and agrees to use such marks in a manner commensurate
with the style, appearance and quality of the other party's services and/or
products bearing such marks. Notwithstanding anything contained in this
Agreement to the contrary in no event shall bamboo.com use the Company Marks to
indicate that bamboo.com has the right to include Bamboo.com Images on the Real
Estate System Web Sites or that, except with respect to the banner purchases for
the Super Site provided for in Section 3.1 or access to Bamboo.com Images
provided for in Section 2, Bamboo.com entered into or maintains any marketing
or promotion arrangement with Company or Company affiliates to be marketed or
promoted to the Franchisees of the Real Estate Systems or any other brand or
franchised system of Cendant or a Cendant affiliate.
6. TERM AND TERMINATION
--------------------
6.1 Term. Unless earlier terminated as set forth below, this Agreement
----
will become effective upon the Effective Date and shall
[*] = 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>
continue for a period of two (2) years from the Commencement Date; provided,
however, that, in the event that the event described in Section 1.7(ii) does not
occur within two (2) years from the Commencement Date, this Agreement shall
terminate three (3) years and three (3) months after the Effective Date.
Notwithstanding anything contained in this Agreement to the contrary, the Term
will be automatically extended to the extent required to expend all of the
purchased banner ads consistent with the 5% inventory limitation described above
in Section 4.2; provided, however, that no such extension shall be provided if
this Agreement is terminated by Company pursuant to Section 6.2 below. In no
event will the Term extend beyond three (3) years and three (3) months from the
Effective Date.
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
(ten (10) days in the event of a payment default) after being notified by the
non-breaching party of such breach or failure. Without regard to the foregoing,
Company may terminate this Agreement immediately and without liability in the
event that Bamboo.com markets or promotes Bamboo.com, Bamboo.com Images and/or
the Production Services to any Franchisees of the Real Estate Systems as a
preferred alliance or under any other affiliation with Company or Company
affiliates, except with respect to the banner purchases for the Super Site
provided for in Section 3.1 or access to Bamboo.com Images provided for in
Section 2.
6.3 Survival of Certain Terms. The provisions of Sections 5.1(a), 5.2(a)
-------------------------
and (b), 6.1, 6.3, 7, 8, 9, 10 and Sections (c) and (e)-(h) of Exhibit A 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 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.
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
------------------------------
8.1 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 or constitute a violation of any
applicable law or regulation.
8.2 Bamboo.com represents and warrants that (i) bamboo.com has all
necessary rights, permissions and authorizations to use and permit Company
and/or Company affiliates to use Bamboo.com Technology as contemplated by this
Agreement; (ii) neither Bamboo.com Technology nor Company's or Company
affiliates' use thereof as contemplated under this Agreement does or will
violate any proprietary intellectual property rights of any third party; and
(iii) Bamboo.com Technology shall to the extent provided to and utilized by
Company or Company affiliates conform, without cost to Company or Company
affiliates, to the reasonable applicable specifications and meet the reasonable
performance and technical standards as required or developed by Company to
install, implement and operate Bamboo.com Technology for the purpose of
accessing or viewing Bamboo.com Images with respect to the Super Site and the
Real Estate System Web Sites as contemplated under this Agreement.
8.3 Bamboo.com warrants that the systems (including any
software/technology) leased or owned by bamboo.com in connection with the
provision and operation of Bamboo.com Technology, Bamboo.com Images and/or the
Production Services include or shall include, at no additional cost to Company,
design and performance so that Company shall not experience abnormally ending
and/or invalid and/or incorrect results by or through the use of the systems not
attributable to the Internet or the systems of Company or Company affiliates.
Furthermore, bamboo.com represents and warrants that subject to the proper
functioning of the systems of Company or Company affiliates, such systems will,
under normal use and service, record, store, process and present calendar dates
falling on or after January 1, 2000, in the same manner, and with the same
functionality, data integrity and performance, as the systems record, store,
process and present on or before December 31, 1999. Bamboo.com warrants that,
subject to the proper functioning of the systems of Company or Company
affiliates, the systems will lose no functionality with respect to the
introduction of records containing dates falling on or after January 1, 2000.
8.4 Without limiting any of the rights and remedies available to Company
under this Agreement or at law or equity, in the event of a breach of the
representations and warranties under Sections 8.2 and 8.3 above, Bamboo.com
shall use its best efforts to correct such defect or non-compliance, at no cost
to Company or Company affiliates, upon receipt of written notification of such
defect or non-compliance from Company.
8.5 EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, THE WARRANTIES
PROVIDED BY THE PARTIES UNDER THIS SECTION 8 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. INDEMNITY & LIMITATION OF LIABILITY
9.1 Indemnity. Bamboo.com will indemnify, defend and hold Company and
---------
Company affiliates harmless from and against any and all claims, actions,
liabilities, demands, damages, costs and expenses (including reasonable
attorneys' fees and disbursements) arising from or relating to any claims of the
following nature, to the extent caused by Bamboo.com: (i) any actual or alleged
violation of the right of privacy, right of publicity or similar rights of any
third party; (ii) any actual or alleged violation of the intellectual property
rights of any third party in connection with Bamboo.com Technology, Bamboo.com
Images, the Production Services, and Bamboo.com Marks or any part thereof; (iii)
any claim relating to an end-user's or customer's use of Bamboo.com Images or
the Production services and (iv) any claim arising out of the marketing or
promotion of Bamboo.com, Bamboo.com Images and/or the Production Services to the
Franchisees of the Real Estate Systems
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<PAGE>
as a preferred alliance or under any other affiliation with Company or Company
affiliates, except with respect to the banner purchases for the Super Site
provided for in Section 3.1 or access to Bamboo.com Images provided for in
Section 2.
9.2 Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE TO
------------------------
THE OTHER PARTY 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. THE LIMITATION OF LIABILITY
PROVIDED IN THIS SECTION 9.2 SHALL NOT APPLY WITH RESPECT TO (i) THIRD PARTY
CLAIMS AND/OR (ii) THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF A PARTY.
10. GENERAL PROVISIONS
------------------
10.1 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 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 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
New York 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 Company may assign
this Agreement or assign or delegate its rights and obligations under this
Agreement to an affiliate or in connection with 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 Acknowledgments. Bamboo.com acknowledges and understands that
---------------
Company has entered into and maintains as of the date of this Agreement a
preferred alliance agreement ("Preferred Alliance Agreement") with a provider
(the "Preferred Alliance") of panoramic imaging services (in the capacity of a
supplier of such services) under which Preferred Alliance Agreement the
Franchisors of the Real Estate Systems, among other Company affiliates,
recommend, on an exclusive basis, such provider (including the panoramic imaging
services) to the Franchisees of the Real Estate Systems. Bamboo.com acknowledges
and agrees that in no event shall this Agreement be deemed to: (i) require or
commit Company or the Franchisors to recommend, market or promote Bamboo.com,
Bamboo.com Images or the Production Services to the Franchisees of the Real
Estate Systems in any manner whatsoever; and (ii) grant to Bamboo.com any right
or authority to market or promote Bamboo.com, Bamboo.com Images and/or the
Production Services to any Franchisees of the Real Estate Systems as a preferred
alliance, approved vendor or supplier or under any other affiliation with
Company or Company affiliates, except with respect to the banner purchases for
the Super Site provided for in Section 3.1 or access to Bamboo.com Images
provided for in Section 2.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
BAMBOO.COM, INC. CENDANT CORPORATION
By: /s/ Andrew P. Laszlo By: /s/ Craig E. Hamway
---------------------------- --------------------------------
Name: Andrew P. Laszlo Name: Craig E. Hamway
-------------------------- ------------------------------
Title: SVP, Business Development Title: Vice President-Business Development
-------------------------- ------------------------------------
Date: July 15, 1999 Date: July 15, 1999
-------------------------- ------------------------------
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<PAGE>
EXHIBIT A
---------
POSTING LICENSES
In the event that Company or a designated Company affiliate requires
bamboo.com to post the Bamboo.com Images to the Super Site and the Real Estate
System Web Sites:
(a) Bamboo.com grants to Company a nonexclusive, worldwide, royalty-
free, nontransferable license to display, perform and reproduce on the Super
Site and Real Estate System Web Sites, each Bamboo.com Image that is posted to
such sites during the Term, solely for the purposes contemplated in this
Agreement. Company and designated Company affiliates will not distribute,
modify, edit, or prepare derivative works from the Bamboo.com Images without the
prior written permission of bamboo.com. Except with respect to the designated
Company affiliates, the foregoing license does not include any right to grant or
authorize sublicenses.
(b) Bamboo.com further grants to Company a nonexclusive, worldwide,
royalty-free license to use the Bamboo.com for Java Software, in object code
only, to display on the Super Site and Real Estate System Web Sites Bamboo.com
Images licensed above. "Use" means storing, loading, installing, executing or
displaying the Bamboo.com for Java Software. Company and designated Company
affiliates may not modify the Bamboo.com for Java Software or disable any
licensing or control features of the Bamboo.com for Java Software. Except with
respect to the designated Company affiliates, the foregoing license does not
include any right to grant or authorize sublicenses.
(c) The Bamboo.com for Java Software is owned and copyrighted by
bamboo.com. The license set forth herein 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.
(d) Company and designated Company affiliates may only make copies or
adaptations of the Bamboo.com for Java Software for archival purposes or when
copying or adaptation is an essential step in the authorized use of the
Bamboo.com for Java Software. Company and designated Company affiliates must
reproduce all copyright notices in the original Bamboo.com for Java Software on
all copies or adaptations. Company and designated Company affiliates may only
transfer class files when they are called on by a "requesting" server in the
normal course of Java Applet execution. Company and designated Company
affiliates may not distribute the Bamboo.com for Java Class files. Any transfer
or copying of the Bamboo.com for Java Software by Company or designated Company
affiliates other than as expressly provided herein constitutes a material breach
of this Agreement.
(e) Company and designated Company affiliates may only use the
Bamboo.com for Java Software to read .jut files, a file format proprietary to
bamboo.com.
(f) Company and designated Company affiliates will not disassemble or
decompile the Bamboo.com for Java Software including single Bamboo.com for Java
Class files under any circumstances. The disassembly or decryption by Company
or designated Company affiliates of any Bamboo.com for Java Class file
constitutes a material breach of this Agreement.
(g) Company and designated Company affiliates 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 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 Bamboo.com for Java
Software and any accompanying documentation by the applicable FAR or DFARS
clause or agreement between Company and bamboo.com.
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<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 August 2,
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.
/s/ PricewaterhouseCoopers LLP
San Jose, California
August 2, 1999
<PAGE>
EXHIBIT 23.3
[LOGO OF THE REAL ESTATE LEADERS]
July 19, 1999
BAMBOO.COM
124 University Avenue
Palo Alto, CA 94301
This letter will confirm that RE/MAX International, Inc. has given BAMBOO.COM
permission to use the RE/MAX Approved Supplier logo and the following quote
provided by Dave Liniger, Chairman and Co-Founder of RE/MAX, for use in their
prospectus only.
"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."
In addition, RE/MAX International, Inc. gives it permission to attach a copy of
the RE/MAX Approved Supplier agreement as an exhibit to amendments to
BAMBOO.COM's Registration Statement.
Sincerely,
/s/ BRUCE BENHAM /s/ DAVE LINIGER
---------------------------------------- ----------------------------
Bruce Benham Dave Liniger
Vice President of Information Technology Chairman and Co-Founder
cc: Attachment -- RE/MAX Approved Supplier Agreement
