<PAGE>
As filed with the Securities and Exchange Commission on June 14, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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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. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Maximum
Title of Each Class of Securities to Aggregate Amount of
be Registered Offering Price(1) Registration Fee
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<S> <C> <C>
Common stock, $0.001 par value...... $57,500,000 $15,985
</TABLE>
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(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(o) under the Securities Act of 1933.
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--JUNE 14, 1999
PROSPECTUS
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Shares
[LOGO OF BAMBOO.COM] bamboo.com, Inc.
Common Stock
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Bamboo.com, Inc. is offering shares of its common stock in an initial
public offering. Prior to this offering, there has been no public market for
bamboo.com's common stock.
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 $ and
$ per share. The shares of bamboo.com will be quoted in the Nasdaq National
Market under the symbol "BAMB".
<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 7 to 14 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.
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The underwriters may, under certain circumstances, purchase up to
additional shares from bamboo.com at the public offering price, less
underwriting discounts and commissions. Delivery and payment for the shares
will be on .
Prudential Securities
Dain Rauscher Wessels
a division of Dain Rauscher Incorporated
Volpe Brown Whelan & Company
E*OFFERING
, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.................. 3
Risk Factors........................ 7
Forward Looking Statements.......... 14
Use of Proceeds..................... 15
Dividend Policy..................... 15
Capitalization...................... 16
Dilution............................ 17
Selected Consolidated Financial
Data............................... 18
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 19
Business............................ 24
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Management....................... 34
Certain Transactions............. 43
Principal Stockholders........... 46
Description of Capital Stock..... 48
Shares Eligible for Future Sale.. 52
Underwriting..................... 53
Legal Matters.................... 55
Experts.......................... 55
Available Information............ 55
Index to Consolidated Financial
Statements...................... F-1
</TABLE>
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The terms "bamboo.com", "we", "our" and "us" refer to bamboo.com, Inc., its
subsidiary and its predecessor, Jutvision Corporation, an Ontario corporation,
unless the context suggests otherwise. The term "you" refers to a prospective
investor.
Bamboo.com and the bamboo.com logo are trademarks of bamboo.com. Each
trademark, trade name or service mark of any other company appearing in this
prospectus belongs to its holder. Our Web site address is www.bamboo.com.
Information contained on our website does not constitute part of this
prospectus.
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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.
<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 leading 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 turnkey virtual tour service to real estate agents that
includes videotaping the inside and outside of a home or other property,
processing the videotape into a complete virtual tour and distributing the
virtual tour. We distribute our virtual tours to a variety of Web sites,
including real estate destination sites and Internet portals. We also
distribute our virtual tours by email to real estate agents for easy
redistribution to their clients and prospective home buyers. Utilizing our
extensive service provider network, we offer our virtual tour service in over
100 metropolitan areas across the United States and Canada.
According to the United States Department of Commerce, the market for all
housing and related products and services was in the aggregate over $1 trillion
in 1997, representing 12.4% of the United States gross domestic product and is
one of the largest sectors of the economy. The largest segment of the U.S. real
estate industry is the market for existing home sales. According to the
National Association of Realtors, or the NAR, 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 strategic alliances with real
estate destination Web sites. Through our agreement with HomeStore.com, Inc.
and RealSelect, Inc., our virtual tours are exclusively promoted, marketed and
endorsed by the HomeStore.com, REALTOR.com and HomeBuilder.com Web sites. Our
virtual tours are also promoted, marketed and endorsed exclusively by
HomeSeekers.com, Inc. on the HomeSeekers.com Web site. We provide our virtual
tours to REALTOR.com, the official Web site of the National Association of
Realtors, HomeSeekers.com, Microsoft HomeAdvisor, Homes.com, HomeBuilder.com
and LoopNet. Through our agreements with these sites, our virtual tours can be
viewed on America Online, @Home Network, Excite, GO Network/ Infoseek, MSN,
NBC.com, Netscape Netcenter and Yahoo! In addition, we have established
strategic alliances with real estate brokerage firms, multiple listing services
and technology providers, including Prudential Real Estate Affiliates, RE/MAX
International and GTE.
Our virtual tours provide significant benefits:
. Benefits to Home Buyers. Our virtual tours provide home buyers with rich
visual information that enables them to efficiently view and screen many
properties, at no cost, without physically visiting the home. This saves
buyers the time, expense and inconvenience of scheduling appointments,
traveling to and visiting properties in person.
. Benefits to Home Sellers. Our visually rich virtual tours can be used by
sellers to provide more information about their homes to a larger
audience than traditional methods alone have allowed. In addition, we
believe that our virtual tours will reduce the amount of time and anxiety
involved in showing homes to unscreened buyers.
3
<PAGE>
. Benefits to Real Estate Agents. Our turnkey virtual tour service provides
real estate agents with an Internet-based marketing tool that allows them
to deliver enhanced visual content of properties to a wide audience,
thereby providing a value-added service to home buyers and home sellers.
This enhanced marketing tool also enables real estate agents to
differentiate themselves to potential home sellers and thereby gain new
listings.
. Benefits to Affiliates. Our virtual tours provide real estate destination
sites, Internet portals and multiple listing services with rich visual
content that increases the convenience, usefulness and enjoyment of their
users' visits, thereby promoting increased traffic and repeat usage.
Our objective is to be the leading global provider of online virtual tours to
the real estate industry. We plan to achieve this goal by pursuing the
following key strategies:
. Aggressively grow our virtual tour business;
. Establish bamboo.com as the dominant brand for online virtual tours;
. Develop new strategic relationships;
. Continue to enhance our virtual tour experience;
. Expand our virtual tour business to other real estate segments;
. Develop and implement e-commerce capabilities; 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.
4
<PAGE>
The Offering
<TABLE>
<S> <C>
Shares offered by bamboo.com........ shares
Total shares outstanding after this
offering........................... shares
Use of proceeds..................... For working capital and general corporate
purposes and to redeem the Series C
preferred stock.
Proposed Nasdaq National Market
symbol............................. BAMB
</TABLE>
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.
----------------
The common stock to be outstanding after the offering is based on the shares
outstanding as of March 31, 1999. The shares outstanding include:
. All outstanding shares of Class B common stock; and
. 618,931 shares of common stock and Series B preferred stock issued
subsequent to March 31, 1999 in recent private placements. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations--Recent Developments."
The common stock to be outstanding excludes:
. 2,148,013 shares of common stock issuable as of May 31, 1999 upon the
exercise of outstanding stock options (at a weighted average exercise
price of $0.64 per share) issued under our stock option plans;
. 100,000 shares of common stock issuable upon the exercise of an
outstanding warrant;
. shares of common stock reserved for issuance under our stock option
plans; and
. 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;
. The redemption of all outstanding shares of Series C preferred stock
upon the consummation of this offering;
. The filing of our amended and restated certificate of incorporation, the
provision of which are summarized in "Description of Capital Stock;" and
. No exercise of the underwriters' over-allotment option.
5
<PAGE>
Summary Consolidated Financial Data
The following table summarizes our statements of operations for the years
ended December 31, 1997 and 1998 and for the three month periods ended March
31, 1998 and 1999 and our balance sheet as of March 31, 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>
Three Months Ended
Consolidated Statement of Years ended December 31, March 31,
Operations Data: ------------------------- ----------------------
1997 1998 1998 1999
------------ ------------ ---------- ----------
(unaudited)
<S> <C> <C> <C> <C>
Revenues.................... $ 45,553 $ 77,410 $ 20,798 $ 88,658
Cost of revenues............ 15,204 67,710 9,914 73,939
----------- ------------ ---------- ----------
Gross profit................ 30,349 9,700 10,884 14,719
Operating expenses:
Sales and marketing........ 9,672 883,469 183,441 1,558,793
General and
administrative............ 122,034 723,607 272,962 1,498,194
Research and development... 41,567 242,917 86,233 55,763
Employee stock-based
compensation.............. -- -- -- 2,936,601
----------- ------------ ---------- ----------
173,273 1,849,993 542,636 6,049,351
----------- ------------ ---------- ----------
Loss from operations........ (142,924) (1,840,293) (531,752) (6,034,632)
Interest income............. -- -- -- 16,093
----------- ------------ ---------- ----------
Net loss.................... (142,924) (1,840,293) (531,752) (6,018,539)
Foreign currency translation
adjustments................ 1,230 (9,492) -- 10,563
----------- ------------ ---------- ----------
Comprehensive loss.......... $ (141,694) $(1,849,785) $ (531,752) $6,007,976
=========== ============ ========== ==========
Net loss per share--basic
and diluted................ $ (0.14) $ (0.87) $ (0.48) $ (2.19)
=========== ============ ========== ==========
Weighted average shares--
basic and diluted.......... 1,006,700 2,119,170 1,097,330 2,750,324
=========== ============ ========== ==========
</TABLE>
<TABLE>
<CAPTION>
As of March 31, 1999
-----------------------
(unaudited)
Pro Forma
Actual As Adjusted
Consolidated Balance Sheet Data: ----------- -----------
<S> <C> <C>
Cash and cash equivalents............................... $10,947,453 $ --
Working capital ........................................ 9,967,347 --
Total assets ........................................... 11,894,608 --
Series C preferred stock ............................... -- --
Total stockholders' equity ............................. 10,762,098 --
</TABLE>
The preceding 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 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 $ per share, after deducting
the underwriting discounts and commissions and estimated offering
expenses and application of the net proceeds.
6
<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 future profitability is uncertain 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 product,
service and brand;
. our need to expand our sales, marketing and customer service operations;
. our ability to successfully market and support our products; and
. our dependence on products and services with only limited market
acceptance to date.
As of March 31, 1999, we had an accumulated deficit of $8.1 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.
Our quarterly results may fluctuate which could cause the price of our
common stock to drop.
We believe that our quarterly operating results could vary significantly in
the future, and that quarter-to-quarter comparisons should not be relied upon
as indications of future performance. In some future quarterly periods our
operating results may fall below the expectations of securities analysts and
investors, which could significantly harm or depress the trading price of our
common stock. Among the factors that may influence our operating results are:
. the number of virtual tours we sell, process and deliver;
. the loss of any significant distribution or service provider partners;
. 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 tours or those of our
competitors;
. economic or other conditions that affect the real estate industry; and
. economic conditions specific to the Internet.
The loss of one or more of our significant Internet distribution partners
or their loss of a significant partner 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 the Web
sites of our distribution partners, which include real estate destination sites
such as REALTOR.com, Microsoft HomeAdvisor, HomeSeekers.com, Homes.com and
LoopNet. Through agreements with our partners, our virtual tours may also be
viewed on America Online, @Home Network,
7
<PAGE>
Excite, GO Network/Infoseek, MSN, NBC.com, Netscape Netcenter and Yahoo! If we
lose any of our distribution partners, or if any of our distribution partners
loses its relationship with any major Internet portal, our business could be
seriously harmed.
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.
The development of an online market for real estate has only recently begun, is
rapidly evolving and likely will be characterized by an increasing number of
market entrants. 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.
We may not be able to successfully scale our operations.
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 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, it is already
competitive and characterized by entrants that may have or may develop online
virtual tours similar to ours. In addition, there are relatively low barriers
to entry to our business. We do not have patents or other intellectual property
that would preclude or inhibit competitors from entering the online virtual
tours market. Moreover, due to the low cost of entering the online virtual
tours market, competition may intensify and increase in the future. We also
compete with traditional methods used by real estate agents to market
properties for sale, including classified ads, brochures and still photos. 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, 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 growth and financial performance.
8
<PAGE>
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.
The performance of our bamboo.com service provider network is critical to
our business and reputation.
We depend on a network of independent contractors (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 we lose one or more of these companies, we could
experience a delay in servicing our virtual tour customers in the affected
regions and our business could be harmed. If our service providers do not
consistently provide high quality service for the real estate agents or
homeowners, our brand will be diluted and our reputation will suffer, which
would result in reduced revenue.
We may not be able to recruit and retain the personnel we need to succeed.
We may be unable to retain our key employees or attract, assimilate or retain
other highly qualified employees in the future. Our future success depends on
our ability to attract, retain and motivate highly skilled employees,
particularly with respect to our direct sales function, our call center and
processing center operations. If we do not succeed in attracting new personnel
or retaining and motivating our current personnel, our business will be harmed.
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, certain members of our
management team, including our Chief Financial Officer, Chief Operating
Officer, Senior Vice President, Business Development and Senior
9
<PAGE>
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 depend on third-party relationships to assist us in marketing our virtual
tours.
In addition to our relationships with major Internet distribution partners,
we depend on establishing and maintaining commercial relationships with
traditional real estate brokerage companies, multiple listing services (MLS)
and MLS 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 MLS 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 would harm our business.
The performance of our Web hosting facility systems is critical to our
business and our 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 our distribution partners. 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.
We may not be able to successfully introduce enhanced virtual tours, new
products and services or e-commerce capabilities.
We expect to introduce new and enhanced products and services, and in
particular, Internet and email products and services in order to generate
additional revenues, attract more business customers to our products and
services and respond to competition. If we fail to adapt to technological
changes, our virtual tours or other products may become obsolete. For example,
we intend to develop or acquire 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.
The failure of our enhanced virtual tours or other new products and services to
achieve market acceptance and generate revenue could harm our business.
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.
We have risks associated with our call center and processing center in
Canada.
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;
10
<PAGE>
. future government regulations in the United States or Canada could limit
or increase expenses related to cross-border transactions; and
. tarrifs, domestic or international taxes or currency exchange rates may
increase our operating costs.
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 certain regions. These cyclical
economic swings could hurt our business.
We have risks associated with international expansion.
A part of our long-term strategy is to establish bamboo.com in international
markets. However, the Internet, or our virtual tour services model, may not
become widely accepted in international markets. In addition, we expect that
the success of any additional foreign operations we initiate will be
substantially dependent upon our distribution partners entering and succeeding
in such markets. We may not be successful in establishing and managing
additional international operations.
We may require additional funding.
Although we believe that, following this offering, our cash balances, cash
equivalents and cash generated from operations together with the net proceeds
from this offering will be adequate to fund our operations for at least the
next 18 months, such sources may prove to be inadequate. 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. 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
We depend on the increased use of the Internet by home buyers.
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, our business would be harmed.
We must continue 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.
11
<PAGE>
We are susceptible to breaches of online commerce security.
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.
We are susceptible to breaches of database security.
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.
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 customer contracts, diversion of
development resources, damage to our reputation, increased service or warranty
costs, and litigation costs, any of which could harm our business. The worst
case scenario is that the Internet fails and we are unable to deliver our
products and services.
Internet related regulatory and legal uncertainties could harm our business.
There are an increasing number of laws and regulations pertaining to the
Internet. In addition, a number of legislative and regulatory proposals are
under consideration by federal, state, local and foreign governments and
agencies. Laws or regulations may be adopted with respect to the Internet
relating to liability for information retrieved from or transmitted over the
Internet, domain name registration, online content regulation, user privacy,
taxation and quality of products and services. Moreover, the applicability to
the Internet of existing laws governing issues including intellectual property
ownership and infringement, copyright, patent, trademark, trade secret,
obscenity, libel, employment and personal privacy is uncertain and developing.
12
<PAGE>
Risks Related To This Offering
Our existing stockholders will exercise significant control and could make
decisions that adversely affect new investors.
Our directors and executive officers and their affiliates will, in the
aggregate, own approximately % of the outstanding shares of our common stock
upon the closing of this offering, or % 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. In the past, following periods of volatility in the market
price of a company's securities, securities class action litigation has often
been instituted against the issuing company, resulting in substantial costs and
a diversion of management's attention from the operation of its business.
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.
The shares sold in this offering, 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 and 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 1,223,615 shares will be immediately exercisable. 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."
13
<PAGE>
Investors Will Experience Immediate And Substantial Dilution And May
Experience Further Dilution.
You will incur immediate and substantial dilution of 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 $ per share.
Our Management Will Have Broad Discretion In Use Of Proceeds And It May Not
Effectively Utilize Those Funds.
Our management will have broad discretion in how we use the net proceeds of
this offering. Investors will be relying on the judgment of our management
regarding the application of the net proceeds of this offering. Our
management's decision regarding use of the net proceeds may not be the most
effective utilization of those funds.
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these
forward-looking statements largely on our current expectations and projections
about future events and financial trends affecting the financial condition of
our business. These forward-looking statements are subject to a number of
risks, uncertainties and assumptions about bamboo.com, including among other
things:
.implementing our business strategy;
.obtaining and expanding market acceptance of the services we offer;
.forecasts of Internet and our market size and growth;
.the continued listing of real estate on the Internet; and
.competition in our market.
In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "potential," "continue," "expects,"
"anticipates," "intends," "plans," "believes," "estimates" and similar
expressions. These statements are based on our current beliefs, expectations
and assumptions and are subject to a number of risks and uncertainties. Actual
results and events may vary significantly from those discussed in the forward-
looking statements.
14
<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 $ per share, are
estimated to be $ ($ if the underwriters exercise their overallotment
option in full) after deducting the underwriting discounts and commissions and
estimated offering expenses. We expect to use the majority of such proceeds for
working capital and general corporate purposes. We will use $11.0 million of
the net proceeds to redeem all outstanding shares of Series C preferred stock.
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.
15
<PAGE>
CAPITALIZATION
The following table sets forth as of March 31, 1999:
. Our actual capitalization;
. Our pro forma capitalization after giving effect to the conversion of
outstanding shares of our Series A and Series B preferred stock into
common stock; and
. Our pro forma as adjusted capitalization, gives effect to the sale of the
shares of common stock offered in this offering at the assumed initial
public offering price of $ per share, after deducting the underwriting
discounts and commissions and the estimated offering expenses and the
application of the net proceeds from the offering, including the
redemption of all outstanding shares of the Series C preferred stock.
<TABLE>
<CAPTION>
As of March 31, 1999
-------------------------------------
Pro Forma
Actual Pro Forma As Adjusted
----------- ----------- -----------
<S> <C> <C> <C>
Series C preferred stock
Stockholder's equity:
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, 2,152,574
authorized shares,
outstanding: 2,152,574 shares actual,
none pro forma and pro forma
adjusted............................ 2,153 -- --
Common stock, $0.001 par value,10,000,000
authorized shares;
150,500 shares outstanding actual,
2,534,324 shares outstanding pro
forma and pro forma as adjusted..... 151 2,535
Class B common stock:
2,650,548 authorized shares $0.0001
par value
2,650,548 shares outstanding actual,
pro forma and pro forma as
adjusted............................ 187 187 187
Additional paid in capital.............. 22,778,406 22,778,406
Notes receivable from stockholders...... (107,556) (107,556) (107,556)
Unearned employee stock-based
compensation........................... (3,820,639) (3,820,639) (3,820,639)
Accumulated other comprehensive income.. 1,338 1,338 1,338
Deficit accumulated during the
development stage...................... (8,092,173) (8,092,173) (8,092,173)
----------- ----------- ----------
Total stockholders' equity .......... $10,762,098 $10,762,098
=========== =========== ==========
</TABLE>
The shares of common stock outstanding in the actual, pro forma and pro forma
as adjusted columns exclude:
. 2,148,013 shares of common stock issuable as of May 31, 1999 upon the
exercise of outstanding stock options (at a weighted average exercise
price of $0.64 per share) issued under our stock option plans;
. 100,000 shares of common stock issuable upon the exercise of an
outstanding warrant;
. shares of common stock reserved for issuance under our stock
option plans; and
. shares of common stock reserved for issuance under our employee
stock purchase plan.
16
<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 March 31, 1999 was $10,762,098, or approximately
$2.08 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 our sale of the
shares of common stock in this offering at an assumed initial public offering
price of $ and after deducting the underwriting discounts and commissions
and estimated offering expenses, our pro forma net tangible book value would
have been $ per share. This represents an immediate increase in pro forma
net tangible book value of $ per share to existing stockholders and an
immediate and substantial dilution of $ per share to new investors. The
following table illustrates this per share dilution.
<TABLE>
<S> <C> <C>
Assumed initial public offering price............................. $
----
Pro forma net tangible book value as of March 31, 1999........... $
----
Increase attributable to new investors........................... $
----
Pro forma net tangible book value after this offering............. $
----
Dilution in pro forma net tangible book value to new investors.... $
====
</TABLE>
The following table sets forth, as of March 31, 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>
Total Average
Shares Purchased Consideration Price
----------------- ----------------- Per
Number Percentage Amount Percentage Share
------ ---------- ------ ---------- -------
<S> <C> <C> <C> <C> <C>
Existing stockholders............ % $ % $
New investors....................
Total.......................... % $ %
</TABLE>
Except as noted above, the foregoing discussions and tables assume no
exercise of any outstanding stock options or warrants. As of May 31, 1999,
there were options outstanding to purchase 2,148,013 shares of common stock at
a weighted average exercise price of $0.64 per share. To the extent that any of
these options are exercised, there will be further dilution to the new
investors.
17
<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 three months ended
March 31, 1998 and 1999, and the balance sheet data at March 31, 1999, are
derived from our unaudited consolidated financial statements included elsewhere
in this prospectus.
<TABLE>
<CAPTION>
Three Months Ended
Years ended December 31, March 31,
---------------------------------- -----------------------
1996 1997 1998 1998 1999
--------- ---------- ----------- ---------- -----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Consolidated Statement of Opera-
tions Data:
Revenues............... $ -- $ 45,553 $ 77,410 $ 20,798 $ 88,658
Cost of revenues....... -- 15,204 67,710 9,914 73,939
--------- ---------- ----------- ---------- -----------
Gross profit........... -- 30,349 9,700 10,884 14,719
Operating expenses:
Sales and marketing.. 4,784 9,672 883,469 183,441 1,558,793
General and adminis-
trative............. 61,804 122,034 723,607 272,962 1,498,194
Research and develop-
ment................ 23,829 41,567 242,917 86,233 55,763
Employee stock-based
compensation........ -- -- -- -- 2,936,601
--------- ---------- ----------- ---------- -----------
90,417 173,273 1,849,993 542,636 6,049,351
--------- ---------- ----------- ---------- -----------
Loss from operations... (90,417) (142,924) (1,840,293) (531,752) (6,034,632)
Interest income........ -- -- -- -- 16,093
--------- ---------- ----------- ---------- -----------
Net loss............... (90,417) (142,924) (1,840,293) (531,752) (6,018,539)
Foreign currency
translation
adjustments........... (963) 1,230 (9,492) -- 10,563
--------- ---------- ----------- ---------- -----------
Comprehensive loss..... $ (91,380) $ (141,694) $(1,849,785) $ (531,752) $(6,007,976)
========= ========== =========== ========== ===========
Net loss per share--
basic and diluted..... $ (0.11) $ (0.14) $ (0.87) $ (0.48) $ (2.19)
========= ========== =========== ========== ===========
Weighted average
shares--basic and
diluted............... 808,333 1,006,700 2,119,170 1,097,330 2,750,324
========= ========== =========== ========== ===========
<CAPTION>
As of December 31, As of
----------------------------------- March 31,
1996 1997 1998 1999
---------- ----------- ---------- -----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents........ $130,839 $ 3,955 $430,097 $10,947,453
Working capital (deficit)........ 36,680 (86,433) 265,405 9,967,347
Total assets .................... 150,075 25,369 780,118 11,894,608
Series C preferred stock ........
Total stockholders' equity
(deficit) ...................... 55,917 (72,170) 517,068 10,762,098
</TABLE>
18
<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 leading provider of 360-degree virtual tours of real estate
properties on the Internet. We provide a comprehensive turnkey service to real
estate agents that includes videotaping the inside and outside of the home or
other property, processing the videotape into a complete virtual tour, and
distributing the virtual tour to sites on the Internet. Our virtual tours allow
home buyers to look around a room or specific area of a home or other property
as if they were actually present. Our virtual tours provide enhanced visual
content and are integrated with multiple listing service information by real
estate Web sites, thereby adding significant value to home buyers, home sellers
and real estate agents. Users are able to quickly view our virtual tours over a
basic dial up connection to the Internet using a standard Web browser and
without special plug-in software to download or install. We also distribute our
virtual tours via email in one convenient self-contained executable file.
In November 1995, we incorporated in Ontario, Canada as Visual Dynamics
Software Corporation. From inception through December 1996, we focused on the
development of our proprietary hardware and software technology. We changed our
name to Visdyn Software Corporation in December 1996. During 1997, we continued
our product development efforts and began deriving initial revenues from the
sale of virtual tours, primarily of city locations in Toronto, Canada. During
1998, we began providing a turnkey virtual tour service for the residential
real estate market in Canada. In September 1998, we changed our name to
Jutvision Corporation, moved our headquarters from Toronto to Palo Alto,
California and began implementing a service provider network of videographers
throughout the United States. On January 1, 1999, Jutvision Corporation
reorganized its business as a Delaware corporation and began deriving revenues
from the sale of virtual tours to the real estate industry in the United
States. We changed our name from Jutvision Corporation to bamboo.com, Inc. in
April 1999.
All of our revenues are derived from the sale of virtual tours. Revenues are
recognized at the time a virtual tour is delivered. A virtual tour is delivered
to our customer when it is made available for viewing on the Internet or has
been sent by email. 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.
We have a limited operating history. As of March 31, 1999 we had an
accumulated deficit of $8.1 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.
During the three months ended March 31, 1999 we recorded aggregate unearned
employee stock-based compensation of $6.8 million in connection with the grant
of certain options to employees and directors. This amount is being amortized
over the vesting period, generally two or three years, of the underlying
options. In
19
<PAGE>
addition, we have recorded further unearned employee stock-based compensation
of $3.3 million arising from options granted after March 31, 1999. The total
charge to date will be amortized as follows: $4.2 million for the remainder of
1999; $2.2 million in 2000; $678,000 in 2001; $131,000 in 2002 and $9,000 in
2003. 623,313 shares of common stock subject to options shall become
exercisable as a result of the completion of this public offering and will
result in additional unearned employee stock-based compensation expense in the
quarter in which this offering is completed.
Recent Developments
In June 1999, we completed a private placement that raised approximately
$11.0 million of new capital, consisting of 1,100 shares of Series C preferred
stock, with a stated redemption amount of $11.0 million, and 446,725 shares of
common stock. We anticipate redeeming all of the Series C preferred stock with
a portion of the net proceeds of this offering.
Results of Operations
Three Months Ended March 31, 1999 and 1998
Revenues
The increase in revenues to $89,000 for the three months ended March 31, 1999
from $21,000 for the three months ended March 31, 1998 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 $74,000 for the three
months ended March 31, 1999 from $10,000 for the three months ended March 31,
1998 as a result of increased volume as well as expansion of capacity in our
processing center located in Toronto, Canada.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of salaries for marketing,
sales, business development and field operations personnel. Sales and marketing
expenses also include commissions and related benefits for sales personnel and
consultants, traditional advertising and promotional expenses, trademark
licensing and sponsorship or carriage fees paid to certain affiliates to
facilitate availability of our tours on their Web sites. Our sales and
marketing expenses increased to $1.6 million for the three months ended March
31, 1999 from $183,000 for the three months ended March 31, 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 $1.5 million for the three months
ended March 31, 1999 from $273,000 for the three months ended March 31, 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.
20
<PAGE>
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 decreased to $56,000 for the three months
ended March 31, 1999 from $86,000 for the three months ended March 31, 1998 due
to a reduction in the use of independent contractors 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.
Liquidity and Capital Resources
Since inception, we have financed our operations primarily through the
issuance of equity securities. From inception through December 31, 1998,
financing was provided primarily through periodic private sales of equity which
generated aggregate net proceeds of $1.5 million. On March 12, 1999, we sold
Series B preferred stock generating net cash proceeds of $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 of 1999, we sold 1,100
shares of Series C preferred stock and 446,725 shares common stock generating
net proceeds of approximately $11.0 million.
Net cash used in operating activities was $1.4 million for the three months
ended March 31, 1999. This was primarily as a result of the loss for the
quarter, net of stock based compensation charges and an increase in accounts
payable. Investment in capital assets was $613,000, substantially all of which
was used to acquire property and equipment, primarily videography and computer
equipment and software. Financing activities in the quarter generated $12.5
million in additional capital from the sale of Series B preferred stock and
notes. As of March 31,1999 we had $10.9 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
were partially offset by depreciation of $12,000 and
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$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 March 31, 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.
At March 31, 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 $11.5 million due over the next three-year period.
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 at least the next 18 months. However, the underlying assumed
levels of revenues and expenses may not prove to be accurate. We may seek
additional funding through public or private financing or other arrangements
prior to such time. Adequate funds may not be available when needed or may not
be available on favorable terms. If we raise additional funds by issuing equity
securities, dilution to existing stockholders may result. If funding is
insufficient at any time in the future, we may be unable to develop or enhance
our products or services, take advantage of business opportunities or respond
to competitive pressures, any of which could harm our business.
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
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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 ("AcSEC") issued
Statements of Position No. 98-1 (SOP 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. SOP 98-1 is effective for financial statements for fiscal years beginning
after December 15, 1998. We are currently evaluating the impact of SOP 98-1 on
our financial statements and related disclosures.
In April 1998, the AcSEC issued Statement of Position 98-5 (SOP 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, SOP 98-5 is effective for fiscal years beginning after
December 15, 1998. We believe the adoption of SOP 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 (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. We do not currently hold derivative instruments or engage in hedging
activities.
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. We have invested our capital in short-term
investments, primarily cash accounts such as money market funds and
certificates of deposit, and we believe that the fair value of these
investments would not be significantly impacted by increases or decreases in
interest rates due mainly to the short-term nature of these investments.
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BUSINESS
Overview
We are a leading 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 turnkey virtual tour service to real estate agents that
includes videotaping the inside and outside of a home or other property,
processing the videotape into a complete virtual tour and distributing the
virtual tour. We distribute our virtual tours to a variety of Web sites,
including real estate destination sites and Internet portals. We also
distribute our virtual tours by email to real estate agents for easy
redistribution to their clients and prospective home buyers. Utilizing our
extensive service provider network, we offer our virtual tour service in over
100 metropolitan areas across the United States and Canada. As the real estate
industry increasingly leverages the geographic reach and rich media potential
of the Internet, we believe virtual tours will become a standard method to
market real estate, the way still photographs are a standard method today.
In order to accelerate the adoption and enhance the benefits of our
bamboo.com virtual tours, we have established strategic alliances with real
estate destination Web sites. Through our agreement with HomeStore.com, Inc.
and RealSelect, Inc., our virtual tours are exclusively promoted, marketed and
endorsed by the HomeStore.com, REALTOR.com and HomeBuilder.com Web sites. Our
virtual tours are also promoted, marketed and endorsed exclusively by
HomeSeekers.com, Inc. on the HomeSeekers.com Web site. We provide our virtual
tours to REALTOR.com, the official Web site of the National Association of
Realtors (NAR), HomeSeekers.com, Microsoft HomeAdvisor, Homes.com,
HomeBuilder.com and LoopNet. Through our agreements with these sites, our
virtual tours can be viewed on America Online, @Home Network, Excite, GO
Network/Infoseek, MSN, NBC.com, Netscape Netcenter and Yahoo! In addition, we
have established strategic alliances with real estate brokerage firms, multiple
listing services and technology providers, including Prudential Real Estate
Affiliates, RE/MAX International and GTE.
Industry Overview
The Real Estate Industry
According to the United States Department of Commerce, the market for all
housing and related products and services was in the aggregate over $1 trillion
in 1997, representing 12.4% of the United States gross domestic product and is
one of the largest sectors of the economy. The real estate industry in the
United States is large and diverse, consisting of a variety of segments
including:
. existing home sales;
. new home sales;
. apartment rentals;
. commercial property sales and leases; and
. hotels and other hospitality or specialty properties.
The largest segment of the U.S. real estate industry is the market for
existing home sales. According to the National Association of Realtors, which
is comprised of approximately 720,000 residential and commercial real estate
agents, there were approximately 5 million existing home sales in the United
States in 1998, representing $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 (MLS), a proprietary network of property
listing information which traditionally has only been available to real estate
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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 MLS 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 MLS listings 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. 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 leading 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
method today. Our virtual tours provide enhanced visual content that allows a
buyer to look around a room or specific area of a home or other property as if
they were actually standing inside or outside the property. Our virtual tours
are integrated with property listing information by real estate Web sites and
multiple listing services, thereby providing a complete package of information
and adding significant value to the home buyer, home seller and real estate
agent. Users are able to quickly view our virtual tours over a basic dial-up
connection to the Internet using a standard Web browser, on almost all computer
platforms, and without special plug-in software to download or install. We also
distribute our virtual tours by email to real estate agents in one convenient,
self contained executable file. Real estate agents can easily forward our email
virtual tours to prospective home buyers, home sellers and real estate agents.
Key elements of the bamboo.com solution are:
Affordable, Comprehensive Turnkey Service. We deliver an affordable
comprehensive turnkey service to real estate agents that includes videotaping
the inside and outside of a home or other property, processing the
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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
service provider network, we currently offer our turnkey virtual tour service
in over 100 metropolitan areas across the United States and Canada.
Extensive Network of Internet Partners and Affiliates. Users can access our
virtual tours through major destination sites on the Internet. We provide our
virtual tours to major real estate destination sites including REALTOR.com,
HomeSeekers.com, Microsoft HomeAdvisor, Homes.com, HomeBuilder.com and LoopNet.
Through our agreements with these sites, our virtual tours can be viewed on
America Online, @Home Network, Excite, GO Network/Infoseek, MSN, NBC.com,
Netscape Netcenter and Yahoo!
Benefits to Home Buyers. Our virtual tours provide home buyers with rich
visual information enabling them to efficiently view and screen many
properties, at no cost, without requiring visits to homes. 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. Our visually rich virtual tours allow sellers
to market their homes to a larger audience than traditional methods alone
currently allow, such as local classified ads and multiple listing service
printouts. In addition, we believe that our virtual tours will reduce the
amount of time and anxiety involved in showing their homes to unscreened
buyers.
Benefits to Real Estate Agents. Our virtual tours provide real estate agents
with an Internet based tool that allows them to cost-effectively market
properties to a wide audience, thereby providing a value-added service to both
home buyers and home sellers. This enhanced marketing tool also enables real
estate agents to differentiate themselves to potential home sellers and thereby
gain new listings. As home buyers increasingly use the Internet and virtual
tours to screen homes, real estate agents may save time by showing homes to
more qualified buyers. Real estate agents can also more effectively help home
buyers find properties by identifying and emailing to a home buyer our virtual
tours that match a buyer's criteria. Alternatively, real estate agents can also
store our email virtual tours on their laptop computers and display these
virtual tours directly to their clients.
Benefits to Affiliates. Our virtual tours provide real estate destination
sites, Internet portals and multiple listing services with rich visual content
which helps to increase the convenience, usefulness and enjoyment of their
users' visits. We believe that these benefits promote increased traffic and
repeat usage on our affiliates' Web sites.
The Bamboo.com Strategy
Our objective is to be the leading global provider of online virtual tours to
the real estate industry. We plan to achieve this goal by pursuing the
following key strategies:
Aggressively Grow Our Virtual Tour Business. We intend to establish a
significant market presence for our 360-degree virtual tours by continuing to
provide comprehensive turnkey services at competitive prices to the existing
home sales market. We plan to continue to drive market share of our virtual
tours by utilizing our 60 direct sales professionals to aggressively market our
virtual tours to real estate agents at the local and regional levels. We have
recently expanded our service provider network to include 147 videographers
that provide us with broad national coverage in over 100 metropolitan areas.
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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 Strategic Relationships. We have entered into strategic
relationships which help us sell and distribute our virtual tours and promote
the bamboo.com brand. These relationships include HomeStore.com, REALTOR.com,
HomeSeekers.com, Microsoft HomeAdvisor, Homes.com, HomeBuilder.com, LoopNet,
GTE, Prudential Real Estate Affiliates and RE/MAX International. 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 relationships 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.
Develop and Implement E-Commerce Capabilities. We intend to participate in e-
commerce opportunities by making value-added products and services available
online.
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 turnkey 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 turnkey service involves the following six steps:
(1) a real estate agent orders a virtual tour by phone, fax, email or
online;
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(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 and can
also deliver it 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 provide our virtual tours to REALTOR.com, HomeSeekers.com,
Microsoft HomeAdvisor, Homes.com, HomeBuilder.com and LoopNet. Through our
agreements with these sites, our virtual tours can be viewed on America Online,
@Home Network, Excite, GO Network/Infoseek, MSN, NBC.com, Netscape Netcenter
and Yahoo!
Email Virtual Tours
In addition to our Web-based virtual tour, we offer a self contained,
executable virtual tour which can be distributed by email. The email virtual
tour offers all of the features of our Web-based virtual tours and can be
customized to include contact information for the real estate agent
representing the seller.
The listing real estate agent receives the email virtual tour from bamboo.com
and is able to widely disseminate the email virtual tour by sending it directly
to potential home buyers, other real estate agents and the 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.
Strategic Alliances
In order to accelerate the adoption of our bamboo.com virtual tours, we have
established strategic alliances with real estate destination sites, real estate
brokerage firms and real estate multiple listing services.
Real Estate Destination Sites
These alliances listed below 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.
REALTOR.com HomeSeekers.com Homes.com
HomeBuilder.com Microsoft HomeAdvisor LoopNet
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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, NBC.com 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.
HomeSeekers.com. HomeSeekers.com is a provider of online residential listing
information. We have a multi-year agreement with HomeSeekers.com through which
we are the exclusive provider of virtual tours on the HomeSeekers.com Web site.
HomeSeekers.com markets, promotes and facilitates sales of our virtual tours on
the HomeSeekers sites, at seminars and tradeshows, on CD-ROM products and
through e-mail and direct marketing. We pay HomeSeekers transaction fees for
sales generated by HomeSeekers as well as for virtual tours posted to the
HomeSeekers Web site.
Microsoft HomeAdvisor. Microsoft HomeAdvisor is a real estate destination
site which aggregates existing home listings. We recently entered into a short
term agreement with Microsoft to provide virtual tours to the HomeAdvisor site.
Under the agreement, we are required to pay Microsoft quarterly sponsorship
fees.
Homes.com. Homes.com is a real estate destination site which aggregates
existing home listings and a variety of other real estate listings such as
apartments. We have a short term agreement with Homes.com to provide our
virtual tours of existing homes on the Homes.com Web site. We are also the
preferred provider of virtual tour images for rental property listings on
Homes.com. We pay Homes.com a quarterly transaction fee on net revenues
collected from sales originated by Homes.com.
LoopNet. LoopNet is an aggregator of commercial property listings. We have an
agreement with LoopNet to provide virtual tours of commercial properties on the
LoopNet.com Web site. We pay LoopNet monthly sponsorship fees.
Real Estate Brokerage Firms
We have developed strategic relationships with major real estate brokerage
firms. These relationships 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.
Strategic Real Estate Brokerage Firm Alliances
<TABLE>
<S> <C>
Prudential Real Estate Affiliates RE/MAX International
</TABLE>
<TABLE>
<S> <C>
Arvida Realty Services Windermere Real Estate
</TABLE>
<TABLE>
<S> <C>
John L. Scott Real
Estate Carlson Real Estate/Better Homes & Gardens Realty
</TABLE>
<TABLE>
<S> <C>
Keller Williams Southwest Region Northside Realty
</TABLE>
<TABLE>
<S> <C>
The Equity Group Realtors Pacific Union
</TABLE>
<TABLE>
<S> <C>
Sudler/Beliard Gordon
</TABLE>
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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 developed and continue to develop relationships directly with
multiple listing services as well as MLS technology providers. Through these
relationships, we seek to integrate our virtual tours into the existing MLS
infrastructure to benefit us, the multiple listing services and real estate
agents. This integration enables us to directly market our virtual tour service
to real estate agents associated with these multiple listing services through
marketing and promotion agreements. In addition, our MLS relationships provide
significant exposure for our virtual tours within the MLS intranet systems.
Strategic MLS Alliances
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
Metrolist .11th largest multiple listing service in North
America
.Average of 15,000 active listings
.11,000 members
GTE Enterprise Solutions .Full service provider of MLS technology
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 MLS 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 MLS system.
Metrolist. Metrolist covers the Denver metropolitan area. We have an
exclusive agreement with Metrolist to market and promote our virtual tours on
its Web site, MLS system and print collateral.
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GTE Enterprise Solutions. GTE Enterprise Solutions (GTE-ES) is a full service
provider of MLS technology to the real estate industry. The GTE-ES System 4 is
an information database and communications network which integrates MLS
functions. We have an agreement with GTE-ES 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-ES 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 May 31,
1999, we employed 60 field sales personnel, including 7 regional directors and
53 account executives. The direct sales force focuses its efforts on real
estate agents. Below is a representative list of real estate brokerage firms
whose agents have purchased our virtual tours:
Alain Pinel Fred Sands Realtors Prudential Real Estate
Arvida Realty Services Affiliates
John L. Scott Real Estate
Better Homes & Gardens Keller Williams RE/MAX International
Century 21 Koenig & Strey Royal LePage
Coldwell Banker Pacific Union Towne and Country
ERA Realtor
Windermere Real Estate
Our direct sales force is employing the following strategies to market
bamboo.com virtual tours to real estate agents:
. Real Estate Brokerage Workshops. We organize and present sales workshops
at regional and local real estate brokerage offices. Our direct sales
force uses these presentations to educate and inform the real estate
agents about our virtual tours and the Internet to enhance their ability
to win listings and market properties.
. Internet Marketing Advisory Board. We have engaged eleven experienced
real estate agents from different brokerage firms and an Internet
consultant to serve on our Internet Marketing Advisory Board. These
individuals help promote bamboo.com, provide input on our products and
services and assist in our approach to the market.
. 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,
multiple listing services and MLS technology companies 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 May 31, 1999, we had 147 trained
videographers active in approximately 100 metropolitan areas. The
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videographers are responsible for capturing our images using a video camera
attached to a proprietary tripod and turntable system.
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. Our Web viewer technology
has been developed using the Java programming language, enabling our virtual
tours to be viewed on almost all computer platform 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 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 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
also compete with traditional methods used by real estate agents to market
properties for sale, including classified ads, brochures and still photos. 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, 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
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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 a patent application in the United States with respect to our video image
processing system 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.
Legal Proceedings
Bamboo.com is not a party to any material legal proceedings.
Employees
As of May 31, 1999, we employed 113 full-time employees in the United States
and 29 full-time employees in Canada, and 21 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
June 14, 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 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. Mr. McCurdy holds a
Bachelor of Science in Business Administration from Babson College. 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. Mr. Field holds a Bachelor of Science in
Business Administration from Babson College.
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. Since
July 1991, Mr. Fortier has served as President of Jascan Investment
Corporation, an investment holding company. From 1988 to 1991, Mr. Fortier
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. Prior to joining Walden Media, L.L.C., Mr. Sanderson was an associate
with Robertson Stephens, an investment banking firm. Prior to joining Robertson
Stephens, 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., 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. 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 , the Class II
directors are and the Class III directors are . 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.
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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 "Certain 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 such interlocking relationship existed in the past.
Director Compensation
Our directors do not currently receive cash compensation from bamboo.com for
their service as members of the Board of Directors, although they are
reimbursed for certain expenses in connection with attendance at Board and
Committee meetings. We do not provide additional compensation for committee
participation or special assignments of the Board of Directors. From time to
time, our directors have received and may continue to receive grants of options
to purchase shares of bamboo.com's common stock pursuant to the 1998 Employee,
Director and Consultant Stock Plan.
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<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 May 31, 1999 (the "Named Executive Officers"). The
titles listed below are the titles of the Named Executive Officers as of
May 31, 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 $120,000
during the fiscal year ending on December 31, 1999.
<TABLE>
<CAPTION>
Long-Term
Compensation Awards
---------------------
Restricted Securities
Annual Compensation Stock Underlying
-------------------------------- ---------- ----------
Name and Principal Bonus Other Annual Options
Position Fees(1)($) ($) Compensation($) Awards ($) (#)
- ------------------ ---------- ----- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Leonard B. McCurdy(3)
Chairman of the Board
and
Chief Executive
Officer................ $10,109 $-- $172,402 $34,758 200,000
Kevin B. McCurdy,
Executive Vice
President.............. 20,962 -- 137,098 34,758 150,000
Howard Field, Vice
President.............. 25,368 -- 130,336 34,758 140,000
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 Mr. 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) The options and stock granted to Leonard McCurdy were granted to Lanek
Ltd., an entity affiliated with Leonard McCurdy.
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<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth grants of stock options to each of the Named
Executive Officers for the year ended December 31, 1998. All of the stock
options listed below were fully vested and exercisable on the date of grant.
All of the options listed below were exercised during 1998. Bamboo.com has
never granted any stock appreciation rights. Potential realizable values are
computed by (i) multiplying the number of shares of common stock subject to a
given option by the initial public offering price of $ per share, (ii)
assuming that the aggregate stock value derived from that calculation compounds
at the annual 0%, 5% or 10% rate shown in the table for the entire ten-year
term of the option and (iii) subtracting from that result the aggregate option
exercise 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
---------------------------------------------------
Potential Realizable
Value at Assumed Annual
Number of Percent of Rates of Stock Price
Securities Total Options Appreciation for Option
Underlying Granted to Term
Options Employees in Exercise Price Expiration --------------------------
Name Granted Fiscal Year(1) ($/Sh) Date 0% 5% 10%
---- ---------- -------------- -------------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Leonard B. McCurdy(2)... 200,000 29.94% $0.01 02/12/08 $136,223 $224,207 $357,011
Kevin B. McCurdy........ 100,000 14.97 0.01 02/12/08 67,807 111,607 177,715
50,000 7.48 0.01 05/31/08 33,468 55,094 87,727
Howard Field............ 100,000 14.97 0.01 02/12/08 68,807 113,236 180,309
40,000 5.99 0.01 05/31/08 27,177 44,731 71,227
Randall I. Bresee....... -- -- -- --
Andrew P. Laszlo........ -- -- -- --
Mark R. Searle.......... -- -- -- --
</TABLE>
- --------
(1) In 1998, we granted options to purchase an aggregate of 668,100 shares of
common stock.
(2) The options granted to Leonard McCurdy were granted to Lanek Ltd., an
entity affiliated with Leonard McCurdy.
In January 1999, we granted to Leonard McCurdy a fully vested option to
purchase 15,000 shares of common stock at an exercise price per share of $0.50;
such option expires on January 1, 2009. In February 1999, we granted to Leonard
McCurdy an option to purchase 120,000 shares of common stock at an exercise
price per share of $0.50; such option becomes fully exercisable upon the
completion of this offering and expires on February 2, 2009. In January 1999,
we granted Kevin McCurdy a fully vested option to purchase 15,000 shares of
common stock at an exercise price per share of $0.50; such option expires on
January 1, 2009. In February 1999, we granted to Kevin McCurdy an option to
purchase 96,000 shares of common stock at an exercise price per share of $0.50;
such option becomes fully exercisable upon the completion of this offering and
expires on February 2, 2009. In January 1999, we granted Mr. Field a fully
vested option to purchase 18,373 shares of common stock at an exercise price
per share of $0.50; such option expires on January 1, 2009. In February 1999,
we granted to Mr. Field an option to purchase 60,000 shares of common stock at
an exercise price per share of $0.50; such option becomes fully exercisable
upon the completion of this offering and expires on February 2, 2009. In April
1999, we granted to Mr. Bresee an option to purchase 75,000 shares of common
stock at an exercise price of $0.75 per share of which 25% of the shares
subject to this option become exercisable upon the completion of this offering;
such option expires on April 6, 2009. In January 1999, we granted Mr. Laszlo a
fully vested option to purchase 107,500 shares of common stock at an exercise
price per share of $0.50; such option expires on January 1, 2009. In February
1999, we granted to Mr. Laszlo an option to purchase 120,000 shares of Common
Stock at an exercise price per share of $0.50; such option becomes fully
exercisable upon the completion of this offering and expires on February 2,
2009. In April 1999, we granted to Mr. Laszlo a fully vested option to purchase
10,000 shares of Common Stock at an exercise price per share of $0.75; such
option expires on April 6, 2009. In February 1999, we granted to Mr. Searle an
option to purchase 40,000 shares of common stock at an exercise price of $0.50
per share of which 25% of the shares
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subject to this option become exercisable upon the completion of this offering;
such option expires on February 2, 2009. In April 1999, we granted to Mr.
Searle an option to purchase 20,000 shares of common stock at an exercise price
of $0.75 per share of which 25% of the shares subject to this option become
exercisable upon the completion of this offering; such option expires on April
6, 2009.
Fiscal Year End Option Values
The following table provides certain summary information concerning stock
options held as of December 31, 1998 by each of the Named Executive Officers.
All these options were exercised during 1998.
<TABLE>
<CAPTION>
Shares
Acquired Value
Name On Exercise (#) Realized ($)
---- --------------- ------------
<S> <C> <C>
Leonard B. McCurdy(1)............................. 200,000 $137,643
Kevin B. McCurdy.................................. 150,000 102,340
Howard Field...................................... 140,000 96,978
Randall I. Bresee................................. -- --
Andrew P. Laszlo.................................. -- --
Mark R. Searle.................................... -- --
</TABLE>
- --------
(1) The options held by Leonard McCurdy were granted to Lanek Ltd., an entity
affiliated with Leonard McCurdy.
Stock Plans
Amended and Restated 1998 Employee, Director and Consultant Stock Plan
The Board of Directors adopted the 1998 Employee, Director and Consultant
Stock Plan (the "1998 Plan") in December, 1998 and the stockholders approved
the 1998 Plan in December 1998. In connection with this offering, the Board of
Directors approved the amendment and restatement of the 1998 Plan in June 1999
and the stockholders approved the amendment and restatement in June 1999. The
1998 Plan provides for the grant to employees of incentive stock options within
the meaning of Section 422 of the Internal Revenue Code (the "Code"), and for
the grant to employees, directors and consultants of nonstatutory stock options
and stock purchase rights ("SPRs").
Number of Shares of Common Stock Available under the 1998 Plan
As of , 1999, a total of shares of common stock were reserved for
issuance pursuant to the 1998 Plan, of which options to acquire shares were
issued and outstanding as of that date. As part of the 1999 amendment and
restatement of the 1998 Plan, the Board of Directors approved an increase of
shares for issuance under the 1998 Plan, and for annual increases in the number
of shares available for issuance under the 1998 Plan, on the first day of each
new fiscal year of bamboo.com beginning with fiscal 2000, equal to the lesser
of 4% of the outstanding shares of common stock on the first day of the fiscal
year, 2 million shares or such lesser amount as the Board of Directors may
determine.
Administration of the 1998 Plan
The Board of Directors or a committee of the Board (as applicable, the
"administrator") administers the 1998 Plan. In the case of options intended to
qualify as "performance-based compensation" within the meaning of Section
162(m) of the Code, the committee will consist of two or more "outside
directors" within the meaning of Section 162(m) of the Code. The administrator
has the power to determine the terms of the options or SPRs granted, including
the exercise price, the number of shares subject to each option or SPR, the
exercisability of the options and the form of consideration payable upon
exercise.
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Options
The administrator determines the exercise price of nonstatutory stock options
granted under the 1998 Plan, but with respect to nonstatutory stock options
intended to qualify as "performance-based compensation" within the meaning of
Section 162(m) of the Code, the exercise price must be equal to at 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 such incentive stock option may not exceed five
years. The term of all other options granted under the 1998 Plan may not exceed
ten years.
After termination of an optionee's status as an employee, director or
consultant of bamboo.com, an optionee generally must exercise an option granted
under the 1998 Plan within the time period set forth in the optionee's option
agreement, or in the absence of a specified time within 3 months or within 12
months after the optionee's termination by death or disability, but in no event
later than the expiration of the option's ten year term.
SPRs
The administrator determines the exercise price of SPRs granted under the
1998 Plan. Unless the administrator determines otherwise, the restricted stock
purchase agreement entered into in connection with the exercise of the SPR
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 SPRs
An optionee generally may not transfer options and SPRs granted under the
1998 Plan, and only the optionee may exercise an option or SPR during his or
her lifetime.
Adjustments upon Merger or Asset Sale
The 1998 Plan provides that in the event of a merger of bamboo.com with or
into another corporation or a sale of substantially all of our assets, the
successor corporation shall assume or substitute each option or SPR. If the
outstanding options or SPRs 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 SPR as to all of the shares subject to the option or SPR,
including shares which would not otherwise be exercisable, for a period of
fifteen days from the date of the notice. The option or SPR will terminate upon
the expiration of the fifteen-day period. In addition, options granted under
the 1998 Plan may provide, and past grants have provided, for additional
vesting in the event of a change of control of bamboo.com.
Amendment and Termination of the 1998 Plan
Unless terminated sooner, the 1998 Plan will terminate automatically in 2008.
In addition, the administrator has the authority to amend, suspend or terminate
the 1998 Plan, provided that no such action may affect any share of common
stock previously issued and sold or any option previously granted under the
1998 Plan.
1999 Employee Stock Purchase Plan
The Board of Directors adopted the 1999 Employee Stock Purchase Plan in June
1999, and the stockholders approved the Purchase Plan in June 1999.
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Number of Shares of Common Stock Available under the Purchase Plan
A total of 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 the Purchase Plan on the
first day of each fiscal year, beginning with fiscal 2000, equal to the lesser
of % of the outstanding shares of common stock on the first day of the fiscal
year, 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 at least 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 and 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 .
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.
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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 outstanding right to
purchase shares of Common Stock under the Purchase Plan. If the successor
corporation refuses to assume or substitute for the outstanding options, the
offering period then in progress will be shortened, and a new exercise date
will be set.
Amendment and Termination of the Purchase Plan
The 1999 Purchase Plan will terminate in 2009. However, the Board of
Directors has the authority to amend or terminate the Purchase Plan, except
that, subject to certain exceptions described in the Purchase Plan, no such
action may adversely affect any outstanding rights to purchase stock under the
Purchase Plan.
Employment Agreements and Change of Control Arrangements
We have entered into Employment Agreements (the "Agreements") with Leonard
McCurdy, Kevin McCurdy, Howard Field, and Andrew Laszlo. The Agreements have
initial two-year terms, and thereafter are automatically renewed on a yearly
basis, absent notification by either party to the contrary. The 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 $0.50, vesting monthly over 24 months, in the following
amounts: 120,000 shares, 96,000 shares, 60,000 shares and 120,000 shares,
respectively. The Agreements provide that these options shall become fully
vested upon a change of control or the completion of this offering. The
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 preceding fiscal year), reimbursement of
premium payments for group health coverage (up to $1500 per month for Leonard
McCurdy and Mr. Laszlo, and up to $750 per month for Kevin McCurdy and Mr.
Field) for up to 12 months, and full acceleration of option vesting. 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 change in control,
instead of monthly severance payments. The 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 Amended and
Restated 1998 Employee, Director and Consultant 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 such
merger, acquisition or sale of assets.
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<PAGE>
CERTAIN 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
- ------------------------ --------- ------------------------ -------- --------------------
<S> <C> <C> <C> <C>
Jane McCurdy(1)......... 3/31/1998 Common Stock $ 0.70(9) 1,000
Kristy McCurdy(1)....... 3/31/1998 Common Stock $ 0.70(9) 1,000
4/8/1998 Common Stock $ 0.70(9) 5,500
Howard Field............ 3/31/1998 Common Stock $ 0.70(9) 60,000
4/8/1998 Common Stock $ 0.70(9) 5,500
6/28/1998 Common Stock units(5) $ 0.68(9) 12,500
Lanek Limited........... 3/31/1998 Common Stock $ 0.70(9) 129,000
6/28/1998 Common Stock units(5) $ 0.68(9) 25,000
Lisa Field(2)........... 3/31/1998 Common Stock $ 0.70(9) 2,000
Peter Field(2).......... 3/31/1998 Common Stock $ 0.70(9) 2,000
Carol Smith Slavens(2).. 3/31/1998 Common Stock $ 0.70(9) 3,000
12/8/1998 Series A Preferred Stock $ 4.00 12,500
Paul Slavens(2)......... 3/31/1998 Common Stock $ 0.70(9) 2,000
Mark Stephenson(3)...... 2/12/1998 Option to purchase -- 100,000
Common Stock
5/31/1998 Option to purchase -- 40,000
Common Stock
Vestmark Limited........ 6/28/1998 Common Stock units(5) $ 0.68(9) 12,500
4/8/1998 Common Stock $ 0.70(9) 25,000
5/22/1998 Common Stock (4) 102,000
1/1/1999 Option to purchase -- 2,750
Common Stock
Duncan Fortier.......... 4/21/1998 Common Stock $ 0.70(9) 15,000
2/2/1999 Option to purchase -- 12,000
Common Stock
4/6/1999 Option to purchase -- 18,000
Common Stock
Jascan Investments(6)... 4/21/1998 Common Stock $ 0.70(9) 25,000
6/28/1998 Common Stock units(5) $ 0.68(9) 50,000
Andrew Aicklen.......... 1/1/1999 Option to purchase -- 34,084
Common Stock
Walden Media and
Information Technology 2/18/1999 Convertible $850,000 $850,000 principal;
Fund, L.P.(7)........... subordinated 10% interest per
promissory note year; convertible
into Series B
preferred stock
3/12/1999 Series B Preferred Stock $ 5.807 490,787
5/5/1999 Series B Preferred Stock $ 5.807 172,206
Walden Japan Partners,
L.P. (7)................ 3/12/1999 Series B Preferred Stock $ 5.807 34,441
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Price
Date of per Number
Name Purchase Type of Security Security of Securities
- ------------------------ --------- ------------------------ -------- -------------
<S> <C> <C> <C> <C>
Walden EDB Partners,
L.P.(7)................ 3/12/1999 Series B Preferred Stock $5.807 34,441
Information Associates-
II, L.P.(8)............ 3/12/1999 Series B Preferred Stock $5.807 813,570
IA-II Affiliates Fund,
L.L.C.(8).............. 3/12/1999 Series B Preferred Stock $5.807 47,460
Intel Corporation....... 3/12/1999 Series B Preferred Stock $5.807 430,514
</TABLE>
- --------
(1) A relative of Leonard and Kevin McCurdy.
(2) A relative of Howard Field.
(3) Mr. Stephenson is an affiliate of Vestmark Limited and these options have
been exercised prior to this offering.
(4) These shares were issued as compensation for prior services performed by
Mr. Stephenson.
(5) Each unit consisted of one share of common stock and a warrant to purchase
one share of common stock at an exercise price of Canadian $1.00.
(6) An entity affiliated with Duncan Fortier.
(7) An affiliate of Philip Sanderson.
(8) An affiliate of John Moragne.
(9) Each of these transactions were at C$1.00 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 107,500 shares of our common stock pursuant to the
stock option grant made to Mr. Laszlo on December 30, 1999. The loan accrues
interest at six percent (6%) per annum and is secured by a full recourse
promissory note, the 107,500 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 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 35,000 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 35,000 shares of our common stock and all proceeds of such shares.
On January 1, 1999 we entered into employment agreements, which contain
severance provisions, with Leonard B. McCurdy, Kevin B. McCurdy, Howard Field
and Andrew P. Laszlo. These agreements are more fully described in
"Management--Employment Agreements."
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 five percent stockholder, 270,742 and 135,372 shares of
common stock, respectively, and 667 and 333 shares of Series C preferred stock
for an aggregate purchase price of $6,666,667 and $3,333,333, respectively.
We have entered into indemnification agreements with our officers and
directors containing provisions that require us, among other things, to
indemnify our officers and directors against certain liabilities that may arise
by reason of their status or service as officers or directors (other than
liabilities arising from willful misconduct of a culpable nature) and to
advance their expenses incurred as a result of any proceeding against them as
to which they could be indemnified. See "Limitation of Liability and
Indemnification."
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<PAGE>
These individuals 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.
Prudential Securities may, at any time and without notice, waive the terms of
these lockup agreements.
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<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to beneficial
ownership of our common stock, as of May 31, 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 named in the Summary Compensation Table, 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 May 31, 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 5,369,572 shares of
common stock outstanding as of May 31, 1999 (after giving effect to the
conversion of our currently outstanding preferred stock). Percentage of
beneficial ownership after the offering is based on shares outstanding
and also includes 623,313 shares that become exercisable immediately upon the
completion of the offering and shares of common stock to be issued in this
offering.
<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)................. 861,030 (2) 16.04% %
Funds affiliated with Walden Media
and Information Technology Fund,
L.P.
Philip Sanderson(3).............. 731,875 (4) 13.63%
Intel Corporation.................. 430,514 8.02%
Lanek Limited
Leonard B. McCurdy............... 754,000 (5) 14.04%
Kevin B. McCurdy................... 483,000 (6) 9.00%
Howard Field....................... 619,373 (7) 11.53%
Vestmark Limited................... 294,750 (8) 5.49%
Duncan Fortier..................... 161,750 (9) 3.01%
Randall I. Bresee.................. 0(10) *
Andrew P. Laszlo................... 152,500(11) 2.84%
Mark R. Searle..................... 0(12) *
All directors and executive
officers as a group (13 persons).. 4,557,876(13) 85.26%
</TABLE>
- --------
* Represents beneficial ownership of less than one percent of the common
stock.
(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.
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<PAGE>
(2) Represents 813,570 shares held by Information Associates-II, L.P. and
47,460 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 662,993 shares held by Walden Media and Information Technology
Fund, L.P., 34,441 shares held by Walden Japan Partners, L.P., and 34,441
shares held by Walden EDB Partners, L.P.
(5) Represents 704,000 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 50,000 shares of common stock beneficially owned
as a result of options held by Leonard McCurdy and Lanek Limited
exercisable within 60 days of May 31, 1999 and in the column After
Offering includes 85,000 shares that become exercisable upon the
completion of this offering.
(6) Includes 43,000 shares of common stock beneficially owned as a result of
options exercisable within 60 days of May 31, 1999 and in the column After
Offering includes 68,000 shares that become exercisable upon the
completion of this offering.
(7) Includes 35,873 shares of common stock beneficially owned as a result of
options exercisable within 60 days of May 31, 1999 and includes in the
column After Offering 42,500 shares that become exercisable upon the
completion of this offering.
(8) Includes 2,750 shares of common stock beneficially owned as a result of
options exercisable within 60 days of May 31, 1999 and includes in the
column After Offering 4,500 shares held by Mark Stephenson, an affiliate
of Vestmark Limited, that become exercisable upon the completion of this
offering.
(9) Includes 125,000 shares held by Jascan Investments Corporation, an entity
affiliated with Mr. Fortier and 21,750 shares of common stock beneficially
owned as a result of options exercisable within 60 days of May 31, 1999
and includes in the column After Offering 15,000 shares that become
exercisable upon the completion of this offering.
(10) Includes in the column After Offering 18,750 shares of common stock that
become exercisable upon the completion of this offering.
(11) Includes 45,000 shares of common stock beneficially owned as a result of
options exercisable within 60 days of May 31, 1999 and includes in the
column After Offering 85,000 shares that become exercisable upon the
completion of this offering.
(12) Includes in the column After Offering 15,000 shares of common stock that
become exercisable upon the completion of this offering.
(13) Includes options to purchase shares of our common stock issued to Mr.
Assaraf of which up to 55,000 are exercisable within 60 days of this
prospectus. Also includes options to purchase shares of our common stock
issued to Mr. Aicklen of which 34,084 are exercisable within 60 days of
this prospectus. Includes in the column After Offering options to purchase
shares of our common stock issued to Mr. Assaraf of which 6,000 are
exercisable upon completion of this offering and options to purchase
shares of our common stock issued to Mr. Aicklen of which 12,000 are
exercisable upon completion of this offering.
47
<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 million shares of common stock, par value $0.001 per share,
2,650,548 shares of Class B common stock, par value $0.0001 per share and
6,100,000 shares of preferred stock, par value $0.001 per share, 1,100 shares
of which shall be designated Series C preferred stock and 5,000 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 SEC as exhibits to our registration statement, of which this
prospectus forms a part. As of May 31, 1999, 2,813,548 shares of common stock
were outstanding and 2,556,024 shares of preferred stock convertible into
2,556,024 shares of common stock upon the completion of this offering were
issued and outstanding. As of May 31, 1999, we had 69 stockholders.
Common Stock
Each holder of common stock is entitled to one vote for each share on all
matters to be voted upon by the stockholders and there are no cumulative voting
rights. Subject to preferences to which holders of Preferred Stock issued after
the sale of the common stock offered hereby may be entitled, holders of common
stock are entitled to receive ratably such dividends, if any, as may be
declared from time to time by the Board of Directors out of funds legally
available therefor. Please see "Dividend Policy". In the event of a
liquidation, dissolution or winding up of bamboo.com, holders of common stock
would be entitled to share in bamboo.com's assets remaining after the payment
of liabilities and the satisfaction of any liquidation preference granted the
holders of any then outstanding shares of Preferred Stock. Holders of common
stock have no preemptive or conversion rights or other subscription rights and
there are no redemption or sinking fund provisions applicable to the common
stock. All outstanding shares of common stock are, and the shares of common
stock offered by bamboo.com in this offering, when issued and paid for, will
be, fully paid and nonassessable. The rights, preferences and privileges of the
holders of common stock are subject to, and may be adversely affected by the
rights of the holders of shares of any series of Preferred Stock, which
bamboo.com may designate in the future.
We have outstanding a warrant to purchase an aggregate of 100,000 shares of
our common stock at an exercise price of $4.00 per share, 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 holder's
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
million shares of preferred stock, $0.001 par value per 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
48
<PAGE>
stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could 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 (Investor Rights
Agreement), the holders of 2,771,499 shares of the outstanding common stock or
their permitted transferees (Registrable Securities) are entitled to certain
rights with respect to the registration of such shares under the Securities
Act. The holders of at least 60% of the Registrable Securities may require us,
subject to certain limitations, to file a registration statement covering at
least 30% of the Registrable Securities or any lesser amount of shares if the
aggregate gross offering price of at least $10 million. We are not required to
effect (i) more than two such registrations pursuant to such demand
registration rights; (ii) a registration within 60 days following the
determination by our Board of Directors to file a registration statement; (iii)
a registration during the period in which any other registration statement has
been filed or has been declared effective within the prior six months; or (iv)
a registration for a period not to exceed 90 days, if the Board of Directors of
bamboo.com has made a good faith determination that such registration would be
seriously detrimental to bamboo.com or to its stockholders. Furthermore,
pursuant to the terms of the Investor Rights Agreement, the holders of the
Registrable Securities are entitled to certain piggyback registration rights in
connection with any registration by us of our securities for its own account or
the account of other security holders. In the event that we propose to register
any shares of common stock under the Securities Act, the holders of such
piggyback registration rights are entitled to receive notice of such
registration and are entitled to include their shares therein.
At any time after we become eligible to file a registration statement on Form
S-3, holders of $1,000,000 of Registrable Securities may require us to file
registration statements on Form S-3 under the Securities Act with respect to
their shares of common stock; provided, however, 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 certain 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 (i) 5 years from the effective date of
this offering or (ii) 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 Provisions of the Certificate of Incorporation Certain 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 bamboo.com's 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 meeting. These provisions may make it more difficult for
stockholders to take certain corporate actions and could have the effect of
delaying or preventing a change in control of bamboo.com.
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. Subject to certain exceptions, Section 203 of Delaware law
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the
49
<PAGE>
transaction in which the person became an interested stockholder, unless the
interested stockholder attained such status with the approval of the board of
directors or unless the business combination is approved in a prescribed
manner. A "business combination" includes mergers, asset sales and other
transactions resulting in a financial benefit to the interested stockholder.
Subject to certain exceptions, an "interested stockholder" is a person who,
together with affiliates and associates, owns, or within three years did own
fifteen percent or more of a corporation's voting stock. This statute could
prohibit or delay the accomplishments of mergers or other takeover or change in
control attempts with respect to bamboo.com and, accordingly, may discourage
attempts to acquire us.
Our Amended and Restated Certificate of Incorporation provides that, upon the
closing of this offering, the Board of Directors will be divided into three
classes of directors with each class serving a staggered three-year term. The
classification system of electing directors may tend to discourage a third
party from making a tender offer or otherwise attempting to obtain control of
us and may maintain the incumbency of the Board of Directors, as the
classification of the Board of Directors generally increases the difficulty of
replacing a majority of the directors. Our Amended and Restated Certificate of
Incorporation eliminates the right of stockholders to act by written consent
without a meeting and bamboo.com's Bylaws eliminate the right of stockholders
to call special meetings of stockholders. The Amended and Restated Certificate
of Incorporation does not provide for cumulative voting in the election of
directors. These and other provisions may have the effect of deferring hostile
takeovers or delaying changes in control or management of bamboo.com. The
amendment of any of these provisions would require approval by the Board of
Directors and holders of at least 66 2/3% of the outstanding common stock.
Board of Directors Vacancies
Our bylaws authorize the board of directors to fill vacant directorships or
increase the size of the Board of Directors. This may deter a stockholder from
removing incumbent directors and simultaneously gaining control of the Board of
Directors by filling the vacancies created by such removal with its own
nominees.
Classified Board
Our bylaws provide that our board will be classified into three classes of
directors beginning at the next annual meeting of stockholders. Please see
"Management--Classes of the Board" for more information regarding the
classified board.
Stockholder Action; Special Meeting of Stockholders
Our certificate of incorporation provides that stockholders may act only at
duly called annual or special meetings of stockholders, not by written consent.
Our bylaws further provide that special meetings of our stockholders may be
called only by the President, Chief Executive Officer or Chairman of the Board
of Directors or a majority of the board of directors.
Advance Notice Requirements for Stockholder Proposals and Director Nominations
Our bylaws provide that stockholders seeking to bring business before our
annual meeting of stockholders, or to nominate candidates for election as
directors at our annual meeting of stockholders, must provide timely notice
thereof in writing. To be timely, a stockholder's notice must be delivered to,
or mailed and received at, our principal executive offices not less than 120
days prior to the first anniversary of the date of notice of 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.
50
<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.
Delaware law provides generally that the affirmative vote of a majority of
the shares entitled to vote on any matter is required to amend a corporation's
certificate of incorporation or bylaws, unless a corporation's certificate of
incorporation or bylaws, as the case may be, requires a greater percentage. Our
certificate of incorporation and bylaws require the approval of holders of at
least 66 2/3% of Common Stock for amendments thereto.
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
. for 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.
51
<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, shares of common stock will be outstanding,
shares if the underwriters exercise their over-allotment option in full. Of
these shares, the shares sold in this offering, shares of the
underwriters over-allotment option is 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 5,404,572 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 of bamboo.com holding shares of
common stock have entered into lock-up agreements under which they have agreed
not to offer or sell any shares of common stock for a period of 180 days after
the date of this prospectus without the prior written consent of Prudential
Securities, on behalf of the underwriters. See "Underwriting." Prudential
Securities may, at any time and without notice, waive any of the terms of these
lock-up agreements specified in the underwriting agreement. Following the lock-
up period, these shares will not be eligible for sale in the public market
without registration under the Securities Act unless such sales meet the
applicable conditions and restrictions of Rule 144 as described below.
In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, any person (or persons whose shares are
aggregated), including an affiliate, who has beneficially owned shares for a
period of at least one year is entitled to sell, within any three-month period,
a number of shares that does not exceed the greater of:
. 1% of the then-outstanding shares of common stock, and
. the average weekly trading volume in the common stock during the four
calendar weeks immediately preceding the date on which the notice of such
sale on Form 144 is filed with the Securities and Exchange Commission.
Sales under Rule 144 are also subject to provisions, relating to notice and
manner of sale and the availability of current public information about us. In
addition, a person (or persons whose shares are aggregated) who has not been an
affiliate of us at any time during the 90 days immediately preceding a sale,
and who has beneficially owned the shares for at least two years, would be
entitled to sell such shares under Rule 144(k) without regard to the volume
limitation and other conditions described above. The above summary of Rule 144
is not intended to be a complete description.
In addition, our employees, directors, officers, advisors or consultants who
were issued shares pursuant to a written compensatory plan or contract may be
entitled to rely on the resale provisions of Rule 701, which permits
nonaffiliates to sell their Rule 701 shares without having to comply with the
public information, holding period, volume limitation or notice provisions of
Rule 144, and permits affiliates to sell their Rule 701 shares without having
to comply with Rule 144's holding period restrictions, in each case commencing
90 days after the date of this prospectus.
As soon as practicable following the closing of this offering, we intend to
file a registration statement under the Securities Act to register shares
of common stock issuable upon the exercise of outstanding stock options or
reserved for issuance under our stock option plans, of which shares will be
immediately exercisable. 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.
52
<PAGE>
UNDERWRITING
We 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 are obligated to sell, and
the underwriters are obligated to purchase, all of the shares offered on the
cover page of this prospectus, if any are purchased. Subject to certain
conditions of the underwriting agreement, each underwriter has severally agreed
to purchase the shares indicated opposite its name:
<TABLE>
<CAPTION>
Number
Underwriters of Shares
------------ ---------
<S> <C>
Prudential Securities Incorporated.................................
Dain Rauscher Wessels..............................................
Volpe Brown Whelan & Company, LLC..................................
E*OFFERING Corp....................................................
----
Total............................................................
====
</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, an over-allotment option to purchase up to
additional shares from us. If any additional shares are purchased, the
underwriters will severally purchase the shares in the same proportion as per
the table above.
The representatives of the underwriters have advised us that the shares will
be offered to the public at the offering price indicated on the cover page of
this prospectus. The underwriters may allow to selected dealers a concession
not in excess of $ per share and such dealers may reallow a concession not in
excess of $ per share to certain other dealers. After the shares are released
for sale to the public, the representatives may change the offering price and
the concessions. The representatives have informed us that the underwriters do
not intend to sell shares to any investor who has granted them discretionary
authority.
We have agreed to pay to the underwriters the following fees, assuming both
no exercise and full exercise of the underwriters' overallotment option to
purchase additional shares:
<TABLE>
<CAPTION>
Total Fees
-------------------------------------------
Fee Without Exercise of Full Exercise
Per Share Over-Allotment Option Over-Allotment Option
--------- --------------------- ---------------------
<S> <C> <C> <C>
Fees paid by us....... $ $ $
</TABLE>
In addition, we estimate that we will spend approximately $ in expenses for
this offering. We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act, or contribute to
payments that the underwriters may be required to make in respect of these
liabilities.
We, our officers and directors, and stockholders of bamboo.com have entered
into lockup agreements pursuant to which we and they have agreed not to offer
or sell any shares of common stock or securities convertible into or
exchangeable or exercisable for shares of common stock for a period of 180 days
from the date of this prospectus without the prior written consent of
Prudential Securities, on behalf of the underwriters. 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.
53
<PAGE>
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 option.
. Stabilizing and short covering; stabilizing bids to purchase the shares
are permitted if they do not exceed a specified maximum price. After the
distribution of shares has been completed, short covering purchases in
the open market may also reduce the short position. These activities may
cause the price of the shares to be higher than would otherwise exist in
the open market.
. Penalty bids permitting the representatives to reclaim concessions from a
syndicate member for the shares purchased in the stabilizing or short
covering transactions.
Such activities, which may be commenced and discontinued at any time, may be
effected on the Nasdaq National Market, in the over-the-counter market or
otherwise.
Each underwriter has represented that it has complied and will comply with
all applicable laws and regulations in connection with the offer, sale or
delivery of the shares and related offering materials in the United Kingdom,
including:
. the Public Offers of Securities Regulations 1995,
. the Financial Services Act 1986, and
. the Financial Services Act 1986, (Investment Advertisements) (Exemptions)
Order 1996 (as amended).
Prudential Securities and other underwriters have, from time to time,
performed various investment banking and financial advisory services on a fee
for services basis for bamboo.com. In March 1999, an entity affiliated with
Dain Rauscher Wessels, a division of Dain Rauscher Incorporated, invested in
our private placement purchasing an aggregate of 86,102 shares of our Series B
preferred stock on 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 affiliates or related third parties. 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.
54
<PAGE>
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for
bamboo.com by Wilson Sonsini Goodrich & Rosati, P.C., Palo Alto, California.
Certain legal matters will be passed upon for the underwriters by Skadden,
Arps, Slate, Meagher & Flom LLP, Palo Alto, California. As of the date of this
prospectus, WS Investment Company 98B and WS Investment Company 99A, investment
partnerships composed of current and former members of and persons associated
with Wilson Sonsini Goodrich & Rosati, P.C., and Mario Rosati a member of
Wilson Sonsini Goodrich & Rosati, P.C., beneficially own an aggregate of 53,555
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 and comprehensive loss,
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.
55
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants.......................................... F-2
Consolidated Balance Sheets................................................ F-3
Consolidated Statements of Operations and Comprehensive Loss............... F-4
Consolidated Statements of Stockholders' Equity (Deficit).................. F-5
Consolidated Statements of Cash Flows...................................... F-6
Notes to Consolidated Financial Statements................................. F-7
</TABLE>
F-1
<PAGE>
Report of Independent Accountants
March 12, 1999, except for Note 13,
which is as of June 11, 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 and comprehensive loss, 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.
/s/ PricewaterhouseCoopers LLP
San Jose, California
F-2
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Pro Forma
December 31, March 31,
---------------------- March 31, 1999
1997 1998 1999 (See Note 11)
--------- ----------- ----------- -------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.. $ 3,955 $ 430,097 $10,947,453
Accounts receivable, net of
allowance for doubtful
accounts of zero in 1997,
$1,304 in 1998 and zero in
1999 (unaudited).......... 7,151 19,379 68,256
Prepaid expenses and other
current assets............ -- 78,979 84,148
--------- ----------- -----------
11,106 528,455 11,099,857
Property, plant and
equipment.................. 14,263 211,663 754,751
Other assets................ -- 40,000 40,000
--------- ----------- -----------
Total assets.............. $ 25,369 $ 780,118 $11,894,608
========= =========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Accounts payable........... $ 11,777 $ 133,446 $ 470,186
Accrued liabilities........ 24,206 122,104 591,525
Deferred revenue........... -- -- 63,133
Notes payable to
stockholders.............. 61,556 7,500 7,666
--------- ----------- -----------
Total liabilities......... 97,539 263,050 1,132,510
--------- ----------- -----------
Commitments (Notes 7 and 9)
Stockholders' equity
(deficit):
Capital stock:
Preferred stock: $0.001 par
value
Series A Convertible:
500,000 authorized shares.. -- 231 231 --
Issued and outstanding:
zero in 1997, 231,250
shares in 1998 and 1999
(unaudited) and zero pro
forma (unaudited)
(Liquidation value:
$925,000).................
Series B Convertible:
2,152,574 authorized
shares.....................
Issued and outstanding:
zero in 1997 and 1998,
2,152,574 in 1999
(unaudited) and zero pro
forma (unaudited)
(Liquidation value:
$12,500,000).............. -- -- 2,153 --
Common stock:
$0.001 par value...........
10,000,000 authorized
shares....................
Issued and outstanding:
zero in 1997 and 1998,
150,500 in 1999
(unaudited) and 2,534,324
pro forma (unaudited)..... -- -- 151 $ 2,535
Class B common stock:
$0.0001 par value
2,650,548 authorized
shares;...................
Issued and outstanding:
1,016,080 shares in 1997,
2,650,548 shares in 1998,
1999 (unaudited) and pro
forma (unaudited)......... 23 187 187 187
Additional paid in capital.. 160,881 2,653,315 22,778,406 22,778,406
Notes receivable from
stockholders............... -- (53,806) (107,556) (107,556)
Unearned employee stock-
based compensation......... -- -- (3,820,639) (3,820,639)
Accumulated other
comprehensive income
(loss)..................... 267 (9,225) 1,338 1,338
Deficit accumulated during
the development stage...... (233,341) (2,073,634) (8,092,173) (8,092,173)
--------- ----------- ----------- -----------
Total stockholders' equity
(deficit)................ (72,170) 517,068 10,762,098 $10,762,098
--------- ----------- ----------- ===========
Total liabilities and
stockholders' equity
(deficit)................ $ 25,369 $ 780,118 $11,894,608
========= =========== ===========
</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 AND COMPREHENSIVE LOSS
<TABLE>
<CAPTION>
From
November 2,
1995 (date From
of November 2,
inception) Three Months Ended 1995 (date of
Years ended December 31, to March 31, inception) to
-------------------------------- December 31, ----------------------- March 31,
1996 1997 1998 1998 1998 1999 1999
-------- --------- ----------- ------------ ----------- ----------- -------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues................. $ -- $ 45,553 $ 77,410 $ 122,963 $ 20,798 $ 88,658 $ 211,621
Cost of revenues......... -- 15,204 67,710 82,914 9,914 73,939 156,853
-------- --------- ----------- ----------- --------- ----------- -----------
Gross profit............. -- 30,349 9,700 40,049 10,884 14,719 54,768
Operating expenses:
Sales and marketing..... 4,784 9,672 883,469 897,925 183,441 1,558,793 2,456,718
General and
administrative......... 61,804 122,034 723,607 907,445 272,962 1,498,194 2,405,639
Research and
development............ 23,829 41,567 242,917 308,313 86,233 55,763 364,076
Employee stock-based
compensation........... -- -- -- -- -- 2,936,601 2,936,601
-------- --------- ----------- ----------- --------- ----------- -----------
Total................... 90,417 173,273 1,849,993 2,113,683 542,636 6,049,351 8,163,034
-------- --------- ----------- ----------- --------- ----------- -----------
Loss from operations..... (90,417) (142,924) (1,840,293) (2,073,634) (531,752) (6,034,632) (8,108,266)
Interest income.......... -- -- -- -- -- 16,093 16,093
-------- --------- ----------- ----------- --------- ----------- -----------
Net loss................. (90,417) (142,924) (1,840,293) (2,073,634) (531,752) (6,018,539) (8,092,173)
Foreign currency
translation
adjustments............. (963) 1,230 (9,492) (9,225) -- 10,563 1,338
-------- --------- ----------- ----------- --------- ----------- -----------
Comprehensive loss....... $(91,380) $(141,694) $(1,849,785) $(2,082,859) $(531,752) $(6,007,976) $(8,090,835)
======== ========= =========== =========== ========= =========== ===========
Net loss per share--basic
and diluted............. $ (0.11) $(0.14) $(0.87) $(1.54) $(0.48) $(2.19) $(5.46)
======== ========= =========== =========== ========= =========== ===========
Weighted average shares--
basic and diluted....... 808,333 1,006,700 2,119,170 1,347,650 1,097,330 2,750,324 1,483,279
======== ========= =========== =========== ========= =========== ===========
Pro forma net loss per
share--basic and diluted
(unaudited)............. $ (0.86) $(1.53) $ (1.75) $(5.24)
=========== =========== =========== ===========
Pro forma weighted
average shares--basic
and diluted (unaudited).. 2,150,837 1,358,375 3,436,006 1,543,021
=========== =========== =========== ===========
</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 Common Notes Unearned Accumulated
Preferred Stock Common Stock Stock Additional Receivable Employee 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... -- $ -- -- $ -- 800,000 $ 1 $ -- $ -- $ -- $ --
Common stock
issued for cash
in December 1996
at C$1.00 per
share
(US$0.74)....... -- -- -- -- 200,000 20 147,276 -- -- --
Net loss........ -- -- -- -- -- -- -- -- -- --
Other
comprehensive
loss............ -- -- -- -- -- -- -- -- -- (963)
--------- ------ ------- ----- --------- ---- ----------- --------- ----------- ------
Balance --
December 31,
1996............ -- -- -- -- 1,000,000 21 147,276 -- -- (963)
Common stock
issued for cash
in July 1997 at
C$1.17 per share
(US$0.85)....... -- -- -- -- 16,080 2 13,605 -- -- --
Net loss........ -- -- -- -- -- -- -- -- -- --
Other
comprehensive
income.......... -- -- -- -- -- -- -- -- -- 1,230
--------- ------ ------- ----- --------- ---- ----------- --------- ----------- ------
Balance --
December 31,
1997............ -- -- -- -- 1,016,080 23 160,881 -- -- 267
Common stock
issued through
March to
September 1998
at fair value of
C$1.00 (US$0.68)
to C$3.00
(US$1.99)....... -- -- -- -- 479,368 48 431,775 -- -- --
Common stock
issued for
services through
February to May
1998 at fair
value of C$1.00
(US$0.69) to
C$1.40
(US$1.00)....... -- -- -- -- 367,000 37 325,463 -- -- --
Issuance of
options to
purchase common
stock for
services at fair
value of US$0.75
to US$1.00 per
share in
February to May
1998............ -- -- -- -- -- -- 536,419 -- -- --
Shares issued
upon exercise of
options for
common stock at
$0.01 per share
in September
1998............ -- -- -- -- 668,100 67 4,563 -- -- --
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... -- -- -- -- 120,000 12 77,733 (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 -- -- 2,650,548 187 2,653,315 (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.. 1,841,079 1,839 -- -- -- -- 10,684,170 -- -- --
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
March 1999...... -- -- -- -- -- -- 645,802 -- -- --
Unearned
employee stock-
based
compensation.... -- -- -- -- -- -- 6,757,240 -- (6,757,240) --
Amortization of
employee stock-
based
compensation.... -- -- -- -- -- -- -- -- 2,936,601 --
Common stock
issued for
services in
January 1999.... -- -- 43,000 43 -- -- 175,699 -- -- --
Common stock
issued on
exercise of
stock options in
February 1999... -- -- 107,500 108 -- -- 53,642 (53,750) -- --
Net loss........ -- -- -- -- -- -- -- -- -- --
Other
comprehensive
income.......... -- -- -- -- -- -- -- -- 10,563
--------- ------ ------- ----- --------- ---- ----------- --------- ----------- ------
Balance -- March
31, 1999
(unaudited)..... 2,383,824 $2,384 150,500 $ 151 2,650,548 $187 $22,778,406 $(107,556) $(3,820,639) $1,338
========= ====== ======= ===== ========= ==== =========== ========= =========== ======
<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$1.00 per
share
(US$0.74)....... -- 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$1.17 per share
(US$0.85)....... -- 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$1.00 (US$0.68)
to C$3.00
(US$1.99)....... -- 431,823
Common stock
issued for
services through
February to May
1998 at fair
value of C$1.00
(US$0.69) to
C$1.40
(US$1.00)....... -- 325,500
Issuance of
options to
purchase common
stock for
services at fair
value of US$0.75
to US$1.00 per
share in
February to May
1998............ -- 536,419
Shares issued
upon exercise of
options for
common stock 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.. -- 10,686,009
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
March 1999...... -- 645,802
Unearned
employee stock-
based
compensation.... -- --
Amortization of
employee stock-
based
compensation.... -- 2,936,601
Common stock
issued for
services in
January 1999.... -- 175,742
Common stock
issued on
exercise of
stock options in
February 1999... -- --
Net loss........ (6,018,539) (6,018,539)
Other
comprehensive
income.......... -- 10,563
------------ ------------
Balance -- March
31, 1999
(unaudited)..... $(8,092,173) $10,762,098
============ ============
</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 Three Months Ended 1995 (date of
Years ended December 31, inception) to March 31, inception) to
-------------------------------- December 31, ----------------------- March 31,
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) $(531,752) $(6,018,539) $(8,092,173)
Items not affecting
cash:
Depreciation and
amortization......... 11,914 10,763 32,045 54,722 2,414 70,105 124,827
Issuance of common
stock in exchange for
services............. -- -- 370,404 370,404 123,500 175,742 546,146
Issuance of Series B
convertible preferred
stock in settlement
of interest payable.. -- -- -- -- -- 8,850 8,850
Issuance of warrant
for common stock for
services............. -- -- 168,401 168,401 -- -- 168,401
Issuance of options
for common stock for
services............. -- -- 536,419 536,419 370,000 742,203 1,278,622
Employee stock-based
compensation......... -- -- -- -- -- 2,936,601 2,936,601
Changes in assets and
liabilities:
Accounts receivable,
net................. -- (7,384) (13,139) (20,523) (12,742) (48,877) (69,400)
Prepaid expenses and
other current
assets.............. -- -- (82,982) (82,982) (2,447) (5,169) (88,151)
Other assets......... -- -- (40,000) (40,000) -- -- (40,000)
Accounts payable..... 16,160 7,957 126,612 150,729 (25,546) 336,740 487,469
Accrued liabilities.. -- 8,046 93,946 101,992 -- 373,021 475,013
Deferred revenue..... -- -- -- -- -- 63,133 63,133
-------- --------- ----------- ----------- --------- ----------- -----------
Net cash used in
operating
activities......... (62,343) (123,542) (648,587) (834,472) (76,573) (1,366,190) (2,200,662)
-------- --------- ----------- ----------- --------- ----------- -----------
Investing activities:
Purchase of capital
assets............... (30,430) (6,458) (219,068) (255,956) (11,542) (613,194) (869,150)
-------- --------- ----------- ----------- --------- ----------- -----------
Net cash used in
investing
activities......... (30,430) (6,458) (219,068) (255,956) (11,542) (613,194) (869,150)
-------- --------- ----------- ----------- --------- ----------- -----------
Financing activities:
Notes payable to
stockholders......... 77,278 (13,702) (26,828) 36,748 (26,294) 166 36,914
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 13,607 386,919 547,823 154,951 -- 547,823
Proceeds from exercise
of common stock
options.............. -- -- 4,630 4,630 -- -- 4,630
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....... -- -- -- -- -- 10,686,011 10,686,011
Proceeds from issuance
of warrants.......... -- -- 23,311 23,311 -- -- 23,311
-------- --------- ----------- ----------- --------- ----------- -----------
Net cash provided by
financing
activities......... 224,575 (95) 1,313,032 1,537,512 128,657 12,486,177 14,023,689
-------- --------- ----------- ----------- --------- ----------- -----------
Effect of exchange rate
changes on cash....... (963) 3,211 (19,235) (16,987) 2,735 10,563 (6,424)
-------- --------- ----------- ----------- --------- ----------- -----------
Increase (decrease) in
cash during the
period................ 130,839 (126,884) 426,142 430,097 43,277 10,517,356 10,947,453
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 $ 47,232 $10,947,453 $10,947,453
======== ========= =========== =========== ========= =========== ===========
Supplemental
disclosures cash flow
information:
Unearned stock based
compensation related
to stock options
grants............... $ -- $ -- $ -- $ -- $ -- $ 6,757,240 $ 6,757,240
======== ========= =========== =========== ========= =========== ===========
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 $ -- $ 53,750 $ 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
======== ========= =========== =========== ========= =========== ===========
Issuance of common
stock for services... $ -- $ -- $ 325,500 $ 325,500 $ 123,500 $ 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 $ 370,000 $ 742,203 $ 1,278,622
======== ========= =========== =========== ========= =========== ===========
</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 March 31, 1999 and/or for the periods ended March 31, 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 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, converting 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 Web sites. The Company's primary 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.
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 2,650,548 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 2,650,548 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 March 31, 1999 and/or for the periods ended March 31, 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
in 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 March 31, 1999, and for
the three months ended March 31, 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 March 31, 1999 and for
the three months ended March 31, 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 three months ended March 31, 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 March 31, 1999 and/or for the periods ended March 31, 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 shareholders 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 at December 31, 1997. Two
customers accounted for 58% and 13% of total accounts receivable as at December
31, 1998. At March 31, 1999 (unaudited) two customers accounted for 58% and 14%
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 three months ended March 31, 1999 (unaudited). 100%, 100% and
23% (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 three months ended March 31, 1999
(unaudited).
The Company does not list real estate on its own web site and is therefore
dependent upon distribution partnerships with other real estate distributor
sites. If the Company were to lose any of these distribution partners its
revenue and results of operations could be materially 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 March 31, 1999 and/or for the periods ended March 31, 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, converting 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 customer's Web site 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 issued to non-employees has 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 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 March 31, 1999 and/or for the periods ended March 31, 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 Three Months Ended 1995 (date of
Years ended December 31, inception) to March 31, inception) to
--------------------------------- December 31, ------------------------ March 31,
1996 1997 1998 1998 1998 1999 1999
-------- ---------- ----------- ------------- ----------- ----------- -------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Numerator
Net loss............... $(90,417) $ (142,924) $(1,840,293) $(2,073,634) $ (531,752) $(6,018,539) $(8,092,173)
======== ========== =========== =========== ========== =========== ===========
Denominator
Weighted average
shares -- basic and
diluted............... 808,333 1,006,700 2,119,170 1,347,650 1,097,330 2,765,215 1,484,410
Weighted average common
shares subject to
repurchase............ -- -- -- -- -- (14,891) (1,131)
-------- ---------- ----------- ----------- ---------- ----------- -----------
Denominator for basic
and diluted
calculation........... 808,333 1,006,700 2,119,170 1,347,650 1,097,330 2,750,324 1,483,279
-------- ---------- ----------- ----------- ---------- ----------- -----------
Net loss per share --
basic and diluted.... $ (0.11) $ (0.14) $ (0.87) $ (1.54) $ (0.48) $ (2.19) $ (5.46)
======== ========== =========== =========== ========== =========== ===========
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 Three Months Ended 1995 (date of
Years ended December 31, inception) to March 31, inception) to
--------------------------------- December 31, ------------------------ March 31,
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....... -- -- 31,667 10,925 -- 231,250 26,865
Series B convertible
preferred stock....... -- -- -- -- -- 454,432 32,877
Options to purchase
common stock.......... -- -- -- -- 261,111 1,227,403 66,128
Warrants to purchase
common stock.......... -- -- -- -- -- 18,534 --
Common stock subject to
repurchase............ -- -- -- -- -- 14,891 1,131
-------- ---------- ----------- ----------- ---------- ----------- -----------
-- -- 31,667 10,925 261,111 1,946,510 127,001
======== ========== =========== =========== ========== =========== ===========
</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.
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
F-11
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of March 31, 1999 and/or for the periods ended March 31, 1998
and 1999 is unaudited
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>
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.
F-12
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of March 31, 1999 and/or for the periods ended March 31, 1998
and 1999 is unaudited
NOTE 6--PREFERRED STOCK:
Under the Company's Article's of Incorporation, as amended, the Company's
preferred stock is issuable in series and the Company's Board of Directors is
authorized to determine the rights, preferences and privileges of each series.
The Company has authorized 2,652,574 shares of convertible preferred stock, of
which 500,000 is designated Series A convertible preferred stock ("Series A")
and 2,152,574 is designated Series B convertible preferred stock ("Series B").
On March 12, 1999, the Company issued 2,152,574 shares of Series B preferred
shares, having a par value of $0.001 per share, at $5.80 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 shares 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 shares, a sum equal to all unpaid
dividends, in addition to an amount per share of $4.00 and $5.807,
respectively. In addition, the Series B stockholders are entitled to
participate pro rata based on the number of common shares 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
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 initial conversion price will be $4.00 and $5.807,
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 $11.6140 per
share, or upon the written election of not less than two-thirds of voting power
of the then outstanding Series A and B convertible preferred stock.
F-13
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of March 31, 1999 and/or for the periods ended March 31, 1998
and 1999 is unaudited
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 common shares 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 share split.
The effect of this stock split has been retroactively reflected throughout the
financial statements.
Class B Common Stock
On the reorganization on January 1, 1999, (Note 2) the Company authorized and
issued 2,650,548 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 one
common share and a warrant to purchase one common share. 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 one common share at approximately $0.65 per share on or
before June 28, 1999. On December 8, 1998, the warrants were exercised to
purchase 120,000 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 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, 367,000 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 850,000 common shares. This plan became
effective on January 1, 1999 once the Company was reorganized. During 1999, an
additional 1,351,638 common shares were authorized under the Plan. Each option
under the incentive plan allows for the purchase of one common share of the
Company and expires not later than five or
F-14
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of March 31, 1999 and/or for the periods ended March 31, 1998
and 1999 is unaudited
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...... 2,201,638
Options granted......... 1,975,838 1,975,838 $0.50-1.00 $0.54 1,065,219
Options exercised....... -- (150,500) $ 0.50 $0.50 (75,250)
--------- --------- ---------- ----- ----------
Balances, March 31,
1999................... 225,800 1,825,338 $0.50-1.00 $0.54 $ 989,969
========= ========= ========== ===== ==========
</TABLE>
The options outstanding and currently exercisable by exercise price at March
31, 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>
$0.50................ 1,540,138 9.8 $0.50 356,138 $0.50
$0.75................ 261,200 9.9 0.75 7,700 0.75
$1.00................ 24,000 9.8 1.00 24,000 1.00
-------
387,838
=======
</TABLE>
Option agreements
On February 12, 1998, the Company issued 500,000 stock options to non-
employees, and on May 31, 1998, the Company issued a further 168,100 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 in ten years from the date of grant and vested immediately. As at
December 31, 1998, all of the options had been exercised into common shares for
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 100%, 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
$0.80. 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 (unaudited)
In February 1999, the Company issued 43,000 shares of its common stock on
exercise of options granted in exchange for services under restricted purchase
agreements. At March 31, 1999, 39,417 (unaudited) common
F-15
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of March 31, 1999 and/or for the periods ended March 31, 1998
and 1999 is unaudited
shares are subject to repurchase under these agreements in the event of
voluntary termination of the purchaser's services. The repurchase provision
expires on 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 100,000 shares of
common stock at $4.00 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.
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.
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>
F-16
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of March 31, 1999 and/or for the periods ended March 31, 1998
and 1999 is unaudited
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--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
$11,459,000 payable over three years. A total of $5,725,000 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..................... $1,875,000 $ 2,007,000
Year ended December 31, 2000..................... 3,850,000 3,916,000
Year ended December 31, 2001..................... -- 4,510,000
Year ended December 31, 2002..................... -- 1,026,000
---------- -----------
$5,725,000 $11,459,000
========== ===========
</TABLE>
NOTE 10--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 11--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
March 31, 1999.
F-17
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of March 31, 1999 and/or for the periods ended March 31, 1998
and 1999 is unaudited
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 three months ended March 31, 1999.
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, November 2,
1995 (date of 1995 (date of
inception) to inception) to
December December 31, March 31, March 31,
31, 1998 1998 1999 1999
----------- ------------- ----------- -------------
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net loss................ $(1,840,293) $(2,073,634) $(6,018,539) $(8,092,173)
=========== =========== =========== ===========
Shares used in computing
basic and diluted net
loss per share......... 2,119,170 1,347,650 2,750,324 1,483,279
Adjusted to reflect the
effect of the assumed
conversion of all
convertible preferred
stock from the date of
issuance............... 31,667 10,925 685,682 59,742
----------- ----------- ----------- -----------
Weighted average shares
used in computing pro
forma basic and diluted
net loss per share..... 2,150,837 1,358,575 3,436,006 1,543,021
=========== =========== =========== ===========
Pro forma basic and
diluted net loss per
share.................. $ (0.86) $ (1.53) $ (1.75) $ (5.24)
=========== =========== =========== ===========
</TABLE>
NOTE 12--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-18
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of March 31, 1999 and/or for the periods ended March 31, 1998
and 1999 is unaudited
NOTE 13--SUBSEQUENT EVENTS:
Distribution Agreements
On March 16, 1999, the Company entered into a distribution agreement with a
real estate destination Web site to maintain certain promotional and linkage
rights in exchange for quarterly payments of $55,000 and minimum payments
totaling $275,000. At March 31, 1999, the additional minimum future payments
required under this agreement are as follows:
<TABLE>
<S> <C>
Year ended December 31, 1999....................................... $165,000
Year ended December 31, 2000....................................... 55,000
--------
$220,000
========
</TABLE>
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.
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.
Private Placements
On May 5, 1999, the Company issued an additional 172,206 Series B preferred
shares with a par value of $0.001 for $5.807 per share for total cash proceeds
of $1,000,000.
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.
F-19
<PAGE>
BAMBOO.COM, INC.
(FORMERLY JUTVISION CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Information as of March 31, 1999 and/or for the periods ended March 31, 1998
and 1999 is unaudited
On June 7, 1999, the Company authorized an additional 1,100 shares of
preferred stock and designated them as Series C redeemable preferred stock
("Series C redeemable stock"). Series C redeemable stockholders are entitled to
cumulative dividends in preference to all other share classes at a rate of $500
per share per annum, commencing from June 30, 2000. Series C redeemable stock
is automatically redeemable on the earlier of the completion of an initial
public offering, five years from the date of issuance or at any time at the
option of the Company at a redemption price of $10,000 per share plus all
accrued and unpaid dividends.
On June 11, 1999, the Company entered into an agreement to sell 1,100 shares
of its Series C redeemable preferred stock and 446,725 shares of its common
stock for total gross proceeds of $11 million.
In addition, on June 9, 1999 Company adopted the 1999 Employee Stock Purchase
Plan under which shares have been reserved for issuance.
Initial Public Offering
On June 9, 1999, the Company approved the issuance and sale in an
underwritten public offering of the Company's common stock.
F-20
<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............................................... $15,985
NASD Filing Fee.................................................... 6,250
Nasdaq National Market Listing Fee................................. (*)
Printing Costs..................................................... (*)
Legal Fees and Expenses............................................ (*)
Accounting Fees and Expenses....................................... (*)
Blue Sky Fees and Expenses......................................... (*)
Transfer Agent and Registrar Fees.................................. (*)
Miscellaneous...................................................... (*)
-------
Total............................................................ $ (*)
=======
</TABLE>
- --------
(*) To be provided by amendment.
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 100,000 shares of common stock to two
founders for an aggregate consideration of C$10.00.
2. On December 12, 1996 we issued 40,000 to one U.S. investor's shares of
common stock and 160,000 shares of common stock to 12 non-U.S.
investors for an aggregate consideration of C$200,000.00.
3. On July 31, 1997 we issued 16,080 shares of common stock to 6 investors
for an aggregate consideration of C$18,759.89.
4. On February 12, 1998 we issued 150,000 shares of common stock to 3
officers for an aggregate consideration of C$150,000, paid for by
services rendered and options to purchase 500,000 shares of common
stock at an exercise price of $.01.
5. On March 31, 1998 we issued 254,000 shares of common stock to 14
investors for an aggregate consideration of C$220,000.
6. On April 8, 1998 we issued 36,000 shares of common stock to one officer
and two investors for an aggregate consideration of C$36,000.
II-1
<PAGE>
7. On April 13, 1998 we issued 40,000 shares of common stock to an
employee for an aggregate consideration of C$40,000.
8. On April 21, 1998 we issued 40,000 shares of common stock to one
officer and an investor for an aggregate consideration of C$40,000.
9. On May 22, 1998 we issued 177,000 shares of common stock to two
investors for an aggregate consideration of C$177,000.
10. On June 28, 1998 we issued warrants for 120,000 shares of common stock
to six investors which were exercised for an aggregate consideration of
C$120,000.
11. On September 28, 1998 we issued 13,368 shares of common stock to three
investors for an aggregate consideration of C$40,104.
12. On September 30, 1998 we issued 50,000 shares of common stock to one
investor for an aggregate consideration of C$150,000.
13. On October 20, 1998 we issued 148,750 shares of Series A preferred
stock to eleven investors at an aggregate consideration of $595,000.
14. On November 11, 1998 we issued warrants for 139,965 shares of common
stock to one investor at an exercise price of $4.00 per share, which
was later amended to warrants for 100,000 shares of common stock on
June 11, 1999.
15. On December 8, 1998 we issued 25,000 shares of Series A preferred stock
to 3 non-U.S. investors and 57,500 shares of Series A preferred stock
to 6 non-U.S. investors for an aggregate consideration of C$330,000.
16. On January 1, 1999 we issued 2,650,548 shares of Class B redeemable
common stock to twenty eight shareholders as part of the amalgamation
and reorganization of our business as a Delaware corporation.
17. On February 25, 1999 we issued 43,000 shares of common stock to two
investors at an aggregate consideration of $21,500
18. On March 12, 1999 we issued 2,324,774 shares of Series B preferred
stock to eighteen investors at an aggregate consideration of
$13,499,962.61
19. On June 11, 1999, the Company entered into an agreement to sell 1,100
shares of its Series C redeemable preferred stock and 446,725 shares of
its common stock to four investors for an aggregate consideration of
$11,000,000.
20. Since our incorporation, we have issued an aggregate of 2,311,013
options and stock purchase rights to purchase our common stock under
the 1998 Employee Director and Consultant Stock Plan to employees,
directors, and consultants with exercise prices ranging from $0.50 to
$1.50.
The issuances of securities described in Items 1-12 were sold Canadian
dollars and are denominated above in Canadian dollars. "C$" 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 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
II-2
<PAGE>
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.
(a)
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement dated , 1999.*
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 of
agreement thereunder, as currently in effect.
10.3 Form of 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.
10.4 Form of 1999 Employee Stock Purchase Plan and form of agreements
thereunder.
10.5 Investors' Rights Agreement dated as of March 12, 1999 among
bamboo.com and certain investors.
10.6 Joint Services Agreement with RealSelect, Inc. dated as of Nov. 11,
1998 as amended June 11, 1999.*
10.7 Distribution Agreement with Microsoft Corporation dated as of March
16, 1999.*
10.8 Distribution Agreement with HomeSeekers.com, Inc. dated as of Nov. 20,
1998.*
10.9 Distribution Agreement with Homes.com, a division of PCL Media
Limited, dated as of May 10, 1999.*
10.10 Form of Distribution Agreement with multiple listing services.
10.11 Form of bamboo.com Approved Web Pro Agreement.
10.12 Form of Distribution and Co-marketing Agreement with real estate
brokerage companies.
10.13 Line of Credit with Silicon Valley Bank dated April 16, 1999.
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C>
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 Employment Agreement with Mark R. Searle.
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.
21.1 Subsidiaries of Registrant.
23.1 Consents of Accountants.
23.2 Consents of Attorneys.
24.1 Power of Attorney (see page II-5).
27.1 Financial Data Schedule.
</TABLE>
- --------
*To be filed by amendment
(b)Financial Statement Schedules
Schedule II--Valuation and Qualifying Accounts
Other schedules are omitted because they are not applicable, or because the
information is included in the Financial Statements or the Notes thereto.
Item 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Palo Alto, State of
California on June 14, 1999.
/s/ Leonard B. McCurdy
By: _________________________________
Leonard B. McCurdy
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints, jointly and severally, Randall I. Bresee
and Kevin B. McCurdy, and each of them, as his attorney-in-fact, with full
power of substitution, for him in any and all capacities, to sign any and all
amendments to this registration statement (including post-effective
amendments), and any and all registration statements filed pursuant to Rule 462
under the Securities Act of 1933, as amended, in connection with or related to
the offering contemplated by this registration statement and its amendments, if
any, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming our signatures as they may be signed by our said
attorney to any and all amendments to said registration statement.
Pursuant to the requirements of the Securities Act of 1933, this 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>
/s/ Leonard B. McCurdy Chief Executive Officer, June 14, 1999
______________________________________ Chairman and Director
Leonard B. McCurdy
/s/ Kevin B. McCurdy Executive Vice President June 14, 1999
______________________________________ and Director
Kevin B. McCurdy
/s/ Randall I. Bresee Chief Financial Officer June 14, 1999
______________________________________
Randall I. Bresee
/s/ Duncan Fortier Director June 14, 1999
______________________________________
Duncan Fortier
/s/ John Moragne Director June 14, 1999
______________________________________
John Moragne
/s/ Philip Sanderson Director June 14, 1999
______________________________________
Philip Sanderson
/s/ James Marver Director June 14, 1999
______________________________________
James Marver
</TABLE>
II-6
<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 13, which is as of June 11, 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.
San Jose, California
June 11, 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
March 31, 1999
Allowance for doubtful accounts..... $1,304 $ -- $(1,304) $ --
</TABLE>
S-2
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement dated , 1999.*
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 Form of 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.
10.4 Form of 1999 Employee Stock Purchase Plan and form of agreements
thereunder.
10.5 Investors' Rights Agreement dated as of March 12, 1999 among
bamboo.com and certain investors.
10.6 Joint Services Agreement with RealSelect, Inc. dated as of Nov. 11,
1998, as amended June 11, 1999.*
10.7 Distribution Agreement with Microsoft Corporation dated as of March
16, 1999.*
10.8 Distribution Agreement with HomeSeekers.com, Inc. dated as of Nov. 20,
1998.*
10.9 Distribution Agreement with Homes.com, a division of PCL Media
Limited, dated as of May 10, 1999.*
10.10 Form of Distribution Agreement with multiple listing services.
10.11 Form of bamboo.com Approved Web Pro Agreement.
10.12 Form of Distribution and Co-marketing Agreement with real estate
brokerage companies.
10.13 Line of Credit with Silicon Valley Bank dated April 16, 1999.
10.14 Master lease agreement with Silicon Valley Bank dated March 24, 1999.
10.15 Sublease with Pete's Brewing Company dated November 2, 1998.
10.16 Sublease with Pete's Brewing Company dated December 1, 1998.
10.17 Sublease with Information Access Inc. dated Nov. 15, 1998, and
amendment dated Feb. 22, 1999.
10.18 Service Provider Agreement with TBI Imaging dated Nov. 23, 1998 (also
form of).*
</TABLE>
<PAGE>
<TABLE>
<C> <S>
10.19 Employment Agreement with Leonard B. McCurdy.
10.20 Employment Agreement with Kevin B. McCurdy.
10.21 Employment Agreement with Andrew P. Laszlo.
10.22 Employment Agreement with Howard D. Field.
10.23 Employment Agreement with Mark R. Searle.
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.
21.1 Subsidiaries of Registrant.
23.1 Consents of Accountants.
23.2 Consents of Attorneys (see Exhibit 5.1).
24.1 Power of Attorney (see page II-5).
27.1 Financial Data Schedule.
</TABLE>
- --------
*To be filed by amendment
(b)Financial Statement Schedules
Schedule II--Valuation and Qualifying Accounts
Other schedules are omitted because they are not applicable, or because the
information is included in the Financial Statements or the Notes thereto.
<PAGE>
EXHIBIT 3.1
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
bamboo.com, Inc.
bamboo.com, Inc. (the "Corporation"), a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "General
Corporation Law") hereby certifies as follows:
1. That the Corporation was incorporated on March 26, 1998 under the name
Jutvision Corporation, pursuant to the General Corporation Law.
2. Pursuant to Sections 242 and 245 of the General Corporation Law, this
Amended and Restated Certificate of Incorporation restates and integrates and
further amends the provisions of the First Amended and Restated Certificate of
Incorporation of the Corporation.
3. The text of the Certificate of Incorporation is hereby amended and
restated in its entirety as follows:
ONE. That the name of the Corporation is: bamboo.com, Inc.
TWO. The address of the Corporation's registered office in the State
of Delaware is 1013 Centre Road, City of Wilmington, County of New Castle,
Delaware. The name of its registered agent at such address is Corporation
Service Company.
THREE. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law.
FOUR. The Corporation is authorized to issue three classes of stock to
be designated, respectively, "Common Stock," "Class B Common Stock" and
"Preferred Stock." The total number of shares of Common Stock that the
Corporation is authorized to issue is 10,000,000, with a par value of $0.001 per
share. The total number of shares of Class B Common Stock that the Corporation
is authorized to issue is 2,650,548, with a par value of $0.0001 per share. The
total number of shares of Preferred Stock that the Corporation is authorized to
issue is 2,557,130 with a par value of $0.001 per share, 231,250 of which are
designated "Series A Preferred Stock," 2,324,780 of which are designated "Series
B Preferred Stock" and 1,100 of which is designated "Series C Redeemable
Preferred Stock."
FIVE. The special rights of Common Stock and the Class B Common Stock
or the holders thereof are as follows:
<PAGE>
1. General. The voting, dividend and liquidation rights of the holders
-------
of the Common Stock and Class B Common Stock are subject to and qualified by the
rights of the holders of the Preferred Stock of any series as may be designated
by the Board of Directors upon any issuance of the Preferred Stock of any
series. Except as otherwise required by the General Corporation Law or as
otherwise provided in this Certificate of Incorporation, each share of Common
Stock and Class B Common Stock shall have identical rights, preferences,
privileges and restrictions, including rights in liquidation. Each provision of
this Article Five shall be severable and an adverse determination as to any such
provision shall in no way affect the validity of any other provision.
2. Voting. The holders of the Common Stock and Class B Common Stock are
------
entitled to one vote for each share held at all meeting of stockholders (and
written actions in lieu of meeting). With respect to all matters upon which
stockholders are entitled to vote or to which stockholders are entitled to give
consent, the holders of the outstanding shares of Common Stock and Class B
Common Stock shall have voted together without regard to class. There shall be
no cumulative voting.
The number of authorized shares of Common Stock and Class B Common Stock
may be increased or decreased (but not below the number of shares thereof then
outstanding, including shares issuable upon conversion of shares of Preferred
Stock then outstanding, and upon exercise of options and warrants then
outstanding) by the affirmative vote of the holders of a majority of the stock
of the Corporation entitled to vote, irrespective of the provisions of Section
242(b)(2) of the General Corporation Law of Delaware.
3. Dividends. No dividends shall be paid on the Class B Common Stock.
---------
4. Liquidation. The Class B Common Stock shall not be entitled to
-----------
receive any assets of the Corporation upon the dissolution or liquidation of the
Corporation.
5. Mandatory Redemption of Class B Common Stock. Upon the issuance of
--------------------------------------------
any shares of Common Stock to a holder of Class B Common Stock in connection
with the conversion (a "Conversion Event") by such holder of any Series C
Convertible Preferred Shares, no par value per share, of bamboo.com Canada,
Inc., an Ontario Corporation (formerly named Jutvision Canada, Inc.)("bamboo.com
Canada") ("bamboo.com Canada Series C Preferred"), such holder's shares of Class
B Common Stock shall be automatically redeemed, out of funds legally available
therefor, by the Corporation for par value. The number of shares of Class B
Common Stock redeemed shall be equal to that number of shares of Common Stock
issued to the holder upon the Conversion Event. Upon a Conversion Event, the
Class B Common Stock held by the stockholder participating in the Conversion
Event shall only represent the right to receive par value for each Class B
Common Stock share from the Corporation and all others rights of the Class B
Common Stock shall be automatically extinguished. Further, upon a Conversion
Event, the Corporation shall have no obligation to issue shares of Common Stock
to any holder converting bamboo.com Canada Series C Preferred shares until said
holder surrenders (or constructively surrenders, as the case may be, if the
certificate or certificates for such shares are being held for such holder by
bamboo.com Canada, or if bamboo.com
-2-
<PAGE>
Canada has not yet issued and delivered such certificate or certificates to the
holder) the certificates, duly endorsed, at the office of the Corporation or of
any transfer agent for the equal number shares of Class B Common Stock for
redemption by the Corporation or such holder provides the Corporation with a
lost certificate affidavit, in a form acceptable to the Corporation. Such
redemption shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Class B Common Stock to
be redeemed. Nothing in this Section 5 shall require the redemption of a
holder's Class B Common Stock upon the issuance of Common Stock to such holder
separate from a Conversion Event.
6. Transfer of Stock Pairing.
-------------------------
(a) Subject to the restrictions on transfer of stock described in the
Corporation's Bylaws, as amended from time to time, upon surrender to any
transfer agent of the Corporation of a certificate of shares of the Corporation
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the Corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
(b) Until the limitations on transfer set forth in the Conversion and
Pairing Agreement (the "Conversion and Pairing Agreement"), dated as of January
1, 1999, by and between the Corporation and bamboo.com Canada, as amended by
that Amended and Restated Conversion and Pairing Agreement dated as of June 7,
1999, and which may be amended from time to time in accordance with the
provisions thereof, shall be terminated:
(i) All shares of Class B Common Stock that are paired
pursuant to the Conversion and Pairing Agreement with the bamboo.com Canada
Series C Preferred shall not be transferable, and shall not be transferred on
the stock transfer books of the Corporation, unless (i) a simultaneous transfer
of bamboo.com Canada Series C Preferred is made by the same transferor to the
same transferee for the same number of shares or (ii) arrangements have been
made with bamboo.com Canada for the acquisition by the transferee of a like
number of shares of bamboo.com Canada Series C Preferred and such shares are
paired with the Class B Common Stock. Any purported transfer of Class B Common
Stock in violation of this Section 6 shall be void ab initio, and the intended
-- ------
transferee shall acquire no rights in such shares of Class B Common Stock.
(ii) Each certificate evidencing ownership of shares of Class B
Common Stock of the Corporation that are paired pursuant to the Conversion and
Pairing Agreement and issued and not canceled prior to the effectiveness of the
Conversion and Pairing Agreement shall be deemed to evidence a like number of
bamboo.com Canada Series C Preferred shares.
(iii) A legend shall be placed on the face of each certificate
evidencing ownership of shares of Class B Common Stock referring to the
restrictions on transfer set forth herein.
-3-
<PAGE>
(iv) A copy of the Conversion and Pairing Agreement shall be made
available to the stockholders upon request, without charge.
(c) Nothing in this Section 6 shall prohibit the redemption of the
Class B Common Stock, as provided for by Section 5 hereof, upon the conversion
of the bamboo.com Canada Series C Preferred into Common Stock.
SIX. The relative rights, preferences, privileges and restrictions granted
to or imposed upon the respective classes and series of the shares of capital
stock or the holders thereof are as set forth below.
1. Dividend Provisions.
-------------------
(a) Series C Redeemable Preferred Stock Provisions. The holders of
----------------------------------------------
Series C Redeemable Preferred Stock shall be entitled to receive cumulative
dividends, out of any assets legally available therefore, prior and in
preference to any declaration or payment of any dividend (payable other than in
Common Stock or other securities and rights convertible into or entitling a
holder thereof to receive, directly or indirectly, additional shares of Common
Stock of this corporation) on the Series B Preferred, Series A Preferred, Class
B Common and Common Stock of this corporation at the rate of $500.00 per share,
per annum, accruing annually from June 30, 2000. Dividends on the holders of
Series C Redeemable Preferred Stock shall not accrue prior to June 30, 2000.
(b) Series A and Series B Preferred Stock. The holders of shares of
-------------------------------------
Series A and Series B Preferred Stock shall be entitled to receive dividends,
out of any assets or funds legally available therefor, prior and in preference
to any declaration or payment of any dividend (payable other than in Common
Stock or other securities and rights convertible into or entitling the holder
thereof to receive, directly or indirectly, additional shares of Common Stock of
this Corporation) on the Common Stock of this Corporation, at the rate of $0.32
and $0.4646, respectively, per share per annum (as adjusted for any stock
dividends, combinations, recapitalizations or splits and the like), or, if
greater (as determined on a per annum basis and on an as converted basis for the
Series A and Series B Preferred Stock), an amount equal to that paid on any
other outstanding shares of this Corporation. Such dividends on Common Stock and
the Series A and Series B Preferred Stock shall be payable quarterly when, as
and if declared by the Board of Directors, and shall not be cumulative, and no
right shall accrue to holders of Common Stock or Series A and Series B Preferred
Stock by reason of the fact that dividends on said shares are not declared in
any prior period. No dividends shall be paid on either the Common Stock or
Series A Preferred Stock in any year unless an equal dividend shall have been
paid on the Series B Preferred Stock.
-4-
<PAGE>
2. Liquidation Preference.
----------------------
(a) Preferred Preference.
--------------------
(i) In the event of any liquidation, dissolution or winding up
of this Corporation, either voluntary or involuntary, the holders of shares of
the Series A and Series B Preferred Stock shall rank on a parity with each other
and be entitled to receive, prior and in preference to any distribution of any
of the assets of this Corporation, whether such assets are capital surplus or
earnings, to the holders of Common Stock or Class B Common Stock (collectively
"Common Equity") by reason of their ownership thereof, an amount per share equal
to $4.00 and $5.807, for each outstanding share of Series A or Series B
Preferred Stock (as adjusted for any stock dividends, combinations,
recapitalizations or splits and the like), respectively, plus an amount equal to
any declared but unpaid dividends on such share up to the date fixed for
distribution. If upon the occurrence of such liquidation, dissolution or winding
up of this Corporation, either voluntary or involuntary, the assets and funds
thus distributed among the holders of the Series A and Series B Preferred Stock
shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amounts, then, the entire assets and funds of this
Corporation legally available for distribution shall be distributed ratably
among the holders of the Series A and Series B Preferred Stock in proportion to
the full preferential amount each such holder is otherwise entitled to receive.
(ii) After payment of the full amount due to the holders of
Series A Preferred Stock and Series B Preferred Stock as provided in subsection
(i) above, the remaining assets of the Corporation available for distribution to
stockholders shall be distributed among the holders of the Series B Preferred
Stock and Common Stock pro rata based on the number of shares Common Stock held
by each holder, except that in the case of the Series B Preferred Stock, the
number of shares of Common Stock held shall be the number of such shares into
which the Series B Preferred Stock are then convertible; provided, however, that
-------- -------
(i) in the case of any liquidation, dissolution or winding up of this
Corporation on or before December 31, 1999, at such time as the distribution of
liquidation preferences pursuant to this Section 2 shall equal $8.7105 per share
of Series B Preferred Stock, the holders of Series B Preferred Stock shall not
be entitled to any further distribution pursuant to this Section 2 with respect
to shares of Series B Preferred Stock and (ii) in the case of any liquidation,
dissolution or winding up of this Corporation after December 31, 1999, at such
time as the distribution of liquidation preferences pursuant to this Section 2
shall equal $14.5175 per share of Series B Preferred Stock, the holders of
Series B Preferred Stock shall not be entitled to any further distribution
pursuant to this Section 2 with respect to shares of Series B Preferred Stock.
Thereafter, all of the remaining assets of the Corporation available for
distribution to stockholders shall be distributed pro rata among the holders of
Common Stock.
(b) Mergers. A sale of all or substantially all of the assets of
-------
this Corporation or a merger, consolidation, reorganization of the Corporation
with or into another corporation through one or a series of related transactions
in which the stockholders of this Corporation immediately prior to the
transaction possess less than 50% of the voting power of the surviving entity
(or its parent) (a "Change in Control") immediately after the transaction shall
be deemed to be a liquidation,
-5-
<PAGE>
dissolution or winding up within the meaning of this Section 2; provided that
the holders of Series A and Series B Preferred Stock and Common Stock shall be
paid at the closing in cash or in securities received or in a combination
thereof (which combination shall be in the same proportions as the consideration
received in the transaction) in amounts as specified in Section 2(a) above. Any
securities to be delivered to the holders of the Series A and Series B Preferred
Stock and Common Stock pursuant to this Section 2(b) shall be valued as follows:
(i) if traded on a securities exchange, the value shall be
deemed to be the average of the closing prices of the securities on such
exchange over the 30-day period ending three (3) business days prior to the
closing;
(ii) if actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid prices (or closing sales prices,
which ever is applicable) over the 30-day period ending three (3) business days
prior to the closing; and
(iii) if there is no active public market, the value shall be
the fair market value thereof as mutually determined by the Corporation and the
holders of not less than a majority of the outstanding shares of Series A and
Series B Preferred Stock, provided that if the Corporation and the holders of a
majority of the outstanding shares of Series A and Series B Preferred Stock are
unable to reach agreement, then by independent appraisal by an investment banker
hired and paid by the Corporation, but acceptable to the holders of a majority
of the outstanding shares of Series A and Series B Preferred Stock.
(c) Notice. In the event of any voluntary or involuntary
------
liquidation, dissolution or winding up of the Corporation, the Corporation
shall, within ten (10) days after the date the Board of Directors approves such
action, or ten (10) days prior to any stockholders' meeting called to approve
such action, or ten (10) days after the commencement of any involuntary
proceeding, or ten (10) days prior to the closing of such transaction, whichever
is earlier, give each holder of shares of Preferred Stock (including the holder
of the Series C Redeemable Preferred Stock) written notice of the proposed
action. Such written notice shall describe the material terms and conditions of
such proposed action, including a description of the stock, cash and property to
be received by the holders of shares of Series A Preferred Stock and Series B
Preferred Stock upon consummation of the proposed action, and the date of
delivery thereof. If any material change in the facts set forth in the written
notice shall occur, the Corporation shall promptly give written notice of such
material change to each holder of shares of Preferred Stock.
(d) Effect of Noncompliance. In the event the requirements of this
-----------------------
Section 2 are not complied with, the Corporation shall forthwith either cause
the closing of the transaction to be postponed until such requirements have been
complied with, or cancel such transaction, in which event the rights,
preferences and privileges of the holders of the Series A and Series B Preferred
Stock shall revert to and be the same as such rights, preferences and privileges
existing immediately prior to the date of the first notice referred to in
Section 2(c) hereof.
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<PAGE>
3. Redemption Rights.
-----------------
(a) Redemption at the Corporation's Option. The Corporation may
--------------------------------------
redeem the Series C Redeemable Preferred Stock at any time, to the extent it may
lawfully do so. The Corporation shall effect such redemption by paying in cash
in exchange for each share of Series C Redeemable Preferred Stock to be redeemed
a sum equal to $10,000.00 plus all accrued and unpaid dividends, if any, on such
share of Series C Redeemable Preferred Stock as provided for in Section 1 above
(the "Redemption Price"). At least fifteen (15) but no more than thirty (30)
days prior to the date the Corporation intends to redeem Series C Redeemable
Preferred Stock, a written notice will be mailed, postage prepaid, to each
holder of the Series C Redeemable Preferred Stock to be redeemed, at the
holder's address last shown on the records of the Corporation, notifying such
holder of the redemption to be effected, specifying the number of shares to be
redeemed from such holder, specifying the date of redemption and the Redemption
Price and calling upon such holder to surrender to the Corporation, at the
offices of the Corporation or any other location that the Corporation shall
designate, its certificate or certificates representing the share or shares to
be redeemed. On or prior to the date specified in the notice of redemption, each
holder of the Series C Redeemable Preferred Stock to be redeemed shall surrender
its certificate or certificates representing such share or shares to the
Corporation at the offices of the Corporation or any other location as the
Corporation shall designate, and thereupon the Redemption Price of such share
shall be payable to the order of the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered
certificate shall be canceled. In the event less than all the shares represented
by any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares. If, on or prior to the date of redemption
hereunder, the funds necessary for such redemption shall have been set aside by
the Corporation and deposited with a bank or trust company, for the benefit of
the holders of the Series C Redeemable Preferred Stock, whose shares are to be
redeemed, then from after the close of business on the date of the redemption as
specified in the notice discussed in this Section 3, all rights of the holders
to such shares as the holders of Series C Redeemable Preferred Stock of the
Corporation (except the right to receive the Redemption Price without interest
upon surrender of its certificate or certificates) shall cease with respect to
such shares, and such shares shall not thereafter be transferred on the books of
the Corporation or be deemed to be outstanding for any purpose.
(b) Redemption at the Holders' Option The holders of the outstanding
---------------------------------
share of Series C Redeemable Preferred Stock may require the Corporation, to the
extent it may lawfully do so, to redeem the Series C Redeemable Preferred Stock
in a single installment any time after a "Redemption Event" (as defined below).
The Corporation shall effect such redemption by paying in cash in exchange for
each share of Series C Redeemable Preferred Stock to be redeemed the Redemption
Price. "Redemption Event" means the earliest to occur of: (i) the sale of the
Corporation's Common Stock in a firm commitment underwritten public offering
pursuant to a registration statement under the Securities Action of 1933, as
amended, the public offering price of which was not less than Ten Million
Dollars ($10,000,000.00) in the aggregate, (ii) a Change in Control, and (iii)
June 8, 2004. On the date of the Redemption Event, subject to the prompt
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<PAGE>
surrender of certificate or certificates by the holders of Series C Redeemable
Preferred Stock representing such share or shares to be redeemed by the
Corporation, the Corporation shall immediately pay to the order of the entity or
person whose name appears on such certificate or certificates as the owner
thereof the Redemption Price and the certificate or certificates shall be
canceled. If, on or prior to the date of redemption hereunder, the funds
necessary for such redemption shall have been set aside by the Corporation and
deposited with a bank or trust company, for the benefit of the holders of the
Series C Redeemable Preferred Stock, whose shares are being redeemed, then from
after the close of business on the date of the redemption as specified in the
notice discussed in this Section 3, all rights of the holders to such shares as
the holders of Series C Redeemable Preferred Stock of the Corporation (except
the right to receive the Redemption Price without interest upon surrender of
their certificate or certificates) shall cease with respect to such shares, and
such shares shall not thereafter be transferred on the books of the Corporation
or be deemed to be outstanding for any purpose.
(c) Trust Fund. On or prior to the date the share of Series C
----------
Redeemable Preferred Stock is to be redeemed, the Corporation may deposit the
Redemption Price with a bank or trust company as a trust fund for the benefit of
the holder of the share designated for redemption.
(d) Insufficient Funds. If the funds of the Corporation legally
------------------
available for redemption of the shares of Series C Redeemable Preferred Stock
are insufficient to redeem all of the shares of Series C Redeemable Preferred
Stock to be redeemed on such date, those funds which are legally available will
be used to redeem the maximum possible amount of such outstanding shares from
the holders thereof in proportion to their relative ownership of all shares of
Series C Redeemable Preferred Stock then outstanding. Any remainder of the
shares not redeemed shall remain outstanding and entitled to all the rights and
preferences provided herein. At any time thereafter when additional funds of the
Corporation are legally available for the redemption of the shares of Series C
Redeemable Preferred Stock such funds will immediately be used to redeem the
balance of the shares which the Corporation has become obligated to redeem, but
which has not been redeemed.
(e) Redemption Priority and Preference. 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 payment of any assets of the
Corporation, its payment of the Redemption Price pursuant to this Section 3.
4. Conversion. The holders of the Series A and Series B Preferred Stock
----------
shall have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A and Series B Preferred
----------------
Stock shall be convertible without the payment of any additional consideration
by the holder thereof and, at the option of the holder thereof, at any time
after the date of issuance of such share, at the office of the Corporation or
any transfer agent for the Series A and Series B Preferred Stock. Each share of
Series A and Series B Preferred Stock shall be convertible into the number of
fully paid and non-
-8-
<PAGE>
assessable shares of Common Stock which results from dividing the Conversion
Price (as hereinafter defined) per share in effect for the Series A and Series B
Preferred Stock at the time of conversion into the per share Conversion Value
(as hereinafter defined) of such series. The initial Conversion Price per share
of Series A Preferred Stock shall be $4.00. The Conversion Value per share of
the Series A Preferred Stock shall be $4.00. The initial Conversion Price per
share of Series B Preferred Stock shall be $5.807. The Conversion Value per
share of the Series B Preferred Stock shall be $5.807. The Conversion Prices of
the Series A and Series B Preferred Stock shall be subject to adjustment from
time to time as provided below. The number of shares of Common Stock into which
a share of a series of Series A and Series B Preferred Stock is convertible is
hereinafter referred to as the "Conversion Rate" of such series.
(b) Automatic Conversion. Each share of Series A and Series B
--------------------
Preferred Stock shall automatically be converted into shares of Common Stock at
its then effective Conversion Rate immediately upon (i) the closing of a bona
fide, firm commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, covering
the offer and sale of Common Stock in which (a) the public offering price equals
or exceeds $11.6140 per share (adjusted to reflect subsequent stock dividends,
stock splits, combinations or recapitalization) and (b) the aggregate gross
proceeds raised equals or exceeds $10,000,000 or (ii) the date specified by
written consent or agreement of the holders of a majority of the then
outstanding shares of Series B Preferred Stock.
(c) Mechanics of Conversion. Before any holder of Series A or
-----------------------
Series B Preferred Stock shall be entitled to convert the same into shares of
Common Stock, the holder shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or of any transfer
agent for the Series A or Series B Preferred Stock and shall give written notice
to the Corporation at such office that the holder elects to convert the same
(except that no such written notice of election to convert shall be necessary in
the event of an automatic conversion pursuant to Section 4(b) hereof). The
Corporation shall, as soon as practicable thereafter, issue and deliver at such
office to such holder of Series A or Series B Preferred Stock a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Series A or Series B Preferred Stock to be converted (except that in
the case of an automatic conversion pursuant to Section 4(b) hereof such
conversion shall be deemed to have been made immediately prior to the closing of
the offering referred to in Section 4(b)) and the person or persons entitled to
receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock on such date.
(d) Fractional Shares. In lieu of any fractional shares to which the
-----------------
holder of Series A or Series B Preferred Stock would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the fair market
value of one share of Common Stock on the effective date of conversion as
determined in good faith by the Board of Directors of the Corporation. Such
payment shall be determined on the basis of the total number of shares of Series
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<PAGE>
A or Series B Preferred Stock of each holder to be converted at such time into
Common Stock and the number of shares of Common Stock issuable upon such
aggregate conversion.
(e) Adjustment of Conversion Price. The Conversion Price of the
------------------------------
Series A and Series B Preferred Stock shall be subject to independent adjustment
from time to time as follows:
(i) If at any time from time to time the Corporation shall issue
or is deemed by the express provisions hereof to have issued, after the date
upon which any shares of Series B Preferred Stock were first issued, any Common
Stock other than "Excluded Stock", as defined below, without consideration or
for a consideration per share less than the Conversion Price in effect
immediately prior to the issuance of such Common Stock (excluding stock
dividends, subdivisions, split-ups, combinations, dividends or recapitalizations
which are covered by Sections 4(e) (iii), (iv) (v) and (vi)), the Conversion
Price in effect immediately after each such issuance shall forthwith (except as
provided in this Section 4(e)) be reduced to a price (calculated to the nearest
cent) determined by multiplying the Conversion Price then in effect by a
fraction:
(A) the numerator of which shall be the total number of
shares of Common Equity outstanding (including any shares of Common Stock
issuable upon conversion of Series A or Series B Preferred Stock, or deemed to
have been issued pursuant to subdivision (3) of this clause (i) and to clause
(ii) below) immediately prior to such issuance ("Outstanding Common"), plus the
number of shares of Common Stock that the aggregate consideration received by
the Corporation for such issuance would purchase at such Conversion Price; and
(B) the denominator of which shall be the Outstanding
Common plus the additional shares of Common Equity issued in such issuance
(including any shares of Common Stock issuable upon conversion of Series A or
Series B Preferred Stock, or deemed to have been issued pursuant to subdivision
(3) of this clause (i) and to clause (ii) below, but not including any
additional shares of Common Stock deemed to be issued as a result of any
adjustment in the Conversion Price resulting from such issuance).
For purposes of any adjustment of the Conversion Price
pursuant to this clause (i), the following provisions shall be applicable:
(1) In the case of the issuance of Common Stock for
cash, the consideration shall be deemed to be the amount of cash paid therefor
before deducting any reasonable discounts, commissions or other expenses paid or
incurred by the Corporation for any underwriting or otherwise in connection with
the issuance and sale thereof.
(2) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair market value thereof as determined by the
Board of Directors of the Corporation, in accordance with generally accepted
accounting treatment; provided, however, that if, at the time of such
-------- -------
determination, the Corporation's Common Stock is traded in the over-the-counter
market or on
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<PAGE>
a national or regional securities exchange, such fair market value as determined
by the Board of Directors of the Corporation shall not exceed the aggregate
"Current Market Price" (as defined below) of the shares of Common Stock being
issued.
(3) In the case of the issuance of (i) options to
purchase or rights to subscribe for Common Stock (other than Excluded Stock),
(ii) securities by their terms convertible into or exchangeable for Common Stock
(other than Excluded Stock), or (iii) options to purchase or rights to subscribe
for such convertible or exchangeable securities, the following provisions shall
apply for all purposes of this Section 4(e)(i):
(A) the aggregate maximum number of shares of
Common Stock deliverable upon exercise (assuming the satisfaction of any
conditions to exercisability, including, without limitation, the passage of
time, but without taking into account potential antidilution adjustments) of
such options to purchase or rights to subscribe for Common Stock shall be deemed
to have been issued at the time such options or rights were issued and for a
consideration equal to the consideration (determined in the manner provided in
subdivisions (1) and (2) above), if any, received by the Corporation upon the
issuance of such options or rights plus the minimum purchase price provided in
such options or rights (without taking into account potential antidilution
adjustments for the Common Stock covered thereby;
(B) the aggregate maximum number of shares of
Common Stock deliverable upon conversion of or in exchange (assuming the
satisfaction of any conditions to exercisability, including, without limitation,
the passage of time, but without taking into account potential antidilution
adjustments) for any such convertible or exchangeable securities or upon the
exercise of options to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange thereof, shall be
deemed to have been issued at the time such securities were issued or such
options or rights were issued and for a consideration equal to the
consideration, if any, received by the Corporation for any such securities and
related options or rights (excluding any cash received on account of accrued
interest or accrued dividends), plus the minimum additional consideration, if
any, to be received by the Corporation upon the conversion or exchange of such
securities or the exercise of any related options or rights (the consideration
in each case to be determined in the manner provided in subdivisions (1) and (2)
above);
(C) on any change in the number of shares of
Common Stock deliverable or in the consideration payable to the Corporation upon
exercise of any such options or rights or upon conversion of or in exchange for
such convertible or exchangeable securities, or on any change in the minimum
purchase price of such options, rights or securities, including, but not limited
to, a change resulting from the antidilution provisions of such options, rights
or securities, the Conversion Price, to the extent in any way affected by or
computed using such options, rights or securities, shall forthwith be readjusted
to reflect such change, but no further adjustment shall be made for the actual
issuance of Common Stock or any payment of such
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<PAGE>
consideration upon the exercise of any such options or rights, conversion or
exchange of such securities;
(D) on the expiration of any such options or
rights, the termination of any such rights to convert or exchange or the
expiration of any options or rights related to such convertible or exchangeable
securities, the Conversion Price, to the extent in any way affected by or
computed using such options, rights or securities, shall forthwith be readjusted
to such Conversion Price as would have obtained had the adjustment made upon the
issuance of such options, rights, convertible or exchangeable securities or
options or rights related to such convertible or exchangeable securities, as the
case may be, been made upon the basis of the issuance of only the number of
shares of Common Stock actually issued upon the exercise of such options or
rights, upon the conversion or exchange of such convertible or exchangeable
securities or upon the exercise of the options or rights related to such
convertible or exchangeable securities, as the case may be.
(E) The number of shares of Common Stock deemed
issued and the consideration deemed paid therefor pursuant to Sections
4(e)(i)(B)(3)(A) and 4(e)(i)(B)(3)(B) shall be appropriately adjusted to reflect
any change, termination or expiration of the type described in either Sections
4(e)(i)(B)(3)(C) and 4(e)(i)(B)(3)(D).
(F) Notwithstanding any other provisions of this
Section 4(e)(i), except to the limited extent provided for in Sections
4(e)(i)(B)(3)(C) and 4(e)(i)(B)(3)(D), no adjustment of the Conversion Price
pursuant to this Section 4(e)(i) shall have the effect of increasing the
Conversion Price above the Conversion Price in effect immediately prior to such
adjustment.
(ii) "Excluded Stock" shall mean:
(A) all shares of Common Stock issued and outstanding on
the date this document is filed with the Delaware Secretary of State;
(B) all shares of capital stock issued upon exercise or
conversion of all currently outstanding securities exercisable for or
convertible into, capital stock of the Corporation;
(C) all shares of Series A and Series B Preferred Stock and
the Common Stock into which such shares of Series A and Series B Preferred Stock
are convertible;
(D) all shares of Series C Preferred Stock and the Common
Stock issued pursuant to that certain Series C Redeemable Preferred Stock
Purchase Agreement dated as of June 9, 1999;
(E) all shares of Common Stock issued pursuant to a
transaction described in Section 4(e)(iii) hereof;
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<PAGE>
(F) all shares of Class B Common Stock issued and
outstanding on the date this document is filed with the Delaware Secretary of
State and the Common Stock issuable to a holder of Class B Common Stock in
connection with a Conversion Event under Article Five, Section 5 hereof;
(G) all shares of Common Stock, including warrants or
options to purchase such shares of Common Stock issued, upon the approval of the
Board of Directors of the Corporation, to employees, officers, directors and
consultants of the Corporation pursuant to any plan or arrangement, but, for
purposes of any adjustment of the Conversion Price of the Series B Preferred
Stock only, prior to February 28, 2000, not exceeding 744,574 shares (as
adjusted for recapitalizations, stock combinations, stock dividends, stock
splits and the like) of Common Stock (net of any repurchases of such shares or
cancellations, or expirations of options);
(H) all securities issued to equipment lessors, banks,
financial institutions or similar entities in transactions approved by the Board
of Directors, the principle purpose of which is other than the raising of
capital;
(I) all securities issued in a merger or acquisition that
is approved by the Board of Directors;
(J) all securities issued pursuant to any transactions
approved by the Board of Directors primarily for the purpose of (A) joint
ventures, technology licensing or research and development activities, (B)
distribution or manufacture of the Corporation's products or services, or (C)
any other transactions involving corporate partners that are primarily for
purposes other than raising capital; or
(K) all securities issued if the holders of a majority of
the then outstanding shares of Series A or Series B Preferred Stock the
Conversion Price of which may be subject to adjustment upon such issuance agree
in writing that such securities shall constitute Excluded Stock.
All outstanding shares of Excluded Stock (including any
shares issuable upon conversion of the Series A or Series B Preferred Stock)
shall be deemed to be outstanding for all purposes of the computations of
Section 4(e)(i) above.
(iii) If the number of shares of Common Stock outstanding at any
time after the date hereof is increased by a stock dividend payable in shares of
Common Stock or by a subdivision or split-up of shares of Common Stock, then, on
the date such payment is made or such change is effective, the Conversion Price
of Series A or Series B Preferred Stock shall be appropriately decreased so that
the number of shares of Common Stock issuable on conversion of each share of
Series A or Series B Preferred Stock shall be increased in proportion to such
increase of outstanding shares.
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<PAGE>
(iv) If the number of shares of Common Stock outstanding at
any time after the date hereof is decreased by a combination of the outstanding
shares of Common Stock, then, on the effective date of such combination, the
Conversion Price of Preferred Stock shall be appropriately increased so that the
number of shares of Common Stock issuable on conversion of each share of Series
A or Series B Preferred Stock shall be decreased in proportion to such decrease
in outstanding shares.
(v) In case the Corporation shall distribute to holders of
its Common Stock shares of its capital stock other than Common Stock (including
options to purchase and rights to subscribe for Common Stock or other securities
of the Corporation convertible into or exchangeable for Common Stock), and such
distribution is not deemed to be a payment of dividends under Section 1 hereof,
then, in each such case, the holders of shares of Series A or Series B Preferred
Stock shall, concurrent with the distribution to holders of Common Stock,
receive a like and proportionate share of such distribution based upon the
number of shares of Common Stock into which Preferred Stock is convertible.
(vi) Except as provided in Section 2 hereof, in case, at any
time after the date hereof, of any capital reorganization, or any
reclassification of the stock of the Corporation (other than as a result of a
stock dividend or subdivision, split-up or combination of shares governed by any
other provision of this subsection (e)), or the consolidation or merger of the
Corporation with or into another person (other than a consolidation or merger in
which the Corporation is the continuing entity and which does not result in any
change in the Common Stock), or of the sale or other disposition of all or
substantially all the properties and assets of the Corporation, the shares of
Series A or Series B Preferred Stock shall, after such reorganization,
reclassification, consolidation, merger, sale or other disposition, be
convertible into the kind and number of shares of stock or other securities or
property of the Corporation or otherwise to which such holder would have been
entitled if immediately prior to such reorganization, reclassification,
consolidation, merger, sale or other disposition such holder had converted his
shares of Series A or Series B Preferred Stock into Common Stock. In any such
case, appropriate adjustments shall be made in the application of the provisions
of this Section 3 with respect to the rights of the holders of such Series A or
Series B Preferred Stock after the recapitalization to the extent that the
provisions of this Section 3 (including adjustment of the Conversion Price then
in effect and the number of shares purchasable upon conversion of such Series A
or Series B Preferred Stock) shall be applicable after that event and be nearly
equivalent as practicable. The provisions of this clause (vi) shall similarly
apply to successive reorganizations, reclassifications, consolidations, mergers,
sales or other dispositions.
(vii) All calculations under this Section 4 shall be made to
the nearest cent or to the nearest one hundredth (1/100) of a share, as the case
may be.
(viii) For the purpose of any computation pursuant to this
Section 4(e), the "Current Market Price" at any date of one share of Common
Stock, shall be deemed to be the closing sales price, or if no sale was
reported, the average of the highest reported bid and the lowest reported offer
prices, on the preceding business day as furnished by the National Quotation
Bureau,
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<PAGE>
Incorporated (or equivalent recognized source of quotations); provided, however,
-------- -------
that if the Common Stock is not traded in such manner that the quotations
referred to in this clause (viii) are available for the period required
hereunder, Current Market Price shall be determined in good faith by the Board
of Directors of the Corporation, but if challenged by the holders of more than
50% of the outstanding Series A or Series B Preferred Stock then as determined
by an independent appraiser selected by the Board of Directors of the
Corporation with the cost of such appraisal to be borne by the challenging
parties.
(f) Minimal Adjustments. No adjustment in Conversion Price need be
-------------------
made if such adjustment would result in a change in the Conversion Price of less
than $0.01. Any adjustment of less than $0.01 which is not made shall be carried
forward and shall be made at the time of and together with any subsequent
adjustment which, on a cumulative basis, amounts to an adjustment of $0.01 or
more in the Conversion Price.
(g) No Impairment. Without the consent of the majority of the
-------------
outstanding shares of Series A or Series B Preferred Stock, the Corporation will
not through any reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
Section 3 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of Series A
or Series B Preferred Stock against impairment.
(h) Certificate as to Adjustments. Upon the occurrence of each
-----------------------------
adjustment or readjustment of the Conversion Rate pursuant to this Section 3,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Series A or Series B Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon written request
at any time of any holder of Series A or Series B Preferred Stock, furnish or
cause to be furnished to such holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Conversion Rate of such series at the
time in effect, and (iii) the number of shares of Common Stock and the amount,
if any, of other property which at the time would be received upon the
conversions of such holder's shares of Series A or Series B Preferred Stock.
(i) Notices of Record Date. In the event of any taking by the
----------------------
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property or to receive any other right, the Corporation
shall mail to each holder of Series A or Series B Preferred Stock at least
fifteen (15) days prior to such record date, a notice specifying the date on
which any such record is to be taken for the purpose of such dividend or
distribution or right, and the amount and character of such dividend,
distribution or right.
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<PAGE>
(j) Reservation of Stock Issuable Upon Conversion. The Corporation
---------------------------------------------
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
shares of Series A or Series B Preferred Stock such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of Series A or Series B Preferred Stock; and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of Preferred
Stock, in addition to such remedies as shall be available to the holder of such
Series A or Series B Preferred Stock, the Corporation will take such corporate
action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purpose, including, without limitation, engaging in best
efforts to obtain stockholder approval of any necessary amendment to this
Certificate of Incorporation.
(k) Notices. Any notice required by the provisions of this Section
-------
3 to be given to the holder of shares of Series A or Series B Preferred Stock
shall be deemed given if deposited in the United States mail, postage prepaid,
and addressed to each holder of record at his address appearing on the books of
the Corporation.
(l) Reissuance of Converted Shares. No shares of Series A or Series
------------------------------
B Preferred Stock which have been converted into Common Stock after the original
issuance thereof shall ever again be reissued and all such shares so converted
shall upon such conversion cease to be a part of the authorized shares of the
Corporation.
5. Voting Rights.
-------------
(a) Generally. Except as provided in Section 5(b), the holder of
---------
each share of Series A and Series B Preferred Stock shall be entitled to the
number of votes equal to the number of shares of Common Stock into which each
share of Preferred Stock could be converted on the record date for the vote or
consent of stockholders and, except as otherwise required by law, shall have
voting rights and powers equal to the voting rights and powers of the Common
Stock. The holder of each share of Preferred Stock shall be entitled to notice
of any stockholders' meeting in accordance with the bylaws of the Corporation
and shall vote with holders of the Common Stock upon the election of directors
and upon any other matter submitted to a vote of stockholders, except those
matters required by law to be submitted to a class vote. Fractional votes shall
not, however, be permitted and any fractional voting rights resulting from the
above formula (after aggregating all shares of Common Stock into which shares of
Preferred Stock held by each holder could be converted) shall be rounded to the
nearest whole number (with one-half rounded upward to one).
(b) Election of Directors. The authorized number of directors of the
---------------------
Corporation shall be set forth in the Bylaws of the Corporation and may be
increased or decreased by an amendment to such Bylaws in accordance with their
provisions. Notwithstanding the foregoing, for so long as at least 500,000
shares of Series B Preferred Stock remain outstanding (as adjusted for
recapitalizations, stock combinations, stock dividends, stock splits and the
like) and so long as at
-16-
<PAGE>
least 1 share of Series C Redeemable Preferred Stock remains outstanding: (i)
the authorized number of directors shall be seven (7); (ii) the holders of
Series B Preferred Stock, voting separately as a class, shall be entitled to
elect two (2) directors of the Corporation at each annual election of directors,
and, so long as Trident Capital holds at least 250,000 shares of Series B
Preferred Stock, one (1) of such directors shall be elected by Trident Capital;
(iii) the holders of Series C Redeemable Preferred Stock, voting as a separate
class, shall be entitled to elect one (1) director of the Corporation at each
annual election of directors; and (iv) the Common Stock and Series A Preferred
Stock, voting together as a single class, shall be entitled to elect four (4)
directors at each annual election of directors.
(c) Subject to Section 141 of the General Corporation Law, any
director who shall have been elected by a specified group of stockholders may be
removed during the aforesaid term of office, either for or without cause, by,
and only by, the affirmative vote of the holders of a majority of the shares of
such specified group, given at a special meeting of such stockholder duly called
or by an action by written consent for that purpose. Any vacancy in the Board of
Directors caused by the removal, resignation or death of any such director who
shall have been elected by a specified group of stockholders or the declaration
by the Board of Directors that the office of such director is vacant because
such director has been declared of unsound mind by a court of convicted of a
felony may be filled by, and only by, the vote of the holders of a majority of
the shares of such specified group given at a special meeting of such
stockholders or by an action by written consent.
6. Protective Provisions.
---------------------
(a) In addition to any other class vote that may be required by law,
so long as any shares of Series B Preferred Stock are outstanding, this
Corporation shall not without first obtaining the approval (by vote or written
consent, as provided by law) of the holders of at least 60% of the then
outstanding shares of Series B Preferred Stock:
(i) materially alter or change the rights, preferences,
privileges or restrictions of the Series B Preferred Stock;
(ii) create a new class or series of shares having rights,
preferences or privileges, or increase the number of authorized shares of any
class or series having rights, preferences or privileges senior to or on a
parity with the shares of Series B Preferred Stock;
(iii) transfer or license any material assets of the
Corporation to any person other than a wholly-owned subsidiary of the
Corporation, unless such transaction is approved by all directors of the
Corporation elected by holders of the Series B Preferred Stock;
(iv) extend the Series A or Series B Preferred Stock
Financings;
(v) dissolve or liquidate the Corporation, or sell, convey or
otherwise dispose of all or substantially all of its property or business, or
merge into or effect a reorganization
-17-
<PAGE>
with any other Corporation (other than a wholly owned subsidiary Corporation) in
which the stockholders of this Corporation immediately prior to the transaction
possess less than 50% of the voting power of the surviving entity (or its
parent) immediately after the transaction, provided the transaction does not
yield to the holders of Series B Preferred Stock at least $11.6140 per share of
Series B Preferred Stock (as adjusted for recapitalizations, stock combinations,
stock dividends, stock splits and the like);
(vi) grant warrants or options (to purchase the Corporation's
Common Stock) to strategic partners in excess of an aggregate of 3%, 2% and 1%
(of the Corporation's fully-diluted capitalization) for the 12 months ended
March 1, 2000, 2001 and 2002, respectively provided, however, that for the 12
--------
months ended March 1, 2000, the 3% shall be adjusted to equal 3%(1-(x/219,574))
where x equals the amount of shares issued, in which Article Six Section
4(e)(ii)(F) is applicable, in excess of 525,000 shares; or
(vii) amend or repeal the Corporation's Certificate of
Incorporation or Bylaws in a manner that materially adversely affects the
holders of Series B Preferred Stock.
(b) In addition to any other class vote that may be required by law,
so long as any shares of Series A and Series B Preferred Stock are outstanding,
this Corporation shall not without first obtaining the approval (by vote or
written consent, as provided by law) of the holders of a majority of the then
outstanding shares of Series A and Series B Preferred Stock, voting together as
a class:
(i) increase the authorized number of shares of Preferred
Stock;
(ii) approve the purchase, redemption or other acquisition of
any Common Equity of the Corporation, other than as set forth in Section 6
hereof;
(iii) authorize the payment of a cash dividend to any holders
of any class or series of capital stock, other than a redemption of the share of
Series C Redeemable Preferred Stock under Article Six, Section 3(b); or
(iv) approve the liquidation or dissolution of the
Corporation.
7. Consent to Distributions. Each holder of Preferred Stock and each
------------------------
holder of Common Equity shall be deemed to have consented, for purposes of
Sections 502, 503 and 506 of the California Corporations Code, Section 160 of
the General Corporation Law of Delaware and the provisions hereof, to (i)
distributions made by the Corporation in connection with the repurchase of
shares of Common Stock (at cost) from employees, officers, directors or
consultants of the Corporation in connection with the termination of their
employment or services pursuant to agreements or arrangements approved by the
Board of Directors of the Corporation and (ii) redemption of any shares of Class
B Common Stock pursuant to Article Five hereof.
SEVEN. The Corporation is to have perpetual existence.
-18-
<PAGE>
EIGHT. Except as set forth in Article Six, Section 5(b) hereof, the
number of directors which constitute the whole Board of the Corporation shall be
as specified in the Bylaws of the Corporation.
NINE. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors of the Corporation is expressly authorized to
make, alter, amend or repeal the Bylaws of the Corporation.
TEN. Elections of directors need not be by written ballot unless a
stockholder demands election by written ballot at the meeting and before voting
begins or unless the Bylaws of the Corporation shall so provide.
ELEVEN. Meetings of stockholders may be held within or without the State
of Delaware, as the Bylaws of the Corporation may provide. The books of the
Corporation may be kept outside of the State of Delaware at such place or places
as may be designated from time to time by the Board of Directors of the
Corporation or in the Bylaws of the Corporation.
TWELVE.
(a) Limitation of Director's Liability. To the fullest extent not
----------------------------------
prohibited by the General Corporation Law as the same exists or as it may
hereafter be amended, a director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for conduct
as a director.
(b) Indemnification of Corporate Agents. The Corporation may
-----------------------------------
indemnify to the fullest extent not prohibited by law any person made or
threatened to be made a party to an action or proceeding, whether criminal,
civil, administrative or investigative, by reason of the fact that such person,
such person's testator or intestate is or was a director, officer, employee
benefit plan fiduciary, agent or employee of the Corporation or any predecessor
of the Corporation or serves or served at the request of the Corporation or any
predecessor of the Corporation as a director, officer, agent, employee benefit
plan fiduciary or employee of another Corporation, partnership, limited
liability company, joint venture, trust or other entity or enterprise.
(c) Repeal or Modification. Neither any amendment or repeal of this
----------------------
Article Twelve, nor the adoption of any provision of the Corporation's
Certificate of Incorporation inconsistent with this Article Twelve, shall
eliminate or reduce the effect of this Article Twelve, in respect of any matter
occurring, or any action or proceeding accruing or arising or that, but for this
Article Twelve, would accrue or arise, prior to such amendment, repeal or
adoption of an inconsistent provision.
4. The foregoing amendment and restatement of the Certificate of
Incorporation has been duly approved by the Board of Directors of the
Corporation in accordance with the provisions of Sections 242 and 245 of the
General Corporation Law.
-19-
<PAGE>
5. The foregoing amendment and restatement of the Certificate of
Incorporation has been duly approved by the written consent of the stockholders
in accordance with Sections 228 and 245 of the General Corporation Law. The
total number of outstanding shares of Common Stock of the Corporation is
198,000. The total number of outstanding shares of Class B Common Stock of the
Corporation is 2,650,548. The total number of outstanding shares of Series A
Preferred Stock is 231,250. The total number of outstanding shares of Series B
Preferred Stock is 2,324,774. The number of shares held by stockholders who
consented to this amendment in writing equaled or exceeded the required
percentage. Pursuant to Section 228 of the General Corporation Law, prompt
written notice of this amendment and restatement has been given to all
stockholders who did not consent to this amendment.
[The remainder of this page is intentionally left blank.]
-20-
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Second Amended and
Restated Certificate of Incorporation to be signed by Leonard McCurdy, its
President, and attested by A. Hunter Farrell, its Assistant Secretary, this 9th
day of June, 1999.
bamboo.com, Inc.
______________________________________
Leonard McCurdy,
Chief Executive Officer
ATTEST:
_______________________________
A. Hunter Farrell,
Assistant Secretary
<PAGE>
EXHIBIT 3.3
For Ministry Use Only Ontario Corporation Number
1334184
[LOGO APPEARS HERE]
Ministry of
Consumer and
Commercial Relations
CERTIFICATES
This is to certify that these
Articles are effective on
January 01, 1999
--------------------------------
Director
Business Corporation Act
- --------------------------------------------------------------------------------
ARTICLES OF AMALGAMATION
STATUS DE FUSION
1. The name of the amalgamated corporation is:
J U T V I S I O N C A N A D A , I N C .
2. The address of the registered office:
5405 Eglinton Avenue West, Suite 107
- --------------------------------------------------------------------------------
(Street & Number or R.R. Number & if Multi-Office Building give Room No.)
Toronto, Ontario M 9 C 5 K 6
- --------------------------------------------------------------------------------
(Name of Municipality or Post Office) (Postal Code)
3. Number (or minimum and maximum number) of directors is:
minimum one (1) maximum ten (10)
<TABLE>
<CAPTION>
Resident
4. The director(s) is/are: Canadian
Residence address, giving street & No. State
First Name, initials and surname R.R. No., Municipality and Postal Code Yes or No
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Leonard McCurdy 4198 Mississauga Road, Mississauga, Yes
Kevin McCurdy 4198 Mississauga Road, Mississauga, Yes
Howard Field 1 Chedington Place, Suite 9L, North Yes
York, Ontario M4N 3R4
</TABLE>
<PAGE>
2.
5. (A) The amalgamation agreement has been duly adopted by the shareholders of
each of the amalgamating corporations as required by subsections 176 (4)
of the Business Corporations Act on the date set out below.
A Check Cocher B
[X] A or B A ou B [_]
(B) The amalgamation has been approved by the directors of each amalgamating
corporation by a resolution as required by section 177 of the Business
Corporations Act on the date set out below.
The articles of amalgamation in substance contain the provisions of the
articles of incorporation of
- --------------------------------------------------------------------------------
and are more particularly set out in these articles.
Names of amalgamating Ontario Corporation Number Date of Adoption/Approval
corporations
- --------------------------------------------------------------------------------
JUTVISION CANADA, INC. 1331733 30/12/98
JUTVISION CORPORATION 1154207 30/12/98
<PAGE>
6. Restrictions, if any, on business the corporation may carry on or on powers
the corporation may exercise.
NONE.
7. The classes and any maximum number of shares that the corporation is
authorized to issue:
The Amalgamated Corporation shall be authorized to issue an unlimited
number of common shares and an unlimited number of preference shares.
<PAGE>
8. Rights, privileges, restrictions and conditions (if any) attaching to each
class of Droits, shares and directors authority with respect to any class
of shares which may be issued in series:
Convertible Preferred Shares
- ----------------------------
The rights, preferences, privileges and restrictions granted to or imposed upon
the Convertible Preferred Shares are as follows:
1. Designation and Amount. The Convertible Preferred Shares shall be
----------------------
designated as "Series B Convertible Preferred Shares" (the "Series B
Preferred Shares"). The Amalgamated Corporation shall be authorized to
issue an unlimited number of Series B Preferred Shares.
2. Liquidation Rights.
------------------
(a) Treatment at Liquidation, Dissolution or Winding Up.
---------------------------------------------------
In the event of any liquidation, dissolution or winding up of the
affairs of the Amalgamated Corporation, whether voluntary or
involuntary, the holders of the Series B Preferred Shares shall
not be entitled to receive any assets of the Amalgamated
Corporation available for distribution to its Shareholders and
all such assets shall be distributed rateably among the holders
of the Common Shares.
3. Conversion.
----------
I. The holders of the Series B Preferred Shares shall have the conversion
rights as follows:
(a) Right to Convert: Conversion Price. Each share of series B
-----------------------------------
Preferred Shares shall be convertible, without the payment of any
additional consideration by the holder thereof and at the option
of the holder thereof, at any time after the date of issuance of
such share, at the office of the Amalgamated Corporation or any
transfer agent for the Series B Preferred Shares, into one (1)
Common Share of Jutvision Corporation (a "Delaware Common Share
").
(b) Mechanics of Conversion. Before any holder of Series B Preferred
-----------------------
Shares shall be entitled to convert the same into Delaware Common Shares, such
holder shall surrender the certificate or certificates therefor, duly endorsed,
at the office of the Amalgamated Corporation or of any transfer agent for the
Series B Preferred Shares, and shall give written notice to the Amalgamated
Corporation at such office that such holder elects to convert the same and shall
state therein the name of such holder or the name or names of the nominees of
such holder in which such holder wishes the certificate or certificates for
Delaware Common Shares
<PAGE>
to be issued. No fractional Delaware Common Shares shall be issued upon
conversion of Series B Preferred Shares. The Amalgamated Corporation shall, as
soon as practicable thereafter, issue and deliver at such office to such holder
of Series B Preferred Shares, or to such holder's nominee or nominees, a
certificate or certificates for the number of Delaware Common Shares to which
such Holder shall be entitled as aforesaid. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of the Series B Preferred Shares to be converted, and the person or
persons entitled to receive the Delaware Common Shares issuable upon conversion
shall be treated for all purposes as the record holder or holders of such
Delaware Common Shares on such date.
(c) Automatic Conversion
--------------------
(i) Each share of Series B Preferred Shares shall
automatically be converted into Delaware Common Shares
upon:
(A) The closing of a firm commitment underwritten
public offering pursuant to an effective
registration statement under the United States
Securities Act of 1933, as amended, or prospectus
under the Securities Act (Ontario), covering the
offer and sale of Delaware Common Shares to the
public with net proceeds to the Corporation of not
less than US$15,000,000 (a "Qualified Initial
Public Offering"); or
(B) The written election of the holder of not less
than two-thirds in voting power of the then
outstanding shares of Series B Preferred Shares to
require such mandatory conversion; or
(C) The liquidation, dissolution or winding up of the
affairs of the Amalgamated Corporation, whether
voluntary or involuntary.
(ii) Upon the occurrence of an event specified in Section 3(c)
(i) hereof, all Series B Preferred Shares shall be
converted automatically without any further action by any
holder of such shares and whether or not the certificate
or certificates representing such shares are surrendered
to the Amalgamated Corporation or the transfer agent for
the Series B Preferred Shares, provided, however, that the
Amalgamated Corporation shall not be obligated to issue a
certificate or certificates evidencing the Delaware Common
Shares into
<PAGE>
which such Series B Preferred Shares were convertible
unless the certificate or certificates representing such
Series B Preferred Shares being converted are either
delivered to the Amalgamated Corporation or the transfer
agent of the Series B Preferred Shares, or the holder
notifies the Amalgamated Corporation or such transfer
agent that such certificate or certificates have been
lost, stolen, or destroyed and executes and delivers an
affidavit of loss and bond of indemnity agreement
satisfactory to the Amalgamated Corporation to indemnify
the Amalgamated Corporation from any loss incurred by it
in connection therewith and, if the Amalgamated
Corporation so elects, provides an appropriate indemnity.
(iii) Upon the automatic conversion of the Series B Preferred
Shares, each holder of Series B Preferred Shares shall
surrender the certificate or certificates representing
such holder's Series B Preferred Shares at the office of
the Amalgamated Corporation or of the transfer agent for
the Series B Preferred Shares. Thereupon, there shall be
issued and delivered to such holder, promptly at such
office and in such holder's name as shown on such
surrendered certificate or certificates, a certificate or
certificates for the number of shares of Delaware Common
Shares into which the Series B Preferred Shares
surrendered were convertible on the date on which such
automatic conversion occurred. No fractional Delaware
Common Shares shall be issued upon the automatic
conversion of Series B Preferred Shares.
4. Voting Rights.
--------------
(a) Except as otherwise required by law or these Articles of
Amalgamation, the holders of the Series B Preferred Shares and
the holders of the Common Shares shall be entitled to notice of
any shareholders' meeting and to vote together as a single class
upon any matter submitted to the shareholders for a vote, on the
following basis:
(i) Holders of Common Shares shall have one (1) vote per
Common Share held by them; and
(ii) Holders of Series B Preferred Shares shall not be entitled
to vote, except as set out in paragraph (b) below.
(b) Notwithstanding the foregoing, the holders of Series B Preferred
Shares shall vote as a separate class on any matters as to which
a separate class vote is required by law.
<PAGE>
(c) Notwithstanding the foregoing, the holders of Series B Preferred
Shares shall vote in the same manner as the holder of the Common Shares on any
matters as to which a separate class vote is required by law.
5. Covenants. So long as ten percent (10%) of the original issued shares of
---------
Series B Preferred Shares remain outstanding, unless there is given the
written consent of at least two-thirds of the Series B Preferred Shares
outstanding voting as a separate class, the Amalgamated Corporation shall
not undertake any further amendments of its articles if such amendments
would alter or change the preferences, voting power, qualifications or
special or relative rights or privileges of the Series B Preferred Shares
so as to affect the holders thereof in a materially adverse manner. The
holders of two-thirds of the aggregate number of shares of Series B
Preferred Shares outstanding may, by affirmative vote or consent as
aforesaid, agree to a change or alteration by the Amalgamated Corporation
in the preferences, voting powers, qualifications and special or relative
rights and privileges of the Series B Preferred Shares or may waive the
application thereof in any particular instance.
6. No Reissuance of Series B Preferred Shares. No Series B Preferred Shares
------------------------------------------
or shares acquired by the Amalgamated Corporation by reason of redemption,
purchase, conversion or otherwise shall be reissued, and all such shares
shall be cancelled, retired and eliminated from the shares which the
Amalgamated Corporation shall be authorized to issue.
7. Residual Rights. All rights accruing to the outstanding shares of the
---------------
Amalgamated Corporation not expressly provided for in the terms of the
Series B Preferred Shares shall be vested in the Common Shares.
8. Transfer of Stock; Pairing.
---------------------------
(a) Subject to the restrictions on transfer of shares described in the
Amalgamated Corporation's by-laws as amended from time to time, upon
surrender to any transfer agent of the Amalgamated Corporation of a
certificate of shares of the Amalgamated Corporation duly endorsed or
accompanied by proper evidence of succession, assignment or authority
to transfer, it shall be the duty of the Amalgamated Corporation to
issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
(b) Until the limitations on transfer set forth in the Conversion and
Pairing Agreement dated as of December 31, 1998 by and between the
Amalgamated Corporation and Jutvision Corporation, a corporation
incorporated under the laws of the State of Delaware (the "Parent
Company"), as amended from time to time in accordance with the
provisions thereof (the "Pairing
<PAGE>
Agreement") shall be terminated.
(i) the Series B Preferred Shares that are paired pursuant to the
Pairing Agreement with the Series B Common Stock of the Parent
Company, par value $0.0001, shall not be transferable and shall
not be transferred on the share transfer books of the
Amalgamated Corporation, unless
A. A simultaneous transfer of the Series B Common Stock of
the Parent Company is made by the same transferor to the
same transferee for the same number of shares, or
B. Arrangements have been with the Parent Company for the
acquisition by the transferee of a like number of shares
of Series B Common Stock of the Parent Company and such
shares are paired with the Series B Preferred Shares. Any
purported transfer of Series B Preferred Shares in
violation of this section 8 shall be void ab initio and
the intended transferee shall acquire no rights in such
shares of the Series B Preferred Shares.
(ii) Each certificate evidencing ownership of Series B Preferred
Shares of the Amalgamated Corporation that are paired pursuant
to the pairing Agreement and issued and not cancelled prior to
the effectiveness of the Pairing Agreement shall be deemed to
evidence a like number of Series B Common Stock of the Parent
Company.
(iii) A legend shall be placed on the face of each certificate
evidencing ownership of Series B Preferred Shares that are
paired pursuant to the Pairing Agreement referring to the
restrictions on transfer set forth herein.
(c) Notwithstanding the foregoing, the Amalgamated Corporation may issue
or transfer its Series B Preferred Shares to the Parent Company
without regard to the restrictions of section 8.
<PAGE>
5.
9. The issue, transfer or ownership of shares is/is not restricted and the
restrictions (if any) are as follows:
The right to transfer shares of the Amalgamated Corporation shall be
restricted in that no shareholder shall be entitled to transfer any share
or shares of the Amalgamated Corporation without either:
(a) the express sanction of the holders of at least sixty-six and two-
thirds (66-2/3%) percent of the common shares of the Amalgamated
Corporation for the time being outstanding expressed by a resolution
passed at a meeting of such shareholders or by an instrument or
instruments in writing signed by the holders of at least sixty-six and
two-thirds (66-2/3%) percent of the common shares of the Amalgamated
Corporation for the time being outstanding, or,
(b) the express sanction of the directors of the Amalgamated Corporation
expressed by a resolution passed at a meeting of the board of
directors or by an instrument or instruments signed by a majority of
the directors.
10. Other provisions, if any, are:
(a) The number of shareholders of the Corporation, exclusive of persons
who are in the employment of the Corporation and exclusive of the
persons who, having been formerly in the employment of the Corporation
were, while in that employment, and have continued after the
termination of that employment to be shareholders of the Corporation,
is limited to not more than fifty (50); two (2) or more persons who
are joint registered holders of one (1) or more shares being counted
as one (1) shareholder.
(b) Any invitation to the public to subscribe for any shares or securities
of the Corporation is hereby prohibited.
(c) The Corporation may purchase any of its common shares.
(d) The board of directors may from time to time, in such amounts and on
such terms as it deems expedient:
(i) borrow money on the credit of the Corporation;
(ii) issue, sell or pledge debt obligations (including bonds,
debentures, notes or other similar obligations secured or
unsecured) of the Corporation;
(iii) charge, mortgage, hypothecate or pledge all or any of the
currently owned or subsequently acquired real or personal,
moveable or immoveable, property of the Corporation, including
book debts, rights, powers, franchises and undertaking, to
secure any debt obligations or any money borrowed, or other
debt or liability of the Corporation.
(e) The board of directors may from time to time delegate to such one or
more of the directors and officers of the Corporation as may be
designated by the board all or any of the powers conferred on the
board above to such extent and in such manner as the board shall
determine at the time of each such delegation.
11. The statements required by subsection 178(2) of the Business Corporations
Act are Attached as Schedule "A".
12. A copy of the amalgamation agreement or directors resolutions (as the case
may be) is/are attached as Schedule "B".
<PAGE>
6.
These articles are signed in duplicate.
Names of the amalgamating corporations and signatures and descriptions of office
of their proper officers.
/s/ Leanard McCurdy /s/ Leanard McCurdy
JUTVISION CANADA, INC. JUTVISION CORPORATION
Leonard McCurdy, Leonard McCurdy,
Chairman Chairman
<PAGE>
Schedule "A"
TO: The Director
Ministry of Consumer and Commercial Relations
393 University Avenue
Toronto, Ontario
M5G 2M2
Re: Amalgamation of Jutvision Canada, Inc. and Jutvision Corporation
With reference to the above amalgamation, the undersigned director of
JUTVISION CORPORATION hereby certifies, pursuant to subsection 178(2) of the
Business Corporations Act that:
(a) there are reasonable grounds for believing that each of the
amalgamating corporations is, and the amalgamated corporation will be,
able to pay their liabilities as they become due and the realizable
value of the amalgamated corporation's assets will not be less than
the aggregate of its liabilities and stated capital of all classes;
(b) there are reasonable grounds for believing that no creditor of the
amalgamating corporations will be prejudiced by the amalgamation;
(c) no creditors have notified JUTVISlON CORPORATION that they object to
the present amalgamation; and
(d) JUTVISlON CORPORATION has not given notice pursuant to paragraph
178(2) of the Business Corporations Act, since the requirements of
that paragraph are not applicable in light of the fact that no
creditors have notified JUTVISION CORPORATION that they object to the
present amalgamation.
DATED the 3lst day of December, 1998:
/s/ Leonard McCurdy
----------------------------------
Leonard McCurdy, Director
<PAGE>
Schedule "A"
TO: The Director
Ministry of Consumer and Commercial Relations
393 University Avenue
Toronto, Ontario
M5G 2M2
Re: Amalgamation of Jutvision Canada, Inc. and Jutvision Corporation
With reference to the above amalgamation, the undersigned director of
JUTVISION CANADA, INC. hereby certifies, pursuant to subsection 178(2) of the
Business Corporations Act that:
(a) there are reasonable grounds for believing that each of the
amalgamating corporations is, and the amalgamated corporation will be,
able to pay their liabilities as they become due and the realizable
value of the amalgamated corporation's assets will not be less than
the aggregate of its liabilities and stated capital of all classes;
(b) there are reasonable grounds for believing that no creditor of the
amalgamating corporations will be prejudiced by the amalgamation;
(c) no creditors have notified JUTVISlON CANADA, INC. that they object to
the present amalgamation; and
(d) JUTVISlON CANADA, INC. has not given notice pursuant to paragraph
178(2) of the Business Corporations Act, since the requirements of
that paragraph are not applicable in light of the fact that no
creditors have notified JUTVISION CANADA, INC. that they object to the
present amalgamation.
DATED the 3l/st/ day of December, 1998:
/s/ Leonard McCurdy
------------------------------
Leonard McCurdy, Director
<PAGE>
Schedule "B"
AMALGAMATION AGREEMENT made as of the 31/st/ day of December, 1998,
between JUTVISION CANADA, INC., a corporation incorporated under the laws of the
Province of Ontario and JUTVISION CORPORATION, a corporation incorporated under
the laws of the Province of Ontario;
WHEREAS the parties have agreed to amalgamate and continue as one
corporation upon the terms and conditions hereinafter set out;
NOW THEREFORE THIS AGREEMENT WITNESSETH as follows:
1. In this agreement, the term "Amalgamated Corporation" shall mean the
corporation continuing from the amalgamation of Jutvision Canada, Inc. and
Jutvision Corporation.
2. Jutvision Canada, Inc. and Jutvision Corporation hereby agree to
amalgamate under the provisions of section 175 of the Business Corporations Act
(Ontario) (the "Act") and to continue as one corporation upon the following
terms and conditions.
3. The name of the Amalgamated Corporation shall be JUTVISION CANADA,
INC.
4. The registered office of the Amalgamated Corporation shall be situate
in the City of Toronto, in the Province of Ontario.
5. The address of the registered office of the Amalgamated Corporation
shall be 5405 Eglinton Avenue West, Suite 107, Toronto, Ontario, M9C 5K6.
6. The Amalgamated Corporation shall be authorized to issue an unlimited
number of common shares and an unlimited number of Series B Convertible
Preferred Shares.
<PAGE>
-2-
7. The rights, preferences, privileges and restrictions granted to or imposed
upon the Series B Convertible Preferred Shares are as follows:
1. Designation and Amount. The Convertible Preferred Shares shall be
designated as "Series B Convertible Preferred Shares" (the "Series B
Preferred Shares"). The Corporation shall be authorized to issue an
unlimited number of Series B Preferred Shares.
2. Liquidation Rights.
(a)Treatment at Liquidation, Dissolution or Winding Up.
In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the
holders of the Series B Preferred Shares shall not be entitled to
receive any assets of the Corporation available for distribution to
its Shareholders and all such assets shall be distributed rateably
among the holders of the Common Shares.
3.Conversion.
I.The holders of the Series B Preferred Shares shall have the conversion
rights as follows:
(a) Right to Convert: Conversion Price. Each share of Series B
Preferred Shares shall be convertible, without the payment of any
additional consideration by the holder thereof and at the option
of the holder thereof, at any time after the date of issuance of
such share, at the office of the Corporation or any transfer
agent for the Series B Preferred Shares, into one (1) Common
Share of Jutvision Corporation (a "Delaware Common Share").
(b)Mechanics of Conversion. Before any holder of Series B Preferred
Shares shall be entitled to convert the same into Delaware Common Shares, such
holder shall surrender the certificate or certificates therefor, duly endorsed,
at the office of the Corporation or of any
<PAGE>
-3-
transfer agent for the Series B Preferred Shares, and shall give written notice
to the Corporation at such office that such holder elects to convert the same
and shall state therein the name of such holder or the name or names of the
nominees of such holder in which such holder wishes the certificate or
certificates for Delaware Common Shares to be issued. No fractional Delaware
Common Shares shall be issued upon conversion of Series B Preferred Shares. The
Corporation shall, as soon as practicable thereafter, issue and deliver at such
office to such holder of Series B Preferred Shares, or to such holder's nominee
or nominees, a certificate or certificates for the number of Delaware Common
Shares to which such holder shall be entitled as aforesaid. Such conversion
shall be deemed to have been made immediately prior to the close of business on
the date of such surrender of the Series B Preferred Shares to be converted, and
the person or persons entitled to receive the Delaware Common Shares issuable
upon conversion shall be treated for all purposes as the record holder or
holders of such Delaware Common Shares on such date.
(c) Automatic Conversion
(i) Each share of Series B Preferred Shares shall automatically
be converted into Delaware Common Shares upon:
(A) The closing of a firm commitment underwritten public
offering pursuant to an effective registration
statement under the United States Securities Act of
1933, as amended, or prospectus under the Securities
Act (Ontario), covering the offer and sale of Delaware
Common Shares to the public with net proceeds to the
Corporation of not less than US$15,000,000 (a
"Qualified Initial Public Offering"); or
(B) The written election of the holder of not less than
two-thirds in voting power of the then outstanding
shares of Series B Preferred Shares to require such
mandatory conversion; or
<PAGE>
-4-
(C) The liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or
involuntary.
(ii) Upon the occurrence of an event specified in Section 3(c)(i)
hereof, all Series B Preferred Shares shall be converted
automatically without any further action by any holder of such
shares and whether or not the certificate or certificates
representing such shares are surrendered to the Corporation or
the transfer agent for the Series B Preferred Shares, provided,
however, that the Corporation shall not be obligated to issue a
certificate or certificates evidencing the Delaware Common
Shares into which such Series B Preferred Shares were
convertible unless the certificate or certificates representing
such Series B Preferred Shares being converted are either
delivered to the Corporation or the transfer agent of the Series
B Preferred Shares, or the holder notifies the Corporation or
such transfer agent that such certificate or certificates have
been lost, stolen, or destroyed and executes and delivers an
affidavit of loss and bond of indemnity agreement satisfactory
to the Corporation to indemnify the Corporation from any loss
incurred by it in connection therewith and, if the Corporation
so elects, provides an appropriate indemnity.
(iii) Upon the automatic conversion of the Series B Preferred Shares,
each holder of Series B Preferred Shares shall surrender the
certificate or certificates representing such holder's Series B
Preferred Shares at the office of the Corporation or of the
transfer agent for the Series B Preferred Shares. Thereupon,
there shall be issued and delivered to such holder, promptly at
such office and in such holder's name as shown on such
surrendered certificate or certificates, a certificate or
certificates for the number of shares of Delaware Common Shares
into which the Series B Preferred Shares surrendered were
convertible on the date on which such automatic conversion
occurred. No fractional Delaware Common Shares shall be issued
upon the automatic conversion of Series B Preferred Shares .
<PAGE>
-5-
4. Voting Rights,
(a) Except as otherwise required by law or these Articles of
Incorporation, the holders of the Series B Preferred Shares and the
holders of the Common Shares shall be entitled to notice of any
shareholders' meeting and to vote together as a single class upon any
matter submitted to the shareholders for a vote, on the following
basis:
(i) Holders of Common Shares shall have one (1) vote per Common Share
held by them; and
(ii) Holders of Series B Preferred Shares shall not be entitled to
vote, except as set out in paragraph (b) below.
(b) Notwithstanding the foregoing, the holders of Series B Preferred
Shares shall vote as a separate class on any matters as to which a
separate class vote is required by law.
(c) Notwithstanding the foregoing, the holders of Series B Preferred
Shares shall vote in the same manner as the holder of the Common Shares on any
matters as to which a separate class vote is required by law.
5. Covenants. So long as ten percent (10%) of the original issued shares of
Series B Preferred Shares remain outstanding, unless there is given the
written consent of at least two-thirds of the Series B Preferred Shares
outstanding voting as a separate class, the Corporation shall not undertake
any further amendments of its articles if such amendments would alter or
change the preferences, voting power, qualifications or special or relative
rights or privileges of the Series B Preferred Shares so as to affect the
holders thereof in a materially adverse manner. The holders of two-thirds
of the aggregate number of shares of Series B Preferred Shares outstanding
may, by affirmative vote or consent as aforesaid, agree to a change or
alteration by the Corporation in the preferences, voting powers,
qualifications
<PAGE>
-6-
and special or relative rights and privileges of the Series B Preferred
Shares or may waive the application thereof in any particular instance.
6. No Reissuance of Series B Preferred Shares. No Series B Preferred Shares or
shares acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be
cancelled, retired and eliminated from the shares which the Corporation
shall be authorized to issue.
7. Residual Rights. All rights accruing to the outstanding shares of the
Corporation not expressly provided for in the terms of the Series B
Preferred Shares shall be vested in the Common Shares.
8. Transfer of Stock; Pairing.
(a) Subject to the restrictions on transfer of shares described in the
Corporation's by-laws as amended from time to time, upon surrender to
any transfer agent of the Corporation of a certificate of shares of
the Corporation duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty
of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon
its books.
(b) Until the limitations on transfer set forth in the Conversion and
Pairing Agreement dated as of December 31, 1998 by and between the
Corporation and Jutvision Corporation, a corporation incorporated
under the laws of the State of Delaware (the "Parent Company"), as
amended from time to time in accordance with the provisions thereof
(the "Pairing Agreement") shall be terminated.
(i) the Series B Preferred Shares that are paired pursuant to the
Pairing Agreement with the Series B Common Stock of the Parent
Company, par value $0.0001, shall not be transferrable and shall
not be transferred on the share transfer books of the
Corporation, unless
<PAGE>
-7-
A. A simultaneous transfer of the Series B Common Stock of
the Parent Company is made by the same transferor to the
same transferee for the same number of shares, or
B. Arrangements have been with the Parent Company for the
acquisition by the transferee of a like number of shares
of Series B Common Stock of the Parent Company and such
shares are paired with the Series B Preferred Shares. Any
purported transfer of Series B Preferred Shares in
violation of this section 8 shall be void ab initio and
the intended transferee shall acquire no rights in such
shares of the Series B Preferred Shares.
(ii) Each certificate evidencing ownership of Series B Preferred
Shares of the Corporation that are paired pursuant to the
Pairing Agreement and issued and not cancelled prior to the
effectiveness of the Pairing Agreement shall be deemed to
evidence a like number of Series B Common Stock of the Parent
Company.
(iii) A legend shall be placed on the face of each certificate
evidencing ownership of Series B Preferred Shares that are
paired pursuant to the Pairing Agreement referring to the
restrictions on transfer set forth herein.
(c) Notwithstanding the foregoing, the Corporation may issue or transfer
its Series B Preferred Shares to the Parent Company without regard to
the restrictions of section 8.
8. The right to transfer Shares of the Amalgamated Corporation shall be
restricted in that no shareholder shall be entitled to transfer any share or
shares of the Amalgamated Corporation without either:
(a) the express sanction of the holders of at least Sixty-six and two-
thirds (66-2/3%) percent of the common shares of the Amalgamated
Corporation for the time being outstanding expressed by a resolution
passed at a meeting of such
<PAGE>
-8-
shareholders or by an instrument or instruments in writing signed by
the holders of at least sixty-six and two-thirds (66-2/3%) percent of
the common shares of the Amalgamated Corporation for the time being
outstanding, or
(b) the express sanction of the directors of the Amalgamated Corporation
expressed by a resolution passed at a meeting of the board of
directors or by an instrument or instruments in writing signed by a
majority of the directors.
9. The board of directors of the Amalgamated Corporation, until otherwise
determined in accordance with the Act, shall consist of a minimum of one (1) and
a maximum of ten (10) directors and the number of directors of the Amalgamated
Corporation shall be such number within those limits as shall be determined from
time to time by special resolution pursuant to subsection 125(3) of the Act,
except that the number of directors of the Amalgamated Corporation shall be one
(1) at the time the amalgamation becomes effective and until changed by special
resolution pursuant to section 125(3) of the Act. The first directors, who shall
hold office until the first annual meeting of shareholders of the Amalgamated
Corporation or until their successors are elected, shall be:
Name in Full Residence Address
------------ -----------------
LEONARD MCCURDY, 4198 Mississauga Road
a resident Canadian within the Mississauga, Ontario
meaning of the Act L5L 2S7
KEVIN MCCURDY, 4198 Mississauga Road
a resident Canadian within the Mississauga, Ontario
meaning of the Act L5L 2S7
<PAGE>
-9-
HOWARD FIELD 1 Chedington Place
a resident Canadian with Suite 9L
the meaning of the Act North York, Ontario
M4N 3R4
10. The by-laws of Jutvision Canada, Inc. shall be the by-laws of the
Amalgamated Corporation until repealed, amended, altered or added to, a copy of
which by-laws may be examined at the offices of Messrs. Beard, Winter, 150 King
Street West, Suite 900, Toronto, Ontario M5H 2K4.
11. The number of shareholders of the Amalgamated Corporation, exclusive
of persons who are in its employment and exclusive of persons who, having been
formerly in the employment of the Amalgamated Corporation, were, while in that
employment and have continued after the termination of that employment to be,
shareholders of the Amalgamated Corporation, shall be limited to not more than
fifty (50); two (2) or more persons who are joint registered owners of one (1)
or more shares being counted as one (1) shareholder.
12. Any invitation to the public to subscribe for any shares or securities
(within the meaning of the Securities Act (Ontario)) of the Amalgamated
Corporation is prohibited.
13. At the time the amalgamation of Jutvision Canada, Inc. and Jutvision
Corporation becomes effective, their shares become issued and fully paid shares
of the Amalgamated Corporation, as follows:
(a) The Two Million, Six Hundred and Fifty Thousand, Five Hundred and
Forty-Eight (2,650,548) Common Shares of Jutvision Corporation held by
Jutvision Canada, Inc. shall be cancelled without any repayment of
capital in respect thereof.
(b) The Two Hundred and Thirty-One Thousand, Two Hundred and Fifty
(231,250) Series A Convertible Preferred Shares of Jutvision
Corporation, held by Jutvision Canada, Inc. shall be cancelled without
any repayment o[ capital in respect thereof.
(c) The Two Hundred and Thirty-One Thousand, Three Hundred and Fifty
(231,350) issued and outstanding Common Shares of Jutvision Canada,
Inc. shall
<PAGE>
-10-
become Two Hundred and Thirty-One Thousand, Three Hundred and
Fifty(231,350) Common Shares of the Amalgamated Corporation.
(d) The Two Million, Six Hundred and Fifty Thousand, Five Hundred and
Forty-Eight (2,650,548) Series B Convertible Preferred Shares of
Jutvision Canada, Inc. shall become Two Million, Six Hundred and Fifty
Thousand, Five Hundred and Forty-Eight (2,650,548) Series B
Convertible Preferred Shares of the Amalgamated Corporation.
(e) All of the authorized but unissued shares in the capital stock of
Jutvision Canada, Inc. and Jutvision Corporation are hereby cancelled.
With the result that immediately after the amalgamation becomes effective, there
shall be outstanding as fully paid and non-assessable Two Hundred and Thirty-One
Thousand, Three Hundred and Fifty (231,350) Common Shares and Two Minion, Six
Hundred and Fifty Thousand, Five Hundred and Forty-Eight (2,650,548) Series B
Convertible Preferred Shares in the capital of the Amalgamated' Corporation.
14. The stated capital accounts of the Amalgamated Corporation immediately
after the amalgamation becomes effective shall be equal to the following amounts
immediately before the amalgamation becomes effective. In the case of the
account maintained for the common shares of the Amalgamated Corporation, it
shall be equal to the stated capital account of Two Hundred and Thirty-One
Thousand, Three Hundred and Fifty (231,350) common shares of Jutvision Canada,
Inc. In the case of the account maintained for the Series B Convertible
Preferred Shares of the Amalgamated Corporation, it shall be equal to the stated
capital account of Two Million, Six Hundred and Fifty Thousand, Five Hundred and
Forty-Eight (2,650,548) Series B Convertible Preferred Shares of Jutvision
Canada, Inc.
15. The Amalgamated Corporation shall possess all the property, rights,
privileges, franchises and other assets and shall be subject to all liabilities,
including civil, criminal and quasi-criminal, and all contracts and disabilities
and debts of each of the parties hereto.
16. All rights of creditors against the property, rights and assets of the
parties hereto and all liens upon their property, rights and assets shall be
unimpaired by such amalgamation and
JUTVISION CORPORATION
Per:
"Leonard McCurdy"
--------------------------
Leonard McCurdy, Chairman
<PAGE>
1.
EXHIBIT 3.4
For Ministry Use Only Ontario Corporation Number
1334184
---------------------------
[LOGO APPEARS HERE]
Ministry of
Consumer and
Commercial Relations
CERTIFICATE
This is to certify that these
Articles are effective on
APRIL 23, 1999
------------------------------
Director
Business Corporations Act
- --------------------------------------------------------------------------------
ARTICLES OF AMENDMENT
1. The name of the corporation is:
---------------------------------------------------------------------------
J U T V I S I O N C A N A D A , I N C .
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2. The name of the corporation is changed to (if applicable):
---------------------------------------------------------------------------
B A M B O O . C O M C A N A D A , I N C .
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3. Date of incorporation/amalgation:
1999 01 01
---------------------------------------------------------------------------
(Year, Month, Day)
4. The articles of the corporation are amended as follows:
A The name of the Corporation be and is hereby changed to:
BAMBOO.COM CANADA, INC.
B Any director or officer of the Corporation be and is hereby authorized
and directed to execute and deliver to the Minister of Consumer and Commercial
Relations articles of amendment and to do, sign and execute all things, deeds
and documents necessary or desirable for the due carrying out of the
foregoing.
<PAGE>
2.
5. The amendment has been duly authorized as required by Sections 168 & 170
(as applicable) of the Business Corporations Act.
6. The resolution authorizing the amendment was approved by the
shareholders/directors (as applicable) of the corporation on
1999 04 15
---------------------------------------------------------------------------
(Year, Month, Day)
These articles are signed in duplicate.
JUTVISION CANADA, INC.
------------------------------------------
(Name of Corporation)
Leonard B. McCurdy,
By: /s/ Leonard B.McCurdy Chairman
------------------------------------------
(Signature) (Description of
Office)
<PAGE>
1.
EXHIBIT 3.5
For Ministry Use Only
Ontario Corporation Number
1334184
-----------------------------------
[LOGO APPEARS HERE]
Ministry of
Consumer and
Commercial Relations
CERTIFICATE
This is to certify that these
articles are effective on
JUNE 07, 1999
------------------------------
Director
Business Corporations Act
- --------------------------------------------------------------------------------
ARTICLES OF AMENDMENT
1. The name of the corporation is:
---------------------------------------------------------------------------
B A M B O O . C O M C A N A D A , I N C .
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2. The name of the corporation is changed to (if applicable):
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3. Date of incorporation/amalgation:
1999 01 01
---------------------------------------------------------------------------
(Year, Month, Day)
4. The articles of the corporation are amended as follows:
(i) The authorized capital of bamboo.com Canada, Inc. (the "Amalgamated
Corporation") be amended by the creation of an unlimited number of
Series C Convertible Preferred Shares;
(ii) Each issued and outstanding Series B Convertible Preferred Share of
the Amalagated Corporation shall be converted into one (1) Series C
Convertible Preferred Share of the Amalgamated Corporation; and
(iii) The rights, preferences, privileges and restrictions granted to or
imposed upon the Series C Convertible Preferred Shares are as
follows:
<PAGE>
1. Designation and Amount. The Convertible Preferred Shares shall be
----------------------
designated as "Series C Convertible Preferred Shares" (the "Series C
Preferred Shares"). The Amalgamated Corporation shall be authorized to
issue an unlimited number of Series C Preferred Shares.
2. Liquidation Rights.
------------------
(a) Treatment at Liquidations. Dissolution or Winding Up.
----------------------------------------------------
In the event of any liquidation, dissolution or winding up of the
affairs of the Amalgamated Corporation, whether voluntary or
involuntary, the holders of the Series C Preferred Shares shall not be
entitled to receive any assets of the Amalgamated Corporation
available for distribution to its Shareholders and all such assets
shall be distributed rateably among the holders of the Common Shares.
3. Conversion.
-----------
The holders of the Series C Preferred Shares shall have the conversion
rights as follows:
(a) Right to Convert: Conversion Price. Each share of Series C Preferred
----------------------------------
Shares shall be convertible, without the payment of any additional
consideration by the holder thereof and at the option of the holder
thereof, at any time after the date of issuance of such share, at the
office of the Amalgamated Corporation or any transfer agent for the
Series C Preferred Shares, into one (1) Common Share of bamboo.com,
Inc. (a "Delaware Common Share").
(b) Mechanics of Conversion. Before any holder of Series C Preferred
-----------------------
Shares shall be entitled to convert the same into Delaware Common
Shares, such holder shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Amalgamated Corporation
or of any transfer agent for the Series C Preferred Shares, and shall
give written notice to the Amalgamated Corporation at such office that
such holder elects to convert the same and shall state therein the
name of such holder or the name or names of the nominees of such
holder in which such holder wishes the certificate or certificates for
the Delaware Common Shares to be issued. No fractional Delaware Common
Shares shall be issued upon conversion of Series C Preferred Shares.
The Amalgamated Corporation shall, as soon as practicable thereafter,
issue and deliver at such office to such holder of Series C Preferred
Shares, or to such holder's nominee or nominees, a
<PAGE>
certificate or certificates for the number of the Delaware Common
Shares to which such holder shall be entitled as aforesaid. Such
conversion shall be deemed to have been made immediately prior to the
close of business on the date of such surrender of the Series C
Preferred Shares to be converted, and the person or persons entitled
to receive the Delaware Common Shares issuable upon conversion shall
be treated for all purposes as the record holder or holders of such
Delaware Common Shares on such date.
(c) Automatic Conversion.
---------------------
(i) Each share of Series C Preferred Shares shall automatically be
converted into a Delaware Common Share upon:
(A) The written election of the holder of not less than two-
thirds in voting power of the then outstanding shares of
Series C Preferred Shares to require such mandatory
conversion; or
(B) The liquidation, dissolution or winding up of the affairs
of the Amalgamated Corporation, whether voluntary or
involuntary.
(ii) Upon the occurrence of an event specified in Section 3(c) (i)
hereof, all Series C Preferred Shares shall be converted
automatically without any further action by any holder of such
shares and whether or not the certificate or certificates
representing such shares are surrendered to the Amalgamated
Corporation or the transfer agent for the Series C Preferred
Shares, provided, however, that the Amalgamated Corporation
shall not be obligated to issue a certificate or certificates
evidencing the Delaware Common Shares into which such Series C
Preferred Shares were convertible unless the certificate or
certificates representing such Series C Preferred Shares being
converted are either delivered to the Amalgamated Corporation or
the transfer agent of the Series C Preferred Shares, or the
holder notifies the Amalgamated Corporation or such transfer
agent that such certificate or certificates have been lost,
stolen, or destroyed and executes and delivers an affidavit of
loss and bond of indemnity agreement satisfactory to the
Amalgamated Corporation to indemnify the Amalgamated Corporation
from any loss incurred by it in connection therewith and, if the
Amalgamated Corporation so elects, provides an appropriate
indemnity.
(iii) Upon the automatic conversion of the Series C Preferred
<PAGE>
Shares, each holder of Series C Preferred Shares shall surrender
the certificate or certificates representing such holder's
Series C Preferred Shares at the office of the Amalgamated
Corporation or of the transfer agent for the Series C Preferred
Shares. Thereupon, there shall be issued and delivered to such
holder, promptly at such office and in such holder's name as
shown on such surrendered certificate or certificates, a
certificate or certificates for the number of shares of Delaware
Common Shares into which the Series C Preferred Shares
surrendered were convertible on the date on which such automatic
conversion occurred. No fractional Delaware Common Shares shall
be issued upon the automatic conversion of Series C Preferred
Shares.
2. Voting Rights.
--------------
(a) Except as otherwise required by law or these Articles of Amendment,
the holders of the Series C Preferred Shares and the holders of the
Common Shares shall be entitled to notice of any shareholders' meeting
and to vote together as a single class upon any matter submitted to
the shareholders for a vote, on the following basis:
(i) Holders of Common Shares shall have one (1) vote per Common share
held by them; and
(ii) Holders of Series C Preferred Shares shall not be entitled to
vote, except as set out in paragraph (b) below.
(b) Notwithstanding the foregoing, the holders of Series C Preferred
Shares shall vote as a separate class on any matters as to which a
separate class vote is required by law.
(c) Notwithstanding the foregoing, the holders of Series C Preferred
Shares shall vote in the same manner as the holder of the Common
Shares on any matters as to which a separate class vote is required by
law.
5. Covenants. So long as ten percent (10%) of the original issued shares of
---------
Series C Preferred Shares remain outstanding, unless there is given the
written consent of at least two-thirds of the Series C Preferred Shares
outstanding voting as a separate class, the Amalgamated Corporation shall
not undertake any further amendments of its articles if such amendments
would alter or change the preferences, voting power, qualifications or
special or relative rights or privileges of the Series C Preferred Shares
so as to affect the holders thereof in a materially adverse manner. The
holders of two-thirds of the aggregate number of shares of Series C
Preferred Shares outstanding may, by affirmative vote or consent as
<PAGE>
aforesaid, agree to a change or alteration by the Amalgamated Corporation
in the preferences, voting powers, qualifications and special or relative
rights and privileges of the Series C Preferred Shares or may waive the
application thereof in any particular instance.
6. No Reissuance of Series C Preferred Shares. No Series C Preferred Shares or
------------------------------------------
shares acquired by the Amalgamated Corporation by reason of redemption,
purchase, conversion or otherwise shall be reissued, and all such shares
shall be cancelled, retired and eliminated from the shares which the
Amalgamated Corporation shall be authorized to issue.
7. Residual Rights. All rights accruing to the outstanding shares of the
---------------
Amalgamated Corporation not expressly provided for in the terms of the
Series C Preferred Shares shall be vested in the Common Shares.
8. Transfer of Stock; Pairing.
---------------------------
(a) Subject to the restrictions on transfer of shares described in the
Amalgamated Corporation's by-laws as amended from time to time, upon
surrender to any transfer agent of the Amalgamated Corporation of a
certificate of shares of the Amalgamated Corporation duly endorsed or
accompanied by proper evidence of succession, assignment or authority
to transfer, it shall be the duty of the Amalgamated Corporation to
issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
(b) Until the limitations on transfer set forth in the Amended and
Restated Conversion and Pairing Agreement dated as of June 7, 1999 by
and between the Amalgamated Corporation and bamboo.com, Inc., a
corporation incorporated under the laws of the State of Delaware (the
"Parent Company"), as amended from time to time in accordance with the
provisions thereof (the "Pairing Agreement") shall be terminated:
(i) The Series C Preferred Shares that are paired pursuant to the
Pairing Agreement with the Class B Common Stock of the Parent
Company, par value $0.0001, shall not be transferrable and shall
not be transferred on the share transfer books of the Amalgamated
Corporation, unless
A. A simultaneous transfer of the Class B Common Stock of the
Parent Company is made by the same transferor to the same
transferee for the same number of shares, or
B. Arrangements have been with the Parent Company for the
acquisition by the transferee of a like
<PAGE>
number of shares of Class B Common Stock of the Parent
Company and such shares are paired with the Series C
Preferred Shares. Any purported transfer of Series C
Preferred Shares in violation of this section 8 shall be
void ab initio and the intended transferee shall acquire no
rights in such shares of the Series C Preferred Shares.
(ii) Each certificate evidencing ownership of Series C Preferred
Shares of the Amalgamated Corporation that are paired pursuant
to the Pairing Agreement and issued and not cancelled prior to
the effectiveness of the Pairing Agreement shall be deemed to
evidence a like number of Class B Common Stock of the Parent
Company.
(iii) A legend shall be placed on the face of each certificate
evidencing ownership of Series C Preferred Shares that are
paired pursuant to the Pairing Agreement referring to the
restrictions on transfer set forth herein.
(c) Notwithstanding the foregoing, the Amalgamated Corporation may issue
or transfer its Series C Preferred Shares to the Parent Company
without regard to the restrictions of section 8.
<PAGE>
2.
5. The amendment has been duly authorized as required
by Sections 168 & 170 (as applicable) of the Business
Corporations Act.
6. The resolution authorizing the amendment was
approved by the shareholders/directors (as applica-
ble) of the corporation on
1999
- --------------------------------------------------------------------------------
(Year, Month, Day)
These articles are signed in duplicate.
BAMBOO.COM CANADA, INC.
--------------------------------------------
(Name of Corporation)
By: /s/ Leonard B. McCurdy,
Chairman
------------------------------------------
(Signature) (Description of Office)
<PAGE>
-11-
all debts, contracts and liabilities and duties of the parties hereto shall
thenceforth attach to the Amalgamated Corporation and may be enforced against
it.
17. No action or proceeding by or against any of the parties hereto shall abate
or be affected by such amalgamation.
18. Upon the shareholders of each of the parties hereto respectively passing or
consenting to a special resolution approving this agreement, the parties hereto
shall jointly file, in duplicate, with the Ministry of Consumer and Commercial
Relations articles of amalgamation and all other documents necessary to bring
such amalgamation into effect. Notwithstanding the foregoing, this agreement
shall be terminated if the directors of any one of Jutvision Canada, Inc. or
Jutvision Corporation enact a resolution terminating this agreement at any time
before the endorsement of a certificate of amalgamation, notwithstanding
approval of this agreement by the shareholders of all or any one of Jutvision
Canada, Inc. or Jutvision Corporation.
19. The amalgamation provided for in this agreement shall take effect on the
1/st/ day of January, 1999.
IN WITNESS WHEREOF this agreement has been duly executed by the
parties hereto under their respective corporate seals as witnessed by the
signatures of their proper officers in that behalf.
JUTVISION CANADA, INC.
Per:
/s/ Leonard McCurdy
------------------------------
Leonard McCurdy, Chairman
JUTVISION CORPORATION
Per:
/s/ Leonard McCurdy
------------------------------
Leonard McCurdy, Chairman
<PAGE>
EXHIBIT 3.6
AMENDED AND RESTATED
CONVERSION AND PAIRING AGREEMENT
THIS AMENDED AND RESTATED CONVERSION AND PAIRING AGREEMENT (the "Amended
Agreement") is dated as of June 7, 1999 by and between bamboo.com, Inc.
("Parent"), a Delaware corporation, and bamboo.com Canada, Inc. ("Subsidiary"),
an Ontario corporation.
Recitals:
Parent and Subsidiary completed a related series of transactions effective
January 1, 1999 consisting principally of: (i) the amalgamation of Jutvision
Corporation, an Ontario corporation ("Jutvision Canada") with and into
Subsidiary, pursuant to which each outstanding share of Jutvision Canada common
stock, no par value ("Jutvision Canada Common Stock"), was converted into one
Subsidiary Series B Convertible Preferred Share, no par value ("Subsidiary
Series B Preferred Stock") (the "Amalgamation "); (ii) in connection therewith,
the issuance by Parent of its Class B redeemable common stock, $.0001 par value
("Parent Class B Common Stock") to the holders of the outstanding shares of
Jutvision Canada Common Stock, on a share-for-share basis (the "Sale"); and
(iii) the pairing of the outstanding shares of Subsidiary Series B Preferred
Stock and the Parent Class B Common Stock so that they are transferable only in
units (the "Units"), each Unit consisting of one share of Subsidiary Series B
Preferred Stock and one share of Parent Class B Common Stock (the "Pairing").
The Articles of Amalgamation of Subsidiary and Certificate of Incorporation
of Parent each provide that, commencing on the effective date of the
Amalgamation and the Sale, the shares of Subsidiary Series B Preferred Stock and
the Parent Class B Common Stock are not transferable, and shall not be
transferred, on the books of Subsidiary or Parent, as the case may be, except in
combination with an equal number of shares of the other company.
Subsidiary and Parent entered into a Conversion and Pairing Agreement dated
as of January 1, 1999 (the "Agreement") for the purpose of further effectuating
the Pairing, including the establishment of the terms and conditions which will
govern the issuance and the transfer of shares of Subsidiary Series B Preferred
Stock and Parent Class B Common Stock after the effective date of the
Amalgamation and the Sale.
Subsidiary and Parent also entered into the Agreement to provide for the
obligation of Parent to issue Parent Common Stock to holders of Subsidiary
Series B Preferred Stock upon the conversion of the Subsidiary Series B
Preferred Stock into Parent Common Stock pursuant to the rights of the
Subsidiary Series B Preferred Stock set forth in Articles of Amalgamation of
Subsidiary.
Effective April 23, 1999, Parent changed its name from Jutvision
Corporation to bamboo.com, Inc. and Subsidiary changed its name from Jutvision
Canada, Inc. to bamboo.com Canada, Inc.
<PAGE>
2
Effective June 7, 1999, Subsidiary completed a reorganization (the
"Reorganization") which created a new class of shares of Subsidiary called
Series C Convertible Preferred Shares ("Subsidiary Series C Preferred Stock")
and converted each issued and outstanding share of Subsidiary Series B Preferred
Stock into one (1) share of Subsidiary Series C Preferred Stock.
The terms of the Reorganization also provided that the outstanding shares
of Subsidiary C Preferred Stock be paired with the outstanding shares of Parent
Class B Common Stock in the same manner as the outstanding shares of Subsidiary
B Preferred Stock were paired with the outstanding shares of Parent Class B
Common Stock.
Section 6 of the Agreement provides for the amendment of the Agreement in
accordance with the terms thereof.
The Agreement is hereby amended and restated in its entirety as follows:
COVENANTS
1. Transfer of Shares. Commencing as of the date hereof (the "Effective
Time of the Pairing") and continuing until such time as the Pairing shall have
been terminated in the manner herein provided:
(a) No shares of Subsidiary Series C Preferred Stock shall be
transferable, and they shall not be transferred on the books of Subsidiary,
unless (i) a simultaneous transfer is made by the same transferor to the
same transferee, or (ii) such transferor has previously arranged with
Parent for the transfer to the transferee, of the same number of shares of
Parent Class B Common Stock, except that Parent may transfer shares of
Subsidiary Series C Preferred Stock acquired by it from Subsidiary to a
person to whom Parent simultaneously issues the same number of shares of
Parent Class B Common Stock.
(b) No shares of Parent Class B Common Stock shall be transferable,
and they shall not be transferred on the books of Parent, unless (i) a
simultaneous transfer is made by the same transferor to the same
transferee, or (ii) such transferor has previously arranged with Subsidiary
for the transfer to the transferee, of the same number of shares of
Subsidiary Series C Preferred Stock, except that Subsidiary may transfer
Parent Class B Common Stock acquired by it from Parent to a person to whom
Subsidiary simultaneously issues the same number of shares of Subsidiary
Series C Preferred Stock.
(c) Each certificate evidencing ownership of shares of Subsidiary
Series C Preferred Stock issued and not canceled prior to the Effective
Time of the Pairing shall be deemed to evidence, in addition, the same
number of Parent Class B Common Shares.
<PAGE>
3
(d) Any registered holder of a certificate evidencing ownership of
shares of Subsidiary Series C Preferred Stock issued prior to the Effective
Time of the Pairing may, upon request and presentation of said certificate
to the Company or transfer agent for the Subsidiary Series C Preferred
Stock, as applicable, obtain in substitution therefor a certificate or
certificates registered in such holder's name evidencing the same number of
shares of Subsidiary Series C Preferred Stock and a like number of shares
of Parent Class B Common Stock.
2. Issuance of Shares. (a) Commencing at the Effective Time of the
Pairing and continuing until such time as the Pairing shall have been terminated
in the manner herein provided:
(i) Subsidiary shall not issue or agree to issue any shares of
Subsidiary Series C Preferred Stock to any person except Parent unless
effective provision has been made for the simultaneous issuance or
transfer to the same person of the same number of shares of Parent
Class B Common Stock and for the pairing of such shares of Subsidiary
and Parent and unless Subsidiary and Parent have agreed on the manner
and basis of allocating the consideration to be received upon such
issuance between Subsidiary and Parent or, if allocation of such
consideration between them is not practicable, on the payment by one
company to the other of cash or other consideration in lieu thereof.
(ii) Parent shall not issue or agree to issue any shares of
Parent Class B Common Stock to any person except Subsidiary unless
effective provision has been made for the simultaneous issuance or
transfer to the same person of the same number of shares of Subsidiary
Series C Preferred Stock and for the pairing of such shares of Parent
and Subsidiary and unless Parent and Subsidiary have agreed on the
manner and basis of allocating the consideration to be received upon
such issuance between Parent and Subsidiary or, if allocation of such
consideration between them is not practicable, on the payment by one
company to the other of cash or other consideration in lieu thereof.
(iii) Upon exercise of any stock option or warrant granted by
Jutvision Canada prior to the Amalgamation and assumed by Subsidiary
or granted by Subsidiary after the Amalgamation, Parent agrees upon
request of management of Subsidiary, that it will simultaneously issue
a number of shares of Parent Class B Common Stock to Subsidiary or to
the exercising optionee equal to the number of Subsidiary Series C
Preferred Shares issued by Subsidiary pursuant to such exercise, and
Subsidiary agrees to pay Parent par value of each Parent Class B
Common Share so issued at the date of exercise of such option,
notwithstanding the provisions of subsection (i) of this Section 2.
(b) Upon the conversion of the Subsidiary Series C Preferred Stock
into Parent Common Stock pursuant to the rights of the Subsidiary Series C
Preferred Stock
<PAGE>
4
set forth in the Articles of Amendment of the Subsidiary, Parent shall
issue Parent Common Stock to each holder of Subsidiary Series C Preferred
Stock on a share for share basis, subject to the restrictions and mechanics
set forth in the Articles of Amendment of Subsidiary and Certificate of
Incorporation of Parent. Before any holder of Subsidiary Series C Preferred
Stock shall be entitled to convert the same into Parent Common Stock, such
holder shall surrender (or constructively surrender, as the case may be, if
the certificate or certificates for such shares are being held for such
holder by Subsidiary, or if Subsidiary has not yet issued and delivered
such certificate or certificates to the holder) the certificate or
certificates therefor, duly endorsed, together with an equal number of
shares of Parent Class B Common Stock, at the office of the Subsidiary or
of any transfer agent for the Subsidiary Series C Preferred Stock, and
shall give written notice to the Subsidiary at such office and to Parent at
its office that such holder elects to convert the same and shall state
therein the name of such holder or the name or names of the nominees of
such holder in which such holder wishes the certificate or certificates for
Parent Common Stock to be issued. The Parent shall, as soon as practicable
thereafter and upon receipt of payment from Subsidiary of the par value for
the shares of Parent Common Stock, issue and deliver at such office to such
holder of Subsidiary Series C Preferred Stock, or to such holder's nominee
or nominees, a certificate or certificates for the number of shares of
Parent Common Stock to which such holder shall be entitled as aforesaid,
together with cash in lieu of any fraction of a share. Such conversion
shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Subsidiary Series C
Preferred Stock to be converted, and the person or persons entitled to
receive the Parent Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Parent Common
Stock on such date. Parent shall have no obligation to issue shares of
Parent Common Stock to the holder of Subsidiary Series C Preferred Stock
until such holder has surrendered its certificates representing the number
of Subsidiary Series C Preferred Stock converted and an equal number of
shares of Parent Class B Common Stock or such holder provides Subsidiary
and Parent with lost certificate affidavit(s), in a form acceptable to
both.
3. Stock Certificates, Transfer Agents and Registrars. Commencing at the
Effective Time of Pairing and continuing until such time as the Pairing shall
have been terminated in the manner herein provided:
(a) Each certificate which is issued evidencing shares of Subsidiary
Series C Preferred Stock shall be printed with a certificate evidencing the
same number of shares of Parent Class B Common Stock, and shall bear a
conspicuous legend referring to the restrictions on the transfer of the
shares evidenced thereby contained in the Articles of Amendment of
Subsidiary, and shall be in a form which satisfies the requirements of the
laws of Ontario, Canada and which has been approved by the board of
directors of Subsidiary.
<PAGE>
5
(b) Each certificate which is issued evidencing shares of Parent
Class B Common Stock shall be printed with a certificate evidencing the
same number of shares of Subsidiary Series C Preferred Stock, and shall
bear a conspicuous legend referring to the restrictions on the transfer of
the shares evidenced thereby contained in the Certificate of Incorporation
of Parent, and shall be in a form which satisfies the requirements of the
laws of Delaware and which has been approved by the board of directors of
Parent.
(c) Subsidiary and Parent shall appoint the same transfer agents and
registrars for the shares of Subsidiary Series C Preferred Stock and the
Parent Class B Common Stock, respectively.
4. Stock Dividends, Reclassifications, etc. Commencing at the Effective
Time of the Pairing and continuing until such time as the Pairing shall have
been terminated in the manner herein provided:
(a) Subsidiary shall not declare or pay any stock dividend consisting
in whole or in part of Subsidiary Series C Preferred Stock, issue any
rights or warrants to purchase any shares of Subsidiary Series C Preferred
Stock, or subdivide, combine or otherwise reclassify the shares of
Subsidiary Series C Preferred Stock, unless Parent simultaneously takes the
same or equivalent action with respect to the Parent Class B Common Stock,
to the end that the outstanding shares of Subsidiary Series C Preferred
Stock and Parent Class B Common Stock will at all times be effectively
"paired", on a one-for-one basis as contemplated herein.
(b) Parent shall not declare or pay any stock dividend consisting in
whole or in part of Parent Class B Common Stock, issue any rights or
warrants to purchase any Parent Class B Common Stock, or subdivide, combine
or otherwise reclassify the Parent Class B Common Stock, unless Subsidiary
simultaneously takes the same or equivalent action with respect to the
Subsidiary Series C Preferred Stock, to the end that the outstanding Parent
Class B Common Stock and the outstanding shares of Subsidiary Series C
Preferred Stock will at all times be effectively "paired" on a one-for-one
basis as contemplated herein.
5. Termination. (a) This Agreement and the Pairing may be terminated by
action of the Board of Directors of either Subsidiary or of Parent upon 30 days'
written notice to the other party hereto that such termination has been approved
by the affirmative vote of the holders of two-thirds of the outstanding shares
of Subsidiary Series C Preferred Stock represented and voting at a duly held
meeting at which a quorum is present (if terminated by Subsidiary) or of the
holders of two-thirds of the outstanding shares of Parent Class B Common Stock
represented and voting at a duly held meeting at which a quorum is present (if
terminated by Parent).
(b) This Agreement and Pairing shall terminate upon the redemption of
all shares of Parent Class B Common Stock.
<PAGE>
6
6. Amendment. This Agreement may be amended by action of the Board of
Directors of both Subsidiary and Parent, provided that any such action has been
approved by the affirmative vote of the holders of two-thirds of the outstanding
shares of Subsidiary Series C Preferred Stock, voting as a class, and the
holders of two-thirds of the outstanding Parent Class B Common Stock, voting as
a class represented and voting at a duly held meeting at which a quorum is
present if such amendment shall permit a separation of the paired securities so
as to allow the separate issuance and transfer thereof other than as provided
herein.
In Witness Whereof the parties hereto have set their hands and seals to
this Agreement as of the date first written above.
Bamboo.com, Inc.
--------------------------------
By: Leonard B. McCurdy
Its: Chairman
Bamboo.com Canada, Inc.
--------------------------------
By: Leonard B. McCurdy
Its: Chairman
<PAGE>
EXHIBIT 3.7
AMENDED AND RESTATED
BYLAWS
OF
BAMBOO.COM, INC.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I - CORPORATE OFFICES...................................... 1
1.1 REGISTERED OFFICE............................................ 1
1.2 OTHER OFFICES................................................ 1
ARTICLE II - MEETINGS OF STOCKHOLDERS.............................. 1
2.1 PLACE OF MEETINGS............................................ 1
2.2 ANNUAL MEETING............................................... 1
2.3 SPECIAL MEETING.............................................. 2
2.4 NOTICE OF STOCKHOLDERS' MEETINGS............................. 2
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE................. 2
2.6 QUORUM....................................................... 2
2.7 ADJOURNED MEETING; NOTICE.................................... 3
2.8 VOTING....................................................... 3
2.9 WAIVER OF NOTICE............................................. 3
2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING...... 4
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS.. 4
2.12 PROXIES...................................................... 5
2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE........................ 5
ARTICLE III - DIRECTORS............................................ 5
3.1 POWERS....................................................... 5
3.2 NUMBER OF DIRECTORS.......................................... 6
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS...... 6
3.4 RESIGNATION AND VACANCIES.................................... 6
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE..................... 7
3.6 FIRST MEETINGS............................................... 7
3.7 REGULAR MEETINGS............................................. 8
3.8 SPECIAL MEETINGS; NOTICE..................................... 8
3.9 QUORUM....................................................... 8
3.10 WAIVER OF NOTICE............................................. 8
3.11 ADJOURNED MEETING; NOTICE.................................... 9
3.12 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING............ 9
3.13 FEES AND COMPENSATION OF DIRECTORS........................... 9
3.14 APPROVAL OF LOANS TO OFFICERS................................ 9
3.15 REMOVAL OF DIRECTORS......................................... 9
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE IV - COMMITTEES............................................ 10
4.1 COMMITTEES OF DIRECTORS...................................... 10
4.2 COMMITTEE MINUTES............................................ 10
4.3 MEETINGS AND ACTION OF COMMITTEES............................ 10
ARTICLE V - OFFICERS............................................... 11
5.1 OFFICERS..................................................... 11
5.2 ELECTION OF OFFICERS......................................... 11
5.3 SUBORDINATE OFFICERS......................................... 11
5.4 REMOVAL AND RESIGNATION OF OFFICERS.......................... 11
5.5 VACANCIES IN OFFICES......................................... 12
5.6 CHAIRMAN OF THE BOARD........................................ 12
5.7 PRESIDENT.................................................... 12
5.8 VICE PRESIDENT............................................... 12
5.9 SECRETARY.................................................... 12
5.10 TREASURER.................................................... 13
5.11 ASSISTANT SECRETARY.......................................... 13
5.12 ASSISTANT TREASURER.......................................... 13
5.13 AUTHORITY AND DUTIES OF OFFICERS............................. 14
ARTICLE VI - INDEMNITY............................................. 14
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS..................... 14
6.2 INDEMNIFICATION OF OTHERS..................................... 14
6.3 INSURANCE..................................................... 15
ARTICLE VII - RECORDS AND REPORTS.................................. 15
7.1 MAINTENANCE AND INSPECTION OF RECORDS......................... 15
7.2 INSPECTION BY DIRECTORS....................................... 16
7.3 ANNUAL STATEMENT TO STOCKHOLDERS.............................. 16
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS................ 16
ARTICLE VIII - GENERAL MATTERS..................................... 16
8.1 CHECKS........................................................ 16
8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS.............. 16
8.3 STOCK CERTIFICATES; PARTLY PAID SHARES........................ 17
8.4 SPECIAL DESIGNATION ON CERTIFICATES........................... 17
8.5 LOST CERTIFICATES............................................. 18
8.6 CONSTRUCTION; DEFINITIONS..................................... 18
8.7 DIVIDENDS..................................................... 18
</TABLE>
<PAGE>
<TABLE>
<S> <C>
8.8 FISCAL YEAR.................................................. 18
8.9 SEAL......................................................... 18
8.10 TRANSFER OF STOCK............................................ 19
8.11 STOCK TRANSFER AGREEMENTS.................................... 19
8.12 REGISTERED STOCKHOLDERS...................................... 19
ARTICLE IX - AMENDMENTS............................................ 19
ARTICLE X - DISSOLUTION............................................ 19
ARTICLE XI - CUSTODIAN............................................. 20
11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES.................. 20
11.2 DUTIES OF CUSTODIAN.......................................... 21
</TABLE>
<PAGE>
AMENDED AND RESTATED
--------------------
BYLAWS
------
OF
--
BAMBOO.COM, INC.
----------------
ARTICLE I
CORPORATE OFFICES
-----------------
1.1 REGISTERED OFFICE
-----------------
The registered office of the corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware. The name of the registered
agent of the corporation at such location is Corporation Service Company.
1.2 OTHER OFFICES
-------------
The board of directors may at any time establish other offices at any place
or places where the corporation is qualified to do business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
------------------------
2.1 PLACE OF MEETINGS
-----------------
Meetings of stockholders shall be held at any place, within or outside the
State of Delaware, designated by the board of directors. In the absence of any
such designation, stockholders' meetings shall be held at the registered office
of the corporation.
2.2 ANNUAL MEETING
--------------
The annual meeting of stockholders shall be held each year on a date and at
a time designated by the board of directors. In the absence of such designation,
the annual meeting of stockholders shall be held on the third (3rd) Tuesday of
May in each year at the corporation's registered office. However, if such day
falls on a legal holiday, then the meeting shall be held at the same time and
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<PAGE>
place on the next succeeding full business day. At the meeting, directors shall
be elected and any other proper business may be transacted.
2.3 SPECIAL MEETING
---------------
A special meeting of the shareholders may be called at any time by the
board of directors, or by the chairman of the board, or by the president, or by
one or more shareholders holding shares in the aggregate entitled to cast not
less than ten percent (10%) of the votes at that meeting.
If a special meeting is called by any person or persons other than the
board of directors or the president or the chairman of the board, then the
request shall be in writing, specifying the time of such meeting and the general
nature of the business proposed to be transacted, and shall be delivered
personally or sent by registered mail or by telegraphic or other facsimile
transmission to the chairman of the board, the president, any vice president or
the secretary of the corporation. The officer receiving the request shall cause
notice to be promptly given to the shareholders entitled to vote, in accordance
with the provisions of Sections 2.4 and 2.5 of these bylaws, that a meeting will
be held at the time requested by the person or persons calling the meeting, so
long as that time is not less than thirty-five (35) nor more than sixty (60)
days after the receipt of the request. If the notice is not given within twenty
(20) days after receipt of the request, then the person or persons requesting
the meeting may give the notice. Nothing contained in this paragraph of this
Section 2.3 shall be construed as limiting, fixing or affecting the time when a
meeting of shareholders called by action of the board of directors may be held.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
--------------------------------
All notices of meetings with stockholders shall be in writing and shall be
sent or otherwise given in accordance with Section 2.5 of these bylaws not less
than ten (10) nor more than sixty (60) days before the date of the meeting to
each stockholder entitled to vote at such meeting. The notice shall specify the
place, date, and hour of the meeting, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called.
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
--------------------------------------------
Written notice of any meeting of stockholders, if mailed, is given when
deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the records of the corporation. An
affidavit of the secretary or an assistant secretary or of the transfer agent of
the corporation that the notice has been given shall, in the absence of fraud,
be prima facie evidence of the facts stated therein.
2.6 QUORUM
------
The holders of a majority of the stock issued and outstanding and entitled
to vote thereat, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders for the transaction of business
except as otherwise provided by statute or by the
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<PAGE>
certificate of incorporation. If, however, such quorum is not present or
represented at any meeting of the stockholders, then the stockholders entitled
to vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum is present or represented. At such adjourned meeting
at which a quorum is present or represented, any business may be transacted that
might have been transacted at the meeting as originally noticed.
2.7 ADJOURNED MEETING; NOTICE
-------------------------
When a meeting is adjourned to another time or place, unless these bylaws
otherwise require, notice need not be given of the adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business that
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
2.8 VOTING
------
The stockholders entitled to vote at any meeting of stockholders shall be
determined in accordance with the provisions of Section 2.11 of these bylaws,
subject to the provisions of Sections 217 and 218 of the General Corporation Law
of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners
of stock and to voting trusts and other voting agreements).
Except as may be otherwise provided in the certificate of incorporation,
each stockholder shall be entitled to one vote for each share of capital stock
held by such stockholder.
2.9 WAIVER OF NOTICE
----------------
Whenever notice is required to be given under any provision of the General
Corporation Law of Delaware or of the certificate of incorporation or these
bylaws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such
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<PAGE>
meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in any written waiver of notice unless so
required by the certificate of incorporation or these bylaws.
2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
-------------------------------------------------------
Unless otherwise provided in the certificate of incorporation, any action
required by this chapter to be taken at any annual or special meeting of
stockholders of a corporation, or any action that may be taken at any annual or
special meeting of such stockholders, may be taken without a meeting, without
prior notice, and without a vote if a consent in writing, setting forth the
action so taken, is signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted.
Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing. If the action which is consented to is such as
would have required the filing of a certificate under any section of the General
Corporation Law of Delaware if such action had been voted on by stockholders at
a meeting thereof, then the certificate filed under such section shall state, in
lieu of any statement required by such section concerning any vote of
stockholders, that written notice and written consent have been given as
provided in Section 228 of the General Corporation Law of Delaware.
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS
-----------------------------------------------------------
In order that the corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not be more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action.
If the board of directors does not so fix a record date:
(i) The record date for determining stockholders entitled to notice
of or to vote at a meeting of stockholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held.
(ii) The record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the board of directors is necessary, shall be the day on which the first
written consent is expressed.
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(iii) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.
2.12 PROXIES
-------
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for him by a written proxy, signed by
the stockholder and filed with the secretary of the corporation, but no such
proxy shall be voted or acted upon after three (3) years from its date, unless
the proxy provides for a longer period. A proxy shall be deemed signed if the
stockholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission or otherwise) by the stockholder or the
stockholder's attorney-in-fact. The revocability of a proxy that states on its
face that it is irrevocable shall be governed by the provisions of Section
212(e) of the General Corporation Law of Delaware.
2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE
-------------------------------------
The officer who has charge of the stock ledger of a corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
ARTICLE III
DIRECTORS
---------
3.1 POWERS
------
Subject to the provisions of the General Corporation Law of Delaware and
any limitations in the certificate of incorporation or these bylaws relating to
action required to be approved by the stockholders or by the outstanding shares,
the business and affairs of the corporation shall be
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managed and all corporate powers shall be exercised by or under the direction of
the board of directors.
3.2 NUMBER OF DIRECTORS
-------------------
The number of directors of the corporation which shall constitute the whole
board shall be determined by resolution of the Board of Directors.
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
-------------------------------------------------------
Except as provided in Section 3.4 of these bylaws, directors shall be
elected at each annual meeting of stockholders to hold office until the next
annual meeting. Directors need not be stock holders unless so required by the
certificate of incorporation or these bylaws, wherein other qualifications for
directors may be prescribed. Each director, including a director elected to fill
a vacancy, shall hold office until his successor is elected and qualified or
until his earlier resignation or removal.
Elections of directors need not be by written ballot.
3.4 RESIGNATION AND VACANCIES
-------------------------
Any director may resign at any time upon written notice to the corporation.
When one or more directors so resigns and the resignation is effective at a
future date, a majority of the directors then in office, including those who
have so resigned, shall have power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective, and each director so chosen shall hold office as provided in this
section in the filling of other vacancies.
Unless otherwise provided in the certificate of incorporation or these
bylaws:
(i) Vacancies and newly created directorships resulting from any
increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.
(ii) Whenever the holders of any class or classes of stock or series
thereof are entitled to elect one or more directors by the provisions of the
certificate of incorporation, vacancies and newly created directorships of such
class or classes or series may be filled by a majority of the directors elected
by such class or classes or series thereof then in office, or by a sole
remaining director so elected.
If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or
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guardian of a stockholder, or other fiduciary entrusted with like responsibility
for the person or estate of a stockholder, may call a special meeting of
stockholders in accordance with the provisions of the certificate of
incorporation or these bylaws, or may apply to the Court of Chancery for a
decree summarily ordering an election as provided in Section 211 of the General
Corporation Law of Delaware.
If, at the time of filling any vacancy or any newly created directorship,
the directors then in office constitute less than a majority of the whole board
(as constituted immediately prior to any such increase), then the Court of
Chancery may, upon application of any stockholder or stockholders holding at
least ten (10) percent of the total number of the shares at the time outstanding
having the right to vote for such directors, summarily order an election to be
held to fill any such vacancies or newly created directorships, or to replace
the directors chosen by the directors then in office as aforesaid, which
election shall be governed by the provisions of Section 211 of the General
Corporation Law of Delaware as far as applicable.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
----------------------------------------
The board of directors of the corporation may hold meetings, both regular
and special, either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or these
bylaws, members of the board of directors, or any committee designated by the
board of directors, may participate in a meeting of the board of directors, or
any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at the meeting.
3.6 FIRST MEETINGS
--------------
The first meeting of each newly elected board of directors shall be held at
such time and place as shall be fixed by the vote of the stockholders at the
annual meeting and no notice of such meeting shall be necessary to the newly
elected directors in order legally to constitute the meeting, provided a quorum
shall be present. In the event of the failure of the stockholders to fix the
time or place of such first meeting of the newly elected board of directors, or
in the event such meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of the
board of directors, or as shall be specified in a written waiver signed by all
of the directors.
3.7 REGULAR MEETINGS
----------------
Regular meetings of the board of directors may be held without notice at
such time and at such place as shall from time to time be determined by the
board.
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3.8 SPECIAL MEETINGS; NOTICE
------------------------
Special meetings of the board of directors for any purpose or purposes may
be called at any time by the chairman of the board, the president, any vice
president, the secretary or any two (2) directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at that director's address
as it is shown on the records of the corporation. If the notice is mailed, it
shall be deposited in the United States mail at least four (4) days before the
time of the holding of the meeting. If the notice is delivered personally or by
telephone or by telegram, it shall be delivered personally or by telephone or to
the telegraph company at least forty-eight (48) hours before the time of the
holding of the meeting. Any oral notice given personally or by telephone may be
communicated either to the director or to a person at the office of the director
who the person giving the notice has reason to believe will promptly communicate
it to the director. The notice need not specify the purpose or the place of the
meeting, if the meeting is to be held at the principal executive office of the
corporation.
3.9 QUORUM
------
At all meetings of the board of directors, a majority of the authorized
number of directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the board of directors, except as may be
otherwise specifically provided by statute or by the certificate of
incorporation. If a quorum is not present at any meeting of the board of
directors, then the directors present thereat may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
is present.
3.10 WAIVER OF NOTICE
----------------
Whenever notice is required to be given under any provision of the General
Corporation Law of Delaware or of the certificate of incorporation or these
bylaws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the directors, or members of a committee of directors, need be specified in
any written waiver of notice unless so required by the certificate of
incorporation or these bylaws.
3.11 ADJOURNED MEETING; NOTICE
-------------------------
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If a quorum is not present at any meeting of the board of directors, then
the directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is present.
3.12 ACTION BY WRITTEN CONSENT WITHOUT A MEETING
-------------------------------------------
Unless otherwise restricted by the certificate of incorporation or these
bylaws, any action required or permitted to be taken at any meeting of the board
of directors, or of any committee thereof, may be taken without a meeting if all
members of the board or committee, as the case may be, consent thereto in
writing and the writing or writings are filed with the minutes of proceedings of
the board or committee.
3.13 FEES AND COMPENSATION OF DIRECTORS
----------------------------------
Unless otherwise restricted by the certificate of incorporation or these
bylaws, the board of directors shall have the authority to fix the compensation
of directors.
3.14 APPROVAL OF LOANS TO OFFICERS
-----------------------------
The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or of its
subsidiary, including any officer or employee who is a director of the
corporation or its subsidiary, whenever, in the judgment of the directors, such
loan, guaranty or assistance may reasonably be expected to benefit the
corporation. The loan, guaranty or other assistance may be with or without
interest and may be unsecured, or secured in such manner as the board of
directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
3.15 REMOVAL OF DIRECTORS
--------------------
Unless otherwise restricted by statute, by the certificate of incorporation
or by these bylaws, any director or the entire board of directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors.
No reduction of the authorized number of directors shall have the effect of
removing any director prior to the expiration of such director's term of office.
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ARTICLE IV
COMMITTEES
----------
4.1 COMMITTEES OF DIRECTORS
-----------------------
The board of directors may, by resolution passed by a majority of the whole
board, designate one or more committees, with each committee to consist of one
or more of the directors of the corporation. The board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the board of
directors to act at the meeting in the place of any such absent or disqualified
member. Any such committee, to the extent provided in the resolution of the
board of directors or in the bylaws of the corporation, shall have and may
exercise all the powers and authority of the board of directors in the
management of the business and affairs of the corporation, and may authorize the
seal of the corporation to be affixed to all papers that may require it; but no
such committee shall have the power or authority to (i) amend the certificate of
incorporation (except that a committee may, to the extent authorized in the
resolution or resolutions providing for the issuance of shares of stock adopted
by the board of directors as provided in Section 151(a) of the General
Corporation Law of Delaware, fix any of the preferences or rights of such shares
relating to dividends, redemption, dissolution, any distribution of assets of
the corporation or the conversion into, or the exchange of such shares for,
shares of any other class or classes or any other series of the same or any
other class or classes of stock of the corporation), (ii) adopt an agreement of
merger or consolidation under Sections 251 or 252 of the General Corporation Law
of Delaware, (iii) recommend to the stockholders the sale, lease or exchange of
all or substantially all of the corporation's property and assets, (iv)
recommend to the stockholders a dissolution of the corporation or a revocation
of a dissolution, or (v) amend the bylaws of the corporation; and, unless the
board resolution establishing the committee, the bylaws or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock, or to adopt
a certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of Delaware.
4.2 COMMITTEE MINUTES
-----------------
Each committee shall keep regular minutes of its meetings and report the
same to the board of directors when required.
4.3 MEETINGS AND ACTION OF COMMITTEES
---------------------------------
Meetings and actions of committees shall be governed by, and held and taken
in accordance with, the provisions of Article III of these bylaws, Section 3.5
(place of meetings and meetings by telephone), Section 3.7 (regular meetings),
Section 3.8 (special meetings and notice), Section 3.9
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(quorum), Section 3.10 (waiver of notice), Section 3.11 (adjournment and notice
of adjournment), and Section 3.12 (action without a meeting), with such changes
in the context of those bylaws as are necessary to substitute the committee and
its members for the board of directors and its members; provided, however, that
the time of regular meetings of committees may also be called by resolution of
the board of directors and that notice of special meetings of committees shall
also be given to all alternate members, who shall have the right to attend all
meetings of the committee. The board of directors may adopt rules for the
government of any committee not inconsistent with the provisions of these
bylaws.
ARTICLE V
OFFICERS
--------
5.1 OFFICERS
--------
The officers of the corporation shall be a president, one or more vice
presidents, a secretary, and a treasurer. The corporation may also have, at the
discretion of the board of directors, a chairman of the board, one or more
assistant vice presidents, assistant secretaries, assistant treasurers, and any
such other officers as may be appointed in accordance with the provisions of
Section 5.3 of these bylaws. Any number of offices may be held by the same
person.
5.2 ELECTION OF OFFICERS
--------------------
The officers of the corporation, except such officers as may be appointed
in accordance with the provisions of Sections 5.3 or 5.5 of these bylaws, shall
be chosen by the board of directors, subject to the rights, if any, of an
officer under any contract of employment.
5.3 SUBORDINATE OFFICERS
--------------------
The board of directors may appoint, or empower the president to appoint,
such other officers and agents as the business of the corporation may require,
each of whom shall hold office for such period, have such authority, and perform
such duties as are provided in these bylaws or as the board of directors may
from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
-----------------------------------
Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by an
affirmative vote of the majority of the board of directors at any regular or
special meeting of the board or, except in the case of an officer chosen by the
board of directors, by any officer upon whom such power of removal may be
conferred by the board of directors.
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Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.
5.5 VACANCIES IN OFFICES
--------------------
Any vacancy occurring in any office of the corporation shall be filled by
the board of directors.
5.6 CHAIRMAN OF THE BOARD
---------------------
The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise and perform
such other powers and duties as may from time to time be assigned to him by the
board of directors or as may be prescribed by these bylaws. If there is no
president, then the chairman of the board shall also be the chief executive
officer of the corporation and shall have the powers and duties prescribed in
Section 5.7 of these bylaws.
5.7 PRESIDENT
---------
Subject to such supervisory powers, if any, as may be given by the board of
directors to the chairman of the board, if there be such an officer, the
president shall be the chief executive officer of the corporation and shall,
subject to the control of the board of directors, have general supervision,
direction, and control of the business and the officers of the corporation. He
shall preside at all meetings of the shareholders and, in the absence or
nonexistence of a chairman of the board, at all meetings of the board of
directors. He shall have the general powers and duties of management usually
vested in the office of president of a corporation and shall have such other
powers and duties as may be prescribed by the board of directors or these
bylaws.
5.8 VICE PRESIDENT
--------------
In the absence or disability of the president, the vice presidents, if any,
in order of their rank as fixed by the board of directors or, if not ranked, a
vice president designated by the board of directors, shall perform all the
duties of the president and when so acting shall have all the powers of, and be
subject to all the restrictions upon, the president. The vice presidents shall
have such other powers and perform such other duties as from time to time may be
prescribed for them respectively by the board of directors, these bylaws, the
president or the chairman of the board.
5.9 SECRETARY
---------
The secretary shall keep or cause to be kept, at the principal executive
office of the corporation or such other place as the board of directors may
direct, a book of minutes of all meetings and actions of directors, committees
of directors, and shareholders. The minutes shall
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show the time and place of each meeting, whether regular or special (and, if
special, how authorized and the notice given), the names of those present at
directors' meetings or committee meetings, the number of shares present or
represented at shareholders' meetings, and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal executive
office of the corporation or at the office of the corporation's transfer agent
or registrar, as determined by resolution of the board of directors, a share
register, or a duplicate share register, showing the names of all shareholders
and their addresses, the number and classes of shares held by each, the number
and date of certificates evidencing such shares, and the number and date of
cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all meetings of
the shareholders and of the board of directors required to be given by law or by
these bylaws. He shall keep the seal of the corporation, if one be adopted, in
safe custody and shall have such other powers and perform such other duties as
may be prescribed by the board of directors or by these bylaws.
5.10 TREASURER
---------
The treasurer shall keep and maintain, or cause to be kept and maintained,
adequate and correct books and records of accounts of the properties and
business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, retained earnings,
and shares. The books of account shall at all reasonable times be open to
inspection by any director.
The treasurer shall deposit all money and other valuables in the name and
to the credit of the corporation with such depositaries as may be designated by
the board of directors. He shall disburse the funds of the corporation as may be
ordered by the board of directors, shall render to the president and directors,
whenever they request it, an account of all of his transactions as treasurer and
of the financial condition of the corporation, and shall have such other powers
and perform such other duties as may be prescribed by the board of directors or
these bylaws.
5.11 ASSISTANT SECRETARY
-------------------
The assistant secretary, or, if there is more than one, the assistant
secretaries in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as the board of
directors or the stockholders may from time to time prescribe.
5.12 ASSISTANT TREASURER
-------------------
The assistant treasurer, or, if there is more than one, the assistant
treasurers, in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the
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order of their election), shall, in the absence of the treasurer or in the event
of his or her inability or refusal to act, perform the duties and exercise the
powers of the treasurer and shall perform such other duties and have such other
powers as the board of directors or the stockholders may from time to time
prescribe.
5.13 AUTHORITY AND DUTIES OF OFFICERS
--------------------------------
In addition to the foregoing authority and duties, all officers of the
corporation shall respectively have such authority and perform such duties in
the management of the business of the corporation as may be designated from time
to time by the board of directors or the stockholders.
ARTICLE VI
INDEMNITY
---------
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
The corporation shall, to the maximum extent and in the manner permitted by
the General Corporation Law of Delaware, indemnify each of its directors and
officers against expenses (including attorneys' fees), judgments, fines,
settlements, and other amounts actually and reasonably incurred in connection
with any proceeding, arising by reason of the fact that such person is or was an
agent of the corporation. For purposes of this Section 6.1, a "director" or
"officer" of the corporation includes any person (i) who is or was a director or
officer of the corporation, (ii) who is or was serving at the request of the
corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, or (iii) who was a director or officer of a
corporation which was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor corporation.
6.2 INDEMNIFICATION OF OTHERS
-------------------------
The corporation shall have the power, to the extent and in the manner
permitted by the General Corporation Law of Delaware, to indemnify each of its
employees and agents (other than directors and officers) against expenses
(including attorneys' fees), judgments, fines, settlements, and other amounts
actually and reasonably incurred in connection with any proceeding, arising by
reason of the fact that such person is or was an agent of the corporation. For
purposes of this Section 6.2, an "employee" or "agent" of the corporation (other
than a director or officer) includes any person (i) who is or was an employee or
agent of the corporation, (ii) who is or was serving at the request of the
corporation as an employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or (iii) who was an employee or agent of a
corporation which was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor corporation.
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6.3 INSURANCE
---------
The corporation may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability under
the provisions of the General Corporation Law of Delaware.
ARTICLE VII
RECORDS AND REPORTS
-------------------
7.1 MAINTENANCE AND INSPECTION OF RECORDS
-------------------------------------
The corporation shall, either at its principal executive office or at such
place or places as designated by the board of directors, keep a record of its
shareholders listing their names and addresses and the number and class of
shares held by each shareholder, a copy of these bylaws as amended to date,
accounting books, and other records.
Any stockholder of record, in person or by attorney or other agent, shall,
upon written demand under oath stating the purpose thereof, have the right
during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the attorney or other agent to so act on
behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in Delaware or at its principal place of
business.
The officer who has charge of the stock ledger of a corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
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7.2 INSPECTION BY DIRECTORS
-----------------------
Any director shall have the right to examine the corporation's stock
ledger, a list of its stockholders, and its other books and records for a
purpose reasonably related to his position as a director. The Court of Chancery
is hereby vested with the exclusive jurisdiction to determine whether a director
is entitled to the inspection sought. The Court may summarily order the
corporation to permit the director to inspect any and all books and records, the
stock ledger, and the stock list and to make copies or extracts therefrom. The
Court may, in its discretion, prescribe any limitations or conditions with
reference to the inspection, or award such other and further relief as the Court
may deem just and proper.
7.3 ANNUAL STATEMENT TO STOCKHOLDERS
--------------------------------
The board of directors shall present at each annual meeting, and at any
special meeting of the stockholders when called for by vote of the stockholders,
a full and clear statement of the business and condition of the corporation.
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
----------------------------------------------
The chairman of the board, the president, any vice president, the
treasurer, the secretary or assistant secretary of this corporation, or any
other person authorized by the board of directors or the president or a vice
president, is authorized to vote, represent, and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority granted
herein may be exercised either by such person directly or by any other person
authorized to do so by proxy or power of attorney duly executed by such person
having the authority.
ARTICLE VIII
GENERAL MATTERS
---------------
8.1 CHECKS
------
From time to time, the board of directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.
8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
------------------------------------------------
The board of directors, except as otherwise provided in these bylaws, may
authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the
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name of and on behalf of the corporation; such authority may be general or
confined to specific instances. Unless so authorized or ratified by the board of
directors or within the agency power of an officer, no officer, agent or
employee shall have any power or authority to bind the corporation by any
contract or engagement or to pledge its credit or to render it liable for any
purpose or for any amount.
8.3 STOCK CERTIFICATES; PARTLY PAID SHARES
--------------------------------------
The shares of a corporation shall be represented by certificates, provided
that the board of directors of the corporation may provide by resolution or
resolutions that some or all of any or all classes or series of its stock shall
be uncertificated shares. Any such resolution shall not apply to shares
represented by a certificate until such certificate is surrendered to the
corporation. Notwithstanding the adoption of such a resolution by the board of
directors, every holder of stock represented by certificates and upon request
every holder of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the corporation by the chairman or vice-chairman of
the board of directors, or the president or vice-president, and by the treasurer
or an assistant treasurer, or the secretary or an assistant secretary of such
corporation representing the number of shares registered in certificate form.
Any or all of the signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate has ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer, transfer agent or
registrar at the date of issue.
The corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock certificate issued to represent
any such partly paid shares, upon the books and records of the corporation in
the case of uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend on fully paid shares, the corporation shall
declare a dividend upon partly paid shares of the same class, but only upon the
basis of the percentage of the consideration actually paid thereon.
8.4 SPECIAL DESIGNATION ON CERTIFICATES
-----------------------------------
If the corporation is authorized to issue more than one class of stock or
more than one series of any class, then the powers, the designations, the
preferences, and the relative, participating, optional or other special rights
of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the corporation shall issue to represent
such class or series of stock a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, the designations,
the preferences, and the relative, participating, optional or other special
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rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
8.5 LOST CERTIFICATES
-----------------
Except as provided in this Section 8.5, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and cancelled at the same time. The corporation
may issue a new certificate of stock or uncertificated shares in the place of
any certificate theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the corporation may require the owner of the lost, stolen or
destroyed certificate, or his legal representative, to give the corporation a
bond sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate or uncertificated shares.
8.6 CONSTRUCTION; DEFINITIONS
-------------------------
Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the Delaware General Corporation Law shall
govern the construction of these bylaws. Without limiting the generality of
this provision, the singular number includes the plural, the plural number
includes the singular, and the term "person" includes both a corporation and a
natural person.
8.7 DIVIDENDS
---------
The directors of the corporation, subject to any restrictions contained in
the certificate of incorporation, may declare and pay dividends upon the shares
of its capital stock pursuant to the General Corporation Law of Delaware.
Dividends may be paid in cash, in property, or in shares of the corporation's
capital stock.
The directors of the corporation may set apart out of any of the funds of
the corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve. Such purposes shall include but not be
limited to equalizing dividends, repairing or maintaining any property of the
corporation, and meeting contingencies.
8.8 FISCAL YEAR
-----------
The fiscal year of the corporation shall be fixed by resolution of the
board of directors and may be changed by the board of directors.
8.9 SEAL
----
This corporation may have a corporate seal, which may be adopted or altered
at the pleasure of the Board of Directors, and may use the same by causing it or
a facsimile thereof, to be impressed or affixed or in any other manner
reproduced.
Page 18
<PAGE>
8.10 TRANSFER OF STOCK
-----------------
Upon surrender to the corporation or the transfer agent of the corporation
of a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignation or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate, and record the transaction in its books.
8.11 STOCK TRANSFER AGREEMENTS
-------------------------
The corporation shall have power to enter into and perform any agreement
with any number of shareholders of any one or more classes of stock of the
corporation to restrict the transfer of shares of stock of the corporation of
any one or more classes owned by such stockholders in any manner not prohibited
by the General Corporation Law of Delaware.
8.12 REGISTERED STOCKHOLDERS
-----------------------
The corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends and
to vote as such owner, shall be entitled to hold liable for calls and
assessments the person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of another person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE IX
AMENDMENTS
----------
The original or other bylaws of the corporation may be adopted, amended or
repealed by the stockholders entitled to vote; provided, however, that the
corporation may, in its certificate of incorporation, confer the power to adopt,
amend or repeal bylaws upon the directors. The fact that such power has been so
conferred upon the directors shall not divest the stockholders of the power, nor
limit their power to adopt, amend or repeal bylaws.
ARTICLE X
DISSOLUTION
-----------
If it should be deemed advisable in the judgment of the board of directors
of the corporation that the corporation should be dissolved, the board, after
the adoption of a resolution to that effect by a majority of the whole board at
any meeting called for that purpose, shall cause notice to be mailed
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<PAGE>
to each stockholder entitled to vote thereon of the adoption of the resolution
and of a meeting of stockholders to take action upon the resolution.
At the meeting a vote shall be taken for and against the proposed
dissolution. If a majority of the outstanding stock of the corporation entitled
to vote thereon votes for the proposed dissolution, then a certificate stating
that the dissolution has been authorized in accordance with the provisions of
Section 275 of the General Corporation Law of Delaware and setting forth the
names and residences of the directors and officers shall be executed,
acknowledged, and filed and shall become effective in accordance with Section
103 of the General Corporation Law of Delaware. Upon such certificate's
becoming effective in accordance with Section 103 of the General Corporation Law
of Delaware, the corporation shall be dissolved.
Whenever all the stockholders entitled to vote on a dissolution consent in
writing, either in person or by duly authorized attorney, to a dissolution, no
meeting of directors or stockholders shall be necessary. The consent shall be
filed and shall become effective in accordance with Section 103 of the General
Corporation Law of Delaware. Upon such consent's becoming effective in
accordance with Section 103 of the General Corporation Law of Delaware, the
corporation shall be dissolved. If the consent is signed by an attorney, then
the original power of attorney or a photocopy thereof shall be attached to and
filed with the consent. The consent filed with the Secretary of State shall
have attached to it the affidavit of the secretary or some other officer of the
corporation stating that the consent has been signed by or on behalf of all the
stockholders entitled to vote on a dissolution; in addition, there shall be
attached to the consent a certification by the secretary or some other officer
of the corporation setting forth the names and residences of the directors and
officers of the corporation.
ARTICLE XI
CUSTODIAN
---------
11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES
-------------------------------------------
The Court of Chancery, upon application of any stockholder, may appoint one
or more persons to be custodians and, if the corporation is insolvent, to be
receivers, of and for the corporation when:
(i) at any meeting held for the election of directors the
stockholders are so divided that they have failed to elect successors to
directors whose terms have expired or would have expired upon qualification of
their successors; or
(ii) the business of the corporation is suffering or is threatened
with irreparable injury because the directors are so divided respecting the
management of the affairs of the corporation that the required vote for action
by the board of directors cannot be obtained and the stockholders are unable to
terminate this division; or
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<PAGE>
(iii) the corporation has abandoned its business and has failed
within a reasonable time to take steps to dissolve, liquidate or distribute its
assets.
11.2 DUTIES OF CUSTODIAN
-------------------
The custodian shall have all the powers and title of a receiver appointed
under Section 291 of the General Corporation Law of Delaware, but the authority
of the custodian shall be to continue the business of the corporation and not to
liquidate its affairs and distribute its assets, except when the Court of
Chancery otherwise orders and except in cases arising under Sections 226(a)(3)
or 352(a)(2) of the General Corporation Law of Delaware.
Page 21
<PAGE>
EXHIBIT 3.9
BAMBOO.COM, INC.
SERIES C REDEEMABLE PREFERRED
STOCK PURCHASE AGREEMENT
June 11, 1999
<PAGE>
EXHIBITS
- --------
Exhibit A Schedule of Investors
Exhibit B Second Amended and Restated Certificate of Incorporation
Exhibit C Schedule of Exceptions
Exhibit D Opinion Letter of Counsel (Wilson Sonsini Goodrich & Rosati)
Exhibit D-1 Opinion Letter of Counsel (Beard, Winter)
Exhibit E Investors Rights Agreement
<PAGE>
BAMBOO.COM, INC.
SERIES C REDEEMABLE PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES C REDEEMABLE PREFERRED STOCK PURCHASE AGREEMENT (the
"Agreement") is made as of the 11th day of June, 1999, by and among BAMBOO.COM,
INC., a Delaware corporation (the "Company"), and those persons and entities set
forth in the Schedule of Investors attached hereto as Exhibit A (each an
---------
"Investor" and collectively the "Investors").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
--------------------------
1.1 The Company shall adopt and file with the Secretary of State of
the State of Delaware on or before the Closing (as defined in Section 1.3 below)
an Amended and Restated Certificate of Incorporation in the form attached hereto
as Exhibit B ( the "Second Restated Certificate").
---------
1.2 Subject to the terms and conditions of this Agreement, each
Investor severally (and not jointly) agrees to purchase at the Closing, and the
Company agrees to sell and issue to each Investor at the Closing, that number of
shares (a) of the Company's Series C Redeemable Preferred Stock, and (b) the
Company's Common Stock (collectively, the "Shares"), which are set forth
opposite such Investor's name in the Schedule of Investors attached hereto as
Exhibit A at a total aggregate purchase price of $11,000,000.00 (the "Purchase
Price").
1.3 The purchase and sale of the Shares shall take place at the
offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation, 650 Page
Mill Road, Palo Alto, California 94304, at 3:00 P. M., on June 11 1999, or at
such other time and place as the Company and the Investors mutually agree upon
orally or in writing (which time and place are designated as the "Closing"). At
the Closing, the Company shall deliver to the Investors (or, at the election of
an Investor, to such Investor's nominee) certificates representing the Shares to
be purchased by that Investor at the Closing against delivery to the Company by
that Investor of a wire transfer or a check in the amount of the purchase price
set forth opposite such Investor's name on Exhibit A hereto payable to the
Company's order.
2. Representations and Warranties of the Company. The Company hereby
---------------------------------------------
represents and warrants to each Investor that, as of the Closing, except as set
forth on a Schedule of Exceptions attached hereto as Exhibit C (the "Schedule
---------
of Exceptions"):
2.1 Organization, Good Standing and Qualification. The Company is a
---------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and as presently proposed to be conducted
by it, and to enter and perform this Agreement and to carry out the transactions
contemplated by this Agreement. The Company is duly qualified to
-1-
<PAGE>
transact business and is in good standing in each jurisdiction in which the
failure so to qualify would have a material adverse effect on its business or
properties.
2.2 Capitalization and Voting Rights. The authorized capital of the
--------------------------------
Company consists, or will consist prior to the Closing, of:
(a) 2,557,130 shares of Preferred Stock (the "Preferred
Stock"), (i) 231,250 of which shares have been designated Series A Preferred
Stock and of which 231,250 are outstanding prior to Closing, (ii) 2,324,780 of
which shares have been designated Series B Preferred Stock and of which
2,324,774 are outstanding prior to Closing and (iii) 1,100 of which shares have
been designated Series C Redeemable Preferred Stock none of which is outstanding
prior to Closing. The rights, preferences, privileges and restrictions of the
Preferred Stock will be as stated in the Second Restated Certificate.
(b) 2,650,548 shares of Class B Common Stock, of which
2,650,548 shares are outstanding prior to Closing.
(c) 10,000,000 shares of Common Stock (the "Common Stock") of
which 198,000 shares are issued and outstanding. In addition, 446,725 shares of
Common Stock will be sold pursuant to this Agreement.
(d) 2,421,212 shares of Common Stock reserved for issuance
under the Company's 1998 Employee, Director and Consultant Stock Plan (the "1998
Stock Plan"), of which 2,131,013 shares are issuable upon the exercise of
outstanding options and 82,199 shares remain available for future issuance.
(e) Warrants exercisable for up to 100,000 shares of Common
Stock.
(f) Except for (A) the conversion privileges of the Preferred
Stock; (B) options that are currently outstanding to purchase up to 2,131,013
shares of Common Stock; (C) 82,199 shares of Common Stock reserved for future
issuance pursuant to the Company's 1998 Stock Plan pursuant to approval by the
Company's Board of Directors; (D) warrants issued by the Company to purchase
100,000 shares of Common Stock; and (E) the rights set forth in the Company's
Investors' Rights Agreement dated as of March 12, 1999 (the "Investors Rights
Agreement"), there are not outstanding any options, warrants, rights (including
conversion or preemptive rights) or agreements for the purchase or acquisition
from the Company of any shares of its capital stock. The Company is not a party
or subject to any agreement or understanding, and, to the Company's knowledge,
there is no agreement or understanding between any persons and/or entities,
which affects or relates to the voting or giving of written consents with
respect to any security or by a director of the Company.
2.3 Subsidiaries. The Company does not presently own or control,
------------
directly or indirectly, any interest in any other corporation, association, or
other business entity.
-2-
<PAGE>
2.4 Authorization. All corporate action on the part of the
-------------
Company, its officers, directors and stockholders necessary for (i) the
authorization, execution and delivery of this Agreement, (ii) the performance of
all obligations of the Company hereunder and (iii) the authorization, issuance
(or reservation for issuance) and delivery of the Shares being sold hereunder
has been taken or will be taken prior to the Closing, and this Agreement and the
Ancillary Agreements each constitute a valid and legally binding obligation of
the Company, enforceable in accordance with its respective terms, except as
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, or by general equitable principles.
2.5 Valid Issuance of Preferred and Common Stock.
--------------------------------------------
(a) The Shares to be issued, sold and delivered to the
Investors hereunder, when so issued, sold and delivered in accordance with the
terms hereof for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable and, based in part upon the representations
of each Investor in this Agreement, will be issued in compliance with all
applicable federal and state securities laws.
(b) The outstanding shares of Common Stock of the Company are
all duly and validly authorized and issued, fully paid and nonassessable, and
were issued in compliance with all applicable federal and state securities laws.
2.6 Governmental Consents. No consent, approval, order or
---------------------
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, local or provincial governmental authority on
the part of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement, except for any filings pursuant to
state and federal securities laws, all of which filings will be effected in a
timely manner. The Company has received all material licenses, permits, orders
or approvals from governmental bodies required for the conduct of its business
as currently conducted.
2.7 Conflict of Interest. The Company and its executive officers
--------------------
have no interest (other than as holders of securities of a publicly-traded
company), either directly or indirectly, in any entity, including, without
limitation thereto, any corporation, partnership, joint venture, proprietorship,
firm, person, licensee, business or association (whether as an employee,
officer, director, stockholder, agent, independent contractor, security holder,
creditor, consultant or otherwise) that presently (i) provides any services, or
designs, produces and/or sells any products or product lines, or engages in any
activity which is the same, similar to or competitive with any activity or
business in which the Company is now engaged; (ii) is a supplier, customer, or
creditor of the Company, or has an existing contractual relationship with any of
the Company's managing employees; (iii) has any direct or indirect interest in
any asset or property, real or personal, tangible or intangible, of the Company
or any property, real or personal, tangible, that is necessary or desirable for
the conduct of the Company's business.
2.8 Litigation. There is no action, suit, proceeding or
----------
investigation pending or, to the Company's knowledge, currently threatened
against the Company which questions the validity of
-3-
<PAGE>
this Agreement or the right of the Company to enter into this Agreement, or to
consummate the transactions contemplated hereby or thereby, or which might
result, either individually or in the aggregate, in any material adverse changes
in the assets, condition, affairs or prospects of the Company, financially or
otherwise, or any change in the current equity ownership of the Company, nor, to
the Company's knowledge, is there any basis for the foregoing. The foregoing
includes, without limitation, actions pending or threatened (or any basis
therefor known to the Company) involving the prior employment of any of the
Company's employees, officers, or directors, their use in connection with the
Company's business of any information or techniques allegedly proprietary to any
of their former employers, or their obligations under any agreements with prior
employers. The Company is not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or other governmental judicial
body. There is no action, suit, proceeding or investigation by the Company
currently pending or which the Company intends to initiate.
2.9 Proprietary Information Agreements. Each key or technical
----------------------------------
employee and officer of the Company has executed an Employment, Confidential
Information and Inventions Assignment Agreement. The Company, after reasonable
investigation, is not aware that any of its employees are in violation thereof.
2.10 Patents and Trademarks. The Company has sufficient title and
----------------------
ownership of, or full right to use, all technology, patents, trademarks, service
marks, trade names, copyrights, trade secrets, information, proprietary rights
and processes necessary to enable the Company to conduct its business as now
conducted and, to the Company's knowledge, without any conflict with or
infringement of the rights of others. There are no outstanding options,
licenses, liens, encumbrances or agreements of any kind relating to the
foregoing, nor is the Company bound by or a party to any options, licenses,
liens, encumbrances or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other person or entity.
The Company has taken all commercially reasonable security measures to protect
the secrecy, confidentiality and value of all trade secrets, know-how,
inventions, designs, processes and technical data required to conduct its
business. The Company has not received any communications alleging that the
Company has violated or, by conducting its business as proposed, would violate
any of the patents, trademarks, service marks, trade names, copyrights or trade
secrets or other proprietary rights of any other person or entity. The Company
is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with the use of their best efforts to promote the
interests of the Company or that would conflict with the Company's business as
proposed to be conducted. Neither the execution nor delivery of this Agreement,
nor the carrying on of the Company's business by the employees of the Company,
nor the conduct of the Company's business as proposed, will, to the Company's
knowledge after reasonable inquiry, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any of such employees is now obligated. The
Company does not reasonably believe it is or will be necessary to utilize any
inventions of any of its employees (or people it currently intends to hire)
created prior to their employment by the Company and which have not been
assigned to the Company.
-4-
<PAGE>
2.11 Compliance with Other Instruments. The Company is not in
---------------------------------
violation or default of any provisions of its Certificate of Incorporation or
Bylaws, any instrument, judgment, order, writ, decree or contract to which it is
a party or by which it is bound. To its knowledge, the Company is not in
violation of any provision of federal or state statute, rule or regulation
applicable to the Company, the violation or default of which, as the case may
be, would have a material adverse effect upon the business of the Company. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not result in any such violation or
constitute, with or without the passage of time and giving of notice, either a
default under any such provision, instrument, judgment, order, writ, decree or
contract or an event which results in the creation of any lien, charge or
encumbrance upon any assets of the Company, where the violation or default or
the creation of such lien, charge or encumbrance would have a material adverse
effect upon the business of the Company.
2.12 Agreements; Action.
------------------
(a) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company is a party or by which it is bound which may involve (i) obligations
(contingent or otherwise) of, or payments to the Company in excess of, $20,000,
or (ii) the license of any patent, copyright, trade secret or other proprietary
right to or from the Company or (iii) provisions restricting or affecting the
development, manufacture or distribution of the Company's products or services
or indemnification by the Company with respect to infringements of proprietary
rights.
(b) The Company has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or any
other liabilities individually in excess of $20,000 or, in the case of
indebtedness and/or liabilities individually less than $20,000, in excess of
$50,000 in the aggregate, (iii) made any loans or advances to any person, other
than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights.
(c) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
(d) The Company is not a party to and is not bound by any
contract, agreement or instrument, or subject to any restriction under its
Certificate of Incorporation or Bylaws, which adversely affects its business,
properties or financial condition.
(e) The Company has not engaged in the past three (3) months in
any discussion (i) with any representative of any corporation or corporations
regarding the consolidation or merger of the Company with or into any such
corporation or corporations, (ii) with any corporation, partnership, association
or other business entity or any individual regarding the sale, conveyance or
disposition of all or substantially all of the assets of the Company on a
transaction or
-5-
<PAGE>
series of related transactions in which more than fifty percent (50%) of the
voting power of the Company is disposed of, or (iii) regarding any other form of
acquisition, liquidation, dissolution or winding up of the Company.
2.13 Registration Rights. Except as provided in the Investors'
-------------------
Rights Agreement, the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity.
2.14 Title to Property and Assets. The Company owns or has rights to
----------------------------
utilize all such assets, tangible or intangible, necessary for it to operate its
business and to utilize such assets as they are utilized as of the date of this
Agreement. The Company owns its property and assets free and clear of all
mortgages, liens, loans and encumbrances, except such encumbrances and liens
which arise in the ordinary course of business and do not materially impair the
Company's ownership or use of such property or assets. With respect to the
property and assets it leases, the Company is in material compliance with such
leases and, to the best of its knowledge, holds a valid leasehold interest free
of any liens, claims or encumbrances.
2.15 Employee Benefit Plans. The Company does not have any Employee
----------------------
Benefit Plan as defined in the Employee Retirement Income Security Act of 1974.
2.16 Tax Returns, Payments and Elections. The Company has filed all
-----------------------------------
tax returns and reports as required by law. These returns and reports are true
and correct in all material respects. The Company has paid all taxes and other
assessments due. The Company has not elected pursuant to the Internal Revenue
Code of 1986, as amended ("Code"), to be treated as a Subchapter S corporation
or a collapsible corporation pursuant to Section 341(f) or Section 1362(a) of
the Code, nor has it made any other elections pursuant to the Code (other than
elections which relate solely to methods of accounting, depreciation or
amortization) which would have a material effect on the Company, its financial
condition, its business as presently conducted or proposed to be conducted or
any of its properties or material assets.
2.17 Insurance. The Company has in full force and effect fire and
---------
casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its tangible
properties that might be damaged or destroyed.
2.18 Year 2000 Compatibility
-----------------------
(a) All of the Company's products (including products currently
under development) are able to record, store, process and calculate and present
calendar dates falling on and after January 1, 2000, and are able to calculate
any information dependent on or relating to such dates in the same manner and
with the same functionality, data integrity and performance as the products are
able to record, store, process, calculate and present calendar dates on or
before December 31, 1999, or calculate any information dependent on or relating
to such dates (collectively "Year 2000 Compliant").
-6-
<PAGE>
(b) All of the Company's material products lose no
functionality with respect to the introduction of records containing dates
falling on or after January 1, 2000.
(c) All of the Company's internal computer systems, including
without limitation, its accounting systems, are Year 2000 Compliant.
2.19 Financial Statements. The financial statements previously
--------------------
delivered to the Investors, together with the notes thereto (the "Financial
Statements"), (i) are complete and correct in all material respects, (ii) are in
accordance with the Company's books and records, (iii) present fairly its
financial position as of the dates and for the periods indicated therein,
subject, in the case of unaudited Financial Statements, to normal year-end
adjustments, and (iv) have been prepared in conformity with generally accepted
accounting principles consistently applied throughout the periods indicated,
subject to normal year end adjustments and the absence of footnotes. Except as
set forth in the Financial Statements, the Company has no material liabilities,
contingent or otherwise, other than (i) liabilities incurred in the ordinary
course of business and (ii) obligations under contracts and commitments incurred
in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in the Financial Statements which, in both
cases, individually or in the aggregate, are not material to the financial
condition or operating results of the Company. Except as disclosed in the
Financial Statements, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
2.20 Changes. Since June 1, 1999, there has not been:
-------
(a) any change in the assets, liabilities, financial condition
or operating results of the Company, except changes in the ordinary course of
business which have not been, either in any case or in the aggregate, materially
adverse.
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the assets, properties, financial
condition, operating results, prospects or business of the Company (as such
business is presently conducted and as it is proposed to be conducted);
(c) any waiver by the Company of a valuable right or of a
material debt owed to it;
(d) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and which is not material to the assets, properties,
financial condition, operating results or business of the Company as such
business is presently conducted and as it is proposed to be conducted);
(e) any change or amendment to a contract or arrangement by
which the Company or any of its assets or properties is bound or subject which
is material to the business or finances of the Company;
-7-
<PAGE>
(f) any material change in any compensation arrangement or
agreement with any employee;
(g) any loans made by the Company to its employees, officers or
directors other than travel advances made in the ordinary course of business; or
(h) to the Company's knowledge after reasonable inquiry, any
other event or condition of any character which might materially and adversely
affect the assets, properties, financial condition, operating results or
business of the Company (as such business is presently conducted and as it is
proposed to be conducted).
2.21 Corporate Documents. The Certificate of Incorporation (prior
-------------------
to the filing of the Second Restated Certificate) and Bylaws of the Company are
in the form provided to counsel for the Investors. The minute books of the
Company provided to special counsel to the Investors contain a complete summary
of all meetings and unanimous written consents of directors and all meetings and
written consents of stockholders since the time of incorporation.
2.22 Labor Agreements and Actions. The Company is not bound by or
----------------------------
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the knowledge of the
Company, has sought to represent any of the employees, representatives or agents
of the Company. There is no strike or other labor dispute involving the Company
pending, or to the knowledge of the Company threatened, which could have a
material adverse effect on the assets, properties, financial condition,
operating results, or business of the Company (as such business is presently
conducted and as it is proposed to be conducted), nor is the Company aware of
any labor organizing activity involving its employees. The Company is not aware
that any officer or key employee, or that any group of key employees, intends to
terminate their employment with the Company, nor does the Company have a present
intention to terminate the employment of any of the foregoing. The employment
of each officer and, to the best of the Company's knowledge, each employee of
the Company is terminable at the will of the Company. To the Company's
knowledge, no employee is in violation of the terms of any employment agreement,
proprietary information agreement, noncompetition agreement or any other
agreement relating to such employee's relationship with any previous employer.
The Company has complied in all material respects with all laws relating to the
employment of labor, including provisions relating to wages, hours, equal
opportunity, collective bargaining and payment of Social Security and other
taxes.
2.23 Section 83(b) Elections. To the best of the Company's
-----------------------
knowledge, all elections and notices required by Section 83(b) of the Internal
Revenue Code and any analogous provisions of applicable state tax laws have been
made in a timely fashion with respect to individuals who have purchased shares
of the Company's Common Stock.
2.24 Environmental and Safety Laws. To its knowledge after
-----------------------------
reasonable inquiry, the Company is in compliance in all material respects with
all limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any Applicable
Environmental Laws, or in any plan, order, decree, judgment, notice or demand
letter
-8-
<PAGE>
issued, entered, promulgated or approved thereunder. The Company is not aware
of, nor has the Company received notice of, any past, present or future events,
conditions, circumstances, activities, practices, incidents, actions or plans
which may interfere with or prevent continued compliance, or which may give rise
to any common law or legal liability, or otherwise form the basis of any claim,
action, suit, proceeding, hearing or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, or hazardous or toxic
material or waste.
To its knowledge after reasonable inquiry, no Hazardous Material has been
incorporated in, used on, stored on or under, released from, treated on,
transported to or from, or disposed of on or from any property owned or leased
by the Company such that, under Applicable Environmental Laws (i) any such
Hazardous Material would be required to be removed, cleaned-up or remediated
before the property could be altered, renovated, demolished or transferred, or
(ii) the owner or lessee of the property could be subjected to liability for the
removal, clean-up or remediation of such Hazardous Material; and the Company has
not received any notification from any governmental bodies or other third
parties relating to Hazardous Material on or affecting any property owned or
leased by the Company or relating to any potential or known liability under
Applicable Environmental Laws arising from the ownership or leasing of any
property.
For the purposes of this Section 2.25, the following terms shall apply:
"Applicable Environmental Law" shall mean CERCLA, RCRA, the Federal Water
----------------------------
Pollution Control Act, 33 U.S.C. (S)(S) 1261 et seq., the Clean Air Act, 42
-- ---
U.S.C. (S)(S) 7401 et seq., any similar provisions of state or local law in the
-- ---
jurisdictions where the properties of the Company are located and the
regulations thereunder and any other local, state and/or federal laws or
regulations, whether currently in existence or hereafter enacted, that govern:
(a) the existence, cleanup and/or remedy of contamination on property;
(b) the protection of the environment from spilled, deposited or otherwise
emplaced contamination;
(c) the control of hazardous wastes; or
(d) the use, generation, transport, treatment, storage, disposal, removal
or recovery of Hazardous Materials, including building materials.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
------
and Liability Act, 42 U.S.C. (S)(S) 6901 et seq.
-- ---
"Hazardous Material" shall mean any substance which as of the date of this
------------------
Agreement shall be identified as "hazardous" or "toxic" or otherwise regulated
under CERCLA or RCRA or which has been or shall be determined at any time by any
agency or court to be a hazardous or toxic substance under Applicable
Environmental Law. The term "Hazardous Material" shall also include,
-9-
<PAGE>
without limitation, raw materials, building components, the products of any
manufacturing or other activities on the properties, wastes, petroleum, and
source, special nuclear or by-product material as defined by the Atomic Energy
Act of 1954, 42 U.S.C. (S)(S) 3011 et seq., as amended.
-- ---
"RCRA" shall mean the Resource Conservation and Recovery Act, 42 U.S.C.
----
(S)(S) 6901 et seq.
-- ---
2.25 Disclosure. The Company has fully provided the Investors with all
----------
the information which Investors have requested for deciding whether to purchase
the Shares and all information which the Company believes is reasonably
necessary to enable the Investors to make such decision. As of the date hereof,
neither this Agreement with the Exhibits hereto nor any other statements or
certificates made or delivered in connection herewith, when read as a whole,
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements herein or therein not misleading.
2.26 Real Property Holding Corporation. The Company is not a United
---------------------------------
States real property holding corporation within the meaning of the Internal
Revenue Code Section 897(c)(2) and any regulations promulgated thereunder.
2.27 Qualified Small Business Stock. The Company represents and
------------------------------
warrants to each Investor that, to the best of its knowledge, as of the Closing
the Shares should qualify as "Qualified Small Business Stock" as defined in
Section 1202 (c) of the Internal Revenue Code of 1986, as amend ed as of the
date hereof.
3. Representations and Warranties of the Investors.
-----------------------------------------------
Each Investor hereby represents and warrants as of the Closing that:
3.1 Authorization. This Agreement constitutes its valid and legally
-------------
binding obligation, enforceable against such Investor in accordance with its
terms.
3.2 Purchase Entirely for Own Account. This Agreement is made with
---------------------------------
such Investor in reliance upon such Investor's representation to the Company,
which by such Investor's execution of this Agreement such Investor hereby
confirms, that the Shares will be acquired for investment for such Investor's
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that such Investor has no intention of
selling or otherwise distributing the same at the present time. By executing
this Agreement, each Investor further represents that such Investor does not
have any contract, undertaking, agreement or arrangement with any person to sell
or transfer to such person or to any third person, with respect to any of the
Shares. Each Investor represents that it has full power and authority to enter
into this Agreement.
3.3 Disclosure of Information. Each Investor represents that it has
-------------------------
had an opportunity to ask questions and receive answers and to request and
receive documents from the Company regarding the terms and conditions of the
offering of the Shares. The foregoing, however,
-10-
<PAGE>
does not limit or modify the representations and warranties of the Company in
Section 2 of this Agreement or the right of each Investor to rely thereon.
3.4 Investment Experience. Each Investor is an investor in securities
---------------------
of companies in the development stage and can bear the economic risk of its
investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Shares. Each Investor also represents it has not been organized solely
for the purpose of acquiring the Shares.
3.5 Preexisting Relationship with Company; Business and Financial
-------------------------------------------------------------
Experience. By reason of its business or financial experience or the business
- ----------
and financial experience of its professional advisors who are unaffiliated with
the Company and who are not compensated by the Company, each Investor has the
capacity to protect its own interests in connection with the purchase of the
Shares and underlying Conversion Stock. Each Investor also represents it has not
been organized for the purpose of acquiring the Shares.
3.6 Restricted Securities. Each Investor understands that the Shares
---------------------
are characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act of
1933, as amended (the "Act"), only in certain limited circumstances. In this
connection, each Investor represents that it is familiar with Rule 144, as
presently in effect, promulgated by the Commission under the Act, and
understands the resale limitations imposed thereby and by the Act.
3.7 Lock-Up. Each Investor agrees, in connection with the Company's
-------
initial underwritten public offering of the Company's securities, (a) not to
sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any of the Shares of the Company held by the Investor
pursuant to this Agreement (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 (b) further agrees to execute any agreement reflecting (a)
above as may be requested by the underwriters at the time of the public
offering, and (c) further agrees that the Company may impose stop transfer
instructions with its transfer agent in order to enforce the agreements in (a)
and (b) above. Notwithstanding the foregoing, in the event that any stockholder
of the Company holding at least an aggregate of five percent (5%) (each, a "5%
Stockholder") of the outstanding capital stock of the Company is not subject to
any lock-up provisions in connection with the Company's initial underwritten
public offering of its stock, then each Investor shall not be bound by the lock-
up restrictions of this Section 3.7 to the same extent and on a pro rata basis,
and the lock-up agreement described in subparagraph (b) above shall not be
enforceable against each Investor who is a party to such agreement. Company
shall promptly give each Investor written notice in the event any 5% Stockholder
is not subject to any lock-up provisions in connection with the Company's
initial underwritten public offering of its stock.
-11-
<PAGE>
3.8 Legends. Each Investor understands that the certificates
-------
evidencing the Shares and the Conversion Stock may bear one or all of the
following legends at the discretion of the Company:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED."
(b) Any legend required by the laws of the State of California or any
other state the securities laws of which apply to the transactions contemplated
by this Agreement.
4. Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE
------------------------
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS
CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED
UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
5. Closing Conditions.
------------------
5.1 Conditions of Investor's Obligations at Closing. The obligations
-----------------------------------------------
of each Investor under of this Agreement are subject to the fulfillment on or
before the Closing of each of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of the Company contained in Section 2 shall be true on and as of the
Closing in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.
(b) Performance. The Company shall have performed and complied
-----------
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing in
all material respects.
(c) Compliance Certificate. The President of the Company shall
----------------------
deliver to the Investors at the Closing a certificate on behalf of the Company
certifying that the conditions specified in Sections 5.1(a) and (b) have been
fulfilled and stating that there shall have been no material adverse change in
the business, affairs, prospects, operations, properties, assets or condition of
the Company since the date of this Agreement.
-12-
<PAGE>
(d) Qualifications. Except for notices required to be filed
--------------
after the date of the Closing with certain federal and state securities
commissions, which notices the Company hereby covenants to file on a timely
basis, the Company shall have obtained all approvals of any federal or state
governmental authority or regulatory body that are required in connection with
the lawful sale and issuance of the Shares.
(e) Proceedings and Documents. All corporate and other
-------------------------
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to Investor's special counsel, and they shall have received all such
counterpart original and certified or other copies of such documents as they may
reasonably request.
(f) Second Restated Certificate. The Second Restated Certificate
---------------------------
in the form attached hereto as Exhibit A shall have been filed with the Delaware
---------
Secretary of State.
(g) Opinion of Company Counsel. Investors shall have received
--------------------------
from Wilson Sonsini Goodrich & Rosati, Professional Corporation, and Beard
Winter, counsels for the Company, an opinion, dated as of the Closing, in the
form attached hereto as Exhibit D and Exhibit D-1.
--------- -----------
(h) Directors. Upon the effectiveness of the Closing, the
---------
Company's Board of Directors shall consist of Leonard McCurdy, Kevin McCurdy,
Duncan Fortier, John Moragne, Philip Sanderson and James D. Marver.
5.2 Conditions of the Company's Obligations at Closing. The
--------------------------------------------------
obligations of the Company to the Investors under this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions by
that Investor:
(a) Representations and Warranties. The representations and
------------------------------
warranties of each Investor contained in Section 3 shall be true on and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of the Closing.
(b) Payment of Purchase Price. Each Investor shall have
-------------------------
delivered the purchase price specified in Section 1.2 hereof.
6. Covenants.
---------
6.1 Directors. From and upon the Closing, the Company's Board of
---------
Directors shall consist of:
(a) Leonard McCurdy, Kevin McCurdy and Duncan Fortier
(constituting three (3) of the four (4) directors entitled to be elected by the
Common Stock and Series A Preferred Stock, voting together as a single class, at
each annual election of directors (the "Common Directors", including any and all
successors thereto)) who shall serve until their successors are duly elected and
qualified or until their earlier resignation or removal;
-13-
<PAGE>
(b) John Moragne and Philip Sanderson (constituting the two (2)
directors entitled to be elected by the Series B Preferred Stock, voting
separately as a class, at each annual election of directors), who shall serve
until their successors are duly elected and qualified or until their earlier
resignation or removal; and
(c) James D. Marver, (constituting the one (1) director entitled
to be elected by the Series C Redeemable Preferred Stock, at each annual
election of directors so long as at least one share of Series C Redeemable
Preferred Stock remains outstanding) who shall serve until a successor is duly
elected and qualified or until earlier resignation or removal (the "Series C
Director", including any and all successors thereto).
6.2 Redemption of Series C Preferred Stock. Notwithstanding the
--------------------------------------
provisions of Section 7.1 below, in the event of a redemption of the Series C
Preferred Stock, then effective within fifteen (15) days following such
redemption and payment of the Redemption Price (as defined in the Second
Restated Certificate), or within the time period otherwise expressly provided
for below:
(a) The authorized number of directors of the Company shall be
reduced to five (5) in accordance with the terms and provisions of the bylaws of
the Company;
(b) Prior to the redemption of the Series C Preferred Stock, (i)
the Investors shall use best efforts to cause the Series C Director to resign,
such resignation to be effective no later than fifteen (15) days after the
redemption of the Series C Preferred Stock and the payment of the Redemption
Price (as defined in the Second Restated Certificate), or (ii) if such
resignation has not been delivered to the Company prior to such redemption,
immediately prior to such redemption the Investors will remove the Series C
Director as a director, such removal to be effective no later than fifteen (15)
days after the redemption of the Series C Preferred Stock and the payment of the
Redemption Price (as defined in the Second Restated Certificate); and
(c) To the extent that there are four (4) Common Directors at
the time of such redemption, the Company shall use best efforts to cause the
director that was appointed to fill the vacancy in the Board of Directors
pursuant to the terms and provisions of the Bylaws of the Company, which vacancy
existed as the date hereof, to resign as a director of the Company, effective
upon the resignation or removal of the Series C Director as provided in Section
6.2(b) above.
6.3 [Intenitonally Omitted].
---------------------
6.4 Registration Rights. The Company covenants and agrees as follows:
-------------------
(a) Definitions. For purposes of this Section 6.4:
-----------
In addition to the definition of "Registrable Securities" as set forth
in Section 1 of the Investors Rights Agreement, the term "Registrable
Securities" also includes the Common Stock issued pursuant to this Agreement.
-14-
<PAGE>
The term "Shareholder" means any holder of Registrable Securities,
securities convertible into Registrable Securities and any person holding such
securities to whom the right under the Investors Rights Agreement has been
transferred in accordance with Section 2.13 thereof.
The term "Registration Rights" means those rights and attendant
obligations set forth in Section 2 of the Investors Rights Agreement.
(b) Grant of Rights. The Company hereby grants to the
---------------
Shareholders the Registration Rights. A true and complete copy of the Investors
Rights Agreement is attached hereto as Exhibit E. The Company represents and
---------
warrants to the Shareholders that the Company has obtained all consents of
necessary parties to the Investors Rights Agreement and of any other persons
that are required in order for the shares of Common Stock issued pursuant to
this Agreement to be included in the definition of "Registrable Securities" and
for each such Shareholder to be included in the definition of "Holder," as such
terms are used in the Investors Rights Agreement. Furthermore, the Company
represents and warrants to the Shareholders that the Company is not a party to
any agreement that conflicts in any manner with the Shareholders' Registration
Rights granted hereunder to cause the Company to register Registrable Securities
pursuant to the Investors Rights Agreement and this Section 6.4. The intent of
this Section 6.4 is to grant the Registration Rights to the Shareholders, and
this Section 6.4 is not intended to accord the Shareholders any additional
rights under the Investors Rights Agreement.
(c) Amendment of Registration Rights. The Company covenants and
--------------------------------
agrees that it shall not, without the prior written consent of the Shareholders
holding a majority of the outstanding Registrable Securities, amend, modify or
restate the Investor Rights Agreement if the rights of the Shareholders would be
subordinated, diminished or otherwise adversely affected in a different manner
than other "Holders" of "Registrable Securities" (as defined in the Investors
Rights Agreement).
7. Miscellaneous.
-------------
7.1 Survival of Warranties. Subject to the applicable statute of
----------------------
limitations, the warranties, representations and covenants of the Company and
Investor contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing for a period of the
earlier of (i) the redemption of the shares of Series C Redeemable Preferred
Stock pursuant to the Second Restated Certificate, or (ii) eighteen (18) months
from the date hereof and shall in no way be affected by any investigation of the
subject matter thereof made by or on behalf of the Investors or the Company.
7.2 Successors and Assigns. Except as otherwise provided herein, the
----------------------
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any Shares sold hereunder or any Conversion Stock). Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
-15-
<PAGE>
7.3 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
7.4 Dispute Resolution. The parties agree to negotiate in good faith
------------------
to resolve any dispute between them regarding this Agreement. If the
negotiations do not resolve the dispute to the reasonable satisfaction of both
parties, then each party shall nominate one senior officer of the rank of Vice
President or higher as its representative. These representatives shall, within
thirty (30) days of a written request by either party to call such a meeting,
meet in person and alone (except for one assistant for each party) and shall
attempt in good faith to resolve the dispute. If the disputes cannot be resolved
by such senior managers in such meeting, the parties agree that they shall, if
requested in writing by either party, meet within thirty (30) days after such
written notification for one day with an impartial mediator and consider dispute
resolution alternatives other than litigation. If an alternative method of
dispute resolution is not agreed upon within thirty (30) days after the one day
mediation, either party may begin litigation proceedings. This procedure shall
be a prerequisite before taking any additional action hereunder.
7.5 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.
7.6 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.7 Notices. Except as may be otherwise provided herein, all notices,
-------
requests, waiver and other communications made pursuant to this Agreement shall
be in writing and addressed as set forth below and shall be conclusively deemed
to have been duly given (a) when hand delivered to the other party; (b) when
received when sent by facsimile; (c) three business days after deposit in the
U.S. mail with first class of certified mail receipt requested postage prepaid;
or (d) the next business day after deposit with a national overnight delivery
service, postage prepaid, with next business-day delivery guaranteed, provided
that the sending party receives a confirmation of delivery from the delivery
service provider. Each person making a communication hereunder by facsimile
shall promptly confirm by telephone to the person to whom such communication was
addressed each communication made by it by facsimile pursuant hereto but the
absence of such confirmation shall not affect the validity of any such
communication. Notwithstanding the foregoing, all notices and communications to
or from addresses outside the United States, shall be given by facsimile and
certified in writing sent by overnight or two-day national courier service. All
notices, requests, waivers and other communications made pursuant to the
Agreement shall be addressed (a) if to an Investor, at such Investor's address
set forth on the signature page to this Agreement, or (b) if to the Company, at
124 University Avenue, Palo Alto, California 94301, or at such other address as
the Company shall have furnished to the Investors in writing.
7.8 Finder's Fee. Each party represents that it neither is nor will
------------
be obligated for any finders' fee or commission in connection with this
transaction. Each Investor agrees to
-16-
<PAGE>
indemnify and to hold harmless the Company from any liability for any commission
or compensation in the nature of a finder's fee (and the costs and expenses of
defending against such liability or asserted liability) for which such Investor
or any of its officers, partners, employees, or representatives is responsible.
The Company agrees to indemnify and hold harmless the Investors from any
liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
7.9 Expenses. If the Closing is effected, the Company shall, at the
--------
Closing, reimburse the reasonable fees and out-of-pocket expenses of Gray Cary
Ware & Freidenrich LLP, special counsel for the Investors. If any action at law
or in equity is necessary to enforce or interpret the terms of this Agreement or
the Second Restated Certificate, the prevailing party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
7.10 Amendments and Waivers. Any term of this Agreement may be amended
----------------------
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the Investors holding a majority of
the outstanding Shares. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each holder of any securities purchased under
this Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities, and the
Company.
7.11 Severability. If one or more provisions of this Agreement are
------------
determined to be unenforceable under applicable law, such provisions shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
7.12 Aggregation of Stock. All shares of the stock held or acquired by
--------------------
affiliated entities or persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.
7.13 Attorneys' Fees. In an action or proceeding brought by a party to
---------------
this Agreement to enforce any provision of this Agreement or to seek damages for
a breach thereof, the prevailing party shall be entitled to recover the
reasonable costs and expenses incurred by it in connection with that action or
proceeding (including, but not limited to, attorneys' fees).
[The remainder of this page is left blank intentionally.]
-17-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
COMPANY:
BAMBOO.COM, INC.
By:_________________________
Name:_______________________
Title:______________________
bamboo.com, Inc.
Series C Redeemable Preferred Stock
Purchase Agreement Counterpart, dated June 11, 1999
<PAGE>
INVESTORS:
VANTAGEPOINT VENTURE PARTNERS III, LP
BY: VANTAGEPOINT VENTURE ASSOCIATES III, LLC, ITS
GENERAL PARTNER
By:_____________________________________________
James D. Marver, Managing Member
VANTAGEPOINT COMMUNICATIONS PARTNERS, LP
BY: VANTAGEPOINT COMMUNICATIONS
ASSOCIATES, LLC, ITS GENERAL PARTNER
By:_____________________________________________
James D. Marver, Managing Member
HKL I, LLC
By:_____________________________________________
Walter G. Kortschak, General Partner
bamboo.com, Inc.
Series C Redeemable Preferred Stock
Purchase Agreement, dated June 11, 1999
<PAGE>
INVESTORS:
GCW&F INVESTMENT PARTNERS
BY: GRAY WARE CORPORATION, ITS MANAGING
PARTNER
By: _______________________________________________________
Gregory M. Gallo, President and Chief Financial Officer
JASON STROBER
____________________________________
bamboo.com, Inc.
Series C Redeemable Preferred Stock
Purchase Agreement, dated June 11, 1999
<PAGE>
EXHIBIT A
---------
Schedule of Investors
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Number of
Shares of
Number of Shares of Series C Redeemable
Common Stock Preferred Stock
Name Purchased Purchased Total Amount Invested ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
VantagePoint Venture
Partners III, LP 270,742 667 $ 6,666,666.67
- --------------------------------------------------------------------------------------------------------------------------------
VantagePoint Communications
Partners, LLP 135,372 333 $ 3,333,333.33
- -------------------------------------------------------------------------------------------------------------------------------
HKL I, LLC 38,581 95 $ 950,000.00
- --------------------------------------------------------------------------------------------------------------------------------
GCW&F Investment Partners 1,624 4 $ 40,000.00
- --------------------------------------------------------------------------------------------------------------------------------
Jason Strober 406 1 $ 10,000.00
- --------------------------------------------------------------------------------------------------------------------------------
Total: 446,725 1,100 $11,000,000.00
</TABLE>
<PAGE>
Exhibit B
---------
Second Amended and Restated Certificate of Incorporation
<PAGE>
Exhibit C
---------
Schedule of Exceptions
<PAGE>
Exhibit D
---------
Form of Opinion Letter of Counsel
(Wilson, Sonsini, Goodrich & Rosati)
<PAGE>
Exhibit D-1
-----------
Form of Opinion Letter of Counsel
(Beard, Winter)
<PAGE>
Exhibit E
---------
Investors Rights Agreement
<PAGE>
Exhibit 5.1
Wilson Sonsini Goodrich & Rosati
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
TELEPHONE 650-493-9300 FACSIMILE 650-493-6811
WWW.WSGR.COM
June 14, 1999
bamboo.com, Inc.
124 University Avenue
Palo Alto, CA 94301
Re: Registration Statement on Form S-1
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-1 (File No. 333-
_____) filed with the Securities and Exchange Commission on June 14, 1999 (as
such may be amended or supplemented, the "Registration Statement"), in
connection with the registration under the Securities Act of 1933, as amended,
of shares of Common Stock of bamboo.com, Inc. (the "Shares"). The Shares, which
include shares of Common Stock issuable pursuant to an over-allotment option
granted to the underwriters, are to be sold to the underwriters as described in
such Registration Statement for the sale to the public or issued to the
Representatives of the underwriters. As your counsel in connection with this
transaction, we have examined the proceedings proposed to be taken in connection
with said sale and issuance of the Shares.
It is our opinion that, upon approval by the pricing committee duly
authorized by the Company's Board of Directors, the Shares when issued and sold
in the manner referred to in the Registration Statement will be legally and
validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement, including the prospectus constituting a part hereof, and
any amendment thereto.
Very truly yours,
/s/ Wilson Sonsini Goodrich & Rosati
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
<PAGE>
EXHIBIT 9.1
JUTVISION CORPORATION
SHARE CONTRIBUTION, SUBSCRIPTION, RIGHT OF FIRST REFUSAL AND
VOTING AGREEMENT
This Share Contribution, Subscription, Right of First Refusal and Voting
Agreement, by and between Jutvision Corporation, a Delaware corporation with
principal address at 124 University Avenue, Palo Alto, California, 94301 (the
"Company"), and [insert name of investor ("Investor")], is entered into as of
the 1/st/ day of January, 1999 (the "Agreement").
WHEREAS, Investor is the holder of [insert number of shares] of the
Series A Convertible Preferred Shares of Jutvision Corporation, an Ontario,
Canada corporation ("Jutvision Canada");
WHEREAS, pursuant to a duly called special meeting of the shareholders of
Jutvision Canada held on December 30, 1998, the shareholders of Jutvision
Canada, both in person and by proxy, voted in favor of a reorganization of
Jutvision Canada (the "Reorganization"), as more fully described in that
certain Information Circular (including all exhibits thereto) relating to the
special meeting dated as of December 15, 1998 (the "Information Circular"),
and mailed to all of the shareholders of Jutvision Corporation;
WHEREAS, as part of the Reorganization, the holders of the Series A
Convertible Preferred Shares of Jutvision Canada are to contribute all of the
Series A Convertible Preferred Shares of Jutvision Canada to the Company in
consideration of and exchange for a like number of shares of the Series A
Convertible Preferred Stock of the Company (the "Series A Preferred"), and the
Common Shareholders of Jutvision Canada for cash consideration shall receive
in exchange therefore all of the shares of Class B Common Stock of the
Company, which, together with the Series A Preferred, constitute all of the
outstanding voting stock of the Company (the Company having no authorized non-
voting stock);
WHEREAS, the parties intend the Reorganization to constitute an exchange
under Section 351(a) of the Internal revenue Code of 1986, as amended;
WHEREAS, to consummate the Reorganization, Investor wishes to contribute
[his, her, its] shares of Series A Convertible Preferred Shares of Jutvision
Canada to the Company in consideration of and exchange for a like number of
shares of the Series A Preferred pursuant to and in accordance with the terms
and conditions of this Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, intending to be legally bound,
the parties hereto agree as follows:
1. Contribution, Issuance and Subscription.
----------------------------------------
(a) Investor has thoroughly read and understands this Agreement, the
Information Circular and the terms of the Reorganization.
(b) In connection therewith, and subject to the terms and conditions of
this Agreement, Investor hereby contributes, transfers and conveys to the
Company [insert number of shares] of the Series A Convertible Preferred Shares
of Jutvision Canada.
<PAGE>
(c) In consideration of such contribution and subject to the terms and
conditions of this Agreement, the Company hereby agrees to issue, and Investor
hereby subscribes for, [insert number of shares] shares of Series A Preferred.
(d) Each of the parties agree to deliver such documents, certificates,
agreements and opinions as shall be reasonably requested by the other parties in
connection with the execution, delivery and performance by each party of this
agreement and the transactions contemplated hereby.
2. Accredited or Un-Accredited Investor.
-------------------------------------
(a) Investor hereby represents and warrants that [his/her/its]
representations and warranties set forth under the heading "2. Accredited or Un-
Accredited Investor" contained in that certain Share Subscription, Right of
First Refusal and Voting Agreement, by and between Jutvision Canada and Investor
relating to Jutvision Canada's 1998 private placement of Series A Convertible
Preferred Shares and Investor's subscription therefore (the "Original
Subscription Agreement") remains true and correct and is incorporated herein by
reference.
(b) For purposes of the offer and issuance of the Series A Preferred in
connection with the Reorganization, Investor warrants that [he/she/it] is not a
"public" purchaser as such term is used in United States and Canadian securities
laws nor is a resident of any province or territory of Canada. Investor
understands that the Series A Preferred shares are being issued to sophisticated
subscribers having common bonds of interest and association with the Company and
its management only (and Investor is such a subscriber) and not for sale to the
public. Investor understands that the Company is relying on Investor's
representations contained herein to make this offer to Investor.
(c) In order to meet the conditions for exemption from the registration
requirements under the securities laws of certain jurisdictions, investors who
are residents of such jurisdictions may be required to meet additional
suitability requirements.
3. Experience and Suitability. Investor is qualified by [his/her/its]
--------------------------
knowledge and experience in financial and business matters, investments,
securities and private placements to evaluate the merits and risks of an
investment in the Series A Preferred and to make an informed decision relating
thereto. Investor has the financial capability for making the investment and
protecting [his/her/its] interests, and Investor can afford a complete loss of
the investment. The investment is a suitable one for Investor.
4. No Need for Liquidity. Investor is aware that [he/she/it] will be
---------------------
unable to liquidate the investment readily in case of an emergency and that the
Series A Preferred may have to be held for an indefinite period of time.
Investor's overall commitment to investments which are not readily marketable is
not excessive in view of Investor's net worth and financial circumstances and
the subscription for the Series A Preferred will not cause such commitment to
become excessive. In view of such facts, Investor acknowledges that [he/she/it]
has adequate means of providing for [his/her/its] current needs, anticipated
future needs and possible contingencies and emergencies and has no need for
liquidity in the investment in the Series A Preferred. Investor is able to bear
the economic risk of this investment.
-2-
<PAGE>
5. Opportunity to Investigate. Prior to the execution of this Agreement,
--------------------------
Investor and [his/her/its] advisors have had the opportunity to ask questions
of, and receive answers from, representatives of the Company concerning the
terms and conditions of the Reorganization, how it will affect Investor's
investment in the Company, how the Series A Preferred differs from the Series A
Convertible Preferred Shares of Jutvision Canada contributed to the Company
hereunder, and the finances, operations, business and prospects of the Company.
Investor and [his/her/its] advisors have also had the opportunity to obtain
additional information necessary to verify the accuracy of information furnished
about the Company. Accordingly, Investor has independently evaluated the risks
of the contribution to the Company of the Series A Convertible Preferred Shares
of Jutvision Canada and Investor's subscription for the Series A Preferred, and
is satisfied that [he/she/it] has received information with respect to all
matters which [he/she/it] considers material to [his/her/its] decision to make
this investment.
6. Risk Factors. Investor has carefully considered the potential risks
------------
relating to the Reorganization. Investor fully understands that the Company has
limited financial and operating history, is a development stage company which
has generated minimal revenues from the sale of products and has had net
operating losses in each year of operation, and that the Series A Preferred is a
speculative investment which involves a high degree of risk of loss of
Investor's entire investment. Investor is familiar with the general risks of
investment in companies with a limited operating history and financial results
such as those of the Company. Investor understands that the Company is subject
to all of such risks.
7. Investment Purpose. Investor is acquiring the Series A Preferred for
------------------
the purpose of investment and not with a view to, or for resale in connection
with, the distribution thereof, nor with any present intention of distributing
or selling the Series A Preferred. Investor understands that the Series A
Preferred has not been registered under the United States Securities Act or the
securities laws of Canada or any state or province, and hereby agrees not to
make any sale, transfer or other disposition of any such Series A Preferred
unless either (i) the Series A Preferred first shall have been registered under
the United States Securities Act and all applicable state securities laws or the
applicable Canadian Securities laws, or (ii) an exemption from such registration
is available, and the Company has received such documents and agreements from
Investor and the transferee as the Company requests at such time.
8. Legends. Investor understands that until the Series A Preferred has
-------
been registered under the Securities Act or the Canadian Securities laws and
applicable state securities laws each certificate representing such securities
shall bear a legend substantially similar to the following:
The securities represented by this certificate have not been
registered under the United States Securities Act of 1933 or any other
securities laws. These securities have been acquired for investment
and not with a view to distribution or resale. Such securities may
not be offered for sale, sold, delivered after sale, transferred,
pledged or hypothecated in the absence of an effective registration
statement covering such securities under the Securities Act of 1933
and any other applicable securities laws, unless the holder shall have
obtained an opinion of counsel reasonably satisfactory to the
corporation that such registration is not required.
In addition, each certificate representing the Series A Preferred shall bear a
legend substantially
-3-
<PAGE>
similar to the following:
The shares represented hereby are also subject to restrictions on
transfer contained in a certain Share Contribution, Subscription,
Right of First Refusal and Voting Agreement, and may not be sold,
pledged or otherwise transferred without compliance with the terms
thereof. The Company will furnish a copy of the full text of such
restrictions to the holder of this certificate upon written request
and without charge.
9. No Regulatory Approval of Merits. Investor understands that neither
--------------------------------
the United States Securities and Exchange Commission nor the commissioner or
department of securities or attorney general of Canada or any state or province
has passed upon the merits or qualifications of, nor recommended nor approved,
the Series A Preferred. Any representation to the contrary is a criminal
offense.
10. Independent Advice. Investor understands that [he/she/it] is urged to
------------------
seek independent advice from my professional advisors relating to the
suitability for me of an investment in the Company in view of my overall
financial needs and with respect to the legal and tax implications of such an
investment. Because the Reorganization involves Canadian and U.S. corporations,
both United States domestic and Canadian tax law could effect your investment in
the Series A Preferred. By executing this Subscription Agreement, you
acknowledge your obligation to seek appropriate tax advice.
11. Restrictions on Transfer. Investor hereby agrees to the following
------------------------
provisions with respect to any sale, transfer or other disposition of the Series
A Preferred which Investor acquires, in the event such sale, transfer or
disposition is allowed pursuant to Section 7 hereof:
(a) Non-Complying Transfers Prohibited. Investor understands that
----------------------------------
[he/she/it] may not sell, assign, transfer, exchange, gift, devise, pledge,
hypothecate, encumber or otherwise alienate or dispose of any Series A
Preferred owned by Investor, or any right or interest therein, whether
voluntarily or involuntarily, by operation of law or otherwise, except in
accordance with this Agreement. Any such purported transfer in violation of
any provision of this Agreement and all actions by the purported transferor
and transferee in connection therewith shall be of no force or effect. The
Company shall not be required to recognize such purported transfer for any
purpose, including without limitation for purposes of dividend and voting
rights. If any transfer of the Series A Preferred is made or attempted
contrary to the provisions of this Agreement or if any Series A Preferred
is not offered as required by this Agreement, the Company shall have the
right to purchase such Series A Preferred from Investor or [his/her/its]
transferee at any time before or after the purported transfer, as
hereinafter provided. In addition to any other legal or equitable remedies
the Company or such other holders may have, the Company and such other
holders may enforce this right by actions for specific performance, to the
extent permitted by law.
(b) Rights of First Refusal on Voluntary Transfers.
----------------------------------------------
(i) Right of First Refusal of the Company. In the event that
-------------------------------------
Investor (hereafter the "Selling Shareholder") intends to sell,
assign, transfer or otherwise voluntarily alienate or dispose of any
Series A Preferred, [he/she/it] shall, prior to
-4-
<PAGE>
any such transfer, give written notice (the "Selling Shareholder's
Notice") of such intention to the Company. The Selling Shareholder's
Notice shall include the name of the proposed transferee, the proposed
purchase price per share, the terms of payment of such purchase price
and all other matters relating to such transfer and shall be
accompanied by a copy of a binding written agreement of the proposed
transferee to purchase such Series A Preferred from the Selling
Shareholder. The Selling Shareholder's Notice shall constitute a
binding offer by the Selling Shareholder to sell to the Company or its
designee such number of shares of Series A Preferred (the "Offered
Securities") then owned by the Selling Shareholder as are proposed to
be sold in the Selling Stockholder's Notice at the monetary price per
share designated in the Selling Shareholder's Notice, payable as
provided in Section 11(b)(ii) hereof. Not later than thirty (30) days
after receipt of the Selling Shareholder's Notice, the Company shall
deliver written notice (the "Company's Notice") to the Selling
Shareholder stating whether the Company or its designee has accepted
the offer stated in the Selling Shareholder's Notice. The Company may
only accept the offer of the Selling Shareholder in whole and may not
accept such offer in part. If the Company accepts the offer of the
Selling Shareholder, the Company's Notice shall fix a time, location
and date for the closing of such purchase, which date shall be not
less than ten (10) nor more than thirty (30) days after delivery of
the Company's Notice.
(ii) Closing. The place for the closing of any purchase and
-------
sale described in Section 11 (b)(i) shall be the principal office of
the Company or at such other place as the parties shall agree. At the
closing, the Selling Shareholder shall accept payment on the terms
offered by the proposed transferee named in the Selling Shareholder's
Notice; provided, however, that the Company shall not be required to
meet any non-monetary terms of the proposed transfer, including,
without limitation, delivery of other securities in exchange for the
Series A Preferred proposed to be sold. At the closing, the Selling
Shareholder shall deliver to the Company, in exchange for Securities
purchased and sold at the closing, certificates for the number of
Securities stated in the Selling Shareholder's Notice, accompanied by
duly executed instruments of transfer.
(iii) Transfers to Third Parties. If the Company fails to accept
--------------------------
the offer stated in the Selling Shareholder's Notice, then the Selling
Shareholder shall be free to sell all, but not less than all, of the
Offered Securities to the designated transferee at a price and on
terms no less favorable to the Selling Shareholder than described in
the Selling Shareholder's Notice; provided, however, that such sale is
consummated within ninety (90) days after the giving of the Selling
Shareholder's Notice to the Company. As a condition precedent to the
effectiveness of a transfer pursuant to this Section 11 (b)(iii), the
proposed transferee(s) shall agree in writing prior to such transfer
to become a party to this Agreement and shall thereafter be permitted
to transfer Securities only in accordance with this Agreement.
(iv) Transfers to Permitted Transferees. The restrictions on
----------------------------------
transfer contained in this Section 11 (b) shall not apply to (a)
transfers by a holder of Series A Preferred to his spouse, children or
other member of his immediate family, or to a trust for the benefit of
such persons, (b) transfers by a holder of Series A Preferred
-5-
<PAGE>
to the trustee or trustees of a trust revocable solely by him, (c)
transfers by a holder of Series A Preferred to his guardian or
conservator, or (d) transfers by a holder of Series A Preferred, in
the event of his death, to his executor(s)or administrator(s) or to
trustee(s) under his will (collectively, "Permitted Transferees");
provided, however, that in any such event the Series A Preferred so
-----------------
transferred in the hands of each such Permitted Transferee shall
remain subject to the provisions of this Section 11(b), and each such
Permitted Transferee shall so acknowledge in writing as a condition
precedent to the effectiveness of such transfer.
(c) Waiver; Disposition of Shares. From time to time the Company may
-----------------------------
waive its rights hereunder either generally or with respect to one or more
specified transfers which have been proposed, attempted or made. All action
to be taken by the Company hereunder shall be taken by vote of a majority
of its Directors then in office. Any Shares which the Company has elected
to purchase hereunder may be disposed of by its Board of Directors in such
manner as it deems appropriate, with or without further restrictions on the
transfer thereof.
(d) Termination of Restrictions.
----------------------------
The restrictions contained in Sections (11 )(a) to and inclusive of
(11 )(d) hereof shall cease to apply upon the earliest to occur of the
following:
(i) the closing of an agreement of purchase and sale with respect to
all of the assets of the Company; or
(ii) a public offering by the Company after which the Company becomes
subject to the reporting requirements of the United States
Securities Exchange Act of 1934, as amended; or
(iii) the dissolution and/or liquidation of the Company.
(f) Residents of Pennsylvania. Residents of Pennsylvania shall
-------------------------
complete the form attached hereto as Exhibit A.
----------
The restrictions of this Section 11 shall be binding upon the heirs,
executors, administrators, assigns or other successors in interest of the
undersigned.
12. Voting. Investor agrees that, as long as Investor, (alone or with
------
[his/her/its] affiliates or associates) beneficially owns any Series A Preferred
of the Company, Investor shall, and shall direct [his/her/its] associates and
affiliates to, vote all the Series A Preferred owned by [him/her/it] in the same
proportion as the votes cast by all other holders of the Company's Common Stock
and Class B Common Stock with respect to (and shall take no actions in
opposition to) any merger, consolidation, reorganization, reincorporation, sale
of assets, sale of all or substantially all of the outstanding shares of the
Company, or the like involving the Company and recommended by the Company's
Board of Directors. Investor shall be entitled to rely upon the information
provided to [him/her/it] in writing by the Company or, in the absence thereof,
filed by the Company with the United States Securities and Exchange Commission,
regarding the number of shares of capital outstanding and issuable upon exercise
or conversion of options, warrants or the other securities.
-6-
<PAGE>
The restrictions of this Section 12 shall terminate upon the conversion of
Investor's Series A Preferred to Common Stock as provided by the Company's
Certificate of Incorporation, as amended.
13. Indemnification. Investor understands the meaning and legal
---------------
consequences of this Agreement and agrees to indemnify and hold harmless the
Company and each director and officer thereof from and against any and all loss,
damage or liability due to or arising out of a breach of any representation,
warranty or agreement of the undersigned contained in this Agreement.
14. Ownership of Series A Convertible Preferred Shares; No Encumbrances;
--------------------------------------------------------------------
Authority and Noncontraventional.
---------------------------------
(a) Investor has good and marketable title to the Series A Convertible
Preferred Shares of Jutvision Canada contributed, transferred and conveyed to
the Company hereunder, free and clear of any and all liens, pledges, mortgages
and other encumbrances, and Investor is not a party to any agreement of
guarantee, indemnification or assumption of the obligations of a third party, or
any other commitment, including endorsements or other contingent liabilities,
any one more of which would adversely affect title to the Series A
Convertible Preferred Shares of Jutvision Canada contributed, transferred and
conveyed to the Company hereunder.
(b) The execution and performance hereof violates no order, judgment,
injunction, agreement or controlling document to which the Investor is a party
or by which the Investor is bound. If an organization, (i) the Investor is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it has been formed; (ii) the Investor has the right and
power under its organizational instruments to execute, deliver and perform its
obligations hereunder; and (iii) this Agreement has been duly authorized by all
necessary action on the part of all officers, directors, partners, stockholders
and trustees and will not violate any agreement to which the Investor is a
party; and (iv) the individual executing and delivering this Agreement has the
requisite right, power, capacity and authority to do so on behalf of the
organization. The Investor has not been organized for the purpose of subscribing
for the Series A Preferred.
15. Duration. Investor understands that [he/she/it] may not cancel,
--------
terminate or revoke this Agreement or any agreement made by [him/her/it]
hereunder and that this Agreement shall survive Investor's death or disability
and shall be binding upon Investor's heirs, executors, administrators,
successors and assigns.
16. Further Assurances. Within ten (10) days after receipt of a written
------------------
request from the Company, Investor agrees to provide such information and to
execute and deliver such documents as reasonably may be necessary to comply with
any and all laws and ordinances to which the Company is subject.
-7-
<PAGE>
17. Miscellaneous.
--------------
(a) Notices. All notices, requests, consents and other communications
-------
hereunder shall be in writing, shall be addressed to the receiving party's
address set forth below or to such other address as a party may designate
by notice hereunder, and shall be either (i) delivered by hand, (ii) made
by telecopy or facsimile transmission, (iii) sent by overnight courier, or
(iv) sent by registered mail, return receipt requested, postage prepaid.
If to the Investor:
To the address designated in Section 18 hereof.
If to the Company:
To the address set forth at the top of this Agreement.
All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the
delivery thereof to the receiving party at the address of such party set
forth above, (ii) if made by telecopy or facsimile transmission, at the
time that receipt thereof has been acknowledged by electronic confirmation
or otherwise, (iii) if sent by overnight courier, on the next business day
following the day such notice is delivered to the courier service, or (iv)
if sent by registered mail, on the 5th business day following the day such
mailing is made.
(b) Entire Agreement. This Agreement embodies the entire agreement
----------------
and understanding between the parties hereto with respect to the subject
matter hereof and supersedes all prior oral or written agreements and
understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement of any kind not expressly
set forth in this Agreement shall affect, or be used to interpret, change
or restrict, the express terms and provisions of this Agreement.
(c) Modifications and Amendments. The terms and provisions of this
----------------------------
Agreement may be modified or amended only by written agreement executed by
the parties hereto.
(d) Waivers and Consents. The terms and provisions of this
--------------------
Agreement may be waived, or consent for the departure therefrom granted,
only by written document executed by the party entitled to the benefits of
such terms or provisions. No such waiver or consent shall be deemed to be
or shall constitute a waiver or consent with respect to any other terms or
provisions of this Agreement, whether or not similar. Each such waiver or
consent shall be effective only in the specific instance and for the
purpose for which it was given, and shall not constitute a continuing
waiver or consent.
(e) Assignment. This Agreement may not be transferred or assigned
----------
without the prior written consent of the Company and any such transfer or
assignment shall be made only in accordance with applicable laws and any
such consent.
-8-
<PAGE>
(f) Benefit. All statements, representations, warranties, covenants
-------
and agreements in this Agreement shall be binding on the parties hereto and
shall inure to the benefit of the respective successors and permitted
assigns of each party hereto. Nothing in this Agreement shall be construed
to create any rights or obligations except among the parties hereto, and no
person or entity shall be regarded as a third-party beneficiary of this
Agreement.
(g) Governing Law. This Agreement and the rights and obligations of
-------------
the parties hereunder shall be construed in accordance with and governed by
the law of the State of Delaware, without giving effect to the conflict of
law principles thereof.
(h) Jurisdiction and Service of Process. Any legal action or
-----------------------------------
proceeding with respect to this Agreement shall be brought in the courts of
the State of Delaware or of the United States of America for the District
of Delaware. By execution and delivery of this Agreement, each of the
parties hereto accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. Each of the
parties hereto irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of
copies thereof by certified mail, postage prepaid, to the party at its
address set forth in Section 18 hereof.
(i) Severability. In the event that any court of competent
------------
jurisdiction shall determine that any provision, or any portion thereof,
contained in this Agreement shall be unenforceable in any respect, then
such provision shall be deemed limited to the extent that such court deems
it enforceable, and as so limited shall remain in full force and effect. In
the event that such court shall deem any such provision, or portion
thereof, wholly unenforceable, the remaining provisions of this Agreement
shall nevertheless remain in full force and effect.
(j) Interpretation. The parties hereto acknowledge and agree that:
--------------
(i) each party and its counsel have reviewed the terms and provisions of
this Agreement; (ii) the rule of construction to the effect that any
ambiguities are resolved against the drafting party shall not be employed
in the interpretation of this Agreement; and (iii) the terms and provisions
of this Agreement shall be construed fairly as to the parties hereto and
not in favor of or against any party, regardless of which party was
generally responsible for the preparation of this Agreement. Whenever used
herein, the singular number shall include the plural, the plural shall
include the singular, the use of any gender shall include all persons.
(k) Headings and Captions. The headings and captions of the various
---------------------
(i) subdivisions of this Agreement are for convenience of reference only
and shall in no way modify, or affect the meaning or construction of any of
the terms or provisions hereof.
(1) Enforcement. Each of the parties hereto acknowledges and agrees
-----------
that the rights acquired by each party hereunder are unique and that
irreparable damage would occur in the event that any of the provisions of
this Agreement to be performed by the other party were not performed in
accordance with their specific terms or were otherwise breached.
Accordingly, in addition to any other remedy to which the parties hereto
are entitled at law or in equity, each party hereto shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement by the
other party and to enforce specifically the terms and
-9-
<PAGE>
provisions hereof in any federal or state court to which the parties have
agreed hereunder to submit to jurisdiction.
(m) No Waiver of Rights, Powers and Remedies. No failure or delay
----------------------------------------
by a party hereto in exercising any right, power or remedy under this
Agreement, and no course of dealing between the parties hereto, shall
operate as a waiver of any such right, power or remedy of the party. No
single or partial exercise of any right, power or remedy under this
Agreement by a party hereto, nor any abandonment or discontinuance of steps
to enforce any such right, power or remedy, shall preclude such party from
any other or further exercise thereof or the exercise of any other right,
power or remedy hereunder. The election of any remedy by a party hereto
shall not constitute a waiver of the right of such party to pursue other
available remedies. No notice to or demand on a party not expressly
required under this Agreement shall entitle the party receiving such notice
or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances
without such notice or demand.
(n) Expenses. Each of the parties hereto shall pay its own fees
--------
and expenses (including the fees of any attorneys, accountants, appraisers
or others engaged by such party) in connection with this Agreement and the
transactions contemplated hereby whether or not the transactions
contemplated hereby are consummated.
(o) Counterparts. This Agreement may be executed in one or more
------------
counterparts, and by different parties hereto on separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
18. The parties hereto agree that the information and representations set
forth in Section 18 of the Original Subscription Agreement are hereby
incorporated herein by reference.
19. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE REORGANIZATION, INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY
UNITED STATES FEDERAL OR STATE OR CANADIAN PROVINCIAL OR TERRITORIAL COMMISSION
OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT
CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, AND THE APPLICABLE CANADIAN PROVINCIAL AND TERRITORIAL AND UNITED
STATES STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISK
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
20. Under penalties of perjury, Investor certifies that:
-10-
<PAGE>
A. The Taxpayer Identification Number set forth in Section 18 of the
Original Subscription Agreement is true and correct;
B. Investor is not subject to backup withholding either because
Investor has not been notified by the Internal Revenue Service (IRS) that
[he/she/it] is subject to backup withholding as a result of a failure to report
all interest or dividends, or the IRS has notified Investor that Investor is no
longer subject to backup withholding.
C. INVESTOR IS SUBSCRIBING FOR THE SERIES A PREFERRED ONLY AFTER
HAVING READ, CONSIDERED AND FULLY UNDERSTOOD THE COMPANY'S INFORMATION CIRCULAR.
INVESTOR IS NOT RELYING ON ANY INFORMATION OR REPRESENTATION CONCERNING THE
COMPANY OR THE SERIES A PREFERRED EXCEPT AS SPECIFICALLY SET FORTH IN THE
INFORMATION CIRCULAR.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as a
sealed instrument on this 1/st/ day of January, 1999.
JUTVISION CORPORATION
By: _________________________________
Name: Roy Dalton
Title: Vice President, Finance
(For Co-owners, if applicable)
_______________________ _______________________________________
Investor Signature Investor Signature
_______________________ _______________________________________
Print Name Print Name
-11-
<PAGE>
EXHIBIT A
FOR RESIDENTS OF THE STATE OF PENNSYLVANIA
------------------------------------------
I hereby agree not to sell the Securities for a period of twelve (12)
months from the date of purchase, except in accordance with Regulation
(S)204.011 promulgated under the Pennsylvania Securities Act of 1972.
Signed:_________________________________
Dated:_________________________________
-12-
<PAGE>
EXHIBIT 10.1
BAMBOO.COM, INC.
FORM OF
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is effective as of
___________, 1999 by and between bamboo.com, Inc., a Delaware corporation (the
"Company"), and (NAME) ("Indemnitee").
WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and its related
entities;
WHEREAS, in order to induce Indemnitee to continue to provide services to
the Company, the Company wishes to provide for the indemnification of, and the
advancement of expenses to, Indemnitee to the maximum extent permitted by law;
WHEREAS, the Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for the Company's directors, officers, employees,
agents and fiduciaries, the significant increases in the cost of such insurance
and the general reductions in the coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited; and
WHEREAS, in connection with the Company's reincorporation, the Company and
Indemnitee desire to continue to have in place the additional protection
provided by an indemnification agreement, with such changes as are required to
conform the existing agreement to Delaware law and to provide indemnification
and advancement of expenses to the Indemnitee to the maximum extent permitted by
Delaware law;
WHEREAS, in view of the considerations set forth above, the Company desires
that Indemnitee shall be indemnified and advanced expenses by the Company as set
forth herein;
NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth below.
1. Certain Definitions.
-------------------
a. "Change in Control" shall mean, and shall be deemed to have
occurred if, on or after the date of this Agreement, (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended), other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company acting in such capacity or a corporation
owned directly or indirectly by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company, becomes the
"beneficial owner" (as defined
<PAGE>
in Rule 13d-3 under said Act), directly or indirectly, of securities of the
Company representing more than 50% of the total voting power represented by the
Company's then outstanding Voting Securities, (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose election by the
Board of Directors or nomination for election by the Company's stockholders was
approved by a vote of at least two thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, (iii) the stockholders of the Company
approve a merger or consolidation of the Company with any other corporation
other than a merger or consolidation which would result in the Voting Securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting Securities of
the surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series of
related transactions) all or substantially all of the Company's assets.
b. "Claim" shall mean with respect to a Covered Event: any threatened,
pending or completed action, suit, proceeding or alternative dispute resolution
mechanism, or any hearing, inquiry or investigation that Indemnitee in good
faith believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other.
c. References to the "Company" shall include, in addition to E-Loan,
Inc., any constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger to which E-Loan, Inc. (or any of its
wholly owned subsidiaries) is a party which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
officers, employees, agents or fiduciaries, so that if Indemnitee is or was a
director, officer, employee, agent or fiduciary of such constituent corporation,
or is or was serving at the request of such constituent corporation as a
director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.
d. "Covered Event" shall mean any event or occurrence related to the fact
that Indemnitee is or was a director, officer, employee, agent or fiduciary of
the Company, or any subsidiary of the Company, or is or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action or inaction on the part of Indemnitee while serving in
such capacity.
e. "Expenses" shall mean any and all expenses (including attorneys' fees
and all other costs, expenses and obligations incurred in connection with
investigating, defending, being a
-2-
<PAGE>
witness in or participating in (including on appeal), or preparing to defend, to
be a witness in or to participate in, any action, suit, proceeding, alternative
dispute resolution mechanism, hearing, inquiry or investigation), judgments,
fines, penalties and amounts paid in settlement (if such settlement is approved
in advance by the Company, which approval shall not be unreasonably withheld) of
any Claim and any federal, state, local or foreign taxes imposed on the
Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement.
f. "Expense Advance" shall mean a payment to Indemnitee pursuant to
Section 3 of Expenses in advance of the settlement of or final judgement in any
action, suit, proceeding or alternative dispute resolution mechanism, hearing,
inquiry or investigation which constitutes a Claim.
g. "Independent Legal Counsel" shall mean an attorney or firm of
attorneys, selected in accordance with the provisions of Section 2(d) hereof,
who shall not have otherwise performed services for the Company or Indemnitee
within the last three years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other Indemnitees under similar
indemnity agreements).
h. References to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on
Indemnitee with respect to an employee benefit plan; and references to "serving
at the request of the Company" shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties on, or involves
services by, such director, officer, employee, agent or fiduciary with respect
to an employee benefit plan, its participants or its beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the
best interests of the Company" as referred to in this Agreement.
i. "Reviewing Party" shall mean, subject to the provisions of
Section 2(d), any person or body appointed by the Board of Directors in
accordance with applicable law to review the Company's obligations hereunder and
under applicable law, which may include a member or members of the Company's
Board of Directors, Independent Legal Counsel or any other person or body not a
party to the particular Claim for which Indemnitee is seeking indemnification.
j. "Section" refers to a section of this Agreement unless otherwise
indicated.
k. "Voting Securities" shall mean any securities of the Company that
vote generally in the election of directors.
2. Indemnification.
---------------
a. Indemnification of Expenses. Subject to the provisions of Section
---------------------------
2(b) below, the Company shall indemnify Indemnitee for Expenses to the fullest
extent permitted by law if Indemnitee was or is or becomes a party to or witness
or other participant in, or is threatened to be made a party to or witness or
other participant in, any Claim (whether by reason of or arising in part
-3-
<PAGE>
out of a Covered Event), including all interest, assessments and other charges
paid or payable in connection with or in respect of such Expenses.
b. Review of Indemnification Obligations. Notwithstanding the
-------------------------------------
foregoing, in the event any Reviewing Party shall have determined (in a written
opinion, in any case in which Independent Legal Counsel is the Reviewing Party)
that Indemnitee is not entitled to be indemnified hereunder under applicable
law, (i) the Company shall have no further obligation under Section 2(a) to make
any payments to Indemnitee not made prior to such determination by such
Reviewing Party, and (ii) the Company shall be entitled to be reimbursed by
Indemnitee (who hereby agrees to reimburse the Company) for all Expenses
theretofore paid to Indemnitee to which Indemnitee is not entitled hereunder
under applicable law; provided, however, that if Indemnitee has commenced or
-------- -------
thereafter commences legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee is entitled to be indemnified hereunder
under applicable law, any determination made by any Reviewing Party that
Indemnitee is not entitled to be indemnified hereunder under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expenses theretofore paid in indemnifying Indemnitee until a
final judicial determination is made with respect thereto (as to which all
rights of appeal therefrom have been exhausted or lapsed). Indemnitee's
obligation to reimburse the Company for any Expenses shall be unsecured and no
interest shall be charged thereon.
c. Indemnitee Rights on Unfavorable Determination; Binding Effect.
--------------------------------------------------------------
If any Reviewing Party determines that Indemnitee substantively is not entitled
to be indemnified hereunder in whole or in part under applicable law, Indemnitee
shall have the right to commence litigation seeking an initial determination by
the court or challenging any such determination by such Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and, subject to
the provisions of Section 15, the Company hereby consents to service of process
and to appear in any such proceeding. Absent such litigation, any determination
by any Reviewing Party shall be conclusive and binding on the Company and
Indemnitee.
d. Selection of Reviewing Party; Change in Control. If there has not
-----------------------------------------------
been a Change in Control, any Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control (other than a Change
in Control which has been approved by a majority of the Company's Board of
Directors who were directors immediately prior to such Change in Control), any
Reviewing Party with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnification of Expenses under this Agreement or any
other agreement or under the Company's Certificate of Incorporation or Bylaws as
now or hereafter in effect, or under any other applicable law, if desired by
Indemnitee, shall be Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld).
Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent Indemnitee would be
entitled to be indemnified hereunder under applicable law and the Company agrees
to abide by such opinion. The Company agrees to pay the reasonable fees of the
Independent Legal Counsel referred to above and to indemnify fully such counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto. Notwithstanding any
-4-
<PAGE>
other provision of this Agreement, the Company shall not be required to pay
Expenses of more than one Independent Legal Counsel in connection with all
matters concerning a single Indemnitee, and such Independent Legal Counsel shall
be the Independent Legal Counsel for any or all other Indemnitees unless (i) the
employment of separate counsel by one or more Indemnitees has been previously
authorized by the Company in writing, or (ii) an Indemnitee shall have provided
to the Company a written statement that such Indemnitee has reasonably concluded
that there may be a conflict of interest between such Indemnitee and the other
Indemnitees with respect to the matters arising under this Agreement.
e. Mandatory Payment of Expenses. Notwithstanding any other
-----------------------------
provision of this Agreement other than Section 10 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
Claim, Indemnitee shall be indemnified against all Expenses incurred by
Indemnitee in connection therewith.
3. Expense Advances.
----------------
a. Obligation to Make Expense Advances. Upon receipt of a written
-----------------------------------
undertaking by or on behalf of the Indemnitee to repay such amounts if it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified
therefore by the Company hereunder under applicable law, the Company shall make
Expense Advances to Indemnitee.
b. Form of Undertaking. Any obligation to repay any Expense Advances
-------------------
hereunder pursuant to a written undertaking by the Indemnitee shall be unsecured
and no interest shall be charged thereon.
c. Determination of Reasonable Expense Advances. The parties agree
--------------------------------------------
that for the purposes of any Expense Advance for which Indemnitee has made
written demand to the Company in accordance with this Agreement, all Expenses
included in such Expense Advance that are certified by affidavit of Indemnitee's
counsel as being reasonable shall be presumed conclusively to be reasonable.
4. Procedures for Indemnification and Expense Advances.
---------------------------------------------------
a. Timing of Payments. All payments of Expenses (including without
------------------
limitation Expense Advances) by the Company to the Indemnitee pursuant to this
Agreement shall be made to the fullest extent permitted by law as soon as
practicable after written demand by Indemnitee therefor is presented to the
Company, but in no event later than thirty (30) business days after such written
demand by Indemnitee is presented to the Company, except in the case of Expense
Advances, which shall be made no later than ten (10) business days after such
written demand by Indemnitee is presented to the Company.
b. Notice/Cooperation by Indemnitee. Indemnitee shall, as a
--------------------------------
condition precedent to Indemnitee's right to be indemnified or Indemnitee's
right to receive Expense Advances under this Agreement, give the Company notice
in writing as soon as practicable of any Claim made
-5-
<PAGE>
against Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the Chief Executive
Officer of the Company at the address shown on the signature page of this
Agreement (or such other address as the Company shall designate in writing to
Indemnitee). In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
c. No Presumptions; Burden of Proof. For purposes of this Agreement,
--------------------------------
the termination of any Claim by judgment, order, settlement (whether with or
without court approval) or conviction, or upon a plea of nolo contendere, or its
---------------
equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by this Agreement or applicable
law. In addition, neither the failure of any Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by any
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
this Agreement under applicable law, shall be a defense to Indemnitee's claim or
create a presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief. In connection with any
determination by any Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder under applicable law, the burden of
proof shall be on the Company to establish that Indemnitee is not so entitled.
d. Notice to Insurers. If, at the time of the receipt by the Company
------------------
of a notice of a Claim pursuant to Section 4(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such Claim in
accordance with the terms of such policies.
e. Selection of Counsel. In the event the Company shall be obligated
--------------------
hereunder to provide indemnification for or make any Expense Advances with
respect to the Expenses of any Claim, the Company, if appropriate, shall be
entitled to assume the defense of such Claim with counsel approved by Indemnitee
(which approval shall not be unreasonably withheld) upon the delivery to
Indemnitee of written notice of the Company's election to do so. After delivery
of such notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees or expenses of separate counsel subsequently retained by
or on behalf of Indemnitee with respect to the same Claim; provided that, (i)
Indemnitee shall have the right to employ Indemnitee's separate counsel in any
such Claim at Indemnitee's expense and (ii) if (A) the employment of separate
counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense,
or (C) the Company shall not continue to retain such counsel to defend
-6-
<PAGE>
such Claim, then the fees and expenses of Indemnitee's separate counsel shall be
Expenses for which Indemnitee may receive indemnification or Expense Advances
hereunder.
5. Additional Indemnification Rights; Nonexclusivity.
-------------------------------------------------
a. Scope. The Company hereby agrees to indemnify the Indemnitee to
-----
the fullest extent permitted by law, notwithstanding that such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's Bylaws or by statute. In
the event of any change after the date of this Agreement in any applicable law,
statute or rule which expands the right of a Delaware corporation to indemnify a
member of its board of directors or an officer, employee, agent or fiduciary, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change. In the event of any
change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its board of directors or an
officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder except as set forth in Section 10(a) hereof.
b. Nonexclusivity. The indemnification and the payment of Expense
--------------
Advances provided by this Agreement shall be in addition to any rights to which
Indemnitee may be entitled under the Company's Certificate of Incorporation, its
Bylaws, any other agreement, any vote of stockholders or disinterested
directors, the General Corporation Law of the State of Delaware, or otherwise.
The indemnification and the payment of Expense Advances provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity even though subsequent thereto
Indemnitee may have ceased to serve in such capacity.
6. No Duplication of Payments. The Company shall not be liable under this
--------------------------
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Company's Certificate of
Incorporation, Bylaws or otherwise) of the amounts otherwise payable hereunder.
7. Partial Indemnification. If Indemnitee is entitled under any provision
-----------------------
of this Agreement to indemnification by the Company for some or a portion of
Expenses incurred in connection with any Claim, but not, however, for all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such Expenses to which Indemnitee is entitled.
8. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge
---------------------
that in certain instances, federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.
-7-
<PAGE>
9. Liability Insurance. To the extent the Company maintains liability
-------------------
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are provided to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.
10. Exceptions. Notwithstanding any other provision of this Agreement,
----------
the Company shall not be obligated pursuant to the terms of this Agreement:
a. Excluded Actions or Omissions. To indemnify or make Expense
-----------------------------
Advances to Indemnitee with respect to Claims arising out of acts, omissions or
transactions for which Indemnitee is prohibited from receiving indemnification
under applicable law.
b. Claims Initiated by Indemnitee. To indemnify or make Expense
------------------------------
Advances to Indemnitee with respect to Claims initiated or brought voluntarily
by Indemnitee and not by way of defense, counterclaim or crossclaim, except (i)
with respect to actions or proceedings brought to establish or enforce a right
to indemnification under this Agreement or any other agreement or insurance
policy or under the Company's Certificate of Incorporation or Bylaws now or
hereafter in effect relating to Claims for Covered Events, (ii) in specific
cases if the Board of Directors has approved the initiation or bringing of such
Claim, or (iii) as otherwise required under Section 145 of the Delaware General
Corporation Law, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, Expense Advances, or insurance recovery, as
the case may be.
c. Lack of Good Faith. To indemnify Indemnitee for any Expenses
------------------
incurred by the Indemnitee with respect to any action instituted (i) by
Indemnitee to enforce or interpret this Agreement, if a court having
jurisdiction over such action determines as provided in Section 13 that each of
the material assertions made by the Indemnitee as a basis for such action was
not made in good faith or was frivolous, or (ii) by or in the name of the
Company to enforce or interpret this Agreement, if a court having jurisdiction
over such action determines as provided in Section 13 that each of the material
defenses asserted by Indemnitee in such action was made in bad faith or was
frivolous.
d. Claims Under Section 16(b). To indemnify Indemnitee for Expenses
--------------------------
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.
11. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall constitute an original.
12. Binding Effect; Successors and Assigns. This Agreement shall be
--------------------------------------
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), spouses, heirs and
personal and
-8-
<PAGE>
legal representatives. The Company shall require and cause any successor
(whether direct or indirect, and whether by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business or
assets of the Company, by written agreement in form and substance satisfactory
to Indemnitee, expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
if no such succession had taken place. This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as a director, officer,
employee, agent or fiduciary (as applicable) of the Company or of any other
enterprise at the Company's request.
13. Expenses Incurred in Action Relating to Enforcement or Interpretation.
---------------------------------------------------------------------
In the event that any action is instituted by Indemnitee under this Agreement or
under any liability insurance policies maintained by the Company to enforce or
interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be
indemnified for all Expenses incurred by Indemnitee with respect to such action
(including without limitation attorneys' fees), regardless of whether Indemnitee
is ultimately successful in such action, unless as a part of such action a court
having jurisdiction over such action makes a final judicial determination (as to
which all rights of appeal therefrom have been exhausted or lapsed) that each of
the material assertions made by Indemnitee as a basis for such action was not
made in good faith or was frivolous; provided, however, that until such final
judicial determination is made, Indemnitee shall be entitled under Section 3 to
receive payment of Expense Advances hereunder with respect to such action. In
the event of an action instituted by or in the name of the Company under this
Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee
shall be entitled to be indemnified for all Expenses incurred by Indemnitee in
defense of such action (including without limitation costs and expenses incurred
with respect to Indemnitee's counterclaims and cross-claims made in such
action), unless as a part of such action a court having jurisdiction over such
action makes a final judicial determination (as to which all rights of appeal
therefrom have been exhausted or lapsed) that each of the material defenses
asserted by Indemnitee in such action was made in bad faith or was frivolous;
provided, however, that until such final judicial determination is made,
Indemnitee shall be entitled under Section 3 to receive payment of Expense
Advances hereunder with respect to such action.
14. Period of Limitations. No legal action shall be brought and no cause
---------------------
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two year period; provided, however, that if any shorter
-------- -------
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
15. Notice. All notices, requests, demands and other communications under
------
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and signed for by the party addressed, on the date of such
delivery, or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked. Addresses
for notice to either party are as shown on the signature page of this Agreement,
or as subsequently modified by written notice.
-9-
<PAGE>
16. Consent to Jurisdiction. The Company and Indemnitee each hereby
-----------------------
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.
17. Severability. The provisions of this Agreement shall be severable in
------------
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including without limitation each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.
18. Choice of Law. This Agreement, and all rights, remedies, liabilities,
-------------
powers and duties of the parties to this Agreement, shall be governed by and
construed in accordance with the laws of the State of Delaware as applied to
contracts between Delaware residents entered into and to be performed entirely
in the State of Delaware without regard to principles of conflicts of laws.
19. Subrogation. In the event of payment under this Agreement, the Company
-----------
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
20. Amendment and Termination. No amendment, modification, termination or
-------------------------
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed to be or shall constitute a waiver of any other
provisions hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver.
21. Integration and Entire Agreement. This Agreement sets forth the entire
--------------------------------
understanding between the parties hereto and supersedes and merges all previous
written and oral negotiations, commitments, understandings and agreements
relating to the subject matter hereof between the parties hereto.
22. No Construction as Employment Agreement. Nothing contained in this
---------------------------------------
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries or affiliated entities.
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement as of the date first above written.
BAMBOO.COM, INC.
By:___________________________
Name:_________________________
Title:________________________
Address: 124 University Avenue
Palo Alto, CA 94301
AGREED TO AND ACCEPTED
INDEMNITEE:
________________________________________
(Signature)
((Name))
----------------------------------------
Name
________________________________________
Address
________________________________________
-11-
<PAGE>
Exhibit 10.2
BAMBOO.COM, INC.
1998 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are to attract
--------------------
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company's business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of its Committees as shall
-------------
be administering the Plan in accordance with Section 4 hereof.
(b) "Applicable Laws" means the requirements relating to the
---------------
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any other country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
-----
(d) "Code" means the Internal Revenue Code of 1986, as amended.
----
(e) "Committee" means a committee of Directors appointed by the Board
---------
in accordance with Section 4 hereof.
(f) "Common Stock" means the Common Stock of the Company.
------------
(g) "Company" means Jutvision Corporation, a Delaware corporation.
-------
(h) "Consultant" means any person who is engaged by the Company or
----------
any Parent or Subsidiary to render consulting or advisory services to such
entity.
(i) "Director" means a member of the Board of Directors of the
--------
Company.
(j) "Disability" means total and permanent disability as defined in
----------
Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers
<PAGE>
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. For purposes of Incentive Stock Options, no such
leave may exceed ninety days, unless reemployment upon expiration of such leave
is guaranteed by statute or contract. If reemployment upon expiration of a leave
of absence approved by the Company is not so guaranteed, on the 181st day of
such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute "employment" by
the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(m) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as
----------------------
an incentive stock option within the meaning of Section 422 of the Code.
(o) "Nonstatutory Stock Option" means an Option not intended to
-------------------------
qualify as an Incentive Stock Option.
(p) "Officer" means a person who is an officer of the Company within
-------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(q) "Option" means a stock option granted pursuant to the Plan.
------
(r) "Option Agreement" means a written or electronic agreement
----------------
between the Company and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
-2-
<PAGE>
(s) "Option Exchange Program" means a program whereby outstanding
-----------------------
Options are exchanged for Options with a lower exercise price.
(t) "Optioned Stock" means the Common Stock subject to an Option or a
--------------
Stock Purchase Right.
(u) "Optionee" means the holder of an outstanding Option or Stock
--------
Purchase Right granted under the Plan.
(v) "Parent" means a "parent corporation," whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(w) "Plan" means this Jutvision Corporation 1998 Employee, Director
----
and Consultant Stock Plan.
(x) "Restricted Stock" means shares of Common Stock acquired pursuant
----------------
to a grant of a Stock Purchase Right under Section 11 below.
(y) "Service Provider" means an Employee, Director or Consultant.
----------------
(z) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 12 below.
(aa) "Stock Purchase Right" means a right to purchase Common Stock
--------------------
pursuant to Section 11 below.
(bb) "Subsidiary" means a "subsidiary corporation," whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
-------------------------
the Plan, the maximum aggregate number of Shares which may be subject to option
and sold under the Plan is 2,201,638 Shares. The Shares may be authorized but
unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). However, Shares that have actually been issued under the Plan,
upon exercise of either an Option or Stock Purchase Right, shall not be returned
to the Plan and shall not become available for future distribution under the
Plan, except that if Shares of Restricted Stock are repurchased by the Company
at their original purchase price, such Shares shall become available for future
grant under the Plan.
-3-
<PAGE>
4. Administration of the Plan.
--------------------------
(a) Administrator. The Plan shall be administered by the Board or a
-------------
Committee appointed by the Board, which Committee shall be constituted to comply
with Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities, the
Administrator shall have the authority in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and Stock
Purchase Rights may from time to time be granted hereunder;
(iii) to determine the number of Shares to be covered by each
such award granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, of any Option or
Stock Purchase Right granted hereunder. Such terms and conditions include, but
are not limited to, the exercise price, the time or times when Options or Stock
Purchase Rights may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Option or Stock Purchase Right or the
Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(vi) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(e) instead of Common Stock;
(vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;
(viii) to initiate an Option Exchange Program;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(x) to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to the amount required to be
-4-
<PAGE>
withheld. The Fair Market Value of the Shares to be withheld shall be determined
on the date that the amount of tax to be withheld is to be determined. All
elections by Optionees to have Shares withheld for this purpose shall be made in
such form and under such conditions as the Administrator may deem necessary or
advisable; and
(xi) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
(c) Effect of Administrator's Decision. All decisions, determinations
----------------------------------
and interpretations of the Administrator shall be final and binding on all
Optionees.
5. Eligibility.
-----------
(a) Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
(b) Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(c) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon any Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall it interfere in
any way with his or her right or the Company's right to terminate such
relationship at any time, with or without cause.
6. Term of Plan. The Plan shall become effective upon its adoption by the
------------
Board. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 14 of the Plan.
7. Term of Option. The term of each Option shall be stated in the Option
--------------
Agreement; provided, however, that the term shall be no more than ten (10) years
from the date of grant thereof. In the case of an Incentive Stock Option
granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant or such shorter term as may be provided
in the Option Agreement.
8. Option Exercise Price and Consideration.
---------------------------------------
-5-
<PAGE>
(a) The per share exercise price for the Shares to be issued upon
exercise of an Option shall be such price as is determined by the Administrator,
but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant.
(B) granted to any other Employee, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a Service Provider who, at the time of
grant of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the exercise price shall be no less than 110% of the Fair Market Value per Share
on the date of grant.
(B) granted to any other Service Provider, the per Share
exercise price shall be no less than 85% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price other than as required above pursuant to a merger or
other corporate transaction.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan, or (6) any combination of the foregoing methods of payment. In making
its determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
-6-
<PAGE>
9. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable according to the terms hereof at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. Except in the case of Options granted to Officers,
Directors and Consultants, Options shall become exercisable at a rate of no less
than 20% per year over five (5) years from the date the Options are granted.
Unless the Administrator provides otherwise, vesting of Options granted
hereunder to Officers and Directors shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
-------------------------------------------------
ceases to be a Service Provider, such Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement (of at least
thirty (30) days) to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of the Option
as set forth in the Option Agreement). In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
----------------------
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
(of at least six (6) months) to the extent the Option is
-7-
<PAGE>
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for twelve (12) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider,
-----------------
the Option may be exercised within such period of time as is specified in the
Option Agreement (of at least six (6) months) to the extent that the Option is
vested on the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Option Agreement) by the Optionee's
estate or by a person who acquires the right to exercise the Option by bequest
or inheritance. In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to the
entire Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. If the Option is not so exercised within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy
-----------------
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
10. Non-Transferability of Options and Stock Purchase Rights. The Options
--------------------------------------------------------
and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
11. Stock Purchase Rights.
---------------------
(a) Rights to Purchase. Stock Purchase Rights may be issued either
------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically of the terms, conditions and restrictions
related to the offer, including the number of Shares that such person shall be
entitled to purchase, the price to be paid, and the time within which such
person must accept such offer. The terms of the offer shall comply in all
respects with Section 260.140.42 of Title 10 of the California Code of
Regulations. The offer shall be accepted by execution of a Restricted Stock
purchase agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines otherwise,
-----------------
the Restricted Stock purchase agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason
-8-
<PAGE>
(including death or disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock purchase agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine. Except with respect to Shares purchased by
Officers, Directors and Consultants, the repurchase option shall in no case
lapse at a rate of less than 20% per year over five (5) years from the date of
purchase.
(c) Other Provisions. The Restricted Stock purchase agreement shall
----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
-----------------------
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 12 of
the Plan.
12. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.
----------------------------------------------------------------
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. The conversion of any convertible securities
of the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option or Stock Purchase Right until
fifteen (15) days prior to such transaction as to all of the Optioned Stock
covered thereby, including Shares as to which the Option or Stock Purchase Right
would not otherwise be exercisable. In addition, the
-9-
<PAGE>
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company
--------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option or Stock Purchase
Right shall terminate upon the expiration of such period. For the purposes of
this paragraph, the Option or Stock Purchase Right shall be considered assumed
if, following the merger or sale of assets, the option or right confers the
right to purchase or receive, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
13. Time of Granting Options and Stock Purchase Rights. The date of grant
--------------------------------------------------
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Service Provider to whom an
Option or Stock Purchase Right is so granted within a reasonable time after the
date of such grant.
14. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend or terminate the Plan.
-10-
<PAGE>
(b) Shareholder Approval. The Board shall obtain shareholder approval
--------------------
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
15. Conditions Upon Issuance of Shares.
----------------------------------
(a) Legal Compliance. Shares shall not be issued pursuant to the
----------------
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) Investment Representations. As a condition to the exercise of an
--------------------------
Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.
16. Inability to Obtain Authority. The inability of the Company to obtain
-----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
17. Reservation of Shares. The Company, during the term of this Plan,
---------------------
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
18. Shareholder Approval. The Plan shall be subject to approval by the
--------------------
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the degree and manner
required under Applicable Laws.
19. Information to Optionees and Purchasers. The Company shall provide to
---------------------------------------
each Optionee and to each individual who acquires Shares pursuant to the Plan,
not less frequently than annually during the period such Optionee or purchaser
has one or more Options or Stock Purchase Rights outstanding, and, in the case
of an individual who acquires Shares pursuant to the Plan, during the period
such individual owns such Shares, copies of annual financial statements. The
-11-
<PAGE>
Company shall not be required to provide such statements to key employees whose
duties in connection with the Company assure their access to equivalent
information.
-12-
<PAGE>
BAMBOO.COM, INC.
1998 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the 1998 Employee,
Director and Consultant Stock Plan shall have the same defined meanings in this
Stock Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
----------------------------
[Name]
The undersigned Optionee has been granted an Option to purchase Common
Stock of the Company, subject to the terms and conditions of the Plan and this
Option Agreement, as follows:
Grant Number
Date of Grant
Vesting Commencement Date
Exercise Price per Share $
Total Number of Shares Granted
Total Exercise Price $
Type of Option: ______ Incentive Stock Option
______ Nonstatutory Stock Option
Term/Expiration Date:
Vesting Schedule:
----------------
This Option shall be exercisable, in whole or in part, according to the
following vesting schedule:
[supply vesting schedule]
<PAGE>
Termination Period:
------------------
This Option shall be exercisable for sixty (60) days after Optionee ceases
to be a Service Provider. Upon Optionee's death or Disability, this Option may
be exercised for one (1) year after Optionee ceases to be a Service Provider. In
no event may Optionee exercise this Option after the Term/Expiration Date as
provided above.
II. AGREEMENT
---------
1. Grant of Option. The Plan Administrator of the Company hereby grants
---------------
to the Optionee named in the Notice of Grant (the "Optionee"), an option (the
"Option") to purchase the number of Shares set forth in the Notice of Grant, at
the exercise price per Share set forth in the Notice of Grant (the "Exercise
Price"), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 14(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option ("ISO"),
this Option is intended to qualify as an Incentive Stock Option as defined in
Section 422 of the Code. Nevertheless, to the extent that it exceeds the
$100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option ("NSO").
2. Exercise of Option.
------------------
(a) Right to Exercise. This Option shall be exercisable during its
-----------------
term in accordance with the Vesting Schedule set out in the Notice of Grant and
with the applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option shall be exercisable by delivery
------------------
of an exercise notice in the form attached as Exhibit A (the "Exercise Notice")
---------
which shall state the election to exercise the Option, the number of Shares with
respect to which the Option is being exercised, and such other representations
and agreements as may be required by the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by the aggregate Exercise
Price.
No Shares shall be issued pursuant to the exercise of an Option unless
such issuance and such exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Shares shall be considered transferred
to the Optionee on the date on which the Option is exercised with respect to
such Shares.
3. Optionee's Representations. In the event the Shares have not been
--------------------------
registered under the Securities Act of 1933, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company, concurrently with
the exercise of all or any portion of this Option, deliver
2
<PAGE>
to the Company his or her Investment Representation Statement in the form
attached hereto as Exhibit B.
---------
4. Lock-Up Period. Optionee hereby agrees that, if so requested by the
--------------
Company or any representative of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee shall not sell or otherwise transfer
any Shares or other securities of the Company during the 180-day period (or such
other period as may be requested in writing by the Managing Underwriter and
agreed to in writing by the Company) (the "Market Standoff Period") following
the effective date of a registration statement of the Company filed under the
Securities Act. Such restriction shall apply only to the first registration
statement of the Company to become effective under the Securities Act that
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.
5. Method of Payment. Payment of the aggregate Exercise Price shall be by
-----------------
any of the following, or a combination thereof, at the election of the Optionee:
(a) cash or check;
(b) consideration received by the Company under a formal cashless
exercise program adopted by the Company in connection with the Plan; or
(c) surrender of other Shares which, (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.
6. Restrictions on Exercise. This Option may not be exercised until such
------------------------
time as the Plan has been approved by the shareholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any Applicable
Law.
7. Non-Transferability of Option. This Option may not be transferred in
-----------------------------
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
8. Term of Option. This Option may be exercised only within the term set
--------------
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
9. Tax Consequences. Set forth below is a brief summary as of the date of
----------------
this Option of some of the federal tax consequences of exercise of this Option
and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE
TAX LAWS AND
3
<PAGE>
REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of NSO. There may be a regular federal income tax
---------------
liability upon the exercise of an NSO. The Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price. If Optionee is an Employee or a former Employee, the
Company will be required to withhold from Optionee's compensation or collect
from Optionee and pay to the applicable taxing authorities an amount in cash
equal to a percentage of this compensation income at the time of exercise, and
may refuse to honor the exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of exercise.
(b) Exercise of ISO. If this Option qualifies as an ISO, there will
---------------
be no regular federal income tax liability upon the exercise of the Option,
although the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may subject the Optionee to
the alternative minimum tax in the year of exercise.
(c) Disposition of Shares. In the case of an NSO, if Shares are held
---------------------
for at least one year, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal income tax purposes. In the case
of an ISO, if Shares transferred pursuant to the Option are held for at least
one year after exercise and of at least two years after the Date of Grant, any
gain realized on disposition of the Shares will also be treated as long-term
capital gain for federal income tax purposes. If Shares purchased under an ISO
are disposed of within one year after exercise or two years after the Date of
Grant, any gain realized on such disposition will be treated as compensation
income (taxable at ordinary income rates) to the extent of the difference
between the Exercise Price and the lesser of (1) the Fair Market Value of the
Shares on the date of exercise, or (2) the sale price of the Shares. Any
additional gain will be taxed as capital gain, short-term or long-term depending
on the period that the ISO Shares were held.
(d) Notice of Disqualifying Disposition of ISO Shares. If the
-------------------------------------------------
Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after the date of exercise, the Optionee shall immediately notify the
Company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.
10. Entire Agreement; Governing Law. The Plan is incorporated herein by
-------------------------------
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws but not
the choice of law rules of California.
4
<PAGE>
11. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES
---------------------------------
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH
THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option. Optionee
further agrees to notify the Company upon any change in the residence address
indicated below.
OPTIONEE BAMBOO.COM, INC.
___________________________ ________________________________________
Signature By
___________________________ ________________________________________
Print Name Title
___________________________
___________________________
Residence Address
5
<PAGE>
EXHIBIT A
---------
1998 STOCK PLAN
EXERCISE NOTICE
BAMBOO.COM, INC.
124 University Avenue
Palo Alto, California 94301
Attention:
1. Exercise of Option. Effective as of today, ___________, 19__, the
------------------
undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
_________ shares of the Common Stock (the "Shares") of bamboo.com, Inc. (the
"Company") under and pursuant to the 1998 Stock Plan (the "Plan") and the Stock
Option Agreement dated __________ (the "Option Agreement").
2. Delivery of Payment. Purchaser herewith delivers to the Company the
-------------------
full purchase price of the Shares, as set forth in the Option Agreement.
3. Representations of Optionee. Optionee acknowledges that Optionee has
---------------------------
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance of the Shares (as evidenced
---------------------
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Shares shall be issued to the
Optionee as soon as practicable after the Option is exercised. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date of issuance except as provided in Section 12 of the Plan.
5. Company's Right of First Refusal. Before any Shares held by Optionee
--------------------------------
or any transferee (either being sometimes referred to herein as the "Holder")
may be sold or otherwise transferred (including transfer by gift or operation of
law), the Company or its assignee(s) shall have a right of first refusal to
purchase the Shares on the terms and conditions set forth in this Section (the
"Right of First Refusal").
(a) Notice of Proposed Transfer. The Holder of the Shares shall
---------------------------
deliver to the Company a written notice (the "Notice") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration for which the Holder proposes to
transfer the Shares (the "Offered Price"), and the Holder shall offer the Shares
at the Offered Price to the Company or its assignee(s).
<PAGE>
(b) Exercise of Right of First Refusal. At any time within thirty
----------------------------------
(30) days after receipt of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the Holder, elect to purchase all, but not less than
all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection (c)
below.
(c) Purchase Price. The purchase price ("Purchase Price") for the
--------------
Shares purchased by the Company or its assignee(s) under this Section shall be
the Offered Price. If the Offered Price includes consideration other than cash,
the cash equivalent value of the non-cash consideration shall be determined by
the Board of Directors of the Company in good faith.
(d) Payment. Payment of the Purchase Price shall be made, at the
-------
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within 30 days after receipt of the Notice or in the manner
and at the times set forth in the Notice.
(e) Holder's Right to Transfer. If all of the Shares proposed in the
--------------------------
Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section, then the Holder may
sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within 120 days after the date of the Notice, that any such sale or
other transfer is effected in accordance with any applicable securities laws and
that the Proposed Transferee agrees in writing that the provisions of this
Section shall continue to apply to the Shares in the hands of such Proposed
Transferee. If the Shares described in the Notice are not transferred to the
Proposed Transferee within such period, a new Notice shall be given to the
Company, and the Company and/or its assignees shall again be offered the Right
of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.
(f) Exception for Certain Family Transfers. Anything to the contrary
--------------------------------------
contained in this Section notwithstanding, the transfer of any or all of the
Shares during the Optionee's lifetime or on the Optionee's death by will or
intestacy to the Optionee's immediate family or a trust for the benefit of the
Optionee's immediate family shall be exempt from the provisions of this Section.
"Immediate Family" as used herein shall mean spouse, lineal descendant or
antecedent, father, mother, brother or sister. In such case, the transferee or
other recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section.
(g) Termination of Right of First Refusal. The Right of First Refusal
-------------------------------------
shall terminate as to any Shares upon the first sale of Common Stock of the
Company to the general public pursuant to a registration statement filed with
and declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended.
<PAGE>
6. Tax Consultation. Optionee understands that Optionee may suffer
----------------
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
7. Restrictive Legends and Stop-Transfer Orders.
--------------------------------------------
(a) Legends. Optionee understands and agrees that the Company shall
-------
cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any other legends that may be required by the Company or by state or
federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COMPANY
COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE
ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE
BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A
COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE
BINDING ON TRANSFEREES OF THESE SHARES.
(b) Stop-Transfer Notices. Optionee agrees that, in order to ensure
---------------------
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to
-------------------
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Exercise Notice or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.
3
<PAGE>
8. Successors and Assigns. The Company may assign any of its rights under
----------------------
this Exercise Notice to single or multiple assignees, and this Exercise Notice
shall inure to the benefit of the successors and assigns of the Company. Subject
to the restrictions on transfer herein set forth, this Exercise Notice shall be
binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns.
9. Interpretation. Any dispute regarding the interpretation of this
--------------
Exercise Notice shall be submitted by Optionee or by the Company forthwith to
the Administrator which shall review such dispute at its next regular meeting.
The resolution of such a dispute by the Administrator shall be final and binding
on all parties.
10. Governing Law; Severability. This Exercise Notice is governed by the
---------------------------
internal substantive laws but not the choice of law rules, of California. The
invalidity or unenforceability of any provision or term of this Exercise Notice
shall not affect the validity or enforceability of any other provision or term
of this Exercise Notice.
11. Entire Agreement. The Plan and Option Agreement are incorporated
----------------
herein by reference. This Exercise Notice, the Plan, the Option Agreement and
the Investment Representation Statement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee.
Submitted by: Accepted by:
OPTIONEE BAMBOO.COM, INC.
____________________________ ________________________________________
Signature By
____________________________ ________________________________________
Print Name Title
Address: Address:
- ------- -------
____________________________ 124 University Avenue
____________________________ Palo Alto, California 94301
________________________________________
Date Received
4
<PAGE>
EXHIBIT B
---------
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE:
COMPANY: BAMBOO.COM, INC.
SECURITY: COMMON STOCK
AMOUNT:
DATE:
In connection with the purchase of the above-listed Securities, the
undersigned Optionee represents to the Company the following:
(a) Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. Optionee is
acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
(b) Optionee acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Optionee's
investment intent as expressed herein. In this connection, Optionee understands
that, in the view of the Securities and Exchange Commission, the statutory basis
for such exemption may be unavailable if Optionee's representation was
predicated solely upon a present intention to hold these Securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities, or
for a period of one year or any other fixed period in the future. Optionee
further understands that the Securities must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available. Optionee further acknowledges and understands that
the Company is under no obligation to register the Securities. Optionee
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company, and any other legend required under applicable
state securities laws.
(c) Optionee is familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited public
resale of "restricted securities" acquired, directly or indirectly from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the
time of the grant of the Option to the Optionee, the exercise will be exempt
from registration under the Securities Act. In the event the Company becomes
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any
market stand-off agreement may require) the Securities exempt under Rule 701 may
be resold, subject to the satisfaction of certain of the conditions specified by
Rule 144, including: (1) the resale being made through a broker in an
unsolicited
<PAGE>
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934); and, in the case of
an affiliate, (2) the availability of certain public information about the
Company, (3) the amount of Securities being sold during any three month period
not exceeding the limitations specified in Rule 144(e), and (4) the timely
filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the time
of grant of the Option, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires the resale
to occur not less than one year after the later of the date the Securities were
sold by the Company or the date the Securities were sold by an affiliate of the
Company, within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the
Securities less than two years, the satisfaction of the conditions set forth in
sections (1), (2), (3) and (4) of the paragraph immediately above.
(d) Optionee further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.
Signature of Optionee:
____________________________________________
Date:___________________________, __________
2
<PAGE>
EXHIBIT 10.3
BAMBOO.COM, INC.
AMENDED AND RESTATED 1998 EMPLOYEE, DIRECTOR AND CONSULTANT
STOCK PLAN
1. Purposes of the Plan. The purposes of this Amended and Restated 1998
--------------------
Employee, Director and Consultant Stock Plan are:
. to attract and retain the best available personnel for positions
of substantial responsibility,
. to provide additional incentive to Employees, Directors and
Consultants, and
. to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of its Committees as shall
-------------
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
---------------
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
-----
(d) "Code" means the Internal Revenue Code of 1986, as amended.
----
(e) "Committee" means a committee of Directors appointed by the Board
---------
in accordance with Section 4 of the Plan.
(f) "Common Stock" means the common stock of the Company.
------------
(g) "Company" means Bamboo.com, Inc., a Delaware corporation.
-------
(h) "Consultant" means any person, including an advisor, engaged by
----------
the Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
--------
<PAGE>
(j) "Disability" means total and permanent disability as defined in
----------
Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(m) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as
----------------------
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(o) "Nonstatutory Stock Option" means an Option not intended to
-------------------------
qualify as an Incentive Stock Option.
(p) "Notice of Grant" means a written or electronic notice evidencing
---------------
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.
-2-
<PAGE>
(q) "Officer" means a person who is an officer of the Company within
-------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(r) "Option" means a stock option granted pursuant to the Plan.
------
(s) "Option Agreement" means an agreement between the Company and an
----------------
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.
(t) "Option Exchange Program" means a program whereby outstanding
-----------------------
Options are surrendered in exchange for Options with a lower exercise price.
(u) "Optioned Stock" means the Common Stock subject to an Option or
--------------
Stock Purchase Right.
(v) "Optionee" means the holder of an outstanding Option or Stock
--------
Purchase Right granted under the Plan.
(w) "Parent" means a "parent corporation," whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(x) "Plan" means this Amended and Restated 1998 Employee, Director
----
and Consultant Stock Plan.
(y) "Restricted Stock" means shares of Common Stock acquired pursuant
----------------
to a grant of Stock Purchase Rights under Section 11 of the Plan.
(z) "Restricted Stock Purchase Agreement" means a written agreement
-----------------------------------
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.
(aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
----------
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(bb) "Section 16(b) " means Section 16(b) of the Exchange Act.
-------------
(cc) "Service Provider" means an Employee, Director or Consultant.
----------------
(dd) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 13 of the Plan.
(ee) "Stock Purchase Right" means the right to purchase Common Stock
--------------------
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
(ff) "Subsidiary" means a "subsidiary corporation", whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
-3-
<PAGE>
3. Stock Subject to the Plan. Subject to the provisions of Section 14 of
-------------------------
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is [_________] Shares, plus an annual increase to be added on the
first day of the Company's fiscal year beginning in [2000] equal to the lesser
of (i) [__________] shares, (ii) [___]% of the outstanding shares on such date
or (iii) a lesser amount determined by the Board. The Shares may be authorized,
but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
--------
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.
4. Administration of the Plan.
--------------------------
(a) Procedure.
---------
(i) Multiple Administrative Bodies. The Plan may be
------------------------------
administered by different Committees with respect to different groups of Service
Providers.
(ii) Section 162(m). To the extent that the Administrator
--------------
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
----------
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.
(iv) Other Administration. Other than as provided above, the
--------------------
Plan shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;
(iii) to determine the number of shares of Common Stock to be
covered by each Option and Stock Purchase Right granted hereunder;
-4-
<PAGE>
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Options or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Option or Stock Purchase Right or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;
(vi) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase Right was granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(x) to modify or amend each Option or Stock Purchase Right
(subject to Section 15(c) of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;
(xi) to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The Fair Market
Value of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined. All elections by an Optionee
to have Shares withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or advisable;
(xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;
(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
----------------------------------
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.
-5-
<PAGE>
5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may
-----------
be granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
6. Limitations.
-----------
(a) Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options:
(i) No Service Provider shall be granted, in any fiscal year of
the Company, Options to purchase more than [_________________] Shares.
(ii) In connection with his or her initial service, a Service
Provider may be granted Options to purchase up to an additional
[_________________] Shares which shall not count against the limit set forth in
subsection (i) above.
(iii) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 13.
(iv) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall become
------------
effective upon its adoption by the Board. It shall continue in effect for a term
of ten (10) years unless terminated earlier under Section 15 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
--------------
Agreement. In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock
-6-
<PAGE>
Option shall be five (5) years from the date of grant or such shorter term as
may be provided in the Option Agreement.
9. Option Exercise Price and Consideration.
---------------------------------------
(a) Exercise Price. The per share exercise price for the Shares to be
--------------
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price of less than 100% of the Fair Market Value per Share
on the date of grant pursuant to a merger or other corporate transaction.
(b) Waiting Period and Exercise Dates. At the time an Option is
---------------------------------
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before the
Option may be exercised.
(c) Form of Consideration. The Administrator shall determine the
---------------------
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and
-7-
<PAGE>
(B) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be exercised;
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 13 of the Plan.
Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
-------------------------------------------------
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the
-8-
<PAGE>
Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
----------------------
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider,
-----------------
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy
-----------------
out for a payment in cash or Shares an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
11. Stock Purchase Rights.
---------------------
(a) Rights to Purchase. Stock Purchase Rights may be issued either
------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically, by means of a Notice of Grant, of the
terms, conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid, and
the time within which the offeree must accept such offer. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.
-9-
<PAGE>
(b) Repurchase Option. Unless the Administrator determines otherwise,
-----------------
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.
(c) Other Provisions. The Restricted Stock Purchase Agreement shall
----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
-----------------------
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.
12. Non-Transferability of Options and Stock Purchase Rights. Unless
--------------------------------------------------------
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.
13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
------------------------------------------------------------------
Asset Sale.
- ----------
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
-10-
<PAGE>
(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company
--------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
14. Date of Grant. The date of grant of an Option or Stock Purchase Right
-------------
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall
be provided to each Optionee within a reasonable time after the date of such
grant.
-11-
<PAGE>
15. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain shareholder
--------------------
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
16. Conditions Upon Issuance of Shares.
----------------------------------
(a) Legal Compliance. Shares shall not be issued pursuant to the
----------------
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an
--------------------------
Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.
17. Inability to Obtain Authority. The inability of the Company to obtain
-----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
18. Reservation of Shares. The Company, during the term of this Plan, will
---------------------
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
19. Shareholder Approval. The Plan shall be subject to approval by the
--------------------
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.
-12-
<PAGE>
EXHIBIT 10.4
BAMBOOBAMBOO.COM, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1999 Employee Stock Purchase
Plan of Bamboo.com, Inc..
1. Purpose. The purpose of the Plan is to provide employees of the
-------
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. Definitions.
-----------
(a) "Board" shall mean the Board of Directors of the Company.
-----
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
----
(c) "Common Stock" shall mean the common stock of the Company.
------------
(d) "Company" shall mean Bamboo.com, Inc. and any Designated
-------
Subsidiary of the Company.
(e) ["Compensation" shall mean all base straight time gross earnings
------------
and commissions, but exclusive of payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses and other compensation.]
(f) "Designated Subsidiary" shall mean any Subsidiary that has been
---------------------
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan.
(g) "Employee" shall mean any individual who is an Employee of the
--------
Company for tax purposes whose customary employment with the Company is at least
twenty (20) hours per week and more than five (5) months in any calendar year.
For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.
(h) "Enrollment Date" shall mean the first Trading Day of each
---------------
Offering Period.
(i) "Exercise Date" shall mean the last Trading Day of each Purchase
-------------
Period.
(j) "Fair Market Value" shall mean, as of any date, the value of
-----------------
Common Stock determined as follows:
<PAGE>
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the date of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock prior
to the date of determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board; or
(iv) For purposes of the Enrollment Date of the first Offering
Period under the Plan, the Fair Market Value shall be the initial price to the
public as set forth in the final prospectus included within the registration
statement in Form S-1 filed with the Securities and Exchange Commission for the
initial public offering of the Company's Common Stock (the "Registration
Statement").
(k) "Offering Periods" shall mean the periods of approximately
----------------
twenty-four (24) months during which an option granted pursuant to the Plan
may be exercised, commencing on the first Trading Day on or after
[_______________] and[_______________] of each year and terminating on the last
Trading Day in the periods ending twenty-four months later; provided, however,
that the first Offering Period under the Plan shall commence with the first
Trading Day on or after the date on which the Securities and Exchange Commission
declares the Company's Registration Statement effective and ending on the last
Trading Day on or before [ _____________ ]. The duration and timing of Offering
Periods may be changed pursuant to Section 4 of this Plan.
(l) "Plan" shall mean this 1999 Employee Stock Purchase Plan.
----
(m) "Purchase Period" shall mean the approximately six month period
---------------
commencing after one Exercise Date and ending with the next Exercise Date,
except that the first Purchase Period of any Offering Period shall commence on
the Enrollment Date and end with the next Exercise Date.
(n) "Purchase Price" shall mean 85% of the Fair Market Value of a
--------------
share of Common Stock on the Enrollment Date or on the Exercise Date, whichever
is lower; provided however, that the Purchase Price may be adjusted by the Board
pursuant to Section 20.
(o) "Reserves" shall mean the number of shares of Common Stock
--------
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.
-2-
<PAGE>
(p) "Subsidiary" shall mean a corporation, domestic or foreign, of
----------
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
(q) "Trading Day" shall mean a day on which national stock exchanges
-----------
and the Nasdaq System are open for trading.
3. Eligibility.
-----------
(a) Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the time such option
is granted) for each calendar year in which such option is outstanding at any
time.
4. Offering Periods. The Plan shall be implemented by consecutive,
----------------
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after [_______________] and [_______________] each year, or on
such other date as the Board shall determine, and continuing thereafter until
terminated in accordance with Section 20 hereof; provided, however, that the
first Offering Period under the Plan shall commence with the first Trading Day
on or after the date on which the Securities and Exchange Commission declares
the Company's Registration Statement effective and ending on the last Trading
Day on or before [ _____________ ]. The Board shall have the power to change
the duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without shareholder approval if such change is
announced [at least five (5) days] prior to the scheduled beginning of the first
Offering Period to be affected thereafter.
5. Participation.
-------------
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office prior
to the applicable Enrollment Date.
(b) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.
-3-
<PAGE>
6. Payroll Deductions.
------------------
(a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding 15% of the Compensation
which he or she receives on each pay day during the Offering Period.
(b) All payroll deductions made for a participant shall be credited
to his or her account under the Plan and shall be withheld in whole percentages
only. A participant may not make any additional payments into such account.
(c) A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may increase or decrease the rate of
his or her payroll deductions during the Offering Period by completing or filing
with the Company a new subscription agreement authorizing a change in payroll
deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to zero percent (0%) at any time during a
Purchase Period. Payroll deductions shall recommence at the rate provided in
such participant's subscription agreement at the beginning of the first Purchase
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each Offering Period, each
---------------
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than
10,000 shares of the Company's Common Stock (subject to any adjustment pursuant
to Section 19), and provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof. The Board may, for future
Offering Periods, increase or decrease, in its absolute discretion, the maximum
number of shares of
-4-
<PAGE>
the Company's Common Stock an Employee may purchase during each Purchase Period
of such Offering Period. Exercise of the option shall occur as provided in
Section 8 hereof, unless the participant has withdrawn pursuant to Section 10
hereof. The option shall expire on the last day of the Offering Period.
8. Exercise of Option.
------------------
(a) Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.
(b) If the Board determines that, on a given Exercise Date, the
number of shares with respect to which options are to be exercised may exceed
(i) the number of shares of Common Stock that were available for sale under the
Plan on the Enrollment Date of the applicable Offering Period, or (ii) the
number of shares available for sale under the Plan on such Exercise Date, the
Board may in its sole discretion (x) provide that the Company shall make a pro
rata allocation of the shares of Common Stock available for purchase on such
Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall
be practicable and as it shall determine in its sole discretion to be equitable
among all participants exercising options to purchase Common Stock on such
Exercise Date, and continue all Offering Periods then in effect, or (y) provide
that the Company shall make a pro rata allocation of the shares available for
purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform
a manner as shall be practicable and as it shall determine in its sole
discretion to be equitable among all participants exercising options to purchase
Common Stock on such Exercise Date, and terminate any or all Offering Periods
then in effect pursuant to Section 20 hereof. The Company may make pro rata
allocation of the shares available on the Enrollment Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares for issuance under the Plan by the Company's
shareholders subsequent to such Enrollment Date.
9. Delivery. As promptly as practicable after each Exercise Date on which
--------
a purchase of shares occurs, the Company shall arrange the delivery to each
participant, as appropriate, of a certificate representing the shares purchased
upon exercise of his or her option.
10. Withdrawal.
----------
(a) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company in
the form of Exhibit B to this Plan. All of the participant's payroll deductions
credited to his or her account shall be paid to such participant
-5-
<PAGE>
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period shall be automatically terminated, and no further payroll
deductions for the purchase of shares shall be made for such Offering Period. If
a participant withdraws from an Offering Period, payroll deductions shall not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.
(b) A participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.
11. Termination of Employment.
-------------------------
Upon a participant's ceasing to be an Employee, for any reason, he or
she shall be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participant's account during the Offering Period but
not yet used to exercise the option shall be returned to such participant or, in
the case of his or her death, to the person or persons entitled thereto under
Section 15 hereof, and such participant's option shall be automatically
terminated. The preceding sentence notwithstanding, a participant who receives
payment in lieu of notice of termination of employment shall be treated as
continuing to be an Employee for the participant's customary number of hours per
week of employment during the period in which the participant is subject to such
payment in lieu of notice.
12. Interest. No interest shall accrue on the payroll deductions of a
--------
participant in the Plan.
13. Stock.
-----
(a) Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of shares of the
Company's Common Stock which shall be made available for sale under the Plan
shall be [_____________ (____________)] shares, plus an annual increase to be
added on the first day of the Company's fiscal year beginning in [2000] equal to
the lesser of (i) [____] shares, (ii) [____%] of the outstanding shares on such
date or (iii) a lesser amount determined by the Board.
(b) The participant shall have no interest or voting right in shares
covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the participant and
his or her spouse.
14. Administration. The Plan shall be administered by the Board or a
--------------
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision
and determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.
-6-
<PAGE>
15. Designation of Beneficiary.
--------------------------
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to an Exercise Date
on which the option is exercised but prior to delivery to such participant of
such shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to exercise of the
option. If a participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
16. Transferability. Neither payroll deductions credited to a
---------------
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.
17. Use of Funds. All payroll deductions received or held by the Company
------------
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts shall be maintained for each participant
-------
in the Plan. Statements of account shall be given to participating Employees at
least annually, which statements shall set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.
19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
---------------------------------------------------------------------
Merger or Asset Sale.
- --------------------
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the Reserves, the maximum number of shares each
participant may purchase each Purchase Period (pursuant to Section 7), as well
as the price per share and the number of shares of Common Stock covered by each
option under the Plan which has not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of
-7-
<PAGE>
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.
(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.
(c) Merger or Asset Sale. In the event of a proposed sale of all or
--------------------
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, any Purchase Periods
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date") and any Offering Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.
20. Amendment or Termination.
------------------------
(a) The Board of Directors of the Company may at any time and for any
reason terminate or amend the Plan. Except as provided in Section 19 hereof, no
such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Offering Period or the Plan
is in the best interests of the Company and its shareholders. Except as
provided in Section 19 and this Section 20 hereof, no amendment may make any
change in any option theretofore granted which adversely affects the rights of
any participant. To the extent necessary to comply with Section 423 of the Code
(or any successor rule or provision or any other applicable law, regulation or
stock exchange rule), the Company shall obtain shareholder approval in such a
manner and to such a degree as required.
(b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount
-8-
<PAGE>
withheld during an Offering Period, establish the exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a participant in order to
adjust for delays or mistakes in the Company's processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied toward
the purchase of Common Stock for each participant properly correspond with
amounts withheld from the participant's Compensation, and establish such other
limitations or procedures as the Board (or its committee) determines in its sole
discretion advisable which are consistent with the Plan.
(c) In the event the Board determines that the ongoing operation of
the Plan may result in unfavorable financial accounting consequences, the Board
may, in its discretion and, to the extent necessary or desirable, modify or
amend the Plan to reduce or eliminate such accounting consequence including, but
not limited to:
(i) altering the Purchase Price for any Offering Period
including an Offering Period underway at the time of the change in Purchase
Price;
(ii) shortening any Offering Period so that Offering Period ends
on a new Exercise Date, including an Offering Period underway at the time of the
Board action; and
(iii) allocating shares.
Such modifications or amendments shall not require stockholder
approval or the consent of any Plan participants.
21. Notices. All notices or other communications by a participant to the
-------
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
----------------------------------
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
23. Term of Plan. The Plan shall become effective upon the earlier to
------------
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 20 hereof.
-9-
<PAGE>
24. Automatic Transfer to Low Price Offering Period. To the extent
-----------------------------------------------
permitted by any applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.
-10-
<PAGE>
EXHIBIT A
---------
Bamboo.com, Inc.
1999 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
____ Original Application Enrollment Date: _____
____ Change in Payroll Deduction Rate
____ Change of Beneficiary(ies)
1. ____________________ hereby elects to participate in the Bamboo.com, Inc.
1999 Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") and
subscribes to purchase shares of the Company's Common Stock in accordance
with this Subscription Agreement and the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount of
____% of my Compensation on each payday (from 0 to _____%) during the
Offering Period in accordance with the Employee Stock Purchase Plan.
(Please note that no fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions will be used to automatically exercise my
option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I
understand that my participation in the Employee Stock Purchase Plan is in
all respects subject to the terms of the Plan. I understand that my
ability to exercise the option under this Subscription Agreement is subject
to shareholder approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and Spouse only).
6. I understand that if I dispose of any shares received by me pursuant to the
Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares) or one year after the
Exercise Date, I will be treated for federal income tax purposes as having
received ordinary income at the time of such disposition in an amount equal
to the excess of the fair market value of the shares at the time such
shares were purchased by me over the price which I paid for the shares. I
-
hereby agree to notify the Company in writing within 30 days after the date
---------------------------------------------------------------------------
of any disposition of my shares and I will make adequate provision for
----------------------------------------------------------------------
Federal, state or other tax withholding obligations, if any, which arise
------------------------------------------------------------------------
upon the
--------
<PAGE>
disposition of the Common Stock. The Company may, but will not be obligated
-------------------------------
to, withhold from my compensation the amount necessary to meet any
applicable withholding obligation including any withholding necessary to
make available to the Company any tax deductions or benefits attributable
to sale or early disposition of Common Stock by me. If I dispose of such
shares at any time after the expiration of the 2-year and 1-year holding
periods, I understand that I will be treated for federal income tax
purposes as having received income only at the time of such disposition,
and that such income will be taxed as ordinary income only to the extent of
an amount equal to the lesser of (1) the excess of the fair market value of
the shares at the time of such disposition over the purchase price which I
paid for the shares, or (2) 15% of the fair market value of the shares on
the first day of the Offering Period. The remainder of the gain, if any,
recognized on such disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent upon
my eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan:
NAME: (Please print)_____________________________________________________
(First) (Middle) (Last)
_________________________ _____________________________________________
Relationship
_____________________________________________
(Address)
-2-
<PAGE>
Employee's Social
Security Number:
Employee's Address: ____________________________________
____________________________________
____________________________________
____________________________________
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated:________________________ _____________________________________________
Signature of Employee
_____________________________________________
Spouse's Signature (If beneficiary other than
spouse)
-3-
<PAGE>
EXHIBIT B
---------
Bamboo.com, Inc.
1999 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Bamboo.com, Inc. 1999
Employee Stock Purchase Plan which began on ____________, ______ (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically terminated. The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.
Name and Address of Participant:
________________________________
________________________________
________________________________
Signature:
________________________________
Date:____________________________
<PAGE>
Exhibit 10.5
EXHIBIT D
---------
INVESTORS' RIGHTS AGREEMENT
This Investors' Rights Agreement (the "AGREEMENT") is made as of March, 12
1999 by and among Jutvision Corporation, a Delaware corporation (the "COMPANY")
and the persons and entities listed on Schedule A attached hereto.
RECITALS
--------
WHEREAS, simultaneously herewith, the Company is entering into a Series B
Preferred Stock Purchase Agreement (the "PURCHASE AGREEMENT") and issuing shares
of its Series B Preferred Stock to the Investors named in Exhibit A to the
Purchase Agreement;
NOW, THEREFORE, it is hereby agreed as follows:
1. Certain Definitions. As used in this Agreement, the following terms
-------------------
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Conversion Stock" shall mean the Shares and the shares of Common Stock
issued or issuable upon conversion of the Shares.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Holder" shall mean the holders of Registrable Securities, securities
convertible into Registrable Securities and any person holding such securities
to whom the rights under this Agreement have been transferred in accordance with
Section 2.13 hereof.
"Investors" shall mean the Investors of the Company's Series B Preferred
Stock pursuant to the Purchase Agreement.
"Registrable Securities" means (i) the Conversion Stock and (ii) any Common
Stock of the Company issued or issuable with respect to, or in exchange for or
in replacement of the Conversion Stock or other securities convertible into or
exercisable for Conversion Stock upon any stock split, stock dividend,
recapitalization, or similar event, provided, however, that shares of Common
-------- -------
Stock shall only be treated as Registrable Securities if and so long as they
have not been sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction or sold in a transaction exempt
from the registration and prospectus delivery requirements of the Securities Act
under Section 4(1) thereof so that all transfer restrictions and restrictive
legends with respect thereto, if any, are removed upon the consummation of such
sale.
<PAGE>
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, except Selling Expense
(defined below), incurred by the Company in complying with Sections 2.5, 2.6 and
2.7 hereof, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and disbursements of counsel
for the Company and expenses up to $20,000 of one (1) special counsel to the
selling Holders, blue sky fees and expenses, the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company).
"Restricted Securities" shall mean the securities of the Company required
to bear the legend set forth in Section 2.2 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute and the roles and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions, fees and disbursements of counsel to the selling Holder in excess
of $20,000 and stock transfer taxes applicable to the securities registered by
the Holders.
"Series B Investors" shall mean Investors of the Series B Preferred Stock
pursuant to the Purchase Agreement.
"Shares" shall mean the shares of the Company's Series B Preferred Stock
issued pursuant to the Purchase Agreement.
2. Restrictions on Transfer of Securities; Compliance with Securities
------------------------------------------------------------------
Act; Registration Rights.
- ------------------------
2.1 Restrictions on Transfer. The Shares and the Conversion Stock
------------------------
shall not be sold, assigned, transferred or pledged except upon the conditions
specified in this Section 2, which conditions are intended to ensure compliance
with the provisions of the Securities Act. The Investors will cause any proposed
Investor, assignee, transferee, or pledgee of the Shares or the Conversion Stock
held by the Investors to agree to take and hold such securities subject to the
provisions and upon the conditions specified in this Section 2.
2.2 Restrictive Legend. Each certificate representing (i) the Shares,
------------------
(ii) the Conversion Stock or (iii) any other securities issued in respect of the
Shares or the Conversion Stock upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, shall (unless
otherwise permitted by the provisions of Section 2.3 below) be stamped or
otherwise imprinted with a legend in the following form (in addition to any
legend required under applicable state securities laws):
-2-
<PAGE>
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID
ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE
SHARES AND RESTRICTING THEIR TRANSFER MAYBE OBTAINED A T NO
COST BY WRITTEN REQUEST MADE B Y THE HOLDER OF RECORD OF
THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION A T THE
PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.
The Investors and Holders consent to the Company making a notation on
its records and giving instructions to any transfer agent of the Shares or the
Conversion Stock in order to implement the restrictions on transfer established
in this Section 2.
2.3 Notice of Proposed Transfers. The holder of each certificate
----------------------------
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 2.3. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities (other than (i) a
transfer not involving a change in beneficial ownership, or (ii) in transactions
involving the distribution without consideration of Restricted Securities by any
Holder to any of its members, partners, or retired partners or members, or to
the estate of any of its members, partners or retired partners or members, (iii)
a transfer to an affiliated fund, partnership Or company, which is not a
competitor of the Company, subject to compliance with applicable securities
laws, or (iv) transfers in compliance with Rule 144(k), so long as the Company
is furnished with satisfactory evidence of compliance with such Rule), unless
there is in effect a registration statement under the Securities Act covering
the proposed transfer, the holder thereof shall give written notice to the
Company of such holder's intention to effect such transfer, sale, assignment or
pledge. Each such notice shall describe the manner and circumstances of the
proposed transfer, sale, assignment or pledge in sufficient detail, and, if
requested by the Company, shall be accompanied, at such holder's expense, by
either (i) a written opinion of legal counsel who shall, and whose legal opinion
shall be, reasonably satisfactory to the Company addressed to the Company, to
the effect that the proposed transfer of the Restricted Securities may be
effected without registration under the Securities Act, or (ii) a "no action"
letter from the Commission to the effect that the transfer of such securities
without registration will not result in a recommendation by the staff of the
Commission that action be taken with respect thereto, whereupon the holder of
such Restricted Securities shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered by the holder to
the Company. Each certificate evidencing the Restricted Securities transferred
as above provided shall bear, the appropriate restrictive legend set forth in
Section 2.2 above, except that such certificate shall not bear such restrictive
legend if in the opinion of counsel
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<PAGE>
for such holder and in the reasonable opinion of the Company such legend is not
required in order to establish compliance with any provision of the Securities
Act.
2.4 Removal of Restrictions on Transfer of Securities. Any legend
-------------------------------------------------
referred to in Section 2.2 hereof stamped on a certificate evidencing the
Restricted Securities and the stock transfer instructions and record notations
with respect to such Restricted Security shall be removed and the Company shall
issue a certificate without such legend to the holder of such Restricted
Security if such security is registered under the Securities Act, or if such
holder provides the Company with an opinion of counsel (which may be counsel for
the Company) reasonably acceptable to the Company to the effect that a public
sale or transfer of such security may be made without registration under the
Securities Act or such holder provides the Company with reasonable assurances,
which may, at the option of the Company, include an opinion of counsel
satisfactory to the Company, that such security can be sold pursuant to Section
(k) of Rule 144 under the Securities Act.
2.5 Requested Registration.
----------------------
(a) Request for Registration. If the Company shall receive at
------------------------
any time after the earlier of (i) February 28, 2003 or (ii) six (6) months after
the effective date of the first registration statement filed by the Company
covering an underwritten offering of any of its securities to the general
public; a written request from the Holders of at least 60% of the Registrable
Securities that the Company effect any registration, qualification or compliance
with respect to at least 30% of the Registrable Securities, or any lesser number
of shares of Registrable Securities if the anticipated aggregate offering price
exceeds $10,000,000, the Company will:
(i) within ten days of the receipt by the Company of such
notice, give written notice of the proposed registration, qualification or
compliance to all other Holders; and
(ii) as soon as practicable, use its best efforts to effect
such registration, qualification or compliance (including, without limitation,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or regulations) as may be
so requested and as would permit or facilitate the sale and distribution of all
or such portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request received
by the Company within 20 days after receipt of such written notice from the
Company.
Notwithstanding the foregoing, the Company shall not be obligated to take
any action to effect any such registration, qualification or compliance pursuant
to this Section 2.5:
(A) In any particular jurisdiction in which the Company
would be required to qualify as a foreign corporation, subject itself to
taxation in that jurisdiction or execute a general consent to service of process
in effecting such registration, qualification or compliance unless the Company
is already subject to service in such jurisdiction and except as may be required
by the Securities Act;
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<PAGE>
(B) During the period starting with the date sixty (60)
days prior to the Company's estimated date of filing of, and ending on the date
six (6) months immediately following the effective date of, any registration
statement pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction, with respect to an employee benefit plan
or with respect to the Company's first registered public offering of its stock),
provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective;
(C) After the Company has effected two (2) such
registrations pursuant to this Section 2.5(a) covering all shares requested to
be registered by the Holders initiating or joining such request, and such
registrations have been declared or ordered effective; or
(D) If the Company shall furnish to such Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company or its stockholders for a registration statement to be filed in the
near future, then the Company's obligation to use its best efforts to register,
qualify or comply under this Section 2.5 shall be deferred for a period not to
exceed 90 days from the date of receipt of written request from the Holders;
provided, however, that the Company shall not exercise such right more than once
- -------- -------
in any twelve-month period.
Subject to the foregoing clauses (A) through (D), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable, after receipt of the request or requests of
the Holders.
(b) Underwriting. In the event that a registration pursuant to Section
------------
2.5 is for a registered public offering involving an underwriting, the Company
shall so advise the Holders as part of the notice given pursuant to Section
2.5(a)(i). In such event, the right of any Holder to registration pursuant to
Section 2.5 shall be conditioned upon such Holder's participation in the
underwriting arrangements required by this Section 2.5, and the inclusion of
such Holder's Registrable Securities in the underwriting to the extent requested
shall be limited to the extent provided herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter of recognized national standing
selected for such underwriting by the Company and reasonably acceptable to a
majority of the Holders proposing to distribute their securities through such
underwriting. Notwithstanding any other provision of this Section 2.5, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may limit the
Registrable Securities and other securities to be distributed through such
underwriting. The Company shall so advise all Holders distributing their
securities through such underwriting of such limitation and the number of shares
of Registrable Securities that may be included in the registration (and
underwriting if any) shall be allocated among all Holders in proportion, as
nearly as practicable, to the respective amounts of
-5-
<PAGE>
Registrable Securities requested by such Holders to be included in such
Registration Statement. No Registrable Securities excluded from the underwriting
by reason of the underwriter's marketing limitation shall be included in such
registration. To facilitate the allocation of shares in accordance with the
above provisions, the Company may round the number of shares allocated to any
Holder or Holders to the nearest 100 shares. In no event shall the number of
Registrable Shares underwritten in an offering be limited unless and until all
shares held by persons other than the holders of the Registrable Shares and the
Company are completely excluded from such offering.
If any Holder of Registrable Securities disapproves of the terms of
the underwriting, such Holder may elect to withdraw therefrom by written notice
to the Company, the managing underwriter and the Holders. The Registrable
Securities and/or other securities so withdrawn shall also be withdrawn from
registration, and such Registrable Securities shall not be transferred in a
public distribution prior to 180 days after the effective date of such
registration, or such other shorter period of time as the underwriters may
require.
2.6 Company Registration.
--------------------
(a) Notice of Registration. If at any time or from time to time
----------------------
the Company shall determine to register any of its securities, either for its
own account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans, (ii) a registration
relating solely to a Rule 145 transaction, or (iii) a registration pursuant to
Section 2.5 hereof, the Company will:
(i) promptly give to each Holder written notice thereof;
and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 20 days after receipt of such written notice from the
Company, by any Holder.
(b) Underwriting. If the registration of which the Company gives
------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.6(a)(i). In such event the right of any Holder to
registration pursuant to Section 2.6 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein.
All Holders proposing to distribute their securities through such
underwriting shall (together with the Company) enter into an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
2.6, if the managing underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the managing underwriter
may limit the Registrable Securities and other securities to be distributed
through such underwriting; provided, however, that except in connection with the
-------- -------
Company's initial underwritten public offering of Common Stock (where
Registrable Securities may be entirely excluded), the number of Registrable
-6-
<PAGE>
Securities shall not be limited to less than 20% of the aggregate number of
shares proposed to be included in such underwriting. The Company shall so advise
all Holders distributing their securities through such underwriting of such
limitation and the number of shares of Registrable Securities that may be
included in the registration (and underwriting if any) shall be allocated among
all Holders in proportion, as nearly as practicable, to the respective amounts
of Registrable Securities requested by such Holders to be included in such
Registration Statement. No Registrable Securities excluded from the underwriting
by reason of the underwriter's marketing limitation shall be included in such
registration. To facilitate the allocation of shares in accordance with the
above provisions, the Company may round the number of shares allocated to any
Holder or Holders to the nearest 100 shares. In no event shall the number of
Registrable Shares underwritten in an offering be limited unless and until all
shares held by persons other than the holders of the Registrable Shares and the
Company are completely excluded from such offering.
If any Holder or Holders disapprove of the terms of any such
underwriting, such Holder or Holders may elect to withdraw therefrom by written
notice to the Company and the managing underwriter. Any securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration, and
shall not be transferred in a public distribution prior to 180 days after the
effective date of the registration statement relating thereto, or such other
shorter period of time as the underwriters may require.
(c) Right to Terminate Registration. The Company shall have the
-------------------------------
right to terminate or withdraw any registration initiated by it under this
Section 2.6 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.8 hereof.
2.7 Registration on Form S-3.
------------------------
(a) If any Holder or Holders request in writing that the Company
file a registration statement on Form S-3 (or any successor form to Form S-3),
or any similar short-form registration statement, for a public offering of
Registrable Securities, the reasonably anticipated aggregate price to the public
of which, net of underwriting discounts and commissions (if any), would exceed
$1,000,000 and the Company is a registrant entitled to use Form S-3 to register
the Registrable Securities for such an offering, the Company shall use its best
efforts to cause such Registrable Securities to be registered on such form for
the offering and to cause such Registrable Securities to be qualified in such
jurisdictions as the Holder or Holders may reasonably request; provided,
--------
however, that the Company shall not be required to effect more than one such
- -------
registration in any twelve (12) month period. The provisions of Section 2.5(b)
shall be applicable to each registration initiated under this Section 2.7.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 2.7: (i) in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration, qualification or
compliance unless the Company is already subject to service in such jurisdiction
and
-7-
<PAGE>
except as may be required by the Securities Act; (ii) if the Company, within ten
(10) days of the receipt of the request of the initiating Holders, gives notice
of its bona fide intention to effect the filing of a registration statement with
the Commission within sixty (60) days of receipt of such request (other than
with respect to a registration statement relating to a Rule 145 transaction, or
an offering solely to employees); (iii) during the period starting with the date
sixty (60) days prior to the Company's estimated date of filing of, and ending
on the date six (6) months immediately following, the effective date of any
registration statement pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided that the Company is actively employing in good
faith all reasonable efforts to cause such registration statement to become
effective; or (iv) if the Company shall furnish to such Holder a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors it would be seriously detrimental to the Company or
its stockholders for registration statements to be filed in the near future,
then the Company's obligation to use its best efforts to file a registration
statement shall be deferred for a period not to exceed 90 days from the receipt
of the request to file such registration by such Holder; provided, however, that
-------- -------
the Company shall not exercise such right more than once in any twelve-month
period.
2.8 Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with registrations pursuant to Sections 2.5, 2.6 and 2.7 shall be
borne by the Company. All Selling Expenses relating to securities registered on
behalf of the Holders shall be borne by the holders of securities included in
such registration pro rata among each other on the basis of the number of shares
so registered; provided, however, that the Company shall not be required to pay
-------- -------
for any expenses of any registration proceeding begun pursuant to Section 2.5 if
the registration request is subsequently withdrawn at the request of the Holders
of a majority of the Registrable Securities to be registered (in which case all
participating Holders shall bear such expenses); provided further, however, that
if at the time of such withdrawal, the Holders have learned of a material
adverse change in the condition, business, or prospects of the Company which did
not exist at the time of their request, then the Holders shall not be required
to pay any of such expenses and shall retain their rights pursuant to Section
2.5, if applicable.
2.9 Registration Procedures. In the case of each registration,
-----------------------
qualification or compliance effected by the Company pursuant to this Section 2,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:
(a) Prepare and file with the Commission a registration
statement with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for thirty (30) days or
less if the distribution described in the Registration Statement has been
completed;
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
-8-
<PAGE>
(c) Furnish to the Holders participating in such registration
and to the underwriters of the securities being registered such reasonable
number of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents as such underwriters may reasonably request
in order to facilitate the public offering of such securities.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in connection with an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and if permitted
by applicable accounting standards, to the Holders requesting registration of
Registrable Securities.
2.10 Indemnification.
---------------
(a) The Company will indemnify each Holder, each of its officers,
directors and partners, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Section 2, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all expenses, claims,
-9-
<PAGE>
losses, damages or liabilities (or actions in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto, incident to
any such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any violation by the Company of the
Securities Act or any role or regulation promulgated under the Securities Act
applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse each such Holder,
each of its officers, directors, partners and each person controlling such
Holder, each such underwriter and each person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder,
controlling person or underwriter specifically for use therein, or the failure
of such Holder to deliver a Prospectus that was delivered to the Holder prior to
a sale or sales by such Holder.
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other Holder, each of its officers, directors, partners
and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder
specifically for use therein. Notwithstanding the foregoing, the liability of
each Holder under this subsection (b) shall be limited to the proportion of any
such loss, claim, damage, liability or expense which is equal to the proportion
that the public offering price of the shares sold by such Holder under such
registration statement bears to the total public offering price of all
securities sold thereunder, but not to exceed the proceeds received by such
Holder from the sale of Registrable Securities covered by such registration
statement. A Holder will not be required to enter into any agreement or
undertaking in connection with any registration under this Section 2
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<PAGE>
providing for any indemnification or contribution on the part of such Holder
greater than the Holder's obligations under this Section 2.10(b).
(c) Each party entitled to indemnification under this Section
2.10 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2 unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action and provided further, that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or
separate and different defenses but shall bear the expense of such defense
nevertheless. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(d) If the indemnification provided for paragraphs (a) through
(c) of this Section 2.10 is unavailable or insufficient to hold harmless an
indemnified party under such paragraphs in respect of any losses, claims,
damages or liabilities or actions in respect thereof referred to therein, then
each indemnifying party shall in lieu of indemnifying such indemnified party
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Company, on the one hand, and
the underwriters and the Holder of such Registrable Securities, on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or actions as well as any other relevant equitable
considerations, including the failure to give any notice under paragraph (c).
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact relates to
information supplied by the Company, on the one hand, or the underwriters or the
Holders of such Registrable Securities, on the other, and to the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and each of the Holders agrees
that it would not be just and equitable if contributions pursuant to this
paragraph were determined by pro rata allocation (even if all of the Holders of
--- ----
such Registrable Securities were treated as one entity for such purpose) or by
any other method of allocation which did not take account of the equitable
considerations referred to above in this paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or action in respect thereof, referred to above in this paragraph, shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this paragraph, no Holder shall be
required to contribute any amount in excess of the lesser of (i) the proportion
that the public
-11-
<PAGE>
offering price of shares sold by such Holder under such registration statement
bears to the total public offering price of all securities sold thereunder, but
not to exceed the proceeds received by such Holder for the sale of Registrable
Securities covered by such registration statement and (ii) the amount of any
damages which they would have otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11 (f) of the Securities Act),
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
2.11 Information by Holder. The Holder or Holders of Registrable
---------------------
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them and the distribution proposed by such Holder or Holders as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Section 2.
2.12 Rule 144 Reporting. With a view to making available the benefits
------------------
of certain roles and regulations of the Commission which may at any time permit
the sale of the Restricted Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Securities Exchange Act.
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements);
(c) So long as an Investor owns any Restricted Securities to
furnish to the Investor forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company and other information in the possession of or reasonably
obtainable by the Company as an Investor may reasonably request in availing
itself of any role or regulation of the Commission allowing an Investor to sell
any such securities without registration.
2.13 Transfer of Registration Rights. The rights to cause the Company
-------------------------------
to register securities granted Holders under Sections 2.5, 2.6 and 2.7 may be
assigned to a transferee or assignee in connection with any transfer or
assignment of Registrable Securities by a Holder of not less than 50,000 shares
of Registrable Securities (as presently constituted and subject to subsequent
adjustments for stock splits, stock dividends, reverse stock splits, and the
like), or to any transferee or assignee who is a constituent partner of a
Holder, the estate of such constituent partner, or an
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<PAGE>
entity affiliated with the Holder, provided that such transfer may otherwise be
effected in accordance with applicable securities laws and provided further,
that the Company is given written notice at the time of or within a reasonable
time after said transfer or assignment, stating the name and address of the
transferee or assignee and identifying the securities with respect to which such
registration rights are being transferred or assigned.
2.14 Market Standoff Agreement. Each Holder agrees, in connection
-------------------------
with the Company's initial public offering of the Company's securities, not to
sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any shares of capital stock of the Company, including, but
not limited to, the Shares and the Conversion Stock (other than those included
in the registration), without the prior written consent of the underwriters, for
one hundred eighty (180) days) from the effective date of such registration;
provided, that all of the officers, directors and stockholders of the Company,
other than Global Technology Investment Limited, who own or have the right to
acquire at least one percent (1%) of the capital stock of the Company also agree
to such restrictions. Each Holder further agrees that the Company may impose
stop transfer instructions in order to enforce the foregoing covenant.
2.15 Limitations on Subsequent Registration Rights. From and after
---------------------------------------------
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the outstanding Registrable Securities,
enter into any agreement with any holder or prospective holder of any securities
of the Company which would allow such holder or prospective holder (a) to
include such securities in any registration filed under Section 2.5 hereof,
unless under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of his securities will not reduce the amount of the Registrable
Securities of the Holders which is included or (b) to make a demand registration
which could result in such registration statement being declared effective prior
to the earlier of either of the date set forth in Section 2.5(a).
2.16 Termination of Registration Rights. The rights granted under
----------------------------------
this Section 2 shall terminate on the earlier to occur of the following: (i) on
the fifth (5th) anniversary of the consummation of the initial underwritten
public offering of the Company's securities pursuant to a registration statement
filed under the Securities Act; or (ii) as to a particular Holder, when such
Holder is eligible to sell all of its Registrable Securities within any 90 day
period in reliance on Rule 144 under the Securities Act.
3. Investors' Right of First Refusal.
---------------------------------
3.1 Right of First Refusal Upon Issuances of Securities by the
----------------------------------------------------------
Company.
- -------
(a) The Company hereby grants, on the terms set forth in this
Section 3.1, to each Investor who holds at least 20,000 shares of Conversion
Stock the right of first refusal to purchase all or any part of such Investor's
pro rata share of the New Securities (as defined in Section 3.1 (b)) which the
Company may, from time to time, propose to sell and issue. The Investors may
purchase said New Securities on the same terms and at the same price at which
the Company proposes to sell the New Securities. The pro rata share of each
Investor, for purposes of this right of
-13-
<PAGE>
first refusal, is the ratio of the total number of shares of Common Stock held
by such Investor, including any shares of Common Stock into which shares of
Preferred Stock held by such Investor are convertible, to the total number of
shares of Common Stock outstanding immediately prior to the issuance of the New
Securities plus the number of shares of Common Stock issuable upon exercise or
conversion of all then outstanding securities exercisable for or convertible
into, directly or indirectly, Common Stock.
(b) "New Securities" shall mean any capital stock of the Company,
whether now authorized or not, and any rights, options or warrants to purchase
said capital stock, and securities of any type whatsoever that are, or may
become, convertible into said capital stock; provided that New Securities does
not include (i) the Shares or the Conversion Stock and shares of Series B
Preferred Stock purchased in a closing of the Purchase Agreement subsequent to
the date hereof, (ii) all shares of Common Stock issued to a holder of Class B
Common Stock of the Company in connection with the conversion by such holder of
any Series B Preferred Shares of Jutvision Canada, Inc. pursuant to Article Five
of the Certificate of Incorporation of the Company, (iii) all shares of capital
stock issued upon exercise or conversion of all currently outstanding securities
exercisable for or convertible into, capital stock of the Company, (iv)
securities offered pursuant to a registration statement filed under the
Securities Act, (v) securities issued pursuant to the acquisition of another
corporation by the Company by merger, purchase of substantially all of the
assets or other reorganization, (vi) all shares of Common Stock, including
warrants or options to purchase such shares of Common Stock issued, upon the
approval of the board of directors of the corporation, to employees, officers,
directors and consultants of the corporation pursuant to any plan or
arrangement, but, prior to February 28, 2000, not exceeding 525,000 shares of
Common Stock, including warrants or options to purchase such shares of Common
Stock (net of any repurchases of such shares or cancellation or expirations of
options), subject to adjustment for stock splits, stock dividends, subdivisions,
combinations, and the like; (vii) all securities issued to equipment lessors,
banks, financial institutions or similar entities in transactions approved by
the Board of Directors, the principle purpose of which is other than the raising
of capital; or (viii) all securities issued pursuant to any transactions
approved by the Board of Directors primarily for the purpose of (A) joint
ventures, technology licensing or research and development activities, (B)
distribution or manufacture of the corporation's products or services, or (C)
any other transactions involving corporate partners that are primarily for
purposes other than raising capital.
(c) In the event the Company proposes to undertake an issuance of
New Securities, it shall give to the Investors written notice (the "Notice") of
its intention, describing the type of New Securities, the price, the terms upon
which the Company proposes to issue the same, and a statement as to the number
of days from receipt of such Notice within which the Investors must respond to
such Notice. The Investors shall have thirty (30) days from the date of receipt
of the Notice to purchase any or all of the New Securities for the price and
upon the terms specified in the Notice by giving written notice to the Company
and stating therein the quantity of New Securities to be purchased and
forwarding payment for such New Securities to the Company if immediate payment
is required by such terms, or in any event no later than thirty (30) days after
the date of receipt of the Notice.
-14-
<PAGE>
(d) In the event the Investors fail to exercise in full the right
of first refusal within said thirty (30) day period, the Company shall have
ninety (90) days thereafter to sell or enter into an agreement (pursuant to
which the sale of New Securities covered thereby shall be closed, if at all,
within thirty (30) days from date of said agreement) to sell the New Securities
respecting which the Investors' rights were not exercised, at a price and upon
general terms no more favorable to the Investors thereof than specified in the
Notice. In the event the Company has not sold the New Securities within said
ninety (90) day period (or sold and issued New Securities in accordance with the
foregoing within thirty (30) days from the date of said agreement), the Company
shall not thereafter issue or sell any New Securities without first offering
such securities to the Investors in the manner provided above.
(e) The right of first refusal granted under this Section 3.1
shall expire upon the earlier of (i) closing of the Company's initial
underwritten public offering pursuant to an effective registration statement
filed by the Company under the Securities Act or (ii) for each Investor, the
date on which such Investor no longer holds a minimum of 20,000 shares of
Conversion Stock or the number of Shares originally purchased, whichever is
less.
4. Affirmative Covenants of the Company and the Investors.
------------------------------------------------------
The Company hereby covenants and agrees as follows:
4.1 Financial Information. So long as an Investor continues to hold
---------------------
at least 50,000 shares of Conversion Stock, the Company will provide each
Investor with reports set forth below:
(a) As soon as practicable after the end of each fiscal year, and
in any event within 120 days thereafter, consolidated balance sheets of the
Company and its subsidiaries, if any, as of the end of such fiscal year, and
consolidated statements of income and consolidated statements of changes in
financial position of the Company and its subsidiaries, if any, for such year,
prepared in accordance with generally accepted accounting principles and setting
forth in each case in comparative form the figures for the previous fiscal year
(or, at the election of the Company, setting forth in comparative form the
budgeted figures for the fiscal year then reported), all in reasonable detail
and audited by independent public accountants of national standing selected by
the Company provided the Company's Board of Directors has selected such
accountants by the end of such fiscal year.
(b) As soon as practicable after the end of each quarter, and in
any event within thirty (30) days after each quarterly accounting period, an
unaudited quarterly report including a balance sheet, profit and loss statement
and cash flow analysis (prepared in accordance with generally accepted
accounting principles other than for accompanying notes and subject to changes
resulting from year-end audit adjustments), in reasonable detail.
(c) At such Holder's expense, the right to visit and inspect the
Company's properties, to examine its books of accounts and records and to
discuss the Company's affairs, finances and accounts with its officers, all at
such reasonable times may be requested by the Investor,
-15-
<PAGE>
provided, however, that the Company shall not be obligated pursuant to this
Section 4.1(c) to provide access to any information which it reasonably
considers to be trade secret or similar confidential information.
4.2 Assignment of Rights to Financial Information. The rights granted
---------------------------------------------
pursuant to Section 4.1 may not be assigned or otherwise conveyed by any
Investor or by any subsequent transferee of any such rights without the prior
written consent of the Company; provided, however, that any Investor may assign
-------- -------
to any constituent partner of an Investor or an entity affiliated with an
Investor, other than a competitor of the Company, and after giving notice to the
Company, the rights granted pursuant to Section 4.1.
4.3 Confidentiality And Non-Disclosure.
----------------------------------
(a) Disclosure of Terms. The terms and conditions of this
-------------------
Agreement, the First Refusal and Co-Sale Agreement, and the Purchase Agreement
(collectively, the "Financing Agreements"), including their existence, shall be
considered confidential information and shall not be disclosed by any party
hereto to any third party except in accordance with the provisions set forth
below.
(b) Press Releases, Etc. Within sixty (60) days of the Closing,
-------------------
the Company may issue a press release in the form provided by Intel Corporation
("Intel") disclosing that the Series B Investors have invested in the Company;
provided that the release does not disclose any of the terms and conditions of
the Financing Agreements (the "Financing Terms") and the final form of the press
release is approved in advance in writing by a majority in interest of the
Series B Investors. No other announcement regarding any Series B Investor in a
press release, conference, advertisement, announcement, professional or trade
publication, mass marketing materials or otherwise to the general public may be
made without such Series B Investor's prior written consent.
(c) Permitted Disclosures. Notwithstanding the foregoing, (i)
---------------------
any party may disclose any of the Financing Terms to its current or bona fide
prospective investors, employees, investment bankers, lenders, accountants and
attorneys, in each case only where such persons or entities are under
appropriate nondisclosure obligations; (ii) any party may disclose (other than
in a press release or other public announcement described in subsection (b))
solely the fact that the Series B Investors are investors in the Company to any
third parties without the requirement for the consent of any other party or
nondisclosure obligations; and (iii) Intel may disclose its investment in the
Company and the Financing Terms to third parties or to the public at its sole
discretion and, if it does so, the other parties hereto shall have the right to
disclose to third parties any such information disclosed in a press release or
other public announcement by Intel.
(d) Legally Compelled Disclosure. In the event that any party is
----------------------------
requested or becomes legally compelled (including without limitation, pursuant
to securities laws and regulations) to disclose the existence of the Financing
Agreements or any of the Financing Terms hereof in a contravention of the
provisions of this Section 4.3, such party (the "Disclosing Party") shall
provide the other parties (the "Non-Disclosing Parties") with prompt written
notice of that fact so that the appropriate party may seek (with the cooperation
and reasonable efforts of the other
-16-
<PAGE>
parties) a protective order, confidential treatment or other appropriate remedy.
In such event, the Disclosing Party shall furnish only that portion of the
information which is legally required and shall exercise reasonable efforts to
obtain reliable assurance that confidential treatment will be accorded such
information to the extent reasonably requested by any Non-Disclosing Party.
(e) Other Information. The provisions of this Section 4.3 shall
-----------------
be in addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by any of the parties hereto with respect to
the transactions contemplated hereby.
(f) All notices required under this section shall be made
pursuant to Section 5.5 of this Agreement.
4.4 Termination of Covenants. The covenants set forth in Section 4.1
------------------------
shall terminate and be of no further force or effect upon the closing of the
Company's initial underwritten public offering pursuant to an effective
registration statement filed by the Company under the Securities Act.
5. Miscellaneous.
-------------
5.1 Waivers and Amendments. Any term of this Agreement may be amended
----------------------
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the holders of a majority of the
Registrable Securities then outstanding. Notwithstanding anything herein to the
contrary, no amendment or waiver of Section 4.3 shall be effective without the
written consent of Intel. Notwithstanding the foregoing, additional Investors
who purchase Registrable Securities pursuant to Section 1.4 of the Purchase
Agreement may be added as parties to this Agreement without the consent of any
of the holders of Registrable Securities. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
Registrable Securities then outstanding, each future holder of all such
Registrable Securities, and the Company.
5.2 Governing Law. This Agreement shall be governed in all respects
-------------
by the laws of the State of California as such laws are applied to agreements
between California residents entered into and to be performed entirely within
California.
5.3 Dispute Resolution. The parties agree to negotiate in good faith
------------------
to resolve any dispute between them regarding this Agreement. If the
negotiations do not resolve the dispute to the reasonable satisfaction of both
parties, then each party shall nominate one senior officer of the rank of Vice
President or higher as its representative. These representatives shall, within
thirty (30) days of a written request by either party to call such a meeting,
meet in person and alone (except for one assistant for each party) and shall
attempt in good faith to resolve the dispute. If the disputes cannot be resolved
by such senior managers in such meeting, the parties agree that they shall, if
requested in writing by either party, meet within thirty (30) days after such
written notification for one day with an impartial mediator and consider dispute
resolution alternatives other than litigation. If an alternative method of
dispute resolution is not agreed upon within thirty (30) days after the one day
-17-
<PAGE>
mediation, either party may begin litigation proceedings. This procedure shall
be a prerequisite before taking any additional action hereunder.
5.4 Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
5.5 Entire Agreement. This Agreement constitutes the full and entire
----------------
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
5.6 Notices. Except as may be otherwise provided herein, all notices,
-------
requests, waiver and other communications made pursuant to this Agreement shall
be in writing and addressed as set forth below and shall be conclusively deemed
to have been duly given (a) when hand delivered to the other party; (b) when
received when sent by facsimile; (c) three business days after deposit in the
U.S. mail with first class of certified mail receipt requested postage prepaid;
or (d) the next business day after deposit with a national overnight delivery
service, postage prepaid, with next business-day delivery guaranteed, provided
that the sending party receives a confirmation of delivery from the delivery
service provider. Each person making a communication hereunder by facsimile
shall promptly confirm by telephone to the person to whom such communication was
addressed each communication made by it by facsimile pursuant hereto but the
absence of such confirmation shall not affect the validity of any such
communication. Notwithstanding the foregoing, all notices and communications to
or from addresses outside the United States, shall be given by facsimile and
certified in writing sent by overnight or two-day national courier service. All
notices, requests, waivers and other communications made pursuant to the
Agreement shall be addressed (a) if to an Investor or Holder, at such Investor's
or Holder's address set forth in Schedule A, or at such other address as such
Investor or Holder shall have furnished the Company in writing, or (b) if to the
Company, at its address set forth on the signature page of this Agreement, or at
such other address as the Company shall have furnished to the Investors, Holders
and each such other Holder in writing.
5.7 Titles and Subtitles. The titles of the paragraphs and
--------------------
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
5.8 Subsequent Closings. In the event that the Company shall conduct
-------------------
subsequent sales of shares of Series B Preferred Stock pursuant to and in
accordance with the terms of Section 1.4 of the Purchase Agreement, any Investor
of such shares shall be deemed a Holder and an Investor with all of the rights
of a Holder and an Investor under this Agreement; provided that as a condition
thereto such Holder or Investor shall sign a counterpart signature page to this
Agreement.
5.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[The Remainder of Page Intentionally Left Blank]
-18-
<PAGE>
This Agreement is hereby executed as of the date first above written.
"COMPANY"
JUTVISION CORPORATION
A Delaware Corporation
By: ___________________________
Name: ___________________________
Title: ___________________________
Address:
124 University Avenue
Palo Alto, California 94301
Facsimile: (650) 325-9337
Attention: Chief Financial Officer
Vice President, Business Development
JUTVISION CORPORATION
INVESTORS' RIGHTS AGREEMENT SIGNATURE PAGE
<PAGE>
INVESTORS:
INFORMATION ASSOCIATES-II, L.P.
By: TRIDENT CAPITAL MANAGEMENT-II, L.L.C.,
its general partner
By:________________________________________
Name:______________________________________
Title:_____________________________________
IA-II AFFILIATES FUND, L.L.C.
By:________________________________________
Name:______________________________________
Title:_____________________________________
WALDEN MEDIA AND INFORMATION TECHNOLOGY
FUND, L.P.
By:________________________________________
Name:______________________________________
Title:_____________________________________
INTEL CORPORATION
By:________________________________________
Name:______________________________________
Title:_____________________________________
JUTVISION CORPORATION
INVESTORS' RIGHTS AGREEMENT SIGNATURE PAGE
<PAGE>
INVESTORS:
DAIN RAUSCHER WESSELS
INVESTORS LLC
By:________________________________________
Name:______________________________________
Title:_____________________________________
DIGACOMM (JVN), L.L.C.
By:________________________________________
Name:______________________________________
Title:_____________________________________
___________________________________________
William Kunzweiler
WALDEN JAPAN PARTNERS, L.P.
By:________________________________________
Name:______________________________________
Title:_____________________________________
WALDEN EDB PARTNERS, L.P.
By:________________________________________
Name:______________________________________
Title:_____________________________________
JUTVISION CORPORATION
INVESTORS' RIGHTS AGREEMENT SIGNATURE PAGE
<PAGE>
INVESTORS:
MICHAEL A. BERKE, TRUSTEE OF THE JV
#1 TRUST
By:________________________________________
Name:______________________________________
Title:_____________________________________
COMSTOCK NET SERVICES, INC.
By:________________________________________
Name:______________________________________
Title:_____________________________________
___________________________________________
Melody Kean Haller
SILICON VALLEY BANCSHARES
By:________________________________________
Name:______________________________________
Title:_____________________________________
___________________________________________
Michael Stefonick
JUTVISION CORPORATION
INVESTORS' RIGHTS AGREEMENT SIGNATURE PAGE
<PAGE>
INVESTORS:
__________________________________________
Peter S. Lawrence
__________________________________________
Jerome Gotkin
JVC ASSOCIATES PARTNERSHIP
By:________________________________________
Name:______________________________________
Title:_____________________________________
WS INVESTMENT COMPANY 99A
By:________________________________________
Name:______________________________________
Title:_____________________________________
JUTVISION CORPORATION
INVESTORS' RIGHTS AGREEMENT SIGNATURE PAGE
<PAGE>
Schedule A
----------
(To Jutvision Corporation Investors' Rights Agreement)
List of Investors
NAME AND ADDRESS
- ---------------------------------
Information Associates-II, L.P.
By: Trident Capital Management-II, L.L.C., its
general partner
2480 Sand Hill Road
Menlo Park, CA 94025
Attn: Woody Marshal
650-233-4309
Fax: 650-233-4333
**Walden Media and Information
Technology
Fund, L.P.
750 Battery Street, 7/th /Floor
San Francisco, CA 94111
Attn: Philip Sanderson
Main: 415-391-7225
Fax: 415-391-7262
Intel Corporation
2200 Mission College Blvd.
Santa Clara, CA 95052
Attn: Portfolio Manager SC4-210
408-765-6038
Fax: 408-653-7531 and
Copies to:
Intel Corporation
2200 Mission College Blvd.
Santa Clara, CA 95052
Attn: General Counsel
Fax: 408-765-1859
<PAGE>
Name and Address
- --------------------------------------
Dain Rauscher Wessels Investors LLC
Dain Rauscher Plaza
60 South 6/th /Street
Minneapolis, MN 55402-4422
Attn: Mary Zimmer
612-371-2811
Fax: 612-371-2837
*DigaComm (JVN), L.L.C.
400 N. Michigan Avenue, Suite 520
Chicago, IL 60611
Attn: Kelly Moore
312-222-0003
Fax: 312-222-0008
*William Kunzweiler
5420 LBJ Freeway, Suite 515
Dallas, TX 75240
Work: 972-770-2007
Fax: 972-770-2999
IA-II Affiliates Fund, L.L.C.
2480 Sand Hill Road
Menlo Park, CA 94025
Attn: Woody Marshal
650-233-4309
Fax: 650-233-4333
Walden Japan Partners, L.P.
750 Battery Street, 7/th /Floor
San Francisco, CA 94111
Attn: Philip Sanderson
Main: 415-391-7225
Fax: 415-391-7262
Walden EDB Partners, L.P.
750 Battery Street, 7/th /Floor
San Francisco, CA 94111
Attn: Philip Sanderson
Main: 415-391-7225
Fax: 415-391-7262
<PAGE>
Name and Address
- --------------------------------------
*Michael A. Berke, Trustee of the JV # 1 Trust
c/o Cohen, Berke, Bernstein, Brodie &
Kondell, P.A.
2601 South Bayshore Drive, 19/th /Floor
Miami, FL 33133
Attn: Rich Bernstein
800-854-5902
Fax: 305-857-0857
Comstock Network Services
4343 Shallowford Rd., Suite H4
Marietta, GA 30062
Attn: John Bates & Lloyd Dennison
770-552-0287
Fax: 770-993-5034
Melody Kean Haller
333 Page Street
San Francisco, CA 94102-5611
415-863-3511
Fax: 415-863-3511 or 415-896-1094 (office)
Silicon Valley Bancshares
3003 Tasman Drive, HG 180
Santa Clara, CA 95054
Attn: Oliver Colvin
408-654-7768
Fax: 408-496-2419
Michael Stefonick
2155 Turnberry Court
Center Valley, PA 18034
610-659-1173
Fax: 610-317-9981
<PAGE>
Name and Address
- -----------------------------------
Peter S. Lawrence
c/o Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo
One Financial Center
Boston, MA 02111
617-348-1782
Fax: 617-542-2241
Jerome Gotkin
c/o Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo
One Financial Center
Boston, MA 02111
617-348-1782
Fax: 617-542-2241
JVC Associates Partnership
c/o Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Attn: Eric J. Smith
650-493-9300
Fax: 650-493-6811
WS Investment Company 99A
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Attn: Jim Terranova
650-493-9300
Fax: 650-493-6811
<PAGE>
EXHIBIT 10.10
DISTRIBUTION AGREEMENT
----------------------
THIS DISTRIBUTION AGREEMENT (the "Agreement") is entered into as of
________, ____ (the "Effective Date"), between bamboo.com, Inc., a Delaware
corporation with an office at 124 University Avenue, Palo Alto, CA 94301
("bamboo.com"), and ___________________________________ ("Company"), a
___________ corporation with an office at ___________________________
("Company").
Bamboo.com uses the Bamboo.com Technology and provides the Production
Services. Company operates the Company MLS Database and the Company Site.
Bamboo.com desires to provide virtual tour technology and Production Services
for the Company Members. 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 Software, used to capture, process and view Bamboo.com Images.
1.3 "Company Member" means a real estate agent or Broker that is a
--------------
participant of the Company and has access to the Company MLS Database.
1.4 "Company MLS Database" means the collection of data residing on
--------------------
servers operated by or for Company or its affiliate and accessible by Company
Members and, to the extent Company makes such collection generally available, by
the public via the Internet.
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 or the public via the Internet, including
those currently accessible at the URL http://www.________.com.
-----------------------
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, or as required
by statute, regulation or other law.
1.7 "MLS Software System" means the password protected user
-------------------
interface, consisting of HTML pages and including any future versions of such
interface, that Company Members access via the Internet to obtain listings and
other information in the Company MLS Database.
1.8 "Production Services" means the services provided by or on behalf
-------------------
of bamboo.com in producing the Bamboo.com Images.
1.9 "Property" means any piece of raw land, residential, or
--------
commercial real estate within the Bamboo.com Service Provider Network territory
and entered into the Company MLS Database and/or onto the Company Site,
including without limitation new homes, offered for sale or resale.
1.10 "Service Provider Network" means the network of individuals
------------------------
throughout ________ with whom bamboo.com has entered into agreements to capture
images at designated sites on bamboo.com's behalf.
1.11 "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; EXCLUSIVITY
---------------------------------------------
2.1 Sales and Billing. Bamboo.com will be responsible for receiving
-----------------
and fulfilling orders and invoicing and collecting revenues for all sales of
Virtual Tour Images.
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
Bamboo.com Images to the Company Site and/or Company MLS Database, 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 Bamboo.com Images to the appropriate Company MLS properties,
enabling viewing of such Bamboo.com Images through the Company Site and the
Company MLS Database. Each link to the Company Site and the Company MLS Database
will remain active as long as the Property remains on the market, up to a
maximum of six (6) months unless the ordering Company Member requests an
extension. Bamboo.com will provide a link to all Bamboo.com Images for the
appropriate properties on the Company Site and the Company MLS, except in those
cases where: (a) the Company Member objects to the link; and/or (b) the Web site
or other third-party channel originating the sale of such Bamboo.com Images
(collectively, the "Third-Party Originator") objects to the link. In the event a
Third-Party Originator objects to the link, bamboo.com will provide twenty (20)
days prior written notice of the objection to Company before discontinuing the
link to the Company Site and/or the Company MLS Database.
2.3 Exclusivity. Bamboo.com will be the exclusive provider of
-----------
Virtual Tour Images for the Company Site and the MLS Software System/Company MLS
Database. 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 MLS Software
System, Company Site, or Company MLS Database.
<PAGE>
3. MARKETING AND PROMOTION
-----------------------
3.1 Company Obligations. Company agrees to market, promote and
-------------------
facilitate orders of the Production Services as follows:
(a) MLS Software System and Company Site. Company agrees to
------------------------------------
prominently market and promote the Production Services in the MLS Software
System and Company Site. Such marketing and promotion will include, without
limitation:
(i) A method to order Production Services from within the
MLS Software System at the time that a Company Member enters listing information
as well as on the first page that is accessed on the Company MLS Database by a
Company Member.
(ii) A button (which incorporates the bamboo.com logo)
which links to a Web page containing a description of the Production Services on
the homepage of the Company Site currently accessible via the URL
http://www._________.com/.
- -------------------------
(iii) Generation of a gallery of virtual tours on the
homepage of the Company Site which will display Bamboo.com Images for listings
from the Company MLS Database and/or Company Site.
(b) Print Advertising. To the extent Company creates and
-----------------
distributes print advertising promoting the Company Site, the Company MLS
Database and MLS Software System, including without limitation print advertising
in magazines, flyers, newsletters, billing statements and general mailings,
Company will include, from time to time, in such advertising a bamboo.com logo
and a brief, suitable reference to the availability of the Production Services.
(c) Email and Direct Marketing. Company agrees to include in
--------------------------
email and direct marketing that it generates from time to time a section,
reasonably satisfactory to bamboo.com, highlighting the availability and
features of the Production Services. In addition, the parties will work together
to create flyers containing marketing information regarding the Production
Services, to be distributed through an insertion in the company's monthly
invoices (12) times during each twelve (12) month period in the term of this
Agreement.
(d) Seminars and Trade Shows. Company will invite bamboo.com to
------------------------
speak and promote its Production Services at appropriate seminars and training
sessions Company conducts for Company Members during the term of this Agreement.
Company or its sales representatives will distribute to Company Members at
seminars and training sessions subscription forms and marketing materials
created by bamboo.com that promote the Production Services.
(e) Joint Press Release. Company will participate with
-------------------
bamboo.com in issuing a joint press release regarding the relationship
established through this Agreement. Each party will furnish its written
acceptance of, or comments on, the proposed joint announcement within 48 hours
otherwise it 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.
(f) 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 MLS Software System, the Company MLS Database or
the Company Site during the term of this Agreement. For the purposes of this
Section 3.1(f), "competitor of bamboo.com" means any provider of Virtual Tour
Images, including, but not limited to, _____________.
3.2 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. PROPRIETARY RIGHTS
------------------
4.1 Bamboo.com Technology.
---------------------
(a) All Bamboo.com Technology, including without limitation the
Software and all Bamboo.com Images, whether or not produced for Company
customers and whether or not posted to or linked to the Company MLS Database
and/or 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 such Bamboo.com Technology.
(b) Bamboo.com hereby grants to Company a nonexclusive,
worldwide, royalty-free, nontransferable license to include links to Bamboo.com
Images on the Company MLS Database or Company Site 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.
4.2 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 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 the financing of
Company and/or 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 of this
Agreement, solely in connection with promotion and marketing of the Production
Services and/or financing of 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
-2-
<PAGE>
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 for a
period of ______. 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.
5.2 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.
5.3 Survival of Certain Terms. The provisions of Sections 4.1(a),
-------------------------
4.2(a), 4.3, 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. 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 Images.
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 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 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.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
BAMBOO.COM, INC. [Name of Company]
-3-
<PAGE>
By:__________________________ By:____________________________
Name:________________________ Name:__________________________
Title:_______________________ Title:_________________________
Date:________________________ Date:__________________________
-4-
<PAGE>
EXHIBIT 10.11
BAMBOO.COM APPROVED WEB PRO AGREEMENT
-------------------------------------
COMPANY:_____________________ EFFECTIVE DATE:_________________________
ADDRESS:_____________________
_____________________
THIS BAMBOO.COM APPROVED WEB PRO AGREEMENT (the "Agreement"), effective as
of the Effective Date, between bamboo.com, Inc. ("bamboo.com"), and Company sets
forth the terms and conditions governing certain marketing and other services to
be performed by the parties. Additional terms and conditions and definitions of
certain capitalized terms appear on the reverse side of this 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. PROVISION OF PRODUCTION SERVICES; EXCLUSIVITY
---------------------------------------------
1.1 Sales and Billing. Bamboo.com will be responsible for receiving and
-----------------
fulfilling orders and invoicing and collecting revenues for all sales of
Production Services. Bamboo.com will assign Company a sales origination partner
code for Company's customers to use when submitting orders for Production
Services to bamboo.com via telephone, facsimile, or electronic forms.
1.2 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. Bamboo.com will host Bamboo.com Images on
its servers, or those of its affiliates, and will provide to Company a URL link
and available identifying listing information for each Bamboo.com Image
purchased by Company's customers. Company will use commercially reasonable
efforts to link each such Bamboo.com Image to the appropriate listings on the
Hosted Sites by the end of the business day following the day bamboo.com makes
such Bamboo.com Image available on the bamboo.com server or those of its
affiliates.
1.3 Exclusivity. Bamboo.com will be the exclusive provider of Virtual Tour
-----------
Images for the Company Sites. Company will not directly or indirectly promote 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, or related services or
technology, of any third party to be posted to, linked to or otherwise made
accessible through the Company Sites. This provision does not prohibit Company
customers that use a provider of Virtual Tours Images other than bamboo.com to
link or post to the Hosted Sites.
2. MARKETING AND PROMOTION
-----------------------
2.1 Company Sites. Company agrees to prominently market and promote the
-------------
bamboo.com branded Production Services on the Company Sites. Such marketing and
promotion will include bamboo.com approved electronic order forms permitting
Company's customers to submit orders for Production Services to bamboo.com via
the Internet. Additionally, Company shall display bamboo.com's logo on a
prominent page within each Company Site and shall use commercially reasonable
efforts to cause Hosted Sites to display bamboo.com's logo as well. Such logo,
when clicked on, will link directly to an electronic order form permitting
Company's customers to submit orders for Production Services to bamboo.com via
the Internet. Company shall display the words "Bamboo.com Approved Web Pro"
prominently on the Company Sites.
2.2 Bamboo.com Site. Bamboo.com will market and promote Company, including
---------------
use of a logo, as a partner on the bamboo.com Web site.
2.3 General Marketing. Bamboo.com will create and deliver to Company, a
-----------------
demonstration CD and branded templates to be used by Company to produce co-
branded brochures and other marketing materials. Company will market the
Production Services in sales presentations and marketing activities with real
estate customers. As appropriate, Company will promote the Production Services
through its seminars, training and conferences and at real estate tradeshows it
attends. Company may be requested to participate in press releases and other
marketing initiatives from time to time. Company will not unreasonably withhold
approval.
2.4 Listing Creation/Editing. As appropriate, Company will provide a
------------------------
mechanism for real estate customers to order branded Production Services when
creating their listing or editing their web site.
3. FEES
----
During the Term of this Agreement, bamboo.com will pay quarterly fees to
Company based on sales of Production Services ("Transaction Fees") as follows:
3.1 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
a Hosted Site, bamboo.com will pay to Company for each calendar quarter, 5% of
Net Revenues collected from Production Services so sold during the quarter.
3.2 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. TERM
----
4.1 Term. This Agreement will commence on the Effective Date and continue
----
for a period of six (6) months, and will be automatically renewed for successive
six (6) month periods unless either party notifies the other in writing not less
than forty-five (45) days prior to the end of the then-current term of its
intention to terminate this Agreement as of the end of such term.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
BAMBOO.COM, INC. COMPANY NAME:______________________
By: _____________________ By: _____________________________
Name: _____________________ Name:_____________________________
<PAGE>
Title: _______________________ Title: ___________________________
ADDITIONAL PROVISIONS
1. Certain Defined Terms
---------------------
"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,
including the demonstration CD, and including the Bamboo.com for Java Software,
used to capture, process and view Bamboo.com Images.
"Company Originated Orders" means any legitimate order bamboo.com receives
during the Term, for Production Services via telephone, facsimile, or electronic
order form from a Company customer referencing Company's assigned sales
origination partner code.
"Company Sites" means the collection of HTML documents, other than Hosted Sites,
residing on servers operated by or for Company or its affiliate and accessible
on or after the effective date 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 (the "Confidential Information"). 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.
"Hosted Sites" means the collection of HTML documents that Company or an
affiliate creates and/ or hosts for its customers on its servers, or residing on
servers operated by or for Company or its affiliate, and accessible on or after
the Effective Date via the Internet.
"Net Revenues" means the gross amount received by bamboo.com for sales of the
Production Services less twenty-five (25%) 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 colleltions.
"Production Services" means services provided by or on behalf of bamboo.com in
producing Bamboo.com Images.
"Service Provider Network" means the network of individuals 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. 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 Images sold in accordance with this Agreement during
the quarter and providing a calculation of the Transaction Fees payable.
3. Bamboo.com Technology
---------------------
3.1 All Bamboo.com Technology, is, 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.
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.
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 on with promotion
and marketing of the Production Services. At the reasonable request of either
party, the other party will provide assistance with the protection and
maintenance of the marks of the requesting party. Each party may only use the
marks of the other party as expressly permitted herein and agrees to use the
marks of the other party in a manner commensurate with the style, appearance and
quality of the other party's services and/or products bearing such marks.
5. Limitation on Grant of Rights
-----------------------------
Except as expressly provided herein, neither party receives any other right
or license to the technology or intellectual property of the other party.
6. Termination
-----------
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 remove links to
Bamboo.com Images from all Company Sites and Hosted Sites within a commercially
reasonable time consistent with bamboo.com's Terms and Conditions set forth on
the bamboo.com Web site.
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. Notwithstanding the
foregoing, bamboo.com may terminate this Agreement in its sole discretion, upon
ten (10) days prior written notice, if Company fails to comply with bamboo.com's
general rules and guidelines governing the Web Pro Program.
6.3 The provisions of Sections 3.1, 4.1, 5, 6.1, 6.3, 7, 8 and 9 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. 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. 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 1.3 ON THE FIRST
PAGE OF THIS AGREEMENT OR SECTION 7 OF THESE ADDITIONAL TERMS AND CONDITIONS, IN
NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY FORM
OF INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER FROM
ANY CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS AGREEMENT WHETHER BASED ON
BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR
NOT THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
9. 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. Company shall ensure that all of Company's customers
comply with all applicable provisions of this Agreement, and Company shall
indemnify, defend and hold bamboo.com harmless from and against any costs,
liability and expenses (including without limitation attorney's fees) arising in
connection with any breach by Company's customers of any provision of this
Agreement. 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
<PAGE>
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.
<PAGE>
EXHIBIT 10.12
DISTRIBUTION & CO-MARKETING AGREEMENT
-------------------------------------
THIS DISTRIBUTION & CO-MARKETING AGREEMENT (the "Agreement") is entered
into as of _________________ (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 ______________, a ____________ corporation
with an office located at ____________________________ ("Company").
Bamboo.com uses the Bamboo.com Technology and provides the Production
Services. Company operates the Company Site. 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 "Basic Package" means up to four scenes captured in a designated
-------------
Property and converted into a corresponding number of Bamboo.com 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._________.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 bamboo.com discloses such information in
good faith to a legitimate potential, or actual, strategic investor, investment
banker, venture capital firm or consultant.
1.4 "Bamboo.com Image" means an electronic image of a Property produced
----------------
by or on behalf of bamboo.com.
1.5 "Bamboo.com Technology" means software and hardware, including the
---------------------
Bamboo.com for Java Software, used to capture, process and view Bamboo.com
Images.
1.6 "Bamboo.com Tour" means the combined Production Services supplied by
---------------
bamboo.com 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 bamboo.com
supplies to Sales Agents.
1.8 "Production Services" means the services provided by or on behalf of
-------------------
bamboo.com in producing Bamboo.com 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 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 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. 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 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, a system whereby Company will be capable of linking the
Company Site to Bamboo.com Images.
2.2 Exclusivity. Bamboo.com will be the exclusive provider of
-----------
Virtual Tours Images for the Company Site. Company will not directly or
indirectly promote itself, or act, as a provider of Virtual Tour Images, nor
will it promote, advertise or use the services of any third party acting in such
capacity.
3. MARKETING AND PROMOTION
-----------------------
3.1 Bamboo.com Obligations. Bamboo.com will include Company in
----------------------
bamboo.com's marketing launch campaign. As part of the launch, bamboo.com will:
(a) Promote the Company as a partner on the bamboo.com Web site;
(b) Include Company in marketing material and press releases, as
bamboo.com deems appropriate;
(c) Offer a special promotional at office presentations made by
bamboo.com 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 bamboo.com 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 bamboo.com)
permitting Sales Agents to submit orders for Production Services to bamboo.com
via the Internet;
(b) Ensure that an HTML button and the corresponding URL
provided by bamboo.com will be located on an individual listing page within 24
hours from receiving the URL link from bamboo.com;
(c) Maintain a gallery of Virtual Tour Images;
(d) As the Company deems appropriate, Company shall: (i) 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;
(ii) collaborate with bamboo.com to develop email and
<PAGE>
direct marketing material generated from time to time to highlight the
availability and features of the Production Services; (iii) distribute marketing
materials created by bamboo.com at seminars, presentations, training sessions
and follow-up meetings sponsored by Company regarding Internet marketing and/or
Listing Tools; and (iv) include bamboo.com at trade shows and conventions
Company attends or hosts;
(e) Agree to allow bamboo.com to promote the relationship
established under this Agreement, including, but not limited to, inclusion in
bamboo.com press releases; and
(f) Facilitate presentations by bamboo.com representatives to
Sales agents and office managers, including allowing access to the Company
offices during the period commencing on the Effective Date and continuing for
sixty (60) days and sponsoring follow-up meetings as bamboo.com and Company deem
necessary.
4. PROPRIETARY RIGHTS
------------------
4.1 Bamboo.com Technology.
---------------------
(a) All Bamboo.com Technology, including without limitation
the 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.
4.2 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 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 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 bamboo.com will cease all use of marks of the other
party.
5.2 Termination for Breach. This Agreement will terminate in the
----------------------
event a party breaches any material term, condition or representation of this
Agreement or materially fails to perform any of its material obligations or
undertakings hereunder, and 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 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
-2-
<PAGE>
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.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
BAMBOO.COM, INC. [Company Name]
By:______________________________ By:______________________________
Name:____________________________ Name:____________________________
Title:___________________________ Title:___________________________
Date:____________________________ Date:____________________________
-3-
<PAGE>
EXHIBIT 10.13
[LETTERHEAD OF SILICON VALLEY BANK APPEARS HERE]
April 28, 1999
Mr. Brian Gibson
Bamboo.com
124 University Avenue, Suite 202
Palo Alto, CA 94301
Dear Brian,
Enclosed are the loan documents for the new $1,000,000 line of credit. Please
review the documents, and collect all appropriate initials and signatures.
Thank you for your continued business with Silicon Valley Bank, and if you have
any questions, please call me at (408) 654-7712.
Sincerely,
/s/ Francisco Terrizzano
Francisco Terrizzano
Vice President
Enclosures - sent via UPS
<PAGE>
- --------------------------------------------------------------------------------
LOAN AND SECURITY AGREEMENT
BAMBOO.COM, INC.
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1 ACCOUNTING AND OTHER TERMS.............................................................. 4
- - --------------------------
2 LOAN AND TERMS OF PAYMENT............................................................... 4
- - -------------------------
2.1 Credit Extensions............................................................... 4
2.2 Interest Rate, Payments......................................................... 4
2.3 Fees............................................................................ 5
3 CONDITIONS OF LOANS..................................................................... 5
- - -------------------
3.1 Conditions Precedent to Initial Credit Extension................................ 5
3.2 Conditions Precedent to all Credit Extensions................................... 5
4 CREATION OF SECURITY INTEREST........................................................... 5
- - -----------------------------
4.1 Grant of Security Interest...................................................... 5
5 REPRESENTATIONS AND WARRANTIES.......................................................... 5
- - ------------------------------
5.1 Due Organization and Authorization.............................................. 5
5.2 Litigation...................................................................... 6
5.3 Regulatory Compliance........................................................... 6
5.4 Subsidiaries.................................................................... 6
5.5 Full Disclosure................................................................. 6
6 AFFIRMATIVE COVENANTS................................................................... 6
- - ---------------------
6.1 Government Compliance........................................................... 6
6.2 Taxes........................................................................... 6
6.3 Primary Accounts................................................................ 7
6.4 Further Assurances.............................................................. 7
7 NEGATIVE COVENANTS...................................................................... 7
- - ------------------
7.1 Changes in Business, Ownership, Management or Business Locations................ 7
7.2 Compliance...................................................................... 7
8 EVENTS OF DEFAULT....................................................................... 7
- - -----------------
8.1 Payment Default................................................................. 7
8.2 Covenant Default................................................................ 7
8.3 Material Adverse Change......................................................... 7
8.4 Attachment...................................................................... 8
8.5 Insolvency...................................................................... 8
8.6 Other Agreements................................................................ 8
8.7 Judgments....................................................................... 8
8.8 Misrepresentations.............................................................. 8
9 BANK'S RIGHTS AND REMEDIES.............................................................. 8
- - --------------------------
9.1 Rights and Remedies............................................................. 8
9.2 Remedies Cumulative............................................................. 9
10 NOTICES................................................................................. 9
- -- -------
11 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER.............................................. 9
- -- ------------------------------------------
12 GENERAL PROVISIONS...................................................................... 9
- -- ------------------
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
12.1 Successors and Assigns.......................................................... 9
12.2 Indemnification................................................................. 9
12.3 Time of Essence................................................................. 9
12.4 Severability of Provision....................................................... 10
12.5 Amendments in Writing, Integration.............................................. 10
12.6 Counterparts.................................................................... 10
12.7 Survival........................................................................ 10
12.8 Confidentiality................................................................. 10
12.9 Attorneys' Fees, Costs and Expenses............................................. 10
13 DEFINITIONS............................................................................ 10
- -- -----------
13.1 Definitions..................................................................... 10
</TABLE>
3
<PAGE>
This LOAN AND SECURITY AGREEMENT dated April 16, 1999, between SILICON
VALLEY BANK ("Bank"), whose address is 3003 Tasman Drive, Santa Clara,
California 95054 and BAMBOO.COM, INC. ("Borrower"), whose address is 124
University Avenue, Suite 202, Palo Alto, California 94301 provides the terms on
which Bank will lend to Borrower and Borrower will repay Bank. The parties agree
as follows:
1 ACCOUNTING AND OTHER TERMS
--------------------------
Accounting terms not defined in this Agreement will be construed
following GAAP. Calculations and determinations must be made following GAAP. The
term "financial statements" includes the notes and schedules. The terms
"including" and "includes" always mean "including (or includes) without
limitation," in this or any Loan Document. This Agreement shall be construed to
impart upon Bank a duty to act reasonably at all times.
2 LOAN AND TERMS OF PAYMENT
-------------------------
2.1 Credit Extensions.
Borrower will pay Bank the unpaid principal amount of all Credit
Extensions and interest on the unpaid principal amount of the Credit Extensions.
2.1.1 Revolving Advances.
(a) Bank will make Advances not exceeding (i) the Committed Revolving
Line, minus (ii) the Cash Management Services Sublimit. Amounts borrowed under
this Section may be repaid and reborrowed during the term of this Agreement.
(b) To obtain an Advance, Borrower must notify Bank by facsimile or
telephone by 3:00 p.m. Pacific time on the Business Day the Advance is to be
made. Borrower must promptly confirm the notification by delivering to Bank the
Payment/Advance Form attached as Exhibit B. Bank will credit Advances to
Borrower's deposit account. Bank may make Advances under this Agreement based on
instructions from a Responsible Officer or his or her designee or without
instructions if the Advances are necessary to meet Obligations which have become
due. Bank may rely on any telephone notice given by a person whom Bank believes
is a Responsible Officer or designee. Borrower will indemnify Bank for any loss
Bank suffers due to reliance.
(c) The Committed Revolving Line terminates on the Revolving Maturity
Date, when all Advances and other amounts due under this Agreement are
immediately payable.
2.1.2 Cash Management Services Sublimit.
Borrower may use up to $200,000 for Bank's Cash Management Services,
which include direct deposit of payroll identified in various cash management
services agreements related to such services (the "Cash Management Services").
All amounts Bank pays for any Cash Management Services will be treated as
Advances under the Committed Revolving Line.
2.2 Interest Rate, Payments.
(a) Interest Rate. Advances accrue interest on the outstanding principal
balance at a per annum rate equal to the Prime Rate. After an Event of Default,
Obligations accrue interest at 5 percent above the rate effective immediately
before the Event of Default. The interest rate increases or decreases when the
Prime Rate changes. Interest is computed on a 360 day year for the actual number
of days elapsed.
(b) Payments. Interest due on the Committed Revolving Line is payable on
the 16th of each month. Bank may debit any of Borrower's deposit accounts
including Account Number
4
<PAGE>
________________________________________________ for principal and interest
payments or any amounts Borrower owes Bank. Bank will notify Borrower when it
debits Borrower's accounts. These debits are not a set-off. Payments received
after 12:00 noon Pacific time are considered received at the opening of business
on the next Business Day. When a payment is due on a day that is not a Business
Day, the payment is due the next Business Day and additional fees or interest
accrue.
2.3 Fees.
Borrower will pay:
(a) Bank Expenses. All Bank Expenses (including reasonable attorneys' fees
and expenses) incurred through and after the date of this Agreement, are payable
when due.
3 CONDITIONS OF LOANS
-------------------
3.1 Conditions Precedent to Initial Credit Extension.
Bank's obligation to make the initial Credit Extension is subject to the
condition precedent that it receive the agreements, documents and fees it
requires. Borrower to establish a certificate of deposit with Bank in an amount
not less than $1,000,000.
3.2 Conditions Precedent to all Credit Extensions.
Bank's obligations to make each Credit Extension, including the initial
Credit Extension, is subject to the following:
(a) timely receipt of any Payment/Advance Form; and
(b) the representations and warranties in Section 5 must be materially true
on the date of the Payment/Advance Form and on the effective date of each Credit
Extension and no Event of Default may have occurred and be continuing, or result
from the Credit Extension. Each Credit Extension is Borrower's representation
and warranty on that date that the representations and warranties of Section 5
remain true.
4 CREATION OF SECURITY INTEREST
-----------------------------
4.1 Grant of Security Interest.
Borrower grants Bank a security interest in the Collateral to secure all
Obligations and performance of each of Borrower's duties under the Loan
Documents. Bank's security interest is a first priority security interest in the
Collateral. Bank may place a "hold" on the certificate of deposit pledged as
Collateral.
5 REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants as follows:
5.1 Due Organization and Authorization.
Borrower and each Subsidiary is duly existing and in good standing in its
state of formation and qualified and licensed to do business in, and in good
standing in, any state in which the conduct of its business or its ownership of
property requires that it be qualified.
The execution, delivery and performance of the Loan Documents have been
duly authorized, and do not conflict with Borrower's formation documents, nor
constitute an event of default under any material agreement by which Borrower is
bound. Borrower is not in default
5
<PAGE>
under any agreement to which or by which it is bound in which the default could
cause a Material Adverse Change.
5.2 Litigation.
Except as shown in the Schedule, there are no actions or proceedings
pending or, to Borrower's knowledge, threatened by or against Borrower or any
Subsidiary in which an adverse decision could cause a Material Adverse Change.
5.3 Regulatory Compliance.
Borrower is not an "investment company" or a company "controlled" by an
"investment company" under the Investment Company Act. Borrower is not engaged
as one of its important activities in extending credit for margin stock (under
Regulations G, T and U of the Federal Reserve Board of Governors). Borrower has
complied with the Federal Fair Labor Standards Act. Borrower has not violated
any laws, ordinances or rules, the violation of which could cause a Material
Adverse Change. None of Borrower's or any Subsidiary's properties or assets has
been used by Borrower or any Subsidiary or, to the best of Borrower's knowledge,
by previous Persons, in disposing, producing, storing, treating, or transporting
any hazardous substance other than legally. Borrower and each Subsidiary has
timely filed all required tax returns and paid, or made adequate provision to
pay, all taxes, except those being contested in good faith with adequate
reserves under GAAP. Borrower and each Subsidiary has obtained all consents,
approvals and authorizations of, made all declarations or filings with, and
given all notices to, all government authorities that are necessary to continue
its business as currently conducted.
5.4 Subsidiaries.
Borrower does not own any stock, partnership interest or other equity
securities except for Permitted Investments.
5.5 Full Disclosure.
No representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank contains any untrue statement of
a material fact or omits to state a material fact necessary to make the
statements contained in the certificates or statements not misleading.
6 AFFIRMATIVE COVENANTS
---------------------
Borrower will do all of the following:
6.1 Government Compliance.
Borrower will maintain its and all Subsidiaries' legal existence and good
standing in its jurisdiction of formation and maintain qualification in each
jurisdiction in which the failure to so qualify could have a material adverse
effect on Borrower's business or operations. Borrower will comply, and have each
Subsidiary comply, with all laws, ordinances and regulations to which it is
subject, noncompliance with which could have a material adverse effect on
Borrower's business or operations or cause a Material Adverse Change.
6.2 Taxes.
Borrower will make, and cause each Subsidiary to make, timely payment of
all material federal, state, and local taxes or assessments and will deliver to
Bank, on demand, appropriate certificates attesting to the payment.
6
<PAGE>
6.3 Primary Accounts.
Borrower will maintain its primary depository and operating accounts with
Bank.
6.4 Further Assurances.
Borrower will execute any further instruments and take further action as
Bank requests to perfect or continue Bank's security interest in the Collateral
or to effect the purposes of this Agreement.
7 NEGATIVE COVENANTS
------------------
Borrower will not do any of the following:
7.1 Changes in Business, Ownership, Management or Business Locations.
Engage in or permit any of its Subsidiaries to engage in in any business
other than the businesses currently engaged in by Borrower or have a material
change in its ownership of greater than 25%. Borrower will not, without at least
30 days prior written notice, relocate its chief executive office or add any new
offices or business locations.
7.2 Compliance.
Become an "investment company" or a company controlled by an "investment
company," under the Investment Company Act of 1940 or undertake as one of its
important activities extending credit to purchase or carry margin stock, or use
the proceeds of any Credit Extension for that purpose; fail to meet the minimum
funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair
Labor Standards Act or violate any other law or regulation, if the violation
could have a material adverse effect on Borrower's business or operations or
cause a Material Adverse Change, or permit any of its Subsidiaries to do so.
8 EVENTS OF DEFAULT
-----------------
Any one of the following is an Event of Default:
8.1 Payment Default.
If Borrower fails to pay any of the Obligations when due;
8.2 Covenant Default.
If Borrower violates any covenant in Section 7 or does not perform or
observe any other material term, condition or covenant in this Agreement, any
Loan Documents, or in any agreement between Borrower and Bank and as to any
default under a term, condition or covenant that can be cured, has not cured the
default within 10 days after it occurs, or if the default cannot be cured within
10 days or cannot be cured after Borrower's attempts within 10 day period, and
the default may be cured within a reasonable time, then Borrower has an
additional period (of not more than 30 days) to attempt to cure the default.
During the additional time, the failure to cure the default is not an Event of
Default (but no Credit Extensions will be made during the cure period);
8.3 Material Adverse Change.
If there (i) occurs a material impairment in the perfection or priority of
the Bank's security interest in the Collateral or in the value of such
Collateral which is not covered by adequate
7
<PAGE>
insurance or (ii) is a material impairment of the prospect of repayment of any
portion of the Obligations.
8.4 Attachment.
If any material portion of Borrower's assets is attached, seized, levied
on, or comes into possession of a trustee or receiver and the attachment,
seizure or levy is not removed in 10 days, or if Borrower is enjoined,
restrained, or prevented by court order from conducting a material part of its
business or if a judgment or other claim becomes a Lien on a material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed against
any of Borrower's assets by any government agency and not paid within 10 days
after Borrower receives notice. These are not Events of Default if stayed or if
a bond is posted pending contest by Borrower (but no Credit Extensions will be
made during the cure period);
8.5 Insolvency.
If Borrower becomes insolvent or if Borrower begins an Insolvency
Proceeding or an Insolvency Proceeding is begun against Borrower and not
dismissed or stayed within 30 days (but no Credit Extensions will be made before
any Insolvency Proceeding is dismissed);
8.6 Other Agreements.
If there is a default in any agreement between Borrower and a third party
that gives the third party the right to accelerate any indebtedness exceeding
$100,000 or that could cause a Material Adverse Change;
8.7 Judgments.
If a money judgment(s) in the aggregate of at least $50,000 is rendered
against Borrower and is unsatisfied and unstayed for 10 days (but no Credit
Extensions will be made before the judgment is stayed or satisfied); or
8.8 Misrepresentations.
If Borrower or any Person acting for Borrower makes any material
misrepresentation or material misstatement now or later in any warranty or
representation in this Agreement or in any writing delivered to Bank or to
induce Bank to enter this Agreement or any Loan Document.
9 BANK'S RIGHTS AND REMEDIES
--------------------------
9.1 Rights and Remedies.
When an Event of Default occurs and continues Bank may, without notice or
demand, do any or all of the following:
(a) Declare all Obligations immediately due and payable (but if an Event
of Default described in Section 8.5 occurs all Obligations are immediately due
and payable without any action by Bank);
(b) Stop advancing money or extending credit for Borrower's benefit under
this Agreement or under any other agreement between Borrower and Bank;
(c) Apply to the Obligations any (i) balances and deposits of Borrower it
holds, or (ii) any amount held by Bank owing to or for the credit or the account
of Borrower; and
(d) Dispose of the Collateral according to the Code.
8
<PAGE>
9.2 Remedies Cumulative.
Bank's rights and remedies under this Agreement, the Loan Documents, and
all other agreements are cumulative. Bank has all rights and remedies provided
under the Code, by law, or in equity. Bank's exercise of one right or remedy is
not an election, and Bank's waiver of any Event of Default is not a continuing
waiver. Bank's delay is not a waiver, election, or acquiescence. No waiver is
effective unless signed by Bank and then is only effective for the specific
instance and purpose for which it was given.
10 NOTICES
-------
All notices or demands by any party about this Agreement or any other
related agreement must be in writing and be personally delivered or sent by an
overnight delivery service, by certified mail, postage prepaid, return receipt
requested, or by telefacsimile to the addresses set forth at the beginning of
this Agreement. A party may change its notice address by giving the other party
written notice.
11 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
------------------------------------------
California law governs the Loan Documents without regard to principles of
conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of
the State and Federal courts in Santa Clara County, California.
BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
12 GENERAL PROVISIONS
------------------
12.1 Successors and Assigns.
This Agreement binds and is for the benefit of the successors and
permitted assigns of each party. Borrower may not assign this Agreement or any
rights under it without Bank's prior written consent which may be granted or
withheld in Bank's discretion. Bank has the right, without the consent of or
notice to Borrower, to sell, transfer, negotiate, or grant participation in all
or any part of, or any interest in, Bank's obligations, rights and benefits
under this Agreement.
12.2 Indemnification.
Borrower will indemnify, defend and hold harmless Bank and its officers,
employees, and agents against: (a) all obligations, demands, claims, and
liabilities asserted by any other party in connection with the transactions
contemplated by the Loan Documents; and (b) all losses or Bank Expenses
incurred, or paid by Bank from, following, or consequential to transactions
between Bank and Borrower (including reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.
12.3 Time Of Essence.
Time is of the essence for the performance of all obligations in this
Agreement.
9
<PAGE>
12.4 Severability of Provision.
Each provision of this Agreement is severable from every other provision
in determining the enforceability of any provision.
12.5 Amendments in Writing, Integration.
All amendments to this Agreement must be in writing and signed by Borrower
and Bank. This Agreement represents the entire agreement about this subject
matter, and supersedes prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the
parties about the subject matter of this Agreement merge into this Agreement and
the Loan Documents.
12.6 Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, are an original, and all taken together, constitute one Agreement.
12.7 Survival.
All covenants, representations and warranties made in this Agreement
continue in full force while any Obligations remain outstanding. The obligations
of Borrower in Section 122 to indemnify Bank will survive until all statutes of
limitations for actions that may be brought against Bank have run.
12.8 Confidentiality.
In handling any confidential information, Bank will exercise the same
degree of care that it exercises for its own proprietary information, but
disclosure of information may be made (i) to Bank's subsidiaries or affiliates
in connection with their business with Borrower, (ii) to prospective transferees
or purchasers of any interest in the loans, (iii) as required by law,
regulation, subpoena, or other order, (iv) as required in connection with Bank's
examination or audit and (v) as Bank considers appropriate exercising remedies
under this Agreement. Confidential information does not include information that
either: (a) is in the public domain or in Bank's possession when disclosed to
Bank, or becomes part of the public domain after disclosure to Bank; or (b) is
disclosed to Bank by a third party, if Bank does not know that the third party
is prohibited from disclosing the information.
12.9 Attorneys' Fees, Costs and Expenses.
In any action or proceeding between Borrower and Bank arising out of the
Loan Documents, the prevailing party will be entitled to recover its reasonable
attorneys' fees and other costs and expenses incurred, in addition to any other
relief to which it may be entitled.
13 Definitions
-----------
13.1 Definitions.
In this Agreement:
"Advance" or "Advances" is a loan advance (or advances) under the
Committed Revolving Line.
"Affiliate" of a Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each
10
<PAGE>
of that Person's senior executive officers, directors, partners and, for any
Person that is a limited liability company, that Person's managers and members.
"Bank Expenses" are all audit fees and expenses and reasonable costs and
expenses (including reasonable attorneys' fees and expenses) for preparing,
negotiating, administering, defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).
"Borrower's Books" are all Borrower's books and records including ledgers,
records regarding Borrower's assets or liabilities, the Collateral, business
operations or financial condition and all computer programs or discs or any
equipment containing the information.
"Business Day" is any day that is not a Saturday, Sunday or a day on which
the Bank is closed.
"Cash Management Services" are defined in Section 2.1.2.
"Closing Date" is the date of this Agreement.
"Code" is the California Uniform Commercial Code.
"Collateral" is the property described on Exhibit A.
---------
"Committed Revolving Line" is an Advance of up to $1,000,000.
"Contingent Obligation" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but "Contingent
Obligation" does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under the guarantee or other support arrangement.
"Credit Extension" is each Advance or any other extension of credit by
Bank for Borrower's benefit.
"ERISA" is the Employment Retirement Income Security Act of 1974, and its
regulations.
"GAAP" is generally accepted accounting principles.
"Indebtedness" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.
"Insolvency Proceeding" are proceedings by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.
11
<PAGE>
"Investment" is any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital
contribution to any Person.
"Lien" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.
"Loan Documents" are, collectively, this Agreement, any note, or notes or
guaranties executed by Borrower or Guarantor, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated.
"Material Adverse Change" is defined in Section 8.3.
"Obligations" are debts, principal, interest, Bank Expenses and other
amounts Borrower owes Bank now or later, including letters of credit and
Exchange Contracts and including interest accruing after Insolvency Proceedings
begin and debts, liabilities, or obligations of Borrower assigned to Bank.
"Person" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company association, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or government agency.
"Prime Rate" is Bank's most recently announced "prime rate," even if it is
not Bank's lowest rate.
"Responsible Officer" is each of the Chief Executive Officer, the
President, the Chief Financial Officer and the Controller of Borrower.
"Revolving Maturity Date" is April 15, 2000.
"Schedule" is any attached schedule of exceptions.
"Subordinated Debt" is debt incurred by Borrower subordinated to
Borrower's debt to Bank (and identified as subordinated by Borrower and Bank).
"Subsidiary" is for any Person, or any other business entity of which more
than 50% of the voting stock or other equity interests is owned or controlled,
directly or indirectly, by the Person or one or more Affiliates of the Person.
BORROWER:
Bamboo.com, Inc.
By:_____________________________________
Title:__________________________________
12
<PAGE>
BANK:
SILICON VALLEY BANK
By:_____________________________________
Title:__________________________________
13
<PAGE>
EXHIBIT A
---------
The Collateral consists of all of Borrower's right, title and interest in
and to the following:
Bank Certificate of Deposit No. _______________________ in an amount not
less than One Million Dollars ($1,000,000), together with all renewals and
proceeds of the foregoing; and
All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions
and accessions to and proceeds thereof.
<PAGE>
EXHIBIT B
---------
LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.
TO: CENTRAL CLIENT SERVICE DIVISION DATE: _____________________
FAX#: (408) 496-2426 TIME: _____________________
- --------------------------------------------------------------------------------
FROM: Bamboo.com, Inc.
--------------------------------------------------------------------------
CLIENT NAME (BORROWER)
REQUESTED BY: __________________________________________________________________
AUTHORIZED SIGNER'S NAME
AUTHORIZED SIGNATURE: __________________________________________________________
PHONE NUMBER: __________________________________________________________________
FROM ACCOUNT # ____________ TO ACCOUNT # ______________________________________
REQUESTED TRANSACTION TYPE REQUESTED DOLLAR AMOUNT
- -------------------------- -----------------------
PRINCIPAL INCREASE (ADVANCE) $____________________________________________
PRINCIPAL PAYMENT (ONLY) $____________________________________________
INTEREST PAYMENT (ONLY) $____________________________________________
PRINCIPAL AND INTEREST (PAYMENT) $____________________________________________
OTHER INSTRUCTIONS: ____________________________________________________________
- --------------------------------------------------------------------------------
All Borrower's representations and warranties in the Loan and Security Agreement
are true, correct and complete in all material respects on the date of the
telephone request for and Advance confirmed by this Borrowing Certificate; but
those representations and warranties expressly referring to another date shall
be true, correct and complete in all material respects as of that date.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BANK USE ONLY
TELEPHONE REQUEST:
- -----------------
The following person is authorized to request the loan payment transfer/loan
advance on the advance designated account and is known to me.
_______________________________ ________________________________
Authorized Requester Phone #
_______________________________ ________________________________
Received By (Bank) Phone #
_______________________________
Authorized Signature (Bank)
- --------------------------------------------------------------------------------
<PAGE>
SILICON VALLEY BANK
PRO FORMA INVOICE FOR LOAN CHARGES
BORROWER: Bamboo.com, Inc.
LOAN OFFICER: Francisco Terrizzano
DATE: April 16, 1999
Documentation Fee 350.00
TOTAL FEE DUE $350.00
------------- =======
Please indicate the method of payment:
{ } A check for the total amount is attached.
{ } Debit DDA #_____________ for the total amount.
{ } Loan proceeds
Borrower:
BY:__________________________________
(Authorized Signer)
_____________________________________
Silicon Valley Bank (Date)
Account Officer's Signature
<PAGE>
CORPORATE BORROWING RESOLUTION
Borrower: Bamboo.com, Inc. Bank: Silicon Valley Bank
124 University Avenue, Suite 202 3003 Tasman Drive
Palo Alto, CA 94301 Santa Clara, CA 95054-1191
I, the undersigned Secretary or Assistant Secretary of Bamboo.com, Inc.
("Borrower"), HEREBY CERTIFY that Borrower is a corporation duly organized and
existing under and by virtue of the laws of the State of Delaware.
I FURTHER CERTIFY that at a meeting of the Directors of Borrower (or by other
duly authorized corporate action in lieu of a meeting), duly called and held, at
which a quorum was present and voting, the following resolutions were adopted.
BE IT RESOLVED, that any one (1) of the following named officers, employees, or
agents of Borrower, whose actual signatures are shown below:
NAMES POSITIONS ACTUAL SIGNATURES
----- --------- -----------------
- ----------------------- -------------------------- ----------------------------
- ----------------------- -------------------------- ----------------------------
- ----------------------- -------------------------- ----------------------------
- ----------------------- -------------------------- ----------------------------
acting for and on behalf of Borrower and as its act and deed be, and they hereby
are, authorized and empowered:
Borrow Money. To borrow from time to time from Silicon Valley Bank
("Bank"), on such terms as may be agreed upon between the officers of
Borrower and Bank, such sum or sums of money as in their judgment should be
borrowed.
Execute Loan Documents. To execute and deliver to Bank the loan documents
of Borrower, on Bank's forms, at such rates of interest and on such terms
as may be agreed upon, evidencing the sums of money so borrowed or any
indebtedness of Borrower to Bank, and also to execute and deliver to Bank
one or more renewals, extensions, modifications, refinancings,
consolidations, or substitutions for one or more of the loan documents, or
any portion of the loan documents.
Grant Security. To grant a security interest to Bank in any of Borrower's
assets, which security interest shall secure all of Borrower's obligations
to Bank
Negotiate Items. To draw, endorse, and discount with Bank all drafts, trade
acceptances, promissory notes, or other evidences of indebtedness payable
to or belonging to Borrower or in which Borrower may have an interest, and
either to receive cash for the same or to cause such proceeds to be
credited to the account of Borrower with Bank, or to cause such other
disposition of the proceeds derived therefrom as they may deem advisable.
Letters of Credit. To execute letter of credit applications and other
related documents pertaining to Bank's issuance of letters of credit.
Foreign Exchange Contracts. To execute and deliver foreign exchange
contracts, either spot or forward, from time to time, in such amount as, in
the judgment of the officer or officers herein authorized.
<PAGE>
Issue Warrants. To issue warrants to purchase Borrower's capital stock, for
such class, series and number, and on such terms, as an officer of Borrower
shall deem appropriate.
Further Acts. In the case of lines of credit, to designate additional or
alternate individuals as being authorized to request advances thereunder,
and in all cases, to do and perform such other acts and things, to pay any
and all fees and costs, and to execute and deliver such other documents and
agreements, including agreements waiving the right to a trial by jury, as
they may in their discretion deem reasonably necessary or proper in order
to carry into effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
Resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of Borrower's agreements or commitments in effect at the
time notice is given.
I FURTHER CERTIFY that the persons named above are principal officers of the
Borrower and occupy the positions set opposite their respective names; that the
foregoing Resolutions now stand of record on the books of the Borrower; and that
they are in full force and effect and have not been modified or revoked in any
manner whatsoever.
IN WITNESS WHEREOF, I have hereunto set my hand on April 16, 1999 and attest
that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X _________________________________
*Secretary or Assistant Secretary
X _________________________________
*NOTE: In case the Secretary or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, this resolution should
also be signed by a second Officer or Director of Borrower.
2
<PAGE>
EXHIBIT 10.14
MASTER LEASE AGREEMENT
This Master Lease Agreement ("Master Agreement"), dated as of March 24,
1999, and referred to as Lease Number 0099002, is entered into by and between
Silicon Valley Bank ("Lessor"), with its principal place of business at 3003
Tasman Drive, NC 400, Santa Clara, CA 95054 and Jutvision Corporation, a
Delaware corporation ("Lessee"), with its principal place of business at 124
University Avenue, Palo Alto, California, 94301.
Definitions. As used herein, all terms shall have the meanings set forth below.
- -----------
"ACCEPTANCE CERTIFICATE" means the form of certificate provided by Lessor
to evidence Lessee's acceptance of the Equipment.
"ACCEPTANCE DATE" the date the Lessee signs and delivers to Lessor the
Acceptance Certificate.
"APPLICABLE TERM" the Initial Term and any renewal or extension thereof.
"ASSIGNEE" means any party to whom Lessor assigns Lessor's rights to any
Lease.
"CASUALTY" means any event upon which any Equipment is condemned, taken,
lost, destroyed, stolen or damaged beyond repair.
"CLAIMS" means any and all claims, actions, suits, proceedings, costs,
expenses (including court costs and reasonable attorneys' fees), damages,
obligations, penalties, injuries and liabilities, including actions based on
Lessor's strict liability in tort.
"COMMITMENT AMOUNT" has the meaning set forth in the Schedule.
"CUT-OFF DATE" means the date specified in Section 7 of the Schedule.
"DEFAULT" means any of the events of default described in Section 16 of
this Master Agreement.
"EQUIPMENT" means the items of Equipment leased under each Schedule.
"EQUIPMENT LOCATION" means the location of the Equipment specified in each
Schedule.
"FIRST PAYMENT DATE" has the meaning set forth in the Schedule.
"IMPOSITION" means each license fee, assessment, and sales, use, property,
excise and other tax.
"INTERIM RENT" has the meaning, if any, set forth in Section 5 of the
Schedule.
"INITIAL TERM" means the total monthly, quarterly or other term of each
Lease, as specified in the Schedule.
"LEASE" means each Schedule.
"LICENSE" means collectively, if the Equipment includes any software, a
license identical to that held by Lessee relating to the use of any software,
technical information, confidential business information and other
documentation.
"MATERIAL AGREEMENT" means collectively this Master Agreement, any Lease,
any Transaction Document or any other agreement between Lessee and Lessor, or
any material agreement between Lessee and any third party, specifically
including, without limitation, any agreement or agreements between Lessee and
any third party which in the aggregate give the third party the right, whether
or not exercised, to accelerate any indebtedness exceeding $100,000.
"ORIGINAL" means the single counterpart of the Schedule, including Rider I
attached thereto and incorporated therein by reference, marked "Original".
"PURCHASE DOCUMENTS" means collectively any purchase order, contract or
other documents Lessee has approved or entered into with Supplier.
"RENT" means the amounts payable by Lessee to Lessor for the Equipment.
"RIDER 1" means the rider marked "Rider I" which is attached to and
incorporated within each Schedule.
"SCHEDULE" means each schedule containing the specific terms of each
individual lease.
"STIPULATED LOSS VALUE" means the stipulated loss value of the Equipment as
specified in Rider I to the Schedule.
"SUPPLIER" means the seller of the Equipment.
"TOTAL COST" means the Equipment acquisition cost including such shipping,
delivery, installation and other charges as Lessor shall have approved set forth
in Section 3 of the Schedule, as adjusted pursuant to Section 6 of this Master
Agreement.
"TAX BENEFITS" means collectively certain deductions, credits, and other
tax benefits as are provided in the Internal Revenue Code of 1986, as amended,
including without limitation, accelerated depreciation and interest deductions
to which Lessor may be entitled.
"TRANSACTION DOCUMENTS" means collectively this Master Agreement, all
Leases and all other related instruments or documents executed and/or delivered
hereunder or in connection herewith.
1. LEASE OF EQUIPMENT. This Master Agreement sets forth the general terms
and conditions which apply to the lease of equipment from Lessor to Lessee. The
specific terms of each individual lease are set forth in a separate Schedule,
including the Equipment leased under the applicable Schedule. Each Schedule
constitutes a separate and distinct Lease, enforceable according to its terms.
In the event of any conflict between the terms of this Master Agreement and any
related Schedule, the provisions of the applicable Schedule shall govern. The
parties agree that each Schedule incorporates this Master Agreement by reference
by listing the Lease Number (as specified above) on the Schedule. A Lease shall
not become effective until accepted by Lessor.
<PAGE>
2. TERM. This Master Agreement shall commence upon the execution hereof by
both parties, and shall continue until the full performance of all terms
hereunder. The Initial Term shall be as specified in each Schedule. The
Applicable Term shall be automatically extended for successive one-month periods
unless either party gives the other party ninety days' prior written notice that
it intends to terminate the Lease at the end of the Applicable Term.
3. ACCEPTANCE. The Equipment is unconditionally accepted under the Lease
on the Acceptance Date. Lessee shall accept the Equipment as soon as it is
delivered or, if acceptance requirements are specified in the applicable
Purchase Documents, as soon as such requirements are met. Upon the execution of
the Acceptance Certificate, Lessee shall promptly deliver it to Lessor.
4. RENT; NON-CANCELLABLE NET LEASE. As Rent for the Equipment, Lessee
agrees to pay the amounts specified in the Schedule. Lessee acknowledges and
agrees that all Leases hereunder are non-cancellable net Leases, and Lessee
agrees that its obligation to pay Rent and all other amounts when due is
unconditional. Lessee is not entitled to abate or reduce rent or any other
amounts due, or to set off any charges against those amounts. Lessee is not
entitled to claim or assert any recoupments, cross-claims, counterclaims or any
other defenses to any rent payments or other amounts due hereunder, whether
those defenses arise out of claims by Lessee against Lessor, Supplier, this
Master Agreement, any Schedule or otherwise. If the Equipment is not properly
installed, does not operate as represented or warranted by Supplier or is
unsatisfactory for any reason whatsoever, Lessee shall make any claim or account
thereof solely against Supplier and shall nevertheless pay all sums payable
under any Lease. Lessee hereby waives any such claims against Lessor and any
Assignee.
5. ASSIGNMENT OF PURCHASE DOCUMENTS. Lessee assigns to Lessor all of
Lessee's right, title and interest in and to the Equipment described in the
Purchase Documents and in the Schedule. This assignment is an assignment of
rights only, and Lessee shall remain liable for all obligations under the
Purchase Documents, except that Lessor shall pay for the Equipment within 30
days of the Acceptance Date or as otherwise agreed by Lessor in writing. If
Lessee has not entered into Purchase Documents for such Equipment, Lessee
authorizes Lessor to act as Lessee's agent to execute such Purchase Documents.
Lessee also represents and warrants that it has received and approved a copy of
the Purchase Documents, or has been advised by Lessor of (a) the name of the
Supplier of the Equipment, (b) that Lessee may have under such Supplier's
Purchase Documents, and (c) that Lessee may contact the Supplier for information
on such rights. In addition, Lessee shall deliver to Lessor a document
acceptable to Lessor whereby Supplier acknowledges and provides any consent
required by Lessor or otherwise necessary to such assignment. If the Equipment
includes any software, Supplier shall agree in such acknowledgment and consent
that upon the return of the Equipment to Lessor the Supplier will either grant
Lessor a License and permit Lessor to assign such License to any subsequent end-
user of the Equipment, or grant any such subsequent end-user such a License, but
at no additional charge other than any regularly scheduled fee or charge
otherwise payable by Lessee; provided that Lessee shall at all times remain
liable to Supplier as the licensee under its license, and Lessor shall not have
any obligation thereunder unless and until such license is provided to Lessor in
accordance with these provisions. Lessor shall have no obligation or liability
with respect to Lessee's, or any subsequent third-party licensee's, compliance
under the applicable license. In addition, with respect to any such software,
Supplier shall agree that it will not terminate Lessee's license thereof without
first providing 90 days' prior written notice to Lessor of any intended
termination and providing Lessor the right to cure such breach by Lessee of its
license as gave rise to such notice of intended termination. Supplier shall also
agree to provide all software upgrades and modifications during the Applicable
Term to Lessee, or Lessor or other subsequent licensee, on the same basis as
offered to Supplier's other commercial customers. Lessee agrees that neither
Supplier nor any salesperson or other employee or representative of Supplier is
an agent of Lessor, nor is any such person authorized to waive or alter any
terms of this Master Agreement or any Lease.
6. ADJUSTMENTS. The Total Cost and Rent payment set forth in each Schedule
are estimates, and if the final invoice from the Supplier specifies a Total Cost
(including delivery, installation, taxes and other charges) that is more or less
than such estimated Total Cost, Lessee hereby authorizes Lessor to adjust
accordingly the Total Cost and Rent payment on the applicable Schedule. All
references in this Agreement and in any Schedule to Total Cost and Rent payment
shall mean the estimates thereof specified in the applicable Schedule, as
adjusted pursuant to this Section 6.
7. EQUIPMENT RETURN REQUIREMENTS. On or before the termination of a Lease,
Lessee shall pack the Equipment in accordance with the manufacturer's guidelines
and deliver such Equipment (along with all operating manuals) to Lessor at any
destination within the continental United States designated by Lessor. All
dismantling, packaging, transportation, in-transit insurance and shipping
charges shall be borne by Lessee. All Equipment shall be returned to Lessor in
the same condition and working order as when delivered to Lessee, reasonable
wear and tear excepted, and, if applicable, shall be certifiable for maintenance
by the manufacturer at its standard rates.
8. EQUIPMENT USE AND MAINTENANCE. Lessee is solely responsible for the
selection, installation, operation and maintenance of the
<PAGE>
Equipment and all costs related thereto, including shipping charges. Lessee
shall at all times operate and maintain the Equipment in good operating order,
repair, condition and appearance, normal wear and tear excepted, and in
accordance with its manufacturer's specifications and recommendations. On
reasonable prior notice to Lessee, Lessor and Lessor's agents shall have the
right, during Lessee's business hours, to enter the premises where the Equipment
is located for the purpose of inspecting the Equipment and observing its use.
Lessee shall, at its expense, affix and maintain in a prominent position on each
item of Equipment any tags or identifying labels provided by Lessor to indicate
Lessor's ownership of the Equipment. Lessee shall, at its expense, enter into,
maintain and enforce at all times a maintenance agreement to service and
maintain the Equipment, upon terms and with a provider acceptable to Lessor.
9. EQUIPMENT OWNERSHIP; ATTACHMENTS; LOCATION. Lessor is the sole owner of
the Equipment and has sole title thereto. Lessee covenants that it will not
pledge or encumber the Equipment or Lessor's interest in the Equipment in any
manner whatsoever nor permit any liens to be attached thereto (other than liens
arising directly through Lessor). Lessee shall not make any representation to
any third-party inconsistent with Lessor's sole ownership of the Equipment. The
Equipment shall remain Lessor's personal property whether or not affixed to
realty and shall not become or be made to become a part of any real property on
which it is placed without Lessor's prior written consent. All additions,
attachments and accessories placed on the Equipment or repairs made to the
Equipment become a part thereof and Lessor's property. Lessee shall maintain the
Equipment so that it may be removed from any building in which it is placed
without damage thereto. The Equipment will be located at the Equipment Location,
and Lessee shall not move it and shall not permit it to be moved without the
prior written consent of Lessor.
10. INSURANCE. Lessee agrees to keep the Equipment insured at Lessee's
expense against all risks of loss, including theft or damage from any cause
whatsoever. Lessee agrees that such insurance shall name Lessor as a loss payee,
with a full waiver of warranties (Form BFU-438 or comparable) and provide
coverage not less than the greater of the Stipulated Loss Value of the Equipment
and the then-current fair market value of the Equipment. Lessee also agrees that
it shall carry public liability insurance in an amount consistent with prudent
business practices and customary to Lessee's industry. Each policy shall provide
that the insurance cannot be canceled without at least thirty (30) days prior
written notice to Lessor. Upon request by Lessor, Lessee agrees to furnish proof
of insurance coverage, including a certificate of insurance and a copy of the
policy. If Lessee fails to provide Lessor with such evidence, then Lessor will
have the right, but not the obligation, to have such insurance protecting Lessor
placed at Lessee's expense. Lessee's expense shall include a full premium paid
for such insurance and any customary charges, costs or fees of Lessor. Lessee
agrees to pay such amounts in equal installments allocated to each Rent payment
(plus interest on such amounts at the lesser of 1.5% per month or the maximum
rate allowable under applicable law). Lessee hereby appoints Lessor as its
attorney-in-fact to make any claim, receive payment or execute or endorse all
documents, checks or drafts for loss or damage or return of any premium under
such insurance and to apply any such amounts to satisfy Lessee's obligations
under this Master Agreement or any Lease.
11. RISK OF LOSS. In the event of any Casualty, on the next Rent payment
date Lessee shall pay Lessor the Stipulated Loss Value with respect to the item
of Equipment suffering the Casualty. Upon Lessor's full receipt of such
Stipulated Loss Value, the applicable Schedule shall terminate, and except as
provided in Section 22, Lessee shall be relieved of all obligations under the
applicable Schedule, and Lessor shall transfer all its interest in the Equipment
to Lessee "AS IS, WHERE IS," and without any warranty, express or implied from
Lessor, other than the absence of any liens or claims by, through, or under
Lessor. In the event of a partial destruction of or repairable damage to any
Equipment, the Lease shall continue with respect to such Equipment and Lessee
shall at its expense promptly cause such Equipment to be repaired to a condition
acceptable to Lessor. There shall be no abatement of Rent in any such event.
Lessee shall immediately notify Lessor of any Casualty or partial destruction or
damage to any Equipment.
12. TAXES. On behalf of Lessee Lessor shall file and pay all Impositions
now or hereafter imposed or assessed by any foreign, federal, state or local
government upon the purchase, ownership, delivery, installation, leasing,
rental, use or sale of the Equipment, or the Rent or other charges payable
hereunder, whether assessed on Lessor or Lessee. As additional Rent, Lessee
shall reimburse Lessor for all Impositions, together with any penalties or
interest in connection therewith attributable to Lessee's acts or failure to
act, excepting only any Imposition on or measured by the net income of Lessor.
13. INDEMNITY. Lessee shall indemnify, defend and hold harmless Lessor,
its agents and assignees, from and against any and all Claims, arising, directly
or indirectly, out of or connected with any matter involving this Master
Agreement, the Equipment or any Lease, including but not limited to: (a) the
selection, manufacture, purchase, acceptance, rejection, ownership, delivery,
lease, possession, maintenance, use, condition, return or operation of the
Equipment; (b) any breach by Lessee of any representation, warranty or covenant
hereunder or any other Transaction Document; (c) any latent defects or other
defects in any Equipment, whether or not discoverable by Lessor or by Lessee;
(d) any patent, trademark or copyright infringement; and (e) the condition of
any Equipment arising or existing during Lessee's use.
<PAGE>
Notwithstanding the foregoing, Lessee shall have no indemnity obligation
with respect to any Claims which arise solely out of the gross negligence or
willful misconduct of Lessor.
14. DISCLAIMER OF WARRANTIES AND LESSEE WAIVERs. LESSEE LEASES THE
EQUIPMENT FROM LESSOR "AS IS" AND "WHERE IS," LESSEE HEREBY AGREES THAT: EXCEPT
AS TO QUIET ENJOYMENT, LESSOR MAKES ABSOLUTELY NO WARRANTIES, EXPRESS OR IMPLIED
TO LESSEE; LESSOR SHALL NOT BE LIABLE FOR ANY FAILURE OF ANY EQUIPMENT OR ANY
DELAY IN ITS DELIVERY OR INSTALLATION OR ANY BREACH OF ANY WARRANTY THAT SELLER
MAY HAVE MADE; LESSEE HAS SELECTED ALL EQUIPMENT WITHOUT LESSOR'S ASSISTANCE;
LESSOR IS NOT A MANUFACTURER OF ANY OF THE EQUIPMENT; LESSOR SHALL HAVE NO
LIABILITY TO LESSEE, LESSEE'S CUSTOMERS, OR ANY THIRD PARTIES FOR ANY DIRECT,
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT OR ANY
SCHEDULE OR CONCERNING ANY EQUIPMENT, OR FOR ANY DAMAGES BASED ON STRICT OR
ABSOLUTE TORT LIABILITY OR LESSOR'S NEGLIGENCE; LESSEE'S SOLE RECOURSE FOR ANY
AND ALL CLAIMS AND WARRANTIES RELATING TO THE EQUIPMENT SHALL BE AGAINST SELLER.
Lessor hereby assigns to Lessee for the Applicable Term the right to enforce,
provided that no Default then exists under this Master Agreement or any Lease
and such enforcement is pursued in Lessee's name, any representations,
warranties and agreements made by the Supplier pursuant to the Purchase
Documents, and Lessee may retain any recovery resulting from any such
enforcement efforts. LESSEE WAIVES ANY AND ALL RIGHTS AND REMEDIES CONFERRED
UPON A LESSEE BY ARTICLE 2A (CALIFORNIA COMMERCIAL CODE DIVISION 10) OF THE
UNIFORM COMMERCIAL CODE (INCLUDING LESSEE'S RIGHTS, CLAIMS AND DEFENSES UNDER
UCC ARTICLE 2A SECTIONS 508-522) AND ANY RIGHTS NOW OR HEREAFTER CONFERRED BY
STATUTE OR OTHERWISE THAT MAY LIMIT OR MODIFY LESSOR'S RIGHTS AS DESCRIBED IN
THIS SECTION OR OTHER SECTIONS OF THIS MASTER AGREEMENT.
15. LESSEE WARRANTIES. Lessee represents, warrants and covenants to Lessor
that: (a) all Equipment is leased for business purposes only and not for
personal, family or household purposes; (b) Lessee is duly organized, validly
existing and in good standing under applicable law; (c) Lessee has the power and
authority to enter into the Transaction Documents; (d) the Transaction Documents
are enforceable against Lessee in accordance with their terms and do not violate
or create a default under any instrument or agreement binding on Lessee; (e)
there are no pending or threatened actions or proceedings before any court or
administrative agency which could have a material adverse effect on Lessee or
any Transaction Document, unless such actions are disclosed to Lessor and
consented to in writing by Lessor; (f) Lessee shall comply in all material
respects with all laws and regulations the violation of which could have a
material adverse effect upon the Equipment or Lessee's performance of its
obligations under any Transaction Document; (g) each Transaction Document shall
be effective against all creditors of Lessee under applicable law, including
fraudulent conveyance and bulk transfer laws, and shall raise no presumption of
fraud; (h) financial statements and other related information furnished by
Lessee shall be prepared in accordance with generally accepted accounting
principles and shall fairly present Lessee's financial position as of the dates
given on such statements; (i) Lessee shall furnish Lessor with its financial
statements certified by an officer of Lessee on a monthly basis within thirty
(30) days of the end of each month, and audited financial statements on an
annual basis within 120 days of the end of each fiscal year, opinions of
counsel, resolutions, and such other information and documents as Lessor may
reasonably request; (j) all Equipment is tangible personal property and shall
not become a fixture or real property under Lessee's use thereof; and (k) there
has not been a material adverse change in the general affairs, management,
results of operations, condition (financial or otherwise) or prospects of
Lessee, whether or not arising from transactions in the ordinary course of
business. Lessee shall be deemed to have reaffirmed the foregoing warranties
each time it executes any Transaction Document.
16. DEFAULT. Any of the following shall constitute a Default under this
Master Agreement and all Leases: (a) Lessee fails to pay any Rent payment or any
other amount payable to Lessor hereunder when due; or (b) Lessee defaults on or
breaches any of the other terms and conditions of any Material Agreement; or (c)
any representation or warranty made by Lessee in a Material Agreement proves to
be incorrect in any material respect when made or reaffirmed; or (d) Lessee
becomes insolvent or fails generally to pay its debts as they become due; or (e)
the Equipment is levied against, seized or attached and the same is not bonded
against, released or stayed within ten days; or (f) Lessee makes an assignment
for the benefit of creditors, whether voluntary or involuntary; or (g) a
proceeding under any bankruptcy, reorganization, arrangement of debt, insolvency
or receivership law is filed by or against Lessee or Lessee takes any action to
authorize any of the foregoing matters and, if filed against Lessee, is not
dismissed within 30 days; or (h) any letter of credit, guaranty, surety bond or
like instrument issued in support of a Lease is revoked, breached, canceled or
terminated; (i) any guarantor, surety or like third-party obligor under this
Master Agreement fails to fulfill any of the obligations of Lessor which it
agreed to perform; or (j) in the good faith, reasonable commercial judgment of
Lessor, there has occurred or will likely occur a material adverse change in
<PAGE>
the general affairs, management, results of operations, condition (financial or
otherwise) or prospects of Lessee, whether or not arising from transactions in
the ordinary course of business, or in Lessee's or any such third-party
obligor's willingness or ability to perform under any Transaction Document.
17. REMEDIES. If a Default occurs, Lessor may, in its sole discretion,
exercise one or more of the following remedies, without notice of election and
without demand: (a) terminate this Master Agreement or any Lease; without notice
of election and without demand, (b) take possession of, or render unusable, any
Equipment wherever the Equipment may be located, without demand or notice,
without any court order or other process of law and without liability to Lessor
for any damages occasioned by such action, and no such action shall constitute a
termination of any Lease; or (c) require Lessee to deliver the Equipment to a
location specified by Lessor; or (d) declare the Stipulated Loss Value for any
or all Leases to be due and payable as liquidated damages for loss of a bargain
and not as a penalty and in lieu of any further Rent payments under the
applicable Lease or Leases; or (e) proceed by court action to enforce
performance by Lessee of any Lease and/or to recover all damages and expenses
incurred by Lessor by reason of any Default; or (f) terminate any other
agreement that Lessor may have with Lessee; or (g) suspend or terminate funding
of the Commitment Amount or any other amount in connection with the Transaction
Documents; or (h) exercise any other right or remedy available to Lessor at law
or in equity. Any Rent not received on or before the due date shall bear
interest at the lesser of 1.5% per month or the highest interest rate legally
permissible. Lessee shall pay Lessor all costs and expenses that Lessor may
incur to maintain, safeguard or preserve the Equipment, and other expenses
incurred by Lessor in enforcing any of the terms, conditions or provisions of
this Agreement (including reasonable legal fees and collection agency costs).
Upon repossession or surrender of any Equipment, Lessor shall lease, sell or
otherwise dispose of the Equipment in compliance with applicable law and apply
the net proceeds thereof (after deducting all expenses, including reasonable
legal fees and costs, incurred in connection therewith) to the amounts owed to
Lessor hereunder; provided, however, that Lessee shall remain liable to Lessor
for any deficiency that remains after any sale or lease of such Equipment. These
remedies are cumulative of every other right or remedy given hereunder or now or
hereafter existing at law or in equity or by statute or otherwise, and may be
enforced concurrently therewith or from time to time.
18. PERFORMANCE OF LESSEE'S OBLIGATIONS. If Lessee fails to perform any of
its obligations hereunder, Lessor may perform any act or make any payment that
Lessor deems reasonably necessary for the maintenance and preservation of the
Equipment and Lessor's interests therein; provided that the performance of any
act or payment by Lessor shall not be deemed a waiver of, or release Lessee
from, the obligation at issue. All sums so paid by Lessor, together with
expenses (including reasonable legal fees and costs) incurred by Lessor in
connection therewith, shall be considered Rent hereunder, will bear interest at
the lesser of 1.5% per month or the highest interest rate legally permissible,
and shall be, without demand, immediately due and payable to Lessor by Lessee.
19. ASSIGNMENT. Lessor may assign, pledge, transfer, mortgage or otherwise
convey any of its interest in this Master Agreement, any Lease, Schedule or
Equipment, in whole or in part, without notice to or the consent of Lessee. If
any Lease is assigned, Lessee shall: (a) unless otherwise specified by Lessor
and Assignee, pay all amounts due under the applicable Lease to such Assignee,
notwithstanding any defense, setoff or counterclaim whatsoever that Lessee may
have against Lessor or Assignee, all of which are hereby waived by Lessee as to
any Assignee; (b) not require the Assignee to perform any obligations of Lessor,
other than those that are expressly assumed in writing by such Assignee; and (c)
execute such acknowledgments thereto as may be requested by Lessor. It is
further agreed that: (x) each Assignee shall be entitled to all of Lessor's
rights, powers and privileges under the applicable Lease, to the extent
assigned; (y) any Assignee may reassign its rights and interests under the
applicable Lease with the same force and effect as the assignment described
herein; and (z) any payments received by the Assignee from Lessee with respect
to the assigned Lease shall, to the extent thereof, discharge the obligations of
Lessee to Lessor with respect to the assigned Lease. Lessee acknowledges that
any assignment or transfer by Lessor or any Assignee will not materially change
Lessee's obligations under the assigned Lease. Without Lessor's prior written
consent, Lessee shall not assign this Master Agreement or any Lease or assign
its rights in or sublet the Equipment or any interest therein.
20. FURTHER ASSURANCES. Lessee shall promptly execute and deliver to
Lessor such further documents and take such further action as Lessor may require
in order to more effectively carry out the intent and purpose of this Master
Agreement and any Lease, including executing and delivering any and all
financing statements which Lessor may request. Upon demand, Lessee will promptly
reimburse Lessor for any filing or recording fees or expenses (including
reasonable legal fees and costs) incurred by Lessor in perfecting or protecting
its interests in the Equipment.
21. SURVIVAL. All representations, warranties and covenants made by Lessee
hereunder shall survive the termination of this Agreement and shall remain in
full force and effect. All of Lessor's rights, privileges and indemnities, to
the extent they are fairly attributable to events or conditions occurring or
existing on or prior to the termination of this Agreement, shall survive such
termination and be enforceable by Lessor and Lessor's successors and assigns.
<PAGE>
22. WAIVER OF JURY TRIAL. LESSEE AND LESSOR HEREBY EXPRESSLY WAIVE ANY
RIGHT TO DEMAND A JURY TRIAL WITH RESPECT TO ANY ACTION OR PROCEEDING INSTITUTED
BY LESSOR OR LESSEE IN CONNECTION WITH THIS MASTER LEASE OR ANY LEASE OR
SCHEDULE.
23. CAPTIONS; COUNTERPARTS; LESSOR'S AFFILIATES. The captions contained in
this Agreement are for convenience only and shall not affect the interpretation
of this Master Agreement. Only the Original shall be marked "Original", and all
other counterparts of the Schedule shall be marked as, and shall be, duplicates.
To the extent that any Schedule constitutes chattel paper (as such term is
defined in the Uniform Commercial Code in effect in the applicable
jurisdiction), no security interest in such Schedule may be created through the
transfer or possession of any counterpart other than the Original.
24. MISCELLANEOUS. This Master Agreement and each Lease hereunder shall be
governed by the internal laws (as opposed to conflicts of law provisions) of the
state of California. If any provision of this Master Agreement or any Schedule
shall be prohibited by or invalid under any law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Master Agreement or any Lease. Lessor and Lessee consent to the jurisdiction of
any local, state or federal court located within the County of Santa Clara,
State of California, and waive any objection relating to improper venue or forum
non conveniens to the conduct of any proceeding in any such court. This
Agreement and the other Transaction Documents constitute the entire agreement
between Lessor and Lessee relating to the leasing of the Equipment, and
supersede all prior agreements relating thereto, whether written or oral, and
may not be amended or modified except in a writing signed by the parties hereto.
Any failure of Lessor to require strict performance by Lessee, or any written
waiver by Lessor of any provision hereof, shall not constitute consent or waiver
of any other breach of the same or any other provision hereof.
IN WITNESS WHEREOF, LESSOR AND LESSEE HAVE EXECUTED THIS MASTER AGREEMENT AS OF
THE DATE SPECIFIED.
LESSEE LESSOR
JUTVISION CORPORATION SILICON VALLEY BANK
By: /s/ R. BRIAN GIBSON By: /s/ PHILIP A. JOHNSON
------------------------------ ----------------------------
R. BRIAN GIBSON - CONTROLLER PHILIP A. JOHNSON S.V.P.
- --------------------------------- -------------------------------
Name and Title Name and Title
<PAGE>
SCHEDULE TO MASTER LEASE AGREEMENT
SCHEDULE NUMBER 001
Silicon Valley Bank ("Lessor") and Jutvision Corporation ("Lessee") are
entering into this Schedule Number 001 as of March 24, 1999, in reference and as
parties to that certain Master Lease Agreement, Lease Number 0099002 (the
"Master Agreement"). This Schedule and the Master Agreement together comprise a
separate Lease between the parties. The terms and conditions of the Master
Agreement are hereby incorporated by reference into this Schedule. All
initially-capitalized terms not defined in this Schedule shall have the meanings
assigned to them in the Master Agreement. In the event of any conflict between
the terms of the Master Agreement and this Schedule, the provisions of this
Schedule shall govern.
1. Lease of Equipment. Lessor agrees to lease to Lessee and Lessee agrees
to lease from Lessor the Equipment set forth in this Schedule. This Lease will
be governed by the Master Agreement and this Schedule.
2. Equipment Description. Software acceptable to Lessor, as more
particularly described in Equipment Annex A, and equipment, furniture, fixtures
and soft costs (such soft costs not to exceed 10% of the Commitment Amount)
acceptable to Lessor, including, without limitation, leasehold improvements, as
more particularly described in Equipment Annex B.
3. Commitment Amount. $204.947.00.
------------
4. Initial Term. The Initial Term shall commence on the first payment date
("First Payment Date") which shall be the earlier of (i) the first day of a
calendar month following the month in which the Lessee has fully utilized the
Commitment Amount, provided that if Lessee delivers an Acceptance certificate on
the first day of a calendar month and such Acceptance Certificate results in
full utilization of the Commitment Amount, that date shall be deemed such first
day of a calendar month or (ii) in any event no later than the Cut-off Date. The
Initial Term for software leased under this Schedule shall be ________months
and the Initial Term for all other Equipment leased under this Schedule shall be
36 months.
5. Interim Rent. Lessee shall pay to Lessor on the first day of each
calendar month, in arrears, Interim Rent payments for each day during the period
from and including the acceptance Date through and including the last day of the
calendar month prior to the First Payment date. For purposes of this Schedule,
"Interim Rent" shall be an amount accruing on a daily basis equal to .0333% of
the amount drawn under this Schedule (as set forth in the applicable Equipment
Annex B).
6. Rent Payments. Lessee shall pay Lessor, in advance, on the first day of
each month the Rent payment for the Initial Term. The first monthly Rent payment
shall be due on the First Payment Date. For purposes of this Schedule, (i) the
applicable monthly Rent payment for software financed under this Schedule shall
be _____% of the aggregate cost of such software leased under Equipment Annex A
and (ii) the applicable monthly Rent payment for all other Equipment leased
under this Schedule shall be 3.089% of the aggregate cost of such Equipment
-----
financed under Equipment Annex B. Lessor's obligation to purchase and lease the
Equipment is subject to the Acceptance Date being on or before the Cut-Off Date
set forth in this Schedule.
7. Cut-off Date. April 30, 1999.
--------------
8. End of Term Payment. See Rider 1 for provisions regarding payment at
the end of the term of this Lease.
9. Purchase, Renewal and Return (if applicable). See Rider 1 for
provisions regarding purchase, renewal and return (if applicable) of the
Equipment.
10. Stipulated Loss Value. See Rider 1 for provisions regarding the
Stipulated Loss Value of the Equipment.
11. Counterparts; One Original; Chattel Paper Security Interest. Only the
Original, including Rider 1 attached hereto and incorporated herein by
reference, shall be marked "Original", and all other counterparts hereof shall
be marked as, and shall be, duplicates. To the extent that this Schedule
constitutes chattel paper (as such term is defined in the Uniform Commercial
Code in effect in the applicable jurisdiction), no security interest in this
Schedule may be created through the transfer or possession of any counterpart
other than the Original.
IN WITNESS WHEREOF, LESSOR AND LESSEE HAVE EXECUTED THIS SCHEDULE AS OF THE
DATE SPECIFIED.
LESSEE LESSOR
SILICON VALLEY BANK
JUTVISION CORPORATION
By: /s/ R. BRIAN GIBSON By: /s/ PHILIP A. JOHNSON
-------------------------------- -------------------------------
R. BRIAN GIBSON - CONTROLLER PHILIP A. JOHNSON S.V.P.
- ----------------------------------- ----------------------------------
Name and Title Name and Title
<PAGE>
EQUIPMENT ANNEX A
(Software)
This Equipment Annex A to Schedule Number 001 (the "Schedule") to the
Master Lease Agreement between Silicon Valley Bank ("Lessor") and Jutvision
Corporation ("Lessee") is attached to and made part of the Schedule.
1. Total Cost. The software Equipment acquisition cost including such
shipping, delivery, installation and other charges as Lessor shall have
approved: $__________.
2. Description of Equipment.
NOT APPLICABLE
INITIALS:
Lessee Lessor
JUTVISION CORPORATION ______________ SILICON VALLEY BANK _____________
<PAGE>
EQUIPMENT ANNEX B
(Hardware)
This Equipment Annex B to Schedule Number 001 (the "Schedule") to the
Master Lease Agreement between Silicon Valley Bank ("Lessor") and Jutvision
Corporation ("Lessee") is attached to and made part of the Schedule.
1. Total Cost. The Equipment (excluding software) acquisition cost
including such shipping, delivery, installation and other charges as Lessor
shall have approved: $204,947.00.
2. Description of Equipment.
Various computers and JSP service provider Field Kits (Please see attached
spreadsheet for definitive listing of equipment)
4 Dell PowerEdge Servers
4 Dell 6450 Workstation
2 Dell Dimension, V350, Pentium II Processor at 350 MHz Minitowers
5 Dell lnspiron AS333GT, Pentium II, 14.1" AGP Active Matrix, Notebooks
1 Best Internet Router
1 CCS Presentation Projector System, Proxima UltraLight
1 Netscreen Firewall
1 Infocos 425 (SVGA 800x600)
3 Sony Hi Fi Projector System
1 Dell PC Minitower, Dimension XPS R450 Mzh
1 Dell Trinitron
5 IBM ThinkPads 770
6 Dell lnspiron 7000
3 Dell Dimension V350 Desk Top, Pentium II Processor at 350 MHz Minitowers
1 HP Dexkject 895C
1 Dell M780 Monitor & 1 Dell Dimension V350 Desk Top
1 Iomega Zip Drive
1 3001 Tripod with 3030 Head (Kit)
400 Sony 8 Millimeter Tapes (Kit)
100 Sony chargers (Kit)
INITIALS:
Lessee Lessor
JUTVISION CORPORATION SILICON VALLEY BANK
- --------------------------- -------------------
<PAGE>
RIDER 1
to
SCHEDULE NUMBER 001
TO MASTER LEASE AGREEMENT
This Rider 1 to Schedule Number 001 (the "Schedule") to the Master Lease
Agreement between Silicon Valley Bank ("Lessor") and Jutvision Corporation
("Lessee") is attached to and made part of the Schedule.
A. End of Term Payment. At the end of the term of this Lease, Lessee shall
exercise (i) a fixed price purchase option of either $________ or 10% of the
Total Cost (the "Fixed Purchase Price"); or (ii) a fixed price renewal option of
________% of the monthly Rent payment (the "Fixed Renewal Price"). Lessee hereby
authorizes Lessor to adjust the Fixed Purchase Price and Fixed Renewal Price to
reflect the Total Cost.
B. Purchase and Renewal. The following provisions shall govern the
purchase of the Equipment and the renewal of the Lease: (a) if Lessee elects to
purchase the Equipment or renew the Lease, in any such case, in any such case
Lessee shall advise Lessor thereof in writing at least 90 days prior to the
expiration of the then Applicable Term; (b) if Lessee elects to purchase the
Equipment, it may do so by purchasing all (but not less than all) of the
Equipment at the end of the then Applicable Term at the Fixed Purchase Price; or
(c) if Lessee elects to renew this Lease it may do so with respect to all (but
not less than all) of the Equipment by entering into a mutually agreeable
renewal agreement with Lessor at least 30 days prior to the expiration of the
then Applicable Term, confirming the length of the renewal term and the Rent for
such period in an amount equal to the Fixed Renewal Price; (d) in the event that
Lessee fails to fulfill the foregoing provisions of this Section B for either a
purchase, renewal, as the case may be, the Lease will be automatically extended
for successive 30 day periods until Lessee complies with the applicable purchase
or renewal provisions; (e) if this Lease is extended (as opposed to renewed)
pursuant to any of the provisions hereof, Lessee shall continue to pay Lessor
the monthly Rent payments in effect prior to the expiration of the Applicable
Term and all other provisions of the Master Agreement and this Schedule
(including Lessee's purchase and renewal options) shall remain in full force and
effect; (f) if Lessee elects to purchase the Equipment and has fulfilled the
terms and conditions of the Master Agreement and this Section B, then on the
last day of the Applicable Term: (A) this Schedule shall terminate and, except
as provided in Section 21 of the Master Agreement, Lessee shall be relieved of
all obligations under this Schedule; and (B) Lessor shall transfer all of its
interest in the Equipment to Lessee "AS IS, WHERE IS," and without any warranty,
express or implied from Lessor, other than the absence of any liens or claims
by, through, or under Lessor; and (h) notwithstanding any of the foregoing
provisions to the contrary, if Lessee is in Default of the Lease, Lessor may
cancel any extension or renewal of any term upon ten (10) days prior written
notice to Lessee.
C. Stipulated Loss Value. The parties agree that the stipulated loss value
of the Equipment ("Stipulated Loss Value") shall equal the sum of (i) all Rent
and other amounts then due and owing under the Lease; plus (ii) an amount
calculated by Lessor that is the present value (discounted at 5% per annum
compounded monthly) of all Rent payments from the date of the Casualty or
Default in question to the scheduled date of expiration of the Initial Term and
any renewal or extension term; plus (iii) the present value (computed as
described above and calculated by Lessor as of the date of the Casualty or
Default in question) of the Fixed Purchase Price. The applicable percentage
shall be 30% of the Total Cost for any Lease of an Initial Term of less than 36
months; 25% of the Total Cost for a term of 36 months or more, but less than 48
months; 20% of the Total Cost for a term of 48 months or more, but less than 60
months; 15% of the Total Cost for a term of 60 months or more, but less than 72
months, and 10% of the Total Cost for a term of 72 months or more.
INITIALS:
Lessee Lessor
JUTVISION ???? SILICON VALLEY BANK ????
---------------- -----------------
<PAGE>
RIDER 2 TO SCHEDULE TO
MASTER LEASE AGREEMENT
(Sale & Leaseback)
Silicon Valley Bank ("Lessor") and Jutvision Corporation ("Lessee") are
entering into this Rider to Master Lease Agreement Schedule as of March 24, 1999
in reference and as parties to that certain Master Lease Agreement, Lease Number
0099002 (the "Master Agreement") and Schedule Number 001 thereto (the
"Schedule"). This Rider, together with the Schedule and the Master Agreement
together comprise the Lease referenced and defined in the Master Agreement. All
initially-capitalized terms not defined in this Rider shall have the meanings
assigned to them in the Master Agreement.
1. Sale and Leaseback. Notwithstanding any of the terms and conditions of
the Master Agreement and the Schedule to the contrary with respect to the prior
ownership or use by Lessee of any Equipment subject thereto, Lessor and Lessee
agree to enter into a sale and leaseback of the Equipment identified in the
Schedule (the "Equipment") as provided in this Rider.
2. Sale of Equipment. Lessee hereby sells, transfers and conveys to
Lessor all of its right, title and interest in and to the Equipment for good and
valuable consideration as set forth on Schedule 2 hereto. Lessee agrees to
----------
execute, deliver and/or file any and all such bills of sale, notices of sale,
property tax returns, or other documents or instruments as Lessor may require or
as otherwise required under applicable law in connection with the sale and
leaseback transaction contemplated by this Rider.
3. Lessee Representations, Warranties and Covenants. Lessee represents
and warrants that the Equipment is free and clear of all claims, liens, security
interests or other encumbrances or interests of any party. Lessee shall cause to
be executed and delivered any and all such lien terminations, lien releases,
reconveyances and like instruments and agreements from any party which has filed
or recorded any instrument or filing which could give such party a claim against
any of the Equipment or from any other party as Lessor may require. Lessee
further agrees that it shall be solely responsible for, and shall make all
payment of, any sales, use, property or other tax liability ("Taxes") arising
for the account of Lessor or Lessee in connection with the sale and lease back
transaction contemplated by this Rider.
4. Indemnity. In addition to and as a part of the indemnification
obligations of Lessee pursuant to Section 13 of the Master Agreement, Lessee
shall indemnify, defend and hold harmless Lessor, its agents and assignees, from
and against any and all Claims arising in connection with the sale and leaseback
of the Equipment, including, without limitation: (a) any Claims under any
fraudulent conveyance, vendor-in-possession or like statutes or common law
fraud; (b) any Claims for Taxes; (c) and any Claims arising from the assertion
by any party of a lien, security interest or other interest in any of the
Equipment.
IN WITNESS WHEREOF, LESSOR AND LESSEE HAVE EXECUTED THIS RIDER AS OF THE DATE
SPECIFIED.
LESSEE LESSOR
JUTVISION CORPORATION SILICON VALLEY BANK
By: /s/ R. BRIAN GIBSON By: /s/ PHILIP A. JOHNSON
-------------------------------- -------------------------------
R. BRIAN GIBSON - CONTROLLER PHILIP A. JOHNSON S.V.P.
- ----------------------------------- ----------------------------------
Name and Title Name and Title
<PAGE>
SCHEDULE 2
----------
Sale and Leaseback Consideration
Description of consideration paid by Lessor to Lessee:
Various computers and JSP service provider Field Kits (Please see attached
spreadsheet for definitive listing of equipment)
4 Dell PowerEdge Servers
4 Dell 6450 Workstation
2 Dell Dimension, V350, Pentium II Processor at 350 MHz Minitowers
5 Dell Inspiron AS333GT, Pentium 11, 14.1" AGP Active Matrix, Notebooks
1 Best Internet Router
1 CCS Presentation Projector System, Proxima UltraLight
1 Netscreen Firewall
1 Infocos 425 (SVGA 800x600)
3 Sony Hi Fi Projector System
1 Dell PC Minitower, Dimension XPS R450 Mzh
1 Dell Trinitron
5 IBM ThinkPads 770
6 Dell Inspiron 7000
3 Dell Dimension V350 Desk Top, Pentium II Processor at 350 MHz Minitowers
1 HP Dexkject 895C
1 Dell M780 Monitor & I Dell Dimension V350 Desk Top
1 Iomega Zip Drive
1 3001 Tripod with 3030 Head (Kit)
400 Sony 8 Millimeter Tapes (Kit)
100 Sony chargers (Kit)
<PAGE>
ACCEPTANCE CERTIFICATE
Silicon Valley Bank ("Lessor") and Jutvision Corporation ("Lessee") are
parties to a Master Lease Agreement, Lease Number 0099002 (the "Master
Agreement") and Schedule Number 001 (the "Schedule") under such Master
Agreement. The foregoing Master Agreement and Schedule together comprise a
separate Lease that is being accepted and commenced pursuant to this Acceptance
Certificate. All initially-capitalized terms not defined in this Acceptance
Certificate shall have the meanings ascribed to them in the Master Agreement.
1. Lease and Equipment Acceptance. Lessee hereby acknowledges that the
Equipment described in the Schedule, which description is fully incorporated
herein, has been delivered to the Equipment Location specified below, installed
and otherwise serviced and completed to Lessee's satisfaction, inspected by
Lessee, found to be in good operating order and condition and in compliance with
all specifications of Lessee, and has been unconditionally accepted by Lessee
under the Master Agreement and the Schedule, as of the Acceptance Date set forth
below. Lessee hereby agrees to perform all of its obligations under the Master
Agreement and the Schedule and reaffirms, as of the date hereof, its
representations and warranties as set forth in the Master Agreement. Lessee
further reaffirms that Lessee has reviewed and approved the Purchase Documents
with each Supplier covering the Equipment to be purchased by Lessor for lease to
Lessee hereunder, or that Lessee knows the identity of each Supplier, that it
may have rights under any supply contract from the Supplier, and that Lessee may
contact Supplier for a description of any such rights. Lessee hereby authorizes
and directs Lessor to make payments to each Supplier of the Equipment pursuant
to such Supplier's invoice or any purchase order or agreement with such
Supplier.
2. Equipment Location. The Equipment has been installed and is located at
the following Equipment Location:
Jutvision Corporation
124 University Avenue
Palo Alto, California, 94301
3. Acceptance Date. Dated of Acceptance: March 24, 1999.
LESSEE
JUTVISION CORPORATION
By: /s/ Brian Gibson
----------------------------------
Brian Gibson, Controller
- ------------------------------------
Name and Title
<PAGE>
REQUEST FOR FUNDING
(Deadline for Same Day Processing is 3:00 p.m. California Time)
To: Strategic Capital Services Date: 3/24/99
Fax: _____________ Time: _______________
From: Jutvision Corporation
Lessee's Name
From: /s/ Brian Gibson
----------------------------------
Authorized Signature
Brian Gibson
Authorized Signer's Name (please print)
Phone: 650-325-6787 x-107
In connection with Schedule 001, Lessee hereby requests funding in the amount of
$204,947.00 in accordance with the attached invoices to be made part of the
applicable Equipment Annex(es).
All representations and warranties of Lessee stated in the Transaction Documents
are true, correct and complete in all material respects as of the date of this
Request for Funding; provided, however, that those representations and
warranties expressly referring to another date shall be true, correct and
complete in all material respects as of such date.
<PAGE>
EXHIBIT 10.15
SUBLEASE AGREEMENT
------------------
THIS SUBLEASE AGREEMENT (this "Sublease") is entered into as of the 2nd day
of November, 1998, by and between Pete's Brewing Company, a California
Corporation ("Sublessor") and Jutvision, a Delaware Corporation ("Sublessee").
R E C I T A L S:
- - - - - - - -
A. On the 24th day of January, 1995, Herbert McLaughlin, ("Landlord"), as
landlord, entered into that certain Lease Agreement which was amended by the
Lease Addendum, Second Addendum, Third Addendum and Fourth Addendum (the
"Primary Lease")with Sublessor, as tenant, whereby certain premises (the
"Premises") containing approximately 8579 rentable square feet located on the
2nd and 3rd floor of the building commonly known as ----- and located at
------------
124 University Avenue, Palo Alto, Ca_ (the "Building"), were leased to
Sublessor. A copy of the Primary Lease is attached hereto as Exhibit B and
---------
incorporated herein by reference for all purposes.
B. Sublessor desires to sublease a portion of the Premises to Sublessee,
and Sublessee wishes to sublease a portion of the Premises from Sublessor.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, Sublessor and Sublessee agree as follows:
1. Sublease. Sublessor hereby subleases to Sublessee, and Sublessee
--------
hereby subleases from Sublessor, upon the terms and conditions set forth herein,
a portion of the Premises consisting of approximately 2434 rentable square feet
as shown on the drawing attached hereto as Exhibit A, Suite 202 consisting of
---------
2000 square feet and Suite 205 consisting of 434 square feet and incorporated
herein by reference for all purposes (the "Subleased Premises").
------------------
2. Term. The term of the Sublease shall be for a period of thirty nine
----
(39) months commencing on December 1, 1998, and ending on February 28, 2002 (the
"Expiration Date"), provided, however, that this Sublease shall terminate
earlier in the event of a termination, for any cause whatsoever, as allowed
under the Primary Lease as of the effective date of the Sublease herein. Not
withstanding the foregoing, if the Primary Lease is terminated prior to the
Expiration Date due to Sublessor's default under the Primary Lease without
Sublessee's consent, Sublessor shall be liable to Sublessee for all reasonable
costs and expenses of Sublessee's relocation expenses.
If the Sublease is executed by all parties prior to December 1, 1998 and
the Premises have been cleaned as defined herein, Sublessor grants Sublessee
occupancy of the Premises and the Commencement date shall be adjusted
accordingly.
1
<PAGE>
3. Rent. (a) Sublessee agrees to pay Sublessor for the use of the
----
Subleased Premises the monthly sum of $9005.80 ("Base Rent"). The Base Rent
shall be paid in advance on or before the first day of each calendar month
without notice or demand. Base Rent for any partial month shall be prorated.
Commencing December 1, 1999 the Base Rent will increase to $9275.97. Commencing
December 1, 2000 the Base Rent will increase to $9554.25 Commencing December 1,
2001 the Base rent will increase to $9840.88.
(b) Sublessee further agrees to pay its pro rata share of the [Direct
Expenses-Operating Expenses] (as defined in Paragraph 4.2 of the Primary Lease
and Article 8 of the Fourth Addendum). For the purposes hereof, Sublessee's pro
rata share shall be determined by multiplying (i) the fraction having as its
numerator the number of rentable square feet in the Subleased Premises and
having as its denominator the number of rentable square feet in the Premises,
times (ii) the amount of [Direct Expenses-Operating Expenses] owed by Sublessor
to Landlord under the Primary Lease. Sublessee agrees to make all such payments
to Sublessor at least five (5) days prior to the date on which Sublessor is
required to make such payments to Landlord pursuant to the Primary Lease. Base
Year is defined as 1999
4. Primary Lease. (a) Except as otherwise expressly provided herein, the
-------------
terms and conditions of the Primary Lease are hereby incorporated herein by
reference for all purposes, and Sublessee, by Sublessee's execution hereof,
acknowledges that Sublessor has furnished Sublessee with a copy of the Primary
Lease and that Sublessee has examined the Primary Lease and is familiar with the
terms thereof. Except as otherwise expressly provided in this Sublease,
Sublessee hereby agrees to comply in all respects with the terms and conditions
of the Primary Lease insofar as the same are applicable to the Subleased
Premises.
(b) As between Sublessor and Sublessee, Sublessor shall be entitled
to all of the rights and remedies reserved by and granted to the landlord in the
Primary Lease as if Sublessor was the "landlord" under the Primary Lease and
Sublessee was the "tenant" under the Primary Lease, and such rights and remedies
are hereby incorporated herein by reference for all purposes.
(c) This Sublease is subject and subordinate to all of the terms,
covenants and conditions of the Primary Lease and to all of the rights of
Landlord under the Primary Lease except the following paragraphs of the Primary
Lease which shall be solely the obligation and right of the Sublessor:
Paragraphs 4.1, 4.3, Article 5, and Article 6 of the Primary Lease; First
Addendum; Second Addendum paragraphs 1b, 1c, 1d, and 1e; Third Addendum
paragraphs 1b, 1c, 1d, and 1e; and Fourth Addendum paragraphs 5,6,7, and 11.
(d) In the event the Primary Lease terminates for any reason prior to
the expiration or termination of this Sublease, Sublessee shall not have any
claim whatsoever against
2
<PAGE>
Sublessor arising or resulting from such termination of the Primary Lease except
as set forth in Paragraph 2 of this Sublease.
5. Limitation of Liability and Indemnity. Notwithstanding any provision
-------------------------------------
of the Primary Lease to the contrary, the Sublessor shall not be liable to
Sublessee, or any of its agents, employees, servants or invitees, for any damage
to persons or property due to the condition or design or any defect in the
Building or its mechanical systems which may exist or subsequently occur, and
Sublessee with respect to itself and its agents, employees, servants and
invitees hereby assumes all risks and damage to persons and property, either
proximate or remote by reason of the present or future condition of the
Subleases Premises or the building. All indemnification, hold harmless and
release provisions contained in the Primary Lease running to the benefit of
Landlord are incorporated herein by reference for the benefit of Sublessor as if
Sublessor was the "landlord" and Sublessee was the "tenant" under the Primary
Lease. Except as otherwise expressly provided in this Sublease, all
indemnification, hold harmless and release provisions contained in the Primary
Lease running to the benefit of the Sublessor are incorporated herein by
reference for the benefit of Sublessee as if Sublessee was the "tenant" under
the Primary Lease and Sublessor was the "landlord" under the Primary Lease. This
paragraph is for the benefit of the Sublessee, Sublessor and Landlord only, and
no right of action shall accrue hereunder to any third party by way of
subrogation or otherwise.
Sublessee, Sublessor and Master Lessor each hereby waives any and all rights of
recovery against the other parties, or against the officers, employees, agents
and representatives of the other parties, for loss of or damage to the property
of the waiving party or the property of others under the waiving party's
control, to the extent such loss or damage is covered by proceeds received under
any insurance policy carried by the waiving party an in force at the time of
such loss or damage.
6. Furniture. Except as provided in the following sentence, all furniture
---------
and equipment placed in the Subleased Premises by Sublessee shall remain the
property of Sublessee, subject to the rights of Sublessor therein as provided by
law. The Sublessee may, at the expiration of the term hereof, remove all
furniture and equipment if such removal is done so as not to damage the
Subleased Premises.
7. Alterations, Improvements and Additions. Sublessee may not make any
---------------------------------------
alterations, improvements or additions to the Subleased Premises (collectively,
"Improvements") without the express prior written consent of Landlord and
------------
Sublessor, which shall not be unreasonably withheld. Any Improvements to which
Landlord and Sublessor consents must be constructed and installed in accordance
with (i) all requirements contained in the Primary Lease and (ii) any reasonable
requirements imposed by Sublessor to protect Sublessor's interest in the Primary
Lease and/or in the Subleased Premises. Further, upon termination of this
Sublease, any Improvements to the Subleased
3
<PAGE>
Premises shall remain in the Subleased Premises, and Sublessee shall not have
the right to remove such Improvements.
8. Damage and Destruction (a) If the Subleased Premises, or any portion
----------------------
thereof, are damaged or destroyed by any cause whatsoever, such that the Primary
Lease is terminated as defined in the Primary Lease, this Sublease shall
terminate immediately upon termination of the Primary Lease. Rent and any other
payments for which Sublessee is liable shall be apportioned and paid to the date
of such damage or destruction, and Sublessee shall immediately deliver
possession of the Subleased Premises to Sublessor.
(b) If the Subleased Premises, or any portion thereof, are damaged or
destroyed by any cause whatsoever, such damage or destruction not being
significant enough to cause a termination of the Primary Lease, Sublessor
agrees, subject to Article XII of the Primary Lease, to cause Landlord to repair
such damage.
9. Condemnation. In the event of the taking by condemnation or other
------------
eminent domain proceeding of all or a portion of the Premises which results in
the termination of the Primary Lease, this Sublease shall terminate concurrently
with the Primary Lease. As between Sublessor and Sublessee, all awards or
damages, if any, paid or payable as a result of such taking by condemnation or
other eminent domain proceeding shall be the sole property of Sublessor, and
Sublessee shall have no claim to any part thereof.
10. Certificates. Sublessee agrees to furnish to Sublessor or to Landlord
------------
certificates as required under Article XXIV of the Primary Lease.
11. Condition of Subleased Premises and Surrender of the Subleased
--------------------------------------------------------------
Premises. Sublessee acknowledges that (i) Sublessee has fully inspected the
- --------
Subleased Premises and accepts the same in their present condition, "as is,
where is", with all faults and with all furniture and fixtures removed, and (ii)
Sublessor has made no warranties or representations to Sublessee whatsoever with
respect to the condition of the Subleased Premises. Upon the expiration or
termination of this Sublease, Sublessee agrees to return the Subleased Premises
to Sublessor in the condition existing as of the commencement of the sublease
term.
Sublessor, at Sublessor's cost, shall provide clean carpets and generally
clean conditions prior to the Sublease Commencement date.
12. Certificates, Licenses and/or Permits. Sublessee shall obtain at
-------------------------------------
Sublessee's sole cost and expense, all necessary certificates, licenses or
permits to do business in the Subleased Premises, which may be required by any
governmental authorities.
4
<PAGE>
13. Attorneys' Fees and Costs of Enforcement. In the event that either
----------------------------------------
party hereof commences an action to enforce any of the provisions of this
Sublease, the prevailing party in such action shall be entitled to collect all
of the costs of such action (including, without limitation, attorneys' fees and
court costs) from the other party.
14. Cumulative Rights and Remedies. No right or remedy contained herein,
------------------------------
in the Primary Lease or provided by law is intended to be exclusive of any other
right or remedy, but shall be cumulative and in addition to every other right or
remedy.
15. Security Deposit: In addition to the Rent specified above, Sublessee
----------------
shall pay to Sublessor a security deposit equivalent to two (2) months rent of
$18,011.60 to be held in a non-interest beating account. In the event Sublessee
has performed all of the terms and conditions of this Sublease during the term
hereof, Sublessor shall return to Sublessee, within ten days after Sublessee has
vacated the Subleased Premises, the Security Deposit less any sums due and owing
to Sublessor.
16. Broker Fee: Commission shall be paid according to a separate agreement
-----------
between BT Commercial and Sublessor for which the commission shall be split
50/50 between BT Commercial, listing broker, representing Sublessor and Cornish
& Carey Commercial, procuring broker, representing Sublessee.
17. Inability to Deliver Possession: In the event Sublessor is unable to
-------------------------------
deliver possession of the Premises at the commencement of the term, Sublessor
shall not be liable for any damage caused thereby, nor shall this Sublease be
void or voidable but Sublessee shall not be liable for rent until such time as
Sublessor delivers possession. If Sublessee with Sublessor's permission takes
possession of the premises prior to the commencement date, Sublessee shall do so
subject to all of the covenants and conditions hereof. In the event Sublessor
has been unable to deliver possession of the Subleased premises within 30 days
from the commencement date, Sublessee, at Sublessee's option, may terminate this
Sublease.
18. Notices: All notices, demands, consents and approvals which are
-------
required to be given by either party shall be given in a manner provided in the
Primary Lease at the address shown on the signature page. Sublessor shall notify
Sublessee in event of default under the Primary Lease or in any other event
which will impair Sublessee's ability to conduct its normal business. If
Sublessor elects to terminate the Primary Lease, Sublessor shall so notify
Sublessee by giving at least 30 days prior notice of such termination. However,
Sublessor's failure to give such notice shall not constitute an event of
default.
19. Complete Agreement and Amendment. This Sublease sets forth the
--------------------------------
complete agreement between Sublessor and Sublessee with respect to the subject
matter hereof, and this
5
<PAGE>
Sublease may not be terminated, amended or modified in any respect except by
agreement in writing executed by both Sublessor and Sublessee except as
otherwise indicated herein.
20. Survival. All duties and obligations of Sublessee under this Sublease
--------
that are unperformed shall survive the termination or expiration of this
Sublease.
21. Binding Effect. This Sublease and all the terms and conditions hereof
--------------
shall be binding upon and inure to the benefit of both Sublessor and Sublessee
and their respective successors, legal representatives and assigns.
EXECUTED as of the day, month and year first above written.
SUBLESSOR: Pete's Brewing Company
---------
By:/s/ James J. Bolz
---------------------------
Name: James J. Bolz
----------------
Title: Vice President
----------------
Address: 14800 San Pedro
----------------
San Antonio, TX 78232
---------------------
SUBLESSEE: Jutvision., a Delaware Company
---------
By:/s/ Kevin B. McCurdy
---------------------------
Name: Kevin B. McCurdy
----------------
Title: CEO
----------------
Address: ----------------
----------------
6
<PAGE>
By consenting to the Sublease, Landlord agrees that the waiver set forth in
Paragraph 5 of the Sublease shall be deemed a three party agreement binding
among and inuring to the benefit of Sublessor, Sublessee and Landlord.
LANDLORD
--------
By: ______________________
Name:_________________
Title:________________
Address______________
______________
<PAGE>
C O N S E N T
Herbert P. McLaughlin, Jr., as Landlord under the Lease to Pete's Brewing
Company, a California corporation, for premises located at 124 University
Avenue, Palo Alto, California, hereby agrees to a sublease of a portion of those
premises by Pete's Brewing Company to Jutvision, a Delaware corporation.
By giving his consent, the Landlord does not release the Lessee from any of
its obligations under the Lease. By consenting to this Sublease, the Landlord
does not consent to any other subletting or assignment.
The Landlord does not agree to the second paragraph of Paragraph 5 of the
Sublease, although the Landlord has no objection to the Sublessee and the
Sublessor agreeing to that provision as between themselves.
Dated: November __, 1998
/s/ Herbert P. McLaughlin, Jr.
-----------------------------------
Herbert P. McLaughlin, Jr.
Landlord
<PAGE>
EXHIBIT A
Subleased Premises
------------------
[Not Available]
<PAGE>
EXHIBIT B
Primary Lease
-------------
[To Be Attached]
<PAGE>
[LETTERHEAD OF CORNISH & CAREY COMMERCIAL APPEARS HERE]
November 24, 1998
Mr. Kevin McCurdy
Mr. Howard Field
Ms. Sarah Miles
Jutvision
124 University Avenue, Suite 202
Palo Alto, CA 94301
Re: 124 University Avenue Lease
Dear Kevin, Howard and Sarah,
It has been a pleasure working with you for the 124 University Sublease.
Thank you again!
I'm sorry for the delay in getting you the lease. I wanted to ensure you
had all the pertinent names and numbers for this building. Listed below are all
of the contact names I have. Nancy Dean is the best bet for any property
management issues. If she redirects you to Pete's contact as you are a subtenant
of the building, they will in turn contact Nancy to get any issues resolved. I
have also provided the Landlord name in case there is a change in property
managers.
Names:
1. Jim Boltz, Director of Finance
Gambrina's (Pete's is a subsidiary of Ganbrina's)
1400 San Pedro, 3/rd /Floor, San Antonio, Texas, 78232
210-490-9128
2. Paul Fagan, Real Estate Consultant in Texas for Gambrina's
210-824-9080
3. Nancy Dean, Property Manager for the Owner
She is located in the building next door at Bellomo Architect Office
415-519-5075
fax: 650-326-0484
4. Herbert McLaughlin, Owner
Assistant: Janell Robinet
415-398-71588
fax: 415-394-7158
I look forward to hearing about all your success in the future. Once the
Landlord begins his construction for the small add on space for the second
floor, let's discuss at that time if you think you will need more space. The new
space will be in the 420 square foot range. The third floor is available again
as the last deal fell through. The one back space is about 850 square feet.
<PAGE>
Mr. Kevin McCurdy
November 24, 1998
Page 2
- --------------------------------------------------------------------------------
Let's keep in touch. Please feel free to call should you need anything or
have any questions.
Thank you again.
Sincerely,
/s/ Cherie Wittry
- -----------------------------------
Cherie Wittry
Vice President
Note: @Home.com has a lease out for space in Menlo Park with a January
commencement. I'll keep you posted.
<PAGE>
EXHIBIT 10.16
The following Consent is in reference to the Sublease Agreement commencing
December 1, 1998, by and between Pete's Brewing Company, ("Sublessor") and,
Jutvision ("Sublessee")
CONSENT
Herbert P. McLaughlin, Jr., as Landlord under the Lease to Pete's Brewing
Company, a California corporation, for premises located at 124 University
Avenue, Palo Alto, California, hereby agrees to a sublease of a portion of those
premises by Pete's Brewing Company to Jutvision, a Delaware corporation.
By giving his consent, the Landlord does not release the Lessee from any of its
obligations under the Lease. By consenting to this Sublease, the landlord does
not consent to any other subletting or assignment.
The Landlord does not agree to the second paragraph of Paragraph 5 of the
Sublease, although the Landlord has no objection to the Sublessee and the
Sublessor agreeing to that provision as between themselves.
Dated: December 7, 1998
/s/ Herbert P. McLaughlin
-----------------------------
Herbert P. McLaughlin, Jr.
Landlord
<PAGE>
SUBLEASE AGREEMENT
------------------
THIS SUBLEASE AGREEMENT (this "Sublease") is entered into as of the 1st day
of December, 1998, by and between Pete's Brewing Company, a California
Corporation ("Sublessor") and Jutvision, a Delaware Corporation ("Sublessee").
R E C I T A L S:
- - - - - - - -
A. On the 24/th/ day of January, 1995, Herbert McLaughlin, ("Landlord"),
as landlord, entered into that certain Lease Agreement which was amended by the
Lease Addendum, Second Addendum, Third Addendum and Fourth Addendum (the
"Primary Lease") with Sublessor, as tenant, whereby certain premises (the
"Premises") containing approximately 8579 rentable square feet located on the
2/nd/ and 3/rd/ floor of the building commonly known as ___ and located at 124
University Avenue, Palo Alto, Ca (the "Building"), were leased to Sublessor. A
copy of the Primary Lease is attached hereto as Exhibit B and incorporated
---------
herein by reference for all purposes.
B. Sublessor desires to sublease a portion of the Premises to Sublessee,
and Sublessee wishes to sublease a portion of the Premises from Sublessor.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, Sublessor and Sublessee agree as follows:
1. Sublease. Sublessor hereby subleases to Sublessee, and Sublessee hereby
--------
subleases from Sublessor, upon the terms and conditions set forth herein, a
portion of the Premises consisting of approximately 5021 rentable square feet as
shown on the drawing attached hereto as Exhibit A, Suites 300, 310 and 350 and
---------
incorporated herein by reference for all purposes (the "Subleased Premises").
--------- --------
2. Term. The term of the Sublease shall be for a period of thirty eight
----
and one half (38.5) months commencing on December 15, 1998, and ending on
February 28, 2002 (the "Expiration Date"), provided, however, that this Sublease
shall terminate earlier in the event of a termination, for any cause whatsoever,
as allowed under the Primary Lease as of the effective date of the Sublease
herein. Not withstanding the foregoing, if the Primary Lease is terminated prior
to the Expiration Date due to Sublessor's default under the Primary Lease
without Sublessee's consent, Sublessor shall be liable to Sublessee for all
reasonable costs and expenses of Sublessee's relocation expenses.
1
<PAGE>
If the Sublease is executed by all parties prior to December 1, 1998 and
the Premises have been cleaned as defined herein, Sublessor grants Sublessee
occupancy of the Premises and the Commencement date shall be adjusted
accordingly.
3. Rent. (a) Sublessee agrees to pay Sublessor for the use of the
----
Subleased Premises the monthly sum of $19,581.90 ("Base Rent"). The Base Rent
shall be paid in advance on or before the first day of each calendar month
without notice or demand. Base Rent for any partial month shall be prorated.
Commencing December 1, 1999 the Base Rent will increase to $21,169.38.
Commencing December 1, 2000 the Base Rent will increase to $20,774.43 through
the end of the term. No rent will be due for the period from December 15, 1998
through December 31, 1998.
(b) Sublessee further agrees to pay its pro rata share of the [Direct
Expenses-Operating Expenses] (as defined in Paragraph 4.2 of the Primary Lease
---
and Article 8 of the Fourth Addendum). For the purposes hereof, Sublessee's
pro rata share shall be determined by multiplying (i) the fraction having as its
numerator the number of rentable square feet in the Subleased Premises and
having as its denominator the number of rentable square feet in the Premises,
times (ii) the amount of [Direct Expenses-Operating Expenses] owed by Sublessor
to Landlord under the Primary Lease. Sublessee agrees to make all such payments
to Sublessor at least five (5) days prior to the date on which Sublessor is
required to make such payments to Landlord pursuant to the Primary Lease. Base
Year is defined as 1999
4. Primary Lease. (a) Except as otherwise expressly provided herein, the
-------------
terms and conditions of the Primary Lease are hereby incorporated herein by
reference for all purposes, and Sublessee, by Sublessee's execution hereof,
acknowledges that Sublessor has furnished Sublessee with a copy of the Primary
Lease and that Sublessee has examined the Primary Lease and is familiar with the
terms thereof. Except as otherwise expressly provided in this Sublease,
Sublessee hereby agrees to comply in all respects with the terms and conditions
of the Primary Lease insofar as the same are applicable to the Subleased
Premises.
(b) As between Sublessor and Sublessee, Sublessor shall be entitled to
all of the rights and remedies reserved by and granted to the landlord in the
Primary Lease as if Sublessor was the "landlord" under the Primary Lease and
Sublessee was the "tenant" under the Primary Lease, and such rights and remedies
are hereby incorporated herein by reference for all purposes.
(c) This Sublease is subject and subordinate to all of the terms,
covenants and conditions of the Primary Lease and to all of the rights of
Landlord under the Primary Lease except the following paragraphs of the Primary
Lease which shall be solely the obligation and right of the Sublessor:
Paragraphs 4.1, 4.3, Article 5, and Article 6 of the Primary Lease; First
Addendum; Second Addendum paragraphs 1b, 1c, 1d, and 1e; Third Addendum
paragraphs 1b, 1c, 1d, and 1e; and Fourth Addendum paragraphs 5, 6, 7, and 11.
2
<PAGE>
(d) In the event the Primary Lease terminates for any reason prior to
the expiration or termination of this Sublease, Sublessee shall not have any
claim whatsoever against Sublessor arising or resulting from such termination of
the Primary Lease except as set forth in Paragraph 2 of this Sublease.
5. Limitation of Liability and Indemnity. Notwithstanding any provision
-------------------------------------
of the Primary Lease to the contrary, the Sublessor shall not be liable to
Sublessee, or any of its agents, employees, servants or invitees, for any damage
to persons or property due to the condition or design or any defect in the
Building or its mechanical systems which may exist or subsequently occur, and
Sublessee with respect to itself and its agents, employees, servants and
invitees hereby assumes all risks and damage to persons and property, either
proximate or remote by reason of the present or future condition of the
Subleases Premises or the building. All indemnification, hold harmless and
release provisions contained in the Primary Lease running to the benefit of
Landlord are incorporated herein by reference for the benefit of Sublessor as if
Sublessor was the "landlord" and Sublessee was the "tenant" under the Primary
Lease. Except as otherwise expressly provided in this Sublease, all
indemnification, hold harmless and release provisions contained in the Primary
Lease running to the benefit of the Sublessor are incorporated herein by
reference for the benefit of Sublessee as if Sublessee was the "tenant" under
the Primary Lease and Sublessor was the "landlord" under the Primary Lease. This
paragraph is for the benefit of the Sublessee, Sublessor and Landlord only, and
no right of action shall accrue hereunder to any third party by way of
subrogation or otherwise.
Sublessee, Sublessor and Master Lessor each hereby waives any and all rights of
recovery against the other parties, or against the officers, employees, agents
and representatives of the other parties, for loss of or damage to the property
of the waiving party or the property of others under the waiving party's
control, to the extent such loss or damage is covered by proceeds received under
any insurance policy carried by the waiving party an in force at the time of
such loss or damage.
6. Furniture. Except as provided in the following sentence, all furniture
---------
and equipment placed in the Subleased Premises by Sublessee shall remain the
property of Sublessee, subject to the rights of Sublessor therein as provided by
law. The Sublessee may, at the expiration of the term hereof, remove all
furniture and equipment if such removal is done so as not to damage the
Subleased Premises.
7. Alterations, Improvements and Additions. Sublessee may not make any
---------------------------------------
alterations, improvements or additions to the Subleased Premises (collectively,
"Improvements") without the express prior written consent of Landlord and
------------
Sublessor, which shall not be unreasonably withheld. Any Improvements to which
Landlord and Sublessor consents must be constructed and installed in accordance
with (i) all requirements contained in the Primary Lease and (ii) any reasonable
3
<PAGE>
requirements imposed by Sublessor to protect Sublessor's interest in the Primary
Lease and/or in the Subleased Premises. Further, upon termination of this
Sublease, any Improvements to the Subleased Premises shall remain in the
Subleased Premises, and Sublessee shall not have the right to remove such
Improvements.
8. Damage and Destruction. (a) If the Subleased Premises, or any portion
----------------------
thereof, are damaged or destroyed by any cause whatsoever, such that the Primary
Lease is terminated as defined in the Primary Lease, this Sublease shall
terminate immediately upon termination of the Primary Lease. Rent and any other
payments for which Sublessee is liable shall be apportioned and paid to the date
of such damage or destruction, and Sublessee shall immediately deliver
possession of the Subleased Premises to Sublessor.
(b) If the Subleased Premises, or any portion thereof, are damaged or
destroyed by any cause whatsoever, such damage or destruction not being
significant enough to cause a termination of the Primary Lease, Sublessor
agrees, subject to Article XII of the Primary Lease, to cause Landlord to repair
such damage.
9. Condemnation. In the event of the taking by condemnation or other
------------
eminent domain proceeding of all or a portion of the Premises which results in
the termination of the Primary Lease, this Sublease shall terminate concurrently
with the Primary Lease. As between Sublessor and Sublessee, all awards or
damages, if any, paid or payable as a result of such taking by condemnation or
other eminent domain proceeding shall be the sole property of Sublessor, and
Sublessee shall have no claim to any part thereof.
10. Certificates. Sublessee agrees to furnish to Sublessor or to Landlord
------------
certificates as required under Article XXIV of the Primary Lease.
11. Condition of Subleased Premises and Surrender of the Subleased
--------------------------------------------------------------
Premises. Sublessee acknowledges that (i) Sublessee has fully inspected the
- --------
Subleased Premises and accepts the same in their present condition, "as is,
where is", with all faults and with all furniture and fixtures removed, and (ii)
Sublessor has made no warranties or representations to Sublessee whatsoever with
respect to the condition of the Subleased Premises. Upon the expiration or
termination of this Sublease, Sublessee agrees to return the Subleased Premises
to Sublessor in the condition existing as of the commencement of the sublease
term.
Sublessor, at Sublessor's cost, shall provide clean carpets and generally
clean conditions prior to the Sublease Commencement date.
12. Certificates, Licenses and/or Permits. Sublessee shall obtain at
-------------------------------------
Sublessee's sole cost and expense, all necessary certificates, licenses or
permits to do business in the Subleased Premises, which may be required by any
governmental authorities.
4
<PAGE>
13. Attorneys' Fees and Costs of Enforcement. In the event that either
----------------------------------------
party hereof commences an action to enforce any of the provisions of this
Sublease, the prevailing party in such action shall be entitled to collect all
of the costs of such action (including, without limitation, attorneys' fees and
court costs) from the other party.
14. Cumulative Rights and Remedies. No right or remedy contained herein,
------------------------------
in the Primary Lease or provided by law is intended to be exclusive of any other
right or remedy, but shall be cumulative and in addition to every other right or
remedy.
15. Security Deposit: In addition to the Rent specified above, Sublessee
----------------
shall pay to Sublessor a security deposit of $40,000.00 to be held in a non-
interest bearing account. In the event Sublessee has performed all of the terms
and conditions of this Sublease during the term hereof, Sublessor shall return
to Sublessee, within ten days after Sublessee has vacated the Subleased
Premises, the Security Deposit less any sums due and owing to Sublessor.
16. Broker Fee: Commission shall be paid according to a separate agreement
----------
between BT Commercial and Sublessor for which the commission shall be split
50/50 between BT Commercial, listing broker, representing Sublessor and Cornish
& Carey Commercial, procuring broker, representing Sublessee.
17. Inability to Deliver Possession: In the event Sublessor is unable to
-------------------------------
deliver possession of the Premises at the commencement of the term, Sublessor
shall not be liable for any damage caused thereby, nor shall this Sublease be
void or voidable but Sublessee shall not be liable for rent until such time as
Sublessor delivers possession. If Sublessee with Sublessor's permission takes
possession of the premises prior to the commencement date, Sublessee shall do so
subject to all of the covenants and conditions hereof. In the event Sublessor
has been unable to deliver possession of the Subleased premises within 30 days
from the commencement date, Sublessee, at Sublessee's option, may terminate this
Sublease.
18. Notices: All notices, demands, consents and approvals which are
-------
required to be given by either party shall be given in a manner provided in the
Primary Lease at the address shown on the signature page. Sublessor shall notify
Sublessee in event of default under the Primary Lease or in any other event
which will impair Sublessee's ability to conduct its normal business. If
Sublessor elects to terminate the Primary Lease, Sublessor shall so notify
Sublessee by giving at least 30 days prior notice of such termination. However,
Sublessor's failure to give such notice shall not constitute an event of
default.
5
<PAGE>
19. Complete Agreement and Amendment. This Sublease sets forth the
--------------------------------
complete agreement between Sublessor and Sublessee with respect to the subject
matter hereof, and this Sublease may not be terminated, amended or modified in
any respect except by agreement in writing executed by both Sublessor and
Sublessee except as otherwise indicated herein.
20. Survival. All duties and obligations of Sublessee under this Sublease
--------
that are unperformed shall survive the termination or expiration of this
Sublease.
21. Binding Effect. This Sublease and all the terms and conditions hereof
--------------
shall be binding upon and inure to the benefit of both Sublessor and Sublessee
and their respective successors, legal representatives and assigns.
EXECUTED as of the day, month and year first above written.
SUBLESSOR: Pete's Brewing Company
---------
By: /s/ James J. Bolz
---------------------------------
Name: JAMES J. BOLZ
--------------------------
Title: Vice President
--------------------------
Address:_________________________
_________________________
SUBLESSEE: Jutvision, a Delaware Corp.
---------
By: /s/ Kevin B. MCcurry
---------------------------------
Name: Kevin B. MCcurry
--------------------------
Title: CEO
--------------------------
Address:_________________________
_________________________
6
<PAGE>
By consenting to the Sublease, Landlord agrees that the waiver set forth in
Paragraph 5 of the Sublease shall be deemed a three party agreement binding
among and inuring to the benefit of Sublessor, Sublessee and Landlord.
LANDLORD
--------
By: ________________________________
Name:
---------------------------
Title: _________________________
Address:________________________
________________________
7
<PAGE>
EXHIBIT A
Subleased Premises
------------------
[Insert Graphic Here]
<PAGE>
EXHIBIT B
Primary Lease
-------------
[To Be Attached]
<PAGE>
[LETTERHEAD OF CORNISH & CAREY COMMERCIAL APPEARS HERE]
Date: December 10, 1998 SENT VIA FAX
------------
Memo To: Marcus Wood/BT Commercial
Cc: Brian Gibson-Jutvision
Re: 124 University Avenue Lease
3/rd/ Floor Suites
Dear Marcus,
As per our conversation and in follow up with my conversation with the
Controller for Jutvision today, there was an error in the rental stated in
the sublease.
The annual escalations agreed to was 3% per year. The second year's rent
then equals $20,169.38/month versus the stated rent in the sublease of
----------
$21,169.38. The balance of the annual rents as stated in Paragraph 3, Page
----------
2 of the Sublease are correct.
Please forward to your Sublessor for their records. Jutvision will be
provided a copy of this memo for their files.
All parties are in agreement as to the terms and rental will be paid
accordingly.
Should there be any questions, please do not hesitate to call.
Thank you again.
Sincerely,
/s/ Cherie Wittry
Cherie Wittry
Vice President
650-688-8523
<PAGE>
[LETTERHEAD OF CORNISH & CAREY COMMERCIAL APPEARS HERE]
To: Marcus Wood Fax: 856-1098
- --------------------------------------------------------------------------------
Brian Gibson 325-9337
- --------------------------------------------------------------------------------
From: Cherie Wittry, Vice President Phone: (650) 322-2600
- --------------------------------------------------------------------------------
IMPORTANT
- --------------------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
If all pages are not received, please call (650) 322-2600 as soon as possible to
request re-transmission.
GS 12/10/98 4:00 2
- --------------------------------------------------------------------------------
Facsimile Operator Date/Time Sent No of Pages
The document accompanying this facsimile may contain confidential information
which is legally privileged. The information is intended only for the use of the
individual or entity named above. If you are not the intended recipient, or the
person responsible for delivering it to the intended recipient, you are hereby
notified that any disclosure, copying, distribution or use of any of the
information contained in this transmission is strictly prohibited. If you have
received this transmission in error, please immediately notify us by telephone
and mail the original transmission to us. Thank you.
<PAGE>
[LETTERHEAD OF CORNISH & CAREY COMMERCIAL APPEARS HERE]
- --------------------------------------------------------------------------------
CHERIE WITTRY
VICE PRESIDENT
November 30,1998
Mr. Marcus Wood
BT Commercial
2445 Faber Place, Suite 250
Palo Alto, CA 94303
Re: Proposal To Sublease
124 University Avenue, Third Floor, #300/350/310, Palo Alto, CA
Dear Marcus.
On behalf of my client, Jutvision, a Delaware Corp., I have been authorized
to present the following proposal to sublease the subject property.
Jutvision is the current subtenant on the second floor and as expected
their company expansion and growth in California requires them to seek more
space as soon as possible. Jutvision would like to continue as a subtenant of
Pete's, but without the 3/rd/ floor space they foresee they will have to pursue
other sites and therefore have to potentially vacate the building and sublet
their current Premises. This is not their desire.
We look forward to hearing from you as soon as possible. Jutvision is
prepared to commence the sublease as soon as possible with the allowance defined
herein for their need to replace the current carpet for Suites 300 and 350. The
carpets in these suites are badly damaged.
1. LOCATION: 124 University Ave., Suites 300, 350 and 310, Palo Alto, CA,
consisting of a total of approximately 5021 rentable square feet
2. TERM/COMMENCEMENT: The term shall commence upon Sublease execution, not
later than December 15, 1998. The rent shall commence January 1,1999 or two
weeks following the sublease commencement date, whichever is later. The
Sublessee shall have access upon sublease execution to install new carpet
in Suites 300 and 350, as further defined below.
3. TENANT IMPROVEMENTS: SubLessee accepts the Premises in their "as is"
condition with SubLessor providing clean carpet in Suite 310 and generally
clean conditions, including clean restroom and walls, as is feasible for
all the suites. Sublessor acknowledges and agrees it is Sublessee's intent
to provide new carpet in Suites 300 and 350, at Sublessee's cost, according
to the approval process defined in the Master Lease.
<PAGE>
Mr. Marcus Wood
November 30, 1998
Page 2
4. RENT:
Rental for the suites is full service defined as follows:
Year 1: $3.90/sq.ft. full service
Annual 3% increase thereafter.
There shall be no additional rental due.
5. USE OF PREMISES: SubLessee shall use the premises for software, general
office and legally related uses.
6. FIRST MONTH'S RENT: SubLessee shall provide first month's rent to be paid
to SubLessor upon execution of the SubLease Agreement.
7. SECURITY DEPOSIT: SubLessee shall provide a security deposit in the amount
of $20,000.00 to be paid to SubLessor upon execution of the SubLease
Agreement.
8. SUBLEASING/ASSIGNMENT: SubLessee shall have the right to sublease all or
any portion of its Premises during the term of the lease to a qualified
SubLessee, subject to SubLessor's approval which shall not be unreasonably
withheld or delayed. Any profits generated by said subleasing or assignment
shall be allotted 100% to SubLessor after SubLessee recovers real estate
broker cost associated with subleasing, if applicable.
9. OTHER: Should Sublessor have further question at this time, in order to
expedite the process, Sublessor may call Sublessee, Kevin McCurdy,
President, at 650-325-6787, ext. 15 directly. Time is of the essence. We
appreciate your attention to this matter.
This letter is conditional upon the execution by both parties of a formal
SubLease Agreement. Said Agreement shall include, among other things, the terms
and conditions specified herein. It is understood and agreed, however, that this
is a Letter of Intent only and that neither party shall have any rights or
obligations until the execution of a formal Sublease Agreement.
Note: an Addendum to the existing Sublease document for the second floor is an
acceptable document format for the Premises defined herein.
<PAGE>
Mr. Marcus Wood
November 30, 1998
Page 3
The terms of this document are valid until Wednesday, December 2,1998, after
which time it shall become null and void.
If the outlined Proposal is acceptable, please indicate by executing and dating
in the space provided below and returning a copy of this letter to us.
We look forward to hearing from you.
Sincerely,
CORNISH & CAREY COMMERCIAL
/s/ Cherie Wittry
Cherie Wittry
Vice President
650-688-8523
ACKNOWLEDGED:
SUBLESSOR: Pete's Brewing Co.
By:______________________________ Date:______________________________
Print:___________________________
NOTICE TO SUBLESSOR AND SUBLESSEE: CORNISH & CAREY COMMERCIAL, BROKER, IS NOT
AUTHORIZED TO GIVE LEGAL OR TAX ADVICE; NO REPRESENTATION OR RECOMMENDATION IS
MADE BY CORNISH & CAREY COMMERCIAL, OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL
EFFECT OR TAX CONSEQUENCES OF THIS DOCUMENT OR ANY TRANSACTION RELATING THERETO,
SINCE THESE ARE MATTERS WHICH SHOULD BE DISCUSSED WITH YOUR ATTORNEY.
<PAGE>
EXHIBIT 10.17
SUBLEASE
THIS SUBLEASE made as of November 15, 1998.
B E T W E E N:
INFORMATION ACCESS INC.
(the "Sublandlord")
- and -
JUTVISION CORPORATION
(the "Subtenant")
RECITALS:
- --------
1. Pursuant to a lease (the "Lease") made as of March 7, 1995, between
Beallor, Beallor & Burns Inc., receiver and manager and agent for
Centennial Centre Limited and Chadwill Coal Company Limited (the "Original
Landlord"), as landlord, and the Sublandlord, as tenant, the Original
Landlord leased to the Sublandlord those premises known as Suite 107 in the
building municipally known as 5405 Eglinton Avenue West Toronto, Ontario
(the "Building"), such premises being more particularly described in the
Lease (the "Premises");
2. 5395-5409 Eglinton Avenue West Inc. (the "Landlord") is now the landlord
under the Lease;
3. The Sublandlord has agreed to sublease to the Subtenant and the Subtenant
has agreed to sublease from the Sublandlord approximately 50% of the
Premises (the "Subleased Premises"), on the terms contained in this
Sublease;
NOW THEREFORE THIS SUBLEASE WITNESSES that in consideration of the
covenants and agreements contained in this Sublease and other good and valuable
consideration (the receipt and sufficiency of which is hereby acknowledged by
each of the parties), the parties covenant and agree as follows:
ARTICLE 1.00 - INTERPRETATION
-----------------------------
1.01 Definitions
-----------
Unless otherwise defined in this Sublease, or unless there is something in
the context inconsistent therewith, all capitalized terms used in this Sublease
shall have the meaning given such terms in the Lease. In addition, the following
terms have the respective meanings set out below:
"Additional Rent" means all sums of money or charges required to be paid by
the Subtenant under this Sublease in addition to Gross Rent and Lease Rent
whether or not designated "Additional Rent" and whether payable to the
Sublandlord or to third parties;
<PAGE>
-2-
"Claims" means claims, losses, damages (direct, indirect, consequential or
otherwise), suits, judgments, causes of action, legal proceedings,
executions, demands, penalties or other sanctions of every nature and kind
whatsoever, whether accrued, actual, contingent or otherwise and any and
all costs arising in connection therewith, including, without limitation,
legal fees and disbursements on a solicitor and his own client basis
(including without limitation, all such legal fees and disbursements in
connection with any and all appeals);
"Event of Default" means any of the following events:
(a) the Subtenant fails to pay any Rent reserved by this Sublease on the
day or dates appointed for the payment thereof and such failure
continues for 2 days after written notice from the Sublandlord;
(b) the Subtenant fails to observe or perform any of the terms, covenants,
obligations or conditions of this Sublease to be observed or performed
by the Sublandlord (other than the payment of Rent) and
(i) fails to remedy such breach within 8 days (or such shorter period
of time as may be given by the Landlord under the Lease, less 2
days) of the receipt or deemed receipt by the Subtenant of
written notice from the Sublandlord respecting such breach; or
(ii) if such breach cannot be reasonably remedied within 8 days or
such shorter period, the Subtenant fails to commence to remedy
such breach within such 8 day or shorter period or thereafter
fails to proceed diligently to remedy such breach;
(c) the Subtenant becomes bankrupt or insolvent or takes the benefit of
any statute for bankrupt or insolvent debtors or makes any proposal,
assignment or arrangement with its creditors;
(d) a receiver or a receiver and manager is appointed for all or a portion
of the Subtenant's property;
(e) any steps are taken or any actions or proceedings are instituted by
the Subtenant or by any other party including without limitation any
court or governmental body of competent jurisdiction for the
dissolution, winding up or liquidation of the Subtenant or its assets;
(f) this Sublease or any of the Subtenant's assets are taken under a writ
of execution;
(g) the Subtenant assigns, transfers or encumbers this Sublease or sublets
or permits the occupation or use or the parting with or sharing
possession of all or any part of the Subleased Premises by anyone
except in a manner permitted by this Sublease;
(h) any insurance policies covering any part of the Building or any
occupant thereof are actually or threatened to be cancelled or
adversely changed as a result of any use or occupancy of the Subleased
Premises by any Person;
"Gross Rent" shall have the meaning given it in section 3.01(a);
"Lease Rent" means all Rent (as that term is defined in the Lease) payable
under the Lease;
"Landlord's Covenants" means all of the terms, covenants and conditions of
the Lease on the part of the Landlord to be observed and performed;
<PAGE>
-3-
"Person" includes an individual, a corporation, a limited partnership, a
general partnership, a trust, a joint stock company, a joint venture, an
association, a syndicate, a bank, a trust company and the municipal
provincial and federal governments and any agency thereof, and any other
legal and business entity, and "Persons" shall have a corresponding
meaning;
"Rent" means all Gross Rent, Lease Rent and Additional Rent payable by the
Subtenant pursuant to this Sublease;
"Sales Taxes" means all goods and services, business transfer, value-added,
national sales, multi-stage sales, sales, use or consumption taxes or other
similar taxes imposed by any lawful taxing authority in Canada upon the
Sublandlord or the Subtenant, or in respect of this Sublease, or the
payments made by the Subtenant hereunder, or the goods and services
provided by the Sublandlord hereunder, including, without limitation, the
rental of the Subleased Premises;
"Sublandlord's Covenants" means all of the terms, covenants and conditions
of this Sublease on the part of the Sublandlord to be observed and
performed;
"Sublease Term" shall have the meaning given that term in section 2.01, as
same may be extended in accordance with section 2.02;
"Subtenant's Covenants" means all of the terms, covenants and conditions of
this Sublease on the part of the Subtenant to be observed and performed;
"Subtenant's Employees" means the Subtenant's directors, officers,
employees, servants, agents and those for whom the Subtenant is responsible
at law; and
"Tenant's Covenants" means all of the terms, covenants and conditions of
the Lease on the part of the Sublandlord to be observed and performed.
1.02 Recitals
--------
Each of the parties represents and warrant to the other that the recitals
set out above are true and correct in substance and in fact, as each such
recital relates to each party, and are incorporated as an integral part of this
Sublease.
ARTICLE 2.00 - DEMISE AND TERM
------------------------------
2.01 Term
----
The Sublandlord hereby subleases the Subleased Premises to the Subtenant
for and during a term (the "Sublease Term") commencing on November 15, 1998 (the
"Commencement Date") and continuing until and including April 14, 1999, unless
sooner terminated in accordance with this Sublease. Notwithstanding the
foregoing, the Subtenant shall only have the right to occupy the Subleased
Premises as long as the Lease remains in full force and effect and has not been
terminated.
2.02 Right to Extend
---------------
(a) The Subtenant may extend the Sublease Term so as to expire on the day
preceding the last day of the Lease (the "Extension Option"), if the Subtenant:
(i) observes and performs all of the Subtenant's Covenants and is not in
default of any of the
<PAGE>
-4-
Subtenant's Covenants at the time it exercises the Extension Option;
(ii) is in possession of the Subleased Premises; and
(iii) advises the Sublandlord in writing that it is exercising the within
option to extend by no later than February 1, 1999.
(b) If the Subtenant exercises the Extension Option in accordance with section
2.02(a), then:
(i) the Sublandlord shall vacate the Premises within 120 days following
the date that the Subtenant exercises the Extension Option, the day
the Sublandlord vacates being called the "Vacated Date";
(ii) the Subtenant shall continue to pay the Gross Rent until the last day
of the month in which the Vacated Date occurs. Upon the Sublandlord
vacating the Premises, on the first day of the month following the
month in which the Vacated Date occurs, this Sublease shall be deemed
to be amended so that the Rent payable by the Subtenant to the
Sublandlord shall be the Lease Rent. The Lease Rent shall be paid by
the Subtenant to the Sublandlord, in advance, on the first day of
each month; and
(iii) on the Vacated Date, the Subleased Premises shall be deemed to
include all of the Premises.
2.03 Location of the Subleased Premises
----------------------------------
The parties acknowledge and agree that until such time as section
2.02(b)(iii) comes into effect, the actual location of the Subleased Premises
shall be such area as is designated by the Sublandlord and the Subtenant from
time to time.
2.04 As Is Condition
---------------
The Subtenant acknowledges that it has inspected the Subleased Premises and
agrees to accept the Subleased Premises in their present condition, and the
Subtenant agrees that the Sublandlord has not undertaken to perform any work at
the Subleased Premises for the benefit of the Subtenant.
2.05 Leasehold Improvements
----------------------
If the Extension Option is exercised, the Subtenant shall be responsible
for removing such leasehold improvements, installations, alterations, partitions
and fixtures in the Subleased Premises as the Landlord may require to be
removed, but only to the extent that the Lease permits the Landlord to require
same to be removed.
2.06 Parking
-------
Subject to any rights of the Landlord under the Lease to regulate parking,
the Subtenant may use the parking facilities serving the Building on a first-
come, first-served basis.
2.07 Office Infrastructure
---------------------
During that part of the Sublease Term prior to the Vacated Date, the
Sublandlord shall permit the Subtenant the use of the following:
(a) the telephone infrastructure in the Premises. In this regard, the
Subtenant shall be entitled to
<PAGE>
-5-
use such telephones lines as the Sublandlord is not using. The
Subtenant shall, however, be responsible for all costs (including
without limitation, long distance charges) associated with each phone
line used by the Subtenant. If such costs are invoiced by the
Sublandlord to the Subtenant, the Subtenant shall pay such invoice
within 15 days of receipt of same;
(b) the unused office furniture in the Premises;
(c) the Sublandlord's surplus desktop and laptop computers. The
Sublandlord shall establish a sign-out system for the use of such
computers, and the Subtenant shall sign-out such computers in
accordance with such system;
(d) the security system in the Premises;
(e) reception support;
(f) courier management, but the Subtenant shall be responsible for all
courier costs;
(g) the kitchen and washroom facilities;
(h) the postage machine. The Subtenant shall be responsible for the cost
of all postage used by the Subtenant. The Sublandlord shall invoice
the Subtenant for the postage costs incurred by the Subtenant and the
Subtenant shall pay same to the Sublandlord within 15 days of receipt
of the invoice;
(i) the, fax machine in the Premises. The Subtenant shall be responsible
for all long-distance charges and shall pay such costs to the
Sublandlord within 15 days of receipt of an invoice from the
Sublandlord; and
(j) the photocopy machine in the Premises.
2.08 Signage
-------
The Subtenant may place its signage on the exterior of the Premises in the
locations provided for the signage of tenants, provided that it obtains the
Subtenant's consent (not to be unreasonably withheld) and the Landlord's
consent. However, prior to the Vacated Date, the Sublandlord shall not be
required to remove any of its existing signage in order to allow the Subtenant
to instal its signage.
ARTICLE 3.00 - SUBTENANT'S COVENANTS
------------------------------------
3.01 Rent
----
(a) Subject to section 2.02, during the Subleased Term, the Subtenant shall pay
the Sublandlord a monthly gross rent in the amount of $4,000.00 (the "Gross
Rent").
(b) Gross Rent is to be paid by the Subtenant in advance on the fifteenth day
of each month during the Sublease Term.
(c) Except to the extent specifically permitted by the terms of this Sublease,
all Rent shall be paid by the Subtenant without set-off, abatement, or deduction
for any reason or cause whatsoever, including, without limitation, by reason of
section 35 of the Landlord and Tenant Act, the benefits of which are expressly
waived by
<PAGE>
-6-
the Subtenant.
3.02 Observance of Covenants under the Lease
---------------------------------------
(a) Commencing upon the Vacated Date, the Subtenant shall observe and perform
all of the Tenant's Covenants insofar as they pertain to the Subleased Premises
to the same extent as if the Subtenant had originally been a party to the Lease
as the tenant thereunder.
(b) During the Sublease Term, the Subtenant shall not do or omit to do any act
or thing upon the Subleased Premises which could cause the Sublandlord to be in
default of any of the Tenant's Covenants.
(c) The Subtenant shall be responsible for the cost of all repairs to the
Premises necessitated as a result of the actions or omissions of the Subtenant
or the Subtenant's Employees.
3.03 Consents
--------
Wherever the Sublandlord is required under the Lease to obtain the
Landlord's consent in order to perform or carry out a certain activity, the
Subtenant shall be similarly required to obtain both the Landlord's and the
Sublandlord's consent prior to performing or carrying out such activity.
3.04 Notices from the Landlord
-------------------------
The Subtenant and Sublandlord shall forthwith deliver to the other all
notices which they may receive from the Landlord or any other Person regarding
the Subleased Premises.
3.05 Entry
-----
(a) From and after the Vacated Date, the Subtenant shall permit the entry of
the Sublandlord onto the Subleased Premises from time to time during normal
business hours on 24 hours notice (except in the case of an emergency, when no
notice shall be required) for the purpose of complying with any of the Tenant's
Covenants and for the purpose of verifying that the Subtenant is in full
compliance with its obligations under this Sublease. Prior to the Vacated Date,
the Sublandlord may enter upon the Subleased Premises from time to time without
any prior notice to the Subtenant.
(b) The Subtenant shall permit the entry of the Landlord onto the Subleased
Premises from time to time in accordance with the Landlord's rights under the
Lease.
3.06 Insurance
---------
(a) The Subtenant shall take out and maintain, with reputable insurers
reasonably acceptable to the Sublandlord, the following insurance
(i) prior to the Vacated Date, the insurance required by section 7.1(a) of
the Lease except that the Subtenant shall not be required to (A)
insure the leasehold improvements in the Subleased Premises; or (B)
take out the boiler and machinery insurance contemplated by such
section;
(ii) from and after the Vacated Date, all insurance which the Sublandlord
is obliged to take-out and maintain under the Lease
which insurance shall contain all of the endorsements and provisions required by
the Lease. Wherever the Lease requires the Landlord to be named as an insured or
a loss-payee, the Sublandlord shall be similarly named.
<PAGE>
-7-
(b) Each policy of insurance (other than public liability insurance) shall
contain a waiver of any rights of subrogation which the Subtenant's insurers may
have against the Sublandlord and the Landlord.
(c) Each policy of insurance shall be endorsed with an endorsement providing
that no cancellation of such policy will be effective unless the Sublandlord and
the Landlord shall have received at least 30 days prior written notice of such
cancellation and the Sublandlord shall be given at least 30 days prior written
notice of any failure of the Subtenant to renew the insurance.
(d) The Subtenant shall cause a certificate of the insurer evidencing such
insurance and copies of all such policies and endorsements to be delivered to
the Sublandlord upon request.
3.07 Sales Tax
---------
The Subtenant shall pay to the Sublandlord (or to such other person to whom
the payment is made) all Sales Taxes payable as a result of the Subtenant paying
Rent in accordance with this Sublease, which payment shall be made at the same
time as the Rent to which the Sales Taxes relate is to be paid in accordance
with the terms of this Sublease.
ARTICLE 4.00 - ASSIGNMENT AND SUB-LETTING
----------------------------------------
4.01 Assignment and Subletting
-------------------------
The Subtenant shall not assign or encumber this Sublease or sublease the
whole or any part of the Subleased Premises, nor shall it part with possession
of the whole or any part of the Subleased Premises to any person (collectively,
a "Transfer") without the consent of the Sublandlord and the Landlord. The
consent of the Sublandlord shall not be unreasonably or arbitrarily withheld.
The consent of the Landlord shall be subject to the terms of the Lease. The
Subtenant shall be responsible for all costs all costs incurred by the Landlord
in connection with a request for consent. The provisions of the Lease relating
to assignment and sublettings are hereby incorporated in this Sublease with the
appropriate changes of reference being deemed to have been made with the intent
that all references to (a) the Premises shall be considered a reference to the
Subleased Premises; (b) the Landlord shall be considered a reference to the
Sublandlord; and (c) the Tenant shall be considered a reference to the
Subtenant.
ARTICLE 5.00 - USE
------------------
5.01 Use
---
The Subtenant shall use the Subleased Premises solely for the uses
permitted by the Lease and for no other use whatsoever.
ARTICLE 6.00 - REMEDIES
-----------------------
6.01 Subtenant's Default
-------------------
If and whenever an Event of Default occurs, then the Sublandlord has, to
the extent permitted by law, the right to immediately re-enter the Subleased
Premises and expel all persons, including, without limitation, the Subtenant,
and remove all property from the Subleased Premises without the Sublandlord
being considered guilty of trespass or becoming liable for any loss or damage
which may be occasioned thereby, all as if the Subtenant had not lawfully, been
in possession of the Subleased Premises. In addition to any and all other rights
of the Sublandlord, and at the option of the Sublandlord, the full amount of the
current month's Rent together with the next 3 month's Rent shall immediately
become due and payable as accelerated rent upon the occurrence of an Event of
Default.
<PAGE>
-8-
6.02 Remedies
--------
The remedies available to the Landlord under the Lease (the "Remedies") in
respect of the non-performance of the Tenant's Covenants by the Sublandlord, are
hereby incorporated in this Sublease and all terms, conditions, covenants, and
agreements contained in the Lease pertaining to the Remedies shall apply to and
be binding upon the parties, the appropriate changes of reference being deemed
to have been made with the intent that such provisions shall govern the
relationship in respect of such matters between the Sublandlord and the
Subtenant as if they were landlord and tenant, respectively, under the Lease,
except to the extent that such provisions are inconsistent with any other
provision contained in this Sublease. For greater certainty, whenever an Event
of Default occurs, the Sublandlord shall have available to it all of the
Remedies in respect of such Event of Default. If the Sublandlord terminates this
Sublease, in addition to any other remedies it may have, the Sublandlord may
recover from the Subtenant all damages it incurs by reason of the Subtenant's
breach.
ARTICLE 7.00 - SUBLANDLORD'S COVENANTS
--------------------------------------
7.01 Quiet Enjoyment
---------------
If the Subtenant observes and performs all of the Subtenant's Covenants,
the Subtenant may peaceably possess and enjoy the Subleased Premises for the
Sublease Term without any hindrance, interruption or disturbance from the
Sublandlord, provided that the Sublandlord shall not be liable to the Subtenant
in respect of any breach of this covenant resulting from the Sublandlord not
obtaining quiet enjoyment from the Landlord.
7.02 Observe and Perform Obligations Under the Lease
-----------------------------------------------
The Sublandlord shall observe and perform all of the Tenant's Covenants
insofar as same are not required to be observed and performed by the Subtenant
pursuant to the terms of this Sublease. The Sublandlord shall not be in any way
responsible for the consequences of any failure of the Subtenant to comply with
the Subtenant's Covenants.
7.03 Enforce Covenants
-----------------
The Sublandlord shall use reasonable efforts to enforce the Landlord's
Covenants for the benefit of the Subtenant upon the written request of the
Subtenant and at the expense of the Subtenant, expressly excluding any right to
renew or extend the term of the Lease.
7.04 Sublandlord's Representation and Warranty
-----------------------------------------
The Sublandlord represents and warrants to the Subtenant that the Lease is
in good standing and that the Sublandlord is not in default of any of the
Tenant's Covenants.
ARTICLE 8.00 - GENERAL PROVISIONS
---------------------------------
8.01 Notice
------
Any notice or other communication required or permitted to be given by
this Sublease shall be in writing and shall be effectively given if:
(a) delivered personally;
<PAGE>
-9-
(b) sent by prepaid courier service;
(c) sent by registered mail; or
(d) sent by fax, telex or other similar means of electronic communication
and confirmed by mailing the original documents so sent by prepaid
mail on the same or following day,
in the case of notice to:
(i) the Sublandlord at:
the Premises
Attention: Andy Aicklen
(ii) the Subtenant at:
the Subleased Premises
or at such other address as the party to whom such notice or other communication
is to be given shall have advised the party giving same in the manner provided
in this section, provided that notice by the Sublandlord to the Subtenant shall
be sufficiently given if sent to the Subleased Premises notwithstanding any
other address which the Subtenant may give to the Sublandlord. Any notice or
other communication delivered personally or by prepaid courier service shall be
deemed to have been given and received on the day it is so delivered at such
address, provided that if such day is not a Business Day such notice or other
communication shall be deemed to have been given and received on the next
following Business Day. Any notice or other communication sent by registered
mail shall be deemed to have been given and received on the third Business Day
following the date of mailing. Any notice or other communication transmitted by
fax, telex or other similar form of electronic communication shall be deemed to
have been given and received on the day of its transmission provided that such
day is a Business Day and such transmission is completed before 5:00 p.m. on
such day, failing which such notice or other communication shall be deemed to
have been given and received on the first Business Day after its transmission.
Regardless of the foregoing, if there is a mail stoppage or labour dispute or
threatened labour dispute which has affected or could affect normal mail
delivery by Canada Post, then no notice or other communication may be delivered
by registered mail. If there has been a mail stoppage and if a party, sends a
notice or other communication by fax, telex or other similar means of electronic
communication, such party shall be relieved from the obligation to mail the
original document in accordance with this section.
8.02 Entire Agreement
----------------
This Sublease, and the Lease, constitutes the entire agreement between the
parties pertaining to the subject matter of this Sublease and supersedes all
prior agreements, offers to lease, understandings, negotiations and discussions,
whether oral or written, of the parties. This Sublease may not be modified or
amended except pursuant to an agreement in writing executed by the Sublandlord
and the Subtenant. There are no representations, warranties, covenants,
conditions or other agreements, whether oral or written, express or implied,
forming part of or in any way affecting or relating to this Sublease or the
Subleased Premises except as expressly set out in this Sublease.
8.03 Applicable Law
--------------
This Sublease shall be construed in accordance with the laws of the
Province of Ontario and the laws of Canada applicable in the Province of Ontario
and shall be treated in all respects as an Ontario contract. Each of the
<PAGE>
-10-
parties irrevocably attorns to the jurisdiction of the courts of the Province of
Ontario.
8.04 Interpretation
--------------
In this Sublease, "herein", "hereof", "hereunder", "hereafter" and similar
expressions refer to this Sublease and not to any particular section, paragraph
or other portion thereof, unless there is something in the subject matter or
context inconsistent therewith. The parties agree that all of the provisions of
this Sublease are to be construed as covenants and agreements as though the
words importing such covenants and agreements were used in each separate
paragraph of this Sublease. In this Sublease the term "however caused" shall
include, without limitation, the negligence of the Sublandlord, its officers,
employees, agents, invitees or other Person for whom it may in law be
responsible.
8.05 Partial Invalidity
------------------
If for any reason whatsoever any term, covenant or condition of this
Sublease, or the application thereof to any Person, firm or corporation or
circumstance, is to any extent held or rendered invalid, unenforceable or
illegal, then such term, covenant or condition:
(a) is deemed to be independent of the remainder of the Sublease and to be
severable and divisible therefrom, and its validity, unenforceability
or illegality does not affect, impair or invalidate the remainder of
the Sublease or any part thereof; and
(b) continues to be applicable to and enforceable to the fullest extent
permitted by law against any Person and circumstance other than those
as to which it has been held or rendered invalid, unenforceable or
illegal.
8.06 Survival of Obligations
-----------------------
If either party is in default of any of its obligations under this Sublease
at the time this Sublease expires or is terminated:
(a) such party shall remain fully liable for the performance of such
obligations; and
(b) all of the non-defaulting party's rights and remedies in respect of
such failure shall remain in full force and effect.
In addition, all indemnities of the Subtenant in favour of the Sublandlord, and
vice-versa, shall survive the expiration or earlier termination of this
Sublease.
8.07 Time
----
Time shall be of the essence of this Sublease and every part of it, except
as may be expressly provided to the contrary in this Sublease, and no extension
or variation of this Sublease shall operate as a waiver of this provision. When
calculating the period of time within which or following which any act is to be
done or step taken pursuant to this Sublease, unless this Sublease provides to
the contrary, the date which is the reference date in calculating such period
shall be excluded.
8.08 No Waiver
---------
The waiver by the Sublandlord of any breach of any term, covenant or
condition herein contained shall be deemed not to be a waiver of any subsequent
breach of the same or any other term, covenant or condition herein
<PAGE>
-11-
contained. The subsequent acceptance of any amount hereunder by the Sublandlord
shall not be deemed to be a waiver of any preceding breach by the Subtenant of
any term, covenant or condition of this Sublease, regardless of the Sublandord's
knowledge of such preceding breach at the time of acceptance of such amount. No
term, covenant or condition of this Sublease shall be deemed to have been waived
by the Sublandlord unless such waiver is in writing by the Sublandlord.
8.09 Confidentiality
---------------
Each of the parties shall retain in the strictest of confidence any
confidential information of the other party which advertently or inadvertently
comes into the possession of a party as a result of their both occupying the
Premises during the period prior to the Vacated Date.
8.09 Actions of Landlord
-------------------
The exercise by the Landlord of any of its rights or purported rights under
the Lease shall be deemed not to be a breach by the Sublandlord of any of the
Sublandlord's Covenants, unless such rights are validly exercised as a result of
a default of the Sublandlord under the terms of the Lease, which default is not
in any way attributable to the acts or omissions of the Subtenant.
8.10 Landlord's Consent and Costs
----------------------------
Except for the provisions of this section 8.10, this Sublease is deemed not
to have been signed by the Sublandlord nor delivered by the Sublandlord to the
Subtenant until such time as the Landlord has given its consent to the within
sublease by the Sublandlord to the Subtenant. The Subtenant shall be responsible
for the payment of all fees and other amounts charged by the Landlord in
connection with the request for its consent (including without limitation, all
costs which the Landlord may charge to the Tenant pursuant to the terms of the
Lease), regardless of whether or not the Landlord gives its consent to the terms
of this Sublease, to a maximum of $1,000.00 plus all applicable GST.
8.11 Acknowledgment of Receipt of Lease
----------------------------------
The Subtenant acknowledges receipt of a copy of the Lease.
8.12 Successors
----------
This Sublease shall ensure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns.
IN WITNESS WHEREOF the parties have duly executed this Sublease with effect
as of November 15, 1998.
INFORMATION ACCESS INC.
Per: /s/ Andrew Aicklen
--------------------------------------
Name: Andrew Aicklen
Title: President
<PAGE>
-12-
JUTVISION CORPORATION
Per: /s/ Leonard B. McCurdy
--------------------------------------
Name: Leonard B. McCurdy
Title: Chairman
<PAGE>
[LETTERHEAD OF DUNDEE APPEARS HERE]
February 22, 1999
Mr. Andy Aicklen
Information Access Inc.
5405 Eglinton Avenue West
Suite 107
Etobicoke, Ontario
M9C 5K6
Dear Mr. Aicklen:
Re: Consent to Sublease between 5395-5409 Eglinton Avenue West Inc. (the
"Landlord"), Information Access Inc. (the "Tenant") and Jutvision
Corporation (the "Subtenant") dated December 16, 1998
- -----------------------------------------------------------------------------
This letter shall amend and become part of the above noted Consent to Sublease
for Premises located at 5405 Eglinton Avenue West Suite 107 (the "Leased
Premises"), whereas the Subtenant subletted a portion of the Leased Premises
from the Tenant with an option to sublease all of the Leased Premises to the
Subtenant from November 15, 1999 and ending April 14, 1999. Further, the
Subtenant has the option to extend the sublease term to February 28, 2000.
This letter shall confirm that the Subtenant will sublease all of the Leased
Premises commencing April 1, 1999 and ending February 28, 2000.
All other terms and conditions of the Consent to Sublease are to remain the
same.
<PAGE>
Mr. Andy Aicklen
Information Access Inc.
Page 2
Please indicate your acceptance of the foregoing by executing in the space
provided below and return to the Landlord on or before 12:00 on Friday, February
26, 1999. Failure to return this letter executed by both the Tenant and
Subtenant shall doom this amendment to the Consent to Sublease null and void and
of no further force and effect.
Please call me should you have any questions.
Your truly,
DUNDEE REALTY MANAGEMENT CORP.
As Agent For Owners, 5395-5409 Eglinton Avenue West Inc.
/s/ Cheryl Ledamun
Cheryl Ledamun
Assistant Leasing Manager
----------------------------------------------------------------
AGREED and accepted this 4/th/ day of March, 1999
INFORMATION ACCESS INC.
/s/ Mr. Andy Aicklen
-----------------------------------------------c/s
Mr. Andy Aicklen
I have the authority to bind the corporation
----------------------------------------------------------------
----------------------------------------------------------------
AGREED and accepted this 10/th/ day of March, 1999
JUTVISION CORPORATION
/s/ Mr. Roy Dalton
-----------------------------------------------c/s
Mr. Roy Dalton
I have the authority to bind the corporation
----------------------------------------------------------------
<PAGE>
[LETTERHEAD OF BAMBOO.COM APPEARS HERE]
Fax
<TABLE>
<S> <C>
To: Roy Dalton From: Andy Aiklen
--------------------------------------------------------------------------------------------
Fax: [Click here and type fax number] Pages: [Click here and type # of pages]
--------------------------------------------------------------------------------------------
Phone: [Click here and type phone number] Date: 05/07/99
--------------------------------------------------------------------------------------------
Re: [Click here and type subject of fax] CC: [Click here and type name]
--------------------------------------------------------------------------------------------
[_] Urgent [_] For Review [_] Please Comment [_] Please Reply [_] Please Recycle
--------------------------------------------------------------------------------------------
</TABLE>
. Comments
Roy,
All I have is the final consent to sublease agreement. Here are the copies
______________________________
<PAGE>
Exhibit 10.19
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into effective as of January
1, 1999 by and between Jutvision Corporation, a Delaware corporation with its
principal offices at 124 University Avenue, Palo Alto, California 94301 (the
"Company"), and Leonard B. McCurdy ("Employee").
WHEREAS, the Company wishes to employ Employee as its President and Chief
Executive Officer for the period and upon the terms and conditions hereinafter
set forth, and Employee desires to serve in such capacities upon the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Employee hereby agree as follows:
1. Term of Employment. Employee's employment under this Agreement shall
------------------
commence on January 1, 1999 (the "Effective Date") and shall continue until the
close of business on December 31, 2000 subject to any extension as set forth
herein or any earlier termination of Employee's employment as provided in
Section 6 hereof (the "Initial Term"). Upon the expiration of the Initial Term,
and each subsequent term or extension thereof, this Agreement shall
automatically be extended for an additional term of one (1) year, unless the
Company or Employee shall have notified the other party hereto of its or his
election to terminate this Agreement not later than ninety (90) days prior to
the end of such subsequent term or extension thereof (the Initial Term, together
with any extensions, until termination in accordance herewith, shall be referred
to herein as the "Term of Employment"). If Employee's employment is terminated
pursuant to Section 6 hereof, the Term of Employment shall expire as of the
Termination Date (as defined in Section 6 hereof).
2. Duties and Activities.
----------------------
(a) During the Term of Employment, Employee will faithfully perform
those duties and responsibilities commensurate with his position as President
and Chief Executive Officer and such other responsibilities and duties as may be
reasonably determined in the future by the Company's Board of Directors (the
"Board"). Employee will devote his full working time and use his best efforts to
advance the business and welfare of the Company in furtherance of the policies
established by the Board. Employee shall report to the Board. During the Term of
Employment, Employee shall not engage in any other employment activities for any
direct or indirect remuneration without the concurrence of the Board, except
that Employee may continue to devote reasonable time to the management of
investments, participation in community and charitable affairs, and the
activities as further set forth in Exhibit A hereto, so long as such activities
---------
do not interfere with his duties under this Agreement (as reasonably determined
by the Board). Employee hereby agrees that, except as disclosed on Exhibit A
---------
hereto, during his employment hereunder, he will not, directly or indirectly,
engage (i) individually, (ii) as an officer, (iii) as a director, (iv) as an
employee, (v) as a consultant, (vi) as an advisor, (vii) as an agent (whether a
salesperson or otherwise), (viii) as a broker, or (ix) as a partner, coventurer,
<PAGE>
stockholder or other proprietor owning directly or indirectly more than one
percent (1%) interest in, any firm, corporation, partnership, trust,
association, or other organization that is a Competitor (as defined in Section
8.1 hereof) of the Company (such engagement by Employee hereinafter referred to
as a "Prohibited Engagement"). Except as may be shown on Exhibit A hereto,
---------
Employee hereby represents that he is not engaged in any of the foregoing
capacities (i) through (ix) in any Prohibited Engagement.
(b) During the Term of Employment, Employee shall also serve as
Chairman of the Company's Board of Directors.
3. Former Employers. Employee represents and warrants that his
----------------
employment by the Company will not conflict with and will not be constrained by
any prior or current employment, consulting or other relationship. Employee
represents and warrants that he does not possess confidential information
arising out of any such employment, consulting or other relationship which, in
Employee's best judgment, would be utilized in connection with his employment by
the Company.
4. Compensation.
-------------
4.1 Salary. In consideration for Employee's services under this
------
Agreement, Employee will be paid, during the Term of Employment, salary at an
annual rate of $150,000, or at a such other annual salary rate as determined by
the Board or its Compensation Committee, but in any event at least equal to the
annual salary rate in effect immediately preceding any change thereto.
Employee's annual salary rate in effect from time to time is referred to herein
as the "Base Salary." Employee's Base Salary shall be paid in periodic
installments at such times as salaries are generally paid to other senior
executives of the Company. In addition to the Base Salary, Employee shall
receive a monthly housing allowance, not to exceed $5,000 ("Housing Allowance").
4.2 Other Compensation. Employee's compensation by payments of Base
------------------
Salary and the Housing Allowance shall not be deemed exclusive and shall not
prevent Employee from participating in any other incentive compensation, profit
sharing or benefit plan made available by the Company to its executive employees
generally. The Base Salary and Housing Allowance payments hereunder shall not in
any way limit or reduce any other obligation of the Company hereunder, and no
other compensation, benefit or payment hereunder shall in any way limit or
reduce the obligation of the Company to pay Employee's Base Salary or Housing
Allowance, if applicable.
4.3 Stock Option Grant. As of the Effective Date and in connection
------------------
with the execution of this Agreement, the Company shall grant to Employee an
incentive stock option (the "Option"), to the extent permitted by the applicable
provisions of Section 422 of the Internal Revenue Code) to purchase 120,000
shares of the common stock of the Company pursuant to the Company's 1998
Employee, Director and Consultant Stock Plan at an exercise price of $0.50 per
share. The Option will have a term of ten years. The Option will vest and become
exercisable as to one-twenty-fourth of the shares at the end of each month after
the Effective Date. The Option will be subject to such other terms as deemed
appropriate by the Board or its Compensation Committee and set forth in the
applicable option agreement. In the event of (i) a Change of
-2-
<PAGE>
Control (as defined in Section 6.l(e) hereof); (ii) the completion of an
underwritten initial public offering by the Company; (iii) termination of
employment for Good Reason (as defined in Section 6.l(e) hereof); (iv) the
termination of Employee without Cause (as defined in Section 6.1(c) hereof); (v)
the death of Employee; or (vi) the Permanent Disability of Employee (as defined
in Section 6.1(b) hereof), the Option will vest and become fully exercisable.
4.4 Home Office. The Company shall pay Employee's expenses to
-----------
establish and maintain, during the Term of Employment, a home office (including
high speed Internet access) not to exceed $1,000 per year.
4.5 Country Club Dues. During the Term of Employment, the Company
-----------------
shall pay Employee's dues, fees and expenses incurred in connection with
membership in a local country club.
5. Benefits.
--------
5.1 Participation. During the Term of Employment, Employee shall be
-------------
entitled to participate in all fringe benefit programs maintained by the Company
and made available to its executive officers from time to time; provided,
however, that during the Term of Employment and as otherwise provided herein the
Company shall maintain for Employee (i) a life insurance policy with a minimum
of a $1,000,000 death benefit; (ii) disability coverage comparable to that
customarily provided to similarly situated senior executives; and (iii) health,
vision, dental and prescription drug coverage for Employee and his spouse and
children at no additional cost to Employee comparable to that customarily
provided to similarly situated senior executives and their families. Any
payments or benefits payable to Employee hereunder in respect of any calendar
year during which Employee is employed by the Company for less than the entire
year shall, unless otherwise provided in the applicable plan or arrangement, be
prorated in accordance with the number of days in such calendar year during
which he is so employed. Employee will be furnished with an auto allowance of
$750 per month to cover costs of leasing, maintenance, repair and insurance of
an automobile. Employee will be entitled to four (4) weeks of paid vacation per
year, which vacation time shall accrue in accordance with the Company's
policies. Employee acknowledges that he shall have no vested rights under or to
participate in any such program except as expressly provided under the terms
hereof or thereof.
5.2 Expenses. The Company will pay or reimburse Employee for such
--------
reasonable travel, entertainment or other business expenses as he may incur on
behalf of the Company during the Term of Employment in connection with the
performance of his duties hereunder but only to the extent that such expenses
were either specifically authorized by the Company or incurred in accordance
with policies established by the Board for senior executives and provided that
Employee shall furnish the Company with such evidence relating to such expenses
as the Company may reasonably require to substantiate such expenses for tax
purposes.
6. Termination of Employment.
-------------------------
6.1 Circumstances of Termination. Notwithstanding the terms set
----------------------------
forth in Section 1 hereof, Employee's employment shall terminate under any of
the following
-3-
<PAGE>
circumstances and the date of such an occurrence, unless otherwise provided
below, shall be Employee's "Termination Date":
(a) Death. Immediately, in the event of Employee's death.
-----
(b) Permanent Disability. At the option of the Company, if
--------------------
Employee becomes physically or mentally incapacitated or disabled so that (i) he
is unable to perform for the Company substantially the same services as he
performed prior to incurring such incapacity or disability or to devote his full
working time or use his best efforts to advance the business and welfare of the
Company or otherwise to perform his duties under this Agreement, (ii) such
condition exists for an aggregate of six (6) months in any twelve (12)
consecutive calendar months, and (iii) such incapacity or disability is
incapable of reasonable accommodations under applicable law, including but not
limited to the Americans with Disabilities Act of 1990, as amended (a "Permanent
Disability"). The Company, at its option and expense, is entitled to retain a
physician reasonably acceptable to Employee to confirm the existence of such
incapacity or disability, and the determination of such physician is binding
upon the Company and Employee.
(c) Cause. At the option of the Company, if Employee:
-----
(i) has been convicted of, or has pled guilty or nolo
----
contendere to, a felony; or
- ----------
(ii) has embezzled or misappropriated Company funds or
property or that of the Company's customers, suppliers or affiliates; or
(iii) has engaged in any Prohibited Engagement; or
(iv) has violated any material term of the Employment,
Confidential Information and Invention Assignment Agreement (the
"Confidentiality Agreement") entered into with the Company; or
(v) has demonstrated gross negligence or willful
misconduct in connection with the performance of Employee's duties hereunder;
provided, however, that with respect to subsections (iii), (iv) and (v) above,
the Company's right to terminate Employee shall be conditioned on (A) the
Company giving Employee written notice specifically referring to the pertinent
subsection above and describing the specific circumstances and/or actions
purportedly giving rise to the occurrence of such item; and (B) failure by
Employee, within thirty (30) days after receipt of any such notice to cease the
actions and/or reinstate or rectify the circumstances described in such notice
to the reasonable satisfaction of the Board. With respect to these subsections,
the Company shall have the right to place Employee on administrative leave
pending investigation of the circumstance(s) or action(s) purportedly giving
rise to the occurrence of such items.
(d) Without Cause. At the option of the Company at any time
-------------
for any reason other than those referred to above or for no reason at all,
whereupon the Company shall be obligated to make those payments set forth in
Section 7 hereof.
-4-
<PAGE>
(e) Resignation for Good Reason.
----------------------------
(i) Employee, at his option, may resign for "Good Reason":
(1) because the Company has materially reduced the
title, role or responsibilities of Employee; provided, however, that a reduction
in duties, position or responsibilities solely by virtue of the Company being
acquired and made part of a larger entity (as, for example, when the President
and Chief Executive Officer of the Company remains as such following a Change of
Control but is not made the President and Chief Executive Officer of the
acquiring corporation) shall not constitute "Good Reason;"
(2) because the Company has reduced Employee's Base
Salary or Housing Allowance from the level in effect immediately prior to such
change, with the exception of a company-wide reduction of compensation due to
economic considerations, provided that the foregoing shall not limit or derogate
from the Company's obligations set forth in Section 4 above;
(3) because the Company has breached any material
term of this Agreement other than as noted in subsections (1) and (2) above; or
(4) because the Company has relocated its principal
place of business more than 35 miles from its current location.
(ii) In the event that Employee terminates this Agreement
for Good Reason, the Company shall become obligated to make those payments set
forth in Section 7 hereof.
(iii) For purposes of this Agreement, a "Change in Control"
shall be deemed to have occurred upon the occurrence of any of the following:
(1) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially all
of the assets of the Company;
(2) individuals who, as of the date hereof,
constitute the entire Board of Directors of the Company (the "Incumbent
Directors") cease for any reason to constitute at least a majority of the Board
of Directors (hereinafter referred to as a "Board Change"), provided that any
individual becoming a director subsequent to the date hereof whose election or
nomination for election was approved by a vote of at least a majority of the
then Incumbent Directors shall be, for purposes of this provision, deemed an
Incumbent Director;
(3) approval by the shareholders of the Company of
any consolidation or merger of the Company where the shareholders of the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own, directly or
indirectly, shares representing in the aggregate more than fifty percent (50%)
of the combined voting power of all the outstanding securities of the Company or
surviving entity immediately following such merger or consolidation, or
-5-
<PAGE>
(4) any "person," as such term is used in Section
13(d) of the 1934 Act (other than the Company, any employee benefit plan of the
Company or any entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan), together with all "affiliates" and
"associates" (as such terms are defined in Rule 12b-2 under the 1934 Act or any
successor provision) of such person, shall become the "beneficial owner" or
"beneficial owners" (as defined in Rules 13d-3 and 13d-5 under the 1934 Act or
any successor provision), directly or indirectly, of securities of the Company
representing in the aggregate (A) in the event the Company is not subject to the
reporting requirements of the 1934 Act and has not registered shares of a class
of equity securities pursuant to Section 12(g) or 12(b) of the 1934 Act, fifty
percent (50%) or more, or (B) in the event the Company is a Reporting Company,
twenty-five percent (25%) or more of either (1) the then outstanding shares of
Common Stock of the Company or (2) the combined voting power of all then
outstanding securities of the Company having the right under ordinary
circumstances to vote in an election of the Board of Directors of the Company.
6.2 Notice of Termination. Any intent to terminate employment by
---------------------
Employee pursuant to Section 6.1(e) shall be communicated by written notice to
the Company setting forth in detail the specific actions deemed to constitute
Good Reason. If the Company does not respond within ten (10) days from such
notice, the resignation shall be deemed effective. The Company may, within the
ten (10) day period, correct such condition giving rise to Employee's notice or
dispute Employee's claims by giving written notice of such dispute.
7. Payments Upon Termination of Employment.
----------------------------------------
7.1 Payments. In addition to any rights Employee may have under
--------
Section 4.3, on the Termination Date:
(a) If the Company terminates Employee's employment for Cause or
if Employee voluntarily terminates his employment without Good Reason, the
Company's obligation to compensate Employee shall in all respects cease as of
the Termination Date, except that the Company shall pay Employee the Base Salary
and Housing Allowance accrued under Section 4.1, the value of accrued vacation
time pursuant to Section 5.1 hereof, and the reimbursable expenses incurred
under Section 5.2 of this Agreement up to such Termination Date (the "Accrued
Obligations");
(b) If Employee's employment is terminated due to the death of
Employee, the Company's obligation to compensate Employee shall in all respects
cease as of the Termination Date, except that within thirty (30) days after the
Termination Date, the Company shall pay Employee's estate or legal
representative the Accrued Obligations;
(c) If Employee's employment is terminated upon the Permanent
Disability of Employee, the Company's obligation to compensate Employee with
respect to (i) Base Salary (as in effect on the Termination Date), and (ii)
Housing Allowance, shall continue for twelve (12) months following such
termination. In addition, the Company shall pay Employee any Accrued
Obligations; and
-6-
<PAGE>
(d) If Employee's employment is terminated by the Company
pursuant to Section 6.l(d), or by Employee pursuant to Section 6.1(e) the
Company's obligation to compensate Employee shall in all respects cease, except
that within thirty (30) days after the Termination Date the Company shall pay
Employee the Accrued Obligations and during the period ending on the expiration
of the sixth month following the Termination Date the Company shall pay to
Employee each month: (i) one-twelfth (1/12th) of the annual Base Salary of
Employee in effect at the Termination; plus (ii) one-twelfth (1/12th) of the
annual Housing Allowance (collectively, the "Continuation Payments"). The
Company shall be excused from its obligations to make the Continuation Payments
if Employee breaches his obligations under this Agreement or the Confidentiality
Agreement.
Notwithstanding the foregoing, in the event such termination
occurs within two (2) years of a Change in Control of the Company, the full
amount of the Continuation Payments will be paid in a lump sum within ten (10)
days of such Change in Control.
7.2 Medical Benefits. If Employee's employment is terminated by the
----------------
Company pursuant to Section 6.1(d) or by Employee pursuant to Section 6.1(e),
the Company shall reimburse the Employee for the amount of his or her premium
payment for group health coverage, if any, elected by the Employee pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"); provided, however, that (A) such reimbursement shall not exceed $1500
per month, and (B) the Employee shall be solely responsible for all matters
relating to his or her continuation of coverage pursuant to COBRA, including
(without limitation) his or her election of such coverage and his or her timely
payment of premiums; provided, further, that upon the earlier to occur of (C)
the time that the Employee no longer constitutes a Qualified Beneficiary (as
such term is defined in Section 4980B(g)(l) of the Internal Revenue Code of
1986, as amended) and (D) the date twelve (12) months following the Employee's
termination, the Company's obligations to reimburse the Employee under this
subsection (ii) shall cease.
7.3 Effect on this Agreement. Any termination of Employee's
------------------------
employment and any expiration of the Term of Employment under this Agreement
shall not affect the continuing operation and effect of this Section and Section
8 hereof, which shall continue in full force and effect with respect to the
Company and Employee, and its and his heirs, successors and assigns.
Nothing in Section 6 hereof shall be deemed to operate or shall
operate as a release, settlement or discharge of any liability of Employee to
the Company or others from any action or omission by Employee enumerated in
Section 6.1(c) hereof as a possible basis for termination of Employee's
employment for Cause.
7.4 No Duty to Mitigate. Subject to the provisions of the
-------------------
Confidentiality Agreement and Section 8 of this Agreement, Employee shall be
free to accept such employment and engage in such business as Employee may
desire following the termination of his employment hereunder, and no
compensation received by Employee therefrom shall reduce or affect any payments
required to be made by the Company hereunder except to the extent expressly
provided herein or in the benefit plans of the Company.
-7-
<PAGE>
8. Post-Employment Activities.
---------------------------
8.1 Conditional Nature of Severance Payments; Non-Competition.
---------------------------------------------------------
Employee acknowledges that the nature of the Company's business is such that if
Employee were to become employed by, or substantially involved in, the business
of a Competitor during the twelve (12) months following the termination of
Employee's employment with the Company (the "Noncompete Period"), it would be
very difficult for the Employee not to rely on or use the Company's trade
secrets and confidential information. A "Competitor" is defined as any person or
entity whether now existing or hereafter established which is primarily engaged
in the business of producing and selling virtual tours. To avoid the inevitable
disclosure of the Company's trade secrets and confidential information, Employee
agrees and acknowledges that the Employee's right to receive the severance
payments and other benefits set forth in Section 7 (to the extent the Employee
is otherwise entitled to such payments) shall be conditioned upon (a) the
Employee not directly or indirectly engaging in (whether as an employee,
consultant, proprietor, partner, director or otherwise), nor having any
ownership interest directly or indirectly of more than 1% in, or participating
in the financing, operation, management or control of, a Competitor; and (b) the
Employee continuing to observe, and not be in breach of, the provisions of the
Confidentiality Agreement. Upon any breach of this Section or the
Confidentiality Agreement, all severance payments pursuant to Section 7 shall
immediately cease.
8.2 Exclusions. No provision of this Agreement shall be construed to
----------
preclude Employee from performing the same services which the Company hereby
retains Employee to perform for any person or entity which is not a Competitor
of the Company upon the expiration or termination of Employee's employment (or
any post-employment consultation) so long as Employee does not thereby violate
any term of the Confidentiality Agreement.
9. Remedies. Employee's obligations under the Confidentiality Agreement
--------
and Section 8 of this Agreement shall survive the expiration or termination of
Employee's employment (whether through Employee's resignation or otherwise) with
the Company. Employee acknowledges that a remedy at law for any breach or
threatened breach by Employee of the provisions of the Confidentiality Agreement
or Section 8 would be inadequate and Employee therefore agrees that the Company
shall be entitled to injunctive relief in any court of competent jurisdiction in
the case of any such breach or threatened breach. Employee acknowledges that
this Section does not limit the Company's right to seek monetary damages for
breach of this Agreement.
10. Golden Parachute Excise Tax.
----------------------------
10.1 Reimbursement. In the event that it shall be determined that
-------------
any payment or other benefit by the Company to or for the benefit of Employee
under this Agreement or otherwise, whether paid or payable, but determined
without regard to any additional payments required under this Section (the
"Payments"), would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code (the "Excise Tax"), then Employee shall be entitled to
receive (i) an additional payment from the Company (the "Reimbursement Payment")
sufficient to pay the Excise Tax, and (ii) an additional payment from the
Company sufficient to
-8-
<PAGE>
pay the Excise Tax and federal and state income taxes arising from the payments
made by the Company to Employee pursuant to this sentence.
10.2 Determination. Unless the Company and Employee otherwise agree
-------------
in writing, any determination required under this Section shall be made in
writing by the Company's primary independent public accounting firm (the
"Accountants"), whose determination shall be conclusive and binding upon
Employee and the Company for all purposes. For purposes of making the
calculations required by this Section, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and Employee shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make their determination under this Section. The Company
shall bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section.
11. Miscellaneous.
--------------
11.1 Key Man Life Insurance. Employee recognizes and acknowledges
----------------------
that the Company or its affiliates may seek and purchase one or more policies
providing key man life insurance with respect to Employee, the proceeds of which
would be payable to the Company or an affiliate. Employee hereby consents to the
Company or its affiliates seeking and purchasing such insurance and will provide
such information, undergo such medical examinations (at the Company's expense),
execute such documents, and otherwise take any and all actions necessary or
desirable in order for the Company or its affiliates to seek, purchase and
maintain in full force and effect such policy or policies.
11.2 Notice. All notices, requests, consents and other
------
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) made by telecopy, (iii) sent by overnight courier, or (iv) sent by
registered or certified mail, return receipt requested, postage prepaid.
If to the Company: Jutvision Corporation
124 University Avenue
Palo Alto, CA 94301
Attention: Andrew P. Laszlo
If to Employee: Leonard B. McCurdy
305 Emerson Street
Palo Alto, CA 94301
11.3 Modification and No Waiver of Breach. No waiver or modification
------------------------------------
of this Agreement shall be binding unless it is in writing signed by the parties
hereto. No waiver by a party of a breach hereof by the other party shall be
deemed to constitute a waiver of a future breach, whether of a similar or
dissimilar nature, except to the extent specifically provided in any written
waiver under this Section.
-9-
<PAGE>
11.4 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF STATE OF CALIFORNIA
EXCLUDING ITS CONFLICT OF LAW PRINCIPLES. ALL QUESTIONS RELATING TO THE VALIDITY
AND PERFORMANCE HEREOF AND REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAW.
11.5 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement.
11.6 Captions. The captions used herein are for ease of reference
--------
only and shall not define or limit the provisions hereof.
11.7 Entire Agreement. This Agreement, any written agreement
----------------
referred to herein and the Exhibits hereto constitute the entire agreement
between the parties hereto relating. to the matters encompassed hereby and
supersede any prior or contemporaneous written or oral agreements.
11.8 Successors.
-----------
(a) Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially all of the Company's business and assets shall assume
the obligations under this Agreement and agree expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term "Company" shall
include any successor to the Company's business and assets that executes and
delivers the assumption agreement described in this subsection (a) or which
becomes bound by the terms of this Agreement by operation of law.
(b) The terms of this Agreement and all rights of Employee
hereunder shall insure to the benefit or, and be enforceable by, Employee's
personal or legal representatives, executors, administrators, successors, heirs,
devisees and legatees.
11.9 Arbitration. Any dispute, controversy, or claim arising out of,
-----------
in connection with, or in relation to this Agreement and its exhibits, except as
provided in Section 9 hereof, shall be settled by arbitration in California
pursuant to the Commercial Rules then in effect of the American Arbitration
Association and in no other place. Any award or determination shall be final,
binding, and conclusive upon the parties, and a judgment rendered may be entered
in any court having jurisdiction thereof. Employee and the Company knowingly
waive any and all rights to a jury trial in any form. The parties hereby
expressly waive punitive damages, and under no circumstances shall an award
contain any amount that in any way reflects punitive damages. Each party shall
bear its own expenses relating to the arbitration, unless otherwise determined
in arbitration.
It is intended that controversies or claims submitted to arbitration
under this Section shall remain confidential, and to that end it is agreed by
the parties that neither the
-10-
<PAGE>
facts disclosed in the arbitration, the issues arbitrated, nor the views or
opinions of any persons concerning them, shall be disclosed to third persons at
any time, except to the extent necessary to enforce an award or judgment or as
required by law or in response to legal process or in connection with such
arbitration. Nothing in this Section shall limit the Company's right to seek
equitable remedies in any court of competent jurisdiction for breach of this
Agreement.
11.10 Independent Advice. Employee hereby acknowledges that he has
------------------
been advised of the opportunity available to him to seek and obtain advice of
legal counsel and financial advisors of his own choosing prior to and in
connection with Employee's execution of this Agreement. In addition Employee
hereby affirms that he has either obtained such advice or knowingly and
willingly decided to forego the opportunity to avail himself of such advice.
IN WITNESS WHEREOF, this Agreement has been duly executed effective as of
the day and year first written above.
JUTVISION CORPORATION
By: /s/ Andrew P. Laszlo
-------------------------------
Name: Andrew P. Laszlo
-----------------------------
Title: SVP, Business Development
----------------------------
/s/ Leonard B. McCurdy
------------------------------
Leonard B. McCurdy
-11-
<PAGE>
EXHIBIT A
OTHER POSITIONS
None.
<PAGE>
EXHIBIT B
PRIOR INVENTIONS
None.
<PAGE>
EXHIBIT 10.20
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into effective as of January
1, 1999 by and between Jutvision Corporation, a Delaware corporation with its
principal offices at 124 University Avenue, Palo Alto, California 94301 (the
"Company"), and Kevin B. McCurdy ("Employee").
WHEREAS, the Company wishes to employ Employee as its Founder and Executive
Vice President for the period and upon the terms and conditions hereinafter set
forth, and Employee desires to serve in such capacities upon the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Employee hereby agree as follows:
1. Term of Employment. Employee's employment under this Agreement shall
------------------
commence on January 1, 1999 (the "Effective Date") and shall continue until the
close of business on December 31, 2000 subject to any extension as set forth
herein or any earlier termination of Employee's employment as provided in
Section 6 hereof (the "Initial Term"). Upon the expiration of the Initial Term,
and each subsequent term or extension thereof, this Agreement shall
automatically be extended for an additional term of one (1) year, unless the
Company or Employee shall have notified the other party hereto of its or his
election to terminate this Agreement not later than ninety (90) days prior to
the end of such subsequent term or extension thereof (the Initial Term, together
with any extensions, until termination in accordance herewith, shall be referred
to herein as the "Term of Employment"). If Employee's employment is terminated
pursuant to Section 6 hereof, the Term of Employment shall expire as of the
Termination Date (as defined in Section 6 hereof).
2. Duties and Activities.
---------------------
(a) During the Term of Employment, Employee will faithfully perform
those duties and responsibilities commensurate with his position as Founder and
Executive Vice President. Employee shall develop the Company's strategic
direction and initiatives, shall participate in product development and
marketing and shall perform such other responsibilities and duties as may be
reasonably determined in the future by the Company's Board of Directors (the
"Board") or Chief Executive Officer. Employee will devote his full working time
and use his best efforts to advance the business and welfare of the Company in
furtherance of the policies established by the Board. Employee shall report to
the Chief Executive Officer. During the Term of Employment, Employee shall not
engage in any other employment activities for any direct or indirect
remuneration without the concurrence of the Board, except that Employee may
continue to devote reasonable time to the management of investments,
participation in community and charitable affairs, and the activities as further
set forth in Exhibit A hereto, so long as such activities do not interfere with
---------
his duties under this Agreement (as reasonably determined by the Board).
Employee hereby agrees that, except as disclosed on Exhibit A hereto, during his
---------
employment hereunder, he will not, directly or indirectly, engage
<PAGE>
(i) individually, (ii) as an officer, (iii) as a director, (iv) as an employee,
(v) as a consultant, (vi) as an advisor, (vii) as an agent (whether a
salesperson or otherwise), (viii) as a broker, or (ix) as a partner, coventurer,
stockholder or other proprietor owning directly or indirectly more than one
percent (1%) interest in, any firm, corporation, partnership, trust,
association, or other organization that is a Competitor (as defined in Section
8.1 hereof) of the Company (such engagement by Employee hereinafter referred to
as a "Prohibited Engagement"). Except as may be shown on Exhibit A hereto,
----------
Employee hereby represents that he is not engaged in any of the foregoing
capacities (i) through (ix) in any Prohibited Engagement.
(b) During the Term of Employment, Employee shall also serve as a
member of the Board for so long as he shall remain elected as such. In the event
Employee is no longer serving as a member of the Board, throughout the Term of
Employment, Employee shall serve as an observer on the Board. As an observer,
Employee shall be invited to participate in all meetings of the Board.
3. Former Employers. Employee represents and warrants that his
----------------
employment by the Company will not conflict with and will not be constrained by
any prior or current employment, consulting or other relationship. Employee
represents and warrants that he does not possess confidential information
arising out of any such employment, consulting or other relationship which, in
Employee's best judgment, would be utilized in connection with his employment by
the Company.
4. Compensation.
-------------
4.1 Base Salary. In consideration for Employee's services under this
-----------
Agreement, Employee will be paid, during the Term of Employment, salary at an
annual rate of $136,000, or at such other annual salary rate as determined by
the Board or its Compensation Committee, but in any event at least equal to the
annual salary rate in effect immediately preceding any change thereto.
Employee's annual salary rate in effect from time to time is referred to herein
as the "Base Salary." Employee's Base Salary shall be paid in periodic
installments at such times as salaries are generally paid to other senior
executives of the Company.
4.2 Other Compensation. Employee's compensation by payments of Base
------------------
Salary shall not be deemed exclusive and shall not prevent Employee from
participating in any other incentive compensation, profit sharing or benefit
plan made available by the Company to its executive employees generally. The
Base Salary payments hereunder shall not in any way limit or reduce any other
obligation of the Company hereunder, and no other compensation, benefit or
payment hereunder shall in any way limit or reduce the obligation of the Company
to pay Employee's Base Salary.
4.3 Stock Option Grant. As of the Effective Date and in connection
------------------
with the execution of this Agreement, the Company shall grant to Employee an
incentive stock option (the "Option"), to the extent permitted by the applicable
provisions of Section 422 of the Internal Revenue Code) to purchase 96,000
shares of the common stock of the Company pursuant to the Company's 1998
Employee, Director and Consultant Stock Plan at an exercise price of $0.50 per
share. The Option will have a term of ten years. The Option will vest and become
exercisable as
-2-
<PAGE>
to one-twenty-fourth of the shares at the end of each month after the Effective
Date. The Option will be subject to such other terms as deemed appropriate by
the Board or its Compensation Committee and set forth in the applicable option
agreement. In the event of (i) a Change of Control (as defined in Section 6.1(e)
hereof), (ii) the completion of an underwritten initial public offering by the
Company, (iii) termination of employment for Good Reason (as defined in Section
6.l(e) hereof); (iv) the termination of Employee without Cause (as defined in
Section 6.1(c) hereof); (v) the death of Employee; or (vi) the Permanent
Disability of Employee (as defined in Section 6.l(b) hereof), the Option will
vest and become fully exercisable.
4.4 Home Office. The Company shall pay Employee's expenses to
-----------
establish and maintain, during the Term of Employment, a home office (including
high speed Internet access), not to exceed $1,000 per year.
5. Benefits.
---------
5.1 Participation. During the Term of Employment , Employee shall be
-------------
entitled to participate in all fringe benefit programs maintained by the
Company and made available to its executive officers from time to time;
provided, however, that during the Term of Employment and as otherwise provided
herein the Company shall maintain for Employee (i) a life insurance policy with
a minimum of a $500,000 death benefit; (ii) disability coverage comparable to
that customarily provided to similarly situated senior executives; and (iii)
health, vision, dental and prescription drug coverage, at no additional cost to
Employee, comparable to that customarily provided to similarly situated senior
executives. Any payments or benefits payable to Employee hereunder in respect of
any calendar year during which Employee is employed by the Company for less than
the entire year shall, unless otherwise provided in the applicable plan or
arrangement, be prorated in accordance with the number of days in such calendar
year during which he is so employed. Employee will be furnished with an auto
allowance of $750 per month to cover costs of leasing, maintenance, repair and
insurance of an automobile. Employee will be entitled to four (4) weeks of paid
vacation per year, which vacation time shall accrue in accordance with the
Company's policies. Employee acknowledges that he shall have no vested rights
under or to participate in any such program except as expressly provided under
the terms hereof or thereof.
5.2 Expenses. The Company will pay or reimburse Employee for such
--------
reasonable travel, entertainment or other business expenses as he may incur on
behalf of the Company during the Term of Employment in connection with the
performance of his duties hereunder but only to the extent that such expenses
were either specifically authorized by the Company or incurred in accordance
with policies established by the Board for senior executives and provided that
Employee shall furnish the Company with such evidence relating to such expenses
as the Company may reasonably require to substantiate such expenses for tax
purposes.
6. Termination of Employment.
--------------------------
6.1 Circumstances of Termination. Notwithstanding the terms set
----------------------------
forth in Section 1 hereof, Employee's employment shall terminate under any of
the following circumstances and the date of such an occurrence, unless otherwise
provided below, shall be Employee's "Termination Date":
-3-
<PAGE>
(a) Death. Immediately, in the event of Employee's death.
-----
(b) Permanent Disability. At the option of the Company, if
--------------------
Employee becomes physically or mentally incapacitated or disabled so that (i) he
is unable to perform for the Company substantially the same services as he
performed prior to incurring such incapacity or disability or to devote his full
working time or use his best efforts to advance the business and welfare of the
Company or otherwise to perform his duties under this Agreement, (ii) such
condition exists for an aggregate of six (6) months in any twelve (12)
consecutive calendar months, and (iii) such incapacity or disability is
incapable of reasonable accommodations under applicable law, including but not
limited to the Americans with Disabilities Act of 1990, as amended (a "Permanent
Disability"). The Company, at its option and expense, is entitled to retain a
physician reasonably acceptable to Employee to confirm the existence of such
incapacity or disability, and the determination of such physician is binding
upon the Company and Employee.
(c) Cause. At the option of the Company, if Employee:
-----
(i) has been convicted of, or has pied guilty or nolo
----
contendere to, a felony; or
- ----------
(ii) has embezzled or misappropriated Company funds or
property or that of the Company's customers, suppliers or affiliates, or
(iii) has engaged in any Prohibited Engagement; or
(iv) has violated any material term of the Employment,
Confidential Information and Invention Assignment Agreement (the
"Confidentiality Agreement") entered into with the Company; or
(v) has demonstrated gross negligence or willful
misconduct in connection with the performance of Employee's duties hereunder;
provided, however, that with respect to subsections (iii), (iv) and (v) above,
the Company's right to terminate Employee shall be conditioned on (A) the
Company giving Employee written notice specifically referring to the pertinent
subsection above and describing the specific circumstances and/or actions
purportedly giving rise to the occurrence of such item; and (B) failure by
Employee, within thirty (30) days after receipt of any such notice to cease the
actions and/or reinstate or rectify the circumstances described in such notice
to the reasonable satisfaction of the Board. With respect to these subsections,
the Company shall have the right to place Employee on administrative leave
pending investigation of the circumstance(s) or action(s) purportedly giving
rise to the occurrence of such items.
(d) Without Cause. At the option of the Company at any time for
-------------
any reason other than those referred to above or for no reason at all, whereupon
the Company shall be obligated to make those payments set forth in Section 7
hereof.
(e) Resignation for Good Reason.
----------------------------
-4-
<PAGE>
(i) Employee, at his option, may resign for "Good Reason":
(1) because the Company has materially reduced the
title, role or responsibilities of Employee; provided, however, that a reduction
in duties, position or responsibilities solely by virtue of the Company being
acquired and made part of a larger entity (as, for example, when the Founder and
Founder and Executive Vice President of the Company remains as such following a
Change of Control but is not made the Founder and Founder and Executive Vice
President of the acquiring corporation) shall not constitute "Good Reason,"
(2) because the Company has reduced Employee's Base
Salary from the level in effect immediately prior to such change, with the
exception of a company-wide reduction of compensation due to economic
considerations, provided that the foregoing shall not limit or derogate from the
Company's obligations set forth in Section 4 above;
(3) because the Company has breached any material term
of this Agreement other than as noted in subsections (1) and (2) above; or
(4) because the Company has relocated its principal
place of business more than 35 miles from its current location.
(ii) In the event that Employee terminates this Agreement
for Good Reason, the Company shall become obligated to make those payments set
forth in Section 7 hereof.
(iii) For purposes of this Agreement, a "Change in Control"
shall be deemed to have occurred upon the occurrence of any of the following:
(1) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially all
of the assets of the Company;
(2) individuals who, as of the date hereof, constitute
the entire Board of Directors of the Company (the "incumbent Directors") cease
for any reason to constitute at least a majority of the Board of Directors
(hereinafter referred to as a "Board Change"), provided that any individual
becoming a director subsequent to the date hereof whose election or nomination
for election was approved by a vote of at least a majority of the then Incumbent
Directors shall be, for purposes of this provision, deemed an Incumbent
Director;
(3) approval by the shareholders of the Company of any
consolidation or merger of the Company where the shareholders of the Company,
immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, beneficially own, directly or indirectly, shares
representing in the aggregate more than fifty percent (50%) of the combined
voting power of all the outstanding securities of the Company or surviving
entity immediately following such merger or consolidation; or
-5-
<PAGE>
(4) any "person" as such term is used in Section 13(d)
of the 1934 Act (other than the Company, any employee benefit plan of the
Company or any entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan), together with all "affiliates" and
"associates" (as such terms are defined in Rule 12b-2 under the 1934 Act or any
successor provision) of such person, shall become the "beneficial owner" or
"beneficial owners" (as defined in Rules 13d-3 and 13d-5 under the 1934 Act or
any successor provision), directly or indirectly, of securities of the Company
representing in the aggregate (A) in the event the Company is not subject to the
reporting requirements of the 1934 Act and has not registered shares of a class
of equity securities pursuant to Section 12(g) or 12(b) of the 1934 Act, fifty
percent (50%) or more, or (B) in the event the Company is a Reporting Company,
twenty-five percent (25%) or more of either (l) the then outstanding shares of
Common Stock of the Company or (2) the combined voting power of all then
outstanding securities of the Company having the right under ordinary
circumstances to vote in an election of the Board of Directors of the Company.
6.2 Notice of Termination. Any intent to terminate employment by
---------------------
Employee pursuant to Section 6.l(e) shall be communicated by written notice
to the Company setting forth in detail the specific actions deemed to constitute
Good Reason. If the Company does not respond within ten (10) days from such
notice, the resignation shall be deemed effective. The Company may, within the
ten (10) day period, correct such condition giving rise to Employee's notice or
dispute Employee's claims by giving written notice of such dispute.
7. Payments Upon Termination of Employment.
---------------------------------------
7.1 Payments. In addition to any rights Employee may have under
--------
Section 4.3, on the Termination Date:
(a) If the Company terminates Employee's employment for Cause or
if Employee voluntarily terminates his employment without Good Reason, the
Company's obligation to compensate Employee shall in all respects cease as of
the Termination Date, except that the Company shall pay Employee the Base Salary
accrued under Section 4.1, the value of accrued vacation time pursuant to
Section 5.1 hereof, and the reimbursable expenses incurred under Section 5.2 of
this Agreement up to such Termination Date (the "Accrued Obligations");
(b) If Employee's employment is terminated due to the death of
Employee, the Company's obligation to compensate Employee shall in all respects
cease as of the Termination Date, except that within thirty (30) days after the
Termination Date, the Company shall pay Employee's estate or legal
representative the Accrued Obligations;
(c) If Employee's employment is terminated upon the Permanent
Disability of Employee, the Company's obligation to compensate Employee with
respect to Base Salary (as in effect on the Termination Date shall continue for
twelve (12) months following such termination. In addition, the Company shall
pay Employee any Accrued Obligations; and
(d) If Employee's employment is terminated by the Company
pursuant to Section 6.1(d), or by Employee pursuant to Section 6.1(e) the
Company's obligation to compensate Employee shall in all respects cease, except
that within thirty (30) days after the
-6-
<PAGE>
Termination Date the Company shall pay Employee the Accrued Obligations and
during the period ending on the expiration of the sixth month following the
Termination Date the Company shall pay to Employee each month one-twelfth
(1/12th) of the annual Base Salary of Employee in effect at the Termination
Date. The Company shall be excused from its obligations to make the Continuation
Payments if Employee breaches his obligations under this Agreement or the
Confidentiality Agreement.
Notwithstanding the foregoing, in the event such termination
occurs within two (2) years of a Change in Control of the Company, the full
amount of the Continuation Payments will be paid in a lump sum within ten (10)
days of such Change in Control.
7.2 Medical Benefits. If Employee's employment is terminated by the
----------------
Company pursuant to Section 6.1(d) or by Employee pursuant to Section 6.1(e),
the Company shall reimburse the Employee for the amount of his or her premium
payment for group health coverage, if any, elected by the Employee pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"); provided, however, that (A) such reimbursement shall not exceed $750
per month, and (B) the Employee shall be solely responsible for all matters
relating to his or her continuation of coverage pursuant to COBRA, including
(without limitation) his or her election of such coverage and his or her timely
payment of premiums; provided, further, that upon the earlier to occur of (C)
the time that the Employee no longer constitutes a Qualified Beneficiary (as
such term is defined in Section 4980B(g)(1) of the Internal Revenue Code of
1986, as amended) and (D) the date twelve (12) months following the Employee's
termination, the Company's obligations to reimburse the Employee under this
subsection (ii) shall cease.
7.3 Effect on this Agreement. Any termination of Employee's
------------------------
employment and any expiration of the Term of Employment under this Agreement
shall not affect the continuing operation and effect of this Section and Section
8 hereof, which shall continue in full force and effect with respect to the
Company and Employee, and its and his heirs, successors and assigns.
Nothing in Section 6 hereof shall be deemed to operate or shall
operate as a release, settlement or discharge of any liability of Employee to
the Company or others from any action or omission by Employee enumerated in
Section 6.1(c) hereof as a possible basis for termination of Employee's
employment for Cause.
7.4 No Duty to Mitigate. Subject to the provisions of the
-------------------
Confidentiality Agreement and Section 8 of this Agreement, Employee shall be
free to accept such employment and engage in such business as Employee may
desire following the termination of his employment hereunder, and no
compensation received by Employee therefrom shall reduce or affect any payments
required to be made by the Company hereunder except to the extent expressly
provided herein or in the benefit plans of the Company.
8. Post-Employment Activities.
---------------------------
8.1 Conditional Nature of Severance Payments; Non-Competition.
---------------------------------------------------------
Employee acknowledges that the nature of the Company's business is such that if
Employee were to
-7-
<PAGE>
become employed by, or substantially involved in, the business of a Competitor
during the twelve (12) months following the termination of Employee's employment
with the Company (the "Noncompete Period"), it would be very difficult for the
Employee not to rely on or use the Company's trade secrets and confidential
information. A "Competitor" is defined as any person or entity whether now
existing or hereafter established which is primarily engaged in the business of
producing and selling virtual tours. To avoid the inevitable disclosure of the
Company's trade secrets and confidential information, Employee agrees and
acknowledges that the Employee's right to receive the severance payments and
other benefits set forth in Section 7 (to the extent the Employee is otherwise
entitled to such payments) shall be conditioned upon (a) the Employee not
directly or indirectly engaging in (whether as an employee, consultant
proprietor, partner, director or otherwise), nor having any ownership interest
directly or indirectly of more than 1% in, or participating in the financing,
operation, management or control of, a Competitor; and (b) the Employee
continuing to observe, and not be in breach of, the provisions of the
Confidentiality Agreement. Upon any breach of this Section or the
Confidentiality Agreement, all severance payments pursuant to Section 7 shall
immediately cease.
8.2 Exclusions. No provision of this Agreement shall be construed to
----------
preclude Employee from performing the same services which the Company hereby
retains Employee to perform for any person or entity which is not a Competitor
of the Company upon the expiration or termination of Employee's employment (or
any post-employment consultation) so long as Employee does not thereby violate
any term of the Confidentiality Agreement.
9. Remedies. Employee's obligations under the Confidentiality Agreement
--------
and Section 8 of this Agreement shall survive the expiration or termination of
Employee's employment (whether through Employee's resignation or otherwise) with
the Company. Employee acknowledges that a remedy at law for any breach or
threatened breach by Employee of the provisions of the Confidentiality Agreement
or Section 8 would be inadequate and Employee therefore agrees that the Company
shall be entitled to injunctive relief in any court of competent jurisdiction in
the case of any such breach or threatened breach. Employee acknowledges that
this Section does not limit the Company's right to seek monetary damages for
breach of this Agreement.
10. Golden Parachute Excise Tax.
----------------------------
10.1 Reimbursement. In the event that it shall be determined that
-------------
any payment or other benefit by the Company to or for the benefit of Employee
under this Agreement or otherwise, whether paid or payable, but determined
without regard to any additional payments required under this Section (the
"Payments"), would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code (the "Excise Tax"), then Employee shall be entitled to
receive (i) an additional payment from the Company (the "Reimbursement Payment")
sufficient to pay the Excise Tax, and (ii) an additional payment from the
Company sufficient to pay the Excise Tax and federal and state income taxes
arising from the payments made by the Company to Employee pursuant to this
sentence.
10.2 Determination. Unless the Company and Employee otherwise agree
-------------
in writing, any determination required under this Section shall be made in
writing by the
-8-
<PAGE>
Company's primary independent public accounting firm (the "Accountants"), whose
determination shall be conclusive and binding upon Employee and the Company for
all purposes. For purposes of making the calculations required by this Section,
the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Company
and Employee shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make their determination
under this Section. The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
Section.
11. Miscellaneous.
--------------
11.1 Key Man Life Insurance. Employee recognizes and acknowledges
----------------------
that the Company or its affiliates may seek and purchase one or more policies
providing key man life insurance with respect to Employee, the proceeds of which
would be payable to the Company or an affiliate. Employee hereby consents to the
Company or its affiliates seeking and purchasing such insurance and will
provide such information, undergo such medical examinations (at the Company's
expense), execute such documents, and otherwise take any and all actions
necessary or desirable in order for the Company or its affiliates to seek,
purchase and maintain in full force and effect such policy or policies.
11.2 Notice. All notices, requests, consents and other
------
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) made by telecopy, (iii) sent by overnight courier, or (iv) sent by
registered or certified mail, return receipt requested, postage prepaid.
If to the Company: Jutvision Corporation
124 University Avenue
Palo Alto, CA 94301
Attention: Leonard B. McCurdy
If to Employee: Kevin B. McCurdy
305 Emerson Street
Palo Alto, CA 94301
11.3 Modification and No Waiver of Breach. No waiver or modification
------------------------------------
of this Agreement shall be binding unless it is in writing signed by the parties
hereto. No waiver by a party of a breach hereof by the other party shall be
deemed to constitute a waiver of a future breach, whether of a similar or
dissimilar nature, except to the extent specifically provided in any written
waiver under this Section.
11.4 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA EXCLUDING
ITS CONFLICT OF LAW PRINCIPLES. ALL QUESTIONS RELATING TO THE VALIDITY AND
PERFORMANCE HEREOF AND
-9-
<PAGE>
REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAW.
11.5 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement
11.6 Captions. The captions used herein are for ease of reference
--------
only and shall not define or limit the provisions hereof.
11.7 Entire Agreement. This Agreement, any written agreement referred
----------------
to herein and the Exhibits hereto constitute the entire agreement between the
parties hereto relating to the matters encompassed hereby and supersede any
prior or contemporaneous written or oral agreements.
11.8 Successors.
-----------
(a) Any successor to the Company (whether direct or indirect and
whether by purchase, lease, merger, consolidation, liquidation or otherwise) to
all or substantially all of the Company's business and assets shall assume the
obligations under this Agreement and agree expressly to perform the obligations
under this Agreement in the same manner and to the same extent as the Company
would be required to perform such obligations in the absence of a succession.
For all purposes under this Agreement, the term "Company" shall include any
successor to the Company's business and assets that executes and delivers the
assumption agreement described in this subsection (a) or which becomes bound by
the terms of this Agreement by operation of law.
(b) The terms of this Agreement and all rights of Employee
hereunder shall insure to the benefit or, and be enforceable by, Employee's
personal or legal representatives, executors, administrators, successors, heirs,
devisees and legatees.
11.9 Arbitration. Any dispute, controversy, or claim arising out of,
-----------
in connection with, or in relation to this Agreement and its exhibits, except as
provided in Section 9 hereof, shall be settled by arbitration in California
pursuant to the Commercial Rules then in effect of the American Arbitration
Association and in no other place. Any award or determination shall be final,
binding, and conclusive upon the parties, and a judgment rendered may be entered
in any court having jurisdiction thereof. Employee and the Company knowingly
waive any and all rights to a jury trial in any form. The parties hereby
expressly waive punitive damages, and under no circumstances shall an award
contain any amount that in any way reflects punitive damages. Each party shall
bear its own expenses relating to the arbitration, unless otherwise determined
in arbitration.
It is intended that controversies or claims submitted to
arbitration under this Section shall remain confidential, and to that end it is
agreed by the parties that neither the facts disclosed in the arbitration, the
issues arbitrated, nor the views or opinions of any persons concerning them,
shall be disclosed to third persons at any time, except to the extent necessary
to enforce an award or judgment or as required by law or in response to legal
process or in
-10-
<PAGE>
connection with such arbitration. Nothing in this Section shall limit the
Company's right to seek equitable remedies in any court of competent
jurisdiction for breach of this Agreement.
11.10 Independent Advice. Employee hereby acknowledges that he has
------------------
been advised of the opportunity available to him to seek and obtain advice of
legal counsel and financial advisors of his own choosing prior to and in
connection with Employee's execution of this Agreement. In addition Employee
hereby affirms that he has either obtained such advice or knowingly and
willingly decided to forego the opportunity to avail himself of such advice.
IN WITNESS WHEREOF, this Agreement has been duly executed effective as of
the day and year first written above.
JUTVISION CORPORATION
By: /s/
-------------------------------------------
Name: ________________________________________
Title: _______________________________________
/s/
----------------------------------------------
Kevin B. McCurdy
-11-
<PAGE>
EXHIBIT A
OTHER POSITIONS
<PAGE>
EXHIBIT B
PRIOR INVENTIONS
<PAGE>
EXHIBIT 10.21
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into effective as of January
1, 1999 by and between Jutvision Corporation, a Delaware corporation with its
principal offices at 124 University Avenue, Palo Alto, California 94301 (the
"Company"), and Andrew P. Laszlo ("Employee").
WHEREAS, the Company wishes to employ Employee as its Senior
Vice-President, Business Development for the period and upon the terms and
conditions hereinafter set forth, and Employee desires to serve in such
capacities upon the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and conditions contained hereto, and other good and valuable consideration, the
receipt and insufficiency of which are hereby acknowledged, the Company and
Employee hereby agree as follows:
1. Term of Employment. Employee's employment under this Agreement shall
------------------
commence on January 1, 1999 (the "Effective Date") and shall continue until the
close of business on December 31, 2000 subject to any extension as set forth
herein or any earlier termination of Employee's employment as provided in
Section 6 hereof (the "Initial Term"). Upon the expiration of the Initial Term,
and each subsequent term or extension thereof, this Agreement shall
automatically be emended for an additional term of one (1) year, unless the
Company or Employee shall have notified the other party hereto of its or his
election to terminate this Agreement not later than ninety (90) days prior to
the end of such subsequent term or extension thereof (the Initial Term, together
with any extensions, until termination in accordance herewith, shall be referred
to herein as the "Term of Employment"). If Employee's employment is terminated
pursuant to Section 6 hereof, the Term of Employment shall expire as of the
Termination Date (as defined in Section 6 hereof).
2. Duties and Activities.
---------------------
(a) During the Term of Employment, Employee will faithfully perform
those duties and responsibilities commensurate with his position as Senior Vice-
President, Business Development. Employee shall develop strategies for
initiating and fostering strategic business alliances; negotiate, structure and
close strategic alliance agreements; oversee the implementation of strategic
alliances; manage the Company's business development unit; and perform such
other responsibilities and duties as may be reasonably determined in the future
by the Company's Board of Directors (the "Board") or Chief Executive Officer.
Employee will devote his full working time and use his best efforts to advance
the business and welfare of the Company in furtherance of the policies
established by the Board. Employee shall report to the Company's Chief Executive
Officer. During the Term of Employment, Employee shall not engage in any other
employment activities for any direct or indirect remuneration without the
concurrence of the Board, except that Employee may continue to devote reasonable
time to the management of investments, participation in community and charitable
affairs, and the activities as further set forth in Exhibit A hereto, so long as
---------
such activities do not interfere with his duties under this Agreement (as
reasonably determined by the Board). Employee hereby agrees that,
<PAGE>
except as disclosed on Exhibit A hereto, during his employment hereunder, he
---------
will not, directly or indirectly, engage (i) individually, (ii) as an officer,
(iii) as a director, (iv) as an employee, (v) as a consultant, (vi) as an
advisor, (vii) as an agent (whether a salesperson or otherwise), (viii) as a
broker, or (ix) as a partner, coventurer, stockholder or other proprietor owning
directly or indirectly more than one percent (1%) interest in, any firm,
corporation, partnership, trust association, or other organization that is a
Competitor (as defined in Section 8.1 hereof) of the Company (such engagement by
Employee hereinafter referred to as a "Prohibited Engagement"). Except as may
be shown on Exhibit A hereto, Employee hereby represents that he is not engaged
---------
in any of the foregoing capacities (i) through (ix) in any Prohibited
Engagement.
(b) During the Term of Employment, Employee shall also serve as an
observer on the Company's Board of Directors. As an observer, Employee shall be
invited to participate in all meetings of the Board of Directors.
3. Former Employers. Employee represents and warrants that his employment
----------------
by the Company will not conflict with and will not be constrained by any prior
or current employment, consulting or other relationship. Employee represents and
warrants that he does not possess confidential information arising out of any
such employment, consulting or other relationship which, in Employee's best
judgment, would be utilized in connection with his employment by the Company.
4. Compensation.
------------
4.1 Base Salary. In consideration for Employee's services under this
-----------
Agreement, Employee will be paid, during the Term of Employment salary at an
annual rate of $132,000, or at a such other annual salary rate as determined by
the Board or its Compensation Committee, but in any event at least equal to the
annual salary rate in effect immediately preceding any change thereto.
Employee's annual salary rate in effect from time to time is referred to herein
as the "Base Salary." Employee's Base Salary shall be paid in periodic
installments at such times as salaries are generally paid to other senior
executives of the Company.
4.2 Bonus Compensation. In addition to Employee's Base Salary,
------------------
Employee shall be entitled to participate in any bonus plans which the Company
provides or may establish for the benefit of its senior executives pursuant to
which he may be paid any such discretionary bonus payments as the Board or its
Compensation Committee shall determine in recognition of Employee's and the
Company's performance. Notwithstanding the foregoing, at the end of each quarter
during 1999, Employee shall receive a bonus of at least $4,500, and at the end
of each quarter during 2000, Employee shall receive a bonus of at least $5,625
("Bonus Compensation").
4.3 Other Compensation. Employee's compensation by payments of Base
------------------
Salary and Bonus Compensation, if applicable, shall not be deemed exclusive and
shall not prevent Employee from participating in any other incentive
compensation, profit sharing or benefit plan made available by the Company to
its executive employees generally. The Base Salary payments and any Bonus
Compensation payments hereunder shall not in any way limit or reduce any other
obligation of the Company hereunder, and no other compensation, benefit or
<PAGE>
payment hereunder shall in any way limit or reduce the obligation of the Company
to pay Employee's Base Salary or Bonus Compensation, if applicable.
4.4 Stock Option Grant. As of the Effective Date and in connection
------------------
with the execution of this Agreement, the Company shall grant to Employee an
incentive stock option (the "Option"), to the extent permitted by the applicable
provisions of Section 422 of the Internal Revenue Code) to purchase 227,500
shares of the common stock of the Company pursuant to the Company's 1998
Employee, Director and Consultant Stock Plan at an exercise price of $0.50 per
share. The Option will have a term of ten years. The Option will vest and become
exercisable for 107,500 shares as of the Effective Date. With respect to the
balance of 120,000 shares, the Option will vest and become exercisable as to
one-twenty-fourth of the shares at the end of each month after the Effective
Date. The Option will be subject to such other terms as deemed appropriate by
the Board or its Compensation Committee and set forth in the applicable option
agreement. In the event of (i) a Change of Control (as defined in Section 6.1(e)
hereof); (ii) the completion of an underwritten initial public offering by the
Company; (iii) termination of employment for Good Reason (as defined in Section
6.1(e) hereof); (iv) the termination of Employee without Cause (as defined in
Section 6.1(c) hereof); (v) the death of Employee; or (vi) the Permanent
Disability of Employee (as defined in Section 6.1(b) hereof), the Option will
vest and become fully exercisable.
4.5 Home Office. The Company shall pay Employee's expenses to
-----------
establish and maintain during the Term of Employment a home office (including
high speed high speed Internet access), not to exceed $1,000 per year.
5. Benefits.
--------
5.1 Participation. During the Term of Employment, Employee shall be
-------------
entitled to participate in all fringe benefit programs maintained by the Company
and made available to its executive officers from time to time; provided,
however, that during the Term of Employment and as otherwise provided hereto the
Company shall maintain for Employee (i) a life insurance policy with a minimum
of a $1,000,000 death benefit; (ii) disability coverage comparable to that
customarily provided to similarly situated senior executives; and (iii) health,
vision, dental and prescription drug coverage for Employee and his spouse and
children, at no additional cost to Employee, comparable to that customarily
provided to similarly situated senior executives and their families. Any
payments or benefits payable to Employee hereunder in respect of any calendar
year during which Employee is employed by the Company for less than the entire
year shall, unless otherwise provided in the applicable plan or arrangement, be
prorated in accordance with the number of days in such calendar year during
which he is so employed. Employee will be furnished with an auto allowance of
$375 per month to cover costs of leasing, maintenance, repair and insurance of
an automobile. Employee will be entitled to four (4) weeks of paid vacation per
year, which vacation time shall accrue in accordance with the Company's
policies. Employee acknowledges that he shall have no vested rights under or to
participate in any such program except as expressly provided under the terms
hereof or thereof.
5.2 Expenses. The Company will pay or reimburse Employee for such
--------
reasonable travel entertainment or other business expenses as he may incur on
behalf of the Company during the Term of Employment in connection with the
performance of his duties
<PAGE>
hereunder but only to the extent that such expenses were either specifically
authorized by the Company or incurred in accordance with policies established by
the Board for senior executives and provided that Employee shall furnish the
Company with such evidence relating to such expenses as the Company may
reasonably require to substantiate such expenses for tax purposes.
6. Termination of Employment.
-------------------------
6.1 Circumstances of Termination. Notwithstanding the terms set
----------------------------
forth in Section 1 hereof, Employee's employment shall terminate under any of
the following circumstances and the date of such an occurrence, unless otherwise
provided below, shall be Employee's "Termination Date":
(a) Death. Immediately, in the event of Employee's death.
-----
(b) Permanent Disability. At the option of the Company, if
--------------------
Employee becomes physically or mentally incapacitated or disabled so that (i) he
is unable to perform for the Company substantially the same services as he
performed prior to incurring such incapacity or disability or to devote his full
working time or use his best efforts to advance the business and welfare of the
Company or otherwise to perform his duties under this Agreement, (ii) such
condition exists for an aggregate of six (6) months in any twelve (12)
consecutive calendar months, and (iii) such incapacity or disability is
incapable of reasonable accommodation under applicable law, including but not
limited to the Americans with Disabilities Act of 1990, as amended (a "Permanent
Disability"). The Company, at its option and expense, is entitled to retain a
physician reasonably acceptable to Employee to confirm the existence of such
incapacity or disability, and the determination of such physician is binding
upon the Company and Employee.
(c) Cause. At the option of the Company, if Employee:
-----
(i) has been convicted of or has pled guilty or nolo
----
contendere to, a felony; or
- ----------
(ii) has embezzled or misappropriated Company funds or
property or that of the Company's customers, suppliers or affiliates; or
(iii) has engaged in any Prohibited Engagement; or
(iv) has violated any material term of the Employment,
Confidential Information and Invention Assignment Agreement (the
"Confidentiality Agreement") entered into with the Company; or
(v) has demonstrated gross negligence or willful
misconduct in connection with the performance of Employee's duties hereunder;
provided, however, that with respect to subsections (iii), (iv) and (v) above,
the Company's right to terminate Employee shall be conditioned on (A) the
Company giving Employee written notice specifically referring to the pertinent
subsection above and describing the specific circumstances and/or actions
purportedly giving rise to the occurrence of such item; and (B) failure by
<PAGE>
Employee, within thirty (30) days after receipt of any such notice to cease the
actions and/or reinstate or rectify the circumstances described in such notice
to the reasonable satisfaction of the Board. With respect to these subsections,
the Company shall have the right to place Employee on administrative leave
pending investigation of the circumstance(s) or action(s) purportedly giving
rise to the occurrence of such items.
(d) Without Cause. At the option of the Company at any time
-------------
for any reason other than those referred to above or for no reason at all,
whereupon the Company shall be obligated to make those payments set forth in
Section 7 hereof
(e) Resignation for Good Reason.
---------------------------
(i) Employee, at his option, may resign for "Good
Reason":
(1) because the Company has materially reduced the
title, role or responsibilities of Employee; provided, however, that a reduction
in duties, position or responsibilities solely by virtue of the Company being
acquired and made part of a larger entity (as, for example, when the Senior
Vice-President, Business Development of the Company remains as such following a
Change of Control but is not made the Senior Vice-President, Business
Development of the acquiring corporation) shall not constitute "Good Reason;"
(2) because the Company has reduced Employee's Base
Salary or Bonus Compensation opportunity from the level in effect immediately
prior to such change, with the exception of a company-wide reduction of
compensation due to economic considerations, provided that the foregoing shall
not limit or derogate from the Company's obligations set forth in Section 4
above;
(3) because the Company has breached any material
term of this Agreement other than as noted in subsections (1) and (2) above; or
(4) because the Company has relocated its principal
place of business more than 35 miles from its current location
(ii) In the event that Employee terminates this Agreement
for Good Reason, the Company shall become obligated to make those payments set
forth in Section 7 hereof.
(iii) For purposes of this Agreement, a "Change in Control"
shall be deemed to have occurred upon the occurrence of any of the following:
(1) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially all
of the assets of the Company;
(2) individuals who, as of the date hereof
constitute the entire Board of Directors of the Company (the "Incumbent
Directors") cease for any reason to constitute at least a majority of the Board
of Directors (hereinafter referred to as a "Board Change"), provided that any
individual becoming a director subsequent to the date hereof whose
<PAGE>
election or nomination for election was approved by a vote of at least a
majority of the then Incumbent Directors shall be, for purposes of this
provision, deemed an Incumbent Director,
(3) approval by the shareholders of the Company of any
consolidation or merger of the Company where the shareholders of the Company,
immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, beneficially own, directly or indirectly, shares
representing in the aggregate more than fifty percent (50%) of the combined
voting power of all the outstanding securities of the Company or surviving
entity immediately following such merger or consolidation; or
(4) any "person," as such term is used in Section 13(d) of
the 1934 Act (other than the Company, any employee benefit plan of the Company
or any entity organized, appointed or established by the Company for or pursuant
to the terms of any such plan), together with all "affiliates" and "associates'
(as such terms are defined in Rule 12b-2 under the 1934 Act or any successor
provision) of such person, shall become the "beneficial owner" or "beneficial
owners" (as defined in Rules 13d-3 and 13d-5 under the 1934 Act or any successor
provision), directly or indirectly, of securities of the Company representing in
the aggregate (A) in the event the Company is not subject to the reporting
requirements of the 1934 Act and has not registered shares of a class of equity
securities pursuant to Section 12(g) or 12(b) of the 1934 Act, fifty percent
(50%) or more, or (B) in the event the Company is a Reporting Company, twenty-
five percent (25%) or more of either (1) the then outstanding shares of Common
Stock of the Company or (2) the combined voting power of all then outstanding
securities of the Company having the right under ordinary circumstances to vote
in an election of the Board of Directors of the Company.
6.2 Notice of Termination. Any intent to terminate employment by
---------------------
Employee pursuant to Section 6.1 (e) shall be communicated by written notice to
the Company setting forth in detail the specific actions deemed to constitute
Good Reason. If the Company does not respond within ten (10) days from such
notice, the resignation shall be deemed effective. The Company may, within the
ten (10) day period, correct such condition giving rise to Employee's notice or
dispute Employee's claims by giving written notice of such dispute.
7. Payments Upon Termination of Employment.
----------------------------------------
7.1 Payments. In addition to any rights Employee may have under
--------
Section 4.4, on the Termination Date:
(a) If the Company terminates Employee's employment for Cause
or if Employee voluntarily terminates his employment without Good Reason, the
Company's obligation to compensate Employee shall in all respects cease as of
the Termination Date, except that the Company shall pay Employee the Base Salary
accrued under Section 4.1, the value of accrued vacation time pursuant to
Section 5.1 hereof; and the reimbursable expenses incurred under Section 5.2 of
this Agreement up to such Termination Date (the "Accrued Obligations");
(b) If Employee's employment is terminated due to the death of
Employee, the Company's obligation to compensate Employee shall in all respects
cease as of
<PAGE>
the Termination Date, except that within thirty (30) days alter the Termination
Date, the Company shall pay Employee's estate or legal representative the
Accrued Obligations;
(c) If Employee's employment is terminated upon the Permanent
Disability of Employee, the Company's obligation to compensate Employee with
respect to (i) Base Salary (as in effect on the Termination Date), and (ii)
Bonus Compensation, shall continue for twelve (12) months following such
termination; provided that for purposes of this sentence, Employee's Bonus
Compensation shall mean the greater of: (x) Employee's Bonus Compensation for
the preceding fiscal year, or (y) the Bonus Compensation for which Employee is
eligible in the year of termination, assuming the achievement of all relevant
goals, milestones and performance criteria. In addition, the Company shall pay
Employee any Accrued Obligations; and
(d) If Employee's employment is terminated by the Company pursuant to
Section 6.1(d), or by Employee pursuant to Section 6.1(e) the Company's
obligation to compensate Employee shall in all respects cease, except that
within thirty (30) days after the Termination Date the Company shall pay
Employee the Accrued Obligations and during the period ending on the expiration
of the sixth month following the Termination Date the Company shall pay to
Employee each month (i) one-twelfth (1/12th) of the annual Base Salary of
Employee in effect at the Termination Date, plus one-twelfth (1/12th) Bonus
Compensation paid to Employee in the preceding fiscal year; provided that for
purposes of this sentence, Employee's Bonus Compensation shall mean the greater
of: (x) Employee's Bonus Compensation for the preceding fiscal year, or (y) the
Bonus Compensation for which Employee is eligible in the year of termination,
assuming the achievement of all relevant goals, milestones and performance
criteria (collectively, the "Continuation Payments"). The Company shall be
excused from its obligations to make the Continuation Payments if Employee
breaches his obligations under this Agreement or the Confidentiality Agreement.
Notwithstanding the foregoing, in the event such termination occurs
within two (2) years of a Change in Control of the Company, the full amount of
the Continuation Payments will be paid in a lump sum within ten (10) days of
such Change in Control.
7.2 Medical Benefits. If Employee's employment is terminated by the
----------------
Company pursuant to Section 6.1 (d) or by Employee pursuant to Section 6.1(e),
the Company shall reimburse the Employee for the amount of his or her premium
payment for group health coverage, if any, elected by the Employee pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"); provided, however, that (A) such reimbursement shall not exceed $1500
per month, and (B) the Employee shall be solely responsible for all matters
relating to his or her continuation of coverage pursuant to COBRA, including
(without limitation) his or her election of such coverage and his or her timely
payment of premiums; provided, further, that upon the earlier to occur of (C)
the time that the Employee no longer constitutes a Qualified Beneficiary (as
such term is defined in Section 4980B(g)(l) of the Internal Revenue Code of
1986, as amended) and (D) the date twelve (12) months following the Employee's
termination, the Company's obligations to reimburse the Employee under this
subsection (ii) shall cease.
<PAGE>
7.3 Effect on this Agreement. Any termination of Employee's
------------------------
employment and any expiration of the Term of Employment under this Agreement
shall not affect the continuing operation and effect of this Section and Section
8 hereof, which shall continue in full force and effect with respect to the
Company and Employee, and its and his heirs, successors and assigns.
Nothing in Section 6 hereof shall be deemed to operate or shall
operate as a release, settlement or discharge of any liability of Employee to
the Company or others from any action or omission by Employee enumerated in
Section 6.1(c) hereof as a possible basis for termination of Employee's
employment for Cause.
7.4 No Duty to Mitigate. Subject to the provisions of the
-------------------
Confidentiality Agreement and Section 8 of this Agreement, Employee shall be
free to accept such employment and engage in such business as Employee may
desire following the termination of his employment hereunder, and no
compensation received by Employee therefrom shall reduce or affect any payments
required to be made by the Company hereunder except to the extent expressly
provided herein or in the benefit plans of the Company.
8. Post-Employment Activities.
---------------------------
8.1 Conditional Nature of Severance Payments; Non-Competition.
---------------------------------------------------------
Employee acknowledges that the nature of the Company's business is such that if
Employee were to become employed by, or substantially involved in, the business
of a Competitor during the twelve (12) months following the termination of
Employee's employment with the Company (the "Noncompete Period"), it would be
very difficult for the Employee not to rely on or use the Company's trade
secrets and confidential information. A "Competitor" is defined as any person or
entity whether now existing or hereafter established which is primarily engaged
in the business of producing and selling virtual tours. To avoid the inevitable
disclosure of the Company's trade secrets and confidential information, Employee
agrees and acknowledges that the Employee's right to receive the severance
payments and other benefits set forth in Section 7 (to the extent the Employee
is otherwise entitled to such payments) shall be conditioned upon (a) the
Employee not directly or indirectly engaging in (whether as an employee,
consultant, proprietor, partner, director or otherwise), nor having any
ownership interest directly or indirectly of more than 1% in, or participating
in the financing, operation, management or control of, a Competitor; and (b) the
Employee continuing to observe, and not be in breach of, the provisions of the
Confidentiality Agreement. Upon any breach of this Section or the
Confidentiality Agreement, all severance payments pursuant to Section 7 shall
immediately cease.
8.2 Exclusions. No provision of this Agreement shall be construed to
----------
preclude Employee from performing the same services which the Company hereby
retains Employee to perform for any person or entity which is not a Competitor
of the Company upon the expiration or termination of Employee's employment (or
any post-employment consultation) so long as Employee does not thereby violate
any term of the Confidentiality Agreement.
9. Remedies. Employee's obligations under the Confidentiality
--------
Agreement and Section 8 of this Agreement shall survive the expiration or
termination of Employee's
<PAGE>
employment (whether through Employee's resignation or otherwise) with the
Company. Employee acknowledges that a remedy at law for any breach or threatened
breach by Employee of the provisions of the Confidentiality Agreement or Section
8 would be inadequate and Employee therefore agrees that the Company shall be
entitled to injunctive relief in any court of competent jurisdiction in the case
of any such breach or threatened breach. Employee acknowledges that this Section
does not limit the Company's right to seek monetary damages for breach of this
Agreement.
10. Golden Parachute Excise Tax.
----------------------------
10.1 Reimbursement. In the event that it shall be determined that any
-------------
payment or other benefit by the Company to or for the benefit of Employee under
this Agreement or otherwise, whether paid or payable, but determined without
regard to any additional payments required under this Section (the "Payments"),
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code (the "Excise Tax"), then Employee shall be entitled to receive (i)
an additional payment from the Company (the "Reimbursement Payment") sufficient
to pay the Excise Tax, and (ii) an additional payment from the Company
sufficient to pay the Excise Tax and federal and state income taxes arising from
the payments made by the Company to Employee pursuant to this sentence.
10.2 Determination. Unless the Company and Employee otherwise agree
-------------
in writing, any determination required under this Section shall be made in
writing by the Company's primary independent public accounting firm (the
"Accountants"), whose determination shall be conclusive and binding upon
Employee and the Company for all purposes. For purposes of making the
calculations required by this Section, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and Employee shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make their determination under this Section. The Company
shall bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section.
11. Miscellaneous.
11.1 Key Man Life Insurance. Employee recognizes and acknowledges
----------------------
that the Company or its affiliates may seek and purchase one or more policies
providing key man life insurance with respect to Employee, the proceeds of which
would be payable to the Company or an affiliate. Employee hereby consents to the
Company or its affiliates seeking and purchasing such insurance and will provide
such information, undergo such medical examinations (at the Company's expense),
execute such documents, and otherwise take any and all actions necessary or
desirable in order for the Company or its affiliates to seek, purchase and
maintain in full force and effect such policy or policies.
11.2 Notice. All notices, requests, consents and other
------
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either
<PAGE>
(i) delivered by hand, (ii) made by telecopy, (iii) sent by overnight courier,
or (iv) sent by registered or certified mail, return receipt requested, postage
prepaid.
If to the Company: Jutvision Corporation
124 University Avenue
Palo Alto, CA 94301
Attention: Leonard B. McCurdy
If to Employee: Andrew P. Laszlo
1395 Enchanted Way
San Mateo, CA 94402
11.3 Modification and No Waiver of Breach. No waiver or modification
------------------------------------
of this Agreement shall be binding unless it is in writing signed by the parties
hereto. No waiver by a party of a breach hereof by the other party shall be
deemed to constitute a waiver of a breach, whether of a similar or dissimilar
nature, except to the extent specifically provided in any written waiver under
this Section.
11.4 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA
EXCLUDING ITS CONFLICT OF LAW PRINCIPLES. ALL QUESTIONS RELATING TO THE VALIDITY
AND PERFORMANCE HEREOF AND REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAW.
11.5 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement.
11.6 Captions. The captions used herein are for ease of reference
--------
only and shall not define or limit the provisions hereof.
11.7 Entire Agreement. This Agreement, any written agreement
----------------
referred to herein and the Exhibits hereto constitute the entire agreement
between the parties hereto relating to the matters encompassed hereby and
supersede any prior or contemporaneous written or oral agreements.
11.8 Successors.
----------
(a) Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially all of the Company's business and assets shall assume
the obligations under this Agreement and agree expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term "Company" shall
include any successor to the Company's business and assets that executes and
delivers the assumption agreement described in this subsection (a) or which
becomes bound by the terms of this Agreement by operation of law.
<PAGE>
(b) The terms of this Agreement and all rights of Employee
hereunder shall insure to the benefit or, and be enforceable by, Employee's
personal or legal representatives, executors, administrators, successors, heirs,
devisees and legatees.
11.9 Arbitration. Any dispute, controversy, or claim arising out of;
-----------
in connection with, or in relation to this Agreement and its exhibits, except as
provided in Section 9 hereof; shall be settled by arbitration in California
pursuant to the Commercial Rules then in effect of the American Arbitration
Association and in no other place. Any award or determination shall be final,
binding, and conclusive upon the parties, and a judgment rendered may be entered
in any court having jurisdiction thereof. Employee and the Company knowingly
waive any and all rights to a jury trial in any form. The parties hereby
expressly waive punitive damages, and under no circumstances shall an award
contain any amount that in any way reflects punitive damages. Each party shall
bear its own expenses relating to the arbitration, unless otherwise determined
in arbitration.
It is intended that controversies or claims submitted to
arbitration under this Section shall remain confidential, and to that end it is
agreed by the parties that neither the facts disclosed in the arbitration, the
issues arbitrated, nor the views or opinions of any persons concerning them,
shall be disclosed to third persons at any time, except to the extent necessary
to enforce an award or judgment or as required by law or in response to legal
process or in connection with such arbitration. Nothing in this Section shall
limit the Company's right to seek equitable remedies in any court of competent
jurisdiction for breach of this Agreement.
11.10 Independent Advice. Employee hereby acknowledges that he has
------------------
been advised of the opportunity available to him to seek and obtain advice of
legal counsel and financial advisors of his own choosing prior to and in
connection with Employee's execution of this Agreement. In addition Employee
hereby affirms that he has either obtained such advice or knowingly and
willingly decided to forego the opportunity to avail himself of such advice.
IN WITNESS WHEREOF, this Agreement has been duly executed effective as of
the day and year first written above.
JUTVISION CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________
______________________________________
Andrew P. Laszlo
<PAGE>
EXHIBIT B
PRIOR INVENTIONS
None.
<PAGE>
EXHIBIT A
OTHER POSITIONS
Participation on various Advisory Boards and limited consulting.
<PAGE>
EXHIBIT A
LIST OF PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP
Identifying Number
Title Date or Brief Description
---------------- ---------------- -------------------------
X No inventions or improvements
- ---
___ Additional Sheets Attached
Signature of Employee: /s/ Andrew P. Laszlo
---------------------------
Print Name of Employee: Andrew P. Laszlo
---------------------------
Date: 3/10/99
---------------------------
<PAGE>
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF
1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING
ACT, AND LABOR CODE SECTION 201, et seq;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND
REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
10. General Provisions.
------------------
(a) Governing Law; Consent to Personal Jurisdiction. This Agreement
-----------------------------------------------
will be governed by the laws of the State of California. I hereby expressly
consent to the personal jurisdiction of the state and federal courts located in
California for any lawsuit filed there against me by the Company arising from or
relating to this Agreement.
(b) Entire Agreement. This Agreement sets forth the entire agreement
----------------
and understanding between the Company and me relating to the subject matter
herein and merges all prior discussions between us. 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. Any
subsequent change or changes in my duties, salary or compensation will not
affect the validity or scope of this Agreement.
(c) Severability. If one or more of the provisions in this Agreement
------------
is deemed void by law, then the remaining provisions will continue in full force
and effect.
(d) Successors and Assigns. This Agreement will be binding upon my
----------------------
heirs, executors, administrators and other legal representatives and will be for
the benefit of the Company, its successors, and its assigns.
Date:3/10/99
----------------------
/s/ Andrew P. Laszlo
--------------------------------------
Signature
Andrew P. Laszlo
--------------------------------------
Name of Employee (typed or printed)
- ---------------------------
Witness
<PAGE>
ACTION BY WRITTEN CONSENT OF
THE STOCKHOLDER OF
JUTVISION CORPORATION
In accordance with the Delaware General Corporation Law and Section 2.10
of the Bylaws of Jutvision Corporation, a Delaware corporation (the "Company'),
the undersigned, constituting the holders of all of the outstanding shares
having not loss than the total number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted, hereby adopt the following resolution effective
as of March 4, 1999:
Amendment of Certificate of Incorporation
-----------------------------------------
RESOLVED: That the stockholders of this corporation believe it is in their
--------
best interests and the best interests of the corporation to amend and
restate the Certificate of Incorporation of the corporation to (i) create
a new series of Preferred Stock, to be designated Series B Preferred
Stock, consisting of 2,152,574 shares, (ii) establish the relative rights,
preferences and privileges of the Series B Preferred Stock, and (iii) make
certain other changes.
RESOLVED FURTHER: That the Certificate of Incorporation of this
----------------
corporation is amended and restated in its entirety to read as set forth
in the Restated Certificate of Incorporation delivered to each stockholder
with this written consent; provided, however, that the officers of this
-------- -------
corporation are authorized to make such final changes to the Restated
Certificate of Incorporation as they may deem necessary or advisable with
the advice of counsel.
This written consent may be executed in one or more counterparts, each of
which shall be an original document, and all of which, taken together, shall
constitute one instrument.
ANDREW LASZLO
By: /s/ Andrew Laszlo
----------------------------------------------
(signature)
Name: Andrew P. Laszlo
----------------------------------------------
(Print name of signer here)
Title (if applicable): SVP, Business Development
-----------------------------
<PAGE>
ACTION BY WRITTEN CONSENT OF
THE STOCKHOLDERS OF
JUTVSION CORPORATION
In accordance with the Delaware General Corporation Law add Scion 2.10 of
the Bylaws of Jutvision Corporation, a Delaware corporation (the "Company"), the
undersigned, constituting the holders of all of the outstanding shares having
not less than the total number of votes that would be necessary to authority or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted, hereby adopt the following resolution effective as of March
3, 1999:
1998 Employee, Director and Consultant Stock Plan
-------------------------------------------------
RESOLVED: That the Company's 1998 Employee, Director and Consultant Stock
--------
Plan in the form delivered to the undersigned stockholder with this
written consent is hereby ratified and approved and the original
reservation by the board of directors of 800,000 shares of Common Stock
for issuance thereunder is hereby ratified and approved; and
RESOLVED FURTHER: That the reservation of an additional 1,403,638 shares
----------------
of Common Stock for issuance under the 1998 Stuck Plan approved by the
board of directors as of February, 2, 1999 is hereby ratified and
approved.
This written consent may be executed in one or more counterparts, each of
which shall be an original document, and all of which, taken together, shall
constitute one instrument.
ANDREW LASZLO
By: /s/ Andrew Laszlo
-----------------------------------------------
(Signature)
Name: Andrew Laszlo
-----------------------------------------------
(Print name of signer here)
Title (if applicable): SVP, Business Development
------------------------------
<PAGE>
March 10, 1999
Jutvision Corporation
124 University Avenue
Palo Alto, CA 94301
Re: Agreement Not to Sell Following IPO
-----------------------------------
Ladies and Gentlemen:
Reference is made to the proposed offering of shares of Series B Preferred
Stock of Jutvision Corporation, a Delaware corporation, to be made in connection
with a Series B Preferred Stock financing of up to $12,500,000.00 involving
certain venture capital funds and other investors.
In consideration of the offer and sale of such Series B Preferred Stock by
the Company and of other good and valuable consideration the receipt of which is
hereby acknowledged, the undersigned agrees, in connection with the Company's
initial underwritten public offering of the Company's securities, not to,
directly or indirectly, sell, offer to sell, grant any option for the sale of,
grant a security interest in, or otherwise dispose of (the "Resale
Restrictions"), any shares of Common Stock of the Company, or any other shares
of capital stock of the Company convertible into or exchangeable for shares of
such Common Stock, or any options, warrants or other rights to acquire shares of
such Common Stock, or any interest in such shares or rights, beneficially owned
or otherwise held by the undersigned as of the date hereof or hereafter acquired
by the undersigned (other than those shares included in the registration
referred to hereinafter, if any) (collectively, the "Shares") without the prior
written consent of the Company or the underwriters managing such initial
underwritten public offering of the Company's securities for a period of up to
180 days from the effective date of such registration.
Notwithstanding the foregoing, if the undersigned is an individual, he or
she may transfer any or all of the Shares either during his or her lifetime or
on death by will or intestacy to his or her immediate family or to a trust the
beneficiaries of which are exclusively the undersigned and/or a member or
members of his or her immediate family; provided, however, that in any such case
it shall be a condition to the transfer that the transferee execute an agreement
stating that the transferee is receiving and holding the Shares subject to the
provisions hereof, and there shall be no further transfer of such Shares except
in accordance with the terms hereof. For purposes of this paragraph, "immediate
family" shall mean spouse, lineal descendant, father, mother, brother or sister
of the transferor.
<PAGE>
In addition, notwithstanding the foregoing, if the undersigned is a
partnership, the partnership may transfer any Shares to a partner of such
partnership or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such partner or retired partner, and any partner
who is an individual may transfer Shares by gift, will or intestate succession
to his or her spouse or lineal descendants or ancestors; and if the undersigned
is a corporation, the corporation may transfer Shares to any shareholder of such
corporation and any shareholder who is an individual may transfer Shares by
gift, will or intestate secession to his or her spouse or lineal descendants or
ancestors; provided, however, that in any such case, it shall be a condition to
the transfer that the transferee execute an agreement stating that the
transferee is receiving and holding the Shares subject to the provisions of
hereof, and there shall be no further transfer of such Shares except in
accordance with the terms hereof.
Very truly yours,
Stockholder Name (as it appears on the share
certificate):
Andrew P. Laszlo
------------------------------------------------
By /s/ Andrew P. Laszlo
---------------------------------------------
(Signature)
Name Andrew P. Laszlo
-------------------------------------------
(Print name of signer here)
Title (if applicable): SVP, Business Development
-------------------------
<PAGE>
EXHIBIT 10.22
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into effective as of January
1, 1999 by and between Jutvision Corporation, a Delaware corporation with its
principal offices at 124 University Avenue, Palo Alto, California 94301 (the
"Company"), and Howard Field ("Employee").
WHEREAS, the Company wishes to employ Employee as its Co-founder and Vice
President for the period and upon the terms and conditions hereinafter set
forth, and Employee desires to serve in such capacities upon the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Employee hereby agree as follows:
1. Term of Employment. Employee's employment under this Agreement shall
------------------
commence on January 1, 1999 (the "Effective Date") and shall continue until the
close of business on December 31, 2000 subject to any extension as set forth
herein or any earlier termination of Employee's employment as provided in
Section 6 hereof(the "Initial Term"). Upon the expiration of the Initial Term,
and each subsequent term or extension thereof, this Agreement shall
automatically be extended for an additional term of one (1) year, unless the
Company or Employee shall have notified the other party hereto of its or his
election to terminate this Agreement not later than ninety (90) days prior to
the end of such subsequent term or extension thereof (the Initial Term, together
with any extensions, until termination in accordance herewith, shall be referred
to herein as the "Term of Employment"). If Employee's employment is terminated
pursuant to Section 6 hereof, the Term of Employment shall expire as of the
Termination Date (as defined in Section 6 hereof).
2. Duties and Activities. During the Term of Employment, Employee will
---------------------
faithfully perform those duties and responsibilities commensurate with his
position as Co-founder and Vice President. Employee shall participate in
business development and sales and shall perform such other responsibilities and
duties as may be reasonably determined in the future by the Company's Board of
Directors (the "Board") or Chief Executive Officer. Employee will devote his
full working time and use his best efforts to advance the business and welfare
of the Company in furtherance of the policies established by the Board. Employee
shall report to officers on the Senior Vice President level, or such senior
officers as the CEO may determine. During the Term of Employment, Employee shall
not engage in any other employment activities for any direct or indirect
remuneration without the concurrence of the Board, except that Employee may
continue to devote reasonable time to the management of investments,
participation in community and charitable affairs, and the activities as further
set forth in Exhibit A hereto, so long as such activities do not interfere with
---------
his duties under this Agreement (as reasonably determined by the Board).
Employee hereby agrees that, except as disclosed on Exhibit A hereto, during his
---------
employment hereunder, he will not, directly or indirectly, engage (i)
individually, (ii) as an officer, (iii) as a director, (iv) as an employee, (V)
as a consultant, (vi) as an advisor, (vii) as an
<PAGE>
agent (whether a salesperson or otherwise), (viii) as a broker, or (ix) as a
partner, coventurer, stockholder or other proprietor owning directly or
indirectly more than one percent (1%) interest in, any firm, corporation,
partnership, mast, association, or other organization that is a Competitor (as
defined in Section 8.1 hereof) of the Company (such engagement by Employee
hereinafter referred to as a "Prohibited Engagement"). Except as may be shown on
Exhibit A hereto, Employee hereby represents that he is not engaged in any of
- ---------
the foregoing capacities (i) through (ix) in any Prohibited Engagement.
3. Former Employers. Employee represents and warrants that his employment
----------------
by the Company will not conflict with and will not be constrained by any prior
or current employment, consulting or other relationship. Employee represents and
warrants that he does not possess confidential information arising out of any
such employment, consulting or other relationship which, in Employee's best
judgment, would be utilized in connection with his employment by the Company.
4. Compensation.
-------------
4.1 Base Salary. In consideration for Employee's services under this
-----------
Agreement, Employee will be paid, during the Term of Employment, salary at an
annual rate of $100,000, or at such other annual salary rate as determined by
the Board or its Compensation Committee, but in any event at least equal to the
annual salary rate in effect immediately preceding any change thereto.
Employee's annual salary rate in effect from time to time is referred to herein
as the "Base Salary." Employee's Base Salary shall be paid in periodic
installments at such times as salaries are generally paid to other senior
executives of the Company.
4.2 Other Compensation. Employee's compensation by payments of Base
------------------
Salary shall not be deemed exclusive and shall not prevent Employee from
participating in any other incentive compensation, profit sharing or benefit
plan made available by the Company to its executive employees generally. The
Base Salary payments hereunder shall not in any way limit or reduce any other
obligation of the Company hereunder, and no other compensation, benefit or
payment hereunder shall in any way limit or reduce the obligation of the Company
to pay Employee's Base Salary.
4.3 Stock Option Grant. As of the Effective Date and in connection
------------------
with the execution of this Agreement, the Company shall grant to Employee an
incentive stock option (the "Option"), to the extent permitted by the applicable
provisions of Section 422 of the Internal Revenue Code) to purchase 60,000
shares of the common stock of the Company pursuant to the Company's 1998
Employee, Director and Consultant Stock Plan at an exercise price of $0.50 per
share. The Option will have a term of ten years. The Option will vest and become
exercisable as to one-twenty-fourth of the shares at the end of each month after
the Effective Date. The Option will be subject to such other terms as deemed
appropriate by the Board or its Compensation Committee and set forth in the
applicable option agreement. In the event of (i) a Change of Control (as defined
in Section 6.1(e) hereof); (ii) the completion of an underwritten initial public
offering by the Company; (iii) termination of employment for Good Reason (as
defined in Section 6.1 (e) hereof); (iv) the termination of Employee without
Cause (as defined in
-2-
<PAGE>
Section 6.1(c) hereof); (v) the death of Employee; or (vi) the Permanent
Disability of Employee (as defined in Section 6.1 (b) hereof), the Option will
vest and become fully exercisable.
4.4 Home Office. The Company shall pay Employee's expenses to
-----------
establish and maintain, during the Term of Employment, a home office (including
high speed Internet access), not to exceed $1,000 per year.
5. Benefits.
--------
5.1 Participation. During the Term of Employment, Employee shall be
-------------
entitled to participate in all fringe benefit programs maintained by the Company
and made available to its executive officers from time to time; provided,
however, that during the Term of Employment and as otherwise provided herein the
Company shall maintain for Employee (i) a life insurance policy with a minimum
of a $500,000 death benefit; (ii) disability coverage comparable to that
customarily provided to similarly situated senior executives; and (iii) health,
vision, dental and prescription drug coverage, at no additional cost to
Employee, comparable to that customarily provided to similarly situated senior
executives. Any payments or benefits payable to Employee hereunder in respect of
any calendar year during which Employee is employed by the Company for less than
the entire year shall, unless otherwise provided in the applicable plan or
arrangement, be prorated in accordance with the number of days in such calendar
year during which he is so employed. Employee will be furnished with an auto
allowance of $750 per month to cover costs of leasing, maintenance, repair and
insurance of an automobile. Employee will be entitled to four (4) weeks of paid
vacation per year, which vacation time shall accrue in accordance with the
Company's policies. Employee acknowledges that he shall have no vested rights
under or to participate in any such program except as expressly provided under
the terms hereof or thereof.
5.2 Expenses. The Company will pay or reimburse Employee for such
--------
reasonable travel, entertainment or other business expenses as he may incur on
behalf of the Company during the Term of Employment in connection with the
performance of his duties hereunder but only to the extent that such expenses
were either specifically authorized by the Company or incurred in accordance
with policies established by the Board for senior executives and provided that
Employee shall furnish the Company with such evidence relating to such expenses
as the Company may reasonably require to substantiate such expenses for tax
purposes.
6. Termination of Employment.
--------------------------
6.1 Circumstances of Termination. Notwithstanding the terms set forth
----------------------------
in Section 1 hereof, Employee's employment shall terminate under any of the
following circumstances and the date of such an occurrence, unless otherwise
provided below, shall be Employee's "Termination Date":
(a) Death. Immediately, in the event of Employee's death.
-----
(b) Permanent Disability. At the option of the Company, if
--------------------
Employee becomes physically or mentally incapacitated or disabled so that (i) he
is unable to perform for the Company substantially the same services as he
performed prior to incurring such incapacity or disability or to devote his full
working time or use his best efforts to advance the business and
-3-
<PAGE>
welfare of the Company or otherwise to perform his duties under this Agreement,
(ii) such condition exists for an aggregate of six (6) months in any twelve (12)
consecutive calendar months, and (iii) such incapacity or disability is
incapable of reasonable accommodations under applicable law, including but not
limited to the Americans with Disabilities Act of 1990, as amended (a "Permanent
Disability"). The Company, at its option and expense, is entitled to retain a
physician reasonably acceptable to Employee to confirm the existence of such
incapacity or disability, and the determination of such physician is binding
upon the Company and Employee.
(c) Cause. At the option of the Company, if Employee:
-----
(i) has been convicted of, or has pled guilty or nolo
----
contendere to, a felony; or
- ----------
(ii) has embezzled or misappropriated Company funds or
property or that of the Company's customers, suppliers or affiliates; or
(iii) has engaged in any Prohibited Engagement; or
(iv) has violated any material term of the Employment,
Confidential Information and Invention Assignment Agreement (the
"Confidentiality Agreement") entered into with the Company; or
(v) has demonstrated gross negligence or willful
misconduct in connection with the performance of Employee's duties hereunder;
provided, however, that with respect to subsections (iii), (iv) and (v) above,
the Company's right to terminate Employee shall be conditioned on (A) the
Company giving Employee written notice specifically referring to the pertinent
subsection above and describing the specific circumstances and/or actions
purportedly giving rise to the occurrence of such item; and (B) failure by
Employee, within thirty (30) days after receipt of any such notice to cease the
actions and/or reinstate or rectify the circumstances described in such notice
to the reasonable satisfaction of the Board. With respect to these subsections,
the Company shall have the right to place Employee on administrative leave
pending investigation of the circumstance(s) or action(s) purportedly giving
rise to the occurrence of such items.
(d) Without Cause. At the option of the Company at any time for
-------------
any reason other than those referred to above or for no reason at all whereupon
the Company shall be obligated to make those payments set forth in Section 7
hereof.
(e) Resignation for Good Reason.
----------------------------
(i) Employee, at his option, may resign for "Good
Reason":
(1) because the Company has materially reduced the
title, role or responsibilities of Employee; provided, however, that a reduction
in duties, position or responsibilities solely by virtue of the Company being
acquired and made part of a larger entity (as, for example, when the Co-founder
and Vice President of the Company remains as
-4-
<PAGE>
such following a Change of Control but is not made the Co-founder and Vice
President of the acquiring corporation) shall not constitute "Good Reason;"
(2) because the Company has reduced Employee's Base Salary
from the level in effect immediately prior to such change, with the exception of
a company-wide reduction of compensation due to economic considerations,
provided that the foregoing shall not limit or derogate from the Company's
obligations set forth in Section 4 above;
(3) because the Company has breached any material term of
this Agreement other than as noted in subsections (1) and (2) above; or
(4) because the Company has relocated its principal
place of business more than 35 miles from its current location.
(ii) In the event that Employee terminates this Agreement for
Good Reason, the Company shall become obligated to make those payments set forth
in Section 7 hereof.
(iii) For purposes of this Agreement, a "Change in Control" shall
be deemed to have occurred upon the occurrence of any of the following:
(1) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company;
(2) individuals who, as of the date hereof, constitute the
entire Board of Directors of the Company (the "Incumbent Directors") cease for
any reason to constitute at least a majority of the Board of Directors
(hereinafter referred to as a "Board Change"), provided that any individual
becoming a director subsequent to the date hereof whose election or nomination
for election was approved by a vote of at least a majority of the then Incumbent
Directors shall be, for purposes of this provision, deemed an Incumbent
Director,
(3) approval by the shareholders of the Company of any
consolidation or merger of the Company where the shareholders of the Company,
immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, beneficially own, directly or indirectly, shares
representing in the aggregate more than fifty percent (50%) of the combined
voting power of all the outstanding securities of the Company or surviving
entity immediately following such merger or consolidation; or
(4) any "person," as such term is used in Section 13(d) of
the 1934 Act (other than the Company, any employee benefit plan of the Company
or any entity organized, appointed or established by the Company for or pursuant
to the terms of any such plan), together with all "affiliates" and "associates"
(as such terms are defined in Rule 12b-2 under the 1934 Act or any successor
provision) of such person, shall become the "beneficial owner" or "beneficial
owners" (as defined in Rules 13d-3 and 13d-5 under the 1934 Act or any successor
provision), directly or indirectly, of securities of the Company representing in
the aggregate (A) in the event the Company is not subject to the reporting
requirements of the 1934
-5-
<PAGE>
Act and has not registered shares of a class of equity securities pursuant to
Section 12(g) or 12(b) of the 1934 Act, fifty percent (50%) or more, or (B) in
the event the Company is a Reporting Company, twenty-five percent (25%) or more
of either (1) the then outstanding shares of Common Stock of the Company or (2)
the combined voting power of all then outstanding securities of the Company
having the right under ordinary circumstances to vote in an election of the
Board of Directors of the Company.
6.2 Notice of Termination. Any intent to terminate employment by
---------------------
Employee pursuant to Section 6.1 (e) shall be communicated by written notice to
the Company setting forth in detail the specific actions deemed to constitute
Good Reason. If the Company does not respond within ten (10) days from such
notice, the resignation shall be deemed effective. The Company may, within the
ten (10) day period, correct such condition giving rise to Employee's notice or
dispute Employee's claims by giving written notice of such dispute.
7. Payments Upon Termination of Employment.
----------------------------------------
7.1 Payments. In addition to any rights Employee may have under
--------
Section 4.3 on the Termination Date:
(a) If the Company terminates Employee's employment for Cause or
if Employee voluntarily terminates his employment without Good Reason, the
Company's obligation to compensate Employee shall in all respects cease as of
the Termination Date, except that the Company shall pay Employee the Base Salary
accrued under Section 4.1, the value of accrued vacation time pursuant to
Section 5.1 hereof, and the reimbursable expenses incurred under Section 5.2 of
this Agreement up to such Termination Date (the "Accrued Obligations");
(b) If Employee's employment is terminated due to the death of
Employee, the Company's obligation to compensate Employee shall in all respects
cease as of the Termination Date, except that within thirty (30) days after the
Termination Date, the Company shall pay Employee's estate or legal
representative the Accrued Obligations;
(c) If Employee's employment is terminated upon the Permanent
Disability of Employee, the Company's obligation to compensate Employee with
respect to Base Salary (as in effect on the Termination Date) shall continue for
twelve (12) months following such termination. In addition, the Company shall
pay Employee any Accrued Obligations; and
(d) If Employee's employment is terminated by the Company
pursuant to Section 6.1 (d), or by Employee pursuant to Section 6.1 (e) the
Company's obligation to compensate Employee shall in all respects cease, except
that within thirty (30) days after the Termination Date the Company shall pay
Employee the Accrued Obligations and during the period ending on the expiration
of the sixth month following the Termination Date the Company shall pay to
Employee each month one-twelfth (l/12th) of the annual Base Salary of Employee
in effect at the Termination Date. The Company shall be excused from its
obligations to make the Continuation Payments if Employee breaches his
obligations under this Agreement or the Confidentiality Agreement.
-6-
<PAGE>
Notwithstanding the foregoing, in the event such termination
occurs within two (2) years of a Change in Control of the Company, the full
amount of the Continuation Payments will be paid in a lump sum within ten (10)
days of such Change in Control.
7.2 Medical Benefits. If Employee's employment is terminated by the
----------------
Company pursuant to Section 6.l(d) or by Employee pursuant to Section 6.1 (e),
the Company shall reimburse the Employee for the amount of his or her premium
payment for group health coverage, if any, elected by the Employee pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"); provided, however, that (A) such reimbursement shall not exceed $750
per month, and (B) the Employee shall be solely responsible for all matters
relating to his or her continuation of coverage pursuant to COBRA, including
(without limitation) his or her election of such coverage and his or her timely
payment of premiums; provided, further, that upon the earlier to occur of (C)
the time that the Employee no longer constitutes a Qualified Beneficiary (as
such term is defined in Section 4980B(g)(1) of the Internal Revenue Code of
1986, as amended) and (D) the date twelve (12) months following the Employee's
termination, the Company's obligations to reimburse the Employee under this
subsection (ii) shall cease.
7.3 Effect on this Agreement. Any termination of Employee's
------------------------
employment and any expiration of the Term of Employment under this Agreement
shall not affect the continuing operation and effect of this Section and Section
8 hereof, which shall continue in full force and effect with respect to the
Company and Employee, and its and his heirs, successors and assigns.
Nothing in Section 6 hereof shall be deemed to operate or shall
operate as a release, settlement or discharge of any liability of Employee to
the Company or others from any action or omission by Employee enumerated in
Section 6.1 (c) hereof as a possible basis for termination of Employee's
employment for Cause.
7.4 No Duty to Mitigate. Subject to the provisions of the
-------------------
Confidentiality Agreement and Section 8 of this Agreement, Employee shall be
free to accept such employment and engage in such business as Employee may
desire following the termination of his employment hereunder, and no
compensation received by Employee therefrom shall reduce or affect any payments
required to be made by the Company hereunder except to the extent expressly
provided herein or in the benefit plans of the Company.
8. Post-Employment Activities.
--------------------------
8.1 Conditional Nature of Severance Payments; Non-Competition.
---------------------------------------------------------
Employee acknowledges that the nature of the Company's business is such that if
Employee were to become employed by, or substantially involved in, the business
of a Competitor during the twelve (12) months following the termination of
Employee's employment with the Company (the "Noncompete Period"), it would be
very difficult for the Employee not to rely on or use the Company's trade
secrets and confidential information. A "Competitor" is defined as any person or
entity whether now existing or hereafter established which is primarily engaged
in the business of producing and selling virtual tours. To avoid the inevitable
disclosure of the Company's trade secrets and confidential information, Employee
agrees and acknowledges that
-7-
<PAGE>
the Employee's right to receive the severance payments and other benefits set
forth in Section 7 (to the extent the Employee is otherwise entitled to such
payments) shall be conditioned upon (a) the Employee not directly or indirectly
engaging in (whether as an employee, consultant, proprietor, partner, director
or otherwise), nor having any ownership interest directly or indirectly of more
than 1% in, or participating in the financing, operation, management or control
of, a Competitor, and (b) the Employee continuing to observe, and not be in
breach of, the Provisions of the Confidentiality Agreement. Upon any breach of
this Section or the Confidentiality Agreement, all severance payments pursuant
to Section 7 shall immediately cease.
8.2 Exclusions. No provision of this Agreement shall be construed to
----------
preclude Employee from performing the same services which the Company hereby
retains Employee to perform for any person or entity which is not a Competitor
of the Company upon the expiration or termination of Employee's employment (or
any post-employment consultation) so long as Employee does not thereby violate
any term of the Confidentiality Agreement.
9. Remedies. Employee's obligations under the Confidentiality Agreement
--------
and Section 8 of this Agreement shall survive the expiration or termination of
Employee's employment (whether through Employee's resignation or otherwise) with
the Company. Employee acknowledges that a remedy at law for any breach or
threatened breach by Employee of the provisions of the Confidentiality Agreement
or Section 8 would be inadequate and Employee therefore agrees that the Company
shall be entitled to injunctive relief in any court of competent jurisdiction in
the case of any such breach or threatened breach. Employee acknowledges that
this Section does not limit the Company's right to seek monetary damages for
breach of this Agreement.
10. Golden Parachute Excise Tax.
----------------------------
10.1 Reimbursement. In the event that it shall be determined that any
-------------
payment or other benefit by the Company to or for the benefit of Employee under
this Agreement or otherwise, whether paid or payable, but determined without
regard to any additional payments required under this Section (the "Payments"),
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code (the "Excise Tax"), then Employee shall be entitled to receive (i)
an additional payment from the Company (the "Reimbursement Payment") sufficient
to pay the Excise Tax, and (ii) an additional payment from the Company
sufficient to pay the Excise Tax and federal and state income taxes arising from
the payments made by the Company to Employee pursuant to this sentence.
10.2 Determination. Unless the Company and Employee otherwise agree
-------------
in writing, any determination required under this Section shall be made in
writing by the Company's primary independent public accounting firm (the
"Accountants"), whose determination shall be conclusive and binding upon
Employee and the Company for all purposes. For purposes of making the
calculations required by this Section, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and Employee shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make their determination
-8-
<PAGE>
under this Section. The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
Section.
11. Miscellaneous.
--------------
11.1 Key Man Life Insurance. Employee recognizes and acknowledges
----------------------
that the Company or its affiliates may seek and purchase one or more policies
providing key man life insurance with respect to Employee, the proceeds of which
would be payable to the Company or an affiliate. Employee hereby consents to the
Company or its affiliates seeking and purchasing such insurance and will provide
such information, undergo such medical examinations (at the Company's expense),
execute such documents, and otherwise take any and all actions necessary or
desirable in order for the Company or its affiliates to seek, purchase and
maintain in full force and effect such policy or policies.
11.2 Notice. All notices, requests, consents and other communications
------
hereunder shall be in writing, shall be addressed to the receiving party's
address set forth below or to such other address as a party may designate by
notice hereunder, and shall be either (i) delivered by hand, (ii) made by
telecopy, (iii) sent by overnight courier, or (iv) sent by registered or
certified mail, return receipt requested, postage prepaid.
If to the Company: Jutvision Corporation
124 University Avenue
Palo Alto, CA 94301
Attention: Leonard B. McCurdy
If to Employee: Howard Field
525 Lytton Avenue
Palo Alto, CA 94301
11.3 Modification and No Waiver of Breach. No waiver or modification
------------------------------------
of this Agreement shall be binding unless it is in writing signed by the parties
hereto. No waiver by a party of a breach hereof by the other party shall be
deemed to constitute a waiver of a future breach, whether of a similar or
dissimilar nature, except to the extent specifically provided in any written
waiver under this Section.
11.4 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA EXCLUDING
ITS CONFLICT OF LAW PRINCIPLES. ALL QUESTIONS RELATING TO THE VALIDITY AND
PERFORMANCE HEREOF AND REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAW.
11.5 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement.
11.6 Captions. The captions used herein are for ease of reference
--------
only and shall not define or limit the provisions hereof.
-9-
<PAGE>
11.7 Entire Agreement. This Agreement, any written agreement referred
----------------
to herein and the Exhibits hereto constitute the entire agreement between the
parties hereto relating to the matters encompassed hereby and supersede any
prior or contemporaneous written or oral agreements.
11.8 Successors.
-----------
(a) Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially all of the Company's business and assets shall assume
the obligations under this Agreement and agree expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term "Company" shall
include any successor to the Company's business and assets that executes and
delivers the assumption agreement described in this subsection (a) or which
becomes bound by the terms of this Agreement by operation of law.
(b) The terms of this Agreement and all rights of Employee
hereunder shall insure to the benefit or, and be enforceable by, Employee's
personal or legal representatives, executors, administrators, successors, heirs,
devisees and legatees.
11.9 Arbitration. Any dispute, controversy, or claim arising out of,
-----------
in connection with, or in relation to this Agreement and its exhibits, except as
provided in Section 9 hereof, shall be settled by arbitration in California
pursuant to the Commercial Rules then in effect of the American Arbitration
Association and in no other place. Any award or determination shall be final,
binding, and conclusive upon the parties, and a judgment rendered may be entered
in any court having jurisdiction thereof. Employee and the Company knowingly
waive any and all rights to a jury trial in any form. The parties hereby
expressly waive punitive damages, and under no circumstances shall an award
contain any amount that in any way reflects punitive damages. Each party shall
bear its own expenses relating to the arbitration, unless otherwise determined
in arbitration.
It is intended that controversies or claims submitted to
arbitration under this Section shall remain confidential, and to that end it is
agreed by the parties that neither the facts disclosed in the arbitration, the
issues arbitrated, nor the views or opinions of any persons concerning them,
shall be disclosed to third persons at any time, except to the extent necessary
to enforce an award or judgment or as required by law or in response to legal
process or in connection with such arbitration. Nothing in this Section shall
limit the Company's right to seek equitable remedies in any court of competent
jurisdiction for breach of this Agreement.
11.10 Independent Advice. Employee hereby acknowledges that he has
------------------
been advised of the opportunity available to him to seek and obtain advice of
legal counsel and financial advisors of his own choosing prior to and in
connection with Employee's execution of this Agreement. In addition Employee
hereby affirms that he has either obtained such advice or knowingly and
willingly decided to forego the opportunity to avail himself of such advice.
-10-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed effective as of
the day and year first written above.
JUTVISION CORPORATION
By:
---------------------------
Name:
---------------------------
Title: Sr. Vice President
---------------------------
/s/ Howard Field
---------------------------------
-11-
<PAGE>
EXHIBIT A
OTHER POSITIONS
<PAGE>
EXHIBIT B
PRIOR INVENTIONS
<PAGE>
EXHIBIT A
---------
LIST OF PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP
Identifying Number
Title Date or Brief Description
----- ---- ---------------------
x No inventions or improvements
--
__ Additional Sheets Attached
Signature of Employee: /s/ Howard Field
----------------------
Print Name of Employee: HOWARD FIELD
----------------------
Date: 3/12/99
----------------------------------------
<PAGE>
DISCRIMINATION IN EMPLOYEE ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF
1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING
ACT, AND LABOR CODE SECTION 201, et seq;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND
REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
10. General Provisions.
------------------
(a) Governing Law; Consent to Personal Jurisdiction. This Agreement
-----------------------------------------------
will be governed by the laws of the State of California. I hereby expressly
consent to the personal jurisdiction of the state and federal courts located in
California for any lawsuit filed there against me by the Company arising from or
relating to this Agreement.
(b) Entire Agreement. This Agreement sets forth the entire agreement
----------------
and understanding between the Company and me relating to the subject matter
herein and merges all prior discussions between us. 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. Any
subsequent change or changes in my duties, salary or compensation will not
affect the validity or scope of this Agreement.
(c) Severability. If one or more of the provisions in this Agreement
------------
is deemed void by law, then the remaining provisions will continue in full force
and effect.
(d) Successors and Assigns. This Agreement will be binding upon my
----------------------
heirs, executors, administrators and other legal representatives and will be for
the benefit of the Company, its successors, and its assigns.
Date: 3-12-99
---------------------
/s/ Howard Field
-----------------------------------
Signature
HOWARD FIELD
-----------------------------------
Name of Employee (typed or printed)
- -----------------------------
Witness
<PAGE>
ACTION BY WRITTEN CONSENT OF
THE STOCKHOLDERS OF
JUTVISION CORPORATION
In accordance with the Delaware General Corporation Law and Section 2.10 of
the Bylaws of Jutvision Corporation, a Delaware corporation (the "Company"), the
undersigned, constituting the holders of all of the outstanding shares having
not less than the total number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted, hereby adopt the following resolution effective as of March
4, 1999:
Amendment of Certificate of Incorporation
-----------------------------------------
RESOLVED: That the stockholders of this corporation believe it is in their
--------
best interests and the best interests of the corporation to amend and
restate the Certificate of Incorporation of the corporation to (i) create a
new series of Preferred Stock, to be designated Series B Preferred Stock,
consisting of 2,152,574 shares, (ii) establish the relative rights,
preferences and privileges of the Series B Preferred Stock, and (iii) make
certain other changes.
RESOLVED FURTHER: That the Certificate of Incorporation of this corporation
----------------
is amended and restated in its entirety to read as set forth in the
Restated Certificate of Incorporation delivered to each stockholder with
this written consent; provided, however, that the officers of this
-------- -------
corporation are authorized to make such final changes to the Restated
Certificate of Incorporation as they may deem necessary or advisable with
the advice of counsel.
This written consent may be executed in one or more counterparts, each of
which shall be an original document, and all of which, taken together, shall
constitute one instrument.
HOWARD FIELD
By: /s/ Howard Field
----------------------------------------
Signature
Name: HOWARD FIELD
----------------------------------------
(Print name of signer here)
Title (if applicable): Co Founder Vice President
-------------------------
<PAGE>
ACTION BY WRITTEN CONSENT OF
THE STOCKHOLDERS OF
JUTVISION CORPORATION
In accordance with the Delaware General Corporation Law and Section 2.10 of
the Bylaws of Jutvision Corporation, a Delaware corporation (the "Company"), the
undersigned, constituting the holders of all of the outstanding shares having
not less than the total number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted, hereby adopt the following resolution effective as of March
3, 1999:
1998 Employee, Director and Consultant Stock Plan
-------------------------------------------------
RESOLVED: That the Company's 1998 Employee, Director and Consultant Stock
--------
Plan in the form delivered to the undersigned stockholder with this written
consent is hereby ratified and approved and the original reservation by the
board of directors of 800,000 shares of Common Stock for issuance
thereunder is hereby ratified and approved; and
RESOLVED FURTHER: That the reservation of an additional 1,403,638 shares of
----------------
Common Stock for issuance under the 1998 Stock Plan approved by the board
of directors as of February 2, 1999 is hereby ratified and approved.
This written consent may be executed in one or more counterparts, each of
which shall be an original document, and all of which, taken together, shall
constitute one instrument.
HOWARD FIELD
By: /s/ Howard Field
-----------------------------------------
(Signature)
Name: HOWARD FIELD
-----------------------------------------
(Print name of signer here)
Title (if applicable): Co Founder Vice President
-------------------------
<PAGE>
March 10, 1999
Jutvision Corporation
124 University Avenue
Palo Alto, CA 94301
Re: Agreement Not to Sell Following IPO
-----------------------------------
Ladies and Gentlemen:
Reference is made to the proposed offering of shares of Series B Preferred
Stock of Jutvision Corporation, a Delaware corporation, to be made in connection
with a Series B Preferred Stock financing of up to $12,500,000.00 involving
certain venture capital funds and other investors.
In consideration of the offer and sale of such Series B Preferred Stock by
the Company and of other good and valuable consideration the receipt of which is
hereby acknowledged, the undersigned agrees, in connection with the Company's
initial underwritten public offering of the Company's securities, not to,
directly or indirectly, sell, offer to sell, grant any option for the sale of,
grant a security interest in, or otherwise dispose of (the "Resale
Restrictions"), any shares of Common Stock of the Company, or any other shares
of capital stock of the Company convertible into or exchangeable for shares of
such Common Stock, or any options, warrants or other rights to acquire shares of
such Common Stock, or any interest in such shares or rights, beneficially owned
or otherwise held by the undersigned as of the date hereof or hereafter acquired
by the undersigned (other than those shares included in the registration
referred to hereinafter, if any) (collectively, the "Shares") without the prior
written consent of the Company or the underwriters managing such initial
underwritten public offering of the Company's securities for a period of up to
180 days from the effective date of such registration.
Notwithstanding the foregoing, if the undersigned is an individual, he or
she may transfer any or all of the Shares either during his or her lifetime or
on death by will or intestacy to his or her immediate family or to a trust the
beneficiaries of which are exclusively the undersigned and/or a member or
members of his or her immediate family; provided, however, that in any such case
it shall be a condition to the transfer that the transferee execute an agreement
stating that the transferee is receiving and holding the Shares subject to the
provisions hereof, and there shall be no further transfer of such Shares except
in accordance with the terms hereof. For purposes of this paragraph, "immediate
family" shall mean spouse, lineal descendant, father, mother, brother or sister
of the transferor.
<PAGE>
In addition, notwithstanding the foregoing, if the undersigned is a
partnership, the partnership may transfer any Shares to a partner of such
partnership or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such partner or retired partner, and any partner
who is an individual may transfer Shares by gift, will or intestate succession
to his or her spouse or lineal descendants or ancestors; and if the undersigned
is a corporation, the corporation may transfer Shares to any shareholder of such
corporation and any shareholder who is an individual may transfer Shares by
gift, will or intestate secession to his or her spouse or lineal descendants or
ancestors; provided, however, that in any such case, it shall be a condition to
the transfer that the transferee execute an agreement stating that the
transferee is receiving and holding the Shares subject to the provisions of
hereof, and there shall be no further transfer of such Shares except in
accordance with the terms hereof.
Very truly yours,
Stockholder Name (as it appears on the share
certificate):
HOWARD FIELD
----------------------------------------
By: /s/ Howard Field
-----------------------------------
Signature
Name:HOWARD FIELD
-----------------------------------
(Print name of signer here)
Title (if applicable): Vice President
-----------------
<PAGE>
EXHIBIT 10.23
[LETTER HEAD OF BAMBOO.COM]
June 1, 1999
Mark Searle
bamboo.com, Inc.
124 University Avenue
Palo Alto, California 94301
Re: Employment at bamboo.com, Inc.
------------------------------
Dear Mark:
This letter agreement (the "Letter Agreement") is entered into as of
January 25, 1999 (the "Effective Date"), by and between bamboo.com, Inc., a
Delaware corporation (the "Company"), and Mark Searle, an individual
("Employee").
1. Employment and Duties. Commencing on January 25, 1999 Employee will
---------------------
serve as Chief Operating Officer of the Company.
2. At-Will Employment. Employee's employment with the Company is for
------------------
no specified period and constitutes at-will employment. As a result, Employee
is free to resign at any time, for any reason or for no reason. Similarly, the
Company is free to conclude its employment relationship with Employee at any
time, with or without cause.
3. Salary. For all services to be rendered by Employee pursuant to
------
this Letter Agreement, the Company agrees to pay Employee during Employee's
period of employment a salary at an annual rate of $120,000 (the "Salary"). The
Salary shall be paid in periodic installments in accordance with the Company's
regular payroll practices. The Company agrees to review the Salary annually and
to make increases, if any, as the Company may approve in its sole discretion.
4. Stock Options.
-------------
(a) Option. The Company shall grant Employee an option to purchase
------
40,000 shares of the Company's common stock, and a second option to purchase
20,000 shares of the Company's common stock, each with an exercise price equal
to the fair market value of the Company's common stock per share (collectively,
the "Option").
<PAGE>
Mark Searle
June 1, 1999
Page 2
(b) Option Provisions. The Option shall be granted under the Stock
-----------------
Option Plan and shall be subject to the terms and conditions (including vesting)
of the Stock Option Plan and Employee's option agreement. The Stock Option Plan
may be modified from time to time by the Company's Board of Directors.
Notwithstanding the foregoing, the Company's Board of Directors may, in its
discretion, grant the Option outside of the Stock Option Plan, and any such
Options shall include such other terms as the Board of Directors may specify.
5. Other Benefits. During the Employment Period, Employee shall be
--------------
entitled to participate in all other employee benefit plans, programs,
insurances, and perquisites of the Company accorded to other employees of the
Company at Employee's same or similar level of seniority. The Company may
modify the benefits it offers to its employees from time to time as it deems
necessary.
6. Vacations and Holidays. Employee shall be entitled to the amount
----------------------
of paid vacation and Company holidays accorded to employees of the Company at
Employee's same or similar level of seniority in accordance with the Company's
policies in effect from time to time; provided, however, that such amount of
paid vacation shall in no event be less than two (2) weeks annually.
7. Termination Benefits. In the event Employee's employment
--------------------
terminates, then Employee shall be entitled to receive severance and other
benefits, if any, in accordance with the Company's written policies, if any, in
effect from time to time for employees of the Company at Employee's same or
similar level of seniority.
8. Confidential Information. Employee will be expected to sign and
------------------------
comply with the Company's Employment, Confidential Information, Invention
Assignment and Arbitration Agreement, which requires, among other provisions,
the assignment of patent rights to any invention made during Employee's
employment at the Company and nondisclosure of proprietary information.
9. Miscellaneous. This Letter Agreement, and any written plan or
-------------
agreement referred to herein, represent the entire agreement and understanding
between the parties as to the subject matter hereof and supersede all prior or
contemporaneous agreements, whether written or oral. No waiver, alteration, or
modification of any of the provisions of this Letter Agreement shall be binding
unless in writing and signed by duly authorized representatives of the parties
hereto. Failure or delay on the part of either party hereto to enforce any
right, power, or privilege hereunder shall not be deemed to constitute a waiver
thereof. Additionally, a waiver by either party or a breach of any promise
hereof by the other party shall not operate as or be construed to constitute a
waiver of any subsequent waiver by such other party. Whenever possible, each
provision of this Letter Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Letter
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Letter Agreement will be reformed, construed
<PAGE>
Mark Searle
June 1, 1999
Page 3
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein. This Letter Agreement shall be
governed by and construed in accordance with the internal substantive laws, and
not the choice of law rules, of the State of California.
Kindly confirm your agreement with, and acceptance of, all of the foregoing
by signing this Letter Agreement where indicated below.
Very truly yours,
BAMBOO.COM, INC.
By:
Name: Leonard McCurdy
Title: Chairman & Chief Executive Officer
UNDERSTOOD AND AGREED:
Mark Searle
_____________________________
Signature
<PAGE>
EXHIBIT 10.24
[LETTERHEAD OF BAMBOO.COM APPEARS HERE]
[LOGO]
June 1, 1999
Randy Bresee
bamboo.com, Inc.
124 University Avenue
Palo Alto, California 94301
Re: Employment at bamboo.com, inc.
------------------------------
Dear Randy:
This letter agreement (the "Letter Agreement") is entered into as of April
1, 1999 (the "Effective Date"), by and between bamboo.com, Inc., a Delaware
corporation (the "Company"), and Randy Bresee, an individual ("Employee").
1. Employment and Duties. Commencing on April 1, 1999 Employee will serve
---------------------
as Chief Financial Officer of the Company.
2. At-Will Employment. Employee's employment with the Company is for no
------------------
specified period and constitutes at-will employment. As a result, Employee is
free to resign at any time, for any reason or for no reason. Similarly, the
Company is free to conclude its employment relationship with Employee at any
time, with or without cause.
3. Salary. For all services to be rendered by Employee pursuant to this
------
Letter Agreement, the Company agrees to pay Employee during Employee's period of
employment a salary at an annual rate of $135,000 (the "Salary"). The Salary
shall be paid in periodic installments in accordance with the Company's regular
payroll practices. The Company agrees to review the Salary annually and to make
increases, if any, as the Company may approve in its sole discretion.
4. Stock Options.
-------------
(a) Option. The Company shall grant Employee an option (the "Option")
------
to purchase 75,000 shares of the Company's common stock with an exercise price
equal to the fair market value of the Company's common stock per share.
<PAGE>
Randy Bresee
June 1, 1999
Page 2
(b) Option Provisions. The Option shall be granted under the Stock
-----------------
Option Plan and shall be subject to the terms and conditions (including vesting)
of the Stock Option Plan and Employee's option agreement. The Stock Option Plan
may be modified from time to time by the Company's Board of Directors.
Notwithstanding the foregoing, the Company's Board of Directors may, in its
discretion, grant the Option outside of the Stock Option Plan, and any such
Options shall include such other terms as the Board of Directors may specify.
5. Other Benefits. During the Employment Period, effective May 1, 1999,
--------------
Employee shall be entitled to participate in all other employee benefit plans,
programs, insurances, and perquisites of the Company accorded to other employees
of the Company at Employee's same or similar level of seniority. The Company
may modify the benefits it offers to its employees from time to time as it deems
necessary.
6. Vacations and Holidays. Employee shall be entitled to the amount of
----------------------
paid vacation and Company holidays accorded to employees of the Company at
Employee's same or similar level of seniority in accordance with the Company's
policies in effect from time to time; provided, however, that such amount of
paid vacation shall in no event be less than two (2) weeks annually.
7. Termination Benefits. In the event Employee's employment terminates,
--------------------
then Employee shall be entitled to receive severance and other benefits, if any,
in accordance with the Company's written policies, if any, in effect from time
to time for employees of the Company at Employee's same or similar level of
seniority.
8. Confidential Information. Employee will be expected to sign and
------------------------
comply with the Company's Employment, Confidential Information, Invention
Assignment and Arbitration Agreement, which requires, among other provisions,
the assignment of patent rights to any invention made during Employee's
employment at the Company and nondisclosure of proprietary information.
9. Miscellaneous. This Letter Agreement, and any written plan or
-------------
agreement referred to herein, represent the entire agreement and understanding
between the parties as to the subject matter hereof and supersede all prior or
contemporaneous agreements, whether written or oral. No waiver, alteration, or
modification of any of the provisions of this Letter Agreement shall be binding
unless in writing and signed by duly authorized representatives of the parties
hereto. Failure or delay on the part of either party hereto to enforce any
right, power, or privilege hereunder shall not be deemed to constitute a waiver
thereof. Additionally, a waiver by either party or a breach of any promise
hereof by the other party shall not operate as or be construed to constitute a
waiver of any subsequent waiver by such other party. Whenever possible, each
provision of this Letter Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Letter
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Letter Agreement will be reformed, construed
<PAGE>
Randy Bresee
June 1, 1999
Page 3
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein. This Letter Agreement shall be
governed by and construed in accordance with the internal substantive laws, and
not the choice of law rules, of the State of California.
Kindly confirm your agreement with, and acceptance of, all of the foregoing
by signing this Letter Agreement where indicated below.
Very truly yours,
BAMBOO.COM, INC.
By: ______________________________________
Name: Leonard McCurdy
--------------------------------------
Title: Chairman & Chief Executive Officer
--------------------------------------
UNDERSTOOD AND AGREED:
Randy Bresee
______________________________
Signature
<PAGE>
EXHIBIT 10.25
bamboo.com Canada Telephone 416/ 620 4610
5405 Eglinton Avenue West Fax 416/ 620 1290
Suite 107 www.bamboo.com
Toronto, Ontario M9C 5K6
June 1, 1999
Andy Aicklen
Bamboo.com Canada, Inc.
5405 Eglinton Avenue West
Suite 107
Toronto, Ontario M9c 5k6
Re: Employment At Bamboo.com Canada, Inc.
-------------------------------------
Dear Andy:
This letter agreement (the "Letter Agreement") is entered into as of
February 1, 1999 (the "Effective Date"), by and between bamboo.com Canada, Inc.,
a Ontario corporation (the "Company"), and Andy Aicklen, an individual
("Employee").
1. Employment and Duties. Commencing on February 1, 1999 Employee will
---------------------
serve Canadian Operations, Vice President & General Manager of the Company.
2. At-Will Employment. Employee's employment with the Company is for no
------------------
specified period and constitutes at-will employment. As a result, Employee is
free to resign at any time, for any reason or for no reason. Similarly, the
Company is free to conclude its employment relationship with Employee at any
time, with or without cause.
3. Salary. For all services to be rendered by Employee pursuant to this
------
Letter Agreement, the Company agrees to pay Employee during Employee's period of
employment a salary at an annual rate of $96,000 Canadian Dollars (the
"Salary"). The Salary shall be paid in periodic installments in accordance with
the Company's regular payroll practices. The Company agrees to review the Salary
annually and to make increases, if any, as the Company may approve in its sole
discretion.
4. Stock Options.
-------------
(a) Option. The Company shall grant Employee an option to purchase
------
28,251 shares of the Company's common stock, a second option to purchase 48,000
shares of the Company's common stock, and a third option to purchase 6,949
shares of the Company's common stock, each with an exercise price equal to the
fair market value of the Company's common stock per share (collectively, the
"Option").
<PAGE>
Andy Aicklen
June 1, 1999
Page 2
(b) Option Provisions. The Option shall be granted under the Stock
-----------------
Option Plan and shall be subject to the terms and conditions (including vesting)
of the Stock Option Plan and Employee's option agreement. The Stock Option Plan
may be modified from time to time by the Company's Board of Directors.
Notwithstanding the foregoing, the Company's Board of Directors may, in its
discretion, grant the Option outside of the Stock Option Plan, and any such
Options shall include such other terms as the Board of Directors may specify.
5. Other Benefits. During the Employment Period, Employee shall be
--------------
entitled to participate in all other employee benefit plans, programs,
insurances, and perquisites of the Company accorded to other employees of the
Company at Employee's same or similar level of seniority. The Company may modify
the benefits it offers to its employees from time to time as it deems necessary.
6. Vacations and Holidays. Employee shall be entitled to the amount of
----------------------
paid vacation and Company holidays accorded to employees of the Company at
Employee's same or similar level of seniority in accordance with the Company's
policies in effect from time to time; provided, however, that such amount of
paid vacation shall in no event be less than two (2) weeks annually.
7. Termination Benefits. In the event Employee's employment terminates,
--------------------
then Employee shall be entitled to receive severance and other benefits, if any,
in accordance with the Company's written policies, if any, in effect from time
to time for employees of the Company at Employee's same or similar level of
seniority.
8. Confidential Information. Employee will be expected to sign and comply
------------------------
with the Company's Employment, Confidential Information, Invention Assignment
and Arbitration Agreement, which requires, among other provisions, the
assignment of patent rights to any invention made during Employee's employment
at the Company and nondisclosure of proprietary information.
9. Miscellaneous. This Letter Agreement, and any written plan or
-------------
agreement referred to herein, represent the entire agreement and understanding
between the parties as to the subject matter hereof and supersede all prior or
contemporaneous agreements, whether written or oral. No waiver, alteration, or
modification of any of the provisions of this Letter Agreement shall be binding
unless in writing and signed by duly authorized representatives of the parties
hereto. Failure or delay on the part of either party hereto to enforce any
right, power, or privilege hereunder shall not be deemed to constitute a waiver
thereof. Additionally, a waiver by either party or a breach of any promise
hereof by the other party shall not operate as or be construed to constitute a
waiver of any subsequent waiver by such other party. Whenever possible, each
provision of this Letter Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Letter
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or
<PAGE>
Andy Aicklen
June 1, 1999
Page 3
rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Letter
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained
herein. This Letter Agreement shall be governed by and construed in accordance
with the internal substantive laws, and not the choice of law rules, of the
State of California.
Kindly confirm your agreement with, and acceptance of, all of the foregoing by
signing this Letter Agreement where indicated below.
Very truly yours,
BAMBOO.COM CANADA, INC.
By: ____________________________
Name: Leonard McCurdy
----------------------------
Title: Chairman
----------------------------
UNDERSTOOD AND AGREED:
ANDY AICKLEN
____________________________________
Signature
<PAGE>
Exhibit 10.26
[LETTERHEAD OF DUNDEE REALTY MANAGEMENT CORP.]
May 27, 1999
Ms. Carla Finamore
Transmode Consultants Inc.
1111 West Hastings Street Via Facsimile 1-604-682-4017
Suite 100 ----------------------------
Vancouver, British Columbia
V6E 2J3
Dear Ms. Finamore:
Re: Proposed Sublease of 5405 Eglinton Avenue West, Suite 210 to
Bamboo.com Canada, Inc: (tile "Sub-Tenant")
- -----------------------------------------------------------------------------
5395-5409 Eglinton Avenue West Inc (the "Landlord") hereby consents to the
Sublease of 5405 Eglinton Avenue West, Suite 210, subject to the fulfillment of
each and every one of the following conditions:
1) Transmode Consultants Inc. (the "Sub-Landlord") shall remain responsible
for the fulfillment of each and every term, condition and covenant of the
Head-Lease, which shall remain the same, entered into between it and
Beallor, Beallor & Burns, Inc. dated June 30, 1994, under which 5395-5409
Eglinton Avenue West Inc. is now the Landlord.
2) The Sublease commences June 1, 1999, subject to the execution of this
consent and extends to May 30. 2001 (the balance of the term of the Head-
Lease less one (1) day).
3) Any further Sublease or assignment is governed by the assigning and
subletting provisions of the Head-Lease.
4) The Landlord requires a certified cheque which shall cover the
administration costs and the fee to prepare the Consent to Sublease, equal
to $1,070.00 (including G.S.T.).
<PAGE>
Ms. Carla Finamore
May 27, 1999 - Page 2
- -----------------------------------------------------------------------------
5) The Sub-Tenant accepts the Premises in an "as is" condition. Any items of
work required by the Sub-Tenant shall be performed by the Landlord at the
Sub-Tenant's sole expense.
6) The Landlord shall supply and install building standard entrance door
signage at the Sub-Tenant's sole expense.
7) Prior to occupancy, the Sub-Tenant agrees to provide the Landlord with an
insurance certificate as outlined in the Head-Lease,
8) By way of this Agreement, the Head-Lease is amended to reflect the correct
square footage of Three Thousand and Ninety-One (3,091) square feet, as per
the attached certified area Certificate, marked as Schedule "A".
9) The Sub-Tenant agrees and accepts the provisions of this letter and by
doing so agrees directly with the Landlord that:
(1) The provisions set out above in this letter are confirmed,
(2) It has read the Head-Lease and is bound by each of the provisions of
that Head-Lease as though it had signed the Head-Lease itself directly
with the Landlord Insofar as obligations are to be performed under that
Head-Lease from and after the commencement date of the Sublease.
(3) It will not seek to enforce rights under the Landlord and Tenant Act or
the Bankruptcy and Insolvency Act to obtain a new Lease directly with
the Landlord where the Tenant becomes bankrupt or Insolvent or the
Lease is terminated for a default unless all rental obligations under
the Lease are paid up to date and the obligations of the Lease are in
good standing at the lime.
(4) It will recognize the Landlord's rights to distrain and other rights
and remedies under the Head-Lease,
If you have any questions with respect to the foregoing, kindly contact the
undersigned.
Yours very truly,
DUNDEE REALTY MANAGEMENT CORP.
Property Manager for Centennial Centre
Cheryl Ledamun
Assistant Leasing Manager
<PAGE>
Ms. Carla Finamore
May 27, 1999 - Page 3
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
AGREED and accepted this _____ day of _________, 1999
TRANSMODE CONSULTANTS INC.
__________________________________________ c/s
Mr. Adil Cubukgil
I have the authority to bind the corporation
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
AGREED and accepted this _____ day of _________, 1999
BAMBOO.COM CANADA, INC.
__________________________________________ c/s
Mr. Andy Aicklen
I have the authority to bind the corporation
- -----------------------------------------------------------------------------
<PAGE>
OFFER TO SUB-LEASE
Agreement made this 27th day of May, 1999.
BETWEEN: bamboo.com Canada Inc.
(hereinafter referred to as the "Sub-Tenant")
AND Transmode Consultants Inc. ("Transmode")
AND/OR: Traxis Inc. ("Traxis")
(Individually and collectively referred to herein as the "Sublandord")
LOCATION: 5405 Eglinton Avenue West Suite 210
Toronto, Ontario M9C 5K6
(hereinafter referred to as the "Building")
PREMISES: The Sub-Tenant hereby offers to Sub-Lease approximately three
thousand ninety-one (3,091) square feet of office space on the
second (2nd) floor of the Building (hereinafter referred to as
the "Premises"). The size of said Premises is indicated on
Schedule "A" and the approximate location of said Premises is
indicated on Schedule "B", attached.
TERM: The Term of the Sub-Lease (the "Term") shall be from the First
(1st) day of June 1999 (the "Commencement Date") up to and
including May 30, 2001.
NET RENT: The "Net Rent" for the Premises shall be as follows:
June 1, 1999 May 30, 2001: Nine Dollars and zero cents ($9.00)
per rentable square foot per annum for each year of the Sublease
term.
ADDITIONAL
RENT: In addition to the Net Rent above, the Sub-Tenant shall also
pay, as "Additional Rent", its proportionate share of the
Landlord's cost of operating, maintaining and managing the
building, its proportionate share of realty taxes and cost of
hydro and any additional services or special expenses but
including janitorial services, all as more fully defined in the
Lease document, it being intended that the rent payable to the
Sub-Landlord shall be completely net. Additional Rent for the
calendar year 1999 is estimated to be ten dollars and sixty eight
cents ($10.68) per rentable square foot.
- -------------------------------------------------------------------------------
Offer to Sub-Lease, Page 1 of 7
<PAGE>
POST-DATED
CHEQUES: The Sub-Tenant shall deliver a series of post-dated cheques to
the Sub-Landlord at the beginning of the Sub-Lease Term for the
balance of the calendar year and the beginning of each calendar
year thereafter until the end of the Sub-Lease Term.
The total amount of the post-dated cheque shall include the Net
Rent and the estimated Additional Rent for the year plus GST.
The first post-dated cheque for the 1999 series of post-dated
cheques will be in the amount of five thousand four hundred
twenty four dollars and ten cents ($5,424.10) for Net and
Additional Rent for 1999 plus GST.
USE: The Premises will be used solely for the purpose of general
business offices.
DEPOSIT: The Sub-Tenant will deliver a cheque in the amount of ten
thousand eight hundred forty eight dollars and twenty cents
($10,848.20) payable to "Transmode Consultants Inc." as a
deposit for application on account of first and last month
payments of Net and estimated Additional Rent plus GST, as they
fall due once the Offer to Sub-Lease has been unconditionally
accepted by both parties.
"AS IS": The Sub-Tenant acknowledges that it has seen the Premises and
agrees to accept said Premises in an "as is" condition and shall
not call upon the Sub-Landlord to perform any Leasehold
improvements.
The Landlord hereby warrants that the Premises and its Leasehold
Improvements are in compliance with the Building Code for
Ontario and the Municipality's By-Laws in which the building is
located.
EARLY
OCCUPANCY: Provided that the Sub-Lease has been signed by the Sub-Tenant,
should the Sub-Tenant wish to occupy all or part of the Premises
prior to Commencement Date then the Sub. Tenant shall be
permitted provided that the Sub-Tenant shall be governed by all
applicable terms of the Sub-Lease as if the Sub- Lease were in
full force and effect, save only as to the Net Rent, which in no
event will commence sooner than the Commencement Date.
FREE RENT: The Sub-Landlord, with acceptance of this Offer will grant the
Sub-Tenant two (2) months of free rent (Net Rent and Additional
Rent). These two months will be applied and honored at the end
of the term (last two (2) payments of the Term).
- -------------------------------------------------------------------------------
Offer to Sub-Lease, Page 2 of 7
<PAGE>
SUB-LEASE
TERMS: The Tenancy shall be on the same terms and conditions as the
Head Lease which shall be provided to the Sub. Tenant once the
Offer to Sub-Lease has been executed by both parties, save and
except for the terms and conditions contained herewith.
DOCUMENTATION: The Offer to Sub-Lease once executed with signatures will serve
as a Sub-Lease. The Sub-Tenant will also be bound to all
conditions as stipulated In the Head Lease.
LANDLORD'S
APPROVAL: It is agreed and understood that this Offer Is subject to the
Landlord's approval, pursuant to the lease document.
Failure to secure Landlord's approval on or before May 31st 1999
shall render this Offer null and void, and the deposit shall be
returned to the ,Sub-Tenant without Interest or deduction. The
time period for Landlord approval can only be extended by
written consent of both the Sub-Landlord and the Sub-Tenant.
FINANCIAL
STANDING: The Sub-Tenant shall, upon request and subject to non-
disclosure, provide the Sub-Landlord with such Information as to
its financial standing and corporate organization as the Sub.
Landlord may reasonably require, falling which the Sub-Landlord
shall be entitled, by written notice tot he Sub-Tenant, to
terminate the agreement arising from acceptance of this Offer to
Sub-Lease and the deposit shall be returned without interest or
deduction. The Sub-Tenant agrees that the Sub-Landlord may
conduct or cause to be conducted credit Investigation or
inquiries concerning the Sub-Tenant. The Sub-Landlord shall have
the option, for five (5) days from acceptance of this Offer to
Sub- Lease, of terminating this agreement' by written notice to
the Sub-Tenant If the Sub-Landlord, in its reasonable
discretion, is not satisfied with the financial standing of the
Sub-Tenant and the deposit shall be returned without interest or
deduction.
NO
REPRESENTATION: It is understood and agreed that `there are no covenants,
representations, agreements, warranties or conditions in any way
relating to the subject matter of this Offer to Sub-Lease,
whether expressed or implied, collateral or otherwise, except
those set forth therein.
APPROVAL OF
HEAD LEASE: Within seven (7) days of execution of the Offer to Sub-Lease by
both parties, the Sub-Tenant will be given a copy of the Head
Lease. The Sub-Tenant shall have the option, for two (2) days
after receipt of the Head Lease, of terminating this Offer to
Sub- Lease by written notice to the Sub-Landlord and In such
event the deposit shall be returned to the Sub-Tenant without
interest or deduction. Failure to notify of its intent to
terminate shall constitute agreement on the part of the Sub-
Tenant with the Head Lease Agreement as a whole.
- -------------------------------------------------------------------------------
Offer to Sub-Lease, Page 3 of 7
<PAGE>
GENERAL: a) Time shall be of the essence of this Offer to Sub-Lease and
each and every party thereof.
b) The agreement arising from acceptance of this Offer to Sub-
Lease shall be governed by and construed in accordance with the
laws of the Province of Ontario.
c) The agreement resulting from the acceptance of this Offer to
Sub-Lease shall not be assigned by the Sub-Tenant without the
written consent of the Sub-Landlord.
d) All schedules referred to in this Offer to Sub-Lease are
annexed to and form part of this Offer and shall form part of
this agreement or Sub-Lease constituted by the acceptance of
this Offer.
NOTICE: Any notice to be given under the terms of this Offer to Sub-
Lease shall be sufficiently given if delivered (by hand,
courier, or registered mail) to the party for whom it is
intended or if mailed, postage prepaid, by registered mail
addressed to the party for whom it Is intended. The addresses
for notice are as follows:
Sub-Landlord: Transmode Consultants Inc.
Suite 200
1111 West Hastings Street
Vancouver, B.C. V6E 2J3
Sub-Tenant: bamboo.com Canada Inc.
Suite 210
5405 Eglinton Avenue West
Toronto, Ontario M9C 5K6
Any of the parties may change its address for notice by written
notice to the other.
Any notice given as aforementioned shall be conclusively deemed
to have been given on the date which it was delivered.
IRREVOCABLE: This Offer to Sub-Lease is irrevocable until 5:00pm May 28th
1999 after which if not accepted, It will become null and void,
and the deposit shall be returned to the Sub-Tenant without
Interest or deduction.
TELECOPYING: All parties agree that this Offer to Sub-Lease may be
transmitted by Telecopying Device and that the reproduction of
signature by way of this Telecopying Device will be treated as
though such reproductions were executed originals and each party
undertakes to proved the other with a copy of the Offer to Sub-
Lease bearing original signatures within a reasonable time after
acceptance.
- -------------------------------------------------------------------------------
Offer to Sub-Lease, Page 4 of 7
<PAGE>
SUB-TENANT: With authority, the undersigned hereby executes this Offer to
Sub-Lease.
DATED AT
------------------------
THIS DAY OF 1999.
---------- ----
--------------------------------------------------
Sub-Tenant's Signature, Authorized Signing Officer
Name:
---------------------------------------------
Title:
--------------------------------------------
SUB-LANDLORD: With authority, I/WE hereby accept the above Offer to Sub-Lease
subject to all conditions stated above Including receipt of
Deposit.
DATED AT
------------------------
THIS DAY OF 1999.
---------- ----
--------------------------------------------------
Sub-Tenant's Signature, Authorized Signing Officer
Name:
---------------------------------------------
Title:
--------------------------------------------
HEAD-LANDLORD'S
CONSENT: We hereby consent to this Offer to Sub-Lease provided that our
Tenant (the Sub-Landlord) shall remain, without benefit of
division or discussion responsible for payment and performance
of the rental, convenants, and all other obligations as
contained in the Head Lease.
-----------------------------------------
Head-Landlord's Signature
--------------------------------
Date:
- -------------------------------------------------------------------------------
Offer to Sub-Lease, Page 5 of 7
<PAGE>
[LETTERHEAD OF DOUGLAS B. POLLARD]
SCHEDULE `A'
February 4th, 1997.
Centennial Centre
5405 Eglinton Ave. West, Suite 201
Etoblocke, Ontario
M9C 5K6
Attention: Kimberley Hill
CERTIFICATE OF AREA
RE: 5405 EGLINTON AVENUE WEST
SUITE 210
This will certify that, according to our field measurements, the
area of the above premises is 3,091 square feet as per Space
Database Inc. drawing No. 540502 dated December 18, 1996.
The area was calculated according to the measurements methods
defined in the building standard lease to the outside of solid
exterior walls and to the centre line of demising walls.
Yours truly,
Douglas B. Pollard O.A.A.
oc: our file No. C5405210
- -------------------------------------------------------------------------------
Offer to Sub-Lease, Page 6 of 7
<PAGE>
SCHEDULE "B"
[Schedule B floor plan]
- -------------------------------------------------------------------------------
Offer to Sub-Lease, Page 7 of 7
<PAGE>
EXHIBIT 21.1
SUBSIDIARIES OF REGISTRANT
Bamboo.com Canada, Inc., an Ontario corporation, is the only subsidiary
of the Registrant.
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-1 of
our reports dated March 12, 1999, except for Note 13, which is as of June 11,
1999 relating to the consolidated financial statements and consolidated
financial statement schedules of bamboo.com Inc., 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
June 14, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS FOR THE TWELVE MONTH PERIOD ENDING DECEMBER 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 430
<SECURITIES> 0
<RECEIVABLES> 20
<ALLOWANCES> 1
<INVENTORY> 0
<CURRENT-ASSETS> 528
<PP&E> 258
<DEPRECIATION> 46
<TOTAL-ASSETS> 780
<CURRENT-LIABILITIES> 623
<BONDS> 0
0
925
<COMMON> 1,368
<OTHER-SE> (63)
<TOTAL-LIABILITY-AND-EQUITY> 157
<SALES> 77
<TOTAL-REVENUES> 77
<CGS> 68
<TOTAL-COSTS> 1,918
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,840)
<INCOME-TAX> (1,840)
<INCOME-CONTINUING> (1,840)
<DISCONTINUED> (1,840)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,840)
<EPS-BASIC> (0.86)
<EPS-DILUTED> (0.86)
</TABLE>
