10KSB

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB

(Mark One)

x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2004.

OR

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from              to             .

Commission File No. 0-28462

WEBB INTERACTIVE SERVICES, INC.

(name of Small business Issuer in its Charter)

Colorado	84-1293864
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1899 Wynkoop, Suite 600, Denver, CO	80202
(Address of principal executive offices)	(Zip Code)

Issuer’s Telephone Number, Including Area Code: (303) 308-3180

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, no par value

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB  x.

Issuer’s revenues for fiscal year ended December 31, 2004 were $0

The aggregate market value of voting and non-voting common equity held by non-affiliates of registrant as of March 31, 2005 was approximately $6,051,491.

The number of shares outstanding of the registrant’s common stock, no par value, as of March 31, 2005 was 25,433,552.

DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable.

Transitional Small Business Disclosure Format (check one).    Yes  ¨    No  x

PART I

Item 1. DESCRIPTION OF BUSINESS.

General

Our sole business is the ownership of securities of Jabber, Inc. (Jabber), a company we formed in February 2000. Jabber is a commercial developer of extensible instant messaging software for enterprises, government agencies, carriers and service providers and distribution partners that require real-time communication and collaboration solutions. Jabber’s products are based on the standardized extensible message and presence protocol, XMPP, developed by the Jabber.org open-source movement. Jabber instant messaging solutions differ from packaged and consumer instant messaging solutions in their ability to support and to be integrated with other applications and services.

We were incorporated under the laws of the State of Colorado on March 22, 1994. Our executive offices are located at 1899 Wynkoop, Suite 600, Denver, Colorado 80202, telephone number (303) 308-3180.

Our annual report on Form 10-KSB, quarterly reports on Form 10-QSB, current reports on Form 8-K, and all amendments to such reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act are available, free of charge, on or through our Internet website located at www.webb.net, as soon as reasonably practicable after they are filed with or furnished to the Securities and Exchange Commission.

Jabber Financing

On April 8, 2005, Jabber sold 8,571,428 shares of its series E convertible preferred stock (“series E preferred stock”) for $1.5 million to Jona, Inc., our largest shareholder. As a result of the transaction, Webb’s ownership interest in Jabber was reduced from approximately 43% to approximately 38% of Jabber’s outstanding common stock on an as-if converted basis. The investor also acquired an option which expires on December 28, 2005 to purchase up to an additional 11,428,572 shares of the series E preferred stock for $2 million. In the event all of the additional shares are purchased, Webb’s ownership interest in Jabber would be reduced to approximately 33% of Jabber’s then outstanding common stock on an as-if converted basis.

On March 19, 2003, France Telecom Technologies Investissements (FTTI), a wholly-owned subsidiary of France Telecom, Intel Capital Corporation (Intel), a wholly-owned subsidiary of Intel Corporation, and Webb purchased an aggregate of 25,218,914 shares of Jabber series D convertible preferred stock (“series D preferred stock”) for $7.2 million. At April 15, 2005, Webb owned 18,550,232 shares of Jabber common stock and 7,705,779 shares of Jabber series D preferred stock.

The series E and D preferred stock are convertible into shares of Jabber’s common stock on a one-for-one basis. The sale of the series E preferred stock required the approval of two holders of the series D preferred stock. The sale of the series E preferred stock was approved by FTTI and Intel, but not by Webb. In connection with the purchase of the series E preferred stock, Jona, Inc. also purchased from Intel a portion of its series D preferred stock.

The series E and D preferred stock include liquidation preferences which entitle the holders of the preferred stock on the liquidation of Jabber, including a sale of Jabber, to first be paid their original purchase price for their preferred stock and then to participate with holders of common stock on an as-converted basis in the distribution of the remaining proceeds. The conversion price of the preferred stock would be adjusted on a weighted average basis in the event that Jabber sells shares of its common stock or securities convertible into or exercisable for its common stock at a price less than the original purchase prices for the preferred stock.

Without the prior approval of the holder of the series E preferred stock and holders of 66 2/3% of the outstanding shares of series D preferred stock, Jabber may not engage in any transaction or arrangement for the distribution of Jabber’s securities to the public; permit any transaction which would result in any of the holders of the preferred stock owning more than 49% of Jabber’s outstanding shares of capital stock; or take any other action that would result in Jabber becoming a reporting company under the Securities Exchange Act of 1934. If an event

-2-

has not occurred by January 1, 2005, that would permit Webb to distribute its Jabber securities to Webb shareholders, Webb may require FTTI, on an annual basis until such an event has occurred, to sell Webb 1,000,000 shares of the Jabber common stock held by FTTI, at a purchase price equal to the conversion price for the series D preferred stock plus interest compounded at 15% per annum.

Investment Considerations

Investors should consider all of the information contained in this report including the factors discussed under Item 1 – Description of Business –Factors That May Affect Future Results, Item 6 – Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 7 – Financial Statements before making an investment decision with regard to our securities.

Some of the statements made in this report constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to the safe harbor provisions of the reform act. Forward-looking statements may be identified by the use of terminology such as may, will, expect, anticipate, intend, believe, estimate, should, or continue or the negatives of these terms or other variations on these words or comparable terminology. To the extent this report contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of our or Jabber’s business, you should be aware that our and Jabber’s actual financial condition, operating results and business performance may differ materially from that projected or estimated by us in the forward-looking statements. We have attempted to identify, in context, some of the factors we believe may cause actual future experience and results to differ from their current expectations. These differences may be caused by a variety of factors, including but not limited to adverse economic conditions, intense competition, including entry of new competitors, inability to obtain sufficient financing to support our or Jabber’s operations, progress in research and development activities, variations in costs that are beyond our or Jabber’s control, adverse federal, state and local government regulation, unexpected costs, lower sales and net income, or higher net losses than forecasted, price increases for equipment, inability of Jabber to raise prices, failure of Jabber to obtain new customers, the possible fluctuation and volatility of Jabber’s operating results and financial condition, Jabber’s inability to carry out marketing and sales plans, Jabber’s loss of key executives, and other specific risks that may be alluded to in this report. The information in this report has been provided by Webb and Webb is solely responsible for its accuracy.

Jabber, Inc.

The Market. Instant messaging (IM) combines communication, presence awareness and convenience to provide users with the opportunity for personal real-time interaction. IM adds to e-mail and telephone communications technologies presence management, buddy lists and collaboration on a small or large scale. IM enables users to know when someone is available for a conversation; buddy list management allows individuals to vary their availability for interaction depending on who is seeking to communicate with them; and presence management can extend beyond the desktop to mobile devices, allowing for “find me, follow me” services. Jabber is targeting the following markets:

• Financial Services - Financial services firms, including investment banks, brokerages, commodity traders, and hedge funds depend on timely information to speed the throughput and volume of financial transactions and to gain a competitive edge. Jabber’s solutions are used to build real-time transactional trading systems and delivering up-to-the-minute information to the financial services work force. Deployments at major firms typically require customization and integration services.

• Government Agencies - Government agencies, including federal intelligence agencies and state agencies, are deploying Jabber’s solutions to facilitate real-time communication exchange between intra- and inter-agency users. These agencies are able to bridge the gap between traditional independent sources of information, knitting together the right people at the right time, which may be particularly useful in times of crisis. Deployments at government agencies typically require customization and integration services.

• Carriers and Service Providers – Carriers and service providers, including land-line and mobile telecommunication providers and internet service providers, use Jabber’s solution to provide IM services

-3-

for their customers. Deployments by carriers and service providers typically require customization and integration services.

• Technology OEMs - Technology companies who create and sell their own technology solutions use Jabber’s solutions to extend real-time presence information into their core products. These companies select Jabber because it is open, extensible, scalable, and standards-based, and gives them a time-to-market advantage when compared to building their own presence-based solution.

Jabber.org. Jabber.org was established in 1998 to create a new, open-source movement designed to bridge the proprietary IM networks by creating a single system capable of communicating with all IM networks and services. The Jabber.org IM protocol, XMPP, has been approved by the Internet Engineering Task Force as an internet standard. Jabber.org standardized on three key principles:

• Open-source development. Jabber.org technology is based on open-source development taking place at www.jabber.org. As an open-source movement, anyone can leverage and contribute to the future of Jabber.org. Jabber IM is based on modular software design which facilitates quick integration of new server logic and business practices, as well as the development of new IM-based applications.

• System, not a service. Jabber IM, like e-mail, is based on a network of distributed servers which communicate with each other. As a system, it is believed that Jabber IM will be better able to accommodate differing business models, development of value-added applications and use in an application service provider environment.

• XML technology. Jabber.org uses XML technology for transmitting presence and messaging status in order to have a standards-based structured document as part of the native protocol of the messaging platform. By standardizing on XML, Jabber IM systems have improved cross-platform compatibility and the ability to create enhanced applications around the concepts of message warehousing, message mining and anything that requires the routing of structured content.

In early 1999, Webb became a commercial sponsor of Jabber.org. Webb’s initial interest in the Jabber.org technology was based on Webb’s desire to leverage the Jabber IM platform to provide IM services for Webb’s former AccelX product line which also utilized XML technology. Webb formed Jabber, Inc. as a subsidiary on February 15, 2000, in order to commercialize Jabber IM separately from its former AccelX business.

Relationship of Jabber.org and Jabber. Open-source software is free in the sense that the software’s source code is freely available for inspection and modification. A condition to open-source licenses under which the software is made available is that anyone who makes an improvement or modification to the software generally must contribute the improvements and modifications back to the open-source community. At the core of the open-source community is a voluntary group of people dedicated to developing a variety of software packages. The community includes the engineers who create the software, the writers who document it and the designers who create the web sites that serve as the community’s home on the internet. Jabber is a commercial sponsor of the Jabber.org open-source movement. This sponsorship includes dedicating the services of a number of Jabber’s employees to work on XMPP-related projects and promoting the more rapid deployment of the XMPP protocol.

Jabber.org software is provided to the community and others under the Jabber Open Source License (JOSL), an Open Source Initiative approved open-source license. Like other open-source licenses, the JOSL requires that modifications or improvements to the core Jabber IM software be contributed back to the community. The JOSL, like some other more recent open-source licenses, has a narrower definition of derivative works than does the GNU General Public License, one of the first and best known open-source licenses. This allows code to be linked to the core open-source software without requiring that the linked code be covered by the JOSL and, therefore, to be made freely available. Software developed by Jabber may be released under the JOSL or under commercial license agreements that do not make the software code freely available. For example, the Jabber Commercial Server IM software is made available only pursuant to a commercial license which does not include

-4-

free access to the source code. The Jabber Commercial Server software is, however, fully compatible with the free Jabber IM software.

Employees

At March 31, 2005, Webb had 1 employee in a management position. Webb contracts with Jabber for financial and accounting services.

Management

Officers of Webb are as follows:

Name	Age	Position
Lindley Branson	62	Vice President and General Counsel – Webb; Secretary and General Counsel – Jabber

Lindley Branson, joined Webb as Vice President and General Counsel in May 1999 and has served as Secretary and General Counsel of Jabber since its formation in February 2000. Mr. Branson has been a partner with the Minneapolis law firm of Gray, Plant, Mooty, Mooty & Bennett, P.A. for more than thirty years, with an emphasis in corporate finance, mergers and acquisitions and general corporate law.

FACTORS THAT MAY AFFECT FUTURE RESULTS

Webb, as a holding company, has no independent source of revenue or business other than the ownership of securities of Jabber, Inc., a company formed by Webb in February 2000. Webb currently owns approximately 38% of Jabber’s outstanding common stock on an as-if converted basis. Factors that may affect our and Jabber’s future results include, but are not limited to, the following items as well as the information in Item 6 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Factors Relating to Webb

Additional funding for Jabber could reduce further our ownership interest in Jabber. Jabber raised $1.5 million of operating capital through a sale of its series E preferred stock on April 8, 2005 in a transaction that included an option to purchase on the same terms up to $2 million worth of additional shares of series E preferred stock. In the event that Jabber obtains additional equity investments by the sale of the additional shares of series E preferred stock or otherwise, Webb’s percentage ownership of Jabber would be further reduced.

We expect to continue to incur net losses. We have incurred net losses since we began our business totaling approximately $120.2 million through December 31, 2004, including approximately $67 million of non-cash expenses. We expect to incur additional net losses during fiscal 2005 and thereafter for so long as Webb remains a holding company.

We will need to raise additional working capital to sustain our operations and to remain a reporting company. Webb estimates that it has adequate cash and commitments to sustain its operations to December 2005; provided that we will be required to raise approximately $110,000 by mid-2005 if we are to remain a reporting company under the Securities Exchange Act of 1934. In addition to the $110,000 required to maintain our status as a reporting company to December 31, 2005, we estimate we need to raise approximately $400,000 for each year thereafter to remain a reporting company. We estimate our annual expenses would be approximately $140,000 per year if we cease to be a reporting company. There is no assurance that we will be able to raise additional operating capital.

Trading in our common stock may diminish if we cease to be a reporting company. If we are not able to raise additional operating capital, we will not be able to maintain our status as a reporting company under the Securities Exchange Act of 1934. In this event, many brokers may be unwilling to engage in transactions in our common stock because there is likely to be substantially less information regarding our operations available to our

-5-

shareholders and to potential investors, thereby making it more difficult for our shareholders and purchases of our common stock to dispose of their shares.

An investment in our common stock is risky because the price of our stock is highly volatile. Our common stock closed as high as $1.42 per share and as low as $0.31 per share between January 1, 2004 and March 31, 2005. Historically, the over-the-counter markets for securities such as our common stock have experienced extreme price and volume fluctuations. Some of the factors leading to this volatility include:

• Price and volume fluctuations in the stock market at large that do not relate to our or Jabber’s operating performance;

• Fluctuations in Jabber’s quarterly revenue and operating results; and

• Increases in outstanding shares of common stock upon exercise or conversion of derivative securities.

These factors may continue to affect the price of our common stock in the future.

We have issued options, warrants, and convertible securities to acquire our common stock that could have a dilutive effect on our shareholders. As of March 31, 2005, we had outstanding warrants and options to acquire approximately 1.5 million and 2.5 million shares, respectively, of our common stock, exercisable at prices of $1.00 per share and from $0.55 to $19.06 per share, respectively, with a weighted average exercise price of approximately $1.00 and $1.96 per share, respectively. We had also reserved 734,000 shares of common stock for issuance upon conversion of our series D junior convertible preferred stock. During the terms of these derivative securities, the holders may have the opportunity to profit from an increase in the market price of our common stock with resulting potential dilution to the holders of shares who purchased shares for a price higher than the applicable exercise or conversion price. The increase in the outstanding shares of our common stock because of the exercise or conversion of these derivative securities could result in a significant decrease in the percentage ownership of our common stock by current and future holders of our common stock.

Future sales of our common stock in the public market could depress the price of our common stock. Actual or potential future sales of substantial amounts of common stock in the public market could depress the market price for shares of our common stock and could impair the ability of purchasers of our common stock to recoup their investment or make a profit. At March 31, 2005 these shares consisted of:

• Up to 734,000 shares issuable upon conversion of our series D junior convertible preferred stock; and

• Approximately 1.5 million and 2.5 million shares issuable to warrant and option holders, respectively.

Factors Relating to Jabber

Jabber’s limited operating history makes it difficult to evaluate its business. Jabber was founded in February 2000 and began shipping software in 2001. Jabber has a limited operating history for its business model upon which you may evaluate Jabber. Jabber’s business is subject to the risks, exposures and difficulties frequently encountered by early-stage companies with a limited operating history, including:

• Limited ability to respond to competitive developments;

• Exaggerated effect of unfavorable changes in general economic and market conditions; and

• Limited ability to adjust Jabber’s business plan to address marketplace and technological changes.

Jabber may need to raise additional working capital. Jabber’s present cash and working capital are, based on current estimates, adequate to sustain its operations until it is able to generate positive cash flow from operations. In the event that Jabber’s revenues are less than projected or Jabber desires to increase marketing and business development expenses over projected levels, Jabber likely will need to obtain additional capital to fund its business. In addition, the holder of Jabber’s series E preferred stock has an option to purchase up to an additional $2 million worth of the series E preferred stock during the balance of 2005, on the same terms as the shares it purchased on April 8, 2005. In the event the investor purchases the additional shares of series E preferred stock or Jabber is required to raise additional operating capital, Webb’s ownership interest in Jabber, currently approximately 38%, may decrease significantly. There can be no assurance that if Jabber is required to raise additional funds, it will be

-6-

able to raise the funds or if available, that the funds will be available on terms and conditions acceptable to Jabber’s shareholders.

Jabber may not earn revenues sufficient to remain in business. Jabber’s ability to become profitable depends on whether it can sell its products and services for more than it costs to produce and support them. Jabber’s future sales also need to provide sufficient margins to support its ongoing operating activities. The success of Jabber’s revenue model will depend upon many factors, including:

• The extent to which consumers and businesses use Jabber’s products and services; and

• The success of Jabber or its distribution partners in marketing Jabber’s products and services.

Because of the new and evolving nature of instant messaging and web services, the early stage of Jabber’s products and its limited operating history, we cannot predict whether Jabber’s revenue model will prove to be viable, whether demand for Jabber’s products and services will materialize at the prices Jabber expects to charge, or whether Jabber’s current or future pricing levels will be sustainable.

A limited number of Jabber’s customers generate a significant portion of its revenues. A few customers have accounted for a significant portion of Jabber’s revenues. We expect that Jabber’s 2004 customers will account for a significant percentage of its revenues during 2005. There is no assurance that Jabber will be able to retain major customers or attract additional major customers. The loss of or reduction in demand for Jabber’s products or services from major customers could have a material adverse effect on Jabber’s operating results and cash flow from operations.

Jabber must continually develop new products that appeal to its customers. Jabber’s products are subject to rapid obsolescence and Jabber’s future success will depend upon Jabber’s ability to develop new products and services that meet changing customer and marketplace requirements. There is no assurance that Jabber will be able to successfully:

• Identify new product and service opportunities; or

• Develop and introduce new products and services to market in a timely manner.

Even if Jabber is able to identify new opportunities, its working capital constraints may limit its ability to pursue them. If Jabber is unable to identify and develop and introduce new products and services on a timely basis, demand for Jabber’s products and services may decline.

Jabber must identify and develop markets for its products and services. A suitable market for Jabber’s products and services may not develop or, if it does develop, it may take years for the market to become large enough to support significant business opportunities. Even if Jabber is able to successfully identify, develop, and introduce new products and services there is no assurance that a suitable market for these products and services will materialize. The following factors could affect the success of Jabber’s products and services and its ability to address sustainable markets:

• The failure of Jabber’s business plan to accurately predict the types of products and services the marketplace will demand;

• Jabber’s limited working capital may not allow it to commit the resources required to adequately support the introduction of new products and services;

• The failure of Jabber’s business plan to accurately predict the estimated sales cycle, price and acceptance of its products and services; or

• The development by others of products and services that makes Jabber’s products and services noncompetitive or obsolete.

There is a lot of competition that could hurt Jabber’s revenues or cause its expenses to increase. Jabber’s current and prospective competitors include many companies, including Microsoft Corporation and IBM, whose financial, technical, marketing and other resources are substantially greater than Jabber’s. Jabber may not

-7-

have the financial resources, technical expertise or marketing, sales and support capabilities to compete successfully. The presence of these competitors could hurt Jabber’s business by causing Jabber to:

• Reduce the selling prices for its products and services; or

• Increase its spending on marketing, sales and product development.

Jabber may not be able to offset the effects of price reductions or increases in spending. Further, Jabber’s financial condition may put it at a competitive disadvantage relative to its competitors.

It usually takes a long time for Jabber to make a sale of its products and services. While Jabber’s sales cycle varies from customer to customer, it is long, typically ranging from two to nine months or more. Jabber’s sales cycle may also be affected by a prospective customer’s budgetary constraints and internal acceptance reviews, over which Jabber has little or no control.

Jabber may be unable to reduce expenses if sales do not occur as expected. Because of Jabber’s limited operating history, it does not have significant historical financial data upon which to base its planned operating expenses or to forecast revenues and there can be no assurance that Jabber will be able to meet its revenue or expense projections. Jabber’s expense levels are based in part on its expectations of future sales and to a large extent are fixed. Jabber typically operates with little backlog and the sales cycles for its products and services may vary significantly. Jabber may be unable to adjust spending in a timely manner to compensate for any unexpected sales shortfalls. If Jabber were unable to so adjust, any significant shortfall of demand for its products and services in relation to its expectations would result in operating losses or reduced profitability.

Item 2. DESCRIPTION OF PROPERTY.

Webb subleases from Jabber approximately 175 square feet of office space in Denver, Colorado, leased for a term ending in August 2007, at a base monthly rental of $650. Jabber leases approximately 21,400 square feet of office space in Denver, Colorado pursuant to a lease which expires in August 2007.

Item 3. LEGAL PROCEEDINGS.

Not applicable.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

-8-

PART II

Item 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information. The number of record holders of our common stock on March 31, 2005 was 222. The table below sets forth the high and low bid prices for the common stock during the two years ended December 31, 2004. The information shown is based on information provided by Yahoo! Inc. These quotations represent prices between dealers, and do not include retail markups, markdowns or commissions, and may not represent actual transactions. Our common stock is currently quoted on the over-the-counter electronic bulletin board under the symbol “WEBB.” We have never paid cash dividends on our common stock and have no present intention to do so.

	Common Stock
Quarter Ended	High Bid		Low Bid
2003
March 31	$	0.84	$	0.25
June 30	$	1.16	$	0.45
September 30	$	0.97	$	0.65
December 31	$	1.25	$	0.67
2004
March 31	$	1.49	$	0.82
June 30	$	0.97	$	0.51
September 30	$	0.70	$	0.40
December 31	$	0.62	$	0.30

Securities Authorized for Issuance Under Equity Compensation Plans. The following table sets forth the securities authorized for issuance under Webb’s compensation plans as of March 31, 2005.

	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)		(c)
Equity compensation plans approved by security holders	2,541,711	$	1.96	2,478,817
Equity compensation plans not approved by securities holders	—		—	—
Total	2,541,711	$	1.96	2,478,817

Item 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

GENERAL

Our sole business is the ownership of securities of Jabber, a company we formed in February 2000. Jabber is a commercial developer of extensible instant messaging software for enterprises, government agencies, carriers

-9-

and service providers and independent distributors of software that require real-time communication and collaboration solutions. Jabber’s products are based on the standardized extensible message and presence protocol, XMPP, developed by the Jabber.org open-source movement. Jabber instant messaging solutions differ from packaged and consumer instant messaging solutions in the ability of Jabber instant messaging to support and to be integrated with other applications and services.

With the purchase of Jabber’s series D convertible preferred stock on March 19, 2003, by Webb, FTTI and Intel, Webb’s ownership in Jabber was reduced to less than 50% of Jabber’s outstanding capital stock. Due to this change in ownership interest, on March 20, 2003, we ceased consolidating the financial results of Jabber with those of Webb and began to account for our investment in Jabber under the equity method.

On April 8, 2005, Jabber sold $1.5 million worth of Jabber’s series E preferred stock. As a result of this transaction, Webb’s percentage ownership of Jabber was reduced from approximately 43% to 38% of Jabber’s outstanding common stock on an as-if converted basis. The April 8, 2005 financing included an option which expires on December 28, 2005, to purchase up to an additional $2 million worth of series E preferred stock on the same terms as the April 8, 2005 transaction. In the event that the investor purchases all of the additional series E preferred stock, Webb’s ownership interest in Jabber would be reduced to approximately 33% of Jabber’s then outstanding common stock on as-if converted basis.

Webb, as a holding company, has no independent source of revenue and will, therefore, continue to incur losses from its operations. Webb’s value is dependent upon the success of Jabber. Jabber’s ability to become profitable depends on its ability to market its products and services and generate revenues sufficient to exceed its expenses. Because of the new and evolving nature of instant messaging technologies and Jabber’s early stage of development, we cannot be sure that Jabber’s revenue model will prove to be viable, whether demand for its products and services will materialize at the prices it expects to charge, or whether its current or future pricing levels will be sustainable.

LIQUIDITY AND CAPITAL RESOURCES

Amounts included in this liquidity and capital resources discussion for the year ended December 31, 2003, include the accounts of Webb only and do not reflect the consolidation of Jabber as reported in the financial statements included herein and in our annual report on Form 10-KSB as previously filed so as to present the 2003 numbers on a comparable basis with 2004. Included in the reported financial statements and not reflected below are the consolidated results of Jabber through March 19, 2003, for the year ended December 31, 2003. See Item 7 – Financial Statements – Unaudited Supplemental Financial Information for a reconciliation of Webb’s stand-alone financial statements presented below to its consolidated financial statements as reported for the year ended December 31, 2003.

	December 31,
	2004			2003
Working capital	$	259,740	1	$	747,982	2
Cash and cash equivalents	$	42,688		$	559,590
	Years ended December 31,
	2004			2003
Cash used in operating activities	$	(615,258	)	$	(726,781	)
Cash provided by (used in) investing activities	$	98,356		$	(104,346	)

¹ Includes a $249,249 note receivable from Jabber.

² Includes a $136,479 note receivable from Jabber.

Working capital: Working capital is calculated by deducting current liabilities from current assets. Working capital decreased during the year ended December 31, 2004, as compared with December 31, 2003, primarily due to funding our operating activities with cash on-hand at December 31, 2003, and the write-off of the notes receivable from a Company officer totaling $124,676, both of which were partially off-set by the $200,000 receivable we recorded from the sale of our remaining property and equipment to Jabber.

-10-

Cash flows used in operating activities: Cash used in operating activities decreased during the year ended December 31, 2004, as compared with the year ended December 31, 2003, primarily due to a decrease in operating expenses totaling $203,000.

Cash flows provided by (used in) investing activities: During 2004, we collected $88,902 and $9,454 on our notes receivable from Jabber and an officer, respectively. The increase in cash provided by investing activities is primarily from not investing any money in Jabber in 2004, compared to $195,000 in the year ended December 31, 2003.

In connection with the Jabber financing in March 2003, Webb and Jabber formalized a two-year cost sharing arrangement, as amended, which ended on April 1, 2005, whereby Jabber agreed to pay (i) 80% of the cost of two shared employees who provided accounting services for both companies; (ii) 60% of the cost of the Secretary and General Counsel for Webb who performed similar services for Jabber; and (iii) $100,000 annually for salary and 44% of the expenses of Webb’s former CEO for serving on Jabber’s executive committee. In addition, commencing April 1, 2003, we began receiving from Jabber $12,000 per month for 21 months for the purchase of third-party business software we owned, of which $49,249 remained outstanding at December 31, 2004, and at December 31, 2004, we were to receive an additional $200,000 from Jabber for the purchase of computer equipment, office furnishings and fixtures and other office equipment. We collected the $249,249 in the first four months of 2005.

At December 31, 2004, we had $42,688 in cash and $259,740 in working capital. We have no current source of cash other than the amounts collected from Jabber during the first four months of 2005 for amounts owed to us by Jabber at December 31, 2004, totaling $249,249 and $24,000 from the cost sharing agreement we have with Jabber that expired on April 1, 2005.

We believe for Webb to remain a reporting company under the Securities Exchange Act of 1934, we require approximately $110,000 of additional operating capital for the balance of fiscal 2005 and approximately $400,000 per year thereafter, assuming Webb remains only a holding company. If Webb ceases to be a reporting company at the end of the second quarter of fiscal 2005, we estimate that current operating capital is sufficient to fund operations through December 2005. Thereafter, we estimate our annual operating expenses as a non-reporting company would be approximately $140,000, so long as we remain only a holding company. We have initiated discussions with potential sources of additional operating capital, but there can be no assurance that we will be able to raise additional capital as required to either sustain our operations or to remain a reporting company. If we are unsuccessful in obtaining additional operating capital, we will consider the sale of all, or a portion, of our interest in Jabber to fund our operations.

Jabber’s financial plan for 2005 projects total revenues of approximately $8 million based on total sales of approximately $10.3 million for software sales, professional services and maintenance and support services, total expenses of approximately $11.7 million and cash and cash equivalents at the end of 2005 of approximately $3.8 million, assuming the sale of an additional $2 million of Jabber’s series E preferred stock. Jabber’s total revenues, sales and net loss for the first quarter of fiscal 2005 are estimated to be approximately $930,000, $1,550,000 and ($1,250,000), respectively. Based on Jabber’s 2005 financial plan, Jabber will not achieve positive cash flow from operations on a quarter-to-quarter basis until fiscal 2006. Sales represent amounts invoiced to customers during the stated period. See Item 7-Financial Statements-Note 2 of Notes to Consolidated Financial Statements regarding our and Jabber’s revenue recognition policies.

-11-

RESULTS OF OPERATIONS

Amounts in Webb’s results of operations discussion for the year ended December 31, 2003, include the accounts of Webb only and do not reflect the consolidation of Jabber as previously reported in the financial statements included herein and in our annual report on Form 10-KSB for fiscal 2003 in order to present the 2003 numbers on a comparable basis with 2004. Included in the reported financial statements and not reflected below are the consolidated results of Jabber for the period January 1, 2003 through March 19, 2003, for the year ended December 31, 2003. See Item 7 – Financial Statements – Unaudited Supplemental Financial Information for a reconciliation of Webb’s stand-alone financial statements presented below to its consolidated financial statements as reported for the years ended December 31, 2003.

Critical Accounting Policies

Webb’s financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the years presented. To the extent there are material differences between these estimates, judgments or assumptions and actual results, Webb’s financial statements will be affected. The significant accounting policies that we believe are the most critical to aid in fully understanding and evaluating Webb’s reported financial results include accounting for our investment in Jabber and impairment of long-lived assets.

In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result. Management has reviewed these critical accounting policies and related disclosures with our Audit Committee. See Item 7 – Financial Statements – Note 2 to Notes to Consolidated Financial Statements, which contains additional information regarding Webb’s accounting policies and other disclosures required by GAAP.

Accounting for Investment in Jabber

We report our investment in Jabber using the equity method of accounting whereby we record our percentage of Jabber’s net income or losses as an increase or a reduction to the carrying value of our investment account on our balance sheet and as income or losses in our results of operations. To the extent that we record losses from Jabber, our investment account will not be reduced below zero, unless at some future date we become obligated to fund future Jabber losses, if any. The balance of our investment in Jabber as of December 31, 2004, was $422,000 compared to $1.6 million in 2003. The use of the equity method of accounting represents a change in how we reported our investment in Jabber prior to March 19, 2003, the date on which Jabber sold shares of its series D convertible preferred stock to FTTI, Intel and Webb. Prior to this date, we consolidated the operations of Jabber with our own.

Twelve Months Ended December 31, 2004 and 2003

Operating Expenses:

Our sole business is the ownership of securities of Jabber, a company we formed in February 2000. We also conduct corporate activities such as accounting, administration, public reporting and financing activities for both Webb and Jabber. We reduce our expenses by amounts reimbursed to us by Jabber for its share of these costs. Webb’s stand-alone unaudited statements of operations for the year ended December 31, 2004 and 2003, are presented below. See Item 7 – Financial Statements – Unaudited Supplemental Financial Information for a reconciliation of Webb’s stand-alone financial statements presented below to its consolidated financial statements as reported for the year ended December 31, 2003.

-12-

	Years Ended December 31,
	2004			2003
Operating expenses:
General and administrative	$	697,334		$	813,735
Depreciation and amortization		72,408			158,874
Loss from operations		(769,742	)		(972,609	)
Interest income		9,092			1,629,062
Other income, net		13,574			7,668
Loss from investment in Jabber		(1,169,637	)		(2,851,755	)
Net loss	$	(1,916,713	)	$	(2,187,634	)

General and administrative expenses consist primarily of employee compensation, and other costs associated with being a public company, including investor relations, shareholder communications and legal and accounting fees. General and administrative expenses were $697,334 for the year ended December 31, 2004, compared with $813,735 for the year ended December 31, 2003. General and administrative expenses were reduced in 2004 primarily as a result of (i) a decrease in compensation and related expenses of $90,000; (ii) a decrease in travel and entertainment of $21,000; (iii) a decrease of $61,000 in investor relation expenses; and (iv) $66,000 of non-cash expense we recorded in 2004 for warrants and stock options we issued to investor relation firms. These reductions were partially offset by the $125,000 non-cash expense we recorded resulting from the write-off of the notes receivable from a former officer. We are estimating Webb’s general and administrative expenses for 2005 to range from approximately $300,000 to approximately $400,000, depending on whether or not Webb remains a reporting company under the Securities Exchange Act of 1934 for the full year.

Depreciation expense was $72,408 for the year ended December 31, 2004, compared to $158,874 for the year ended December 31, 2003. The decrease is primarily from no depreciation being recorded in 2004 on assets that became fully depreciated in earlier periods. In addition, business software which had a net book value of $220,059, was sold to Jabber in April 2003. As a result of selling our remaining property and equipment to Jabber on December 31, 2004, we do not expect to record depreciation expense in future periods.

Interest Income

Interest income was $9,092 for the year ended December 31, 2004, compared to $1,629,062 for the year ended December 31, 2003. We recorded interest income from Jabber of $8,770 and $1,610,547 in 2004 and 2003, respectively. Included in the interest income from Jabber for 2003 is $1,571,900 of non-cash interest income we recorded from additional shares of Jabber’s series D convertible preferred stock issued to us pursuant to anti-dilution provisions under the terms of our convertible notes receivable. The non-cash interest income was eliminated in our consolidated financial statements for the period ended March 19, 2003.

Loss on Investment in Jabber

At December 31, 2004, we owned 43.4% of Jabber’s outstanding stock, on an as-if converted basis. Prior to March 19, 2003, we owned 74.8% of Jabber stock. As of March 19, 2003, in conjunction with the Jabber financing transaction, we ceased consolidating Jabber’s results of operations and financial position with our own and began reporting our investment in Jabber under the equity method of accounting. During the year ended December 31, 2004, we recorded $1,169,637 in losses from Jabber, compared with $2,851,755 for the year ended December 31, 2003. The decrease in losses in 2004 was primarily from the combination of $570,000 less in losses incurred by Jabber in 2004 and the reduction in the percentage of Jabber’s losses we recorded commencing on March 19, 2003, which was reduced from 99.9% to 43.3%. Unless we make additional investments in Jabber, the amount of losses we record from our investment in Jabber in future periods will not exceed approximately $422,000, which represents the book value of our Jabber investment at December 31, 2004.

-13-

In addition, Jabber’s net loss was $2.70 million for the year ended December 31, 2004, which was $570,000 less when compared to a net loss of $3.27 million for the year ended December 31, 2003. Jabber’s net revenues were $5.37 million for 2004, compared with $7.42 million for 2003. The revenue mix between license fees and services was 57% and 43%, respectively, for 2004, compared with 68% and 32%, respectively, for 2003. France Telecom, a related party, represented 32% of Jabber’s net revenues for 2004, compared with 30% for 2003. The decrease in net loss in 2004 was primarily from a $1,009,000 decrease in operating expenses. Jabber’s operating expenses were $8.06 million for 2004, compared with $9.07 million for 2003. The decrease in operating expenses was primarily due to decreases in product development expenses, sales and marketing expenses and general and administrative expenses of $208,000, $262,000 and $671,000, respectively.

At December 31, 2004, Jabber’s cash and cash equivalents were $1.39 million, which represented a decrease of $3.99 million over $5.38 million in cash and cash equivalents at December 31, 2003. The decrease was primarily from the $3.87 million of cash used to fund its operating activities in 2004.

Net Loss

Net loss was $1,916,713 for the year ended December 31, 2004, compared to $2,187,634 for the year ended December 31, 2003. The decrease in losses for 2004 was primarily from (i) a reduction of $1.68 million in losses we recorded in connection with our investment in Jabber; and (ii) a reduction in operating expenses of $203,000. These reductions were partially offset by $1,620,000 of non-cash interest income in the first quarter of 2003 related to the conversion of notes and issuance of Jabber securities to us. Before recording losses from Jabber, we expect Webb’s losses to range from approximately $300,000 to $400,000 for 2005, depending on whether or not Webb remains a reporting company under the Securities Exchange Act of 1934 for the full year.

Twelve Months Ended December 31, 2003 and 2002

Operating Expenses:

Webb’s stand-alone unaudited statements of operations for the year ended December 31, 2003 and 2002, are presented below. See the 2003 Form 10-KSB Item 7 – Financial Statements – Unaudited Supplemental Financial Information for a reconciliation of Webb’s stand-alone financial statements presented below to its consolidated financial statements as reported the years ended December 31, 2003 and 2002.

	Years Ended December 31,
	2003			2002
Operating expenses:
General and administrative	$	813,735		$	1,508,611
Depreciation and amortization		158,874			334,938
Loss from operations		(972,609	)		(1,843,549	)
Interest income		1,629,062			110,006
Dividend income on Jabber securities		—			199,484
Other income, net		7,668			256,686
Loss from investment in Jabber		(2,851,755	)		(4,834,814	)
Loss on extinguishment of 10% convertible note payable		—			(1,162,934	)
Interest expense		—			(618,961	)
Net loss		(2,187,634	)		(7,894,082	)
Accretion of preferred stock to stated value and other deemed dividends		—			(648,710	)
Net loss applicable to common stockholders	$	(2,187,634	)	$	(8,542,792	)

-14-

General and administrative expenses consist primarily of employee compensation, and other costs associated with being a public company, including investor relations, shareholder communications and legal and accounting fees. General and administrative expenses were $813,735 for the year ended December 31, 2003, compared with $1,508,611 for the year ended December 31, 2002. General and administrative expenses were reduced in 2003 primarily as a result of (i) a decrease in compensation and related expenses of $245,000; (ii) an increase in shared costs paid by Jabber of $164,000; (iii) a decrease of $151,000 in costs associated with public reporting activities such as legal and accounting fees and shareholder meeting costs; and (iv) a decrease in office rent and other facility expenses of $159,000 due to the assignment of the lease for our corporate offices to Jabber. These reductions were partially offset by an increase in investor relation expenses of $93,000, which includes $58,000 in non-cash compensation expense we recorded for the issuance of warrants and options to investor relation consultants.

Depreciation expense was $158,874 for the year ended December 31, 2003, compared to $334,938 for the year ended December 31, 2002. The decrease is primarily from no depreciation being recorded in 2003 on assets that became fully depreciated in periods since the first and second quarters of 2002 and no depreciation recorded in the third and fourth quarter of 2003 for the business software assets we sold to Jabber in April 2003, which had a net book value of $220,059.

Interest Income

Interest income was $1,629,062 for the year ended December 31, 2003, compared to $110,006 for the year ended December 31, 2002. We recorded interest income from Jabber of $1,610,547 and $77,279 in 2003 and 2002, respectively. Included in the interest income from Jabber for 2003 is $1,571,900 of non-cash interest income we recorded from additional shares of Jabber’s series D convertible preferred stock issued to us pursuant to anti-dilution provisions under the terms of our convertible notes receivable. The non-cash interest income was eliminated in our consolidated financial statements for the period ended March 19, 2003.

Loss on investment in Jabber

At December 31, 2003, we owned 43.4% of Jabber’s outstanding stock, on an as-if converted basis. Prior to March 19, 2003, we owned 74.8% of Jabber stock. As of March 19, 2003, in conjunction with the Jabber financing transaction, we ceased consolidating Jabber’s results of operations and financial position with our own and began reporting our investment in Jabber under the equity method of accounting. During the year ended December 31, 2003, we recorded $2,851,755 in losses from Jabber, compared with $4,834,814 for the year ended December 31, 2002. The decreases in losses in 2003 was primarily from the reduction in our percentage of Jabber’s losses between years, which ranged from 78% to 93% in 2002 and from 78% to 43.3% to 43.4% in 2003.

In addition, Jabber’s net loss applicable to common stockholders was $3.27 million for the year ended December 31, 2003, which represented a $2.01 million decrease when compared to a net loss applicable to common stockholders of $5.28 million for the year ended December 31, 2002. Jabber’s net revenues were $7.42 million for 2003, compared with $3.39 million for 2002. The revenue mix between license fees and services was 68% and 32%, respectively, for 2003, compared with 60% and 40%, respectively, for 2002. France Telecom, a related party, represented 30% of Jabber’s net revenues for 2003, compared with 25% for 2002. The decrease in net loss applicable to common stockholders in 2003 was primarily from a $4.03 million increase in revenue, which was partially offset by an increase in operating expenses of $814,000. Jabber’s operating expenses were $9.07 million for 2003, compared with $8.26 million for 2002. The increase in operating expenses was primarily due to increases in product development expenses and sales and marketing expenses of $727,000 and $1.05 million, respectively. These increases were partially offset by a $664,000 decrease in amortization expense related to intangible assets that were fully amortized at June 2002 and a $441,000 decrease in cost of revenues for 2003.

At December 31, 2003, Jabber’s cash and cash equivalents were $5.38 million, which represented an increase of $5.05 million over $331,000 in cash and cash equivalents at December 31, 2002. The increase was primarily from $5 million in gross proceeds Jabber received from the sale of its series D convertible preferred stock in March 2003 and $255,000 of cash provided by operations for 2003, which was a $3.77 improvement when compared to $3.52 million in cash used to fund Jabber’s operations for 2002.

-15-

Net Loss Applicable to Common Stockholders

Net loss applicable to common stockholders was $2,187,634 for the year ended December 31, 2003, compared to $8,542,792 for the year ended December 31, 2002. The decrease in losses for 2003 was primarily from (i) a reduction of $1,983,000 in losses we recorded in connection with our investment in Jabber; (ii) a reduction in operating expenses of $871,000; (iii) recording non-cash expenses in the first quarter of 2002 related to our 10% convertible note payable for loss on debt extinguishment of $1,163,000 and interest expense of $514,000; (iv) recording $649,000 of non-cash accretion expense in 2002 on our preferred stock securities; and (v) recording $1,572,000 of non-cash interest income in the first quarter of 2003 related to the conversion of notes and issuance of Jabber securities to us. These reductions were partially offset by preferred stock dividends we earned from Jabber and income we recorded in 2002 of $257,000 from creditor concessions.

Item 7. FINANCIAL STATEMENTS.

See Financial Statements beginning on page F-1.

Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

Item 8A. CONTROLS AND PROCEDURES.

Our Vice President and General Counsel, our only executive officer, has reviewed our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon this review, Mr. Branson believes that our disclosure controls and procedures are effective in ensuring that material information related to Webb is made known to him.

There have been no significant changes in internal control over financial reporting that occurred during the fiscal period covered by this report that have materially affected, or are reasonably likely to materially affect, Webb’s internal control over financial reporting.

Our CEO/CFO resigned on September 30, 2004. The certifications provided with this report have been provided by our Vice President and General Counsel. Rules 13a, 14 and 15d-14, pursuant to the Securities and Exchange Act of 1934, provide that when an issuer does not have a CEO/CFO, the person performing similar functions must execute the required certifications. By providing the certifications, our Vice President and General Counsel acknowledges that he is performing CEO/CFO functions for the company for the sole purpose of providing the required certifications and for no other purpose.

Item 8B. OTHER INFORMATION.

Not Applicable.

PART III

Item 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Directors and Executive Officer

Name	Age	Director Since	Position
Lindley Branson	62	—	Vice President, General Counsel and Secretary
Robert Lacey	50	2002	Director
Peter Ren	46	2003	Director
Barry Roelofs	49	2005	Director

-16-

Lindley Branson, joined Webb as Vice President, General Counsel and Secretary in May 1999 and has served as Secretary and General Counsel of Jabber since its formation in February 2000. Mr. Branson has been a partner with the Minneapolis law firm of Gray, Plant, Mooty, Mooty & Bennett, P.A. for more than twenty years, with an emphasis in corporate finance, mergers and acquisitions and general corporate law.

Robert Lacey, has been a director of Webb since March 2002. Mr. Lacey has served since February 2002 as Director of Technology for Nerd Tech, an unincorporated subsidiary of Nerd Gas Company, LLC, a privately-held Casper, Wyoming oil and gas exploration company. From January 1998 through March 1999, Mr. Lacey was a principal of Computer Engineers, LLC, and from March 1999 through February 2002, he was a principal of its successor, R&J Computer Consultants, both of which are privately-held consulting companies based in Casper, Wyoming. Mr. Lacey was employed as a computer consultant and technician by Touchtronics, Inc., a Casper, Wyoming privately-held computer hardware and software company, from October 1995 through January 1998.

Peter Ren, has been a director of Webb since March 2003. Mr. Ren has served as the President of Copier Technologies, Inc., a Trevose, Pennsylvania based provider of digital office solutions since 1982. Mr. Ren also provides consulting services in the areas of marketing and sales.

Barry Roelofs, has been a director of Webb since February 2005. Mr. Roelofs has served as the Data Center Facilities Manager for Pfizer Inc. since September 2004. He has also served as the President and owner of Roelofs Trucking Inc., a Portage, Michigan - based trucking company since December 2003. Prior to his employment with Pfizer, Mr. Roelofs served as Director of Technology for USF Corporation from November 2001 to July 2003; was employed by Kellogg Company from August 1995 through October 2001 (including serving as Senior Global Technology Manager from 1998 through 2001); and served as Manager of Technology for United Parcel Service, Inc. from 1991 through 1995. Mr. Roelofs received his B.A. degree in Finance at Western Michigan University in 1989.

Audit Committee

Peter Ren, Barry Roelofs and Robert Lacey are the current members of the audit committee of the board of directors. Mr. Roelofs is a “financial expert,” as that term is used in the Exchange Act. All of the members are “independent” under the rules promulgated by the Nasdaq Stock Market.

Shareholder Nominee Recommendations

Webb’s compensation/nominating committee is responsible for identifying and selecting nominees for directors. The committee will consider recommendations by shareholders of nominees for election as a director. Recommendations need to be in writing, including a resume of the candidate’s business and personal background and a signed consent that the candidate is willing to be considered as a nominee and will serve if elected. Shareholder recommendations must be sent to Webb Interactive Services, Inc., c/o Corporate Secretary, 1899 Wynkoop, Suite 600, Denver, Colorado 80202.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires Webb’s directors and officers, and persons who own more than ten percent of a registered class of Webb’s equity securities, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Officers, directors and greater than ten-percent shareholders are also required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

-17-

To our knowledge, based solely on review of the copies of such reports furnished to us that no other reports were required, during the year ended December 31, 2004, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten-percent beneficial owners were complied with in a timely manner.

Code of Business Conduct and Ethics

Each of Webb’s directors and employees, including its executive officers, are required to conduct themselves in accordance with ethical standards set forth in the Code of Business Conduct and Ethics adopted by Webb’s board of directors. The code is available on our website at www.webb.net. Any amendments to or waivers from the code will be posted on Webb’s website.

Item 10. EXECUTIVE COMPENSATION.

The following table summarizes the annual compensation paid by Webb during years ended December 31, 2002, 2003, and 2004 to William Cullen, our former Chief Executive Officer, and Lindley Branson, our only other executive officer.

		Summary Compensation Table Annual Compensation					Long-Term Compensation
Name and Principal Position	Year	Salary ($)		Bonus ($)		Other ($)	Securities Underlying Options		All Other Compensation
William Cullen (1)	2004	$	180,991		—	—	—		—
Former Chief Executive Officer,	2003	$	221,375		—	—	150,000 shs.	(2)	—
President, Chief Financial Officer	2002	$	213,500	$	140,000	—	400,000 shs.	(3)	—
Lindley Branson (4)	2004	$	184,239		—	—	—		—
Vice President and	2003	$	178,062		—	—	75,000 shs.	(5)	—
General Counsel	2002	$	172,417	$	70,000	—	200,000 shs.	(3)	—

⁽¹⁾ Mr. Cullen resigned from Webb on September 30, 2004, at which time he also resigned as a director. Webb reimbursed Mr. Cullen for commuting expenses, which totaled $13,065 in 2004. In connection with Mr. Cullen’s resignation, Webb agreed to forgive outstanding loans of $124,676, provided that he provided consulting services as requested until January 2005. The loans were forgiven in January 2005.

⁽²⁾ Does not include an option to purchase 500,000 shares of common stock that was granted to Mr. Cullen in 2003 and cancelled by mutual agreement of Webb and Mr. Cullen on March 23, 2004. Mr. Cullen received no consideration for the cancellation.

⁽³⁾ The vesting of the shares underlying the option was subject to performance-based criteria. The criteria was not met: one-half of the option expired on December 31, 2002; the other half expired on June 30, 2003.

⁽⁴⁾ Webb reimburses Mr. Branson for commuting expenses, which totaled $19,353 in 2004.

⁽⁵⁾ Does not include an option to purchase 400,000 shares of common stock that was granted to Mr. Branson in 2003 and cancelled by mutual agreement of Webb and Mr. Branson on March 23, 2004. Mr. Branson received no consideration for the cancellation.

-18-

Webb Stock Options

Webb did not issue options to the named executive officers nor were there any options exercised during 2004.

Aggregated Option Exercises During Year Ended December 31, 2004

and Option Values at December 31, 2004

Name	Shares Acquired on Exercise (#)	Value Realized ($) (1)	Number of Securities Underlying Options at December 31, 2004 (#) Exercisable /Unexercisable	Value of Unexercised In-The- Money Options at December 31, 2004 ($) (2) Exercisable / Unexercisable
William Cullen	—	—	400,000 / —	$	—   /$—
Lindley Branson(4)	—	—	442,313 / 75,000	$	—   /$—

⁽¹⁾ The value realized is determined by multiplying the number of shares exercised by the favorable difference between the exercise price per share and the closing bid price per share on the date of exercise.

⁽²⁾ The value of unexercised in-the-money options is determined by multiplying the number of shares subject to such options by the favorable difference between the exercise price per share and $0.33, the closing price per share on December 31, 2004.

Board of Director Compensation

Members of our board of directors do not receive cash compensation for their services as directors, but they are reimbursed for their reasonable expenses in attending board meetings. During 2004, we issued the following seven-year options to our non-employee directors for their services:

• Robert Lewis received an option to purchase 50,000 shares at an exercise price of $0.55 per share.

• Richard Jennewine received an option to purchase 50,000 shares at an exercise price of $0.55 per.

• Robert. Lacey received an option to purchase 50,000 shares at an exercise price of $0.55 per share.

• Peter Ren received an option to purchase 50,000 shares at an exercise price of $0.55 per share.

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Information as to the name, address and stockholdings of each person known by Webb to be a beneficial owner of more than five percent of our common stock and as to the name, address and stockholdings of each director, each executive officer named in the Summary Compensation Table and all executive officers and directors, as a group, as of April 1, 2005 is set forth below. Except as indicated below, we believe that each person has the sole (or joint with spouse) voting and investment powers with respect to such shares.

-19-

Name and Address         of Beneficial Owner	Amount of Common Stock Beneficially Owned		Percent of Common Stock (1)
Robert Lacey 1899 Wynkoop, Suite 600 Denver, Colorado 80202	200,000	(2)	*
Peter Ren 1899 Wynkoop, Suite 600 Denver, Colorado 80202	199,475	(3)	*
Barry Roelofs 1899 Wynkoop, Suite 600 Denver, Colorado 80202	184,100		*
Lindley Branson 1899 Wynkoop, Suite 600 Denver, Colorado 80202	467,313	(4)	1.8	%
Jona, Inc. P.O. Box 949 Casper, Wyoming 82602	9,250,000	(5)	36.4	%
Directors and executive officers as a group (four persons)	1,050,888	(5)	4.1	%

* Less than one percent of shares outstanding.

⁽¹⁾ In calculating percentage ownership, all shares of common stock which a named shareholder has the right to acquire within 60 days from the date of this report upon exercise of options or warrants are deemed to be outstanding for the purpose of computing the percentage of common stock owned by that shareholder, but are not deemed to be outstanding for the purpose of computing the percentage of common stock owned by any other shareholder.

⁽²⁾ Consists of options to purchase 200,000 shares of common stock.

⁽³⁾ Includes warrants and options to purchase 150,000 shares of common stock.

⁽⁴⁾ Includes options for the purchase of 442,313 shares of common stock, but excludes options for the purchase of 75,000 shares of common stock that are not exercisable during the next 60 days.

⁽⁵⁾ Does not include 15,000 shares of common stock owned by Neil A. McMurry and his spouse. Mr. McMurry, who is the sole shareholder, president and director of Jona, Inc., is deemed to be the beneficial owner of Webb’s securities owned by Jona.

⁽⁶⁾ Includes warrants and options for the purchase of 792,313 shares of common stock, but excludes options for the purchase of 75,000 shares of common stock that are not exercisable during the next 60 days.

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

William Cullen, our former President, Chief Executive Officer and Chief Financial Officer and a director, owed us $124,676 as of September 30, 2004. The entire amount of this receivable was written-off on September 30, 2004, in connection with his separation from Webb.

Item 13. EXHIBITS.

See Index to Exhibits beginning on page Ex-1.

-20-

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Independent Auditor’s Fees

The following table presents fees for professional services rendered by Ernst & Young LLP and Ehrhardt Keefe Steiner Hottman P.C. for the audit of Webb’s financial statements for the years ended December 31, 2003 and December 31, 2004, respectively, and fees billed by Ernst & Young LLP and Ehrhardt Keefe Steiner & Hottman PC., respectively, for other services during those periods:

	2003(1)		2004(1)
Audit Fees	$	126,900	$	77,000
Audit Related Fees		—		—
Tax Fees		14,888		—
All Other Fees		—		—
Total	$	141,788	$	77,000

⁽¹⁾ Amounts include fees for services related to Jabber, Inc., a significant subsidiary.

Audit Fees were for professional services for auditing and reviewing Webb’s financial statements, as well as for consents and assistance with and review of documents filed with the Securities and Exchange Commission.

Audit Related Fees were for professional services related to auditing and reviewing Webb’s financial statements, including advising Webb as to complying with accounting policies and transactional planning.

Tax Fees were for professional services for tax planning and compliance.

All Other Fees were for professional services not applicable to the other categories.

Pre-Approval Policy for Services of Independent Auditors

The Audit Committee follows established procedures for pre-approval of all audit and permissible non-audit services provided by the independent auditor. Prior to engaging the independent auditor for the next year’s audit, the committee solicits a proposal from the independent auditor detailing the scope of services for each of the categories described above as well as a budget. The committee reviews and approves the services by category. The fees are budgeted and the committee receives periodic reports from the independent auditor of the actual fees incurred by category. If additional services not contemplated in the original pre-approval are required and exceed $15,000 in the aggregate, then the committee requires specific pre-approval before engaging the independent auditor. The committee may delegate pre-approval authority to one or more of its members. That member or members must report, for informational purposes only, any pre-approval decisions to the committee at its next scheduled meeting.

-21-

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	WEBB INTERACTIVE SERVICES, INC.
Date: April 15, 2005	By	/s/ Lindley Branson
		Lindley Branson, Vice President – General Counsel

Know all persons by these presents, that each person whose signature appears below hereby constitutes and appoints Lindley Branson his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments to this Report and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full powers and authority to do and perform each and every act and things requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Lindley Branson	April 15, 2005
Lindley Branson
(Vice President – General Counsel, as registrant’s only executive officer, in accordance with Rules 13a-14 and 15d-4 pursuant to the Securities and Exchange Act of 1934, as amended, registrant’s Chief Executive Officer and Chief Financial Officer for purposes of this report)
/s/ Stuart Lucko	April 15, 2005
Stuart Lucko
(Controller, Principal Accounting Officer)
/s/ Robert Lacey	April 15, 2005
Robert Lacey
(Director)
/s/ Peter Ren	April 15, 2005
Peter Ren
(Director)
/s/ Barry Roelofs	April 15, 2005
Barry Roelofs
(Director)

-22-

Item 7. FINANCIAL STATEMENTS.

WEBB INTERACTIVE SERVICES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Reports of Independent Registered Public Accounting Firms	F-2
Consolidated Balance Sheets as of December 31, 2004 and 2003	F-4
Consolidated Statements of Operations for the Years Ended December 31, 2004 and 2003	F-5
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2004 and 2003	F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2004 and 2003	F-7
Notes to Consolidated Financial Statements	F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Webb Interactive Services Inc.:

We have audited the accompanying consolidated balance sheet of Webb Interactive Services, Inc. and subsidiaries (the “Company”) as of December 31, 2004, and the related consolidated statements of operations, stockholders’ equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the Standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2004, and the consolidated results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming Webb Interactive Services, Inc. and subsidiaries will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, among other factors, the Company has incurred significant and recurring losses from operations, and has an accumulated deficit of $120,216,129, such losses are expected to continue in the near future, which raises substantial doubt about the ability of the Company to continue as a going concern. Management’s plans in regard to these matters are described in Note 1. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

/s/ Ehrhardt Keefe Steiner & Hottman P.C.

Denver, Colorado,

April 8, 2005

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Webb Interactive Services, Inc.:

We have audited the accompanying consolidated balance sheet of Webb Interactive Services, Inc. and subsidiaries (the “Company”) as of December 31, 2003, and the related consolidated statements of operations, stockholders’ equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2003, and the consolidated results of its operations and its cash flows for the year then ended in conformity with U. S. generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Denver, Colorado,

February 10, 2004,

F-3

WEBB INTERACTIVE SERVICES, INC.

CONSOLIDATED BALANCE SHEETS

	December 31,
	2004			2003
ASSETS
Current assets:
Cash	$	42,688		$	559,590
Prepaid expenses		15,082			12,957
Notes receivable from Company officer (Note 3)		—			134,130
Note and accounts receivable from Jabber (Note 4)		249,249			136,479
Total current assets		307,019			843,156
Investment in Jabber (Note 4)		422,348			1,591,985
Property and equipment, net (Note 5)		—			258,834
Total assets	$	729,367		$	2,693,975
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	30,875		$	23,246
Accrued compensation, benefits and payroll taxes		16,404			71,928
Total current liabilities		47,279			95,174
Commitments and contingencies
Stockholders’ equity:
Preferred stock, no par value, 5,000,000 shares authorized:
Series D junior convertible preferred stock, 734 and 784 shares issued and outstanding, respectively, liquidation preference of $1,000 per share		561,781			600,049
Common stock, no par value, 60,000,000 shares authorized, 25,433,552 and 25,268,167 shares issued and outstanding, respectively		109,834,689			105,654,866
Warrants and options		10,501,727			14,643,282
Accumulated deficit		(120,216,109	)		(118,299,396	)
Total stockholders’ equity		682,088			2,598,801
Total liabilities and stockholders’ equity	$	729,367		$	2,693,975

The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets.

F-4

WEBB INTERACTIVE SERVICES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	December 31,
	2004			2003
Net revenues	$	—		$	646,613
Operating expenses:
Cost of revenues		—			161,899
Sales and marketing		—			356,983
Product development		—			590,569
General and administrative		697,334			1,240,896
Depreciation		72,408			205,702
		769,742			2,556,049
Loss from operations		(769,742	)		(1,909,436	)
Interest income		9,092			18,928
Loss from investment in Jabber (Note 4)		(1,169,637	)		(306,809	)
Other income, net		13,574			6,974
Net loss before minority interest		(1,916,713	)		(2,190,343	)
Minority interest in losses of subsidiary		—			2,709
Net loss	$	(1,916,713	)	$	(2,187,634	)
Net loss per share, basic and diluted	$	(0.08	)	$	(0.10	)
Weighted average shares outstanding, basic and diluted		25,418,104			23,013,372

The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.

F-5

WEBB INTERACTIVE SERVICES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

	Series D Junior Preferred Stock					Common Stock				Warrants and Options			Accumulated Deficit			Stockholders’ Equity
	Shares		Amount			Shares	Amount
Balances January 1, 2003	2,584		$	1,977,713		21,668,167	$	103,644,832		$	19,448,886		$	(122,913,504	)	$	2,157,927
Issuance of common stock for cancellation of warrants:
Issuance of common stock	—			—		1,800,000		1,890,000			—			—			1,890,000
Cancellation of warrants	—			—		—		(3,850,202	)		(4,827,787	)		6,787,989			(1,890,000	)
Gain on re-capitalization of Jabber	—			—		—		2,548,345			—			—			2,548,345
Conversion of series D junior preferred stock to common stock	(1,800	)		(1,377,664	)	1,800,000		1,377,664			—			—			—
Warrants and options issued for services	—			—		—		—			66,410			—			66,410
Cancellation of warrants	—			—		—		44,227			(44,227	)		—			—
Other comprehensive income	—			—		—		—			—			13,753			13,753
Net loss	—			—		—		—			—			(2,187,634	)		(2,187,634	)
Balances, December 31, 2003	784			600,049		25,268,167		105,654,866			14,643,282			(118,299,396	)		2,598,801
Conversion of series D junior preferred stock to common stock	(50	)		(38,268	)	50,000		38,268			—			—			—
Cash-less exercise of common stock purchase warrant	—			—		115,385		883,538			(883,538	)		—			—
Cancellation of warrants and stock options	—			—		—		3,258,017			(3,258,017	)		—			—
Net loss	—			—		—		—			—			(1,916,713	)		(1,916,713	)
Balances, December 31, 2004	734		$	561,781		25,433,552	$	109,834,689		$	10,501,727		$	(120,216,109	)	$	682,088

The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.

F-6

WEBB INTERACTIVE SERVICES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2004			2003
Cash flows from operating activities:
Net loss	$	(1,916,713	)	$	(2,187,634	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		72,408			205,702
Loss from investment in Jabber		1,169,637			306,809
Write-off of note receivable from Company officer		124,676			—
Minority interest in losses of subsidiary		—			(2,709	)
Warrants and stock options issued for services		—			66,410
Gain on sale and disposal of property and equipment		(13,574	)		(7,621	)
Changes in operating assets and liabilities:
Increase in accounts receivable		—			(404,246	)
(Increase) decrease in prepaid expenses and other current assets		(3,797	)		82,589
Increase in accounts payable and accrued liabilities		7,629			106,688
Decrease in accrued salaries and payroll taxes payable		(55,524	)		(662	)
Increase in deferred revenue		—			653,287
Net cash used in operating activities		(615,258	)		(1,181,387	)
Cash flows from investing activities:
Purchase of property and equipment		—			(6,121	)
Purchase of Jabber securities from third-party investors		—			(34,993	)
Cash retained by Jabber at March 19, 2003		—			(68,991	)
Collection on note receivable from Jabber		88,902			93,445
Collections from Jabber		—			20,477
Collection on notes receivable from Company officers		9,454			13,346
Net cash provided by investing activities		98,356			17,163
Net decrease in cash and cash equivalents		(516,902	)		(1,164,224	)
Effect of foreign currency exchange rate changes on cash		—			9,737
Cash, beginning of year		559,590			1,714,077
Cash, end of year	$	42,688		$	559,590
Supplemental schedule of non-cash investing and financing activities:
Equity adjustment related to sale of Jabber stock	$	—		$	2,548,345
Series D preferred stock converted to common stock	$	38,268		$	1,377,664
Issuance of common stock for cancellation of warrants	$	—		$	1,890,000
Property and equipment sold to Jabber for note receivable	$	200,000		$	220,059

The accompanying notes to consolidated financial statements are an integral part of these consolidated statements.

F-7

WEBB INTERACTIVE SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) ORGANIZATION AND BUSINESS

The sole business of Webb Interactive Services, Inc. (the Company, Webb, we, us or our) is the ownership of securities of Jabber, Inc. (Jabber). At December 31, 2004, on an as-if converted basis, we owned 43.4% of Jabber’s common stock.

On April 8, 2005, Jabber sold 8,571,458 shares of its series E preferred stock for $1.5 million to an affiliate of Webb. As a result of the transaction, Webb’s ownership of Jabber was reduced from approximately 43% to 38% of Jabber’s outstanding common stock on an as-if converted basis. The series E preferred stock purchase agreement included an option which expires on December 28, 2005, enabling the investor to purchase up to an additional $2 million worth of series E preferred stock on the same terms as the original investment. In the event that the full $2 million of the additional series E preferred stock is sold, Webb’s ownership interest in Jabber would be reduced to approximately 33% of Jabber’s then outstanding common stock on an as-if converted basis.

On March 19, 2003, Jabber issued 25,218,914 shares of its series D convertible preferred stock for $5 million in gross cash proceeds and the cancellation of $2.2 million of convertible notes payable to Webb. As a result of this transaction, Webb’s ownership of Jabber was reduced from 77.8% to 43.3% of Jabber’s outstanding common stock on an as-if converted basis. As a result of the reduction in Webb’s ownership interest, after March 19, 2003, Webb ceased consolidating the financial results of Jabber in its financial statements and began to report its investment in Jabber under the equity method of accounting.

Jabber is a commercial developer of real-time communications software and instant messaging (IM) solutions offering proprietary, scalable extensible IM software solutions for enterprises, government agencies, carriers and service providers and distribution partners. We became a commercial sponsor of the Jabber.org instant messaging open-source movement in September 1999. We formed Jabber in February 2000. Jabber commenced operations in May 2000, and released its initial proprietary IM software product in March 2001. During 2004 and 2003, Jabber earned revenues from licensing its software, fees from support and maintenance agreements and fees from professional service contracts.

We have not been profitable since inception. Webb does not currently have a source of revenue but does incur operating expenses separate from those of Jabber. Our success depends upon the ability of Jabber to market its products and services and generate revenues sufficient to exceed its expenses. Because of the new and evolving nature of instant messaging technologies and Jabber’s early stage of development, we cannot be sure that its revenue model will prove to be viable, whether demand for its products and services will materialize at the prices it expects to charge, or whether current or future pricing levels will be sustainable. Jabber has expended significant funds to develop its current product offerings and Jabber anticipates continuing losses through at least 2005 as it further develops and markets its products.

At December 31, 2004, we had $42,688 in cash and $259,740 in working capital. We have no current source of cash other than the amounts we collected from Jabber during the first four months of 2005 for amounts owed to us by Jabber at December 31, 2004, totaling $249,249 and $24,000 from the cost sharing agreement we have with Jabber that expired on April 1, 2005.

We have initiated efforts to raise additional operating capital so that we may maintain our status as a reporting company under the Securities Exchange Act of 1934. We estimate that so long as we remain only a holding company, we will require approximately $110,000 of additional operating capital to sustain our status as a reporting company through the end of 2005 and approximately $400,000 of additional operating capital for each year thereafter that we remain a reporting company. In the event that we are not able to raise additional working capital by July 2005, we will consider terminating our status as a reporting company under the Securities Exchange Act of 1934, in order to sustain our operations until at least December 31, 2005. We estimate that the cost of maintaining our operations as a non-reporting company would be approximately $140,000 per year. There can be

F-8

no assurance that we will be able to raise additional operating capital or, if we are able to raise operating capital, that the terms upon which such capital is available will be acceptable.

As a result of our continuing operating losses and limited working capital to fund expected operating losses, substantial doubt exists about Webb’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should Webb be unable to continue as a going concern.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Financial Statements: As a result of the March 19, 2003, Jabber financing transaction, on March 20, 2003, Webb ceased consolidating the financial results of Jabber with its financial statements and began to report its investment in Jabber under the equity method of accounting. As such, prior to March 20, 2003, the results of operations from Jabber were consolidated with Webb’s results of operations. During this time, all material intercompany balances and transactions were eliminated in consolidation. The net loss attributable to the minority stockholders’ interests, which relates to our Jabber subsidiary, is recorded based upon the minority interest share of the ownership of Jabber.

Estimates and Assumptions: Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result.

Concentration of Credit Risk: Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, notes receivable and accounts receivable. We have no off balance-sheet concentrations of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements. We maintain our cash in the form of demand deposits with financial institutions that we believe to be of high credit quality.

Property and Equipment: On December 31, 2004, pursuant to a 2003 agreement (See Note 4), Webb sold all of its existing property and equipment to Jabber (See Note 5). As such, at December 31, 2004, Webb no longer owns any property and equipment.

Property and equipment was stated at cost or estimated fair value upon acquisition and depreciation was provided using the straight-line method over the estimated useful lives of the respective assets, generally ranging from three to seven years. Maintenance and repairs were expensed as incurred and improvements were capitalized.

Impairment of Long-Lived Assets: We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. We assess these assets for impairment based on estimated undiscounted future cash flows from these assets. If the carrying value of the assets exceeds the estimated future undiscounted cash flows, a loss is recorded for the excess of the asset’s carrying value over the fair value. For the years ended December 31, 2004 and 2003, we did not recognize any impairment loss for long-lived assets.

Fair Value of Financial Instruments: Financial instruments consist of cash and notes receivable. As of December 31, 2004, the carrying values of such instruments approximated their fair values.

F-9

Income Taxes: The current provision for income taxes represents actual or estimated amounts payable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying balance sheets, and for operating loss and tax credit carryforwards. The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to the tax provision or benefit in the period of enactment. Our deferred tax assets have been reduced by a valuation allowance to the extent it is more likely than not that some or all of the deferred tax assets will not be realized (See Note 11).

Stock Option Accounting and Other Stock-Based Compensation Arrangements: We issue stock options to our employees and outside directors to purchase our stock pursuant to stockholder approved stock option programs. We have elected to account for our stock-based compensation plans under the intrinsic value method of accounting as defined by Accounting Principles Board Opinion No. 25 (APB 25), “Accounting for Stock Issued to Employees” and related interpretations. We apply the disclosure provisions of SFAS Statement No. 123, “Accounting and Disclosure of Stock Based Compensation” (SFAS 123), as amended by SFAS Statement No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure.”

The following table illustrates the effect on net loss and loss per share if we had accounted for our stock option plans under the fair value method of accounting:

	Years Ended December 31,
	2004			2003
Net loss	$	(1,916,713	)	$	(2,187,634	)
Expense calculated under SFAS 123		(201,642	)		(841,668	)
Pro-forma net loss	$	(2,118,355	)	$	(3,029,302	)
Pro-forma net loss per share-basic and diluted	$	(0.08	)	$	(0.13	)

We estimate the fair value of our options using a Black-Scholes option value model, which was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. Option valuation models require the input of assumptions, including the expected stock price volatility. Our options have characteristics significantly different from those of traded options, and changes in the input assumptions can materially affect the fair value estimates. The fair value of options granted were estimated at the date of grant using a Black-Scholes pricing model with the following weighted average assumptions

	2004		2003
Risk-free interest rate	1.59	%	3.79	%
Expected dividend yield	0	%	0	%
Expected lives	2 Years		3.6 Years
Expected volatility	144	%	133	%

Included in the expense calculated under SFAS 123 for the year ended December 31, 2003, are options granted under the Jabber stock option plan, which totaled 1,900,394 for the period ended March 19, 2003.

Equity instruments issued to non-employees are accounted for in accordance with SFAS 123 and related interpretations. Certain grants of warrants require the use of variable plan accounting whereby the warrants are valued using the Black-Scholes option-pricing model at the date of issuance and at each subsequent reporting date with final valuation on the vesting date. Such instruments can result in substantial volatility in our results of operations until they are vested.

Net Loss Per Common Share: Net loss per share is calculated in accordance with SFAS No. 128, “Earnings Per Share” (SFAS 128). Under the provisions of SFAS 128, basic net loss per share is computed by dividing net loss applicable to common shareholders for the period, subject to certain adjustments, by the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of common and potential common shares outstanding

F-10

during the period if the effect of the potential common shares is dilutive. As a result of our net losses, all potentially dilutive securities, as indicated in the table below, would be anti-dilutive and are excluded from the computation of diluted loss per share, and there are no differences between basic and diluted per share amounts for all years presented.

	December 31,
	2004	2003
Stock options	2,749,599	5,317,086
Series D preferred stock	734,000	784,000
Warrants	1,874,584	2,674,700
Total	5,358,183	8,775,786

The number of share equivalents excluded from the earnings per share calculation because they are anti-dilutive, using the treasury stock method, were 299,528 and 389,508 for the years ended December 31, 2004 and 2003, respectively.

Comprehensive Loss: Included in accumulated deficit for 2003 were nominal other comprehensive income and loss due to foreign currency translation.

Subsidiary Stock Transactions: We comply with the requirements of Securities Exchange Commission Staff Accounting Bulletin No. 51, “Accounting for Sales of Stock by a Subsidiary” (SAB 51), which requires that the difference between the carrying amount of the parent’s investment in a subsidiary and the underlying net book value of the subsidiary after the issuance of stock by the subsidiary be reflected as either a gain or loss in the statement of operations or reflected as an equity transaction. We have elected to record gains or losses resulting from the sale of a subsidiary’s stock as equity transactions.

Revenue Recognition: Revenues in 2003 were generated from the license of Jabber’s software products, professional service arrangements and maintenance and support services. Software license revenue is recognized in accordance with the American Institute of Certified Public Accountants (AICPA) Statement of Position (SOP) 97-2 “Software Revenue Recognition” (SOP 97-2) and related interpretations and amendments as well as Technical Practice Aids issued from time to time by the AICPA.

Revenue from software arrangements is recognized only when persuasive evidence of an agreement exists, delivery has occurred, the fee is fixed or determinable, and collectibility is probable. Under certain circumstances, software license revenue is deferred until all criteria of SOP 97-2 are met. Certain arrangements contain provisions which result in the recognition of revenue from software licenses ratably over the term of the contract or in accordance with long-term contract accounting.

Revenue from professional services billed on a time and materials basis is recognized as the services are performed and amounts due from customers are deemed collectible and contractually non-refundable. Revenue from fixed price long-term contracts is recognized on the percentage of completion method for individual contracts. Revenues are recognized in the ratio that costs incurred bear to total estimated contract costs. The use of the percentage of completion method of revenue recognition requires estimates of percentage of project completion. Changes in job performance, estimated profitability and final contract settlements may result in revisions to costs and income in the period in which the revisions are determined. Provisions for any estimated losses on uncompleted contracts are made in the period in which such losses are determinable. In instances when the work performed on fixed price agreements is of relatively short duration, or if sufficiently accurate estimates of costs are not determinable at the outset of the arrangement, the completed contract method of accounting is used whereby revenue is recognized when the work is completed. Customer payments and billed amounts due from customers in excess of revenue recognized are recorded as deferred revenue.

F-11

Revenue from maintenance and support agreements is recognized on a straight-line basis over the term of the related maintenance and support agreement.

For software arrangements with multiple elements, revenue is recognized using the residual method prescribed by SOP 98-9, “Modification of SOP 97-2 ‘Software Revenue Recognition’ with Respect to Certain Transactions.” Revenue applicable to undelivered elements, principally software maintenance, training and implementation services, is determined based on vendor specific objective evidence (VSOE) of the fair value of those elements. VSOE is established by the price of the element when it is sold separately (i.e., the renewal rate for software maintenance and normal prices charged for training and professional services). Revenue applicable to elements for which VSOE of fair value is not determinable is deemed equal to the remainder/residual amount of the fixed arrangement price. Assuming none of the undelivered elements and VSOE of fair value exists for all undelivered elements are essential to the functionality of any of the delivered elements, the residual revenue attributed to the delivered elements is recognized when all other criteria for revenue recognition for those elements have been met.

Cost of Revenues: Cost of revenues include nominal direct costs of delivering software, direct labor costs for maintenance and support and professional services, and an allocation of overhead costs. Costs of revenues does not include any allocation of depreciation or amortization expense.

Reclassifications: Certain prior period amounts have been reclassified to conform to current period presentation.

(3) NOTES RECEIVABLE FROM COMPANY OFFICER

During 2000, pursuant to demand notes, Webb loaned a total of $165,827 to an officer of the Company. In connection with a separation agreement entered into on September 23, 2004, between the Company and its Chief Executive/Chief Financial Officer, the notes receivable were forgiven in consideration for the officer continuing to provide consulting services to the Company until January 2005. As a result, in September 2004 we recorded a non-cash expense for the balance of the notes receivable totaling $124,676. During 2004 and 2003, the Company was repaid principal on these notes totaling $9,454 and $13,346, respectively.

(4) INVESTMENT IN JABBER

Jabber is a Delaware corporation founded by Webb in February 2000. Jabber is a commercial developer of extensible instant messaging software for enterprises, government agencies, carriers and service providers and distribution partners that require real-time communication and collaboration solutions. Jabber’s products are based on the standardized extensible message and presence protocol, XMPP, developed by the Jabber.org open-source movement. Jabber instant messaging solutions differ from packaged and consumer instant messaging solutions in their ability to support and to be integrated with other applications and services.

As a result of the Jabber investment transaction on March 19, 2003, Webb’s ownership in Jabber was reduced to less than 50%. With this change in ownership interest, after March 19, 2003, Webb ceased consolidating the financial results of Jabber with that of its own and began to report its investment in Jabber under the equity method of accounting.

On April 8, 2005, Jabber sold 8,571,428 shares of Jabber’s series E preferred stock for $1.5 million to an affiliate of Webb. As a result of the transaction, Webb’s ownership interest in Jabber was reduced from approximately 43% to approximately 38% of Jabber’s outstanding common stock on an as-if converted basis. The investor also acquired an option which, expires on December 28, 2005, to purchase up to an additional 11,428,572 shares of the series E preferred stock for $2 million. In the event all of the additional shares are purchased, Webb’s ownership interest in Jabber would be reduced to approximately 33% of Jabber’s then outstanding common stock on an as-if converted basis.

On March 19, 2003, Webb, France Telecom Technologies Investissements, a wholly owned subsidiary of France Telecom (FTTI) and Intel Capital Corporation, a wholly owned subsidiary of Intel Corporation (Intel),

F-12

purchased an aggregate of 25,218,914 shares of Jabber’s series D convertible preferred stock for an aggregate consideration of $7.2 million. Webb’s investment was in the form of the cancellation of a $2.2 million convertible note receivable from Jabber for 7,705,779 shares of Jabber’s series D preferred stock.

Without the prior approval of the holder of the series E preferred stock and holders of 66 ²/3% of the outstanding shares of Jabber series D convertible preferred stock, Jabber will not engage in any transaction or arrangement for the distribution of Jabber’s securities to the public, except in connection with a qualified public offering; permit any transaction which would result in any of the holders of the Jabber preferred stock owning more than 49% of Jabber’s outstanding shares of capital stock calculated either by ownership percentage or voting power; or take any other action, other than in connection with a qualified public offering, that would result in Jabber becoming a reporting company under the Securities Exchange Act of 1934. In addition, commencing after January 1, 2005, Webb may require FTTI, on an annual basis until an event has occurred that permits Webb to distribute its Jabber securities to the Webb shareholders, to sell Webb 1,000,000 shares of the Jabber common stock held by FTTI, at a purchase price equal to the conversion price for the Jabber series D convertible preferred stock plus interest compounded at 15% per annum. If the 49% ownership limit described above limits Webb’s ability to exercise this right, then the right will be suspended until Webb is able to exercise the right in full within the 49% limitation or upon an event which provides liquidity for all of Jabber’s shareholders, at which time the 49% limitation would be waived.

As a result of the investment transaction in Jabber in March 2003, Webb recorded an adjustment to equity of $3,472,282 in accordance with SAB 51. The amount was computed as the difference between Webb’s investment in Jabber immediately after the investment transaction and multiplying Jabber’s net worth at March 19, 2003, by Webb’s ownership percentage immediately after the investment transaction.

In connection with the series D preferred stock purchase agreement, Jabber purchased business software owned by Webb and was scheduled to make payments at a rate of $12,000 per month for a period of 21 months commencing April 1, 2003. At December 31, 2004, the balance of the note was $49,249. In addition, Jabber also purchased Webb’s computer equipment, office furnishings and fixtures and other office equipment at a purchase price of $200,000 (See Note 5). We collected the $249,249 in the first four months of 2005.

The unaudited condensed financial information for Jabber is presented below:

Results of Operations

	Years Ended December 31,
	2004			2003
Net revenues	$	5,374,683		$	7,418,282
Costs and expenses		8,059,548			9,068,841
Loss from operations		(2,684,865	)		(1,650,559	)
Other loss, net		(10,149	)		(1,614,089	)
Net loss	$	(2,695,014	)	$	(3,264,648	)
Webb’s loss from investment in Jabber	$	(1,169,637	)	$	(306,809	)

Financial Position

	December 31,
	2004		2003
Cash and cash equivalents	$	1,387,161	$	5,375,388
Accounts receivable, net	$	1,253,382	$	1,052,228
Other current assets	$	261,546	$	174,969
Property and equipment, net	$	387,724	$	452,320
Accounts payable and accrued liabilities	$	1,204,285	$	1,406,938
Deferred revenue	$	961,372	$	1,928,868
Note and other amounts payable to Webb	$	249,249	$	136,479

F-13

Stockholders’ equity $ 874,907 $ 3,582,620

Webb’s loss from investment in Jabber for the year ended December 31, 2003, includes net losses from March 20, 2003 to December 31, 2003. Prior to March 20, 2003, the results of operations from Jabber were consolidated with Webb’s results of operations.

Included in other loss, net for the year ended December 31, 2003, is a $1.57 million non-cash loss on debt extinguishment resulting from the exchange of the convertible note payable to Webb for shares of Jabber’s series D preferred stock in the first quarter of 2003. This amount was eliminated in consolidation in the period ended March 19, 2003.

For the years ended December 31, 2004 and 2003, France Telecom accounted for 32% and 30%, respectively, of Jabber’s total revenues.

(5) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	December 31,
	2004		2003
Computer equipment	$	—	$	571,863
Office furniture and equipment		—		479,219
		—		1,051,082
Less accumulated depreciation		—		(792,248	)
Net property and equipment	$	—	$	258,834

On December 31, 2004, in connection with the Jabber series D preferred stock transaction (See Note 4), Jabber purchased all of Webb’s remaining property and equipment for an aggregate purchase price of $200,000. As a result, Webb recorded a gain totaling $28,234. In addition, in December 2004 Webb recorded a $14,660 loss on the disposition of obsolete computer equipment. As a result of these two transactions, Webb no longer owns any property and equipment. Included in other income, net for the years ended December 31, 2004 and 2003 are $13,574 and $7,621 in income, respectively, from the sale of or the disposition of excess and obsolete property and equipment.

We depreciated computer equipment, office equipment, and software over three to five years and office furnishings over seven years. Depreciation expense totaled $72,408 and $205,702 for the years ended December 31, 2004 and 2003, respectively.

(6) ISSUANCE OF COMMON STOCK

On October 21, 2003, we entered into an agreement with Jona, Inc. (Jona) whereby on November 12, 2003, we issued Jona 1,800,000 restricted shares of our common stock in exchange for 10,060,000 outstanding warrants, with an exercise price of $1.00 per share, issued in connection with a private placement of our securities in January and March of 2002. As a result of the exchange, in November 2003 we recorded a credit to accumulated deficit of $6,787,989, calculated as the difference between the fair value of the warrants and the fair market value of the common stock on November 12, 2003, as follows:

Fair value of warrants using Black-Scholes option-pricing model	$	8,677,989
Fair market value of common stock		1,890,000
Credit to accumulated deficit	$	6,787,989
Black-Scholes option-pricing model assumptions:
Exercise price	$	1.00
Fair market value of common stock on valuation date	$	1.05

F-14

Option life	3.2 to 3.4 years
Volatility rate	144	%
Risk-free rate of return	2.04	%
Dividend rate	0	%

(7) SERIES D JUNIOR CONVERTIBLE PREFERRED STOCK

Castle Creek Technology Partners LLC (Castle Creek) agreed to exchange up to 2,500 shares of series C-1 convertible preferred stock and $1,212,192 of principal of our 10% convertible note payable for up to 4,484 shares of our series D junior convertible preferred stock (the series D preferred stock) and a warrant to purchase 750,000 shares of our common stock at an exercise price of $1.00 per share. As part of the agreement, we reduced the exercise price of existing warrants to purchase 650,116 shares of our common stock held by Castle Creek. The exercise price for these warrants was reduced to $1.00. The 4,484 shares of series D preferred stock were convertible into 4,484,000 shares of our common stock.

As a result of the transactions described above, we issued 4,034 shares of series D preferred stock, with 734 and 784 shares being outstanding at December 31, 2004, and 2003, respectively. The series D preferred stock does not bear dividends and does not entitle the holders to any voting rights except as required by Colorado law. Each share of series D preferred stock is convertible into 1,000 shares of our common stock. The series D preferred stock is convertible into common stock unless the conversion would result in the holder being a beneficial owner of more than 4.99% of our common stock. The current conversion price is $1.00 per share. The conversion price was also subject to anti-dilution protection if we issued our common stock at prices less than the conversion price for the preferred stock or the then current price for our common stock and for stock splits, stock dividends and other similar transactions. The anti-dilution protection expired on January 17, 2004.

The series D preferred stock has liquidation preferences. If we liquidate, dissolve or wind-up our business, whether voluntarily or involuntarily, after we pay our debts and other liabilities, the holder of the preferred stock will be entitled to receive from our remaining net assets, before any distribution to the holders of our common stock, the amount of $1,000 per share.

During the years ended December 31, 2004 and 2003, the holder of our series D preferred stock converted 50 and 1,800 shares, respectively, into 50,000 and 1,800,000 shares, respectively of our common stock at conversion prices per share of $1.00 as follows:

	Number of Shares
Conversion Date	Series D Preferred Stock	Common Stock
February 2, 2004	50	50,000
January 7, 2003	200	200,000
January 28, 2003	200	200,000
February 21, 2003	200	200,000
March 20, 2003	200	200,000
April 23, 2003	200	200,000
June 5, 2003	200	200,000
September 2, 2003	200	200,000
October 23, 2003	200	200,000
December 3, 2003	200	200,000
Total for 2003	1,800	1,800,000

(8) STOCK OPTION PLANS

We have stock option plans for directors, officers, employees and other third parties, which provide for the issuance of up to 6,250,000 nonqualified and incentive stock options. The options vest over various terms with a maximum vesting period of 60 months and expire after a maximum of seven years from the date of grant. At

F-15

December 31, 2004, there were options for 2,541,771 shares of common stock outstanding and options for 2,460,105 shares of common stock were vested, with 2,478,817 options available for future grants under the plans.

A summary of the status of the plans as of December 31, 2004 and 2003, and changes during the years then ended are as follows:

	2004				2003
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding at beginning of year	5,317,086		$	3.13	3,210,419		$	4.59
Granted	200,000		$	0.55	2,655,000		$	0.91
Forfeited and cancelled	(2,975,315	)	$	3.96	(548,333	)	$	2.87
Outstanding at end of year	2,541,771		$	1.96	5,317,086		$	3.13
Exercisable at end of year	2,460,105		$	1.99	3,350,420		$	4.42

The weighted average fair value of options granted during the years ended December 31, 2004 and 2003, with exercise prices greater than the fair market value on grant date are $0.32 and $0.72, respectively. The weighted average fair value of options granted during the year ended December 31, 2003, with exercise prices equal to the fair market value on grant date is $0.61.

The status of total stock options outstanding and exercisable under the plans as of December 31, 2004, is as follows:

	Stock Options Outstanding				Stock Options Exercisable
Range of Exercise Prices	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Number of Shares	Weighted Average Exercise Price
$ 0.55 – $ 1.38	2,008,224	$	0.72	4.6	1,926,558	$	0.71
$ 1.39 – $ 3.46	171,384	$	2.20	3.2	171,384	$	2.20
$ 3.47 – $ 8.68	173,163	$	6.59	1.6	173,163	$	6.59
$8.69 – $19.06	189,000	$	10.62	2.1	189,000	$	10.62
	2,541,771	$	1.96		2,460,105	$	1.99

F-16

(9) WARRANTS AND OPTIONS FOR COMMON STOCK ISSUED OUTSIDE THE STOCK OPTION PLANS

We have issued common stock purchase warrants and options outside our stock option plans (Warrants) in connection with the sale of securities, business acquisitions and services rendered to the Company. The following table sets forth outstanding Warrants as of December 31, 2004 and 2003.

				2004	2003
Warrants and Options Issued in Connection With	Expiration Date	Current Exercise Price Per Share		Shares Underlying Warrants Outstanding	Shares Underlying Warrants Outstanding
Warrants issues with sale of private placement	January to April 2007	$	1.00	675,000	675,000
Warrant issued for exchange of 10% convertible note payable	January 2007	$	1.00	750,000	750,000
Series C-1 convertible preferred stock warrant	February 2004	$	1.00	—	500,000
Series B preferred stock warrants (Note 13)	February 2005	$	0.2425	343,750	343,750
10% convertible note payable warrant	December 2004	$	1.00	—	150,116
Financial services firm warrant	October 2004	$	2.50	—	125,000
Short-term note payable warrant	August 2004	$	2.50	—	25,000
Investor relations firm warrant	April 2006	$	1.00	100,000	100,000
Placement firm warrant	March 2005	$	38.44	5,834	5,834
Total				1,874,584	2,674,700

On February 5, 2004, the holder of the Series C-1 convertible preferred stock warrant to purchase 500,000 shares of our common stock exercised the entire warrant under its cash-less exercise provision whereby we issued 115,385 shares of our common stock. The number of shares issued were calculated by multiplying the number of shares exercised by the quotient of the difference between the average closing price five days immediately prior to the exercise date ($1.30) and the exercise price ($1.00) divided by the average closing price five days immediately prior to the exercise date.

F-17

On February 15, 2005, the holder of the Series B preferred stock warrants exercised the entire warrants under its cash-less exercise provisions where by we issued 122,050 shares of our common stock (See Note 13).

(10) STOCK BASED COMPENSATION EXPENSE

In April 2003, we entered into a six-month consulting agreement with a company to provide Webb with investor relation services. In connection with the agreement, we issued the consulting company a three-year warrant to purchase 100,000 shares of our common stock at an exercise price of $1.00 per share, which vested 50,000 shares on July 16, 2003 and 50,000 on October 14, 2003. We applied variable plan accounting pursuant to SFAS 123 and related interpretations and valued the warrant at $61,907 utilizing the Black-Scholes option-pricing model with the assumptions in the table that follows. The value of the warrant was amortized to expense over the term of the agreement and for the year ended December 31, 2003, we recorded $60,479 of non-cash compensation expense.

Black-Scholes option-pricing model assumptions:
Exercise price	$	1.00
Fair market value of common stock on valuation date	$	0.82
Option life		3 years
Volatility rate		144	%
Risk-free rate of return		2.8	%
Dividend rate		0	%

In April 2003, we entered into a month-to-month consulting agreement with a company to provide Webb with investor relation services including stock support. In connection with the agreement, we issued two separate three-year options to purchase 10,000 shares each of our common stock at $1.00 per share. The first option vested ratably over a three-month period beginning on May 2, 2003. The second option, which was cancelled in 2004, was to vest based on an average daily trading volume for any 60-day trading period subsequent to the date of the option agreement. We applied variable plan accounting pursuant to SFAS 123 and related interpretations and valued the option and recorded non-cash compensation expense for the year ended December 31, 2003, totaling $5,931 utilizing the Black-Scholes option-pricing model with the assumptions in the table that follows.

Black-Scholes option-pricing model assumptions:
Exercise price	$1.00
Fair market value of common stock on valuation date	$0.67 to $0.82
Option life	3 to 2.8 years
Volatility rate	144%
Risk-free rate of return	2.76% to 2.92%
Dividend rate	0%

(11) INCOME TAXES

The statutory federal income tax rate was 34% for the years ended December 31, 2004 and 2003. Differences between the income tax expense reported in the statements of operations and the amount reported by applying the statutory federal income tax rate to loss applicable to common shareholders before income taxes are as follows:

F-18

	Years Ended December 31,
	2004			2003
Benefit at statutory rate	$	(648,348	)	$	(743,796	)
Increase (decrease) due to:
State income taxes		(23,357	)		(29,901	)
Nondeductible expenses		407,687			435,727
Valuation allowance		264,018			337,970
Income tax provision	$	—		$	—

Components of net deferred assets as of December 31, 2004 and 2003 are as follows:

	Years Ended December 31,
	2004			2003
Deferred tax assets:
Accrued liabilities and other reserves	$	3,185		$	14,159
Net operating losses		20,453,444			20,194,838
Stock and warrant expense		393,549			393,549
Total deferred tax assets		20,850,178			20,602,546
Deferred tax liabilities:
Depreciation		—			(53,328	)
Valuation allowance		(20,850,178	)		(20,549,218	)
Net deferred tax assets	$	—		$	—

For income tax purposes, we have approximately $55 million of net operating loss carryforwards that expire at various dates through 2021. The Tax Reform Act of 1986 contains provisions that may limit the net operating loss carryforwards available to be used in any given year in the event of a significant change in ownership. Realization of net operating loss carryforwards is dependent on generating sufficient taxable income prior to the expiration dates.

During 2004 and 2003, we increased our valuation allowance by $264,018 and $337,970, respectively, due mainly to uncertainty relating to the realiability of the 2002 and 2001 net operating loss carryforwards.

(12) RELATED PARTY TRANSACTIONS

Webb’s vice-president of administration and corporate counsel, who began his employment with the Company in 1999, is also a partner in the law firm we retain for our legal services. We incurred $23,069 and $55,022 in legal fees to the law firm during the years ended December 31, 2004 and 2003, respectively. As of December 31, 2004 and 2003, our accounts payable balances included $901 and $1,799, respectively, payable to the law firm.

(13) SUBSEQUENT EVENTS

Exercise of Warrant. On February 15, 2005, the holder of the Series B preferred stock warrants exercised the entire warrants under its cash-less exercise provisions where by we issued 122,050 shares of our common stock. The number of shares issued were calculated by multiplying the number of shares exercised by the quotient of the difference between the average closing price five days immediately prior to the exercise date ($0.38) and the exercise price ($0.2425) divided by the average closing price five days immediately prior to the exercise date.

F-19

Jabber, Inc. Financing. On April 8, 2005, Jabber sold 8,571,428 shares of Jabber’s series E preferred stock for $1.5 million to an affiliate of Webb. As a result of the transaction, Webb’s ownership in Jabber was reduced from approximately 43% to approximately 38% of Jabber’s outstanding common stock on an as-if converted basis. The investor also acquired an option, which expires on December 28, 2005, to purchase up to an additional 11,428,572 shares of the series E preferred stock for $2 million.

The series E preferred stock is convertible into shares of Jabber’s common stock on a one-for-one basis. The series E stock includes a liquidation preference which entitles the holders of the preferred stock on the liquidation of Jabber, including a sale of Jabber, to first be paid their original purchase price for their preferred stock and then to participate with holders of common stock on an as-converted basis in the distribution of the remaining proceeds. The conversion price of the preferred stock would be adjusted on a weighted average basis in the event that Jabber sells shares of its common stock or securities convertible into or exercisable for common stock at a price less than the original purchase price for the preferred stock.

Without the prior approval of the holder of the series E preferred stock, Jabber may not engage in any transaction or arrangement for the distribution of Jabber’s securities to the public; permit any transaction which would result in any of the holders of Jabber’s series E or D preferred stock owning more than 49% of Jabber’s outstanding shares of capital stock; or take any other action that would result in Jabber becoming a reporting company under the Securities Exchange Act of 1934.

F-20

WEBB INTERACTIVE SERVICES, INC.

UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION

RECONCILIATION OF WEBB PARENT ONLY FINANCIAL STATEMENTS TO AS REPORTED FINANCIAL STATEMENTS

With the purchase of Jabber’s series D convertible preferred stock on March 19, 2003, by Webb, FTTI and Intel, Webb’s ownership in Jabber was reduced from 77.8% on an as-if converted basis prior to the transaction to 43.3% immediately after the transaction. Due to this change in ownership, on March 20, 2003, Webb ceased consolidating the financial results of Jabber with Webb’s financial statements and began to report its investment in Jabber under the equity method of accounting. Presented below are the unaudited consolidating financial statements for all periods in which Webb consolidated Jabber’s results of operations with its own to aid the reader in better understanding the financial statements of Webb for all periods presented. The amounts in the column labeled “Consolidated” represent the presentation in accordance with accounting principles generally accepted in the United States (GAAP) and the amounts reported in our financial statements.

UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2003

	WEBB			JABBER (1)			ELIMINATIONS			GAAP CONSOLIDATED
Net revenues	$	—		$	646,613		$	—		$	646,613
Operating expenses:
Cost of revenues		—			161,899			—			161,899
Sales and marketing expenses		—			356,983			—			356,983
Product development expenses		—			590,569			—			590,569
General and administrative expenses		813,735			427,161			—			1,240,896
Depreciation and amortization		158,874			46,828						205,702
		972,609			1,583,440			—			2,556,049
Loss from operations		(972,609	)		(936,827	)		—			(1,909,436	)
Interest income		1,629,062			413			(1,610,547	)		18,928
Loss from investment in Jabber		(2,851,755	)		—			2,544,946			(306,809	)
Loss on extinguishment of convertible notes payable to Webb		—			(1,571,900	)		1,571,900			—
Other income (loss), net		7,668			(694	)		—			6,974
Interest expense		—			(38,647	)		38,647			—
Net loss before minority interest in losses of Jabber		(2,187,634	)		(2,547,655	)		2,544,946			(2,190,343	)
Minority interest in losses of subsidiary		—			—			2,709			2,709
Net loss	$	(2,187,634	)	$	(2,547,655	)	$	2,547,655		$	(2,187,634	)

(1) The operating results of Jabber are for the period ended March 19, 2003.

F-21

UNAUDITED CONSOLIDATING STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2003

	WEBB			JABBER (1)			ELIMINATIONS			GAAP CONSOLIDATED
Cash flows from operating activities:
Net loss	$	(2,187,634	)	$	(2,547,655	)	$	2,547,655		$	(2,187,634	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		158,874			46,828			—			205,702
Interest income on exchange of convertible note receivable from Jabber		(1,571,900	)		—			1,571,900			—
Loss on extinguishment of convertible notes payable to Webb		—			1,571,900			(1,571,900	)		—
Loss from investment in Jabber		2,851,755			—			(2,544,946	)		306,809
Minority interest in losses of subsidiary		—			—			(2,709	)		(2,709	)
Stock and stock options issued for services		66,410			—			—			66,410
Gain on sale and disposal of property and equipment		(7,621	)		—			—			(7,621	)
Accrued interest receivable		(1,377	)		—			—			(1,377	)
Accrued interest payable on convertible note payable		—			38,647			(38,647	)		—
Changes in operating assets and liabilities:
Increase in accounts receivable		—			(404,246	)		—			(404,246	)
(Increase) decrease in prepaid expenses		10,554			35,024			—			45,578
Decrease in short-term deposits and other assets		38,388			—			—			38,388
Increase (decrease) in accounts payable and accrued liabilities		(92,174	)		160,215			38,647			106,688
Increase (decrease) in accrued compensation, benefits and payroll taxes		7,944			(8,606	)		—			(662	)
Increase in deferred revenue		—			653,287			—			653,287
Net cash used in operating activities		(726,781	)		(454,606	)		—			(1,181,387	)
Cash flows from investing activities:
Purchase of property and equipment		(1,621	)		(4,500	)		—			(6,121	)
Cash invested in Jabber		(195,000	)		—			195,000			—
Purchase of Jabber securities from third-party investors		(34,993	)		—			—			(34,993	)
Cash retained by Jabber at March 19, 2003		—			—			(68,991	)		(68,991	)
Collection of note receivable from Jabber		93,445			—			—			93,445
Collections from Jabber		20,477			—			—			20,477
Collection of notes receivable from Company officer		13,346			—			—			13,346
Net provided by (cash used) in investing activities		(104,346	)		(4,500	)		126,009			17,163
Cash flows from financing activities:
Cash investment from Webb		—			195,000			(195,000	)		—
Net cash provided by financing activities		—			195,000			(195,000	)		—
Net decrease in cash and cash equivalents		(831,127	)		(264,106	)		(68,991	)		(1,164,224	)
Effect of foreign currency exchange rate changes on cash		7,519			2,218			—			9,737
Cash and cash equivalents, beginning of year		1,383,198			330,879			—			1,714,077
Cash and cash equivalents, end of year	$	559,590		$	68,991		$	(68,991	)	$	559,590

(1) The cash flows for Jabber are for the period ended March 19, 2003.

F-22

WEBB INTERACTIVE SERVICES, INC.

INDEX TO EXHIBITS

FORM 10-KSB (For Year Ended December 31, 2004)

(a) Listing of Exhibits:

3.1(a)	Articles of Incorporation, as amended, of Webb Interactive Services, Inc. (1)
3.1(b)	Articles of Amendment setting forth the terms of Series D Junior Convertible Preferred Stock (2)
3.2	Bylaws of Webb Interactive Services, Inc. (3)
4.1	Specimen form of Webb Interactive Services, Inc. common stock certificate (4)
4.2	Webb Interactive Services, Inc. Stock Option Plan of 1995 (3)
4.3	Form of Incentive Stock Option Agreement for Webb Interactive Services, Inc. Stock Option Plan of 1995 (3)
4.4	Form of Nonstatutory Stock Option Agreement for Webb Interactive Services, Inc. Stock Option Plan of 1995 (3)
4.5	Webb Interactive Services, Inc. Stock Option Plan of 2000, including forms of Incentive and Nonstatutory Stock Option Agreements (5)
4.6	Stock Purchase Warrant dated August 25, 1999, as amended December 18, 1999, issued by Webb Interactive Services, Inc. to Castle Creek Technology Partners, Inc. (6)
4.7
4.8	Stock Purchase Warrant dated December 31, 1999 issued to by Webb Interactive Services, Inc. Marshall Capital Management, Inc. and Castle Creek Technology Partners, LLC (7)
4.9	Form of Stock Purchase Warrant dated February 28, 2001 issued by Webb Interactive Services, Inc. to Castle Creek Technology Partners, LLC (8)
4.10
10.1	Form of Nondisclosure and Nonsolicitation Agreement between Webb Interactive Services, Inc. and its employees (1)
10.2	Employment Agreement between Webb Interactive Services, Inc. and Lindley S. Branson, dated March 1, 2002 (9)
10.3	Securities Purchase Agreement dated as of January 17, 2002, between Webb Interactive Services, Inc. and Jona, Inc. Included as an exhibit is a Registration Rights Agreement (2)
10.4	Letter Agreement between Webb Interactive Services, Inc. and Jona, Inc. (9)
10.5	Exchange Agreement dated January 17, 2002 between Webb Interactive Services, Inc. and Castle Creek Technology Partners LLC. Included as an exhibit is a Registration Rights Agreement (2)
10.6	Series D Preferred Stock Purchase Agreement dated March 17, 2003, by and among Jabber, Inc. France Telecom Technologies Investissements, Intel Capital Corporation, and Webb Interactive Services, Inc. Included as exhibits to the Stock Purchase Agreement are the Restated Certificate of Incorporation of Jabber, Inc. and the following additional agreements among the parties to the Stock Purchase Agreement: Investors Rights Agreement; Right of First Refusal and Co-Sale Agreement; and Voting Agreement. (10)
10.7	Jabber, Inc. Certificate of Designation for Series E and D Convertible Preferred Stock*
10.8	Exchange Agreement, dated as of October 21, 2003, by and between Webb Interactive Services, Inc. and Jona, Inc. (11)
10.9	Investor Rights Agreement, Right of First Refusal and Co-Sale Agreement and Voting Agreement, all dated April 8, 2005, among Jabber, Inc., Jona, Inc., France Telecom Technologies Investissements and Intel Capital Corporation*
13.1	The registrant intends to deliver to its shareholders a copy of 2004 Annual Report on Form 10-KSB (without exhibits), in lieu of a separate Annual Report to Shareholders
21.1	Subsidiaries of Webb Interactive Services, Inc.*
23.1	Consent of Ehrhardt Keefe Steiner & Hottman PC*
23.2	Consent of Ernst & Young LLP*

Ex-1

24.1	Power of Attorney* (Included in signature page)
31.1	Certification of Chief Executive Officer and Chief Financial Officer*
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

 * Filed herewith. The certifications have been provided by the registrant’s Vice President and General Counsel, the registrant’s only executive officer. Rules 13a, 14 and 15d-14, pursuant to the Securities Exchange Act of 1934, as amended, provide that when an issuer does not have a CEO/CFO, the person performing similar functions must execute the required certifications. By providing the certifications, registrant’s Vice President and General Counsel acknowledges that he is performing CEO/CFO functions for registrant for the sole purpose of providing the required certifications and for no other purpose.

(1) Filed with the Registration Statement on Form S-3, filed January 29, 1999, Commission File No. 333-71503.

(2) Filed with the Registration Statement on Form SB-2, filed April 5, 1996, Commission File No. 333-3282-D.

(3) Filed with the Registration Statement on Form S-3, filed September 24, 1999, Commission File No. 333-86465.

(4) Filed with the Form 10-KSB Annual Report for the year ended December 31, 2000, Commission File No. 0-28462.

(5) Filed with the Current Report on Form 8-K, filed January 22, 2002 and amended on January 29, 2002, Commission File No. 0-28462.

(6) Filed with Amendment No. 2 to Webb’s Registration Statement on Form S-3, filed January 3, 2000, Commission File No. 333-87887.

(7) Filed with the Current Report on Form 8-K, filed January 5, 2000, Commission File No. 0-28462.

(8) Filed with the Current Report on Form 8-K, filed March 1, 2001, Commission File No. 0-28462.

(9) Filed with the Form 10-KSB Annual Report for the year ended December 31, 2001, Commission File No. 0-28462.

(10) Filed with the Current Report on Form 8-K, filed on March 20, 2003, Commission File No. 0-28462.

(11) As filed with the Quarterly Report on Form 10-QSB for the quarter ended September 30, 2003, Commission File No. 0-28462.

Ex-2

EX-10.7

Exhibit 10.7

CERTIFICATE OF DESIGNATION OF

SERIES OF PREFERRED STOCK

AMENDED AND RESTATED STATEMENT OF DESIGNATION OF

RIGHTS, PREFERENCES AND LIMITATIONS OF

SERIES D CONVERTIBLE PREFERRED STOCK

AND

SERIES E CONVERTIBLE PREFERRED STOCK

OF

JABBER, INC.

The undersigned, Stuart Lucko, the Assistant Secretary of Jabber, Inc., a Delaware corporation (the “Corporation”), hereby certifies that the following resolutions establishing Series D Convertible Preferred Stock and Series E Convertible Preferred Stock of the Corporation pursuant to Section 151 of Delaware Corporation Law were duly adopted by unanimous written consent of the Board of Directors of the Corporation on March 24, 2005 and by written consent of a majority of the stockholders of the Corporation and a majority of the holders of Series D Convertible Preferred Stock:

RESOLVED, that, the Company’s Designation of Rights, Preferences and Limitations of Preferred Stock filed with the Secretary of State of the State of Delaware on March 18, 2003 shall be amended and restated as set forth in Amended and Restated Designation of Rights, Preferences and Limitations of Preferred Stock attached hereto as Exhibit A (the “Designation”).

RESOLVED, that, subject to the filing of the Designation, the rights, powers, preferences and restrictions of the Series D Convertible Preferred Stock are amended and restated as set forth in the Designation.

RESOLVED, that, subject to the filing of the Designation, there is hereby created a series of preferred stock of this Corporation, such series to be known as Series E Convertible Preferred Stock, and that such series shall have the rights, powers, preferences and restrictions set forth in the Designation.

RESOLVED, that the Secretary of the Corporation is hereby authorized and directed to make, execute and file with the Delaware Secretary of State in the manner required by law, the Designation, and to take all other action he may deem necessary or advisable to carry into effect the foregoing resolution.

Ex-3

IN WITNESS WHEREOF, I have subscribed my name this 5th day of April, 2005.

/s/ Stuart Lucko

Stuart Lucko

Assistant Secretary

Ex-4

EXHIBIT A

AMENDED AND RESTATED CERTIFICATE OF DESIGNATION

FOR SERIES D PREFERRED STOCK AND

SERIES E PREFERRED STOCK

1. Designation. 25,218,914 shares of Preferred Stock of the Corporation are hereby designated Series D Convertible Preferred Stock (the “Series D Preferred Stock”) and 20,000,000 shares of Preferred Stock of the Corporation are hereby designated Series E Convertible Preferred Stock (the “Series E Preferred Stock”, and together with the Series D Preferred Stock, the “Preferred Stock’). The powers, terms, conditions, designations, powers, preferences and privileges, relative, participating, optional and other special rights, and qualifications, limitations and restrictions, if any, of the Series D Preferred Stock and the Series E Preferred Stock shall be as set forth in this certificate of designation.

2. Ranking.

(a) The Corporation’s Series E Preferred Stock shall rank, as to dividends and upon redemption and Liquidation (as defined in Section 4(a) hereof), senior and prior to the Series D Preferred Stock, the Common Stock and any other class or series of stock of the Corporation.

(b) The Corporation’s Series D Preferred Stock shall rank, as to dividends and upon redemption and Liquidation (as defined in Section 4(a) hereof), senior and prior to the Corporation’s Common Stock, par value $0.01 per share (the “Common Stock”), and any other class or series of stock of the Corporation other than the Series E Preferred Stock.

3. Dividends.

(a) Series E Preferred Stock. The holders of the then outstanding Series E Preferred Stock (the “Series E Preferred Stockholders”) shall be entitled to receive, in preference to the payment of any dividends or other Distribution (as defined below) on the Common Stock, the Series D Preferred Stock and any other class or series of stock in the Corporation in such calendar year (other than a stock dividend declared and paid on the Common Stock that is payable in shares of Common Stock (a “Common Stock Dividend”)), cumulative dividends as provided in this Section 3(a). Dividends on each share of Series E Preferred Stock shall be payable in cash out of funds and assets of the Corporation legally available therefor and accrue at the rate of eight percent (8%) per annum on the sum of (i) $0.175 (as appropriately adjusted for any recapitalizations affecting the Series E Preferred Stock after the original Series E Preferred Stock issuance date in accordance herewith (such date is hereinafter referred to as the “Original Series E Issuance Date”)) (the “Original Series E Issuance Price”) and (ii) all accumulated and unpaid dividends accrued thereon pursuant to this Section 3(a) from the Original Series E Issuance Date (the “Series E Dividends” and the sum of the Original Series E Issuance Price and the Series E Dividends is referred to herein as the “Series E Preference Amount”). Such dividends will be calculated and compounded annually in arrears on December 31 of each year in respect of the prior year prorated on a daily basis for partial years. Such dividends shall commence to accrue on each share of Series E Preferred Stock from the date of issuance thereof

Ex-5

whether or not declared by the Board of Directors, and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of the dividends, and shall continue to accrue thereon until the Series E Preference Amount is paid in full in cash or such share of Series E Preferred Stock is converted to Common Stock. In addition, the Series E Preferred Stockholders shall be entitled to receive dividends or other Distributions ratably and equally with the holders of the then outstanding Common Stock (the “Common Stockholders”) and the holders of the then outstanding Series D Preferred Stock (the “Series D Preferred Stockholders” and together with the Series E Preferred Stockholders, the “Preferred Stockholders”) on each outstanding share of Series E Preferred Stock in an amount at least equal to the product of (i) the per share amount, if any, of the dividend or other Distribution multiplied by (ii) the number of whole shares of Common Stock into which such share of Series D Preferred Stock is then convertible. No dividends (other than a Common Stock Dividend) shall be paid, and no transfer of cash or property by the Corporation to one or more of its stockholders without consideration, whether by dividend or otherwise (except a dividend in shares of the Corporation’s stock) (a “Distribution”) shall be made, with respect to the Common Stock, the Series D Preferred Stock or any other class or series of stock in the Corporation during any calendar year unless approved by Series E Preferred Stockholders representing 66 ²/3% of the then outstanding Series E Preferred Stock; provided, however that this restriction shall not apply to Repurchases of securities of the Corporation pursuant to Section 3(d) below. Payments of any dividends to the Series E Preferred Stockholders shall be paid pro rata, on an equal priority, pari passu basis according to their respective dividend preferences as set forth herein.

(b) Series D Preferred Stock In each calendar year, Series D Preferred Stockholders shall be entitled to receive, when, as and if declared by the Board, out of any funds and assets of the Corporation legally available therefor, noncumulative dividends at the rate declared by the Board for such Series D Preferred Stock, prior and in preference to the payment of any dividends or other Distribution on the Common Stock and any other class or series of stock in the Corporation in such calendar year (other than a Common Stock Dividend, subject to the preferential rights of the Series E Preferred Stock set forth in Section 3(a). No dividends (other than a Common Stock Dividend) shall be paid, and no Distribution shall be made, with respect to the Common Stock or any other class or series of stock in the Corporation other than the Series E Preferred Stock during any calendar year unless approved by Series D Preferred Stockholders representing 66 ²/3% of the then outstanding Series D Preferred Stock; provided, however that this restriction shall not apply to Repurchases of securities of the Corporation pursuant to Section 3(d) below. Payments of any dividends to the Series D Preferred Stockholders shall be paid pro rata, on an equal priority, pari passu basis according to their respective dividend preferences as set forth herein. Dividends on the Series D Preferred Stock shall not be mandatory or cumulative, except as set forth in Section 3(c), and no rights or interest shall accrue to the Series D Preferred Stockholders by reason of the fact that the Corporation shall fail to declare or pay dividends on the Series D Preferred Stock in the amount of the respective annual Dividend Rate for such series or in any other amount in any calendar year or any fiscal year of the Corporation, whether or not the earnings of the Corporation in any calendar year or fiscal year were sufficient to pay such dividends in whole or in part.

(c) Other Dividends. Subject to the dividend rights of the Preferred Stockholders, the holders of record of the Common Stock (the “Common Stockholders”) shall be entitled to receive, out of funds legally available therefor, such dividends as may be declared

Ex-6

from time to time by the Board, but only when, as, and if declared by the Board; provided that, so long as any Preferred Stock is outstanding, the Corporation shall not declare or pay any dividend or make any distribution (whether in cash, shares of capital stock of the Corporation or other property) on the Common Stock or any other class or series of stock ranking junior to the Preferred Stock, unless prior thereto or simultaneously therewith (i) the Series E Dividends shall have been paid, (ii) all dividends and distributions previously declared on the Preferred Stock shall have been paid and (ii) an equal or greater dividend shall be paid on the Preferred Stock (on an as-converted to Common Stock basis).

(d) Repurchase of Securities. Notwithstanding anything to the contrary in this Section 3, whether or not all declared dividends on the Preferred Stock shall have been paid or funds have been set aside therefor, the Corporation may at any time, subject to Section 6(b)(v) hereof, out of funds legally available therefor, repurchase any outstanding securities of the Corporation (i) issued to or held by officers, directors, employees, consultants and other service providers of the Corporation pursuant to any equity incentive agreement or stock restriction agreement approved by the Board, that gives the Corporation the right to repurchase upon termination of services or a right of first refusal on proposed transfers and (ii) pursuant to all of the provisions of the Amended and Restated Right of First Refusal and Co-Sale Agreement dated April 5, 2005.

4. Liquidation Preferences.

(a) Rights on Liquidation, Dissolution, Winding-Up. In the event of any liquidation, dissolution or winding-up of the affairs of the Corporation (collectively, a “Liquidation”), whether voluntary or involuntary, the assets and funds of the Corporation legally available for distribution to its stockholders, whether from capital, surplus or earnings (the “Assets”), shall be distributed as follows:

(i) First, each Series E Preferred Stockholder shall be paid an amount equal to the full Series E Preference Amount of all shares of Series E Preferred Stock held by such Series E Preferred Stockholder. If the Assets shall be insufficient to permit the payment in full of the Series E Preference Amount for all shares of Series E Preferred Stock, then the entire remaining Assets shall be distributed among the Series E Preferred Stockholders ratably in proportion to the full Series E Preference Amount to which they would otherwise be entitled to receive on account of their Series E Preferred Stock.

(ii) Second, each Series D Preferred Stockholder shall be paid an amount equal to (i) $0.2855 per share of Series D Preferred Stock (as appropriately adjusted for any recapitalizations affecting the Series D Preferred Stock after the original Series D Preferred Stock issuance date in accordance with the Amended and Restated Certificate of Designation for the Series D Preferred Stock) (the “Original Series D Issuance Price”) held by such Series D Preferred Stockholder plus (ii) an amount equal to any declared but unpaid dividends on each share of Series D Preferred Stock held by such Series D Preferred Stockholder (collectively, the “Series D Preference Amount”). If the Assets shall be insufficient to permit the payment in full of the Series D Preference Amount for all shares of Series D Preferred Stock, then the entire remaining Assets shall be distributed among the Series D Preferred Stockholders

Ex-7

ratably in proportion to the full Series D Preference Amount to which they would otherwise be entitled to receive on account of their Series D Preferred Stock.

(iii) Third, each Series E Preferred Stockholder, Series D Preferred Stockholder and Common Stockholder shall be paid an amount equal to two (2) times the Original Series E Issuance Price (the “Series E Maximum Amount”) for each share of Common Stock and each share of Common Stock issuable upon conversion of the Series D Preferred Stock and Series E Preferred Stock held by such Series D Preferred Stockholders, Series E Preferred Stockholders and Common Stockholders. If the Assets shall be insufficient to permit the payment in full of the amounts set forth in the immediately preceding sentence, then the entire remaining Assets shall be distributed among the Series E Preferred Stockholders, the Series D Preferred Stockholders and the Common Stockholders ratably in proportion to the full Series E Maximum Amount to which they would otherwise be entitled to receive on account of their shares of Common Stock and Common Stock issuable upon conversion of the Series E Preferred Stock and the Series D Preferred.

(v) Fourth, each Series D Preferred Stockholder and Common Stockholder shall be paid an amount equal to two (2) times the Original Series D Issuance Price less the Series E Maximum Amount for each share of Common Stock and each share of Common Stock issuable upon conversion of the Series D Preferred Stock held by such Series D Preferred Stockholder and Common Stockholder. If the Assets shall be insufficient to permit the payment in full of the amounts set forth in the immediately preceding sentence, then the entire remaining Assets shall be distributed among the Common Stockholders and Series D Preferred Stockholders ratably in proportion to the full amounts to which they would otherwise be entitled to receive pursuant to the immediately preceding sentence on account of their shares of Common Stock and Common Stock issuable upon conversion of the Series D Preferred Stock.

(vi) Fifth, the entire remaining Assets shall be distributed among the Common Stockholders ratably in proportion to the shares of Common Stock held by such Common Stockholders.

Nothing in this Section 4(a) shall prevent shares of Preferred Stock from being converted into shares of Common Stock in order to participate in any distribution of assets or funds of the Corporation, or any series of distributions of assets or funds of the Corporation; provided that, in the event of such conversion, any holder of Preferred Stock shall participate in any such distributions in respect of such shares solely as a holder of Common Stock and shall not participate in any preference payments made to the Preferred Stockholders in respect of the Preferred Stock, including, without limitation, the Series D Preference Amount and the Series E Preference Amount.

(b) Sale, Merger, Consolidation, etc. The following events shall be deemed to be a Liquidation for the purposes of this Section 4: (a) the acquisition of the Corporation by another entity by means of any transaction or series of related transactions (including, without limitation, any stock acquisition, reorganization, merger or consolidation, but not including any sale of stock by the Corporation for capital raising activities), other than a transaction or series of related transactions in which the holders of the voting securities of the Corporation outstanding immediately prior to such transaction continue to retain (either by such voting securities

Ex-8

remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), as a result of shares in the Corporation held by such holders prior to such transaction, at least fifty percent (50%) of the total voting power represented by the voting securities of the Corporation or such surviving entity outstanding immediately after such transaction or series of transactions; or (b) a sale, lease or other conveyance of all or substantially all of the assets of the Corporation.

(c) Valuation of Non-Cash Consideration. If any assets of the Corporation distributed to stockholders in connection with any Liquidation are other than cash, then the value of such assets shall be their fair market value as determined in good faith by the Board of Directors of the Corporation; except that any publicly-traded securities to be distributed to stockholders in a Liquidation shall be valued as follows:

(i) If the securities are then traded on a national securities exchange or the Nasdaq Stock Market (or a similar national quotation system), then the value of the securities shall be deemed to be to the average of the closing prices of the securities on such exchange or system over the ten (10) trading day period ending five (5) trading days prior to the distribution.

(ii) If the securities are actively traded over-the-counter, then the value of the securities shall be deemed to be the average of the closing bid prices of the securities over the ten (10) trading day period ending five (5) trading days prior to the distribution.

(iii) In the event of a merger or other acquisition of the Corporation by another entity, the distribution date shall be deemed to be the date such transaction closes.

5. Conversion Rights.

(a) Mandatory Conversion. Each share of Preferred Stock shall automatically be converted into fully paid and nonassessable shares of Common Stock as provided herein immediately prior to the closing of a Qualified Public Offering (as such term is defined in Section 5(e)(v)). Each share of Series E Preferred Stock shall also automatically be converted into fully paid and nonassessable shares of Common Stock as provided herein upon the affirmative vote or written consent of the holders of at least sixty-six and two-thirds percent (66 ²/3%) of the then outstanding shares of Series E Preferred Stock.

(b) Voluntary Conversion. Subject to and in compliance with this Section 5, any shares of Preferred Stock may, at the option of the holder thereof, be converted at any time or from time to time, into fully paid and nonassessable shares of Common Stock. The number of shares of Common Stock to which a Preferred Stockholder shall be entitled upon conversion (whether by mandatory conversion pursuant to Section 5(a) hereof or voluntary conversion pursuant to this Section 5(b)) shall be the product obtained by multiplying the number of shares of Preferred Stock being converted by the then applicable Conversion Rate (as such term is defined in Section 5(c) hereof). The holder of shares of Series D Preferred Stock voluntarily converted into shares of Common Stock pursuant to this Section 5(b) shall be entitled to

Ex-9

payment of any declared but unpaid dividends on such shares of Preferred Stock up to and including the date such conversion is effective. At the election of each Series D Preferred Stockholder, such dividends may be paid in cash or with shares of Common Stock. For Series D Preferred Stockholders the number of shares issued in payment of such dividend shall be determined based upon the highest price per share which the Corporation could obtain from a willing buyer (who is not a current employee or director) for shares of Common Stock sold by the Corporation, from authorized but unissued shares, as determined in good faith by the Board of Directors of the Corporation. The holder of shares of Series E Preferred Stock voluntarily converted pursuant to this Section 5(b) or mandatorily converted pursuant to Section 5(a) hereof shall be entitled to payment of any declared but unpaid dividends and any accumulated and unpaid Series E Dividends on such shares of Series E Preferred Stock, up to and including the date such conversion is effective. Upon a mandatory conversion pursuant to Section 5(a) hereof, at the election of each Series E Preferred Stockholder, such declared and unpaid dividends and Series E Dividends may be paid in cash or with shares of Common Stock. Upon a voluntary conversion pursuant to this Section 5(b), such declared and unpaid dividends and Series E dividends shall be paid with shares of Common Stock. For Series E Preferred Stockholders, the number of shares issued in payment of such dividend shall be determined based upon the then current Conversion Price (as defined in Section 5(d) hereof and as adjusted pursuant to Section 5(f) hereof.

(c) Conversion Rate. The Conversion Rate in effect at any time for the Preferred Stock shall be the quotient obtained by dividing the Original Issuance Price (as such term is defined in the immediately following sentence) by the Conversion Price (as defined in Section 5(d) hereof and as adjusted pursuant to Section 5(f) hereof) (the “Conversion Rate”). The term “Original Issuance Price” shall mean the Original Series D Issuance Price or the Original Series E Issuance Price, as appropriate.

(d) Conversion Price. Subject to adjustment in accordance with Section 5(f) hereof, the “Conversion Price” shall initially be an amount equal to the Original Series D Issuance Price or the Original Series E Issuance Price, as appropriate.

(e) Mechanics of Conversion.

(i) Mandatory Conversion. Upon the occurrence of any event specified in Section 5(a) above, the outstanding shares of Preferred Stock shall be converted at the then current Conversion Rate into Common Stock automatically without the need for any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent; provided, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless the certificates evidencing such shares of Preferred Stock are either delivered to the Corporation or its transfer agent as provided below, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of the Preferred Stock, the holders of Preferred Stock shall surrender the certificates representing such shares at the office of the Corporation or any transfer agent for the Preferred Stock or Common Stock. Thereupon, there shall be issued and

Ex-10

delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of Common Stock into which the shares of Preferred Stock surrendered were convertible on the date on which such automatic conversion occurred.

(ii) Voluntary Conversion. In order to effect a voluntary conversion of Preferred Stock, the holder thereof shall provide written notice to the Corporation that it elects to convert the same into Common Stock, and shall deliver such notice to the office of the Corporation or of any transfer agent for such shares. Such voluntary conversion shall be deemed to have been made immediately prior to the close of business on the date of surrender of the certificate(s) representing the shares of Preferred Stock to be converted.

(iii) Surrender of Certificates; Deliveries by Corporation. Before delivery to any person of certificates representing shares of Common Stock issued upon voluntary or automatic conversion of shares of the Preferred Stock, the holder of such Preferred Stock shall surrender the certificate or certificates for such Preferred Stock, duly endorsed or assigned in blank, at the office of the Corporation or of any transfer agent for such shares (or shall notify the Corporation or its transfer agent that such certificates have been lost, stolen, or destroyed and execute an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates) and shall provide a written declaration of the name or names in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If a Preferred Stockholder shall surrender more than one stock certificate for shares of Preferred Stock to be converted at any one time, the number of such shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Preferred Stock so surrendered for conversion. The Corporation shall, as soon as practicable after receipt of the certificate or certificates for the Preferred Stock subject to such conversion (or, in the case of a lost certificate, the agreement and indemnification referred to above), issue and deliver at such office to such holder of Preferred Stock, (A) a certificate or certificates for the number of full shares of Common Stock to which such holder shall be entitled as aforesaid, (B) in the event of the conversion of only a portion of the shares covered by a certificate representing Preferred Stock, a new stock certificate representing the number of unconverted shares of the applicable Preferred Stock, (C) a check payable to the holder for any cash amounts payable as the result of a conversion into fractional shares of Common Stock pursuant to Section 5(e)(v), and (D) if such holder of Preferred Stock elects to be paid in cash for declared but unpaid dividends or accumulated and unpaid Series E Dividends, as the case may be, payment of any declared but unpaid dividends and any accumulated and unpaid Series E Dividends, as the case may be, on the shares of Preferred Stock being converted up to and including the date of conversion by delivery of a check payable to the holder, or to the extent the funds of the Corporation legally available for the payment of dividends are insufficient to pay the full amount of such dividends in cash, a certificate for shares of Common Stock (at the then current market price of a share of Common Stock determined in the manner described in Section 5(e)(v) hereof, in the case of shares of Series D Preferred Stock, or the then current Conversion Price, in the case of shares of Series E Preferred Stock).

(iv) Rights Following Conversion. From and after the effective date of any voluntary or automatic conversion pursuant to this Section 5, without any further

Ex-11

action by any holder of shares of Preferred Stock being converted and whether or not such shares are surrendered to the Corporation or its transfer agent: (A) all rights of such holder with respect to any Preferred Stock subject to such conversion, except the right to receive shares of Common Stock and any applicable cash amounts in accordance with this Section 5, shall cease; (B) 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 as of such date; and (C) the shares of Preferred Stock subject to such conversion shall not thereafter be transferred on the books of the Corporation or be deemed to be outstanding for any purpose whatsoever.

(v) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of shares of Preferred Stock. For shares of Series D Preferred Stock, the Corporation shall pay a cash adjustment for such fractional interest in an amount equal to the then current market price (as defined below) of a share of Common Stock multiplied by such fractional interest. For shares of Series E Preferred Stock, the Corporation shall pay a cash adjustment for such fractional shares in an amount equal to the then current Conversion Price multiplied by such fractional interest. The then current market price per share of Common Stock at any date shall be deemed to be (A) the highest price per share which the Corporation could obtain from a willing buyer (who is not a current employee or director) for shares of Common Stock sold by the Corporation, from authorized but unissued shares, as determined in good faith by the Board or (B) in the case of an automatic conversion pursuant to a Qualified Public Offering, the per share price of the Qualified Public Offering. The term “Qualified Public Offering” shall mean a firm commitment underwritten public offering pursuant to a registration statement under the U.S. Securities Act of 1933, as amended, covering the offer and sale by the Corporation of Common Stock at a public offering price per share that is not less than $0.70 (as appropriately adjusted for any stock splits, combinations, divisions or similar recapitalizations affecting the Preferred Stock) and with a total in gross offering proceeds of not less than $20,000,000 (prior to deducting underwriter discounts and commissions and expenses of the offering).

(f) Conversion Price Adjustments. The Conversion Price shall be subject to adjustment from time to time as follows:

(i) Preferred Stock Weighted-Average Adjustment. In the event the Corporation shall at any time or from time to time after the Original Series E Issuance Date issue any Additional Shares (as defined in Section 5(f)(v) hereof), otherwise than as provided in Sections 5(f)(ii), (iii) or (iv) hereof, without consideration or for a consideration per share less than the applicable Conversion Price in effect immediately prior to such issuance, then and in such event, the applicable Conversion Price in effect immediately prior to each such issuance shall be reduced to a price, calculated to the nearest whole cent, determined by the quotient obtained by dividing the total computed under clause (x) below by the total computed under clause (y) below as follows:

(x) the amount equal to the sum of

Ex-12

(1) the aggregate consideration received by the Corporation for the shares of Preferred Stock (the “Preferred Stock Purchase Price”), plus

(2) the aggregate consideration, if any, received by the Corporation for all Additional Shares issued on the purchase date of such Additional Shares;

(y) an amount equal to the sum of:

(1) the Preferred Stock Purchase Price divided by the applicable Original Issuance Price, plus

(2) the number of shares of Additional Shares of issued on the purchase date of such Additional Shares.

Such adjustment shall be made successively whenever any Additional Shares are issued without consideration or for a consideration per share less then the Conversion Price in effect immediately prior to such issuance and shall become effective immediately after the Additional Shares are issued.

(i) In the event the Corporation shall issue any securities, options, warrants or other rights directly or indirectly convertible into or exchangeable or exercisable for shares of Common Stock (“Convertible Securities”) and the consideration per share for which Additional Shares may at any time thereafter be issuable pursuant to the terms of such Convertible Securities shall be less than the Conversion Price in effect immediately prior to the issuance of such Convertible Securities, then upon such issuance of Convertible Securities, such Conversion Price shall be adjusted as provided in Section 5(f)(i)(A) hereof on the basis that (x) all of the Additional Shares issuable upon the conversion, exchange or exercise of all such Convertible Securities shall be deemed to have been issued as of the date of issuance of such Convertible Securities and (y) the aggregate consideration for such Additional Shares shall be deemed to be the consideration received by the Corporation for the issuance of such Convertible Securities plus the minimum consideration receivable by the Corporation for the issuance of such Additional Shares pursuant to the terms of such Convertible Securities upon the conversion, exchange or exercise thereof. With respect to the issuance of any Convertible Securities which has resulted in an adjustment to the Conversion Price pursuant to Section 5(f)(i), to the extent the right to acquire Additional Shares upon conversion, exchange or exercise of such Convertible Securities expires or is terminated without such conversion, exchange or exercise having been effected, such adjustment to the Conversion Price shall be recomputed as if: (i) in the case of the issuance of Convertible Securities, the only Additional Shares issued were the shares of Common Stock, if any, actually issued upon the exercise, conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such exercised Convertible Securities plus the consideration actually received by the Corporation upon such exercise, conversion or exchange, and (ii) in the case of the issuance of options for Convertible Securities, only the Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such options, and the consideration received by the Corporation for the Additional Shares deemed to have been then issued was the consideration actually received by the Corporation for the issue of such exercised options, plus the consideration deemed to have been received by the

Ex-13

Corporation upon the issue of the Convertible Securities with respect to which such options were actually exercised.

(ii) Stock Dividend, Split or Subdivision of Shares. If, the number of shares of Common Stock outstanding is increased or deemed increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up of shares of Common Stock (other than a change in par value, from par value to no par value or from no par value to par value), then, following the effective date fixed for the determination of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the Conversion Price shall be appropriately decreased (but in no event shall the Conversion Price be decreased below the par value of the Common Stock) so that the number of shares of Common Stock issuable upon conversion of the Preferred Stock shall be increased in proportion to such increase in outstanding shares (on a fully diluted basis).

(iii) Combination of Shares. If the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock (other than a change in par value, from par value to no par value or from no par value to par value), then, following the record date fixed for such combination (or the date of such combination, if no record date is fixed), the Conversion Price shall be appropriately increased so that the number of shares of Common Stock issuable on conversion of the Preferred Stock shall be decreased in proportion to such decrease in outstanding shares (on a fully diluted basis).

(iv) Recapitalizations, Reorganization, etc. If there shall be any recapitalization, capital reorganization, or reclassification involving the Common Stock (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend, subdivision, split-up, combination of shares or other event otherwise provided for in this Section 5), provision shall be made (in form and substance satisfactory to the holders of a majority of the outstanding shares of Preferred Stock) so that the holders of the Preferred Stock shall thereafter be entitled to receive, upon conversion of their shares of Preferred Stock, such shares or other securities or property of the Corporation or otherwise, to which a holder of Common Stock deliverable upon conversion would have been entitled to receive in such recapitalization, capital reorganization, or reclassification. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 5 with respect to the rights of the holders of the Preferred Stock after the recapitalization, capital reorganization, or reclassification to the end that the provisions of this Section 5 applicable after that event (including adjustment of the applicable Conversion Prices then in effect and the number of shares purchasable upon conversion of shares of the applicable Series of Preferred Stock) shall be as nearly equivalent to those applicable before the event as may be practicable.

(v) Additional Shares. “Additional Shares” shall mean any shares of Common Stock or other securities directly or indirectly convertible into or exchangeable or exercisable for shares of Common Stock, other than:

(A) Shares of Series E Preferred Stock issued at any closing pursuant to the Series E Preferred Stock Purchase Agreement dated as of April 5, 2005.

(B) Common Stock issued or issuable upon conversion of any shares of Preferred Stock;

Ex-14

(C) Shares of the Corporation’s capital stock issued or issuable upon exercise, exchange or conversion of any warrants or other securities outstanding as of the date of the filing of this Certificate of Designation;

(D) 9,115,869 shares of Common Stock issued to directors, officers, employees, consultants and advisors who provide or have provided bona fide services to the Corporation, pursuant to any options to purchase or rights to subscribe for such Common Stock outstanding as of the date of the filing of this Designation or granted after such date pursuant to an option or rights plan, agreement or arrangement approved by the Board;

(E) Common Stock issued in transactions described in Section 5(f)(ii), (iii) or (iv) hereof;

(F) Securities issued or issuable by the Corporation, with the approval by the Board to persons or entities with which the Corporation has a business relationship, including, without limitation, corporate partner transactions, leasing arrangements and bank financings; provided, however, that such securities are issued for a primary purpose other than equity financing;

(G) Shares of Common Stock issued in connection with a Qualified Public Offering; and

(H) Securities issued or issuable by the Corporation, with the approval of the Board (including the Independent Director, as such term is defined under that certain Amended and Restated Voting Agreement dated as of April 5, 2005) in connection with: (i) the acquisition of another corporation, partnership, company, joint venture, trust or other entity by the Corporation or any subsidiary of the Corporation by means of a merger, consolidation, reorganization, stock acquisition, purchase of assets or other transaction or series of related transactions whereby the Corporation, or its stockholders of record immediately prior to the effectiveness of such transaction, directly or indirectly, own at least a majority of the voting power or assets of such other entity or the resulting or surviving corporation immediately after such transaction; (ii) the acquisition by the Corporation of intellectual property rights, including, without limitation, pursuant to intellectual property licenses or technology transfer or development arrangements; or (iii) the creation of a corporate or joint venture or any other strategic alliance with any other corporation or entity, including, without limitation, manufacturing, marketing or distribution arrangements.

(vi) Rounding. All calculations under this Section 5(f) shall be made to the nearest cent ($0.01) or to the nearest share, as the case may be.

(vii) Timing of Adjustments. In any case in which the provisions of this Section 5(f) shall require that an adjustment shall become effective immediately after a record date for an event, the Corporation may defer until the occurrence of that event (A) issuing to the holder of any share of Preferred Stock converted after such record date and before the occurrence of such event the additional shares of capital stock issuable upon such conversion by reason of the adjustment required by such event over and above the shares of capital stock issuable upon such conversion before giving effect to such adjustment and (B)

Ex-15

paying to such holder any amount in cash in lieu of a fractional share of capital stock pursuant to Section 5(e)(iv) hereof; provided, however, that the Corporation shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares, in such case, upon the occurrence of the event requiring such adjustment.

(g) Notice of Adjustments.

(i) In the event the Corporation shall propose to take any action of the types described in clauses (i), (ii), (iii), (iv) or (v) of Section 5(f) hereof, the Corporation shall give notice to each Preferred Stockholder, by certified, express courier mail, return receipt requested, postage prepaid, which shall specify the record date, if any, with respect to any such action and the date on which such action is to take place. The notice shall also set forth such facts as are reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the applicable Conversion Price and the number, kind or class of shares or other securities or property which shall be deliverable or purchasable upon the occurrence of such action or deliverable upon conversion of shares of Preferred Stock, as applicable. In the case of any action which would require the fixing of a record date, such notice shall be given at least ten (10) days prior to the date so fixed, and in case of all other action, such notice shall be given at least fifteen (15) days prior to the taking of such proposed action. Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action.

(ii) Whenever the Conversion Price shall be adjusted as provided in Section 5(f) hereof, the Corporation shall file, at its principal office, at the office of the transfer agent for the Preferred Stock, if any, or at such other place as may be designated by the Corporation, a statement showing in detail the facts requiring such adjustment and the applicable Conversion Price that shall be in effect after such adjustment. The Corporation shall also cause a copy of such statement to be sent in the manner set forth in Section 5(g)(i) hereof, to each Preferred Stockholder, as applicable, at such holder’s address appearing on the Corporation’s records. Where appropriate, such copy may be given in advance and may be included as part of a notice required to be mailed under the provisions of Section 5(g)(i) hereof.

(h) Reservation of Common Stock. The Corporation shall at all times have authorized and reserve, free from preemptive rights, out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Preferred Stock, a sufficient number of shares of Common Stock to provide for the conversion of all outstanding shares of Preferred Stock.

(i) Status of Common Stock. All shares of Common Stock which may be issued in connection with the conversion provisions set forth herein shall, upon issuance by the Corporation, be validly issued, fully paid and nonassessable, free from preemptive rights and free from all taxes, liens or charges with respect thereto.

6. Voting Rights.

(a) General. The Preferred Stockholders shall be entitled to vote, together with the Common Stockholders and any other class or series of stock then entitled to vote, as one

Ex-16

class on all matters submitted to a vote of stockholders, in the same manner and with the same effect as the Common Stockholders, which voting rights shall not be cumulative. In any such vote, each share of Preferred Stock shall entitle the holder thereof to one vote per share for each share of Common Stock (including fractional shares) into which each share of Preferred Stock, as the case may be, is then convertible, rounded up or down, as applicable, to the nearest share.

(b) Protective Provisions of the Series E Preferred Stock. In addition to any other rights provided by law, so long as any shares of Series E Preferred Stock issued pursuant to that certain Series E Stock Purchase Agreement dated as of April 5, 2005 (whether on the Original Series E Issuance Date or on a subsequent closing date) remain outstanding or any shares of Series D Preferred Stock issued pursuant to that certain Series D Preferred Stock Purchase Agreement, dated as of March 17, 2003, the Corporation shall not do any of the following, without first obtaining the affirmative vote or written consent of the holders of a majority of the outstanding shares of Preferred Stock, on an as-converted basis:

Ex-17

(i) alter, amend or change the rights, preferences, privileges or restrictions of the Series E Preferred Stock as a class;

(ii) increase or decrease the authorized number of shares of Series E Preferred Stock;

(iii) create any new class or series of shares, or reclassify any class or series of existing shares, having rights, preferences or privileges superior to those of the Series E Preferred Stock of the Corporation;

(iv) amend or waive any provision of the Corporation’s Certificate of Incorporation or bylaws;

(v) purchase, redeem or otherwise acquire (or pay into or set funds aside for a sinking fund) any outstanding securities of the Corporation other than repurchases approved by the Board (x) pursuant to equity incentive agreements or stock restriction agreements, approved by the Board, with officers, directors, employees, consultants and other service providers that give the Corporation the right to repurchase upon termination of services or a right of first refusal on proposed transfers or (y) pursuant to the exercise by the Corporation of its first refusal rights as set forth in the Amended and Restated Right of First Refusal and Co-Sale Agreement dated as of April 5, 2005;

(vi) declare, pay or issue a cash dividend to any holders of any class or series of capital stock of the Corporation, except for dividends paid on the Series E Preferred Stock;

(vii) transfer any material assets of the Corporation in a transaction not in the ordinary course of business of the Corporation to any person or entity other than a wholly-owned subsidiary of the Corporation;

(viii) liquidate or dissolve or adopt a plan of liquidation or dissolution;

(ix) increase or decrease the size of the Board;

(x) enter into any transaction of merger or consolidation, sell or otherwise dispose of all or substantially all of the Corporation’s assets or agree to do any of the foregoing; or

(xi) contract, create, incur, assume or suffer to exist any indebtedness for borrowed money in excess of $100,000 in the aggregate at any one time.

(c) Protective Provisions of the Series D Preferred Stock. In addition to any other rights provided by law, so long as any shares of Series D Preferred Stock issued pursuant to that certain Series D Preferred Stock Purchase Agreement, dated as of March 17, 2003, remain outstanding the Corporation shall not, without first obtaining the affirmative vote or written consent of the holders of a majority of the outstanding shares of Series D Preferred Stock, take away any liquidation or dividend preference of the Series D Preferred Stock; provided, however, that the foregoing shall not limit the Corporation’s right to issue any securities that are senior in right to the Series D Preferred Stock with respect to liquidation or dividend preference.

Ex-18

EX-10.9

Exhibit 10.9

JABBER, INC.

AMENDED AND RESTATED

INVESTORS RIGHTS AGREEMENT

THIS INVESTORS RIGHTS AGREEMENT (this “Agreement”) is made effective as of April 8. 2005. by and among JABBER, INC., a Delaware corporation (the “Company”) and those parties listed as Series D Investors on Exhibit A attached hereto (hereinafter sometimes referred to individually as a “Series D Investor” and collectively, as the “Series D Investors”), the party listed as the Series E Investor on Exhibit A attached hereto (the “Series E Investor”) and those parties listed as Prior Investors on Exhibit A attached hereto (hereinafter sometimes referred to individually as a “Prior Investor” and collectively, as the “Prior Investors”).

BACKGROUND

The Company and the Series D Investors have entered into that certain Series D Preferred Stock Purchase Agreement dated March 17, 2003 (the “Series D Purchase Agreement”).

The Company and the Series E Investor have entered into that certain Series E Preferred Stock Purchase Agreement, dated as of April 8, 2005 (the “Series E Purchase Agreement”).

The Company, the Series D Investors and the Prior Investors entered into that certain Investor Rights Agreement, dated as of March 17, 2003 (the “Prior Investor Rights Agreement”). Pursuant to Section 4.4 of the Prior Investor Rights Agreement, the Prior Investor Rights Agreement may be amended by holders of a majority of the Series D Registrable Securities (as defined in the Prior Investor Rights Agreement) (the “Required Majority”).

As a condition and a material inducement to the Series E Investor’s obligations to consummate the transactions contemplated by the Series E Purchase Agreement, the Company and the Required Majority of the Series D Investors have agreed to enter into this Agreement with the Series E Investor and to terminate the Prior Investor Rights Agreement in its entirety as set forth herein.

NOW, THEREFORE, in consideration of the mutual promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Investors and the Company hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions. Unless the contract otherwise requires, the following terms shall have the following meanings for purposes of this Agreement:

(a) “Additional Holders” shall have the meaning set forth in Section 2.1(a) hereof and Section 2.3(a) hereof, as the case may be.

Ex-19

(b) “Affiliate” shall mean, with respect to any Person, (i) a director, officer, general or limited partner, manager, member or stockholder of such Person, (ii) a spouse, parent, sibling or descendant of such Person (or a trust for the benefit of any one of more of the foregoing), and (iii) any other Person that, directly or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, such Person.

(c) “Agreement” shall mean this Investors Rights Agreement.

(d) “Board of Directors” shall mean the Board of Directors of the Company.

(e) “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

(f) “Common Stock” shall mean the Common Stock, par value $0.01 per share, of the Company.

(g) “Company” shall have the meaning set forth in the first paragraph of this Agreement.

(h) “Control” shall mean, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

(i) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and all rules and regulations promulgated thereunder.

(j) “Fully-Exercising Investor” shall have the meaning set forth in Section 3.2 hereof

(k) “Holder” shall mean each of the Investors if such Investor holds Registrable Securities or other securities of the Company which are convertible into or exercisable for Registrable Securities, and any other Person holding Registrable Securities or such other securities to whom these registration rights have been transferred in accordance with Section 2.12 hereof; provided, however, that any Person who acquires any of the Registrable Securities in a distribution pursuant to a registration statement filed by the Company under the Securities Act or pursuant to a sale under Rule 144 promulgated by the Commission under the Securities Act shall not be

(l) “Initial Public Offering” shall mean the Company’s initial distribution of Common Stock in an underwritten public offering of its securities to the general public pursuant to a registration statement filed with and declared effective by the Commission pursuant to the Securities Act.

(m) “Initiating Holders” shall have the meaning set forth in Section 2.1(a) hereof and Section 2.3(a) hereof, as the case may be.

(n) “Investor” or “Investors” shall mean, individually or collectively, the Series D Investors, the Series E Investor and the Prior Investors.

(o) “New Securities” shall have the meaning set forth in Section 3.1 hereof

(p) “Notice of Registration” shall have the meaning set forth in Section 2.1(a) hereof and Section 2.3 hereof, as the case may be.

(q) “Participation Right Notice” shall have the meaning set forth in Section 3.2 hereof

(r) “Person” shall mean any individual, partnership, limited partnership, limited liability partnership, corporation, limited liability company, association, trust, joint venture, unincorporated organization, and any governmental authority or other legal or business entity of any kind.

(s) “Preferred Stock” shall mean the Series D Preferred Stock and the Series E Preferred Stock.

(t) “Prior Investor” shall have the meaning set forth in the first paragraph of this Agreement.

Ex-20

(u) “Prior Investor Rights Agreement” shall have the meaning set forth in the Background section of this Agreement.

(v) “Pro Rata Share” shall have the meaning set forth in Section 3.1 hereof

(w) “Qualified Public Offering” shall mean a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act, covering the offer and sale by the Company of Common Stock at a public offering price per share that is not less than $0.70 per share (as appropriately adjusted for any stock dividends, splits, combinations, divisions, recapitalizations or similar transactions after the date of this Agreement) and with a total in gross offering proceeds of not less than $20,000,000 (prior to deducting underwriter discounts and commissions and expenses of the offering).

(x) “Register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and the declaration or ordering of effectiveness of such registration statement by the Commission.

(y) “Registrable Securities” shall mean the Series D Registrable Securities and the Series E Registrable Securities.

(z) “Required Majority” shall have the meaning set forth in the Background section of this Agreement.

(aa) “Request for Registration” shall have the meaning set forth in Section 2.1(a) hereof and Section 2.3 hereof, as the case may be.

(bb) “Restated Certificate” shall mean the Company’ s Amended and Restated Certificate of Incorporation, including but not limited to any certificate of designation relating to any series of preferred stock, to be filed immediately prior to or contemporaneously with the execution of this Agreement.

(cc) “Right of First Refusal Agreement” shall mean the Amended and Restated Right of First Refusal and Co-Sale Agreement of even date herewith among the Company, the Investors and certain other stockholders of the Company.

(dd) “Series D Investor” shall have the meaning set forth in the first paragraph of this Agreement.

(ee) “Series D Preferred Stock” shall mean the Series D Convertible Preferred Stock, par value $0.01 per share, of the Company.

(ff) “Series D Purchase Agreement” shall have the meaning set forth in the Background section of this Agreement.

(gg) “Series D Registrable Securities” shall mean shares of the Company’s Common Stock (i) issued or issuable upon the conversion of any Series D Preferred Stock held by the Series D Investors, (ii) acquired for fair value by the Series D Investors after March 17, 2003, (iii) issued upon conversion or exercise of any securities of the Company acquired for fair value by the Series D Investors after the date hereof, or (iv) issued as a dividend or other distribution with respect to the Series D Preferred Stock or any of the shares described in the foregoing clauses (i) through (iii).

(hh) “Series E Investor” shall have the meaning set forth in the first paragraph of this Agreement.

(ii) “Series E Preferred Stock” shall mean the Series E Convertible Preferred Stock, par value $0.01 per share, of the Company.

(jj) “Series E Purchase Agreement” shall have the meaning set forth in the Background section of this Agreement.

Ex-21

(kk) “Series E Registrable Securities” shall mean shares of the Company’s Common Stock (i) issued or issuable upon the conversion of any Series E Preferred Stock held by the Series E Investor. (ii) acquired for fair value by the Series E Investor on or after the date hereof, (iii) issued upon conversion or exercise of any securities of the Company acquired for fair value by the Series E Investor on or after the date hereof, or (iv) issued as a dividend or other distribution with respect to the Series E Preferred Stock or any of the shares described in the foregoing clauses (i) through (iii).

(ll) “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

(mm) “Securities” shall mean any Common Stock, Preferred Stock or other securities, directly or indirectly, convertible into or exercisable for Common Stock owned by any Investor.

(nn) “Special Counsel” shall have the meaning set forth in Section 2.5 hereof

(oo) “Transfer” as to any securities issued by the Company, shall mean to sell, or in any other way directly or indirectly, to transfer, assign, distribute, give, bequeath, devise, encumber, pledge, hypothecate or otherwise dispose of, either voluntarily or involuntarily (or a sale, or any other direct or indirect, transfer, assignment, distribution, gift, bequest, devise, encumbrance or other voluntary or involuntary disposition), as the case may be.

(pp) “Violation” shall have the meaning set forth in Section 2.7(a) hereof

(qq) “Voting Agreement” shall mean the Amended and Restated Voting Agreement of even date herewith among the Company, the Series E Investor and certain other stockholders of the Company.

(rr) “Webb” shall mean Webb Interactive Services, Inc.

ARTICLE 2

REGISTRATION RIGHTS

2.1 Demand Registration Rights

(a) Initiation. If at any time after the six-month anniversary of the completion of the Initial Public Offering, the Company shall receive a written request from the holders of forty-five percent (45%) of the Registrable Securities then outstanding (the “Initiating Holders”) that the Company effect the registration under the Securities Act and registration or qualification under all applicable state securities and “blue sky” laws of a number of the Registrable Securities then outstanding (a “Request for Registration”), the Company shall (a) within ten (10) days of receipt thereof, give written notice of such proposed registration (the “Notice of Registration”) to all other Holders (the “Additional Holders”) and (b) as soon as practicable, use commercially reasonable efforts to effect such registration under the Securities Act and take all steps as are reasonably necessary under the Securities Act and all applicable state securities and “blue sky” laws to permit the sale or other disposition of (i) all Registrable Securities which the Company has been requested to register by the Initiating Holders and (ii) all Registrable Securities which the Company has been requested, within twenty (20) days after receipt of the Company’s Notice of Registration, to register by the Additional Holders. The Company shall not be obligated to effect, or take any action to effect, any such registration pursuant to this Section 2.1(a):

(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,

Ex-22

qualification, or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

(ii) during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date ninety (90) days after the effective date of, a Company-initiated registration; provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or

(iii) if the Initiating Holders propose to dispose of shares of Registrable Securities which may be immediately registered on Form S-3 pursuant to a request made under Section 2.3 hereof

(b) Underwritten Offering.

(i) If the Initiating Holders intend to distribute the Registrable Securities covered by their Request for Registration by means of an underwriting, they shall so advise the Company as a part of their Request for Registration and the Company shall include such information in the Notice of Registration. The managing underwriter shall be selected by the holders of a majority of the Registrable Securities included in such registration with the approval of the Company, which approval shall not be unreasonably withheld. The inclusion of any Registrable Securities in such registration shall be conditioned upon the Holder thereof agreeing to participate in such underwriting and entering into an underwriting agreement with the managing underwriter in customary form containing terms and conditions no more or less favorable than those that apply to other securities of the same class to be included in such registration.

(ii) Notwithstanding any other provision of this Section 2.1, if the managing underwriter advises the Initiating Holders and the Company in writing that marketing factors require a limitation of the number of shares to be underwritten and that the total number of shares requested to be underwritten will exceed the maximum number which can be marketed without jeopardizing the success of the entire offering, then the Company shall so advise all Initiating Holders and all Additional Holders and shall exclude from such underwriting the minimum number of Registrable Securities as is necessary in the opinion of the managing underwriter to reduce the size of the offering to the maximum number of securities that can be successfully marketed; provided, however, that no such exclusion shall reduce the number of Registrable Securities included in the registration below thirty-five percent (35%) of the total amount of securities requested by the Holders to be included in such registration. Unless otherwise agreed by the Holders affected by any such reduction, such reduction shall be allocated among the Holders on a pro rata basis based on the number of Registrable Securities requested to be registered by each Holder; provided, however, that, prior to any reduction in the number of shares of Registrable Securities included in such registration, the maximum number of securities, if any, other than Registrable Securities, being included for the account of Persons other than the Holders shall be excluded as is necessary to reduce the size of the offering to the maximum number of securities that can be successfully marketed. To facilitate the

Ex-23

allocation of shares in accordance with the above provisions, the Company or the managing underwriter may round the number of shares allocated to any Holder to the nearest 1,000 shares. No Registrable Securities excluded from the underwriting by reason of the managing underwriter’s marketing limitation shall be included in such registration.

(iii) 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 Initiating 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 ninety (90) days after the effective date of such registration, or such other shorter period of time as the managing underwriter may require. If by the withdrawal of such Registrable Securities a greater number of Registrable Securities held by other Holders may be included in such registration (up to the maximum of any limitation imposed by the underwriters), then the Company shall offer to all Holders who have included Registrable Securities in the registration the right to include additional Registrable Securities in the same proportion and manner used in determining any reduction based on the underwriter limitation in Section 2.1(b)(ii) hereof.

(iv) If the managing underwriter has not limited the number of Registrable Securities to be underwritten, the Company may include securities for its own account or for the account of others in such registration if the managing underwriter and the holders of a majority of the Registrable Securities included in such registration so agree and if the number of Registrable Securities which would otherwise have been included in such registration and underwriting will not thereby be limited.

(v) The Company shall permit the managing underwriter and counsel to the managing underwriter at the Company’s expense to visit and inspect any of the properties of the Company, examine its books and records, take copies and extracts therefrom and discuss the affairs, finances and accounts of the Company with its officers, employees and public accountants (and by this provision the Company hereby authorizes said accountants to discuss with such managing underwriter and such counsel its affairs, finances and accounts), at reasonable times and upon reasonable notice, with or without a representative of the Company being present.

(c) Number of Demand Registrations. Notwithstanding any other provision of this Section 2.1, the Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to this Section 2.1 (i) unless the Registrable Securities proposed to be included in the registration have a proposed aggregate offering price of at least Five Million Dollars ($5,000,000) or (ii) after the Company has effected two (2) registrations at the request of the Holders pursuant to this Section 2.1 and such registrations have been declared or ordered effective and the securities offered pursuant to such registrations have been sold. A registration that covers Registrable Securities together with securities for the Company’s own account or for the account of others shall be deemed a registration pursuant to this Section 2.1 if Registrable Securities constitute more than fifty percent (50%) of the total offering on the effective date of

Ex-24

the registration statement but shall not be deemed to be one of the registrations subject to the limitation on the number of registrations set forth in this Section 2.1(c) if Registrable Securities constitute fifty percent (50%) or less of the total offering on the effective date of the registration statement.

(d) Company Deferral. If the Board of Directors makes a good faith determination that it would be seriously detrimental to the Company and its stockholders for a registration statement to be filed on or before the date filing would be required in connection with the Request for Registration and it is therefore essential to defer the filing of such registration statement to effect such registration, the Company shall deliver to the Initiating Holders a certificate signed by the chief executive officer of the Company to such effect and shall have the right to defer taking action with respect to such filing for a reasonable period not to exceed ninety (90) days; provided, that the Company shall have the right to defer taking such action up to only two (2) times in any twelve (12) month period.

2.2 Registration Rights.

(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) pursuant to a Request for Registration, (ii) a registration relating solely to employee benefit plans, (iii) a registration relating to the offer and sale of non equity-linked debt securities, (iv) a registration relating directly or indirectly to a transaction described in Commission Rules 145(a)(1) 145(a)(2) or 145(a)(3) or ( a registration on any form that does not permit secondary sales, the Company shall (A) as soon as practicable, and in any event within twenty (20) days, before the Company files a registration statement, give written notice of the proposed registration to each Holder and (B) upon the written request of each Holder to include in such registration statement all or any part of the Registrable Securities held by such Holder given within ten (10) days after receipt by such Holder of the Company’s notice, subject to the provisions of Section 2.2(b) hereof, use commercially reasonable efforts to cause all of the Registrable Securities that each such Holder has requested to be registered to be included in the Company’s registration statement (and to be registered and qualified under all applicable state securities and “blue sky” laws) so as to permit the sale or other disposition of such Registrable Securities.

(b) Underwritten Offering.

(i) If the securities the Company determines to register are to be distributed through an underwritten offering, the Company shall so advise the Holders of Registrable Securities in the notice described in Section 2.2(a) hereof In such event, (i) the managing underwriter shall be selected by the Company with the approval of the holders of a majority of the Registrable Securities then outstanding, which approval shall not be unreasonably withheld, and (ii) the right of any Holder to include Registrable Securities in a registration pursuant to this Section 2.2 shall be conditioned upon the Holder thereof agreeing to participate in such underwriting and entering into an underwriting agreement with the managing underwriter in customary form containing terms and conditions no

Ex-25

more or less favorable than those that apply to the securities of the Company or other securities of the same class to be included in such registration.

(ii) Notwithstanding any other provision of this Section 2.2, if the managing underwriter advises the Company in writing that marketing factors require a limitation of the number of shares to be underwritten and that the total number of shares requested to be underwritten will exceed the maximum number which can be marketed without jeopardizing the success of the entire offering, then the Company shall so advise all Holders and shall exclude from such underwriting (A) first, the maximum number of securities, if any, other than Registrable Securities, being included for the account of Persons other than the Company as is necessary to reduce the size of the offering to the maximum number of securities that can be successfully marketed and (B) second, the minimum number of Registrable Securities as is necessary in the opinion of the managing underwriter to reduce the size of the offering to the maximum number of securities that can be successfully marketed; provided that, without the written consent of the holders of a majority of the Registrable Securities requested to be registered, (x) in no event will securities of any Persons other than the Company be included in such registration unless all of the Registrable Securities requested to be registered are included and (y) no such reduction shall reduce the amount of Registrable Securities included in the registration below thirty-five percent (35%) of the total amount of securities included in such registration. Unless otherwise agreed by the Persons affected by any reduction set forth in clauses (x) or (y) above, respectively, such reduction shall be allocated among such Persons on a pro rata basis based on the number of securities requested to be registered by each Person. To facilitate the allocation of shares in accordance with the above provisions, the Company or the managing underwriter may round the number of shares allocated to any Person to the nearest 1,000 shares. No Registrable Securities excluded from the underwriting by reason of the managing underwriter’s marketing limitation shall be included in such registration.

(iii) 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 other 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 one hundred and eighty (180) days after the effective date of such registration, or such other shorter period of time as the managing underwriter may require. If by the withdrawal of such Registrable Securities a greater number of Registrable Securities held by other Holders may be included in such registration (up to the maximum of any limitation imposed by the underwriters), then the Company shall offer to all Holders who have included Registrable Securities in the registration the right to include additional Registrable Securities in the same proportion and manner used in determining any reduction based on the underwriter limitation in Section 2.2(b)(ii) hereof.

(c) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.

Ex-26

2.3 Registrations on Form S-3.

(a) Initiation If at such time as the Company shall have qualified for the use of Form S-3 (or any successor form promulgated under the Securities Act), the Company shall receive a written request from any Holder or Holders (each an “Initiating Holder”) that the Company effect the registration on Form S-3 (a “Request for Registration”), the Company shall (a) within ten (10) days of receipt thereof, give written notice of such proposed registration (the “Notice of Registration”) to all other Holders (the “Additional Holders”) and (b) as soon as practicable, use commercially reasonable efforts to effect such registration under the Securities Act and take all steps as are reasonably necessary under the Securities Act and all applicable state securities and “blue sky” laws to permit the sale or other disposition of (i) all Registrable Securities which the Company has been requested to register by any Initiating Holder and (ii) all Registrable Securities which the Company has been requested, within twenty (20) days after receipt of the Company’s Notice of Registration, to register by the Additional Holders.

(b) Underwritten Offering If the Initiating Holders intend to distribute the Registrable Securities covered by the Request for Registration by means of an underwriting, the substantive provisions of Section 2.1(b) hereof shall apply to any registration on Form S-3 requested pursuant to Section 2.3 hereof.

(c) Limitations Notwithstanding any other provision of this Section 2.3, the Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to this Section 2.3 (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 except as may be required by the Securities Act; (ii) unless the Registrable Securities proposed to be included in the registration have a proposed aggregate offering price of at least One Million Dollars ($1,000,000) or (iii) in the event the Company has effected a registration on Form S-3 at the request of any Holders pursuant to this Section 2.3 within the previous six (6) months and such registration has been declared or ordered effective and the securities offered pursuant to such registration have been sold.

(d) Effect on Number of Demand Registrations A registration effected pursuant to this Section 2.3 shall not be counted as a demand registration for purposes of the limitation on the number of demand registrations set forth in Section 2.1(c) hereof.

2.4 Information from Holders. Notices and requests delivered by Holders to the Company pursuant to this Article 2 shall contain such information regarding the Registrable Securities to be so registered and the intended method of disposition thereof as shall reasonably be required in connection with the action to be taken. Each Holder hereby agrees to provide the Company, or its agents or designees, with all information reasonably required in connection with the registration of any Registrable Securities under the Securities Act or the registration and qualification under any applicable state securities or “blue sky” law.

Ex-27

2.5 Payment of Registration Expenses. The costs and expenses of all registrations under the Securities Act, all registrations and qualifications under any applicable state securities or “blue sky” law, and of all other actions which the Company is required to take or effect pursuant to this Article 2, shall be paid by the Company or holders of other securities of the Company other than Registrable Securities, if any (including, without limitation, all registration and filing fees, printing expenses, auditing costs and expenses, and the fees and disbursements of counsel for the Company and one special counsel for the Holders selected by the holders of a majority of the Registrable Securities to be registered (the “Special Counsel”) and the Holders shall pay only the underwriting discounts and commissions, transfer taxes and fees and disbursements of any representative of any Holder, other than the Special Counsel, if any, relating to the Registrable Securities sold by them. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Sections 2.1 and 2.3 hereof if the registration request is subsequently withdrawn at the request of the holders of a majority of the Registrable Securities to be registered or because a sufficient number of Holders shall have withdrawn so that the minimum offering conditions set forth in Sections 2.1 and 2.3 hereof are no longer satisfied (in which case all participating Holders shall bear such expenses pro rata among each other based on the number of Registrable Securities requested to be so registered), unless the holders of a majority of the Registrable Securities agree to forfeit their rights to one (1) demand registration pursuant to Section 2.1.

2.6 Obligations of the Company. Whenever required to effect the registration of any Registrable Securities pursuant to this Agreement, the Company shall effect the registration and the sale of such Registrable Securities in accordance with the intended method of distribution thereof, and pursuant thereto, the Company shall, as expeditiously as reasonably possible, use commercially reasonable efforts to:

(a) Prepare and file with the Commission a registration statement with respect to such Registrable Securities and use commercially reasonable efforts to cause such registration statement to become effective (provided that no later than five (5) days before filing a registration statement or prospectus or any amendments or supplements thereto, the Company shall furnish to the Special Counsel copies of all such documents proposed to be filed, which documents shall be subject to the reasonable review and comment of the Special Counsel).

(b) Notify each holder of Registrable Securities covered thereby of the effectiveness of each registration statement filed hereunder and prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than one hundred twenty (120) days and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement.

(c) Furnish to the Holders such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus), in conformity with the requirements of the Securities

Ex-28

Act, and such other documents incident thereto as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.

(d) 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 an underwritten public offering, enter into such customary agreements (including underwriting agreements in customary form) and take all such actions pursuant thereto as the holders of a majority of the Registrable Securities being sold or the underwriters reasonably request in order to expedite or facilitate the disposition of such Registrable Securities. 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, and, at the request of any Holder, prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of material fact or omit 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; provided that each Holder of Registrable Securities agrees not to deliver any prospectuses following receipt of any such notice by the Company until such time as such supplement or amendment has been provided to the Holders.

(g) Furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (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, addressed to the underwriters 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 an underwritten public offering, addressed to the underwriters.

(h) Cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and, if not so listed, to be listed on the NASD automated quotation system and, if listed on the NASD automated quotation system, use commercially reasonable efforts to secure designation of all such Registrable Securities covered by such registration statement as a Nasdaq national market system security within the meaning of Rule 11 Aa2- 1 under the Exchange Act.

Ex-29

(i) Provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement.

(j) Subject to execution of a customary confidentiality agreement, make available for inspection by a representative of the sellers of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by any such sellers’ representatives or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by any such sellers’ representative, underwriter, attorney, accountant or agent in connection with such registration statement; provided, however, that the Company may withhold access to any such financial or other records, pertinent corporate documents, properties or information if it reasonably determines that disclosure thereof would have a material adverse affect on the competitive position of the Company.

(k) Comply with all applicable rules and regulations of the Commission and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

(l) Permit any Holder, which Holder, based upon the reasonable opinion of such holder’s counsel, might be deemed to be an underwriter or a controlling person of the Company, to participate in the preparation of such registration or comparable statement and to require the insertion therein of material, furnished to the Company in writing, which in the reasonable judgment of such holder and its counsel should be included.

(m) In the event of the issuance of any stop order suspending the effectiveness of a Registration Statement, or of any order suspending or preventing the issuance of any related prospectus or suspending the qualification of any Common Stock included in such registration statement for sale in any jurisdiction, the Company shall use commercially reasonable efforts promptly to obtain the withdrawal of such order.

2.7 Indemnification. In the event any Registrable Securities are included in a registration statement under Sections 2.1, 2.2 and 2.3 hereof:

(a) Indemnification by the Company. To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, officers, directors, managers, stockholders and members of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint and/or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”) by the Company: (i) any untrue statement or

Ex-30

alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendment or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement, and the Company will pay as incurred to each such Holder, partner, officer, director, manager, stockholder, member, underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage. liability or action; provided, however, that the indemnity agreement contained in this Section 2.7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the written consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, officer, director, manager, stockholder, member, underwriter or controlling person of such Holder.

(b) Indemnification by the Holders. To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its directors, its officers, its stockholders and each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder’s partners, directors, managers, officers, stockholders or members or any person who controls such Holder, against any losses, claims, damages or liabilities to which the Company or any such Company director, officer or controlling person, underwriter or other such Holder, or partner, director, manager, officer, stockholder or member or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder specifically for use in connection with such registration; and each such Holder will pay as incurred any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, or partner, officer, director, manager, stockholder or member or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 2.7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the written consent of each such Holder, which consent shall not be unreasonably withheld: provided further, that the obligation to indemnify shall be individual, not joint and several, for each such Holder and that in no event shall any indemnity under this Section 2.7 exceed the net proceeds from the offering received by such Holder.

Ex-31

(c) Procedure. Promptly after receipt by an indemnified party under this Section 2.7 of notice of the commencement of any action (including any governmental action), such indemnified par will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.7, deliver to the indemnifying par a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying par would be inappropriate due to actual or potential differing interests between such indemnified par and any other park represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying par within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying par of any liability to the indemnified party under this Section 2.7, but the omission so to deliver written notice to the indemnifying part\ will not relieve it of any liability that it ma have to am indemnified parts otherwise than under this Section 2.7. No indemnifying par 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) Contribution. If the indemnification provided for in this Section 2.7 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided that in no event shall any contribution by a Holder hereunder exceed the net proceeds from the offering received by such Holder.

(e) Underwriting Agreement. Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

(f) Survival. The obligations of the Company and Holders under this Section 2.7 shall survive completion of any offering of Registrable Securities in a registration statement and the termination of this Agreement.

Ex-32

2.8 Limitation on Subsequent Registration Rights. After the date of this Agreement, the Company shall not, without the prior written consent of the holders of a majority of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that would grant such holder registration rights senior to or pari passu with those granted to the Holders hereunder.

2.9 Rule 144 Reporting. With a view to making available to the Holders the benefits of certain rules and regulations of the Commission which may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use commercially reasonable efforts to:

(a) Make and keep public information regarding the Company available, as those terms are understood and defined in Rule 144 under the Securities Act or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of the first registration filed by the Company for an offering of its securities to the general public:

(b) File with the Commission, in a timely manner, all reports and other documents required of the Company under the Exchange Act after it has become subject to such reporting obligations; and

(c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon written request; a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 under the Securities Act, and of 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 as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing it to sell any such securities without registration.

2.10 Market-Standoff Agreement.

(a) Market-Standoff Period: Agreement In connection with the Initial Public Offering and upon request of the Company or the underwriters managing such offering of the Company’s securities, each Holder hereby agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company (other than any disposed of in the registration and those acquired by the Holder in the registration or thereafter in open market transactions) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed one hundred eighty (180) days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of such public offering.

(b) Limitations. The restrictions set forth in Section 2.10(a) shall only be binding on and enforceable against the Holders in the event all officers, directors and holders of at least one percent (1%) of the outstanding equity of the Company (on a fully-diluted basis) are bound by similar restrictions. If the Company or the underwriter of any public offering of the Company’s

Ex-33

securities waive or terminate any standoff or lockup restrictions imposed on any holder of securities of the Company, then such waiver or termination shall be granted to all Holders subject to standoff or lockup restrictions pro rata based on the number of shares of Common Stock beneficially held by such holder and the Holders. From and after the date of this Agreement, the Company shall use commercially reasonable efforts to ensure that all holders of capital stock of the Company agree to be bound by terms substantially similar to those set forth in this Section 2.10.

(c) Stop-Transfer Instructions. In order to enforce the foregoing covenants, the Company may impose stop-transfer instructions and may stamp each such certificate with the second legend set forth in Section 5.1 hereof with respect to the securities of each Holder (and the securities of every other person subject to the restrictions in Section 2.10(a) hereof).

(d) Transferees Bound. If and whenever Registrable Securities are sold by any Holder, the selling Holder shall do all things and execute and deliver all documents, and cause any transferee of the Registrable Securities to do all things and execute and deliver all documents, as may be necessary to cause the transferee to be bound by the terms and conditions of this Section 2.10; provided that this Section 2.10(d) shall not apply to transfers pursuant to a registration statement.

2.11 Registrable Securities. Eligible for Sale under Rule 144 No Holder shall be entitled to exercise any registration right provided for in this Article 2 with respect to any number of shares of Registrable Securities constituting less than one percent (1%) of outstanding shares of Common Stock in the event that at such time such Registrable Securities are eligible for sale during a three-month period without registration pursuant to Rule 144.

2.12 Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Article 2 may be assigned by a Holder to a transferee or assignee of Registrable Securities that (a) is an Affiliate of such Holder or (b) acquires not less than One Million (1,000,000) shares of Registrable Securities from such Holder in accordance with the procedures prescribed in the Right of First Refusal Agreement; provided that in either case, prior to the transfer, (i) the transferor shall furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned and (ii) such transferee shall agree in writing to be subject to all restrictions applicable to and obligations of the transferring Holder set forth in this Agreement, including, without limitation, those set forth in Section 2.10 hereof

ARTICLE 3

PREEMPTIVE RIGHTS

3.1 Rights to Purchase New Securities. From and after the date of this Agreement until immediately prior to a Qualified Public Offering, each Series D Investor and Series E Investor shall have the preemptive right to purchase its Pro Rata Share of any additional issues of capital stock of the Company of any or all classes or series thereof, whether or not now authorized, and any securities of the Company of any type, including convertible indebtedness, that are or may become convertible into such capital stock, including, without limitation, any

Ex-34

rights, options or warrants to purchase capital stock, other than (i) shares of Series E Preferred Stock issued pursuant to the Series E Stock Purchase Agreement, (ii) shares issued in a Qualified Public Offering, and (iii) securities that are excluded from the definition of Additional Shares in Section 5(e)(v) of the Restated Certificate’s Certificate of Designation of Series D Preferred Stock (collectively “New Securities” ) which the Company may propose to offer sell or issue from and after the date hereof, subject to the terms and conditions of this Article 3. Each participating Series D Investor and Series E Investor must purchase New Securities on the same terms and at the same price at which the Company proposes to sell New Securities. A Series D Investor or Series E Investor that notifies the Company of its intention to exercise its preemptive right under this Article 3 may assign all or a portion of such right to one or more Affiliates in such proportions as it deems appropriate. The “Pro Rata Share” of each Series D Investor and Series E Investor shall be equal to the quotient obtained by dividing (i) the total number of shares of Common Stock (on an as-converted basis, including shares issuable upon conversion of Series D Preferred Stock and Series E Preferred Stock held by such Series D Investor or Series E Investor, as the case may be) held by such Series D Investor or Series E Investor, as the case may be, immediately prior to the issuance of New Securities plus by (ii) the sum of (X) the total number of shares of Common Stock of the Company then outstanding plus (Y) the total number of shares of Common Stock of the Company into which all then outstanding shares of Preferred Stock of the Company are then convertible.

3.2 Notice of Proposed Sale of New Securities. In the event the Company proposes to undertake an offering, sale or issuance of New Securities, it shall give to each Series D Investor and Series E Investor written notice of its intention (the “Participation Right Notice”), which notice shall describe the type of New Securities, number of shares, the price, the terms upon which the Company proposes to issue New Securities, and shall include a statement as to the number of days (which shall be at least fifteen (15) days) following the date of the Participation Right Notice within which such Preferred Stockholder must respond to the Participation Right Notice. Each Series D Investor and Series E Investor shall have fifteen (15) days from the date the Participation Right Notice is received to purchase any or all of its Pro Rata Share of the New Securities for the price and upon the terms specified in the Participation Right Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased. Each Series D Investor and Series E Investor that elects to participate shall be required to become a party to the agreement(s) executed and delivered in connection with the issuance and sale of the New Securities and to make payment for such New Securities on the terms and at the time contemplated by such agreements. The Company shall promptly, in writing, inform each Series D Investor and Series E Investor that elects to purchase all of its Pro Rata Share of the New Securities (each a “Fully-Exercising Investor”) of any other Series D Investor’s and Series E Investor’s failure to do likewise. During the ten (10) day period commencing after receipt of such information, each Fully-Exercising Investor shall be entitled to purchase on the terms specified above that portion of the New Securities for which Series D Investors and Series E Investor were entitled to subscribe but which were not subscribed for that is equal to the quotient obtained by dividing (i) the total number of shares of Common Stock issuable to such Fully-Exercising Investor upon the conversion of all of the shares of Preferred Stock held by such Fully-Exercising Investor immediately prior to the issuance of New Securities by (ii) the total number of shares of Common Stock issuable to all Fully-Exercising

Ex-35

Investors upon the conversion of all of the shares of Preferred Stock held by all such Fully- Exercising Investors immediately prior to the issuance of New Securities.

3.3 Sale After Notice. The Company may, during the period of forty-five (45) days following the expiration of the periods provided in Section 3.2 hereof, offer, sell and issue the remaining unsubscribed portion of the New Securities covered by the Participation Right Notice to any persons or entities, at a price and upon general terms no more favorable than those specified in the Participation Right Notice. In the event the Company has not sold the New Securities within said forty-five (45) day period, the Company shall not thereafter issue or sell any New Securities without first offering such securities to the Series D Investors and the Series E Investor in the manner provided in this Article 3.

3.4 Assignment of Preemptive Rights. The preemptive rights set forth in this Article 3 may be assigned by a Series D Investor and Series E Investor to a transferee or assignee of Securities that (a) is an accredited investor as defined in Regulation D under the Securities Act and (b) acquires at least 1,000,000 shares of Preferred Stock or Common Stock issued upon conversion of Preferred Stock and either (x) is an Affiliate of such Series D Investor or Series E Investor, as the case may be, or (y) acquires Securities from such Series D Investor or Series E Investor, as the case may be, in accordance with the procedures prescribed in the Right of First Refusal Agreement; provided that in either case, prior to such transfer, (i) the transferor shall furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned and (ii) such transferee shall agree in writing to be subject to all restrictions applicable to and obligations of the transferring Series D Investor or Series E Investor, as the case may be, set forth in this Agreement.

ARTICLE 4

COVENANTS

4.1 Covenants of the Investors. Each Investor covenants and agrees with the Company and each other Investor that, from and after the date hereof and until the closing of a Qualified Public Offering:

(a) No Majority Ownership of the Company. Unless previously approved in writing by each of the Investors, no Investor will engage in any transaction or enter into any agreement, contract or arrangement if, as a result of such transaction, agreement, contract or arrangement, such Investor would own, either directly or indirectly, more than 49% of the Company’s issued and outstanding share capital (calculated either by ownership percentage or voting power).

(b) No Private Agreements. Each Investor will not enter into any agreement, contract or arrangement with any other Investor with respect to the voting of such Investor’s shares of the Company in any matter that must be approved by the Company’s shareholders under law or under this Agreement, the Right of Refusal Agreement or the Voting Agreement.

4.2 Additional Covenants of Webb. Webb covenants and agrees with the Company and each of the other Investors that, from and after the date hereof and until the earlier to occur

Ex-36

of (i) a Qualified Public Offering: (ii) a sale of the entire capital stock of the Company for consideration that is solely in the form of cash or freely tradable public securities; (iii) a sale of all or substantially all of the Company’s assets for consideration that is solely in the form of cash or freely tradable public securities; or (iv) the date on which Webb ceases to be a shareholder of the Company, it will not make any distributions or other transfer of any of its shares in the Company to Webb’s shareholders which distribution or transfer would have the result of making the Company a reporting company under the Securities Exchange Act of 1934, as amended.

ARTICLE 5

MISCELLANEOUS

5.1 Legends on Share Certificates. The following legend shall be imprinted conspicuously on the face of each certificate representing Registrable Securities:

NOTICE IS HEREBY GIVEN THAT THE SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND RESTRICTED BY THE PROVISIONS OF A CERTAIN AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT AMONG JABBER, INC. AND CERTAIN OF THE COMPANY’S STOCKHOLDERS, DATED AS OF APRIL 8, 2005, A COPY OF WHICH AGREEMENT MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE COMPANY, AND ALL OF THE PROVISIONS OF WHICH AGREEMENT ARE INCORPORATED BY REFERENCE IN THIS CERTIFICATE. THE RESTRICTIONS IMPOSED BY THE INVESTORS RIGHTS AGREEMENT INCLUDE, AMONG OTHER THINGS, RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD OF UP TO 180 DAYS IN THE EVENT OF AN INITIAL PUBLIC OFFERING.

5.2 Termination of Agreement. This Agreement shall terminate upon the earlier to occur of (i) seven (7) years after a Qualified Public Offering, or (ii) such date, on or after the closing of the Company’s first registered public offering of Common Stock, on which all shares of Registrable Securities may immediately be sold pursuant to Rule 144 during any ninety (90)-day period.

5.3 Entire Agreement. This Agreement contains the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements among any of them with respect thereto, including, without limitation, the Prior Investor Rights Agreement, which is hereby terminated in its entirety and which shall henceforth be of no force and effect.

5.4 Amendment; Waiver. Neither this Agreement nor any term hereof may be amended, waived or discharged other than by written instrument signed by the Company and Holders of a majority of Registrable Securities. Each Investor acknowledges that by the

Ex-37

operation of this Section 5.4 third parties have the right and power to diminish or eliminate all rights of such Investor under this Agreement. Notwithstanding anything to the contrary contained herein, no modification, amendment or waiver that would treat any Investor in a non ratable, discriminatory manner in comparison to other similarly situated Investors shall be effective against such Investor without the written consent of such Investor.

5.5 Governing Law. This Agreement shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

5.6 Notices. All notices and other communications given to any party hereto pursuant to this Agreement shall be in writing and shall be hand delivered, or sent either by (a) certified mail, postage prepaid, return receipt requested; (b) electronic mail, (c) an overnight express courier service that provides written confirmation of delivery; or (d) facsimile transmission with written confirmation by the sending machine or with telephone confirmation of receipt (provided that a confirming copy is sent by overnight express courier service that provides written confirmation of delivery), addressed as follows:

(a) If to the Company:

Jabber, Inc.

1899 Wynkoop Street

Denver, CO 80202

Tel: 303-308-3255

Fax: 303-308-3215

E-mail: pguerin@jabber.com

Attention: Paul Guerin, CEO

with a copy to:

Hogan & Hartson LLP

1200 17th Street, Suite 1500

Denver, CO 80202

Tel: 303-899-7300

Fax: 303-899-7333

Attention: Robert Mintz, Esq.

(b) To the Series D Investors:

To the address of each Investor set forth on Exhibit A hereto

with a copy to:

Ex-38

Davis Graham & Stubbs LLP

1550 Seventeenth Street, Suite 500

Denver, CO 80202

Tel: (303) 892-9400

Fax: (303) 893-1379

Attention: Chris Richardson, Esq.

(c) To the Series E Investor:

To the address of the Series E Investor set forth in Exhibit A hereto

with a copy to:

Fairfield and Woods, P.C.

1700 Lincoln Street, Suite 2400

Denver, CO 80203

Tel: (303) 830-2400

Fax: (303) 830-1033

Attention: Brian Wallace, Esq.

Any communication given in conformity with this Section 5.6, shall be effective upon the earlier of actual receipt or deemed delivery. Delivery shall be deemed to have occurred as follows: if hand delivered on the day so delivered; if mailed, three business days after the same is deposited in the United States Mail; if telecopied or sent by electronic mail, upon written confirmation by the sending machine of effective transmission or upon telephone confirmation of receipt: and if sent by overnight express courier service, the next business day. An party may at any time change its address for receiving communications pursuant to this Section 5.6 by giving notice of a new address in the manner provided herein.

5.7 Assignment. Except as expressly provided in Sections 2.12, 3.1 or 3.4 hereof, as the case may be. none of the rights and obligations of any Investor set forth in this Agreement may be transferred or assigned without the prior written consent of the Company (which consent shall not be unreasonably withheld), and any purported assignment made without such consent shall be void. None of the rights and obligations of the Company set forth in this Agreement may be transferred or assigned without the prior written consent of the Investors holding a majority of the Registrable Securities then outstanding, and any purported assignment made without such consent shall be void. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto, all permitted transferees and assignees of any Investor, and all of the respective heirs, legatees, personal representatives, successors and assigns of any Investor, to the extent permitted by this Agreement.

5.8 Invalid Provision. If any term or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable in any respect, the remainder of the terms and provisions shall be unaffected and shall remain in full force and effect, and any such

Ex-39

invalid, void or unenforceable term or provision shall be construed by limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law.

5.9 Time Periods. In computing the number of days for any purpose of this Agreement, all days shall be counted including Saturdays, Sundays and holidays, except that if the last day of any period occurs on a Saturday, Sunday or holiday, the period will be deemed extended to the end of the next succeeding day which is not a Saturday, Sunday or holiday. A holiday for purposes of this Agreement shall mean those days on which banks in the State of Delaware may, or are obligated to, remain closed.

5.10 Headings. The Table of Contents and the Article, Section and subsection headings are included solely for convenient reference and shall not be deemed to provide an accurate description of the content of any Article, Section or subsection hereof or otherwise affect the meaning or interpretation of any of the provisions hereof.

5.11 Gender. All pronouns used herein shall include all genders and the singular and plural as the context requires.

5.12 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument.

5.13 Delivery by Facsimile. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the act that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.

5.14 Interpretation of Agreement. The parties hereto acknowledge and agree that this Agreement has been negotiated at arm’s-length and among parties equally sophisticated and knowledgeable in the matters dealt with in this Agreement. Accordingly, any rule of law or legal decision that would require interpretation of any ambiguities in this Agreement against the party that has drafted it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties as set forth in this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Investors Rights Agreement as of the day and year first above written.

Ex-40

JABBER, INC.
By:	/s/ Paul F. Guerin
Name:	Paul F. Guerin
Title:	CEO
SERIES D INVESTORS:
FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS
By:	/s/ Stephane Couvreur
Name:	Stephane Couvreur
Title:	General Manager
INTEL CAPITAL CORPORATION
By:	/s/ Ravi Jacob
Name:	Ravi Jacob
Title:	Vice President, Finance & Enterprise
	Services Group; Assistant Treasurer, M&A
WEBB INTERACTIVE SERVICES, INC.
By:
Name:
Title:

Ex-41

SIGNATURE PAGE TO THE AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT AMONG JABBER, INC. AND THE INVESTORS NAMED HEREIN

SERIES E INVESTOR:
JONA, INC.
By:	/s/ Neil A. McMurry
Name:	Neil A. McMurry
Title:	President
PRIOR INVESTORS:
FRANCE TELECOM TECHNOLOGIES
INVESTISSEMENTS
By:	/s/ Stephane Couvreur
Name:	Stephane Couvreur
Title:	General Manager
WEBB INTERACTIVE SERVICES, INC.
By:
Name:
Title:

SIGNATURE PAGE TO THE AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT AMONG JABBER, INC. AND THE INVESTORS NAMED HEREIN

Ex-42

EXHIBIT A

SCHEDULE OF INVESTORS

SERIES D INVESTORS

FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS

3 8-40 me du Gal Leclerc

92794 Issv les Moulineaux Cedex 9

Paris, France

Fax: 01133 145 296 560

INTEL CAPITAL CORPORATION

2200 Mission College Blvd.

M/S RN6-46

Santa Clara, CA 95052

Attention: Portfolio Manager

Fax Number: (408) 765-6038

E-mail: portfolio.manager@intel.com

WEBB INTERACTIVE SERVICES, INC.

1899 Wynkoop Street

Suite 600

Denver, CO 80202

Attention: Secretary/General Counsel

Fax: (303) 308-3219

E-Mail: lbranson@webb.net

SERIES E INVESTOR:

JONA, INC.

1701 East “E” Street

P.O. Box 3003

Casper, WY 82602

Attention: Richard J. Bratton

Fax: (303) 234-4631

Ex-43

PRIOR INVESTORS

FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS

3 8-40 me du Gal Leclerc

92794 Issv les Moulineaux Cedex 9

Paris, France

Fax: 01133 145 296 560

WEBB INTERACTIVE SERVICES, INC.

1899 Wynkoop Street

Suite 600

Denver, CO 80202

Attention: Secretary/General Counsel

Fax: (303) 308-3219

E-Mail: lbransonwebb.net

Ex-44

JABBER, INC.

AMENDED AND RESTATED

INVESTORS RIGHTS AGREEMENT

Ex-45

JABBER, INC.

AMENDED AND RESTATED

VOTING AGREEMENT

THIS AMENDED AND RESTATED VOTING AGREEMENT (this “Agreement”) is made effective as of April 8, 2005, by and among Jabber, Inc., a Delaware corporation (the “Company”), and those parties listed as Investors on Exhibit A attached hereto (hereinafter sometimes referred to individually as an “Investor” and collectively, as the “Investors”).

BACKGROUND

The Company, France Telecom Technologies Investissements (“FTTI”), Intel Capital Corporation (“Intel”) and Webb Interactive Services, Inc. (“Webb” and together with FTTI and Intel, the “Series D Investors”) have entered into that certain Series D Preferred Stock Purchase Agreement dated March 17, 2003 (the “Series D Purchase Agreement”).

The Company and Jona, Inc., a Wyoming corporation (“Jona”), have entered into that certain Series E Preferred Stock Purchase Agreement dated April 8, 2005 (the “Series E Purchase Agreement”).

The Company and the Series D Investors entered into that certain Voting Agreement, dated as of March 17, 2003 (the “Prior Voting Agreement”). Pursuant to Section 3.5 of the Voting Agreement, the Voting Agreement may be amended by holders of a majority of the outstanding shares of Series D Preferred Stock held by all Investors (as defined in the Prior Voting Agreement) (the “Required Majority”).

As a condition and a material inducement to the obligation of Jona to consummate the transactions contemplated by the Series E Purchase Agreement, the Company and the Required Majority of the Investors have agreed to enter into this Agreement with the Series E Investor and to terminate the Prior Voting Agreement in its entirety as set forth herein.

NOW, THEREFORE, in consideration of the mutual promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Investors and the Company hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions. Unless the contract otherwise requires, the following terms shall have the following meanings for purposes of this Agreement:

(a) “Agreement” shall mean this Amended and Restated Voting Agreement.

(b) “Board of Directors” shall mean the Board of Directors of the

F-46

Company.

(c) “Common Stock” shall mean the Common Stock, par value $0.01 per share, of the Company.

(d) “Company” shall have the meaning set forth in the first paragraph of this Agreement.

(e) “FTTI” shall have the meaning set forth in the Background section of this Agreement.

(f) “FTTI Director” shall have the meaning set forth in Section 2.1 hereof.

(g) “Independent Director” shall have the meaning set forth in Section 2.1 hereof.

(h) “Intel” shall have the meaning set forth in the Background section of this Agreement.

(i) “Jona” shall have the meaning set forth in Section 2.1 hereof.

(j) “Jona Director” shall have the meaning set forth in Section 2.1 hereof.

(k) “Management Director” shall have the meaning set forth in Section 2.1 hereof.

(l) “Preferred Stock” shall mean the Series D Preferred Stock and Series E Preferred Stock.

(m) “Prior Voting Agreement” shall have the meaning set forth in the Background section of this Agreement.

(n) “Qualified Public Offering” shall mean a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act, covering the offer and sale by the Company of Common Stock at a public offering price per share that is not less than $.70 per share (as appropriately adjusted for any stock dividends, splits, combinations, divisions, recapitalizations or similar transactions affecting the Series D Preferred Stock after the date of this Agreement) and with a total in gross offering proceeds of not less than $20,000,000 (prior to deducting underwriter discounts and commissions and expenses of the offering).

(o) “Restated Certificate” shall have the meaning set forth in the Background section of this Agreement.

(p) “Series D Investors” shall have the meaning set forth in the Background section of this Agreement.

(q) “Series D Preferred Stock” shall mean the Series D Preferred Stock, par value $0.01 per share, of the Company.

(r) “Series D Purchase Agreement” shall have the meaning set forth in the Background section of this Agreement.

(s) “Series E Preferred Stock” shall mean the Series E Preferred Stock, par value $0.01 per share, of the Company.

(t) “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

(u) “Webb” shall have the meaning set forth in the Background section of this Agreement.

(v) “Webb Director” shall have the meaning set forth in Section 2.1 hereof.

Ex-47

ARTICLE 2

AGREEMENT TO VOTE FOR DIRECTORS

2.1 Election of Directors—General. Each Investor agrees to hold all shares of the Common Stock and Preferred Stock owned by such Investor subject to, and to vote all of such shares of the Common Stock and Preferred Stock in accordance with, the provisions of this Agreement. As of the date hereof, the Board of Directors shall be comprised of five (5) directors: one (1) director who shall be designated by Jona (the “Jona Director”), one (1) director who shall be designated by Webb (the “Webb Director”), one (1) director who shall be designated by FTTI (the “FTTI Director”), one (1) director who shall be a member of the Company’s senior management and who shall be designated by holders representing a majority of the outstanding shares of Preferred Stock on an as-converted basis (the “Management Director”), and one (1) director who shall be qualified and independent, including being independent of all Investors and who shall be designated by a majority vote of the FTTI Director, the Webb Director, the Jona Director and the Management Director (the “Independent Director”).

2.2 Election of Directors-FTTI Director

(a) As of the date hereof, at each annual meeting of the stockholders of the Company, or at any meeting of the stockholders of the Company at which members of the Board of Directors are to be elected, or whenever members of the Board of Directors are to be elected by written consent, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to elect the FTTI Director.

(b) It is agreed that as of the date of this Agreement, the initial FTTI Director shall be Stephane Couvreur.

(c) In the event of a vacancy in the seat on the Board of Directors held by the FTTI Director, whether as a result of the resignation, death, removal or disqualification of the FTTI Director or for any other reason whatsoever, FTTI shall have the right to designate a successor to fill the vacancy created thereby, and, after written notice of such successor has been given to the Investors, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to elect such successor designated by FTTI to serve on the Board of Directors as the FTTI Director.

(d) FTTI shall have the right to remove any individual serving as the FTTI Director at any time and from time to time, with or without cause, in its sole discretion, and, after written notice of its intention to remove the FTTI Director has been given to the Investors, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to remove the FTTI Director and to take the action to fill the vacancy created by such removal as is contemplated pursuant to Section 2.2(c) above.

2.3 Election of Directors-Webb Director

(a) As of the date hereof, at each annual meeting of the stockholders of the Company, or at any meeting of the stockholders of the Company at which members of the Board of Directors are to be elected, or whenever members of the Board of Directors are to be elected by written

Ex-48

consent, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to elect the Webb Director.

(b) In the event of a vacancy in the seat on the Board of Directors held by the Webb Director, whether as a result of the resignation, death, removal or disqualification of the Webb Director or for any other reason whatsoever, Webb shall have the right to designate a successor to fill the vacancy created thereby, and, after written notice of such successor has been given to the Investors, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to elect such successor designated by Webb to serve on the Board of Directors as the Webb Director.

(c) Webb shall have the right to remove any individual serving as the Webb Director at any time and from time to time, with or without cause, in its sole discretion, and, after written notice of its intention to remove the Webb Director has been given to the Investors, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to remove the Webb Director and to take the action to fill the vacancy created by such removal as is contemplated pursuant to Section 2.3(b) above.

2.4 Election of Directors-Jona Director

(a) As of the date hereof, at each annual meeting of the stockholders of the Company, or at any meeting of the stockholders of the Company at which members of the Board of Directors are to be elected, or whenever members of the Board of Directors are to be elected by written consent, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to elect the Jona Director.

(b) It is agreed that as of the date of this Agreement, the initial Jona Director shall be Richard J. Bratton.

(c) In the event of a vacancy in the seat on the Board of Directors held by the Jona Director, whether as a result of the resignation, death, removal or disqualification of the Jona or for any other reason whatsoever, Jona shall have the right to designate a successor to fill the vacancy created thereby, and, after written notice of such successor has been given to the Investors, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to elect such successor designated by Jona to serve on the Board of Directors as the Jona Director.

(d) Jona shall have the right to remove any individual serving as the Jona Director at any time and from time to time, with or without cause, in its sole discretion, and, after written notice of its intention to remove the Jona Director has been given to the Investors, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to remove the Jona Director and to take the action to fill the vacancy created by such removal as is contemplated pursuant to Section 2.4(c) above.

2.5 Election of Directors-Management Director

(a) At each annual meeting of the stockholders of the Company, or at any meeting of the stockholders of the Company at which members of the Board of Directors are to be elected, or whenever members of the Board of Directors are to be elected by written consent, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to elect the Management Director.

Ex-49

(b) It is agreed that as of the date of this Agreement, the Management Director shall be Paul Guerin.

(c) In the event of a vacancy in the seat on the Board of Directors held by the Management Director, whether as a result of the resignation, death, removal or disqualification of the Management Director or for any other reason whatsoever, holders representing a majority of the outstanding Preferred Stock, on an as-converted basis, shall have the right to designate a successor to fill the vacancy created thereby, and, after written notice of such successor has been given to the Investors, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to elect such successor designated by holders representing a majority of the outstanding Preferred Stock, on an as-converted basis, to serve on the Board of Directors as the Management Director.

(d) Holders representing a majority of the outstanding Preferred Stock, on an as-converted basis, shall have the right to remove any individual serving as the Management Director at any time and from time to time, with or without cause, and, after written notice of their intention to remove any such Management Director has been given to the Investors, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to remove such Management Director and to take the action to fill the vacancy created by such removal as is contemplated pursuant to Section 2.5(c) above.

2.6 Election of Directors-Independent Director

(a) As of the date hereof, at each annual meeting of the stockholders of the Company, or at any meeting of the stockholders of the Company at which members of the Board of Directors are to be elected, or whenever members of the Board of Directors are to be elected by written consent, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to elect as the Independent Director.

(b) In the event of a vacancy in the seat on the Board of Directors held by the Independent Director, whether as a result of the resignation, death, removal or disqualification of the Independent Director or for any other reason whatsoever the FTTI Director, the Webb Director, the Jona Director and the Management Director, by majority vote, shall have the right to designate a successor to fill the vacancy created thereby, and after written notice of such successor has been given to the Investors, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to elect such successor designated by a majority vote of the FTTI Director, the Webb Director, the Jona Director and the Management Director to serve on the Board of Directors as the Independent Director.

(c) A majority of the FTTI Director, the Webb Director, the Jona Director and the Management Director shall have the right to remove any individual serving as the Independent Director at any time and from time to time, with or without cause, and, after written notice of its intention to remove any such Independent Director has been given to the Investors, the Investors agree to vote their shares of Common Stock and Preferred Stock (or execute a written consent with respect thereto) so as to remove such Independent Director and to take the action to fill the vacancy created by such removal as is contemplated pursuant to Section 2.6(b) above.

2.7 Board Observers. Each of Webb, FTTI, Intel and Jona shall be entitled to have one (1) representative (in addition to the Webb Director, FTTI Director and the Jona Director)

Ex-50

attend and participate in all functions of the Board of Directors and any committee established by the Board of Directors as an observer, but such observer shall have no voting rights. The Company shall provide to such observers, concurrently with the members of the Board of Directors, and in the same manner, notice of such functions and a copy of all materials provided to such members of the Board of Directors. The Company may, however, withhold such materials or exclude such observers at the Chairman of the Board’s discretion if the Chairman of the Board determines, based on advice from legal counsel, that access to such materials or attendance of such observers would (i) adversely affect the attorney-client privilege between the Company and its counsel or (ii) involve a conflict of interest between the Company and such observers.

2.8 Expenses. The Company shall pay the reasonable out-of-pocket expenses incurred by the FTTI Director, the Webb Director, the Jona Director, and any observer appointed pursuant to Section 2.7 in attending any meeting of the Board of Directors and any committee established by the Board of Directors (excluding in each case a telephonic meeting).

ARTICLE 3

MISCELLANEOUS

3.1 Legends on Share Certificates. The following legend shall be imprinted conspicuously on the face of each certificate representing shares of Preferred Stock and Common Stock:

NOTICE IS HEREBY GIVEN THAT THE SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND RESTRICTED BY THE PROVISIONS OF A CERTAIN AMENDED AND RESTATED VOTING AGREEMENT AMONG JABBER, INC. AND CERTAIN OF THE COMPANY’S STOCKHOLDERS, DATED AS OF APRIL 8, 2005, A COPY OF WHICH AGREEMENT MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE COMPANY, AND ALL OF THE PROVISIONS OF WHICH AGREEMENT ARE INCORPORATED BY REFERENCE IN THIS CERTIFICATE.

3.2 Transfer of Preferred Stock. If and whenever shares of Preferred Stock and Common Stock are sold or transferred by any Investor, pursuant to the provisions of that certain Amended and Restated Right of First Refusal and Co-Sale Agreement dated as of April 8, 2005, the selling Investor shall do all things and execute and deliver all documents, and cause any transferee of the Preferred Stock or Common Stock, as the case may be, to do all things and execute and deliver all documents, as may be necessary to cause the transferee to be bound by the terms and conditions of this Agreement applicable to the Investors, and any such shares so sold shall continue to be subject to the obligations imposed on the holder of such shares by this Agreement.

Ex-51

3.3 Termination of Agreement. This Agreement shall terminate upon the earliest to occur of (i) a Qualified Public Offering, (ii) written agreement of the Company and the Investors holding a majority of the then outstanding shares of Preferred Stock and (iii) the dissolution of the Company.

3.4 Entire Agreement. This Agreement contains the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements among any of them with respect thereto, including, without limitation, the Prior Voting Agreement which is hereby terminated in its entirety and which shall henceforth be of no force and effect.

3.5 Amendment; Waiver. Neither this Agreement nor any term hereof may be amended, waived or discharged other than by written instrument signed by the Company and the holders of a majority of the outstanding shares of Preferred Stock, on an as-converted basis, then owned by the Investors.

Each Investor acknowledges that by the operation of this Section 3.5, third parties have the right and power to diminish or eliminate all rights of such Investor under this Agreement. Notwithstanding anything to the contrary contained herein, no modification, amendment or waiver that would treat any Investor in a non-ratable, discriminatory manner in comparison to other similarly situated Investors shall be effective against such Investor without the written consent of such Investor.

3.6 Specific Performance. Because of the unique character of the rights granted pursuant to this Agreement, the Investors and the Company will be irreparably damaged if this Agreement is not specifically enforced. Should any dispute arise concerning the voting of stock, an injunction may be issued restraining any such voting pending the determination of such controversy. In the event of any controversy concerning the right or obligation to vote any such stock, such right or obligation shall be enforceable in a court of equity by a decree of specific performance. Such remedy shall, however, be cumulative and not exclusive, and shall be in addition to any other remedy which the Investors or the Company may have.

3.7 Governing Law. This Agreement shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

3.8 Notices. All notices and other communications given to any party hereto pursuant to this Agreement shall be in writing and shall be hand delivered, or sent either by (a) certified mail, postage prepaid, return receipt requested; (b) electronic mail, (c) an overnight express courier service that provides written confirmation of delivery; or (d) facsimile transmission with written confirmation by the sending machine or with telephone confirmation of receipt (provided that a confirming copy is sent by overnight express courier service that provides written confirmation of delivery), addressed as follows:

Ex-52

(a) If to the Company:

Jabber, Inc.

1899 Wynkoop Street

Denver, CO 80202

Tel: 303-308-3255

Fax: 303-308-3215

E-mail: pguerin@jabber.com

Attention: Paul Guerin, CEO

with a copy to:

Hogan & Hartson LLP

1200 17th Street, Suite 1500

Denver, CO 80202

Tel: 303-899-7300

Fax: 303-899-7333

Attention: Robert Mintz, Esq.

(b) If to the Series D Investors:

To the address of each Series D Investor set forth on the signature page hereto

with a copy to:

Davis Graham & Stubbs LLP

1550 Seventeenth Street, Suite 500

Denver, CO 80202

Tel: (303) 892-9400

Fax: (303) 893-1379

Attention: Chris Richardson, Esq.

and Michelle Shepston, Esq.

(c) If to Jona:

To the address of Jona set forth on the signature page hereto.

with a copy to:

Ex-53

Fairfield and Woods, P.C.

Wells Fargo Center, Suite 2400

1700 Lincoln Street

Denver, Colorado 80203-4524

Telephone: (303) 830-2400

Facsimile: (303) 830-1033

Attention: Brian D. Wallace, Esq.

Any communication given in conformity with this Section 3.8, shall be effective upon the earlier of actual receipt or deemed delivery. Delivery shall be deemed to have occurred as follows: If hand delivered on the day so delivered; if telecopied or sent by electronic mail, upon written confirmation by the sending machine of effective transmission or upon telephone confirmation of receipt; and if sent by overnight express courier service, the next business day. Any party may at any time change its address for receiving communications pursuant to this Section 3.8 by giving notice of a new address in the manner provided herein.

3.9 Assignment. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto, all permitted transferees and assignees of any Investor, and all of the respective heirs, legatees, personal representatives, successors and assigns of any Investor, to the extent permitted by this Agreement.

3.10 Invalid Provision. If any term or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable in any respect, the remainder of the terms and provisions shall be unaffected and shall remain in full force and effect, and any such invalid, void or unenforceable term or provision shall be construed by limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law.

3.11 Time Periods. In computing the number of days for any purpose of this Agreement, all days shall be counted including Saturdays, Sundays and holidays, except that if the last day of any period occurs on a Saturday, Sunday or holiday, the period will be deemed extended to the end of the next succeeding day which is not a Saturday, Sunday or holiday. A holiday for purposes of this Agreement shall mean those days on which banks in the State of Delaware may, or are obligated to, remain closed.

3.12 Gender. All pronouns used herein shall include all genders and the singular and plural as the context requires.

3.13 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument.

3.14 Delivery by Facsimile. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as

Ex-54

if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.

3.15 Interpretation of Agreement. The parties hereto acknowledge and agree that this Agreement has been negotiated at arm’s-length and among parties equally sophisticated and knowledgeable in the matters dealt with in this Agreement. Accordingly, any rule of law or legal decision that would require interpretation of any ambiguities in this Agreement against the party that has drafted it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties as set forth in this Agreement.

[signature pages follow]

Ex-55

IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Voting Agreement as of the day and year first above written.

JABBER, INC.
By:	/s/ Paul F. Guerin
Name:	Paul F. Guerin
Title:	CEO
INVESTORS:
FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS
By:	/s/ Stephane Couvreur
Name:	Stephane Couvreur
Title:	General Manager
Address:	38-40 rue du Gal Leclerc
	92794 Issy les Moulineaux Cedex 9
	Paris, France
Fax #:	011 33 145 296 560
E-mail:	____________
INTEL CAPITAL CORPORATION
By:	/s/ Ravi Jacob
Name:	Ravi Jacob
Title:	Vice President, Finance & Enterprise
	Services Group; Assistant Treasurer, M&A
Address:	2200 Mission College Blvd.
	M/S RN6-46
	Santa Clara, CA 95052
Attention:	Portfolio Manager
Fax Number:	(408) 765-6038

SIGNATURE PAGE TO THE AMENDED AND RESTATED VOTING AGREEMENT

AMONG JABBER, INC. AND THE INVESTORS NAMED HEREIN

Ex-56

WEBB INTERACTIVE SERVICES, INC.
By:
Name:
Title:
Address:	1899 Wynkoop Street
	Suite 600
	Denver, CO 80202
Attention:	Secretary/General Counsel
Fax #:	(303) 308-3219
E-mail:	lbranson@webb.net
JONA, INC.
By:	/s/ Neil A. McMurry
Name:	Neil A. McMurry
Title:	President
Address:	1701 East “E” Street
	P.O. Box 3003
	Casper, WY 82602
Fax #:	(307) 234-4631
E-mail:	dbratton@mcmurry.net

SIGNATURE PAGE TO THE AMENDED AND RESTATED VOTING AGREEMENT

AMONG JABBER, INC. AND THE INVESTORS NAMED HEREIN

Ex-57

EXHIBIT A

SCHEDULE OF INVESTORS

INVESTORS:

FRANCE TELECOM TECHNOLOGIES

INVESTISSEMENTS

38-40 rue du Gal Leclerc

92794 Issy les Moulineaux Cedex 9

Paris, France

Fax: 011 33 145 296 560

INTEL CAPITAL CORPORATION

2200 Mission College Blvd.

M/S RN6-46

Santa Clara, CA 95052

Attention: Portfolio Manager

Fax Number: (408) 765-6038

E-mail: portfolio.manager@intel.com

WEBB INTERACTIVE SERVICES, INC.

1899 Wynkoop Street

Suite 600

Denver, CO 80202

Attention: Secretary/General Counsel

Fax: (303) 308-3219

E-Mail: lbranson@webb.net

JONA, INC.

[Address]

Attention:

Fax:

Email:

Ex-58

JABBER, INC.

AMENDED AND RESTATED

VOTING AGREEMENT

DATED APRIL 8, 2005

Ex-59

JABBER, INC.

AMENDED AND RESTATED

RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT

THIS AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND COSALE AGREEMENT (this “Agreement”) is made effective as of April 8, 2005, by and among Jabber, Inc., a Delaware corporation (“the Company”), those parties listed as Series D Investors on Exhibit A attached hereto (hereinafter sometimes referred to individually as a “Series D Investor” and collectively, as the “Series D Investors”), the party listed as the Series E Investor on Exhibit A attached hereto (the “Series E Investor,” and together with the Series D Investors, the “Preferred Investors”) and those parties listed as Prior Investors on Exhibit A attached hereto (hereinafter sometimes referred to individually as a “Prior Investor” and collectively, as the “Prior Investors”).

BACKGROUND

The Company and the Series D Investors have entered into that certain Series D Preferred Stock Purchase Agreement dated as of March 17, 2003 (the “Series D Purchase Agreement”). The Company and the Series E Investor have entered into that certain Series E Preferred Stock Purchase Agreement, dated as of April 8, 2005 (the “Series E Purchase Agreement”).

The Company, the Series D Investors and the Prior Investors entered into that certain Right of Refusal and Co-Sale Agreement, dated as of March 17, 2003 (the “Prior Co-Sale Agreement”). Pursuant to Section 6.4 of the Prior Co-Sale Agreement, the Prior Co-Sale Agreement may be amended by holders of a majority of the aggregate shares of Series D Preferred Stock and Common Stock issued upon conversion of the Series D Preferred Stock (the “Required Majority”).

As a condition and a material inducement to the Series E Investor’s obligations to consummate the transactions contemplated by the Series E Purchase Agreement, the Company and the Required Majority of the Series D Investors have agreed to enter into this Agreement with the Series E Investor and to terminate the Prior Co-Sale Agreement in its entirety as set forth herein.

NOW, THEREFORE, in consideration of the mutual promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Investors and the Company hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions. Unless the contract otherwise requires, the following terms shall have the following meanings for purposes of this Agreement:

Ex-60

(a) “Affiliate” shall mean, with respect to any Person, (i) a director, officer, general or limited partner, manager, member or stockholder of such Person, (ii) a spouse, parent, sibling or descendant of such Person (or a trust for the benefit of any one of more of the foregoing), and (iii) any other Person that, directly or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, such Person.

(b) “Agreement” shall mean this Amended and Restated Right of First Refusal and Co-Sale Agreement.

(c) “Approving Preferred Investors” shall have the meaning set forth in Section 4.1 hereof.

(d) “Available Securities” shall have the meaning set forth in Section 2.4 hereof.

(e) “Call Option” shall have the meaning set forth in Section 5.2 hereof.

(f) “Co-Sale Notice” shall have the meaning set forth in Section 3.1 hereof.

(g) “Co-Sale Right” shall have the meaning set forth in Section 3.2 hereof.

(h) “Co-Sale Securities” shall have the meaning set forth in Section 3.1 hereof.

(i) “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

(j) “Common Stock” shall mean the Common Stock, par value $0.01 per share, of the Company.

(k) “Company” shall have the meaning set forth in the first paragraph of this Agreement.

(l) “Company Exercise Notice” shall have the meaning set forth in Section 2.2 hereof.

(m) “Control” shall mean, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

(n) “Convertible Securities” shall have the meaning set forth in Section 4.1(b)(ii) hereof.

(o) “Escrow” shall have the meaning set forth in Section 4.2(f) hereof.

(p) “Exercise Deadline” shall have the meaning set forth in Section 2.4 hereof.

(q) “FTTI” shall have the meaning set forth in Section 5.2 hereof.

(r) “Fully-Exercising Preferred Investor” shall have the meaning set forth in Section 2.3 hereof.

(s) “Investor” or “Investors” shall mean, individually or collectively, the Preferred Investors and the Prior Investors.

(t) “Investor Exercise Notice” shall have the meaning set forth in Section 2.3 hereof.

(u) “Liquidity Event” shall have the meaning set forth in Section 5.2 hereof.

(v) “Non-Exercising Preferred Investor” shall have the meaning set forth in Section 3.2 hereof.

(w) “Offer” shall have the meaning set forth in Section 2.1 hereof.

(x) “Offered Securities” shall have the meaning set forth in Section 2.1 hereof.

(y) “Offering Investor” shall have the meaning set forth in Section 2.1 hereof.

(z) “Ownership Threshold” shall have the meaning set forth in Section 5.3 hereof.

(aa) “Person” shall mean any individual, partnership, limited partnership, limited liability partnership, corporation, limited liability company, association, trust, joint venture, unincorporated organization, and any governmental authority or other legal or business entity of any kind.

(bb) “Preferred Investor” shall have the meaning set forth in the first paragraph of this Agreement.

Ex-61

(cc) “Preferred Stock” shall mean the Series D Preferred Stock and the Series E Preferred Stock.

(dd) “Prior Co-Sale Agreement” shall have the meaning set forth in the Background section of this Agreement.

(ee) “Prior Investor” shall have the meaning set forth in the first paragraph of this Agreement.

(ff) “Pro Rata Share” shall mean from time to time an amount equal to the quotient obtained by dividing (i) the total number of shares of Common Stock issued or issuable to a Preferred Investor upon the conversion of the shares of Preferred Stock issued to such Preferred Investor by (ii) the total number of shares of Common Stock issued or issuable to all Preferred Investors upon the conversion of the shares of Preferred Stock issued to all such Preferred Investors.

(gg) “Public Securities” shall have the meaning set forth in Section 4.2(d) hereof.

(hh) “Qualified Public Offering” shall mean a firm commitment

underwritten public offering pursuant to a registration statement under the Securities Act, covering the offer and sale by the Company of Common Stock at a public offering price per share that is not less than $0.70 per share (as appropriately adjusted for any stock dividends, splits, combinations, divisions, recapitalizations or similar transactions after the date of this Agreement) and with a total in gross offering proceeds of not less than $20,000,000 (prior to deducting underwriter discounts and commissions and expenses of the offering).

(ii) “Remaining Securities” shall have the meaning set forth in Section 2.3 hereof.

(jj) “Required Majority” shall have the meaning set forth in the Background section of this Agreement.

(kk) “Sale of the Company” shall have the meaning set forth in Section 4.1 hereof.

(ll) “Sales Period” shall have the meaning set forth in Section 2.4 hereof.

(mm) “Securities” shall mean any Common Stock, Preferred Stock or other securities or equity-linked securities, directly or indirectly, convertible into or exchangeable or exercisable for Common Stock owned by any Investor.

(nn) “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

(oo) “Series D Closing” shall mean the Closing as defined in the Series D Purchase Agreement.

(pp) “Series D Investor” shall have the meaning set forth in the first paragraph of this Agreement.

(qq) “Series D Preferred Stock” shall mean the Series D Convertible Preferred Stock, par value $0.01per share, of the Company.

(rr) “Series D Purchase Agreement” shall have the meaning set forth in the Background section of this Agreement.

(ss) “Series D Purchase Price” shall mean the Purchase Price, as defined in the Series D Purchase Agreement.

(tt) “Series E Closing” shall mean the Closing as defined in the Series E Purchase Agreement.

(uu) “Series E Investor” shall have the meaning set forth in the first paragraph of this Agreement.

(vv) “Series E Preferred Stock” shall mean the Series E Convertible Preferred Stock, par value $0.01per share, of the Company.

Ex-62

(ww) “Series E Purchase Agreement” shall have the meaning set forth in the Background section of this Agreement.

(xx) “Series E Purchase Price” shall mean the Purchase Price, as defined in the Series E Purchase Agreement.

(yy) “Subsequent Exercise Notice” shall have the meaning set forth in Section 2.3 hereof.

(zz) “Third Party Purchaser” shall have the meaning set forth in Section 2.4 hereof.

(aaa) “Transfer” as to any securities issued by the Company, shall mean to sell, or in any other way directly or indirectly, to transfer, assign, distribute, give, bequeath, devise, encumber, pledge, hypothecate or otherwise dispose of, either voluntarily or involuntarily, or a sale, or any other direct or indirect, transfer, assignment, distribution, gift, bequest, devise, encumbrance or other voluntary or involuntary disposition, as the case may be.

ARTICLE 2

TRANSFER RESTRICTIONS

2.1 Offer to Sell Securities. Except as otherwise provided in this Agreement, if at any time prior to the completion of a Qualified Public Offering, any Investor shall at any time desire to Transfer any or all of such Investor’s Securities, such Investor (the “Offering Investor”) shall first prepare a written offer (the “Offer”) to sell such Securities (the “Offered Securities”) setting forth the proposed date of the sale, the proposed purchase price of the Securities, the proposed Third Party Purchaser who has made an offer to acquire such Securities, and the other terms and conditions upon which the sale is proposed to be made. If the offered purchase price includes consideration other than cash, the value of the cash equivalent will be determined by the Company’s Board of Directors in good faith, which determination will be binding upon the Company and each Investor, absent fraud or manifest error. The Offering Investor shall then transmit a copy of the Offer to the Company and to all Preferred Investors.

2.2 Right of First Refusal of the Company. Transmittal of the Offer to the Company by the Offering Investor shall constitute an offer by the Offering Investor to sell any or all of the Offered Securities to the Company at the price and upon the terms and conditions set forth in the Offer. For a period of fifteen (15) days after the submission of the Offer to the Company, the Company shall have the right of first refusal, exercisable by written notice to the Offering Investor (the “Company Exercise Notice”) with a copy to each of the Preferred Investors, to accept the Offer as to any or all of the Offered Securities.

2.3 Right of First Refusal of Preferred Investors. In the event that the Company does not exercise its right of first refusal with respect to all of the Offered Securities in accordance with Section 2.2 hereof, the Offering Investor, upon notice from the Company of the Company’s decision (or thirty (30) days after the delivery of a copy of the Offer to the Preferred Investors pursuant to Section 2.1 hereof, if the Company has failed to deliver a Company Exercise Notice within the fifteen (15) day period), shall be deemed to have offered in writing to sell any or all of the Offered Securities not purchased by the Company (the “Remaining Securities”) to the Preferred Investors as a group at the price and upon the terms and conditions set forth in the Offer. For a period of fifteen (15) days after such Offer is deemed made to the Preferred Investors, each of the Preferred Investors shall have the option, subject to the provisions of Section 5.3(a) of the Series D Purchase Agreement exercisable by written notice to the Offering

Ex-63

Investor (the “Investor Exercise Notice”), to purchase, on the terms and conditions specified in the Offer, a portion of the Remaining Securities that is less than or equal to such Preferred Investor’s Pro Rata Share. The Offering Investor shall promptly, in writing, inform each Preferred Investor that elects to purchase all of its Pro Rata Share of the Remaining Securities (each a “Fully-Exercising Preferred Investor”) of any other Preferred Investor’s failure to do likewise. During the five (5) day period commencing after receipt of such information, each of the Fully-Exercising Preferred Investors shall have the option, exercisable by written notice to the Offering Investor (the “Subsequent Exercise Notice”), to purchase, on the terms and conditions specified in the Offer, a portion of any Remaining Securities which Preferred Investors were entitled to purchase but which were not covered by any Investor Exercise Notice that is equal to the quotient obtained by dividing (a) the total number of shares of Common Stock issued or issuable to such Fully-Exercising Preferred Investor upon the conversion of the shares of Preferred Stock issued to such Fully-Exercising Preferred Investor by (b) the total number of shares of Common Stock issued or issuable to all Fully-Exercising Preferred Investors upon the conversion of the shares of Preferred Stock issued to all such Fully-Exercising Preferred Investors.

2.4 Sale to Third Party Purchaser. Following the last date by which the Preferred Investors may exercise their rights of first refusal under Section 2.3 (the “Exercise Deadline”), the Preferred Investors shall be deemed to have declined to purchase any of the Remaining Securities that are not subject to an Investor Exercise Notice or a Subsequent Exercise Notice (the “Available Securities”), and the Offering Investor shall be permitted, subject to the requirements of Section 5.4 of the Series D Purchase Agreement, during the period of sixty (60) days thereafter (the “Sales Period”) and subject to the co-sale provisions of Article 3 hereof, to sell any or all of the Available Securities to any Person or Persons (each a “Third Party Purchaser”), including without limitation, any Investor (subject to the provisions of Section 5.3(a) of the Series D Purchase Agreement), at a price and upon terms and conditions no more favorable to the Third Party Purchaser than those specified in the Offer. If the Offered Securities to be sold in accordance with this Article 2 are sold to any Third Party Purchaser who is not a party to this Agreement, such Third Party Purchaser must agree in writing to be bound by the terms and conditions hereof applicable to the Investors and the Offered Securities so sold shall continue to be subject to the restrictions imposed by this Agreement. In the event the Offering Investor has not sold all of the Available Securities within said sixty (60) day period, the Offering Investor shall not thereafter sell such Available Securities without first offering such securities to the Company and the Preferred Investors in the manner provided in this Article 2.

2.5 Closing. The Company and each Preferred Investor that elects to purchase any or all of the Offered Securities shall be required to become a party to any agreement(s) contemplated by and expressly identified in the Offer to be executed and delivered by the purchaser in connection with the sale of Offered Securities and to make payment for such Offered Securities on the terms and at the time contemplated by the Offer. The closing of the purchase of Offered Securities by the Company or by any Preferred Investor pursuant to the provisions of this Article 2 shall be made in accordance with the terms and conditions set forth in the Offer. At the closing, the stock certificate or certificates or other instruments representing the Offered Securities being sold shall be delivered by the Offering Investor to the purchaser or purchasers, duly endorsed for transfer or with executed stock powers attached, with any

Ex-64

necessary documentary and transfer tax stamps affixed by the seller, free and clear of all liens, claims and encumbrances except as expressly provided in the Offer, against payment of the purchase price for such Offered Securities (in the amount stated in the Offer) by delivery of a certified check payable to the Offering Investor or a wire transfer to an account specified by the Offering Investor.

2.6 Certain Excluded Transfers. Provided that the transferee agrees in writing to be bound by the terms and conditions of this Agreement applicable to the Investors and that the Securities so sold continue to be subject to the restrictions imposed by this Agreement, the provisions of this Article 2 and Article 3 shall not apply to the following Transfers:

(a) Transfers of Securities from an Investor to an Affiliate of the Investor.

(b) Transfers following the completion of a Qualified Public Offering.

(c) Transfers of Securities from an Investor provided such Transfers, individually or in the aggregate, do not exceed ten percent (10%) of the total share capital held, directly or indirectly, by such Investor, on a fully-diluted, as converted basis, as of the date of the Series D Closing, any Series E Closing or Subsequent Closing (as defined in the Series D Purchase Agreement), if any; provided, however, that any Transfers pursuant to Section 2.6(d) are not made to any Person who is a Competitor of any Preferred Investor. For purposes of this Section 2.6, a “Competitor” shall be defined as any Person whose products and/or services compete with the products and/or services of any Preferred Investor in any market segment and such Person’s sales, revenues or profits attributable to such market segment equal or exceed one percent (1%) of the relevant Preferred Investor’s sales, revenues or profits in the same market segment.

(d) Transfers of Securities made pursuant to Article V hereto.

ARTICLE 3

CO-SALE PROVISIONS

3.1 Notice of Proposed Sale. In the event there are any Available Securities following the Exercise Deadline and the Offering Investor proposes to Transfer to a Third Party Purchaser any or all of such Available Securities during the Sales Period, as soon as practical, but in no event less than fifteen (15) days prior to the date of such Transfer, the Offering Investor shall submit a written notice (the “Co-Sale Notice”) to the Preferred Investors disclosing the amount of Available Securities proposed to be Transferred (the “Co-Sale Securities”).

3.2 Right of Participation in Sales. Subject to Section 2.6 hereof, each Preferred Investor that has elected not to exercise its right of first refusal pursuant to Section 2.3 hereof with respect to such Offered Securities (each a “Non-Exercising Preferred Investor”), shall have the right (the “Co-Sale Right”) to sell to the Third Party Purchaser, at the same price per share and on the same terms and conditions set forth in the Offer, a portion of the Securities to be sold to the Third Party Purchaser that is less than or equal to the quotient obtained by dividing (a) the total number of shares of Common Stock issued or issuable to such Non-Exercising Preferred Investor upon the conversion of the shares of Preferred Stock issued to such Non-Exercising Preferred Investor by (b) the sum of (i) the total number of shares of Common Stock issued or issuable to all Non-Exercising Preferred Investors upon the conversion of the shares of Preferred

Ex-65

Stock issued to all such Non-Exercising Preferred Investors plus (ii) the total number of shares of Common Stock included in the Co-Sale Securities or which may be obtained upon conversion, exchange or exercise of the Co-Sale Securities. To the extent a Non-Exercising Preferred Investor exercises its Co-Sale Right in accordance with this Article 3, the amount of Co-Sale Securities which the Offering Investor may sell to such Third Party Purchaser shall be correspondingly reduced.

3.3 Notice of Intent to Participate. If a Non-Exercising Preferred Investor wishes to participate in any sale pursuant to Section 3.2 hereof, then such Non-Exercising Preferred Investor shall notify the Offering Investor in writing of such intention as soon as practicable after such Non-Exercising Preferred Investor’s receipt of the Co-Sale Notice made pursuant to Section 3.1 hereof, and in any event within ten (10) days after the date of such Co-Sale Notice has been delivered.

3.4 Sale of Co-Sale Securities. The Offering Investor and each participating Non-Exercising Preferred Investor shall sell to the Third Party Purchaser all, or, at the option of the Third Party Purchaser, any part, of the Securities proposed to be sold by them at not less than the price and upon other terms and conditions, if any, not more favorable to the Third Party Purchaser than those set forth in the Offer; provided that if the Third Party Purchaser elects to purchase less than all of such Securities, the total amount of Securities proposed to be sold by the Offering Investor and each participating Non-Exercising Preferred Investor shall be reduced pro-rata based upon the relative amount of the Securities that the Offering Investor and each such participating Non-Exercising Preferred Investor is otherwise entitled to sell to the Third Party Purchaser pursuant to Section 3.2 hereof. If the Securities to be sold in accordance with this Article 3 are sold to any Third Party Purchaser who is not a party to this Agreement, such Third Party Purchaser must agree in writing to be bound by the terms and conditions hereof applicable to the Investors and the Securities so sold shall continue to be subject to the restrictions imposed by this Agreement.

3.5 Closing. Each Non-Exercising Preferred Investor that elects to sell any Securities pursuant to its Co-Sale Right shall be required to become a party to any agreement(s) contemplated by and expressly identified in the Offer to be executed and delivered by the Offering Investor in connection with the sale of Offered Securities and shall be entitled to receive payment for such Offered Securities on the terms and at the time contemplated by the Offer. The closing of the sale of Securities by any Non-Exercising Preferred Investor pursuant to the provisions of this Article 3 shall be made in accordance with the terms and conditions set forth in the Offer. At the closing, the stock certificate or certificates or other instruments representing the Securities being sold by any Non-Exercising Preferred Investor shall be delivered to the Third Party Purchaser, duly endorsed for transfer or with executed stock powers attached, with any necessary documentary and transfer tax stamps affixed by the seller, free and clear of all liens, claims and encumbrances except as expressly provided in the Offer against payment of the purchase price for such Securities (in the amount stated in the Offer) by delivery of a certified check payable to such Non-Exercising Preferred Investor or a wire transfer to an account specified by such Non-Exercising Preferred Investor.

Ex-66

ARTICLE 4

DRAG-ALONG

4.1 Post-Closing. Each of the Investors acknowledges and agrees that if Preferred Investors holding 66 ²/3 percent of the outstanding Preferred Stock, on an as converted basis, approve in writing (the “Approving Preferred Investors”) (i) an acquisition of the Company by means of any transaction or series of related transactions (including, without limitation, any share exchange, consolidation, merger, amalgamation, or similar form of corporate reorganization) in which the outstanding shares of the Company are exchanged for securities or other consideration issued, or caused to be issued, by the acquiring entity, its subsidiary or other entity and pursuant to which the holders of the outstanding voting securities of the Company immediately prior to such share exchange, consolidation, merger, amalgamation, or other transaction fail to hold, directly or indirectly, equity securities representing a majority of the voting power of the Company or surviving entity or its parent immediately following such transaction in substantially the same proportions as their ownership of the voting power of the share capital of the Company immediately prior to such transaction; or (ii) the sale, lease, exchange, conveyance or other disposition (including by way of exclusive, perpetual license) of all or substantially all of the assets of the Company (any such event described in (i) or (ii) above being referred to herein as a “Sale of the Company”), then each Investor hereby agrees with respect to all Securities of the Company which it owns or otherwise exercises voting or dispositive authority over: (a) in the event that such transaction is to be brought to a vote at a shareholder meeting, after receiving proper notice of any meeting of shareholders of the Company, to vote all such Investor’s Securities on the approval of such Sale of the Company:

(i) to be present, in person or by proxy, as a holder of shares of voting Securities of the Company, at all such meetings and be counted for the purposes of determining the presence of quorum at such meetings;

(ii) to vote (in person at a regular or special meeting of shareholders, by proxy or by action of written resolution, as applicable) all Securities to which it has beneficial ownership in favor of such Sale of the Company and in opposition to any and all other proposals that could be reasonably expected to delay or impair the ability of the Company to consummate such Sale of the Company; and

(iii) to refrain from exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to such Sale of the Company; and

(b) in the event that such Sale of the Company is to be accomplished by the Transfer of Securities to any Person or group of related persons:

(i) to sell all but not less than all of its Securities on the terms agreed upon by the Approving Preferred Investors for such Sale of the Company; and

(ii) in the case of an Investor holding options, warrants or other securities convertible or exchangeable into Common Shares which, by their terms, are convertible or otherwise exercisable prior to or otherwise in connection with the Sale of the Company (the “Convertible Securities”), notwithstanding the provision of the Convertible Securities

Ex-67

and as requested by the Company, to take such necessary action as to either (i) exercise such Convertible Securities and sell the Common Shares in connection with the Sale of the Company or (ii) sell such Convertible Securities in connection with the Sale of the Company for a consideration equal to the consideration that would be received by a holder of such number of Common Shares as is then issuable upon the exercise of the Convertible Securities less the aggregate exercise price of such Convertible Securities; provided that if the exercise price of the Convertible Securities held by a Shareholder exceeds the consideration to paid to a holder of such number of Common Shares as is then issuable upon the exercise of such Convertible Securities, then the Shareholder agrees that such Convertible Securities shall be cancelled and the Investor shall have no further rights thereunder as of the closing contemplated by the Sale of the Company.

4.2 Drag-Along Requirements. Notwithstanding the provisions set forth in Section 4.1 hereof, the obligation of any Investor (i) to vote all Securities held by it in favor of such Sale of the Company under the same terms and conditions as approved by the Approving Preferred Investors; (ii) to sell pursuant to such transaction all Company Securities held by it subject to compliance by the Company with any applicable liquidation preferences in the Company’s then effective Certificate of Incorporation; and (iii) to take any such other actions, including the timely delivery of documents and instruments, as may be required to effect such Sale of the Company as required by Section 4.1, shall be subject to the satisfaction of each of the following conditions:

(a) The valuation of the Company in any Sale of the Company must be at least two times the Series E Purchase Price;

(b) There shall be no joint and several liabilities from the Series D Investors or the Series E Investors to any purchaser of the Company;

(c) Subject to Section 4.2(d) below, upon the consummation of a Sale of the Company, all of the Investors will receive the same form and amount of consideration per share of Preferred Stock or Common Stock, respectively, taking into account any liquidation preference (including, but not limited to, the Series D Preferred Stock and Series E Preferred Stock liquidation preferences) to which any of the Investors may be entitled, or if any holders of the Company’s Preferred Stock or Common Stock are given an option as to the form and amount of consideration to be received, all Investors will be given the same option;

(d) The form of consideration in a Sale of the Company shall not be in a form other than cash or freely-tradable equity securities registered under the Exchange Act and listed on the New York or American Stock Exchange or the Nasdaq National Market (“Public Securities”).

(e) No Investor shall be obligated to make any out of pocket expenditure prior to the consummation of the Sale of the Company, (excluding modest expenditures for postage, copies, etc.), and shall not be obligated to pay any expenses incurred in connection with a consummated Sale of the Company, except indirectly to the extent such costs are incurred for the benefit of all of the Company’s stockholders and are paid by the Company or the acquiring party. Costs incurred by or on behalf of any Investor for its sole benefit will not be considered costs of the transaction hereunder.

(f) The only representations, warranties or covenants that any Investor shall be required to make in connection with a Sale of the Company are representations and warranties with respect to its own ownership of the Company’s securities to be sold by it and its ability to convey title thereto free and clear of liens, encumbrances or adverse claims and reasonable covenants

Ex-68

regarding confidentiality, publicity and similar matters; the liability of any Investor with respect to any representation and warranty or covenant made by the Company in connection with a Sale of the Company shall be several and not joint with any other person; and such liability shall be limited to a pro rata share of an escrow covering not to exceed 10% in the aggregate of the consideration payable to all stockholders of the Company and which escrow does not exceed a period of one year (the “Escrow”), and providing further that any claims made by any purchaser of the Company must exceed 15% of the amount in the Escrow before any reimbursement may be made to such purchaser of the Company, other than with respect to the representations, warranties and covenants made by such Investor in connection with a Sale of the Company with respect to ownership and ability to convey title.

(g) No Investor shall be required to amend, extend or terminate any contractual or other relationship with the Company, the acquirer or their respective affiliates.

(h) No Investor shall be required to agree to any covenant not to compete or covenant not to solicit customers, employees or suppliers of any party to the Sale of the Company.

ARTICLE 5

LIQUIDITY

5.1 General. Webb Interactive Services, Inc. (“Webb”) hereby covenants and agrees with the Company, each of the other Series D Investors and the Series E Investor that, from and after the First Closing Date (as such term is defined under the Series E Purchase Agreement) and until the earlier to occur of (i) a Qualified Public Offering; (ii) a sale of the entire capital stock of the Company for consideration that is solely in the form of cash or freely tradable public securities; (iii) a sale of all or substantially all of the Company’s assets for consideration that is solely in the form of cash or freely tradable public securities; or (iv) the date on which Webb ceases to be a shareholder of the Company, Webb will not make any distributions or other transfer of any of its shares in the Company to Webb’s shareholders which distribution or transfer would have the result of making the Company a reporting company under the Securities Exchange Act of 1934, as amended, unless the distribution or transfer has been approved by Preferred Investors holding 66 ²/3% of the Preferred Stock, on an as-converted basis, held by all Preferred Investors.

5.2 Right to Purchase Common Shares. If none of the events described in Section 5.1(i)-(iii) occurs and there has been no liquidation or bankruptcy (whether voluntary or involuntary) of the Company (any such event, a “Liquidity Event”), then commencing on January 1, 2006 (and on every annual anniversary thereafter), Webb shall have the right to buy (the “Call Option”) One Million (1,000,000) shares of France Telecom Technologies Investissements’ (“FTTI”) Common Stock in the Company, and FTTI shall have the obligation to sell to Webb One Million (1,000,000) shares of its Common Stock in the Company, at a price per share of (i) the Series D Purchase Price plus (ii) fifteen percent (15%) per annum after March 17, 2003. For each annual occasion that Webb desires to exercise its option, it shall provide written notice to FTTI within five (5) business days after January 1^st and shall exercise the option no later than January 31^st.

Ex-69

5.3 Limitation on Right. Notwithstanding any other provision to the contrary, Webb shall not be entitled to exercise the Call Option if, as a result of such purchase, Webb’s ownership of the Company’s issued and outstanding share capital (calculated either by ownership percentage or voting power) would be greater than forty-nine percent (49%) (the “Ownership Threshold”). If, as a result of this Section 5.3, Webb is unable to exercise its Call Option, then such Call Option shall be deemed to be temporarily suspended until such time that Webb can exercise such Call Option either (i) without exceeding the Ownership Threshold or (ii) immediately prior to the time of any Liquidity Event, at which time the Ownership Threshold described in the prior sentence shall be deemed waived. For the avoidance of doubt, all of Webb’s ownership of the Company’s share capital, including any shares that may be, or have been, lawfully transferred by Webb to any third party pursuant to this Agreement, shall be included in the calculation of Webb’s ownership of the Company’s share capital. The Call Option may not be assigned or transferred by Webb to any third party.

ARTICLE 6

MISCELLANEOUS

6.1 Legends on Share Certificates. The following legend shall be imprinted conspicuously on the face of each certificate representing Securities:

NOTICE IS HEREBY GIVEN THAT THE SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND RESTRICTED BY THE PROVISIONS OF A CERTAIN AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT AMONG JABBER, INC. AND CERTAIN OF THE COMPANY’S STOCKHOLDERS, DATED AS OF APRIL 8, 2005, A COPY OF WHICH AGREEMENT MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE COMPANY, AND ALL OF THE PROVISIONS OF WHICH AGREEMENT ARE INCORPORATED BY REFERENCE IN THIS CERTIFICATE.

In order to ensure compliance with the restrictions referred to herein, each Investor agrees that the Company may issue appropriate “stop transfer” certificates or instructions and that, if the Company Transfers its own securities, it may make appropriate notations to the same effect in its records.

6.2 Termination of Agreement. This Agreement shall terminate upon the earliest to occur of (i) a Qualified Public Offering or (ii) the dissolution of the Company.

6.3 Entire Agreement. This Agreement contains the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements among any of them with respect thereto, including, without limitation, the Prior Co-Sale Agreement, which is hereby terminated in its entirety and which shall henceforth be of no force and effect.

Ex-70

6.4 Amendment; Waiver. Neither this Agreement nor any term hereof may be amended, waived or discharged other than by a written instrument signed by the Company and Investors holding a majority of the aggregate shares of Preferred Stock, on an as converted basis, and Common Stock issued upon conversion of the Preferred Stock held by all Investors. Notwithstanding anything to the contrary contained herein, no modification, amendment or waiver that would treat any Investor in a non-ratable, discriminatory manner in comparison to other similarly situated Investors shall be effective against such Investor without the written consent of such Investor.

6.5 Nonrecognition of Certain Transfers. The Company will not, nor will it be compelled to, recognize any Transfer made other than in accordance with the terms of this Agreement, nor will it issue any warrant or certificate representing any securities of the Company or pay any dividends to any Person who has received such securities in a Transfer made other than in accordance with the terms of this Agreement.

6.6 Specific Performance. Because of the unique character of the Securities, the Investors and the Company will be irreparably damaged if this Agreement is not specifically enforced. Should any dispute arise concerning the sale or disposition of stock, an injunction may be issued restraining any sale or disposition pending the determination of such controversy. In the event of any controversy concerning the right or obligation to purchase or sell any such stock, such right or obligation shall be enforceable in a court of equity by a decree of specific performance. Such remedy shall, however, be cumulative and not exclusive, and shall be in addition to any other remedy which the Investors or the Company may have.

6.7 Governing Law. This Agreement shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

6.8 Notices. All notices and other communications given to any party hereto pursuant to this Agreement shall be in writing and shall be hand delivered, or sent either by (a) electronic mail, (b) an overnight express courier service that provides written confirmation of delivery; or (c) facsimile transmission with written confirmation by the sending machine or with telephone confirmation of receipt (provided that a confirming copy is sent by overnight express courier service that provides written confirmation of delivery), addressed as follows:

(a) If to the Company:

Jabber, Inc.

1899 Wynkoop Street

Denver, CO 80202

Tel: 303-308-3255

Fax: 303-308-3215

E-mail: pguerin@jabber.com

Attention: Paul Guerin, CEO

Ex-71

with a copy to:

Hogan & Hartson LLP

1200 17^th Street, Suite 1500

Denver, CO 80202

Tel: 303-899-7300

Fax: 303-899-7333

Attention: Robert Mintz, Esq.

(b) If to the Series D Investors:

To the address of each Series D Investor set forth on Exhibit A hereto

with a copy to:

Davis Graham & Stubbs LLP

1550 Seventeenth Street, Suite 500

Denver, CO 80202

Tel: (303) 892-9400

Fax: (303) 893-1379

Attention: Chris Richardson, Esq. and Michelle Shepston, Esq.

(c) If to the Series E Investor:

To the address of the Series E Investor set forth on Exhibit A hereto

with a copy to:

Fairfield and Woods, P.C.

1700 Lincoln Street, Suite 2400

Denver, CO 80203

Tel: (303) 830-2400

Fax: (303) 830-1033

Attention: Brian Wallace, Esq.

Any communication given in conformity with this Section 6.8, shall be effective upon the earlier of actual receipt or deemed delivery. Delivery shall be deemed to have occurred as follows: if telecopied or sent by electronic mail, upon written confirmation by the sending machine of effective transmission or upon telephone confirmation of receipt; and if sent by overnight express courier service, the next business day. Any party may at any time change its address for receiving communications pursuant to this Section 6.8 by giving notice of a new address in the manner provided herein.

Ex-72

6.9 Assignment. Except in connection with a Transfer permitted by and completed in accordance with Sections 2.2, 2.3, 2.4, 2.6, or 3.4 hereof, as the case may be, none of the rights and obligations of any Investor set forth in this Agreement may be transferred or assigned without the prior written consent of the Company (which consent shall not be unreasonably withheld), and any purported assignment made without such consent shall be void. None of the rights and obligations of the Company set forth in this Agreement may be transferred or assigned without the prior written consent of the Investors holding a majority of the outstanding Preferred Stock, on an as-converted basis, and any purported assignment made without such consent shall be void. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto, all permitted transferees and assignees of any Investor, and all of the respective heirs, legatees, personal representatives, successors and assigns of any Investor, to the extent permitted by this Agreement.

6.10 Invalid Provision. If any term or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable in any respect, the remainder of the terms and provisions shall be unaffected and shall remain in full force and effect, and any such invalid, void or unenforceable term or provision shall be construed by limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law. 6.11 Time Periods. In computing the number of days for any purpose of this Agreement, all days shall be counted including Saturdays, Sundays and holidays, except that if the last day of any period occurs on a Saturday, Sunday or holiday, the period will be deemed extended to the end of the next succeeding day which is not a Saturday, Sunday or holiday. Notwithstanding the foregoing, and solely for computing the number of days for purposes of Section 3.1 of this Agreement, Saturdays, Sundays and holidays shall not be counted. A holiday for purposes of this Agreement shall mean those days on which banks in the State of Delaware may, or are obligated to, remain closed.

6.12 Headings. The Table of Contents and the Article, Section and subsection headings are included solely for convenient reference and shall not be deemed to provide an accurate description of the content of any Article, Section or subsection hereof or otherwise affect the meaning or interpretation of any of the provisions hereof.

6.13 Gender. All pronouns used herein shall include all genders and the singular and plural as the context requires.

6.14 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument.

6.15 Delivery by Facsimile. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute

Ex-73

original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.

6.16 Interpretation of Agreement. The parties hereto acknowledge and agree that this Agreement has been negotiated at arm’s-length and among parties equally sophisticated and knowledgeable in the matters dealt with in this Agreement. Accordingly, any rule of law or legal decision that would require interpretation of any ambiguities in this Agreement against the party that has drafted it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties as set forth in this Agreement.

[signature pages follow]

Ex-74

IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Right of First Refusal and Co-Sale Agreement as of the day and year first above written.

JABBER, INC.
By:	/s/ Paul F. Guerin
Name:	Paul F. Guerin
Title:	CEO
SERIES D INVESTORS:
FRANCE TELECOM TECHNOLOGIES
INVESTISSEMENTS
By:	/s/ Stephane Couvreur
Name:	Stephane Couvreur
Title:	General Manager
INTEL CAPITAL CORPORATION
By:	/s/ Ravi Jacob
Name:	Ravi Jacob
Title:	Vice President, Finance & Enterprise Services
	Group; Assistant Treasurer, M&A
WEBB INTERACTIVE SERVICES, INC.
By:
Name:
Title:
SERIES E INVESTOR:
JONA, INC.
By:	/s/ Neil A. McMurry
Name:	Neil A. McMurry
Title:	President

SIGNATURE PAGE TO THE AMENDED AND RESTATED RIGHT OF FIRST REFUSAL

AND CO-SALE AGREEMENT AMONG JABBER, INC. AND THE PARTIES NAMED HEREIN

Ex-75

PRIOR INVESTORS:
FRANCE TELECOM TECHNOLOGIES
INVESTISSEMENTS
By:	/s/ Stephane Couvreur
Name:	Stephane Couvreur
Title:	General Manager
WEBB INTERACTIVE SERVICES, INC.
By:
Name:
Title:

SIGNATURE PAGE TO THE AMENDED AND RESTATED RIGHT OF FIRST REFUSAL

AND CO-SALE AGREEMENT AMONG JABBER, INC. AND THE PARTIES NAMED HEREIN

Ex-76

EXHIBIT A

SCHEDULE OF INVESTORS

SERIES D INVESTORS:

FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS

38-40 rue du Gal Leclerc

92794 Issy les Moulineaux Cedex 9

Paris, France

Fax: 011 33 145 296 560

INTEL CAPITAL CORPORATION

2200 Mission College Blvd.

M/S RN6-46

Santa Clara, CA 95052

Attention: Portfolio Manager

Fax Number: (408) 765-6038

E-mail: portfolio.manager@intel.com

WEBB INTERACTIVE SERVICES, INC.

1899 Wynkoop Street

Suite 600

Denver, CO 80202

Attention: Secretary/General Counsel

Fax: (303) 308-3219

E-Mail: lbranson@webb.net

SERIES E INVESTOR:

JONA, INC.

1701 East “E” Street

P.O. Box 3003

Casper, WY 82602

Attention: Richard J. Bratton

Fax: (307) 234-4631

PRIOR INVESTORS:

FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS

38-40 rue du Gal Leclerc

92794 Issy les Moulineaux Cedex 9

Paris, France

Fax: 011 33 145 296 560

Ex-77

WEBB INTERACTIVE SERVICES, INC.

1899 Wynkoop Street

Suite 600

Denver, CO 80202

Attention: Secretary/General Counsel

Fax: (303) 308-3219

E-Mail: lbranson@webb.net

Ex-78

JABBER, INC.

AMENDED AND RESTATED

RIGHT OF FIRST REFUSAL

AND CO-SALE AGREEMENT

DATED APRIL 8, 2005

GP:1701475v1

Ex-79

EX-21.1

Exhibit 21.1

Active Subsidiaries

Subsidiary	Incorporated	Percentage Ownership at April 15, 2005
Jabber, Inc.	Delaware	38%
Jabber BV	Netherlands	100%

Ex-80

EX-23.1

Exhibit 23.1

CONSENT OF EHRHARDT KEEFE STEINER & HOTTMAN PC, INDEPENDENT AUDITORS

We consent to the incorporation by reference in the following registration statements of Webb Interactive Services, Inc. and in the related prospectuses of our report dated April 8, 2005 with respect to the consolidated financial statements of Webb Interactive Services, Inc. included in this Annual Report (Form 10-KSB) for the year ended December 31, 2004:

1) No. 333-13983	3) No. 333-63632	5) No. 333-83103
2) No. 333-57442	4) No. 333-82316	6) No. 333-89600

/s/ EHRHARDT KEEFE STEINER & HOTTMAN PC

Denver, Colorado

April 14, 2005

Ex-81

EX-23.2

Exhibit 23.2

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following registration statements of Webb Interactive Services, Inc. and in the related prospectuses of our report dated February 10, 2004, with respect to the consolidated financial statements of Webb Interactive Services, Inc. as of and for the year ended December 31, 2003, included in this Annual Report (Form 10-KSB) for the year ended December 31, 2004:

1) No. 333-13983	3) No. 333-63632	5) No. 333-83103
2) No. 333-57442	4) No. 333-82316	6) No. 333-89600

/s/ ERNST & YOUNG LLP

Denver, Colorado

April 13, 2005

Ex-82

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Lindley S. Branson, certify that:

1. I have reviewed this annual report on Form 10-KSB of Webb Interactive Services, Inc.;

2 Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this annual report;

4. The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

(c) Disclosed in this quarterly report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter that has materially affected, or is reasonably likely, to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: April 15, 2005

/s/ Lindley S. Branson

Vice President – General Counsel

Ex-83

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Webb Interactive Services, Inc. (the “Company”) on Form 10-KSB for the period ended December 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lindley S. Branson, Vice President – General counsel currently the only executive officer of the Company, certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Lindley S. Branson

Vice President – General Counsel

Date: April 15, 2005

Ex-84