<PAGE>

                                 EXHIBIT 10.1

                                JABBER.COM, INC
                     SERIES B CONVERTIBLE PREFERRED STOCK
                               SUMMARY OF TERMS

     This term sheet summarizes the principle terms of a proposed investment by
France Telecom Technologies, or an affiliated entity, in Jabber.com, Inc., a
subsidiary of Webb Interactive Services, Inc.  Jabber.com develops and sells
Instant Messaging software and services to enterprises, service providers and
carriers.  France Telecom R&D is positioned among the leaders of
telecommunications and Internet technologies and services, and has developed an
Instant Messaging solution of its own, called Le Messager.  France Telecom
recognizes that the market for Instant Messaging is important to its
development.  In January 2001, Wanadoo, a subsidiary of France Telecom, received
a commercial license to use Jabber 2.0 software.  Jabber.com and France Telecom
intend to jointly leverage the research and development assets of France Telecom
R&D and the architectural platform of Jabber.com for use in Europe.


Issuer:               Jabber.com, Inc. (the "Company")

Amount of Financing:  $7 million

Type of Security:     Series B Convertible Preferred Stock (the "Series B
                      Preferred"), initially convertible on a 630.52:1 basis
                      into shares of the Company's Common Stock (the "Common
                      Stock").

Price:                $1,000.00 per share (the "Original Purchase Price"), which
                      price equates to a $1.586 per share price on a 1:1
                      conversion basis. No fractional shares will be issued. The
                      Original Purchase Price represents a fully-diluted
                      (including 2,559,848 currently outstanding options) pre-
                      money valuation of $25,000,000 plus $3,014,847 from the
                      exercise of options. A pro forma capitalization table
                      showing the company's capital structure immediately after
                      the completion of a $7,000,000 investment and conversion
                      of accounts payable (see "Conversion of Accounts Payable"
                      below) is attached hereto as Exhibit A.

Investor:             France Telecom Technologies, or an affiliated entity, will
                      be the investor ("Investor").

Bridge Loan:          The parties anticipate that, contemporaneously with the
                      execution of this Term Sheet, the Investor will lend the
                      Company $2,500,000 pursuant to that certain Note Purchase
                      Agreement dated the date hereof (the "Loan"), which Loan
                      will be secured by the assets of the Company and the
                      shares of the Company owned by Webb Interactive Services,
                      Inc.


<PAGE>

Investment Timing
And "Closing":      On or before July 2, 2001 ("Closing"), the Company will
                    convert the then outstanding principal amount of the Loan
                    into shares of Series B Preferred at the Original Purchase
                    Price.  On or about September 1, 2001, the Investor will
                    purchase $2,500,000 worth of shares of Series B Preferred,
                    at the Original Purchase Price.  On or prior to January 31,
                    2002, the Company will prepare and deliver to the Investor
                    an income statement, which may be unaudited, for the fiscal
                    year ended December 31, 2001 ("Income Statement").  If the
                    Income Statement shows the Company's 2001 net revenues to be
                    equal to or greater than $3,962,000, then (i) the Company
                    shall have the option to require the Investor to purchase an
                    additional $2,000,000 worth of Series B Preferred at the
                    Original Purchase Price and (ii) the Investor, in the
                    Investor's sole discretion, shall have the right, but not
                    the obligation, to purchase $2,000,000 worth of Series B
                    Preferred at the Original Purchase Price.  If the Company's
                    2001 revenues as reflected on the Income Statement are
                    either less than $3,962,000 or greater than $6,603,000, then
                    the Investor and the Company may mutually decide whether the
                    Investor shall purchase $2,000,000 worth of Series B
                    Preferred at a price to be mutually agreed upon.
                    Notwithstanding the foregoing, (A) if the Company's 2001
                    revenues are less than $3,962,000, the Investor shall have
                    the right to exercise the option, in its sole discretion, to
                    purchase $2,000.000 worth of Series B Preferred at the
                    Original Purchase Price, and (B) if the Company's 2001
                    revenues are greater than $6,603,000, the Company shall have
                    the option to require the Investor, at the Company's sole
                    discretion, to purchase $2,000,000 worth of Series B
                    Preferred at the Original Purchase Price.

Conversion of
Accounts
Payable:            Immediately upon the signing of this Term Sheet, Webb
                    Interactive Services, Inc. ("Webb") shall, and the Company
                    shall take all necessary action to, convert all outstanding
                    accounts payable of the Company to Webb (which accounts
                    receivable total $7,871,099) into shares of series C
                    preferred stock of the Company ("Series C Preferred") at the
                    Original Purchase Price.  In addition, immediately upon the
                    signing of this Term Sheet, the Company shall take all
                    necessary action to convert, as of the Closing,  all
                    outstanding accounts payable of the Company to Diamond
                    Technologies Partners (in the amount of $680,000) into
                    shares of Series B Preferred at the Original Purchase Price.


                                       2
<PAGE>

TERMS OF SERIES B PREFERRED STOCK

Dividends:          The holders of the Series B Preferred shall be entitled to
                    receive cumulative dividends in preference to any dividend
                    on the Common Stock at the rate of 8% of the Original
                    Purchase Price per annum, when and as declared by the Board
                    of Directors.  Any accrued but unpaid dividends will be
                    payable upon an acquisition or liquidation of the Company.
                    The holders of Series B Preferred also shall be entitled to
                    participate pro rata in any dividends paid on the Common
                    Stock on an as-if-converted basis.

Liquidation
Preference:         In the event of any liquidation or winding up of the
                    Company, the holders of the Series B Preferred shall be
                    entitled to receive in preference to the holders of the
                    Common Stock, the Series A and Series C Preferred Stock, an
                    amount equal to the Original Purchase Price of the Series B
                    Preferred plus any accrued but unpaid dividends (the
                    "Liquidation Preference"). After the payment of the
                    Liquidation Preference to the holders of the Series B
                    Preferred, the remaining assets shall be distributed ratably
                    to the holders of the Series A and the Series C Preferred
                    Stock and then to the holders of the Common Stock and the
                    Series A, B and C Preferred on a common equivalent basis. A
                    merger, acquisition, sale of voting control or sale of
                    substantially all of the assets of the Company in which the
                    shareholders of the Company do not own a majority of the
                    outstanding shares of the surviving corporation shall be
                    deemed to be a liquidation.

Conversion:         The holders of the Series B Preferred shall have the right
                    to convert the Series B Preferred, at any time, into shares
                    of Common Stock.  The initial conversion rate shall be
                    630.52:1, subject to adjustment for accrued but unpaid
                    dividends as provided below, which amounts shall be
                    convertible into shares of Common Stock at the initial
                    conversion rate.

Automatic
Conversion:         The Series B Preferred shall be automatically converted
                    into Common Stock, at the then applicable conversion price,
                    (i) in the event that the holders of at least a majority of
                    the outstanding Series B Preferred consent to such
                    conversion, or (ii) upon the closing of a firmly
                    underwritten public offering of shares of Common Stock of
                    the Company for a total offering of not less than
                    $30,000,000 (before deduction of underwriters commissions
                    and expenses) (a "Qualified IPO").

Antidilution
Provisions:         The conversion price of the Series B Preferred will be
                    subject to full ratchet antidilution adjustment in the event
                    that the Company issues additional equity securities (other
                    than the reserved


                                       3
<PAGE>

                    employee shares described under "Employee and Consultant
                    Option Pool" below) at a purchase price less than the
                    applicable conversion price. The conversion price will also
                    be subject to proportional adjustment for stock splits,
                    stock dividends, recapitalizations and the like.

Voting Rights:      The Series B Preferred will vote together with the Common
                    Stock and not as a separate class except as specifically
                    provided herein or as otherwise required by law.  Each share
                    of Series B Preferred shall have a number of votes equal to
                    the number of shares of Common Stock then issuable upon
                    conversion of such share of Series B Preferred.

Board of Directors: The holders of the Series B Preferred, voting as a class,
                    shall be entitled to elect one member of the Company's Board
                    of Directors.  The other members shall be elected by holders
                    of the Common Stock and the Preferred Stock, voting
                    together.

Protective
Provisions:         For so long as the Investor holds any shares of Series B
                    Preferred with an Original Purchase Price of at least $2.75
                    million, the consent of a majority of the Series B Preferred
                    voting as a separate class shall be required for any action
                    that (i) alters or changes the rights, preferences or
                    privileges of the Series B Preferred; (ii) increases or
                    decreases the authorized number of shares of Common or
                    Preferred Stock; (iii) creates (by reclassification or
                    otherwise) any new class or series of shares having rights,
                    preferences or privileges senior to or on a parity with the
                    Series B Preferred; (iv) results in the redemption of any
                    shares of Common Stock (other than pursuant to employee
                    benefit plans or equity incentive agreements with service
                    providers giving the Company the right to repurchase shares
                    upon the termination of services); (v) results in any
                    merger, other corporate reorganization, sale of control, or
                    any transaction in which all or substantially all of the
                    assets of the Company are sold; (vi) amends or waives any
                    provision of the Company's Certificate of Incorporation or
                    Bylaws relative to the Series B Preferred; (vii)  results in
                    the sale, transfer or disposition of any intellectual
                    property of the Company; or (viii) subject to the following
                    terms and conditions, results in sale of any Common or
                    Preferred Stock of the Company to one of the ten (10)
                    companies identified by the Investor to the Company in
                    writing on or before the Closing (with the Investor having
                    the annual right to change two out of the seven (7) Category
                    II (as defined below) companies identified by the Investor.
                    Investor will divide the ten (10) companies into two
                    categories, Category I and Category II.  In each case, a
                    Category I or Category II company shall include a successor
                    to such company.  Each of the companies in Category I



                                       4
<PAGE>

                    shall be based in Europe. For the Category I companies, the
                    Company may sell an equity interest in the Company
                    representing up to 20% of the Company's outstanding equity
                    interest following any such sale without Investor's consent,
                    providing that the Company does not grant such investor with
                    a Board seat or Protective Provisions. In the case of
                    Category II companies, the Company may sell to any such
                    company an equity interest in the Company representing up to
                    20% of such equity interest following any such sale without
                    Investor's consent but may not provide such Investor with
                    Protective Provisions, provided that all such Category II
                    investors may as a group be granted no more than one Board
                    seat. In addition, if the Company receives a bona fide offer
                    from a Category II company to purchase more than a 20%
                    equity interest in the Company at a purchase price that is
                    three times or more than the price paid by the Investor for
                    its equity interest in the Company, Investor, or its
                    designee that is reasonably acceptable to the Company, shall
                    have the right to purchase all of the equity securities
                    offered to be purchased by the Category II company on the
                    same terms and conditions as those offered, but Investor
                    shall not otherwise have the right to approve such sale.

Information Rights: So long as the Investor continues to hold shares of Series B
                    Preferred or any shares of Common Stock issued upon
                    conversion of the Series B Preferred, the Company shall
                    deliver to the Investor audited annual and unaudited
                    quarterly financial statements.  So long as an Investor
                    holds any shares of Series B Preferred or Common Stock
                    issued upon conversion of the Series B Preferred, the
                    Company will furnish the Investor with monthly financial
                    statements and will provide a copy of the Company's annual
                    operating plan within 30 days prior to the beginning of the
                    fiscal year.  The Investor shall also be entitled to
                    standard inspection and visitation rights.  These provisions
                    shall terminate upon a Qualified IPO.

Registration
Rights:             Demand Rights:  If Investors holding 50% or more of the
                    outstanding shares of Series B Preferred, including Common
                    Stock issued on conversion of Series B Preferred
                    ("Registrable Securities"), request that the Company file a
                    Registration Statement having an aggregate offering price to
                    the public of not less than $10,000,000, the Company will
                    use its best efforts to cause such shares to be registered;
                    provided, however, that the Company shall not be obligated
                    to effect any such registration prior to the third
                    anniversary of the Closing.  The Company shall have the
                    right to delay such registration under certain circumstances
                    for one periods not in excess of ninety (90) days each in
                    any twelve (12) month period.



                                       5
<PAGE>

                    The Company shall not be obligated to effect more than two
                    (2) registrations under these demand right provisions, and
                    shall not be obligated to effect a registration (i) during
                    the ninety (90) day period commencing with the date of the
                    Company's initial public offering, or (ii) if it delivers
                    notice to the holders of the Registrable Securities within
                    thirty (30) days of any registration request of its intent
                    to file a registration statement for a Qualified IPO within
                    90 days.

                    Company Registration:  The Investors shall be entitled to
                    piggy-back" registration rights on all registrations of the
                    Company or on any demand registrations of any other investor
                    subject to the right, however, of the Company and its
                    underwriters to reduce the number of shares proposed to be
                    registered pro rata in view of market conditions.

                    S-3 Rights: Investors shall be entitled to two (2) demand
                    registrations on Form S-3 per year (if available to the
                    Company).

                    Expenses: The Company shall bear registration expenses
                    (exclusive of underwriting discounts and commissions) of all
                    such demands, piggy-backs, and the S-3  registrations
                    (including the reasonable expense of one special counsel for
                    the selling shareholders).

                    Transfer of Rights: The registration rights may be
                    transferred to any transferee who acquires at least 10,000
                    shares of Registrable Securities; provided the Company is
                    given written notice thereof.

                    Standoff Provision:  No Investor holding 1% or more of the
                    Company will sell shares within a specified period of time
                    before or after the effective date of the Company's initial
                    public offering if all officers, directors, and other 1%
                    shareholders are similarly bound by a standoff or lockup
                    agreement with the underwriter.

                    Other Provisions:  Other provisions shall be contained in
                    the Stock Purchase Agreement with respect to registration
                    rights as are reasonable, including cross-indemnification,
                    the period of time in which the Registration Statement shall
                    be kept effective, and underwriting arrangements.

Right of First
Refusal:            The Investor shall have the right in the event the Company
                    proposes to offer equity securities to any person (other
                    than securities issued to employees, directors or
                    consultants after the date of this Summary of Terms) (a
                    "Sale of Securities") to


                                       6
<PAGE>

                    purchase such portion of the offered amount of the new
                    securities that enables the Investor to maintain its
                    percentage of ownership of the Company on a fully diluted
                    basis existing as of the time of the Sale of Securities. If
                    the Investor does not purchase such securities, the
                    securities may be offered to other parties on terms no less
                    favorable to the Company for a period of 45 days. Such right
                    of first offer will terminate upon a Qualified IPO.

Purchase Agreement: The investment shall be made pursuant to a Stock Purchase
                    Agreement reasonably acceptable to the Company and the
                    Investor, which agreement shall contain, among other things,
                    appropriate representations and warranties of the Company
                    and Webb with respect to intellectual property rights,
                    litigation, and other customary representations and
                    warranties and appropriate conditions of closing, including
                    an opinion of counsel for the Company.  Registration rights
                    provisions may be amended or waived solely with the consent
                    of the holders of two-thirds of the Registrable Securities.

EMPLOYEE MATTERS

Employee and
Consultant
Option Pool:        Upon the Closing of this financing there will be no more
                    than 3,820,000 shares of Common Stock reserved for future
                    issuance to key employees  and consultants.

Stock Vesting:      All options issued after the Closing to employees,
                    directors, consultants and other service providers will be
                    subject to vesting as follows:  33 1/3% to vest at the end
                    of the first year following such issuance, with the
                    remaining 66 2/3% to vest annually over the next two years.

Restrictions on
Sales:              Until a qualified IPO, the Company shall have a right to
                    repurchase from employees within one (1) year following
                    termination of employment, all stock issued on exercise of
                    options.

Proprietary
Information
and Inventions
Agreement:          Each officer, employee and consultant of the Company shall
                    enter into an acceptable proprietary information and
                    inventions agreement.

Co-Sale Agreement:  The shares of the Company's securities held by Webb shall be
                    made subject to a co-sale agreement (with certain reasonable
                    exceptions) with the holders of the Series B Preferred such
                    that Webb may not sell, transfer or exchange its stock
                    unless each holder of Series B Preferred has an opportunity
                    to participate in the



                                       7
<PAGE>

                    sale on a pro-rata basis. In addition to the Co-Sale right
                    provided above, Webb further agrees that, except as provided
                    below, it will not sell a portion of its securities of the
                    Company which represent more than 20% of the Company's then
                    outstanding equity securities to either a Category I or
                    Category II company without Investor's prior written
                    consent, provided that if Webb receives an offer to purchase
                    a portion of its interest in the Company that exceeds such
                    20% equity interest from a Category II company at a price
                    that is three times or more than the price paid by Investor
                    for its interest in the Company, Investor, or its designee
                    that is reasonably acceptable to Webb, shall have the right
                    of first refusal to purchase all such securities proposed to
                    be sold on the same terms and conditions as the offer, but
                    Webb shall not otherwise be required to obtain Investor's
                    consent to any such sale. The foregoing rights shall not
                    apply to and shall terminate upon a Qualified IPO.

OTHER MATTERS


Conditions
Precedent to
the Closing:        1. Completion of legal documentation satisfactory to the
                       prospective Investor.
                    2. Satisfactory completion of due diligence by the Investor.
                    3. Submission of detailed milestones for the next 12 months
                       satisfactory and acceptable to the Investor.
                    4. A review of employee stock arrangements and, if
                       necessary, modifications or amendments thereto.
                    5. Execution and delivery of a Research and Development
                       Agreement between the Company and the Investor with
                       respect to the joint development of the Company's
                       technology on terms satisfactory to the Company and the
                       Investor.  The parties contemplate that the Research and
                       Development Agreement  will allow the Investor and the
                       Company to jointly evaluate the technical changes
                       necessary with respect to the Company's software to
                       enhance its utility in the European market.
                    6. The Company shall have granted to the Investor and
                       affiliated entities identified by the Investor, a license
                       to use the Company's software JCS 2.1 or higher on terms
                       to be agreed upon by the parties prior to Closing.

Finders:            The Company and the Investor shall each indemnify the other
                    for any broker's or finder's fees for which either is
                    responsible.



                                       8
<PAGE>

Auditors:           The Company will engage a qualified local accounting firm to
                    perform an annual audit of the Company's financial
                    statements, with the report of such auditors to be included
                    in the year-end financial statements delivered to Investors.

Inspection:         It is understood that prior to executing definitive
                    agreements and as a part of the negotiation process, the
                    Investor and its representatives will conduct a business,
                    financial and legal review of the Company and its business.
                    By your acceptance of this proposal, you understand that you
                    will cooperate fully in this review and will provide such
                    information concerning the Company's business as the
                    Investor may reasonably request and will provide the
                    Investor with reasonable access to the Company's business
                    premises, key employees, customers and to all relevant
                    books, records, contracts and other documents.  The Company
                    will provide the Investor access to key employees and
                    customers after the definitive agreement is executed.  The
                    Investor expects to commence a due diligence review promptly
                    after execution of this letter of intent, and anticipates
                    that all parties will make a good faith effort to negotiate
                    the definitive agreements as expeditiously as practicable
                    following substantial completion of due diligence.  The
                    Investor further understands by your acceptance of this
                    proposal that, pending the execution of the definitive
                    agreements, you will use your best efforts to cause the
                    Company to continue to diligently carry on its business, to
                    retain its key employees and maintain its existing
                    relationships with its customers and suppliers.

Publicity:          No party will make any public or private announcement
                    concerning the subject matter of this letter without the
                    prior consent of the others except, the Company shall comply
                    with applicable U.S. federal securities laws and any SEC
                    rules and regulations requiring public announcements
                    pertaining to any necessary disclosure of this Summary of
                    Terms and the Definitive Agreement.

No Solicitation/
Termination of
Dealings:           The foregoing is not intended to be exhaustive, but merely
                    an outline of the basic terms of the Investor's proposal.
                    This letter constitutes solely a letter of intent and is not
                    intended to create a binding obligation on the part of any
                    party to consummate the transactions contemplated hereby,
                    but is merely for the purposes of setting forth our mutual
                    intentions and providing a basis for the preparation of
                    definitive agreements. However, your execution of this
                    letter will constitute your binding agreement (both on
                    behalf of the Company and the Company's directors, officers,
                    employees, agents and affiliates) that you will, subsequent
                    to the date hereof,


                                       9
<PAGE>

                    (i) cease all present negotiations or discussions with other
                    parties with respect to the sale of the Company (whether by
                    asset sale, stock sale, merger or otherwise); (ii) not
                    solicit, encourage or initiate any proposal with, negotiate,
                    discuss or otherwise communicate with or furnish or cause to
                    be furnished any information to, or otherwise cooperate with
                    or enter into any agreement or contract with, any person,
                    corporation, firm or other entity other than the Investor
                    with respect to any proposal for the disposition of all or a
                    substantial portion of the assets, stock or equity interest
                    of the Company; and (iii) proceed to negotiate in good faith
                    toward the end of executing a mutually acceptable purchase
                    agreement and related documentation. In the event the
                    Company or Webb receives any offer or proposal, directly, or
                    indirectly of the type referred to in clause (i) or (ii)
                    above, it shall promptly notify Investor as to any such
                    offer or proposal and will furnish a copy of such offer or
                    proposal to Investor, together with any information relating
                    thereto it may reasonably request. The foregoing commitment
                    shall expire upon the earlier to occur of (i) 60 days from
                    the date of your execution hereof, or (ii) receipt of a
                    written notice from Investor stating its intention to
                    terminate negotiations with respect to the transactions
                    contemplated herein. In the event and to the extent either
                    the Company or Webb breach the obligations set forth in the
                    paragraphs entitled "Publicity" or No Solicitation/
                    Termination of Dealings" in any manner, you agree that the
                    Company shall be liable to us for any and all damages that
                    the Investor may suffer as a result of your breach, and
                    shall entitle the wronged party to appropriate injunctive
                    and/or other equitable relief.

Costs:              The Investor, the Company and Webb will be responsible for
                    and bear all of their own costs and expenses (including the
                    expense of its representatives and advisors) incurred at any
                    time in connection with pursuing or consummating the
                    transactions contemplated herein.

Non-binding Intent: Except with respect to the terms of the paragraphs entitled
                    "Publicity" or No Solicitation/Termination of Dealings",
                    which shall bind the parties, the transaction will be
                    binding upon the parties only in accordance with the terms
                    contained in the definitive purchase agreements and only if,
                    as and when such agreements have been executed by all
                    parties.



                                       10
<PAGE>

If the foregoing proposal meets with your approval, please indicate your
acceptance by executing this letter where indicated below and returning, within
five business days one executed copy to my attention.  I look forward to working
with you to conclude this transaction in a timely fashion.

                              Very truly yours,

                              France Telecom Technologies


                              By:     /s/ Eric Cozanet
                                      ------------------------------------------
                              Name:   Eric Cozanet
                              Title:  Director General


                              France Telecom


                              By:     /s/ F. Janet
                                      ------------------------------------------
                              Name:   F. Janet
                              Title:

Acknowledged and agreed to this
2nd day of May, 2001.

                              Jabber.com, Inc.


                              By:     /s/ Robert Balgley
                                      ------------------------------------------
                              Name:   Robert Balgley
                              Title:  President and Chief Executive Officer

                              Webb Interactive Services, Inc.


                              By:     /s/Gwenael Hagan
                                      ------------------------------------------
                              Name:   Gwenael Hagen
                              Title:  Senior Vice President Corporate
                                      Development

cc:  Davis Graham & Stubbs LLP
     Mr. Chris Richardson, Esq.
     1550 Seventeenth Street, Suite 500
     Denver, Colorado 80202
     (303) 892-7420



                                       11
<PAGE>

                                   Exhibit A
                                   ---------

                               Jabber.com, Inc.
                     Liabilities and Stockholders' Equity
                                April 30, 2001

The following table shows Jabber.com's liabilities and stockholders' equity at
April 30, 2001 and as adjusted to show the affect of the proposed issuance of
Series B Preferred Stock to Investor and the conversion of certain outstanding
liabilities into Series B and Series C Preferred Stock.

<TABLE>
<CAPTION>
Current liabilities                                                                    Actual       As Adjusted
                                                                                    -------------  -------------
<S>                                                                                 <C>            <C>
  Accounts payable and accrued liabilities (1)                                      $    761,136   $        ---
  Accrued salaries and payroll taxes payable                                             329,097        329,097
  Customer deposits and deferred revenue                                                  48,080         48,080
  Advances from parent (2)                                                             7,789,963            ---
                                                                                    ------------   ------------

               Total current liabilities                                            $  8,441,662   $    377,177

Stockholders' equity
  Preferred stock, $.01 par value (20,000,000 shares authorized)
     Series A - 8,800,000 shares outstanding  (liquidation value - $.50 per         $  4,400,000   $  4,400,000
     share)(3)
     Series B - 7,710 shares outstanding (liquidation value - $1,000 per                     ---      7,710,000(4)
     share)
     Series C - 7,871 shares outstanding (liquidation value - $1,000 per                     ---      7,871,000(5)
     share)
  Common stock, $.01 par value (30,000,000 shares authorized)
     912,500 shares outstanding (4)                                                      523,700        523,700
      Warrants and options                                                                30,000         30,000
       Deferred compensation                                                            (112,403)      (112,403)
  Accumulated deficit(7)                                                             (10,158,066)   (10,158,066)
                                                                                    ------------   ------------

               Total stockholders' equity                                           $ (5,316,769)  $ 10,264,231
                                                                                    ------------   ------------

               Total liabilities and stockholders' equity                           $  3,708,610   $ 10,641,408
                                                                                    ============   ============
</TABLE>

_______________

(1)  Includes $680,000 payable to Diamond Technologies Partners.  This
     obligation is to be converted into Series B Preferred Stock at Closing.
     Balance will be included in amount advanced by parent and converted into
     Series C Preferred stock on signing of LOI.
(2)  To be converted into Series C Preferred stock of the Company.


                                      A-1
<PAGE>

(3)  Shares issued to parent in connection with formation of the Company in
     consideration for transfer to the Company of all of parent's rights/assets
     relative to the Company's business.  Convertible into 8,800,000 shares of
     Common Stock.
(4)  Based on $7,000,000 investment, interest of $30,000 on note assuming note
     outstanding for 45 days and conversion of $680,000 payable to Diamond
     Technologies Partners.  Convertible at $1.586 per share into an aggregate
     of 4,861,286 shares of common stock.
(5)  Convertible at $1.586 per share into an aggregate of 4,962,799 shares of
     common stock.
(6)  Does not include 3,820,000 shares reserved for options under the Company's
     2000 Stock Option Plan, including options for an aggregate of 2,559,848
     shares granted to employees of the Company and its parent.  Also does not
     include a Warrant representing the right to acquire 50,000 shares issued to
     VA Linux in consideration for placement of the Company's instant messaging
     software on VA Linux's websites.  Exercise price of Warrant to be based on
     first external funding.
(7)  Subject to adjustment for April revenue of approximately $91,000.


                                      A-2